africa expert guide

August 2015

Opportunities & Developments - Africa 2015

EXPERT GUIDE

2 3August 2015 August 2015

ExpErt guidE: OppOrtunitiEs & dEvElOpmEnts - AfricA 2015

38

44

34

SNAPSHOT: Key Statistics for Africa

Rwanda

Changes in the Law and Their Effects, Rwandan corporate and business context

Nigeria

Ministerial Consent: A Prerequisite in Merger and Acquisition Transactions Involving Oil and Gas Assets

South Africa

Patent Enforcement In The Life Sciences Sector In South Africa – Quo Vadis?

The South African Pharmaceutical Sector

South Africa – Combatting cartels and abuses of dominance high on the Competition Commission’s agenda

Contents

Retail Law In South Africa & Africa: Recent Trends

International Taxation in South Africa: Double Tax Agreements, & Legislation

Zimbabwe

Is Africa Ready For The Intellectual Property Influx: An In-Depth Analysis Of The IP Regime In Africa, With Special Attention To The Zimbabwean Position

Expert Directory

6

8

10

14

16

20

22

26

30

34

38

42

44

5222

30

10

Contents

Fenice Media Ltd | 101 The Big Peg | 120 Vyse Street | Birmingham | West Midlands | B18 6NF | United Kingdom | Tel: +44 (0) 121 270 9468 | Fax: +44 (0) 121 345 0834 | www.corporatelivewire.com

Contributing OrganisationsRwanda Bar Association,

G. ELIAS & Co., BMatanga IP Attorneys,

Adams & Adams, Norton Rose Fulbright,

ENSAfrica, B Coutsoudis & Associates

Chief Executive OfficerOsmaan Mahmood

Managing DirectorAndrew Walsh

Editor-in-ChiefJames Drakeford

Publishing DivisionJake Powers, John Hart, John Peterson

Directors Sameena YatesSiobhan Hanley

Awards DirectorsLeah Jones, Elizabeth Moore,Chris Barry,Rupert Hemingway

Awards CoordinatorRoxana Moroianu

Art DirectorTimothy Nordan

Senior DesignerLai Chun Lok

Deputy EditorJosh Hill

Research MangerDavid Bateson

Marketing Development ManagerDilan Parbat

Project ManagersIbrahim Zulfqar, Rocky Singh, Zoe Cannon

Account ManagersNorman Lee, Thomas Patrick, Kerry Payne, Sophie Smith, Jade Hurley, Gemma Palfrey

Production Manager Sunil Kumar

Competitions ManagerArun Salik

Administration ManagerNafisa Safdar

Data AdministratorDan Kells

Head of FinanceJoseph Richmond

Senior Credit ControllerJorawar Johl

Accounts Assistant Jenny Hunter

www.corporatelivewire.com


ExpErt guidE: OppOrtunitiEs & dEvElOpmEnts - AfricA 2015

Introduction

Foreign investors may have been dis-couraged from pouring money into Africa by last year’s Ebola outbreak, but figures for 2014 showed a sur-prisingly positive picture of the re-gions M&A market which might have shocked many detractors. The key to the region’s better than expected performance was internal dealmak-ing, with intra-African deals rapidly overtaking global deals and more than making up the shortfall. Africa is, in fact, on course for beating its record high of $16.1 billion in deals set in 1998 despite a 16% fall in in-vestment from outside countries.

This has been the third year in a row that outside investment has dropped, but with six months left to go there is still time for a dramatic turnaround. Megadeals by drinks giant Coca Cola and French insurance group Axa an-nounced in 2014 showed that large foreign investors still recognise Af-rica’s potential, and an IMF forecast of 5.75% economic expansion in the

region by 2017 could give businesses the confidence they need to invest.

Urban cities such as Dar es Salaam and Lagos are expected to experience rapid growth of their young popula-tions, according to a 2015 trend re-port by Ernst and Young. This has led to a shift in focus towards new opportunities targeting the shift-ing demographics. Beer and spirits are providing a fruitful investment in a continent which is expected to see the largest increase in the legal drinking age population by 2018. Likewise, a younger, more tech-savvy population has contributed to mo-bile internet adoption in Africa tak-ing place at almost double the global rate. Financiers are now beginning to take notice too, with 2015 see-ing a wave of deals to fund growth across the sector. Most recently, Ni-gerian giant Interswitch announced that it intends to list in London and Lagos, making it potentially the first Nigerian tech stock in the UK.

Editor In Chief

James Drakeford

IntroduCtIon

Nigeria rwaNda

South africa Zimbabwe

gdP % chaNgegdP (uSd billioN)

gdP Per caPita (uSd)

PoPulatioN

total iNveStmeNt (% of gdP)uNemPloymeNt rate

6.31

1.525

3.169

7.007

573.652

350.082

13.672

8.012

3,298.03

6,482.75

1,031.04

722.103

15.187

20.356 20.356

25.197

25.1

13.229

173.938

54.002

13.261

11.096

iNterNatioNal moNetary fuNd, world ecoNomic outlook databaSe, aPril 2015

key StatiSticS for africaSNaPShot:

rwanda


ExpErt guidE: OppOrtunitiEs & dEvElOpmEnts - AfricA 2015 rwanda

Kabasha [email protected]+250 078 852 0804

Changes in the Law and Their Effects, Rwandan corporate and business context By Kabasha Vedaste

curities as well as the law on insol-vency matters were also adopted to repeal scattered legislation most of which were established in the colo-nial era before 1962.6 Many other laws followed as mentioned under note 3 within a period of three years, between 2009 and 2011.

The law relating to companies was published on 27 April 20097, this is the same day of its promulgation by the President of the Republic. Before even one year ended, the same law relating to companies and the law on security in movable property of 2009 were amended.8

Changes in the law relating to com-panies are mainly incorporated in the articles of association for any compa-ny, which is a good element for busi-ness owners or investors. Another pressing matter with amending law was easing modalities of registering a company, of requirement regard-ing issue of prospectus for private companies, use of electronic means in communication, etc. The effects of such changes as it appears were to ease the management of companies.

However, it might also be seen as a factor that made some investors or businessmen become reluctant in making decisions. Once a law is in the process of amendment, provi-sions under review may hinder the normal course of business and lead to business instability.

Moreover, in case of an original piece of legislation that has been amended many times, the user may have trou-ble making reference to the text in force. This can likely be the case in the Rwandan context where all the amendments to the original piece of legislation have not yet been up-dated in a consolidated version. And where the user applies the amended law, he shall face the rigor of the Con-stitutional principle that “ignorance of the law is not a defence”.9

Another good illustration taken at random is the amendment of in-vestment code to increase incen-tives granted to investors in order to attract them. If there has been no prior study to assess the impact, the country may face a reduction of tax-es collected.

Existing legislation is one of the pil-lars on which a country is ranked in annual World Bank Doing Business reports. Rwanda, has consistently demonstrated strong performance in the World Bank Doing Business Rankings in recent years with good progress across all the key indica-tors.1 Following significant changes to the methodology of the World Bank Doing Business Report, Rwan-da has been ranked 46th out of 189 countries in the 2015 report.2

Considering the up-surge in new business related laws, there is no doubt that the newly enacted leg-islation has tremen-dously contributed to the new performance of Rwanda in the Doing Business report.3

Amendment context and effect

It is obvious that our society keeps changing due mainly to new inven-tions, altering needs, etc. In the same line, the law has been dynamic in order to adapt with a changing so-ciety. The dynamism of law occurs

through adopting new laws, amend-ing or repealing existing ones.4 It is in that regard, some of the laws referred to above have since been subject to amendment regardless of their recent adoption.

