IP Litigation in Africa

By Darren Olivier

This article by Darren Olivier, Head of Brand Enforcement, Bowman Gilfillan, South Africa, highlights some of the more recent IP dispute developments across the African continent. Mr. Olivier is a co-founder of the Afro-IP blog, which publishes regular articles and updates on IP in Africa.

Africa, a continent of 54 countries, with a population of around one billion, produces relatively few reported cases of IP-related disputes. Apart from a steady stream of IP decisions emanating from South Africa, there is a dearth of information from the rest of the continent and such information, if and when available, tends to reach only those in the know. Most IP practitioners are, therefore, unaware of how IP is enforced on the continent. As a consequence, IP investment in Africa has been treated with some apprehension, or there has been an assumption that effective IP rights enforcement is not a prerequisite for doing business there. However, there is evidence that this is changing.

Online media, such as Afro-IP, World Trademark Review, Managing Intellectual Property and the WIPO Magazine, have stepped up efforts to facilitate access to information on the IP situation in Africa. The cases below are but a few of those that have recently come to light. Whether it is that more is now known about African IP rights enforcement or that its effectiveness is improving is not altogether clear. However, one thing is certain – that IP dispute resolution is alive and well in most economically vibrant economies on the continent.

Some 15 million people in Ethiopia depend on the coffee sector, which generates 60 percent of the country’s export earnings.

Ethiopia’s coffee

In an IP dispute with Starbucks over U.S. registration and use of trademarks for its premium coffee beans, Ethiopia recognized an opportunity to negotiate with the company and settled the dispute in an innovative way that may have long-term benefits for its people. Instead of attempting to extract cash in the form of royalty payments, the settlement aimed to increase Ethiopia’s brand recognition and the demand for its coffee beans in a bid to generate future wealth for the country. According to the settlement, Ethiopia will select the global distributors for its coffee and set the conditions for sale. Ethiopia charges no royalty fees for coffee distribution licenses but, in return, asks distributors to market each type of coffee under its particular brand name. (See “Making the Origin Count: Two Coffees,” WIPO Magazine 5/2007.)

South Africa – Trademarks on the front line

No less than four trademark cases reached the Supreme Court of Appeal, South Africa’s highest commercial court, in 2009, and a significant number of other cases appeared in the law reports of the High Court. This is indicative of the ongoing healthy debate on IP issues in South Africa, where information on IP enforcement in the country has become increasingly accessible, in particular in the areas related to counterfeiting and domain names.

In 2010, the country will be hosting the FIFA World Cup football tournament, whose revenues directly depend on the country’s ability to adequately protect the IP rights of its official sponsors. There have already been a number of cases of international brand owners effectively enforcing the ambush marketing provisions of the Merchandise Marks Act 1943, as amended. (See “Defending its turf: FIFA combats Ambush Marketing,” WIPO Magazine 4/2009.)

No passing off in Namibia

The strength of Namibia’s IP system was tested recently in the passing off case of Guido-Dirk Gonschorek and Others v Asmus and Another. The case arose after Asmus sold part of its ASCO branded business (car hire, panel-beating, properties and yacht chartering) to Gonschorek. Asmus sued successfully both on the grounds of passing off and under the Close Corporation Act 26 (1988). In dismissing an ensuing appeal, the Judge considered what was meant by an "undesirable name" and "calculated to cause damage" in the Close Corporation Act, as well as the principles of passing off, when applied to the sale of part of a business (including its name) and the purchaser’s subsequent use of that name for other business purposes.

Kenya – A controversial patent decision

In a case that has already led to much discussion in Kenya, the Industrial Property Tribunal has ruled that it has no jurisdiction to hear applications to revoke patents granted by the African Regional Intellectual Property Organization (ARIPO). The ruling arises from an application by Chemserve Cleaning Services Ltd to revoke patent AP 773 held by Sanitam Services (EA) Ltd. The decision:

• indicates, unsurprisingly, that the provisions of national laws are very important when enforcing and defending rights to ARIPO-granted patents; and
• may provide more reasons for IP portfolio managers to use the ARIPO system because of the difficulties in having certain rights revoked. Filing for rights using both the local and ARIPO systems may give litigators useful options.

An Appeal Board judgment at ARIPO

The Kenyan company Sanitam Services (EA) Ltd was again in the spotlight when it appealed ARIPO’s decision to remove its patent AP 773 "Foot Operated Sanitary/Litter Bin" from the register due to non-payment of annual maintenance fees. The patent was granted on October 15, 1999, but maintenance fees were consistently received late. The Appeal Board concluded that both parties were to blame for the delays in payments as ARIPO had failed to send reminders, which it ought to have done. Consequently, the Appeal Board ordered that the patent be reinstated in Kenya and Uganda (the appeal was dropped in respect of Botswana, Zambia and Zimbabwe).

ARIPO was urged to strictly respect the Harare Protocol on Patents and Industrial Designs, in particular with regard to time limits, information delivery, application procedure and processing, appeals procedure and the rules of natural justice.

Lessons from Uganda

The High Court of Uganda in Anglo Fabrics (Bolton) Ltd and Ahmed Zziwa v African Queen Ltd and Sophy Nantongo ruled that African Queen Ltd and Sophy Nantongo were infringing the registered trademark “Mekako” and passing off their medicated soap product. The plaintiffs were granted an injunction, and the defendants ordered to pay a fine. The case is interesting in a number of respects:

• Speed: The case was decided within 16 months of its being launched.
• Transfer of ownership: The case has significant implications for brand owners acquiring or disposing of trademarks in Uganda, who may be best advised to include a separate transfer of ownership document – duly stamped – in their records.
• Reliability: The tests for both infringement and passing off used by the Court will be familiar enough to common law lawyers. For example, the Judge was guided by the five pointers in the English case of Reckitt & Coleman Ltd v Borden Inc (also known as the Jiff Lemon case) for determining passing off.
• ARIPO recognition: The judge inferred that ARIPO-registered trademarks designating Uganda would be enforceable.
• Costs: The Court ordered that interest be paid at the rate of 25 percent per annum.

Turning west – Nigeria

The Nigerian Copyright Act has long provided for civil enforcement against copyright infringement. However, with a slow-moving justice system and few copyright-trained attorneys, civil enforcement seemed to be more dream than reality. That changed in 2009 when the Musical Copyright Society of Nigeria (MCSN) successfully sued telecommunications provider Zain for copyright infringement, to the tune of 100 million Naira (approximately US$674,000). Infringed works had been used in advertisements and sold as ringtones. The fact that MCSN was able to obtain a judgment of infringement of foreign-owned songs is good news for international collecting societies, as well as for Nigeria (Source: Aurelia J. Schultz, Afro-IP).