South Africa: Getting High On Intellectual Property Rights

Last Updated: 13 December 2018
Article by Kareema Shaik
Most Read Contributor in South Africa, December 2018

Unless you've just come off a social media cleanse, you will have heard that the Constitutional Court recently issued a decision declaring certain provisions of the Drugs and Drug Trafficking Act and the Medicines and Related Substances Act unconstitutional. The provisions in question were found to infringe upon the right to privacy, entrenched in Section 14 of the Constitution.

In a nutshell, the 74-page decision (lengthy, even by lawyer standards), means that it is now legal for adult persons to possess and use cannabis in private and to cultivate cannabis in a private place for personal consumption...in private.

While the decision does not change the law on trading in cannabis and cannabis products, some consider it South Africa's first step towards joining the ranks of countries in which cannabis trade and use (whether it be medicinal or recreational) has been legalised. There are certainly a number of local stake-holders advocating for this.

Legalising the commercialisation of cannabis has the potential to boost the local economy, including the agricultural industry, the manufacturing industry and the Fast-Moving Consumer Goods sector.

Globally, brand owners have recognised the potential and have been looking at ways to invest in the cannabis industry, either by way of licence agreements or product extensions. For instance, studies have shown that the consumption of alcohol has decreased in countries or states where cannabis has been legalised. This has encouraged breweries to experiment with cannabis in their products. Cannabis-infused beers are already a global trend and a brewery in Canada is currently looking into brewing a beer from cannabis instead of barley.

South African companies are clearly already taking notice of the incredible potential. A locally crafted beer containing hemp (a less scary variety of cannabis which is border-line legal) has just become available in stores. The beer is called Durban Poison and can probably be found at your nearest Tops! outlet (if you're asking for a friend)! Be warned though, hemp contains little to no tetrahydrocannabinol (THC), the stuff in cannabis responsible for the "high", so the buzz you'll feel is probably from the alcohol.

To get ahead of the curve, brand owners may wish to start developing a strategy to surf the marijuana wave. The possibilities are endless, from the more obvious (dry cannabis to brownies and medicinal oils to ointments) to the more inventive (candy to beauty products or even dog treats), not to mention paraphernalia and services to help consumers "light up", "bubble up" or "brew up".

New goods and services demand a strong IP focus and new strategies. Any solid strategy will include trade mark protection.

In certain jurisdictions, this has proven to be difficult. For instance, in the USA, it is still not possible to obtain a federal trade mark registration for cannabis products.  The registration of a trade mark for goods or services that are not lawful is prohibited in terms of local trade mark laws. Although cannabis use (either recreational or medicinal) is legal in some States, it remains illegal in others.

Locally, two possible obstacles arise.

Section 10(12) of the Trade Marks Act prohibits the registration of a mark of which the use would be contrary to law, contra bonos mores (contrary to public policy or morals) or likely give offence to any class of persons.

What is considered moral or offensive changes with time. For instance, an application for BITCH in class 25 covering clothing was refused in 1998 but the trade mark SKINNY BITCH for wine and other alcoholic beverages has existed on the register since 2005. The mark BITCH in class 3 for soaps, perfumes and cosmetic products was also accepted in 2011 and has since proceeded to registration.

An application filed for FAT BASTARD in class 33 covering alcoholic beverages was also provisionally refused in 2007 on the basis that it was offensive, but this decision was reversed after submissions were filed explaining how the trade mark was adopted and that it has widely been used without complaint from the public.

Thanks to some fancy marketing footwork, the face of cannabis has transformed globally. "Artisanal" (hipsters, rejoice!) and "luxury" cannabis products are all the rage now in countries like the USA and the Netherlands. In addition, trendy packaging and a professionally run industry have gone a long way to alter market perceptions. That seems to have seeped through to our local market which is still, relatively speaking, quite conservative. An application for the device of a cannabis leaf (below, left) in class 25 for clothing, shoes and accessories, was rejected in 1998 but an application to register the word mark CANNABIS CLOTHING was accepted, subject to conditions, in 2016. The CANNABIS ENERGY DRINK label (below, right) was also registered in 2015, with no apparent issues.

Durban Poison, the internet tells me, is the street name for a specific strain of cannabis. The mark DURBAN POISON is not objectively offensive, but those who understand the reference may take offence to its use as a trade mark in relation to beer (or any other product for that matter). The brewery selling Durban Poison beer may run into difficulties on this basis should it seek statutory protection for the mark. However, looking at the potentially offensive marks already on the trade marks register, it may well fly...at least on the first obstacle.

Another possible obstacle would be Section 10(2)(b) of the Trade Marks Act which prohibits the registration of a mark which is descriptive of, amongst others, the kind or quality or other characteristic of a product. Marks which are common or reasonably required for use in the trade will fall foul of Section 10(2)(b).

It is arguable that, since the beer in question does not contain the Durban Poison strain of cannabis, but rather hemp, the trade mark is not descriptive of the goods in question. This leads us back to the first obstacle in Section 10(12), which also prohibits the registration of a mark which is deceptive. Using the mark DURBAN POISON in relation to a beer not containing the Durban Poison strain of cannabis is perhaps deceptive.

Apart from trade mark laws, various other laws and regulations may also come into play, including labelling and advertising laws, as well as plant breeders rights and plant variety laws. One would imagine that the cannabis industry would be as strictly regulated as the tobacco industry in South Africa. Non-compliance with such laws may also lead to problems if you're seeking trade mark protection.

In addition to trade mark protection, brand owners should look at other forms of IP available to them. Formulations and medical and non-medical indications for cannabis products or even genetically modified cannabis may qualify for patent, plant variety and/or copyright protection, provided the necessary requirements are met.

Domain names should also not be forgotten. A quick search revealed that has already been snapped up! So too has. A gTLD is not yet available but, once (or if) it is, brand owners should consider registering their most valuable trade marks in this space to explore new opportunities and avoid third-party abuse.

For now, the commercialisation of cannabis (apart from hemp) in South Africa is theoretical, since the cultivation and use of cannabis is only allowed in private. However, legitimate commercial opportunities will inevitably shape policy and decisive IP strategies will pay dividends. Choosing a protectable brand from the start is essential!

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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