There has been positive effects of such amendments, which justifies their implementation as provided in the explanatory noted accompany-ing a draft amending law. However, there are undesired effects. This

short article endeav-ours to go through the difficulties faced when continuously adapting the law. This is in reference to Rwanda and the pe-riod running from the

year 2009 up to present.

One of the prominent laws of great interest to business owners and in-vestors in any country is undoubtedly company law. In Rwanda, a modern law covering company matters was adopted in 2009 to repeal the prior law dated back in 1988.5

In the same period, two laws on se-

mailto:[email protected]


ExpErt guidE: OppOrtunitiEs & dEvElOpmEnts - AfricA 2015 south afrICa

If on one hand “an appreciation that principal and amending legislation must always be construed to form one coherent whole is of prime im-portance to drafters”.10 On the other hand, the amended law may be seen differently by law implementers.11

Conclusion

It is not possible to go through all amended laws and their possible ef-fects. However, as a general observa-tion, before amending a law, there is need for a thorough study on effects to follow. As seen above however, amending legislation is inevitable to move with the society constant dy-namism.

1 Those key indicators are: starting a busi-ness, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trad-ing across borders, enforcing contracts, resolving insolvency and labor market regulation. 2 World Bank, Doing Business 2015, ac-cessed from www.doingbusiness.org 3 Since 2009, the list of business and in-vestment related laws includes but not limited to the following laws: the law relating to compa-nies, the law on mortgage, the law on security in movable property, the law regulating capital market, Law establishing and organising the real property valuation profession,

Law relating to electronic messages, electronic signatures and electronic transactions, law on the protection of intellectual property, the law creating and organizing condominiums, Law establishing the Kigali International Arbitration Centre, the law on arbitration, the law governing labour, the law governing special economic zones, the law governing credit information sys-tem, different laws on taxation, etc4 THORNTON, G.C., Legislative Drafting, 4th ed, Butterworths, 1996, p. 403 et seq5 See Law No 07/2009 of 27/04/2009 relat-ing to companies (in Official Gazette No 17 bis of 24/04/2009)6 See respectively Law N° 10/2009 of 14/05/2009 on mortgages and Law No 11/2009 of 14/05/200 on security interests in movable property ( in O.G No special of 15/05/2009) and Law Nº 12/2009 of 26/05/2009 relating to com-mercial recovery and settling of issues arising from insolvency (in O.G No special of 26 May 2009)7 We have to bear in mind that this is the very same date of its promulgation by the Presi-dent of the Republic. This happens rarely and it is a good proof of the expeditiousness of that law8 See OGRR no special of 14 May 20109 Art. 201 of the Constitution of the Re-public of Rwanda of 04 June 2003 as amended to date10 THORNTON, G.C., Idem 11 A simple example can be to require a com-pany to issue a prospectus, hire a company sec-retary, increase tax or impose the purchase and use of an electronic billing machine by amending the existing law. Depending on the new burden to the company and its financial situation, a com-pany may opt for the closing its business or try other means such as tax evasion

http://www.doingbusiness.org

nigeria


ExpErt guidE: OppOrtunitiEs & dEvElOpmEnts - AfricA 2015 nIgerIa

fidelis adewole [email protected] +234 1 460 7890

Ministerial Consent: A Prerequisite in Merger and Acquisition Transactions Involving Oil and Gas Assets By Fidelis Adewole & Blessing Okhiria

right therein by any company with equity, participating, contractual; or working interest in the said Asset, through merger, acquisition, take-over, divestment or any such trans-action that may alter the ownership, equity, rights or interest of the as-signing company in question.

The Guidelines also set out instan-ces of assignment that will require the Minister’s consent to include: (A) assignment by way of exchange or transfer of shares; (B) assignment by way of merger wherein a holder of an Asset combine with one or more companies to form another com-pany; and (C) assignment by way of acquisition wherein the acquiring company directly or indirectly takes over the whole rights or interest in an Asset (including acquisition of in-terest by an entity in a parent com-pany whose affiliate has interest in an Asset).

The Guidelines have thrown up cer-tain issues that are relevant in Mer-ger and Acquisition transactions (“M&A”). A parent company (wheth-er Nigerian or foreign) whose subsidi-ary or affiliate is a holder of an Asset

will require the Minister’s consent before it can merge with any other company or sell its shares to a third party. The parent company could be mediate, indirect or ultimate par-ent of the holder or otherwise. The Guidelines empowers the DPR to lift the veil of incorporation of the hold-er to determine if the transaction in question constitutes an assignment under the PA Guidelines cl. 4.16.

The Guidelines are silent on when a company can be regarded as a parent of a holder of an Asset. It is unclear whether the test is based on share-holding or control. A company will be parent of a holder of an Asset where such a company has majority shares (directly or indirectly) in that holder. It will be somewhat difficult to de-termine if a company is a parent of a holder of an Asset where such a com-pany does not have majority shares (direct or indirect) in that holder. In our view, a company will be regarded as the parent of a holder of an Asset where company holds shares that are sufficient to direct/control the affairs of that holder or where such shares carry rights that gives the company control over the affairs of the hold-

The Department of Petroleum Re-sources (“DPR”) recently released Guidelines and Procedures for Ob-taining Minister’s Consent to the As-signment of Interest in Oil and Gas Assets (“the Guidelines”). By the Petroleum Act, 1969 (the “PA”) (First Schedule Paragraph 14) and the Oil Pipelines Act 1956 (the “OPA”) (sec-tion 17 (5)(d)), a holder of an oil prospecting licence (“OPL”), oil min-ing lease (“OML”) or oil and gas pipe-lines licence (“OGPL”) is required to obtain the prior written consent of the minister of petroleum resources (the “Minister”) before assigning any right, power or interest in the OPL, OML or OGPL.

The Guidelines have expanded the scope of an “assignment” in an oil and gas asset that requires minister-ial consent to include marginal fields in addition to OPL, OML and OGPL (each an “Asset”). The propriety or otherwise of this inclusion is not the focus of this article.

Prior to the Federal High Court’s de-cision in Moni Pulo Limited v. Brass Exploration Unlimited et al. (2012) 6 CLRN 153, it was unclear what

amounts to an “interest” in an Asset or if ministerial consent will be re-quired where a holder of an Asset is merging with another entity or the holder’s shares or that of its parent company are being acquired. The court held in Moni Pulo that the word “takeover” of an Asset as used in Paragraph 4 (b) of the Petroleum (Drilling and Production) Regulations means “where another person or company gains control of the affairs of a company, either by the acquisi-tion of the controlling shares or other interest in the company”. The Guide-lines have now made it abundantly clear that the Minister’s consent is required in the above-stated situa-tions.

The Guidelines (cl. 2) defines “inter-est in a licence or lease” as “any ar-rangement such as … sale, purchase, mortgage or other business arrange-ments by which a right, privilege, power, benefit, gain or advantage in a licence, or lease is transferred to or conferred either directly or in-directly on a third party”. Further, the Guidelines (cl. 3.1) states that an “assignment” involves the transfer of an Asset or an interest, power or


ExpErt guidE: OppOrtunitiEs & dEvElOpmEnts - AfricA 2015 nIgerIa

the DPR, upon the completion of the technical evaluation, a list of short-listed candidates for preliminary due diligence to (A) ensure that any com-pany that may not be acceptable to the government does not proceed to the commercial stage of the trans-action and (B) determine the tech-nical competence and financial ca-pability of the shortlisted companies (the Guidelines cls. 4.1(a) and 6.2).

