Last night Afro Leo attended the inaugural CIPC Youth IP awards in the aptly name Heartfelt arena in Pretoria.
It was glitzy evening with 400 RSVPs consisting of dignitaries, contestants, representatives from industry, other important people and, of course, yours truly, all dressed up like a James Bond cast.
CIPC's Amanda Lotheringham was instrumental in putting it all together and gave an inspiring speech, together with Rory Voller, the Commissioner of CIPC, reinforcing the need for IP structures to form a bridge between innovation and value creation.
Van's Aircraft is a very successful producer of experimental aircraft and aircraft kits based in the US. Their fleet of RVs (as they are known) have, over the past 50 odd years, become a major player in general aviation, the term used to describe aviation for private pilots and basically everything outside of commercial air transport. In 2023, over 1100 of their fleet were flying worldwide and are popular in Africa. Robin Coss Aviation Vans Aircraft Cape Town is their highly regarded distributor.
However, despite their success in the tangible world, their investment in intangible rights to protect and nurture their innovation appears to have been strangely absent, vastly undervaluing their company at a significant time of need in their history.
In December 2023, Van's Aircraft made a surprising announcement that they had severe cash flow problems and had been forced to file for Chapter 11 Bankruptcy protection - a legal way of retaining ownership of their assets under a plan to restructure and remain in business. Their woes relate to supply chain challenges, problems with laser cut parts, and faulty primers.
The Chapter 11 process requires Van's to publicly disclose their financial position for scrutiny. It is here that we make the observation that their intangible asset value is set at ZERO, and that there are no disclosures of any registered or unregistered intellectual property relating to the brand or designs of aircraft. They are simply recorded as "unknown".
A check of the national registers using TM View's database confirm their lack of protection, not listing a single trade mark in their primary market - the United States. Indeed, in class 12 (the class covering aircraft), it would appear that Vans Footwear have the jump on them. It would also appear that they do not have registers recording unregistered rights in their designs and knowhow in their various kit planes.
To understand the significance of this, for over fifty years Dick VanGrunsven has grown this company, yet those efforts reflect as ZERO in the brand value section on the balance sheet.
Despite the challenges of valuing brands and intangible assets accurately, few who know this company, would deny that its intangible value is substantially more than "nothing". The reality then is that the company is undervalued at a critical time when it is trying to regain trust from their stakeholders, which include their own customers.
Some may argue that by reflecting the brand as ZERO they deter potential creditors from seeking to bankrupt the company and secure the trade marks or other IP at auction at some time in the future, but this is misguided. In fact, it may just do the opposite because the auction value would be low using the valuation the company has placed on its intangibles.
By contrast, Cessna the bastion of the traditional, non-experimental trainer and small airplane market, has a swathe of trade mark registrations supporting its brand value. The reason for this is because brand valuation, properly executed, entails an assessment of the integrity of the rights in the company's intellectual property. This illustrates the while the experimental aircraft segment is flourishing, one should not experiment with IP if you want to your brand valuation to flourish. In a world where safety means everything, overlooking intellectual property governance and protection is particularly ironic.
Last week I spent time in Botswana for a hearing. It also gave me an opportunity
to pilot my first international flight. It’s a wonderful thing when two passions
align in a way that is also sustainable, thanks to local innovation.
My daughter taught me about the fun of “Insta Reels” and this one I share with you now. I hope you enjoy it as much as we did capturing it!
Botswana is an impressive country. Its people
are friendly, welcoming, and very capable. It is relatively small but vast (about
5% of South Africa’s population and 25% of its land mass) and an important
business hub in the region. It is also home to a number of tourist attractions,
particularly in the Okavango area.
Gaborone, the commercial capital, is open for
business. Its skyline illuminates at night with brands of well-known eateries,
banks, fashion houses and other commerce. Any exchange control is light, and the
benefits of foreign direct investment are clear with an apparently, thriving
middle class. Hotels are busy and their rates comparable, if not higher, than
those in Johannesburg 300kms away, suggesting a healthy level of demand and investment.
The courts are stately and proudly bear “minimum standards of service” in
their opening halls. Litigating in Botswana on intellectual property cases is somewhat
familiar because their laws and procedures are largely based on the English
system. That said, it is embryonic when it comes to the number of published decisions
on this area of law and as a result, lean on advocacy and common law from South
Africa. This is why we were present.
Getting there by road from South Africa is
relatively painless except for border control which can lead to unpredictable, if
not significant, delays. It is also not entirely stress free as road safety
issues and hijackings (on the SA side) have been reported and naturally scare those
who must travel between the countries. As a result, the country’s policing
system has a no-tolerance approach which acts in stark contrast to their
otherwise amiable demeanor. Necessary, it would seem, to protect what the country
has nurtured.
Flying commercially is the preferred way of travel
but it’s not inexpensive, and although it is a short hop, it can take as long
as road travel once airport waiting times and clearance delays are considered.
