It is Estimated That Only 10% of Intellectual Property Developed in SA is Registered Overseas, Despite a Scramble By the International Community to Protect Their Patents And Copyrights From Theft in theGlobal Village.

Copyright lawyer Owen Dean says the reason appears to be partly the financial constraints, particularly for inventors and small business, and partly ignorance.

Research shows that, unlike the US and other leading innovators, South African business tends to depend on the domestic patent system to secure local distribution and development rights over inventions from outside.

This means that SA often loses control of its intellectual property to foreigners, with consumers being forced to pay premium prices for products that were actually developed with local intellectual capital. Local companies lose out on an opportunity to exploit this product and bring in foreign capital.

While local companies are willing to buy expensive machinery and spend on corporate image, they do not grasp the value of intellectual capital. Patent holders not only have complete control of a product for 20 years, but can also generate royalties from licensed sales.

Government is aware that it is losing out on an important driver for economic growth and job creation.

"Companies are often not aware that tax breaks are offered for companies investing in research and development, or that registration subsidies are offered by the trade and industry department to companies wishing to register intellectual property overseas," Dean says.

The value of patenting intellectual property, which can only be done in the first year after it is locally patented, becomes evident to business only when it is too late to obtain a patent and the product is already on the market, he says.

"There is only one chance to register a product and if you do not do it within the first year, you lose that chance forever."

And it's not only businesses who are guilty of not securing this invaluable product. A study carried out by the department of science and technology shows that South African academics secure patents at less than 5% of the rate of their developed-world colleagues.

Dean understands the value of protecting intellectual property. He successfully fought and won a copyright battle against US companies on behalf of the estate of South African songwriter Solomon Linda, who wrote Mbube, on which the hit song The Lion Sleeps Tonight is based.

Linda, who has never been credited as co-author, died a pauper in 1962, despite the song having been recorded by over 150 artists.

The settlement has never been revealed but has been estimated to be close to R15m by some.

According to Dean, copyright is the easiest intellectual property right to prove since it does not require registration. It is important to note, however, that this can also work against a company that outsources work, since the work is owned by the creator unless copyright ownership has been assigned in writing.

"It is possible to apply for a patent directly to the patent office, but this leaves room for error, which could mean loss of some of the inventor's rights," he says. "If the local patent is properly done, it definitely helps when it comes to drawing up a foreign patent."

Foreign patent protection can cost between R20000 and R30000 and offers protection in terms of that country's laws, so it is important to find a foreign lawyer to assist.

Dean says developed countries like the US, Japan, Australia and Canada give the best product protection. "Their laws are state-of-the-art and the legal systems are relatively efficient, so there are good prospects of your rights being protected," he says.

In African countries, however, there is less protection. "African countries in general are disastrous. Infrastructure and the entire system for enforcing rights is not good."

SA received only qualified approval, with Dean pointing out that while the country's intellectual property laws are in line with best international practice they have not been updated since 2000, despite intellectual property progressing in leaps and bounds since then. "There are many things the law should address that it now does not," he says.

On top of this, foreign countries, the US in particular, are concerned with SA's inability to enforce the laws, a problem which was acknowledged by trade and industry department director MacDonald Netshitenzhe at last year's World Intellectual Property forum.

The protection of intellectual property rights is one of the sticking points in SA's present trade talks with the US.

Copyright piracy alone costs legitimate business and governments about $600m a year, while it has been said SA stood to lose R500m from illegal music sales last year.


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Chantelle Benjamin
Johannesburg


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