DPR’s involvement in the transac-tion process is required to ensure compliance of the holder of an Asset with the Nigerian Oil and Gas Indus-try Content Development Act 2010 (the “NCA”) by giving priority to Ni-gerian indigenous companies in the divestment process (the Guidelines cl. 4.14) The NCA seeks to enhance the level of participation of Nigerians and Nigerian companies in the Nige-rian oil and gas industry.

In conclusion, the DPR’s approval must be obtained before “commen-cing” an M&A involving assignment of an Asset and such transaction cannot be validly concluded until the Minister’s consent is obtained.

Fidelis Adewole is a senior associate with G. Elias & Co., one of Nigeria’s leading business law firms. He is a seasoned litigator and has advised on numerous mergers and acquisi-tions across various sectors of the economy. He recently advised Asset Management Corporation of Nigeria on the sale of Enterprise Bank Lim-ited.

Fidelis holds a Bachelor of Laws de-gree from Ambrose Alli University, Ekpoma and was called to the Nige-rian bar in 2005. He is a member of the Chartered Institute of Arbitrators (UK) and Chartered Institute of Taxa-tion of Nigeria.

Blessing Okhiria is an associate with G. Elias & Co. She holds a Bachelor of Laws degree from University of Benin and was called to the Nigerian bar in 2012. She is a key member of the corporate unit of G. Elias & Co. responsible for the numerous merg-ers and acquisitions deals that the firm has advised on.

er. For instance, where the company has minimal shares but has, under an agreement with the holder, the right to nominate for appointment major-ity of members of the holder’s board of directors.

The Guidelines do not also prescribe the threshold of shares (whether in a holder of an Asset or its parent com-pany) the transfer of which will trig-ger the requirement of ministerial consent. As stated above and going by the decision in Moni Pulo, the de-terminant is whether the shares to be transferred will give the acquirer the control of the holder of an Asset.

The Guidelines would appear to have now introduced a two-stage approach towards obtaining Ministerial con-sent. First, the DPR must be notified and its prior authorisation obtained before the transaction can be com-menced. Second, it is only when the DPR has authorised the transaction that the application for ministerial consent can be made and obtained. The Guidelines are silent on when a transaction is deemed to have “com-menced”. In our view, a transaction

will be deemed to have commenced when the parties execute an agree-ment (for instance, a term sheet) or make any formal statement in respect thereof. However, any formal state-ment by the parties prior to the DPR authorisation would appear to be il-legal as the Guidelines (cl. 4(b)) pro-hibit any publication or press release in respect of a transaction without the DPR’s prior approval.

Accordingly, it will be unlawful for any party to the transaction to take any steps in the transaction until the authorisation of the DPR has been obtained. Parties, in commencing an M&A, must first seek and obtain the DPR’s authorisation before seeking the approval of the Securities and Exchange Commission (“SEC”), Ni-geria’s anti-competition regulator or other approvals (such as court order for the convening of meetings in a merger).

The Guidelines require that the DPR be carried along in the process of an M&A involving an assignment of any interest in an Asset. The holder of the Asset is required to submit to

south africa



alexis [email protected] +27 12 432 6202

Patent Enforcement In The Life Sciences Sector In South Africa – Quo Vadis? By Alexis Apostolidis

In short the TAC argued that the rights under the Patents Act should be viewed through “the prism” of the Constitution of South Africa, es-pecially with reference to Section 27 of the Constitution which provides that everyone has the right to have access to healthcare services, which includes the right to have access to medicines. For the purposes of argument be-fore the Supreme Court of Appeal, Sanofi-Aventis accepted that the is-sue of public interest could indeed play a role in a court exercising its discretion in the grant or refusal of a preliminary injunction. On the facts of the case, the court nevertheless overturned the lower court decision by granting the preliminary injunc-tion in favour of Sanofi-Aventis. It was clear from the facts of the case that there was no prejudice to pa-tients in either the private or public sector, being adequately served by the originator and the authorised generic and thus the issue of “public interest” was not adversely affected. The outcome was seen as a signifi-cant victory for innovator pharma-

ceutical companies as is perhaps best illustrated by the following extracts from the judgment: “Bearing in mind the commercial ad-vantage of first-entry to the generics market, it is common for a patentee of a pharmaceutical product to enter the market shortly before its patent expires with an alternative product that will compete with anticipated generics.” “The TAC’s opposition to the grant of the interdict (injunction) really comes down to no more than oppo-sition to the monopoly that the law confers upon a patentee. It submits that those who cannot afford Tax-otere, but are able to afford the price of Cipla docetaxel, will be prejudiced if distribution of the latter were to be prohibited. Where the public is de-nied access to a generic during the lifetime of a patent that is the or-dinary consequence of patent pro-tection and it applies as much in all cases. To refuse an interdict only so as to frustrate the patentee’s law-ful monopoly seems to me to be an abuse of the discretionary powers of a court.”

The dynamics of the pharmaceutical market in South Africa and the phar-maceutical patent enforcement land-scape is changing rapidly, especially in the light of recent developments towards the end of 2013 with a new Draft National Intellectual Property Policy. Some of the reasons for the change stems from a greater need to pro-vide access to medicine, often times blaming the patent system for the hold up, the success-ful amendment to In-dian patent law and the successful attacks on patents relating to new crystalline forms or polymorphs, new formulations, new uses and the like in India; the intro-duction of authorised generics into the market by originator research and development entities prior to patent expiry and the launch of ge-neric products by generic manufac-turers, at risk, during the pendency of a patent. From an enforcement point of view, the judicial enforcement of patents

relating to pharmaceutical products is alive and well, a landmark case having taken place mid-2012. In Cip-la Medpro (Pty) Ltd v Aventis Pharma SA, Aventis Pharma SA and Others v Cipla Life Sciences (Pty) Ltd and Oth-ers (139/2012, 138/2012) [2012] ZA-SCA 108; 2013 (4) SA 579 (SCA) (26 July 2012), the issue of public inter-est was added to South African ju-risprudence as a factor to be consid-ered when looking at the balance of convenience in granting an interim

injunction. In 2010, the Sanofi-Aventis group sought to enforce a patent for its oncology drug Taxotere® (and its authorised generic,

Docetere), against Cipla-Medpro (the local distributor of Cipla India’s products in South Africa). In an ap-peal against the denial of an interim injunction by the court a quo, the Treatment Action Campaign (an ac-tivist group promoting access to medicine, amongst other things, hereinafter referred to as the TAC) unexpectedly sought to intervene as an amicus curiae.




legal fraternity. The South African Health Minister, Aaron Motsoaledi, has, very recently, in response to a draft document entitled “Campaign to Prevent Damage to Innovation from the Proposed Draft National IP Policy (Mail & Guardian, 17 to 22 January 2014, Vol 30, No 3) accused a group of multinational pharmaceu-tical companies of conspiring against the state, labelling the plan as a con-spiracy of “satanic proportions”. Unfortunately there is a lot of mis-information on the current South African patent law and its effect on access to medicines and any cam-paign which would result in an hon-est, open, informed and rational dis-cussion on these aspects should be encouraged. The policy however has a very long road to travel and there-after legislation would have to be amended to be in line with the policy. In this process the author believes that there will be much consultation and that an objective and fair policy will result which will hold approval both locally and internationally.

