Friday, 17 March 2017

Afro-Buff

GP: The ASA is here to Stay ...And BAT feels the effect of its power

From the desk of Andrew Papadopoulos (KISCH IP) comes this guest post which is a timely update on what's happening at the Advertising Standards Authority (“ASA”) in South Africa. The ASA was/is experiencing financial difficulty and recently went into business rescue. This, coupled with the damning decision in Herbex (discussed below and which is currently on appeal), left many to doubt the future of this traditional forum of choice for packaging and advertising disputes. Here he analyses its predicament and the recent ruling in the BAT case.

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"There have been many reports about the future of ASA in the recent months but it appears that the ASA is alive and kicking, with no hint of it going anywhere.  If anything, the ASA is poised at obtaining more power.


The first supposed blow to the ASA was a May 2016 High Court judgment in the case between Herbex (Pty) Ltd and the ASA.  This judgment placed in question the ASA’s ability to adjudicate matters over advertisers who are not members of the ASA.  This matter is currently on appeal before the Supreme Court of Appeal (“SCA”) and therefore the effect of this is that the High Court decision is suspended pending the SCA’s ruling.


Following this judgment and in the latter part of 2016, the ASA went into voluntary business rescue in an effort to restructure the industry regulating body.  Comment out of the ASA on this process was that it was a strategic decision and would not affect the operations of the organisation.

These two events did not instil much hope in the ASA and attracted many questions surrounding the relevance of the ASA as an industry watchdog.  However, it would seem that the ASA had different thoughts.

A proposed advertising industry code and ombudsman scheme has been published for public comment, in terms of which the ASA is to be recognised and accredited as an ombudsman for alternative dispute resolution of complaints pertaining to advertising. In other words, the ASA has applied for formalisation of its “Industry Code” in terms of the Consumer Protection Act, which would thereby give the ASA the teeth it has been missing in its current form.  This would also remove any question about the ASA’s jurisdiction and avoid cases like the Herbex judgment.

The proposed Industry Code mainly concerns the consumer-centric provisions (for example, those relating to misleading claims and untruthful advertisements) and omits those competitor provisions relating to advertisements which imitate and take advantage of another’s advertising goodwill.  Therefore, once the Industry Code is enacted, it is proposed that all provisions which have been excluded in the Industry Code will be dealt with in terms of the ASA’s current advertising code.  It is further proposed that the Industry Code (or some other legislation) will later deal with the competitor protection provisions in the same way.

So change appears to be on the horizon for the ASA… but what is happening in the meantime?  Surely would-be advertising infringers don’t just pause their unlawful activities while the ASA gets its house in order?  Well, following a recent judgment out of the Final Appeal Committee of the ASA, it would appear that the ASA has not missed a step.

Since December 2015, tobacco manufacturers Leonard Dingler (part of the Philip Morris group) and British American Tobacco (“BAT”) have been embroiled in a bitter battle over the latter’s entrant to the pipe tobacco market, AFRICA GOLD.  The dispute went through all levels of the ASA (together with numerous interlocutory applications being launched) and has concluded in a ruling handed down on 7 March 2017, with BAT being ordered to immediately cease use of its AFRICA GOLD advertisements and packaging on account of them being too close to Leonard Dingler’s famous BOXER pipe tobacco packaging.

Leonard Dingler’s original complaint was on the grounds that the AFRICA GOLD packaging and get-up is too close to the well-known BOXER pipe tobacco.



The Final Appeal Committee of the ASA agreed with Leonard Dingler and found that BAT’s AFRICA GOLD packaging, which was launched in August 2015, imitates and takes advantage of the advertising goodwill subsisting in the BOXER product and packaging design.  The ASA held that BAT had intentionally designed the AFRICA GOLD packaging to utilise the same combination of key elements to those of the BOXER packaging which has been in the South African market for over 95 years, with hardly any changes to the pack design.

An earlier decision by the Advertising Industry Tribunal of the ASA also found that BAT’s use of the words “Original”, “Makoya” and “No. 1” on the AFRICA GOLD packaging was likely to mislead the relevant consumers and likely to exacerbate the impact of the imitation.


