It is not a closely guarded secret that sub-Saharan Africa currently is a node for economic growth and that the trend is likely to continue in the long term. The World Bank issues a bi-annual report entitled “Africa’s Pulse” that summarises developments in the region and comments on its future prospects. The latest “Africa Pulse” report is predicting growth for sub-Saharan Africa in 2013 - 2015 to be in excess of 5% for that period, with slightly over 6% predicted for 2013.
Considering that the sub-Saharan region as a whole is growing at more than 5% per annum despite certain exceptions, such as the war torn DRC and South Africa that is experiencing slightly milder growth, there are currently countries in the region that are experiencing growth of higher than 7%.
For South African companies, there is an unprecedented opportunity to expand, especially in the consumer goods market, which currently makes up 60% of sub-Saharan Africa’s economy.
Brand strategy is often an aspect of expansion that is overlooked by South African businesses, possibly a result of perceptions that sub-Saharan Africa has a “wild west” trading environment that is not supported by adequate legislative and enforcement systems. Whilst it is often true that laws in certain African countries are lagging behind modern legislative developments, it is a fact that every country in sub-Saharan Africa has an applicable formal or informal system in terms of which trade marks can be registered or protected to some degree. Even in countries such as South Sudan, there is an informal Register of Trade Marks.
There are a number of good business reasons why an expanding business should protect its brands in sub-Saharan Africa. Some of these reasons are summarised briefly below.
Trade mark rights are generally territorial. Therefore identical or confusingly similar trade marks are often owned by different proprietors in different countries.
The failure to protect a brand in an economically significant African country could mean that somebody else lawfully appropriates and registers the brand in that country.
Some countries have legislation to protect so-called “international well-known marks” of the calibre of marks such as MACDONALDS or NIKE. The brand names of most South African businesses will not fall into that exceptional category.
The first to file rule
In most countries, especially former French, Portuguese, Belgian and Italian colonies, the rights in a brand are determined by the person who files the first trade mark application that proceeds to registration in that country. In some former British colonies, a person who can show the first use of a trade mark in the country may acquire the earlier right if those earlier rights can be proven to the satisfaction of a Court. The process of proving an earlier user right often involves litigation and can be costly and uncertain.
For a South African business that is expanding into a new market where its goods are not yet available, whether or not user rights are recognised, filing a trade mark application is the first step to achieving brand protection.
The scourge of counterfeit goods
It does not help if a business has a good product if somebody else has imitated the product, packaging and get up and introduced a cheaper, inferior and often dangerous product into the market on the back of the business’ hard earned reputation.
Africa is a dumping ground for counterfeit goods and owning a trade mark registration in most countries is the first step to combating the scourge.
In many of the major African economies, including Nigeria, Uganda, Kenya and Cameroon, owning a trade mark registration means that the owner can file a notification at Customs in those countries to stop and detain goods at the border that are not goods of the trade mark proprietor. We have seen many successful operations in sub-Saharan Africa where businesses that own trade mark registrations have reduced the inflow of counterfeit goods significantly.
RECENT DEVELOPMENTS IN AFRICA
We have said enough about the benefits of protecting a trade mark in Africa. We have indicated below some interesting recent legislative developments from the region that proves that the authorities in many countries are serious about brand protection in those countries.
In response to criticism by some economists that counterfeit goods are limiting growth prospects in sub-Saharan Africa, Ethiopia has become the latest country in Africa to take steps to combat counterfeit goods.
With the new Trade Marks Proclamation Act of 2006 and the publication of the Trade Mark Regulations on 24 December 2012, the Ethiopian Customs authority may, on the basis of a written application filed together with supporting documents, detain and seize suspected counterfeit goods entering Ethiopia.
Burundi’s economy grew at an estimated 4% in 2012, slightly lower than the expectations for the region. Some economists who analyse economic prospects in Burundi have been commenting that the country needs serious infrastructure upgrades to increase its growth going forward.
From an IP perspective, a challenge in Burundi in recent years has been that a new Trade Marks Act was adopted in 2009 but there were no Regulations implemented to ensure the day to day practical application of the legislation. As a result of pressure from businesses and an initiative by the government to implement the new Trade Marks Act, new Regulations have in recent months been drafted and signed into law.
The new Trade Marks Act and Regulations in Burundi, once properly implemented, will bring the country’s laws closer to acceptable international standards.
Botswana has for some decades been seen as South Africa’s stable little brother, in some cases also more efficient than South Africa in terms of its monetary and banking systems.
Botswana has a new Industrial Property Act 2010 with implementing Regulations that came into force on 31 August 2012. The new Act domesticates the obligations the country has in terms of a number of international arrangements, including the Patent Cooperation Treaty, which is an international filing system for patents where a business can file a single patent application to commence the patent application process in a number of countries, including now Botswana.
From a branding perspective, Botswana is also now part of the Madrid system, in terms of which a single trade mark filing can commence the process of obtaining trade mark protection in several countries that have implementing legislation.
During September 2012, the government of Sierra Leone passed into law the new Patent and Design Act of 2012.
The new Act provides for the protection of internationally well-known marks so as to bring the country legislation in line with the Paris Convention on the Protection of Industrial Property. The new legislation also makes provision for the national filing of patent and design applications, whereas previously the extremely old colonial laws extended United Kingdom patents and designs to Sierra Leone.
As you will note, there are a number of positive developments in Africa right now in terms of governments making efforts to create friendlier and more efficient business environments.
From a business perspective, the question arises which African markets are worthwhile to pursue trade mark applications in? There are, of course a number of subjective and objective considerations. Popular countries to pursue applications are often tied to areas where economic growth has been high for the past three to five years where businesses have already set their eyes on expansion. These countries include Nigeria, Angola, Mozambique, Kenya and Tanzania.
Even so, in addition to the “popular” countries, there are future growth prospects in a number of countries that the World Bank’s latest report mentions are likely to achieve growth of higher than 7%. These countries include Sierra Leone, Niger, Cote d’Ivoire, Liberia, Ethiopia, Burkina Faso and Rwanda.
In summary, wherever you take your business in Africa, rest assured that (albeit sometimes with difficulty) it is possible to protect and enforce your brands and other IP rights.