IP IN M&A STILL NOT ALWAYS RATED AS IMPORTANT

Tuesday, May 27, 2014
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With Africa considered the continent of opportunity, it goes without saying that merger and acquisition (M&A) deals have been highly active over the last few years with the same expectation predicted for some time yet. However, it is disturbing that very often intellectual property (IP) protection, the most common being copyright, trade marks, and patents, is forgotten or the last aspect of the deal to be given attention.

One reason IP protection is often neglected in Africa, is the daunting task of acquiring excellent legal IP services on this often tricky and unfamiliar continent, as qualified and highly experienced IP practitioners are few and far between (although can be found via INTA or World Trademark Review). For many, Africa is the unknown and doing business is different to anywhere else in the world. It speaks a different language and without the right partner with local knowledge, it can often be a cumbersome and daunting process. In addition, not all jurisdictions are well equipped to handle IP rights since, in some instances, the court systems are slow in hearing these matters or alternatively, are riddled in corruption which is frequently found on this continent of opportunity.

To add to this, national registries may not efficiently handle IP matters due to a lack of resources such as manpower, computers or lost records of applicants, marks and patents amongst others.  It is also often not cost effective to make use of IP expertise due to the high legal costs and/or official fees for the protection of IP assets.

In some markets it is difficult to obtain information on the laws that govern IP or how IP laws work. This is because there is no incentive for publishers or law practitioners to write IP journals, law reports or reference works.  Additionally, difficulty in obtaining information is enhanced by the lack of or poor penetration of telecommunications, such as internet access, which hinders access to information on official websites.

While all of this does not exactly encourage IP protection, it remains a vital part of any M&A deal in Africa, no matter its size, and new businesses interested in gaining a long-term foothold in the African market should consider all aspects of their business and identify any intellectual property protection that is required. Inadequate IP protection over an innovation, for example, may provide an opportunity for bigger competitors to adopt the product or service and aggressively commercialise it, thereby gaining the financial benefits that are due to the business that originally developed the product or service. Trade mark, copyright design and patent protection are all instrumental in ensuring the longevity and constant reinvention of any business.

Trade mark is a territorial right meaning that it must always be protected in the countries businesses wish to penetrate. Protection of a trade mark right will require the registration in the country’s national registry, in accordance with its trade mark law.  However, a blanket trade mark protection in several countries is provided for under the Organization Africaine de la Proprietè (OAPI) and African Regional Intellectual Property Organisation (ARIPO).  These regional bodies benefit one’s trade mark by allowing registration under these bodies to protect the trade mark in all or most designated members of OAPI and ARIPO.

OAPI provides protection in seventeen French speaking member countries including Benin, Burkina Faso, Guinea, Guinea Bissau, Cameroon, Ivory Coast, Central African Republic, Mali, Chad, Mauritania, Congo, Niger, Equatorial Guinea, Senegal, Gabon, Comoro Islands, and Togo.

Registering a trade mark in one member state of OAPI provides protection in all member states of OAPI, unlike ARIPO, which provides that businesses must designate the ARIPO member states they intend to protect their intellectual property rights in. ARIPO consists of eighteen countries Botswana, Malawi, Sudan, Gambia, Mozambique, Swaziland, Ghana, Namibia, Tanzania, Kenya, Rwanda, Uganda, Lesotho, Sierra Leone, Zambia, Liberia, Somalia and Zimbabwe.

Trade mark protection may also provide a blanket protection in several member states of the Madrid Union as members of the Madrid Union are signatories to the Madrid Agreement and/or Madrid Protocol.  There are currently sixteen African countries and the European Union, United States, India, Australia, Turkey, Iran, Japan and China in the Madrid Union. These African countries include Egypt, Morocco, North Sudan, Algeria, Kenya, Lesotho, Liberia, Mozambique, Sierra Leone, Swaziland, Zambia, Namibia, Botswana, Madagascar, Ghana and Sao Tome.

Protection under the Madrid Union gives companies the benefit of having a centralised single filing route registration in all or most of the designated member states.

Patents, like trade marks, are territorial rights which require that registration is done in the country a business wishes to penetrate, in accordance with the law of that country or region.

International protection of a patent is administered under the Patent Cooperation Treaty (PCT) and there are 148 countries who are members of the PCT. Examples of African Countries members to the PCT include Angola, Kenya, Libya, Morocco, Mali Uganda, South Africa, Zambia, Zimbabwe, Benin, Botswana, Central African Republic, Congo Côte d’Ivoire, Cameroon, Senegal, Sao Tome and Principe, Chad, Togo and Tanzania, amongst others.

Protection under PCT provides a single “international” patent application which covers all or most countries designated in the application.

When it comes to industrial designs, these are also territorial rights which are protected by registering it in accordance with the law of the country intended to penetrate. However, international protection for an industrial design is given under the Hague Agreement.

The Hague Agreement consists of 61 member states which include the following African countries Egypt, Gabon, Ghana, Mali, Morocco, Namibia, Niger, Rwanda, Sao Tome and Principe, Senegal, Tunisia, Benin, Botswana and Côte d'Ivoire.

Businesses are able to designate protection of their trade marks in all member states or most member states of the Hague Agreement.

Copyright, being a right awarded to authors of film, books, music, and computer programmes among other literary works, is an automatic right given to the expression of an idea; thereby making it an automatic right meaning it is not necessary to register the right to get protection.

However, if businesses intend to register their copyright, they will be required to register that right with the national registry of the country they intend to penetrate.

The importance of businesses protecting their IP, whether in single or multiple jurisdictions, should never be underestimated when looking to expand into complex African markets and should always be a priority consideration in any M&A deal.