South Africa’s R&D tax incentive scheme
South Africa offers a
150% tax deduction on expenditure, plus an
accelerated depreciation deduction for capital expenditure,
on research and development (R&D) activities in the
country. The scheme was introduced in 2006 and is reviewed
annually to see whether it delivers on certain objectives such
as attracting R&D investment into the country.
This month the government
endorsed the 2014/15 report on the scheme. This report is
not yet public but a spokesperson from the Department of
Science and Technology (DST) told Managing IP that the figures
in the report are "the same as those published in the 2013/14
"This is because we have not updated the count for IP
outputs. We are starting a process for impact evaluation of the
incentive which will provide us with a detailed account of the
IP impact," the spokesperson explained. All the reports on the
scheme are published
According to the
press release, R6 billion ($413 million) was claimed by 876
companies between November 2006 and February 2015. The scheme
supported around R33.3 billion ($2 billion) worth of R&D
expenditure during this period.
Some of the companies that participated in the scheme
reported, among other results: (a) 765 scientific publications;
(b) 1,267 total granted and pending patents; and (c) 111 total
number of other forms of IP created.
Based on the 2013/14 report we understand that the patent
figures cover both local and international patent applications.
The top five industries in terms of R&D expenditure were:
(a) manufacturing, (b) financial intermediation, (c) real
estate and business services, (d) transport, storage and
communication and (e) mining and quarrying. The report also
identified electrotechnical and ICT, aerospace and defence,
advanced materials and nuclear as four key sectors for
The DST, however, says the 2014/15 report
highlights certain aspects of the scheme (for example
delays in the approval process) that need to be improved. The
government has initiated legislation to
relax the rules and "allow taxpayers to reopen assessments
and claim approved R&D expenditure that they incurred
during that year".
This has been included in the
2016 Draft Tax Laws Amendment Bill (see page 25), which is
now open for
public comments until August 8 2016.
IP Consultative Framework established in South
From the same government’s press release we
also learn that the DST’s IP Consultative
Framework (IPCF) has been approved. The purpose of the IPCF is
to enhance the engagement between government and stakeholders
towards the development of
South Africa’s IP Policy.
The government said it "will ensure that the IP policy
respects property rights as enshrined in the Constitution while
striking appropriate balances with public interest and responds
to South Africa’s unique innovation and
an article law firm Spoor & Fisher said: "South
Africa’s IP policy remains delayed, but it would
appear that the consultative process is beginning again. We are
encouraged by the Government’s commitment to
respect IP rights while striking appropriate balances with
public interest, and hope that the IP policy will be finalised
without much more delay."
South Africa: AdWord bidding isn’t
South Africa’s Supreme Court of Appeal has
confirmed that a claimant cannot invoke a special kind of
unfair competition law termed 'leaning on’ to
prevent a competitor from bidding on its unregistered trade
mark as a Google AdWord keyword. Delivering the judgment of the
Cochrane Steel Products (Pty) Ltd v M-Systems
Group, Judge Ponnan said: "Our courts have generally
declined to come to the aid of an applicant complaining that a
rival trader has used its trade name for its own commercial
purposes unless that applicant can establish that the rival
trader is using its trade mark or trade name in a manner likely
to deceive or confuse members of the public."
The judge added: "For imitation is the lifeblood of
competition and the bare imitation of another’s
product without more is permitted." The Court made it clear
that the policy behind this is to prevent "the creation of
On the claim of passing off, the Court’s view
was that the appellant did not demonstrate that the way the
advertisement is displayed gives rise to likelihood of
confusion. For more see our analysis of the High Court decision
here and this
case note by law firm Adams & Adams.
Deadlock on GIs and disclosure
WTO members failed to reach agreement on
document TN/C/W/52 at a special session of the TRIPs
Council this month. According to the chairperson of the TRIPs
Council (Trade Negotiation Committee) Dacio Castillo: "The
delegations attending the consultations largely reiterated
known positions and did not offer suggestions on how to move
forward. Most delegations who spoke said that they were still
in reflection mode and were not in a position to make concrete
suggestions as to next steps at this stage."
The document contains proposals by a number of members for
three issues to be included in the
Doha Work Programme negotiations. They are: (a) a register
open to geographical indications for wines and spirits (GI);
(b) a mandatory requirement for the disclosure of the country
source of genetic resources and/or traditional knowledge; and
(c) extension of GIs to cover all products beyond wines and
Switzerland, the EU and the US hope common ground can be
reached after the summer break.
TRIPs Protocol secures 76 members
Papua New Guinea is the latest
country to deposit its instrument of acceptance for the 2005
Protocol amending the TRIPs Agreement.
The Protocol enhances the TRIPs flexibilities to make it
easier for WTO members to import and export generic medicines
made under compulsory licences. This development brings the
number of acceptances to 76.
The amendment will enter into force when two thirds, 109 as of
today, of the WTO members have ratified the
Protocol. The deadline to reach this milestone is December 31
2017. Until then, members have to rely on the existing 2003
'waiver’ to facilitate access to
medicines. This is a topic of discussion at
UNCTAD’s conference in Nairobi this month.
India and others criticise EU’s goods
in transit regime
At a TRIPs Council meeting last month Brazil, India, South
Africa, China and Indonesia expressed concerns over the new EU
trade mark regime dealing with goods in transit. They say it
could hinder shipment of legitimate goods - an
argument made by the Dutch delegation before the Council of
the EU last year. India says it
violates various provisions of the TRIPs Agreement. The EU
defended the criticisms from the five countries arguing that
there are safeguards in its new regime.
During the meeting the chairperson also
urged WTO members to engage in more informal discussions on
meeting agenda. Ambassador Modest Jonathan Mero believes such
talks would encourage "an open and stimulating discussion in
which delegates would not feel compelled to be limited to
simply putting well-known positions on record".
MPP signs patent licence deal
The Medicines Patent Pool (MPP) has
signed manufacturing licences with Aurobindo, Desano, Emcure,
Hetero Labs, Laurus Labs, Lupin and Zydus Cadila to produce
generic versions of drugs used for the treatment of HIV and
hepatitis C. MPP is a UN-backed organisation which serves as a
brokerage entity between patent owners and manufacturers of
generic drugs for certain diseases in low and middle-income
"These new sub-licences will secure greater volumes of
low-cost medicines for people living with HIV and hepatitis C
in low- and middle-income countries," said Greg Perry,
MPP’s Executive Director. "We look forward to
working with the companies to speed delivery of these
treatments to those most in need of better medical options," he
added. For more information click here.
Draft Regulations for Arusha
Experts from ARIPO member states met last month to review
the draft Regulations for the Implementation of the
We understand civil society organisations such as the
African Centre for Biodiversity (ACB), African Seed Trade
Association (AFSTA) and Alliance for Food Sovereignty in Africa
(AFSA) took part in the review.
This follows the ARIPO director general’s
call last year for all stakeholders to get involved.
Further fine-tuning is required before the final draft can be
presented for adoption at the 40th session of the
Kenya is the latest African country to accede
to the UPOV Convention.
INTA comes to Africa in September
INTA will be holding its first conference in Africa for
many years on September 1 to 2 2016. The conference will
be held in Cape Town, South Africa. The theme of the conference
is 'Building Africa with Brands’. For more
information including registration click