During proceedings BAT attempted to challenge the ASA’s jurisdiction to adjudicate the matter (following the Herbex judgment), but BAT later withdrew this defence on account of it being a member of the Consumer Goods Council of South Africa (“CGCSA”) which is a member of the ASA.  The CGCSA actively advocates for the ASA, stating on its website that “the regulation of advertising is essential for the country and ASA has been the voluntary regulator… The CGCSA members place consumer protection at the heart of its business, recognizing that consumers have the right to transparency, to fair business practices and to the right of redress amongst others…”

The ASA ruled that BAT’s current packaging, which includes all of its point of sale material, must be withdrawn, and the process to withdraw the packaging must be actioned with immediate effect.  BAT was also ordered to pay Leonard Dingler’s costs in the proceedings."

Thanks Andrew, and very encouraging indeed.


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Monday, 13 March 2017

Afro Chic

INTA 2017 and Africa IP Collide in Fashion

As INTA hits Europe in May for its annual general meeting, it’s worthwhile considering what it has in store for the Africa Regional Update. This update is important because it offers the 10,000 odd delegates a chance to apprise themselves of what’s hot (and what’s not) on the continent from speakers and attendees who are mostly from Africa.

Afro-Chic has taken the mantle of providing information and coverage of this much awaited session. This year the update is moderated by Nolwazi Gcaba who has compiled a panel that will use African fashion to highlight strategic approaches and pitfalls to brand protection and enforcement on the continent.

Speaking to Afro-IP recently Nolwazi explained that “Africa is abundant with creativity and design, and opportunities for local and international brand owners. Yet, sometimes the perception is that African IP is not up to the task. The update seeks to address and correct that perception by profiling IP strategies in one of Africa’s most vibrant industries”.

The regional update is at 15h30 – 16h45 on Monday 22 May 2017 and will be followed immediately by the Africa Reception between 17h00 – 18h00. If you are interested in African IP, block out these two and half hours and encourage as many as you can to come along.

Please look out for more information on the Africa session in the coming weeks from me, Afro-Chic. In the meantime, here it is straight from the program:

RM50 Regional Update: Protection and Enforcement Strategies in Africa
Speakers who practice across the continent will share their views and give updates on:

  • Recent ground-breaking case law in Africa.
  • The effectiveness of the Madrid Protocol in Africa and the implementation thereof by the African Registries.
  • Anti-counterfeiting strategies in Africa, focusing on jurisdictions without counterfeit goods legislation.

Moderator:
Nolwazi Gcaba, Adams & Adams


Speakers:
Godfrey Budeli, Adams & Adams

Vanessa Ferguson, Kisch IP 
Monique Gieskes, Vlisco Netherlands B.V. 
Darren Olivier, Adams & Adams

Africa Reception

This reception provides registrants from Africa with an invaluable opportunity to network with colleagues and share experiences concerning the benefits and challenges of doing business in the region. This reception provides an opportunity to meet with INTA’s CEO and other INTA staff.
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Friday, 10 March 2017

Afro Leo

MIP Awards Evening : Africa Firms of the Year 2017

Last evening Managing Intellectual Property held their annual awards evening at the glitzy Savoy Hotel in London. A black tie event attracting over 300 practitioners from 89 firms in 44 countries was hosted by the eloquent and humorous James Nurton and Alice O'Donkor.

Nominated for awards in Africa were Spoor & Fisher, Adams & Adams, Kisch IP, EnsAfrica, and Von Seidels pasturing Africa from the South, Jackson Etti & Edu, Rouse Africa, Inlex Africa, and Inventa International from the North, and Abu-Ghazaleh and Coulson Harney from the East in three categories: Africa IP Firm of the Year, Africa Firm to Watch and South Africa IP firm of the Year.

The winners announced last night are:

Africa IP Firm of the Year:                                    Adams & Adams
Africa Firm to Watch:                                            Rouse Africa

South Africa IP firm of the Year:                          Spoor & Fisher


Congratulations to those firms from Afro-IP!
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Wednesday, 8 March 2017

Isaac

The reports of the death of innovation are somewhat exaggerated...

