Intellectual Property in Africa: Opportunities for Licensing

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With a rapidly growing and evolving market in Africa, foreign Intellectual Property (IP) owners are extending their Intellectual Property in Africa and commencing business operations here. Companies not interested in operating in Africa at this stage, should consider obtaining Intellectual Property protection in Africa to open various licensing opportunities.

Obtaining IP protection opens the door, firstly, to potential licensing opportunities with local companies. Licensing of Intellectual Property in Africa can prove lucrative for foreign IP owners, particularly when minimal ongoing support is needed from the IP owner. The licence agreement can place obligations on the local licensee to proactively protect the rights and interests of the licensor. Such obligations may include to uphold the brand in the licence territory, or to bring any potential infringement to the attention of the licensor, etc. The licensor can even place obligations of secrecy and/or confidentiality on the local licensee, thereby shielding business knowledge and know-how from third parties.

Obtaining IP protection in Africa also creates a barrier to potential competitors desiring market entry. Registered Intellectual Property in Africa can be used as leverage to secure licensing agreements with competitors in the relevant territories, be that local or foreign competitors, ensuring that the foreign IP owner benefits from the use of the technology in Africa.

Thirdly, although non-registered forms of IP can also be licenced (e.g. know-how and copyright in certain instances), registered IP forms create a much stronger basis for licence agreements. Statute applicable to registered IP affords IP owners defined legal remedies and avoids lengthy common law debates. Obtaining registered IP protection in Africa is thus imperative at an early stage, particularly where novelty destroying events are relevant to obtaining IP protection.

Finally, as the IP owner, the foreign company will be in a strong negotiating position regarding the type of licensing agreement entered into. The IP owner can determine the structuring as either an exclusive licence, a sole licence or a non-exclusive licence. Smit & Van Wyk can assist with strategic advice regarding licensing agreements in Africa, as well as drafting suitable licence agreements.