More recently, in the case of ASTRA-ZENECA AB & ASTRAZENECA PHAR-MACEUTRICALS (PTY) LTD V SAN-DOZ SA (PTY) LTD, September 2013 (unreported at the time of drafting this article), Astrazeneca success-fully obtained an interim injunction against Sandoz in respect of Nex-iam®. The judgement is particularly instructive insofar as the question of urgency in injunction proceedings is concerned and in terms of launching at risk while a patent is in force, the court stated that any loss of reputa-tion occasioned by the withdrawal of the generic product from the market would be of the generic manufac-turer’s own making for launching at risk. The case is however currently being appealed. Finally, and insofar as the future of patent protection and enforcement in the pharmaceutical sector is con-cerned note must be taken of the DRAFT NATIONAL POLICY ON INTEL-LECTUAL PROPERTY, 2013, General Notice 918 of 2013 GG 36816 of 4 September 2013(the policy), which at this point is merely in draft form,

and does not have the force of law. The policy also comes amidst much activism to promote access to medi-cines and to reduce patent protec-tion for inventions relating to phar-maceutical products. The policy, inter alia, deals with the need for amendment of the South African Patents Act so as to be ame-nable to public health, and to fa-cilitate entry of generic medicines. Reference is also made to the use of pre- and post-grant opposition proceedings in India to prevent the granting of ‘weak’ patents and that similar provisions should apply in South Africa. Although there is no specific reference to such weak patents as relating to patents go-ing beyond a basic pharmaceutical compound (e.g. different crystalline forms etc) the intention, the author believes, is clearly there and the poli-cy has already been cited in litigation proceedings. The policy has attracted much criti-cism both locally and internationally, by various industry sectors and the



The South African Pharmaceutical SectorBy Alexic Apostolidis

Rights (TRIPS) of which South Africa is a signatory. Importantly, discrim-ination between sectors, e.g. the pharmaceutical sector verse the car manufacturing sector verse the min-ing sector and the like, cannot take place (Article 27 TRIPS) and thus all patent applications, regardless of the sector to which they relate, must be examined. Further, examination must take place within a reasonable period of time in order not to curtail the period of protection given for a patent (Art 62 Trips) which is particu-larly important in the pharmaceuti-cal sector because the effective pat-ent protection for a drug is actually five to seven years out of the 20 year period of patent protection due to clinical trials, regulatory and market-ing approval requirements. Unfortunately the Policy is silent on the fact that the majority of foreign filed patents (in the pharmaceutical and other sectors) which are kept in force are generally amended to be in line with their counterpart patents which have undergone thorough ex-amination in major jurisdictions such as the EU and the USA. It also fails to take cognizance of the fact that a

heavy onus is placed on patentees in South Africa when it comes to en-forcing a patent. This is because if an overly wide or weak patent is en-forced, it will be open to revocation and under South African patent law, a patent that is only partially valid (i.e. some claims are valid while oth-ers are not), cannot be enforced, un-less the invalidity is amended away. The policy also seeks to limit the scope of protection offered by phar-maceutical patents, such that pat-ents should not be granted for meth-ods of treatment, surgical and di-agnostic methods, all of which are already excluded from patentability, and new uses and the like which re-sult in “ever greening”. The Policy regrettably does not take into ac-count the notion of incremental de-velopment, which, given the state of technology in the world, is rife through all sectors. Take the mo-bile telephone sector for example. It also does not take into account the fact that new formulations, isomers, crystal forms, may likely improve the efficacy of a drug or simply patient compliance and that the patentabil-ity thereof is adequately capable of

The South African Pharmaceutical sector is a hotbed of change, in par-ticular the patent law landscape. The demand for change is driven, largely, by activist organisations, both local and international, who have painted a picture to the effect that it is the South African patent system that is responsible for stifling access to drugs. As the drive to influence pol-icy and law continues, recent case law suggests that the courts are tak-ing an objective approach and are upholding the law as it stands. In September 2013, the Draft Na-tional Policy on Intellectual Property of South Africa was published in the government gazette (No. GG 36816) (“the Policy”) and although it was framed to address various intellectu-al property issues and policies, a ma-jor focus of the Policy is to secure ac-cess to drugs. The focus of the policy is clear from statements such as: “… The IP System is one of the factors that directly and negatively/positive-ly impacts on access to healthcare … and access to medicines/drugs in de-veloping countries.”

“… IP protection regimes must not contradict public health policies and the two should be balanced… Devel-oping countries could adopt IP poli-cies in their legislation that limit the extent of patenting and facilitate the introduction of generic competition …” (pages 23, 24 and 39) Some of the objectives of the Policy relate to the amendment of the Pat-ents Act to be amenable to issues re-lated to access to public health and to prevent “weak” patents from be-ing granted as these stifle access to public health. As part of the proposed reforms it is proposed, inter alia, that substantive examination be introduced. South Africa currently has a deposit sys-tem whereby patent applications are only examined for compliance with formalities. The introduction of substantive ex-amination is to be welcomed provid-ed that it is carried out correctly, hav-ing regard to the infrastructure and resources required, and in compli-ance with South Africa’s obligations under The Agreement on Trade-Re-lated Aspects of Intellectual Property

alexis [email protected] +27 12 432 6202




From a timing perspective, the Policy is still in its draft form, and its final form, taking into account a barrage of criticisms both locally and interna-tionally, including the risk of placing international trade relations under stress, is rumored to be making its way to the South African Parliament before the end of 2015. Of course, legislative amendments stemming from the finalised policy are likely to appear on the horizon within three to five years or more. The impact of the Policy on the en-forcement of patents in the pharma-ceutical sector, has, in the writer’s experience, had little effect. The courts, most noticeably through the Supreme Court of Appeals, are apply-ing the law in an objective fashion al-though “public interest” has recently been accepted as a factor in the bal-ance of prejudice enquiry during in-terim injunction proceedings. In conclusion, while it is a healthy ex-ercise to review intellectual property laws, and to strive for greater ac-cess to public health, and given that it is early days yet, it is hoped that

a balanced policy and approach will be established that upholds South Africa’s international commitments, fosters investment confidence in the country and encourages better and stronger trade relations on an inter-national basis. Mr Apostolidis, a partner in the pat-ent litigation practice of Adams & Adams and Head of the Competi-tion Law Group, holds a Bachelor of Science (chemistry and law) and a Bachelor of Laws (cum laude) from the University of the Witwatersrand (WITS). He also holds a postgradu-ate degree in European Competition Law (with merit) from King’s College, University of London. Mr Apostolidis is well experienced in all aspects of patent law but specialises, inter alia, in patent litigation in the life sciences sector, representing originator phar-maceutical companies. He has been cited in peer review publications such as IAM’s “Patent 1000 2014: The World’s Leading Patent Practitio-ners”; “Who’s Who Legal – Patents 2014” and “Finance Monthly Glob-al Awards 2014 – Litigation Lawyer, South Africa”.

being addressed by the ordinary re-quirements for patentability, namely novelty, inventiveness and industrial applicability. Mechanisms for access to drugs are also addressed by the IP Policy al-though it is unclear as to the exact nature of these mechanisms since compulsory licensing is already avail-able under the Patents Act No 57 of 1978 (Section 56) and in terms of the Competition Act No 89 of 1998 while Section 15C of the Medicines and Related Substances Act allows for parallel importation in certain cir-cumstances in order to ensure sup-ply of affordable drugs. Finally, pric-ing mechanisms are already present in the pharmaceutical sector, namely single exit pricing (i.e. the price set by the manufacturer or importer of a medicine combined with the logistics fee and value added tax); benchmarking and excessive pricing mechanisms are provided for under the Competition Act. Unfortunately these various options receive little to no attention in the IP Policy. Dovetailing with the Policy in re-

spect of compulsory licensing is also the Promotion and Protection of In-vestment Bill (Notice 1087 of 2013) which, through Section 8, states that the issuance of a compulsory license in respect of an intellectual property right does not constitute an expro-priation of such rights.