Although it is safer than road travel, it is significantly less sustainable for
such a short trip. This is where a private plane becomes an option as it can be
the most affordable, safe (compared to road travel), and sustainable option, especially
if the plane is made by a company like Sling Aircraft, itself a wonderful
example of South African innovation.
Sling Aircraft are based just south of
Johannesburg and over the last two decades have made private plane ownership
and flight relatively affordable for businesspeople with long commutes or
requirements for local travel to tricky to reach places. A secondhand Sling 2
or 4 seat aircraft, for example, is no less affordable than an executive
vehicle and has significantly less environmental impact. It runs on ordinary unleaded petrol
and uses less fuel than an equivalent road trip. It also does not depreciate as
fast a car and is simply a joy to travel in. It took just 1hr 20mins to travel
the distance between the cities.
Of course, flying in small planes is not for
everyone and although it is convenient, it is vulnerable to vagaries of the weather
so careful planning is required. There is no perfect option when it comes to travel
across our continent, but general aviation or small plane travel, marginalised in recent times, can make a
comeback thanks to local innovators, like Sling Aircraft and others.
Flying oneself is an experience quite unlike
any other and this aspect is not represented in a comparison of facts and
figures between the different forms of transport. It is a privilege, a
challenge, a responsibility, and a freedom, none of which can be measured. I am
just grateful that my own journey to learn to fly, which started a few years
ago, has culminated in this example of practical integration into my
professional career, not only as a commuter option which I have been doing now for
some time, but also to connect people, skills and highlight innovation, in a sustainable
way.
South Africa: In the
case of Fire Logic (Pty) Ltd (Fire Logic) v Logic Group Africa (Pty) Ltd t/a Firelogik (Logic
Africa), the Eastern Cape division of the High Court found this week that Logic Group had
passed off its services by using the name “Firelogik”. The court interdicted them from
using the name in the Cape provinces and ordered them to pay costs. This case
illustrates the need for brand owners to have a zero-tolerance approach and be vigilant about trade mark misuse by
others, to protect themselves with registered trade marks and use the courts to
enforce where necessary.
Background:
Fire Logic
has been in existence since 1994 and has developed a substantial reputation in its
brand for fire protection and maintenance services. The dispute began in 2016
when the Logic Africa applied for a license using the name FIRELOGICS. This
led to an exchange between the parties and Logic Group responded by stating
that they were changing their name, but it never fully did so.
By
2019, Fire Logic realised that this nagging fire had only been partially doused
when it received erroneous purchase orders from the retail store Pick ‘n Pay.
Further correspondence was entered into, but it became clear, by August 2021,
that the only way Fire Logic could stop the use of such a similar name, was to approach
the court, which it did. It sought a final interdict and costs.
Logic
Africa responded sometime later by taking down its website and opposing the
applicant on the basis that a reputation could not be shown in the name and the
no confusion was likely. It also claimed that the relief was then moot because of
its name change in 2016.
Findings:
In a considered judgment, Acting Judge Bands
found that FIRELOGIC was a fancy name and/or deserving of protection as a
symbol of the goodwill attached to it. Then judge also found sufficient
similarities in the name for there to be a likelihood of confusion, especially
as the two parties operated in the “common field of activity” and in competition with one another.
For attorneys working with the nuances
of application proceedings in South Africa, the judge re-affirmed that bare denials in affidavits
are not sufficient to create disputes of fact under the Plascon-Evans rule. It
is also an example of a situation where an final interdict can be granted even
where the dispute is alleged to be moot.
These findings lead to a decision against
the Logic Africa.
Comment:
The analogy between a fire that does not
want to extinguish and the facts of this case that took seven years to conclude
(absent an appeal) are useful in illustrating the need for effective trade mark management
and protection from the outset. This means that when a fire ignites, to continue the analogy,
one must make sure it is dealt with comprehensively at the start. This means a zero-tolerance approach, continued vigilance, the use of undertakings and the
need to apply for trade mark registrations (for swifter, less costly and more predictable
outcomes, as well as the possibility of damages in the form of a reasonable
royalty). In these types of cases, punitive costs may also be a handier deterrent
– it should not be possible for seven years of such misuse - something for lawmakers to consider in future.
This year’s Crammer®event hosted by Adams & Adams in late October attracted over 250 attendees
and is the largest legal conference of its type in Africa. It’s an annual event
designed to distill a year’s worth of legal content (largely intellectual property
related) into a single morning through short, sharp presentations. This year’s
keynote speaker was Kimberley Taylor an inspiring, young businessperson who has created Loop, a groundbreaking logistics company, and Stephen Key, a renowned, US-based inventor and author who is passionate about helping others create value out of their innovations through inventRight.
The recordings have been made available and are
now shared with you by Afro-IP. Enjoy!