This recent article from Kenya inspired this Twiga (Swahili for Giraffe) blogger to write, after a long silence.

The article asks why innovation died in Kenya sometime around 1985, and proposes a number of possible contributing factors. It's really quite insightful and thought-provoking, and many of the points are worth exploration.

As a proxy for innovation, the article cites to the number of patents ("registrations"), and compares registrations in Kenya with registrations in China. The number of patents is a standard measure of innovation in developed countries, but numerous studies have shown that it is indeed a poor measure of innovation in developing countries. See, for example, this (free to download) book published by OpenAIR researchers.

That said, the numbers are even worse than the article provides. On average, fewer than 10 Kenyan patents are granted to local inventors each year.  The total number of Kenyan patents granted to local inventors since KIPI began granting patents in 1994 is below 100. Of those 100, fewer than 20 are still valid and enforceable (i.e., are up to date on annual fee payments). But as pointed out in the OpenAIR research, most innovations and innovators never find their way to the patent office.

So, although one can dispute the measurement selected for supporting the assertion that innovation in Kenya is dead, some of the reasoning behind the assertion is really quite insightful.

For example, the author states that "China invested in Science and Technology with more students taking STEM (science, technology, engineering and mathematics) and reserving 2.05 per cent of GDP going to R&D in 2015 compared with Kenya’s 0.79 per cent (2010 data)." This data for Kenya is quite right - although Kenya has a National Research Fund that is supposed to receive 2 per cent of GDP from Government sources and is for funding R&D, we are not close to actually spending that amount. One reason given for the shortfall is that R&D institutions (primarily Universities) cannot absorb that level of funding. The fund is only a few years old so we shall continue to monitor the level of funding.

The author states "I will never get tired of asking why drama festival winners visit State House and not science congress winners" and, to explain this situation, posits: "One suggestion is that our policy makers are mostly social scientists who see science and technology as a nuisance and boring. This shunning of science and technology experts on the high table starts in secondary school and is reflected all the way to the presidency. How many governors, MCAs, MPs, senators or women reps are scientists?"

This blogger, originally a scientist by training but now a lawyer, shouts with glee ("Eureka!") at this insight. It is so very true, and so very sad.  The current President of Mauritius, Ameenah Gurib, is an accomplished scientist, but is notable precisely because scientists so rarely hold high office, particularly in Africa. Without a doubt the background of a leader influences how that leader thinks and leads, and how various fields are prioritized.

The author questions: "Does the President of Kenya have a Science and Technology policy adviser, we know of political and education advisers?" This blogger does not know of one and requests input from readers. If there is none, what a shame! To truly be the "silicon savannah" or, at any rate, a hotbed of innovation, the top leaders must have close advisors that understand these issues.

We should celebrate the innovation that is occurring here, even while we question the priorities that are set by government.

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Friday, 3 March 2017

Afro-Buff

Guest Post: Intangible value underlying the Snapchat IPO


Afro Buff has been grazing for guest posts for you. This one comes from Reinhardt Biermann who readers may recall won the UNISA Domain Name Essay competition promoted on Afro-IP and won a trip to Geneva. This time, Reinhardt, captivated by Snapchat's IPO, gives us his thoughts on:

The Intangible Value of a Tech Startup
In one of the biggest technology IPO’s on the New York Stock Exchange, a tech startup has surprised investors and commentators alike, with a surge in stock prices on the opening day of trading.
I first encountered SNAPCHAT in 2012 during an exchange programme in the Netherlands. Students from the US were all sending “Snaps” to each other, trying to convince their Dutch, South African and Australians counterparts to join in. At that stage, the general consensus was the following (and still remains for many): What is the point of sending videos or images that cannot be stored on your mobile device?
Based on yesterday’s results, the company’s market value appears to be around $28.1 billion.

What sits behind the so-called value of SNAPCHAT and is it merely an empty vessel for a digital generation?
The initial interest behind the platform was the fact that Snaps were only accessible for 10 seconds. This has changed in recent times, with a screenshot making it possible to store the Snap on a device. The sender does however receive a notification when the recipient does take a screenshot of a Snap. There are also Apps that have sprung up with the capability to store photos and videos.
The main features of SNAPCHAT are the unique elements of the Snaps, the inclusion of Geofilters (graphic layovers that users can insert when in a specification geographical area), Lenses[1] (augmented reality for selfies), Stories and Discovery.  