Perhaps more sadly, in considering the debate relating to access to drugs and patents, little attention is given to the facts that access to new drugs require innovation and the protec-tion thereof and that there are other more important and damaging barri-ers hampering access. These specifi-cally concern the lack of infrastruc-ture and distribution channels, pa-tient education, hospital costs, local manufacturing and an effective regu-latory system. It is hoped however that the current health sector en-quiry being conducted by the South African Competition Commission will expose and deal with some of these issues and that perhaps a leaf can be taken out of China’s book where it appears that a pro intellectual prop-erty policy is in place to attract for-eign investment.



heather [email protected] +27 11 685 8829

South Africa – Combatting cartels and abuses of dominance high on the Competition Commission’s agenda By Heather Irvine

collusive tendering in the construc-tion, steel, brick, shipping, retail cy-cle and furniture removal industries. The Commission has also pursued some high profile abuse of domi-nance cases against powerful South African companies. To date, domi-nant firms in South Africa have paid in excess of ZAR600 million in fines related to alleged abuses of domi-nance, including exclusionary rebate schemes and pricing practices that amounted to margin squeeze and ex-cessive pricing. However, South Af-rican-headquartered global brewing company SAB won a protracted bat-tle against a complaint in which the Commission alleged that SAB abused its dominance and engaged in price-fixing with a number of companies who distribute its beer in South Af-rica. The Competition Appeal Court dismissed the complaint, in a deci-sion which has provided valuable guidance to large manufacturers who also chose to distribute their own products (commonly termed ‘dual distribution’). The Commission is likely to be very busy in the second half of 2015. It

is currently conducting an exten-sive market inquiry into the cost of private healthcare in South Africa, as well as a market inquiry into the pricing of liquid petroleum gas (LPG). The Commission has also announced that it will conduct an inquiry into grocery retailing in South Africa, which is likely to focus on barriers to entry for smaller retailers, which the Commission has indicated may include exclusivity clauses in retail lease agreements which restrict the landlord from leasing space in shop-ping centres to more than one gro-cery retailer. An important decision of the Tribunal on an excessive pric-ing complaint was overturned by the Competition Appeal Court in June 2015, and the Commission recently announced that it intends to appeal to the South African Constitutional Court. If the Constitutional Court agrees that this is an important case in the public interest, it may hear it in the second half of 2015. Legislation which introduces criminal liability for directors and managers who are involved in cartels has been on the statute books for more than three years, but has not yet been signed into force by the President. How-

Since the inception of the Competi-tion Act in 1999, the South African Competition Commission has fo-cussed intensively on detecting and prosecuting cartels and preventing abuses by dominant firms in South Africa. Billions of Rands in fines have been paid by global and South Afri-can companies involved in price-fix-ing, market allocation and bid-rigging to date, and the Commission has prosecuted several large South Afri-can companies alleged to have been involved in abusive practices such as ex-cessive pricing. This focus is evident in the Commission’s work in the first half of 2015 and is likely to domi-nate the Commis-sion’s agenda for the remainder of this year. Since January 2015, the Commission has referred twelve cases involving allegations of collusion by competi-tors to the Competition Tribunal for adjudication. Nine of these com-plaints involve collusive tendering or bid-rigging by competitors in relation to construction projects, furniture

removals, motor vehicle repairs and curio retailing in South Africa. One case involves market allocation by competitors in the plastic pipe in-dustry and another involves a long-running complaint about price fix-ing in the cement industry. In each of these cases, the Commission has asked the South African Competition Tribunal, the adjudicatory body, to impose the maximum administrative penalty prescribed by the Competi-tion Act, which is 10% of the com-

pany’s turnover in a single year. In March, the Commission raid-ed the offices of six suppliers of fire con-trol and protection systems, alleging that they had been in-

volved in price-fixing and collusive tendering. In May, the Commission also announced a major investiga-tion into alleged price-fixing of for-eign exchange rates by South Afri-can and international banks. Both of these investigations are currently un-derway. Since the start of 2015, 18 companies have agreed to pay more than ZAR8 million in fines in relation to price-fixing, market allocation and




every five years. Heather was the only lawyer from Africa to feature on the list. Heather was also recently listed by Global Competition Review as one of its 100 successful women in the field of competition law. She has been nominated in Euromoney’s Guide to the World’s Leading Women in Business Law, as one of the leading practitioners in the competition and anti-trust sector. Chambers Global states that Heather is “one of the most knowledgeable lawyers around – she has a way of getting a point across in an articulate manner”. Norton Rose Fulbright is a global le-gal practice. We provide the world’s pre-eminent corporations and finan-cial institutions with a full business law service. We have more than 3800 lawyers and other legal staff based in more than 50 cities across

Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia. Recognised for our industry focus, we are strong across all the key in-dustry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare. Wherever we are, we operate in ac-cordance with our global business principles of quality, unity and integ-rity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

ever, it seems likely that South Af-rica will eventually follow the global trend and introduce jail time for car-tel ringleaders. These developments highlight the South African Commission’s contin-ued focus on detecting and prosecut-ing cartels and abusive practices by dominant companies in South Africa. It also flags the need for comprehen-sive competition law training and compliance programmes in order to minimise the risk of a contravention. Despite the fact that initiating and maintaining such a programme can be time-consuming, it is essential to protect a firm from the far-reaching consequences which may flow from investigation and prosecution by the South African Commission. These consequences can include not only substantial harsh monetary penal-

ties, but also adverse publicity, high legal costs and wasted management time. Although consumer class ac-tions and civil claims for damages consequent upon infringements of the Competition Act are still in their infancy in South Africa, these will also pose a significant risk in future. Heather Irvine is the head of our Af-rican competition team based in Jo-hannesburg. She is an experienced antitrust and regulatory lawyer who is highly recommended by various top international research publications, including Chambers Global who refer to her as an ‘excellent lawyer’ and Legal500 who call her ‘experienced and forthright’. She was been recog-nised as one of the world’s Top 40 l competition law practitioners aged under 40 by Global Competition Re-view in a survey which is conducted



Lawrence helman [email protected] +27 82 567 9072

Retail Law In South Africa & Africa: Recent TrendsBy Lawrence Helman

South Africa has its own legislative regime regulating inbound invest-ment and retail operations gener-ally, including in relation to compe-tition and employment law, tax and exchange control. Two important pieces of consumer protection legis-lation, namely the Consumer Protec-tion Act, No. 68 of 2008 (the “CPA”) and the National Credit Act, No. 34 of 2005 (the “NCA”), have a bearing on the establishment and operation of retail businesses in South Africa. This legislation is part of the South African government’s initiative to promote and advance the social and economic welfare of consumers in South Africa by establishing a le-gal framework for the achievement and maintenance of a consumer and credit market that is fair, transpar-ent, accessible, efficient, sustainable and responsible for the benefit of consumers generally. The CPA is of general application and imposes a wide range of restrictions to ensure, inter alia, the promotion offairness, openness and good busi-ness practice between the suppliers of goods or services and consum-

ers; the improvement of consumer awareness and information and the encouragement of responsible and informed consumer behaviour; and the provision of an accessible, effec-tive and efficient system of redress for consumers. Consumers are pro-tected from unconscionable, unfair, unjust or otherwise improper trade and practices, as well as deceptive, misleading, or fraudulent conduct.

