South Africa: Africa's Percent And The Digital Future

According to Wipo's latest published statistics for the year 2015, the entire African continent collectively was the recipient of approximately 0.5 percent of the world's patent filings in that year. The reported figure for Africa is approximately 14900 patent applications (including PCT national phase entries) out of a global total of nearly 2680900 applications. Approximately half of those patent applications were reported by the South African Patent Office (The South Africa Patent office reported 7497 applications in 2015).

For trademarks, the reported figure is slightly higher in terms of global percentages, with approximately 207017 applications reported to WIPO out of nearly 7.5 million applications worldwide (for the purposes of its statistics, WIPO regards each class designated in a multi-class filing as a single class count filing). This brings the slice of the global trademarks cake for African jurisdictions to just under 3 percent.

We are told by practitioners in various jurisdictions that the statistics may not necessarily be accurate for a number of reasons, for example some Intellectual Property Offices (IPO's) in Sub-saharan Africa may not necessarily report their data to Wipo and it can be argued that the data may be inaccurate or poorly collected in other instances due to a lack of proper record keeping and manually kept records.

Despite the compelling arguments why the statistics may be underreported, the statistics are still an indication that industry, both global and regional in Africa, have very thin IP portfolios covering the region when compared to other regions. In addition, at least as far as reported figures are concerned, there has been a stagnation in Africa for the past decade in terms of reported patent filing numbers. There has been a slightly impressive increase in trademark filings, but there is still no filing frenzy boom of the kind seen in Asia in recent years nor the consistently high volumes in developed regions of the world. The figures below summarize the reported volumes for the continent.

Africa - Patent filling volumes 2004-2015

Africa - Trademark filling volumes 2004-2015.

Much has been written and said about the prospects of economic growth on the continent looking more positive than in previous decades and we agree with this assessment. After all, there have been signs of growth south of the Sahara for at least the past decade and the population explosion alone is likely to continue fueling the need for consumer goods, whether they are manufactured in Africa or not. At least strategically, most in-house IP counsel would agree that it makes strategic sense to increase the size of IP portfolios in Africa and most would admit it is foolish to ignore Africa in any strategy discussion.

If there is, indeed, a general consensus amongst IP counsel that IP owners are under-invested in their African IP portfolios, what is holding IP owners back from filing more liberally? One important factor is the domestic market. The boom in China has been fueled largely by Chinese firms filing domestic applications, yet if we look at the statistics for Africa a very large percentage of the filings are foreign filings. There is, perhaps a need for more awareness amongst African firms, especially SME's that IP registration and protection is a necessary grudge purchase, even on a startup budget.

Besides awareness, there is in our opinion possibly another issue that may be deterring IP counsel from investing more in Africa and the fact that statistics may be inaccurately reported highlights this issue. An important consideration for in-house IP counsel when deciding where to file and to what extent are the questions whether or not a potential filing jurisdiction has an effective and efficient system to both protect and enforce IP rights. This is not only a strategic issue but also one of cost and convenience. Jurisdictions where it is difficult and costly to register IP fall into a category where the IP counsel only identifies a few key patents and trademarks to file, so that the protection can be adequate or, if the jurisdiction is not a key jurisdiction, the IP counsel could strike the jurisdiction off the list (and the budget) entirely. This approach is rather unfortunate as immediate cost and efficiency considerations can often override idealistic long term strategy considerations.

To increase the filing volumes in Africa and to make it attractive for IP counsel to invest larger percentages of their portfolios in Africa, we think that digitization, efficiency and automation at IPO's and in practice are key issues that require much more attention in Africa. Global IP and also its practice, at least when it comes to filings, prosecution and renewals is becoming fast, digital and paperless. The corresponding expectation of the client is that technological advancements mean that the administrative components of filing and prosecution ought to be completed with relative ease and at a low cost. However, since administrative work in many African jurisdictions often needs to be done manually, this results in a high administrative burden of the old kind, with higher associated costs that are much more difficult for an in-house IP counsel to justify to their boards as necessary costs.

The cost and convenience issue is not only about the direct cost of filing, but also the cost burden placed on an in-house team which often is under budget pressures. If an in-house counsel files many patents and trademarks in an administratively inefficient jurisdiction, the administrative burden could be absorbed by either hiring more paralegals or by spending more on layers of agents to manage the administrative burden. Either approach can be costly and the question can be raised if it really justifies doubling the size of the budget to pay several in-house paralegals or agents to spend their day chasing after files that are lost. From this perspective, in an era where IP strategy is a middle management issue and cost reduction is an upper management constraint, it is easy to see why filing jurisdictions that are perceived as costly and inefficient are simply struck off the list of filing destinations.

Efficiency is not all about automation and being digital, as someone still has to do the work. But, in Africa a lack of digitization in many jurisdictions and in some instances more general inefficiency can create enormous administrative burdens, least not because some routine tasks such as performing a search have to be done manually whereas there is an expectation by the client that basic information ought to be easily available and accessible at a reasonable cost.

In conclusion, the possibility in the future for IP owners to file fast, digital and paperless in Africa, as can be done in North America, Europe and increasingly in Asia, might be the missing ingredient that is preventing a filing boom in Africa.

There is indeed a lot of hope that change is on its way on the continent, but this change needs to accelerate. One example is Microsoft's 4Afrika program, which is reported to be developing an online IP registration system in Kenya and for other African jurisdictions. Then of course, in South Africa the PTO's online platform and extensive efforts made by the registry to digitize is an encouraging step in the right direction.

However, more needs to be done for there to be a digital culture, which is becoming the norm in developed countries and this cultural shift has to be driven by IP professionals. For our part, paper files and manual diaries for example, are archaic and as African IP attorneys we should try to be as digital and paperless as is legally possible to drive and support the necessary changes at our IPO's. Ideally, a technological shift across the entire African industry would reduce the overheads of African IP firms, increase the volumes of substantive work that clients are more prepared to pay for and in general increase the client's appetite for filing higher volumes in Africa. We hope so.

The article was first published on Afro IP in September 2017.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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