Intellectual Property
From an intellectual property perspective, the intangible assets of a company are often made up of patents, designs, trade marks, copyright and frequently, while not emphasised enough, confidential information, know-how and trade secrets.
The company has indicated that approximately 158 million people use the App daily, sending 2.5 billion Snaps on the platform. The average user spends in the region of 30 minutes a day on the platform. It therefore appears that a substantial portion of the intellectual property correlates to the data and information of millennials, entrenched within this platform, a segment of the market that so many companies have struggled to connect with. However, the biggest challenge for SNAPCHAT has been monetizing these aspects, as the company remains unprofitable. Furthermore, privacy and data concerns have been raised, as it remains ever difficult to manage consumer information responsibly and with the appropriate protection tools.
The SNAPCHAT trade mark, which has been registered in South Africa, is also an important part of the company’s intellectual property. In addition to registered trade mark rights, SNAPCHAT has acquired a substantial goodwill and reputation in the market place. This places the company in a strong position to enforce its rights against any trader that may wish to use the same or similar trade mark in the social media industry.
The company has started to bolster its patent portfolio, with recent acquisitions from Yahoo and other technology entities, which has made the company more attractive for investors.

Risks and pending litigation
SNAPCHAT filed a US patent application during 2012 for the so-called “tap and hold” function on the shutter to record a video or photograph (see https://www.google.com/patents/US8428453). However, a company called Mojo Media filed a similar “tap and hold” patent application shortly thereafter. SNAPCHAT’s patent application was granted by the US Patent and Trade Marks Office in 2013, but it seems that action was instituted by Mojo Media.
There is also ongoing litigation between Snap Inc. and a Canadian entity, Investel Capital Corporation, who is seeking to invalidate the patent SNAPCHAT obtained in respect of its Geofilters technology. The other side argues that its technology was made available to the public before SNAPCHAT’s patent application was filed.[2]
Furthermore, there is also the settlement that was reached (in quite similar fashion to the Winklevoss brothers’ dispute with Facebook), with an early SNAPCHAT employee, who apparently jointly owned some of the intellectual property. This intellectual property in question includes ghost-shaped logo ("Ghostface Chillah", named after Ghostface Killah of the hip-hop group Wu-Tang Clan), the PICABOO trade mark (which was subsequently rebranded to SNAPCHAT) and possibly the “evaporating photographs” concept.

Is the tech bubble waiting to burst?
Some are of the view that the recent tech investments may be a repeat of the dotcom crash in the 2000’s. However, we live in strange times, with the NYSE reaching record levels and the London financial markets remaining surprisingly stable in times of protectionist movements, amidst fears by investors and consumers.
Consumer data and confidential information (specifically pertaining to millennials), appear to be increasingly valuable forms of intellectual property, and may be inflating the valuations of tech startups. However, the market appears hungry and ready to throw money at it. Together with an increasing patent portfolio, investors seem hypnotized by the potential value thereof.
Can the data and technology of modern-day tech companies translate into strong financial returns? Only time will tell.

Reinhardt Biermann


[1] Taco Bell apparently spent between $500 000 and $750 000 on a sponsored lense/filter that was viewed 224 million times in a single day.



[2] In another ongoing dispute, Vaporstream Inc. v. Snap Inc. (case number 2:17-cv-00220), Vaporstream has instituted patent infringement claims against SNAPCHAT in relation to a system for sending and receiving private electronic messages. SNAPCHAT has argued that the type of invention relied on is not eligible for patent protection, in terms of the case of Alice v CLS Bank International (a 2014 US Supreme Court decision). SNAPCHAT has asserted that the subject matter of the invention is not patentable, as it relates to attempting to keep secret the identity of a sender and recipient of a message, on a computer.

If anyone has an something to contribute to the conversation on IP, please let Afro-Buff know here.


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