Two key ways in which the CPA achieves these objectives are by pro-hibiting provisions in agreements which are excessively one-sided against the consumer and restricting the extent to which a supplier may limit product liability. Provision is also made for the compulsory disclo-sure of provisions which may have adverse implications for consumers. The CPA also regulates the market-ing of goods and services (includ-ing direct marketing to consumers), lay-bys, loyalty programmes, prepaid vouchers, as well as product recalls. A further meaningful protection to consumers is the provision that am-biguous provisions of the CPA or in any contract must be interpreted in a way that will best improve the reali-

One of the key features of the South African legal landscape in recent times has been the inbound invest-ment from major retail players in-cluding Walmart, H&M, Ben Sher-man, Burger King and General Nu-trition Centre, to mention but a few. Many of these international retailers now entering the South African mar-ket are presenting new competitive challenges to the well-established re-tail brands that have long dominated the South African retail landscape. These investments often take the form of the establishment of corporate businesses but may also occur through franchising and similar distribu-tion formats. Franchising is often perceived as a low risk opportunity to combine local expertise with inter-national branding and best business practice retail models. The increased popularity of this format of inbound investment can primarily be ascribed to the fact that the cost of expansion of the franchisor’s business is shifted to the franchisee, as well as its abil-ity to serve as a vehicle to expedite

growth of the franchisor’s business and facilitate broader access to vari-ous economies. Franchising also has the potential to stimulate the growth of the small to medium enterprise sector of the economy, increasing employment and ensuring sustain-able economic growth. We are currently also experiencing an increased expansion by many in-ternational retail brands into the Af-rican continent, with South Africa

(with its well estab-lished, mature mar-ket) being identified, in many instances, as the springboard or stepping stone for in-vestment into other African jurisdictions.

“The big story is Africa” noted one of the speakers at the recent annu-al research conference of the South African Council of Shopping Centres. It has been reported by bizcommu-nity.com that the majority of African youths prefer quality above price and are also brand conscious, equating popular brands with quality, which explains inbound investment by cer-tain major clothing retailers.


bizcommunity.com

bizcommunity.com



Lawrence Helman is a director at EN-Safrica in the corporate commercial department. He is recognised as a leading lawyer by the following repu-table rating agencies and their publi-cations:

- The International Who’s Who of Franchise Lawyers - Legal Experts: Corporate and Merg-ers and Acquisitions (RSA) - Best Lawyers South Africa: Corpo-rate; Health Care; Mergers and Ac-quisitions - FLR 1000: Mergers and Acquisitions (RSA)

As a law firm based in Africa, with es-tablished offices and a growing foot-print throughout Africa, ENSafrica has easy access to clients and their markets, and understands the many political, cultural, linguistic and regu-latory contexts of African countries.

sation and enjoyment of consumer rights generally. The franchise industry is now also regulated by the CPA, which has brought about significant changes to the drafting as well as the implemen-tation of franchise agreements. Un-like the general position that the CPA will not apply where the consumer is a juristic person with an asset value or annual turnover exceeding a spec-ified threshold, no such threshold or limitation applies in respect of the franchise requirements which apply “across the board”, regardless of the size or level of sophistication of the franchisee in question.

The NCA applies predominately in relation to credit transactions where the credit consumer is a natural per-son or where the credit consumer is a juristic person with an asset value or annual turnover below a particu-lar value threshold. The NCA aims to, inter alia, promote the develop-ment of an accessible credit market; ensure consistent treatment of dif-

ferent credit products and credit pro-viders; prevent over-indebtedness and provide mechanisms for resolv-ing over-indebtedness; and promote responsibility in the credit market by encouraging responsible borrowing, fulfilment of financial obligations by consumers and by discouraging reck-less credit granting by credit provid-ers and default by consumers. The NCA must not, as opposed to the CPA, be interpreted in a one-sided manner in favour of the consumer, since credit providers also have right-ful interests that call for protection and the courts have decided that the interpretation of the NCA calls for a well-balanced approach thereto. As will always be the case, retail in-vestors looking to establish and op-erate retail operations in South Afri-ca will need to be advised on the im-plications of all applicable legislation and, in particular, the CPA and the NCA which are relatively new and have extensive implications for retail businesses in South Africa.



Basil [email protected] +27 21 761 3876

International Taxation in South Africa: Double Tax Agreements, & Legislation By Basil Coutsoudis

of incorporation, or the place of ef-fective management.(4) In this re-gard, article 4 of the Organisation for Economic Cooperation and Develop-ment (OECD) Model Tax Convention on Income and on Capital (2010) is useful, and most of South Africa’s double tax agreements (DTA) are based on the OECD model. In South Africa, domestic tax relief for double taxation comes in various forms. The exemption method pro-vides that, income taxed in other ju-risdiction is excluded from domestic income,(5) the credit method, where foreign income is included but for-eign tax paid is allowed as a credit against domestic tax payable,(6) and the deduction method where foreign income is included in taxable income and a deduction is permitted for any foreign tax paid.(7) A further method recently finding fa-vour in the newer tax treaties and re-negotiated treaties, is a reduced rate of tax. Translation of foreign taxes to local currency is also permitted, thereby allowing taxpayers to take advantage of favourable currency ex-change rates.

Another favourable development in South African tax law which benefits foreign owned companies, or compa-nies with foreign shareholders, is the switch in 2012 from a system of im-posing secondary tax on companies (STC) on all dividends declared, to a pure dividends tax in line with such taxes in foreign jurisdictions. Previ-ously DTAs did not cover STC. Gen-erally STC was not regarded as a tax on dividends but fell under business profits and therefore no limit on the STC levied by South Africa could be imposed. Newer treaties do incor-porate provisions to prevent double taxation of dividends tax, and proto-cols have been added to old treaties to incorporate additional taxes. Usu-ally a treaty will apply to any identi-cal or substantially similar taxes in the future, and it was therefore an important move in South Africa, to move from STC to dividends tax. In essence, the provisions of South Africa’s DTAs will mirror the provi-sions of the OECD model law which are closely followed. So for example, in the case of immovable property, passive income such as rental ‘may’ be taxed in state where property is

In an international trade context, in-ternational taxation refers to various treaty provisions relieving interna-tional double taxation. It incorpo-rates domestic legislation covering foreign income of residents and do-mestic income of non-residents. It incorporates domestic legisla-tion,(1) treaty provisions containing domestic legislation, treaty provi-sions relieving international eco-nomic double taxation, rules relating to international tax avoidance and eva-sion, and, directives and domestic leg-islation concerning cross-border direct taxation.(2) Therefore in the context of foreign trade with South Africa, an under-standing is required of the interaction of the South African tax system with the systems of foreign countries. In this regard, there may or may not be double tax treaties in existence, and every instance has to be dealt with on its own merits. One of the main problems in inter-

national tax is the question of source and residence. In South Africa we have a hybrid system of taxing world-wide income for tax resident per-sons and taxing non-residents on a source basis. There are two basic types of double taxation. There is economic double taxation, which is the imposition of comparable taxes by two or more tax jurisdictions on different taxpayers in respect of the same taxable income, for example, where profits are taxed at corporate

level and again at the shareholder level, and there is juridi-cal double taxation, which is the imposi-tion of comparable taxes by two or more tax jurisdictions on

the same taxpayer in respect of the same income or capital, for exam-ple, where one country withholds tax on dividends paid and the recipi-ent shareholder is taxed in another country for dividends received. In South Africa, residence is defined by a test of where a person is ordi-narily resident,(3) physical presence, and for corporate entities, the place




