CommsAdvisory

Trade mark owners should remain vigilant as the Top Level Domain Space expands By Donvay Wegierski, director at Werksmans Attorneys The Google AdWords programme, where the highest bidders are offered third party-owned trade marks for keyword advertising, remains debated by trade mark owners. This programme is on a pay-per-click basis, also known as the sponsored link campaign, whereby an advertiser pays only when the link is clicked on. The Google Adwords programme is a highly popular means of generating traffic to a website and helps to boost online advertising. As a general rule, foreign courts have said that the use of a trade mark as a keyword is acceptable; provided the internet user can discern that there is no connection or association of the mark with the trade mark proprietor. In considering the issue of keyword advertising and trade mark infringement, the importance of fair competition has therefore remained paramount. Recent key ruling On 21 May 2013, the High Court of Justice (England and Wales, Chancery Division) found in favour of Interflora, Inc (“Interflora”) ruling that Marks & Spencer’s (“M&S”), use of the INTERFLORA trade marks by virtue of its successful bids in the Google Adwords programme amounts to trade mark infringement. This brings to an end a four-year battle between Interflora and M&S (Interflora British Unit v Marks & Spencer PLC, Flowers Direct Online Limited C-323-09) and as a consequence, M&S is now prevented from future bids on INTERFLORA trade marks in the Google AdWords programme. It would be fair to infer from this judgment that the use of someone else’s trade mark in keyword advertising will now be more restricted. The Interflora ruling is however very specific because the court found that due to the manner in which the advertisements were displayed, it wasn’t evident to the “reasonably well informed and reasonably attentive internet user” that M&S is not part of the Interflora network of …

News release from Werksmans Attorneys 8 July 2013 .AFRICA domain names to be introduced by year end The .africa domain name is expected to launch towards the end of 2013, making it possible for businesses and other organisations to register domain names ending in .africa for the first time. Donvay Wegierski, director of Werksmans Attorneys and member of its Intellectual Property practice in Stellenbosch, said thatthe .africa domain was created “by Africans for Africans” and marked Africa’s strides in growth and development. “It will present an opportunity to identify the African continent online for the first time. We expect many exisiting and new companies across the continent to to take up the .africa domain to show to the world where they are from.” The procedure to register .africa domain names is yet to be formally disclosed. However the Internet Corporation for Assigned Names and Numbers (“ICANN”) is the coordinator of the launch of the new domain names. “We expect the .africa domain to launch in two phases - first the Sunrise phase and second the Landrush phase,” Wegierski added. During the Sunrise phase, trade mark owners have priority to register .africa domains incorporating their trade marks for a certain period of time. “It is for this reason that trade mark owners should validate their trade marks at the TradeMark Clearinghouse (TMCH) as only trade mark owners with TMCH validation can take advantage of the Sunrise period,“ Wegierski advised. It is only possible for the TMCH to only validate registered trade marks and therefore only proprietors of registered trade marks will have preference. The Landrush phase will open thereafter and domains can be registered on a first-come-first-serve basis. The .africa registry will be managed by UniForum SA, trading as ZA Central Registry (ZACR). UniForum SA was established as a non-profit organisation in 1988 as a professional association to promote and exchange information on …

News release from SAVCA and AVCA 18 June 2013 AVCA and SAVCA sign Memorandum of Understanding Private equity and venture capital associations formalise collaboration over training, networking and research projects for Africa London and Johannesburg, Tuesday 18th June 2013: The African Venture Capital Association (AVCA) and the South African Venture Capital Association (SAVCA) today announced that they have formalised a partnership for the further promotion of private equity and venture capital in Africa. Following approval from their respective Boards, which are comprised of industry leading experts, AVCA and SAVCA will be collaborating to provide additional services to their members and leaders, in pursuit of attracting more global and local capital to Africa. The partnership will include initiatives across a range of activities, including training, conferences, networking and information-sharing events, investor promotion events and research surveys. Specifically, the associations will collaborate in the development and structuring of training programmes targeted at regulators, investors, pension fund trustees and current and prospective members in the private equity industry to encourage the implementation of industry best practice. Additional plans include the creation of investor tours to support members’ business development goals and research designed to better map the rapidly evolving industry and to provide independent data to aid fundraising. Erika van der Merwe, Chief Executive Officer at SAVCA said, “There is significant value in the combination of AVCA’s regional and global reach, with SAVCA’s established presence in South Africa and its role in the local regulatory landscape. We are delighted to be working even more closely with the AVCA team in our mutual goal of promoting our asset class in Africa.” Commenting on the formalised partnership, Michelle Kathryn Essomé, Chief Executive of AVCA said, “Thriving and active …

Once best known for corporate investing, private equity firms are now ploughing money into African infrastructure. Erika van der Merwe, CEO of the South African Venture Capital and Private Equity Association (SAVCA) said: “Infrastructure gives private equity investors access to the strong African growth story, an exceptional theme in a structurally low-growth world.” Buying exposure to infrastructural assets through private equity provides investors exposure to an asset class that is not easily found elsewhere. “There are very few listed alternatives,” added van der Merwe. “There is limited capacity in the listed market and even in the bond market for gaining such exposure to infrastructure.” Big US private equity players like Blackstone, Apollo, KKR and Carlyle have recently invested in Africa with Blackstone taking a stake in a major dam construction project in Uganda. The bulk of foreign direct investment to be devoted to Africa over the next ten years is expected to be in infrastructure and related assets and industries. The most significant constraints to African growth are the lack of energy and transport & logistics infrastructure. Emile du Toit, SAVCA Chairman said: “None of the growth that is projected for the region will materialise without a major rollout of infrastructure, which private equity is now helping to fund. “The multiplier effects created by infrastructural investments are powerful tools for uplifting people and growing economies – and make infrastructure-focused private equity funds an ideal vehicle for fulfilling an impact investing mandate.” van der Merwe added that all development finance institutions and many pension funds now are focused on responsible investing and are looking to modify their allocations to ensure that these mandates, which extend to environmental, social and governance criteria, are fulfilled. Because of the medium- to long-term nature of their investments, infrastructure funds – and private …

South Africa renegotiates double tax agreement with Mauritius By Ernest Mazansky, Tax Director at Werksmans Attorneys The much-anticipated renegotiated double tax treaty with Mauritius was recently signed and disclosed to the public. The new treaty, which is expected to come into effect in 2015, will impact several existing tax structures. Worth noting is the following: · The treaty tie-breaker for companies with dual residence will no longer be the company’s place of effective management (POEM). Rather, the company’s treaty residence will be determined by mutual agreement between the South African and Mauritian Revenue Authorities (MAP). By doing this, the certainty of a legislated provision is being substituted for the uncertainty of a negotiation between Revenue Authorities and in which the taxpayer will play no direct part. The dispute can also not be determined by an independent court, which is currently the case. Under the new treaty, if the two Revenue Authorities cannot reach consensus, the treaty simply ceases to apply to the company concerned. This is hardly acceptable. At the very least, the treaty should have bound the Revenue Authorities to submit themselves to a binding arbitration process (something which is provided for in the Organisation for Economic Co-operation and Development (OECD) rules). · Companies which are incorporated in Mauritius and which have structured their affairs properly so that they truly have their effective management in Mauritius, or at least not in South Africa, would not be impacted by the new treaty. By not having their POEM in South Africa, they would not be dual residents and the question for dispute/mutual agreement simply does not arise. · For these companies (incorporated in Mauritius), the challenge is to ensure that there is no effective management in South Africa, and often this is more easily said than done, which is why so many Mauritian structures are at risk. But then, they were always at risk, …