As of 1 July 2019, the official fees payable on South African patents, registered designs, and patent and design applications will be significantly increased for corporate entities.

In terms of these fees, there will be a separation between “corporate” entities and “SMMEs”. But what defines an SMME? The South African Patent Office has advised that essentially, SMMEs will be defined in accordance with the National Small Enterprise Act, 1996, as amended. This is a fairly complex definition, but in essence, it means a separate and distinct business entity, together with its branches or subsidiaries, if any, including cooperative enterprises, managed by one owner or more predominantly carried on in any sector or subsector of the economy mentioned in column 1 of the Schedule and classified as a micro, a very small, a small or a medium enterprise by satisfying the criteria mentioned in columns 3, 4 and 5 of the Schedule.

The most significant official fee increase will be a once-off fee increase that will apply to the filing of new patent and design applications and to renewal fees.

In particular, in regard to the increase in renewal fees for patents and designs, the new official fee for corporate entities, which is payable annually, is a hefty increase compared with the current sliding scale of fees depending on the annuity due.

In addition, all other official fees will increase by 5% from 1 July 2019. The new fee structure also provides for all official fees to increase annually by 5%.

Recommendation for clients seeking to save on costs

For clients seeking to save costs, we would strongly recommend that they consider instructing their South African patent attorney or renewals agent to attend to bulk payment of their South African renewal fees to term before 1 July 2019 so as to avoid the renewal fee increase.

Because the official fees will distinguish between corporates and SMMEs, two new forms have been introduced: Form P27 for patents and Form D19 for designs, which will constitute a declaration on entity status by the applicant. These forms must be filed with a new application, or on payment of a renewal fee in order to claim the SMME rate. The applicant will need to declare that they have read and understood the definition of an SMME and that to their knowledge and belief, as of the lodgement date, they were a SMME in accordance with the definition and that they are entitled to pay fees at the SMME level in respect of the application or renewal. We are currently waiting for clarification on when the new forms will be made available and on possible extension of the deadline by which these forms are to be filed. Should no Form P27 or D19 be filed, the application or renewal will be billed at the corporate rate.