- S9D proportional amount of net in-come.- Foreign dividends.- Capital gains from foreign source.- Deemed income.(12)- Deemed foreign capital gains.(13)- Capital of trusts. (14)- Proportional amount of tax paid by a partnership or trust as an ‘entity’ in another country.- Other foreign income – a deduction of foreign tax paid is allowed. On the whole, foreign investors will find that the tax, revenue, and bank-ing systems South Africa are ex-tremely evolved, and rank with the best of the world. South Africa can-not be deemed by any means to be a tax haven of any sort, and does not follow polices as a tax haven in or-der to promote foreign investment. However, the tax system is compa-rable in both efficiency and in terms of investment friendly tax policies, to stand up on its own against the best in the world, as an attractive market for foreign business. (1)In South Africa, tax legislation is contained in the Income Tax Act 58

of 1962 (ITA) and the Tax Administra-tion Act 28 of 2011 (TAA).(2)IBFD International Tax Glossary 5th edition (2005).(3)CIR v Kuttel 54 SATC 298, Cohen v CIR 13 SATC 362(4)See South African Revenue Ser-vice (SARS) Practise Note 6; De Beers Consolidated Mines Ltd v Howe (1905-06) 5 TC 198 (KB Dov.CA,HL) (5)See S9(1)(g), 10(1)(l),10(1)lA, 10(1)(m),10(1)(o) of the Income Tax Act, and OECD Article 23A.(6)ITA S 6 quat and OECD Article 23B.(7)ITA s 6 quat.(8)Article 6 OECD Model Tax Conven-tion on Income and on Capital (2010)(9)OECD Model Tax Convention on Income and on Capital (2010)(10)Johannesburg Stock Exchange.(11)http://www.sars.gov.za/Legal/International-Treaties-Agreements/Pages/default.aspx(12)In terms of section 7 of the ITA.(13)In terms of the 8th schedule of the ITA.(14)In terms of section 25B(2A) and paragraph 80(3) of the 8th schedule, of the ITA.

situated, and in the country where the tax payer is resident. However, the resident state must give relief for tax paid in the source state.(8) As a further example, Article 10(9) makes provision for dividends tax. Generally taxing rights for dividends tax are given to country of residence of the recipient of the dividend, but dividends can also be taxed in the company’s state provided the recipi-ent is the ‘beneficial owner’ and if a company, limited to 5% or if an in-dividual, to 15%. Foreign dividends can be taxed in the resident state if residents hold at least 10% of total equity and voting rights, if the share-holder is a company which is in the same country as the foreign company paying the dividend to the extent the foreign dividend does not exceed in-come included per certain provisions of the ITA, or if the dividend is on a foreign share listed on the JSE(10) excluding dividends in specie. There are further articles dealing with royalties, capital gains tax, em-ployment, director’s fees, controlled foreign companies and many more

provisions that are mirrored in South African DTAs. A list of the states with whom South Africa has treaties can be found on the SARS website,(11) and South Af-rican tax authorities and courts will use the commentary that the OECD provides for its Model Tax Conven-tion together with its own jurispru-dence, in order to interpret and ap-ply the provisions of South African DTAs. Lastly, there are certain rebates ap-plicable in terms of the ITA itself that are available, on the basic premise that if a taxpayer elects the relief offered by way of a treaty, then the provisions of the ITA cannot be used for the same income. A summary of such rebates against South Africa tax for foreign taxes payable are: - Foreign source income (note the problem here was South Africa source income could not enjoy re-lief, for example management fees earned in South Africa and foreign withholding also paid elsewhere or true source royalties.)

Dov.CA

http://www.sars.gov.za/Legal/International-Treaties-Agreements/Pages/default.aspx



Zimbabwe


ExpErt guidE: OppOrtunitiEs & dEvElOpmEnts - AfricA 2015 ZImBaBwe

Brenda [email protected]

Is Africa Ready For The Intellectual Property Influx: An In-Depth Analysis Of The IP Regime In Africa, With Special Attention To The Zimbabwean Position By Brenda Matanga

Whilst Europe boasts of the Euro-pean Patent Office in its midst, Eng-lish speaking African countries also take pride in the creation of the Af-rican Regional Intellectual Property Organisation (‘ARIPO’). It is an in-tergovernmental organisation that has harmonised the registration pro-cess of intellectual property rights in some of the English speaking coun-tries. Currently there are 19 mem-ber states of ARIPO, including the re-cently joined Sao Tome and Principe. Sao Tome and Principe recently de-posited its instrument of accession to the Harare Protocol on Patents and Industrial Designs within the frame-work of the African Regional Intellec-tual Property Organisation (ARIPO) on 19 May 2014. The other mem-ber states being Botswana, Gambia, Ghana, Kenya, Lesotho, Liberia, Ma-lawi, Mozambique, Namibia, Sierra Leone, Somalia, Sudan, Swaziland, Tanzania, Uganda, Rwanda, Zambia and Zimbabwe. In order for one to get protection in any of the above mentioned states, one is required during the application process to designate the states in which it seeks protection. Cost-wise it makes sense

as an investor can concentrate on the specific countries it has business interests in. ARIPO registers trademarks, indus-trial designs and patents on behalf of member countries. There are currently nine of the member states which have acceded to the Banjul Protocol on trademark registration namely, Botswana, Lesotho, Liberia, Malawi, Namibia, Swaziland, Tanza-nia, Uganda and Zimbabwe whilst all member countries are party to the Harare Protocol which provides for the registration of patents. The great attribute of this system is that ARIPO is a party to the Patent Co-operation Treaty (PCT) such that any applicant filing a PCT application may designate ARIPO which in turn means a desig-nation of all states party to both the PCT and the Harare Protocol. The mere existence of this institution to me is indicative enough of the state of readiness within our continent in so far as protection of intellectual property is concerned regionally. The system is simple, cost effective and very user friendly. The applicant only uses one language, which is

A reading of the current economic news is reflective of positive projec-tions on how Africa is emerging out of the proverbial ‘dark continent’ to be a force to reckon with amongst leading world economies. Such posi-tivism stems from the fact that Af-rica has experienced unprecedented eco-nomic growth in re-cent years, despite the global economic crisis. Leading econ-omies are sinking bil-lions of dollars into various African countries on dif-ferent projects such as mining, in-frastructure development, health and all sorts of investments with many expanding into the region. Without delving deeper into the fin-er details for such movement - the when, why now and the how part of it - the one thing that any progres-sive government and country should seek to do in this investor hype era is to strategically position itself. Of key importance is to lay out clear policies, constitutional and legisla-tive reforms in key growth economic areas, such as intellectual property development. The Intellectual prop-

erty landscape ought to be clearly defined and levelled to attract key investments in the region. The Intellectual property regime consists of a cycle that revolves from creation to protection to exploita-

tion. Should this cycle be complete, then one can boast of having a good in-tellectual property landscape. In a view shared with many other scholars; the

basic tenets a good IP system needs to have for it to be effective are: Administration,legislation, enforce-ment, generationand commercialisa-tion. If these structures are solid then as Africa, we can count ourselves as ready for any intellectual property activity in our territories. To test this position, this article will investigate how far Zimbabwe has gone in en-suring she is ready for any influx that can make headway into Southern Af-rica but will briefly comment on our regional preparedness. Regional Developments




Clause 8 of their Constitution recog-nising this right. The Congress under that provision is granted the powers to promote the progress of science and useful arts by providing inven-tors the limited but exclusive right to their discoveries. The mere fact that an effort has been made, is so far as recognition of IP as a constitutional right is a welcome development in our legislation. Zimbabwe has publicly embraced intellectual property by becoming a party to the international legal in-struments that govern intellectual property. Like many other countries, it is a member of the World Intellec-tual Property Organisation (WIPO) through the WIPO Convention of 1967. This is the constituent instru-ment of the specialised agency of the United Nations. WIPO’s objective is to promote the protection of intellec-tual property worldwide and to en-sure cooperation among the intellec-tual property unions established by the treaties that WIPO administers. Further to this Zimbabwe has been a party to the following; Paris Conven-tion (Industrial Property), since April 1980, Berne Convention (Literary

and Artistic Works), since April 1980, Patent Corporation Treaty (PCT) (Pat-ents), since June 1997 – therefore it is a part of the global recognition of intellectual property. As a major milestone, Zimbabwe is a member and signatory to the World Trade Organisation’s (WTO) celebrat-ed Trade Related Aspects of Intellec-tual Property Rights known as (TRIPS Agreement) which sets out the basic minimum standards regarding the protection of intellectual property. Unlike many of our fellow African countries Zimbabwe has gone a step further and has incorporated these minimum standards in its legislation. As a country it has the necessary intellectual laws in place and the laws are TRIPS compliant, a rare find amongst the developing countries, non-African countries included. Zimbabwe’s domestic IP legislative framework is one of the most mod-ern frameworks in Africa and it is compliant with some major inter-national treaties such as the TRIPS Agreement (compliant since 2002), the Berne Convention and the Par-is Convention. It has incorporated

English; pays in one currency, United States Dollars, and; employs only one attorney/IP agent to protect his IP on his behalf. Further to that, the user has multiple benefits of centralised processing, grant and renewal which continue to save costs. It will defi-nitely be expensive to do an Africa round trip or to visit all these coun-tries country-by-country, hence, this one stop shop spares all the difficul-ties that arise whilst shuttling across the continent in search of intellectu-al property protections as they enter the region for any investment. The focus of this article will now turn to Zimbabwe to further enlighten the African investor. Zimbabwe is a member and signa-tory to ARIPO and its protocols-: The Lusaka Agreement which establishes the intergovernmental organisation, the Harare Protocol on the protec-tion of patents, and industrial de-signs together with the Banjul Pro-tocol which governs the protection of trademarks amongst the member countries. It is even more appeal-ing that this regional office is housed in Harare, Zimbabwe’s capital and therefore it can be directly accessed

from Zimbabwe.

Zimbabwe’s Position Firstly, it is important to state that Zimbabwe has recognised intellectu-al property as a constitutional right, in the new constitution. Section 71 of the bill of rights under property rights which provides thus; “Subject to Section 72, every person has the right, in any part of Zimba-bwe, to acquire, hold, occupy, use, transfer, hypothecate, lease or dis-pose of all forms of property, either individually or in association with others.” Literally interpreting this provision, intellectual property will also fit into this category as it says “all forms” of property. In addition to that, the constitution further accommodates this type of property in its definition of property being “property of any description and any right or inter-est in property”. It may not neces-sarily be as precise as countries such as the United States of America who have clearly embedded an indepen-dent Clause in Article 1, Section 8,



There are enforcement structures that are in existence. Aspects of en-forcement that relate to criminal matters, are adequately provided for in the Constitution of Zimbabwe, the Customs and Excise Act, the Crimi-nal Procedure and Evidence Act, the Magistrates Court, High Court and Supreme Court Acts and Rules amongst other laws that are in place. A system of customs recordals is avail-able and border enforcement mea-sures are clearly provided for in the laws and customs, if alerted will ac-tively be on the lookout for any coun-terfeited products being imported and exported out of Zimbabwe. An Anti-Piracy Agency which deals with piracy of copyright materials is also

in existence. With the assistance of the IP enforcement agencies in Zim-babwe, Interpol carried out a mean-ingful and successful act in trying to curb the influx of counterfeit drugs at pharmacies and doctors surgeries amongst other enforcement proce-dures.

At national level intellectual property emerges in areasas diverse as public health, food security, environment, education, trade and commerce, biotechnology, the internet, enter-tainment et ceterasuch that the nec-essary policies are in place for some sectors whilst some are being drafted to ensure that Zimbabwe as a coun-try has the right intellectual property landscape should investors consider

these treaties in its national laws in terms of Section 111B of the Con-stitution which requires the domes-tication of any treaties into the lo-cal legislation. Zimbabwe is one of the three countries (Zimbabwe, Bo-tswana and Liberia) that have incor-porated the provisions of the Ban-jul Protocol into its Trade Marks Act through the Trademarks Amendment Act No.10 of 2001 under Section 97. The legal framework is intact, all the basic forms of IP are protected; In-dustrial Designs Act [Chapter 26:02], Patents Act [Chapter 26:03], Trade Marks Act [Chapter 26:04], Copyright and Neighbouring Rights Act [Chap-ter 26:05], Geographical Indications Act [Chapter 26:06], and Integrated Circuit Layout Designs Act [Chapter

26:07] are basic laws that exist in this jurisdiction.It’s also worth noting that we actu-ally have a fully-fledged office (Zim-babwe Intellectual Property Office (‘ZIPO’)that is responsible for the grant and administration of intellec-tual property in Zimbabwe. Indeed it is possible to register one’s intellec-tual property interests in Zimbabwe as it has institutionalised IP. There is a special court (IP Tribunal)that has been created through an Act of Parliament,Intellectual Property Tri-bunal Act (26:08). The bench also comprises of judges well versed in this subject of the law and intellec-tual property law practitioners with extensive and international training and expertise in this area of the law.



entering this region or consider Zim-babwe as an investment option.

Current Trends Although there are some areas that still need to be improved and ad-dressed. The administration of the IP office still requires a bit of atten-tion so that the country is in line with global trends. Automation of the IP office being a key priority area. How-ever, in so far as the automation pro-cess is concerned, the country is not too many steps from completing this process as an efficient software for file management has already been installed at the IP Office whilst online searches and registration are yet to be implemented. The local laws do not necessarily require any radical overhaul but an update of some sec-tions of the statutes in place so as to encompass and come to speed with current technological developments. In conclusion, it is safe to say Africa is headed in the right direction in so far as having a good IP landscape. Whilst one needs to understand the

African IP landscape, it is important to further understand that each country within the continent is inher-ently different. Generally speaking, the initiative is there, the political willingness of most countries to be a part of this global phenomenon is apparent; all that needs to be done is for Africa countries to tidy up its backyards and do a bit of house-keeping, as could be ascertained from the Zimbabwean position. From this writer’s stand-point, the continent is not doing badly at all, from a wholesome and global per-spective. However if the continent yearns to be a real economic giant, intellectual property should be at the fore of luring investments into the country whilst resources should be channelled in key sectors which pro-mote innovation and technological development. It goes without saying that, technology is the lifeblood of any progressive economy and Africa needs to strategically position itself before all investments are headed south wards as has been projected by leading economists in the region.


ExpErt guidE: OppOrtunitiEs & dEvElOpmEnts - AfricA 2015 expert dIreCtory

Expert Directory

Rwanda Bar Association

Kabasha [email protected]+250 078 852 0804

www.rwandabar.org.rw

G. ELIAS & Co.

fidelis adewole [email protected]+234 1 460 7890

www.gelias.com

BMatanga IP Attorneys

Brenda [email protected]

www.brenmatip.com

Adams & Adams

alexis [email protected]+27 12 432 6202

www.adamsadams.com

ENSAfrica

Lawrence helman [email protected]+27 82 567 9072

www.ensafrica.com

B Coutsoudis & Associates

Basil [email protected]+27 21 761 3876

www.bcalegal.co.za

Norton Rose Fulbright

heather [email protected]+27 11 685 8829

www.nortonrosefulbright.com

Rwanda Nigeria Zimbabwe South Africa


www.rwandabar.org.rw


www.gelias.com


www.brenmatip.com


www.adamsadams.com


www.ENSafrica.com


www.bcalegal.co.za


www.nortonrosefulbright.com

Corporate LiveWire Expert Guides are available on all platforms. Access everything from our latest publication to our archived collection through your computer, laptop, tablet or smart phone. It ’s as easy as one click of the button or a tap of the screen.

An InsIght Into the CorporAte World

Connecting The Corporate WorldWired