Tag / Law

by Mike Poverello

The Protection of Personal Information Bill

Grant ThorntonThe folks at Grant Thornton have prepared a paper on this important subject, which is no less relevant to the Customs environment. The Protection of Personal Information Bill (POPI) is expected to be passed into law soon. It makes sweeping changes to the way all organizations are going to be allowed to deal with personal information, laying down very strict guidelines about what we can do with such data once it is received and processed.

As with all acts of law, it is imperative that the public sector leads by example and ensures that staff are trained and systems in place so that personal data of South African citizens remains secure.

In its latest issue of In the Public Eye (available on their website), Grant Thornton provides a comprehensive legal and technical framework to assist you in getting ready for POPI. Remember that failure to comply with the POPI Bill may result in significant penalties including fines and imprisonment. Source : Grant Thornton

by Mike Poverello

Parallel imports in South Africa – Some sound advice

newTyres_m_mThe following article was penned by lawfirm Edward Nathan Sonnenberg and featured on Lexology.com. It was reported recently that bikers had protested outside Parliament about proposed measures which would have the effect of making life very difficult for those businesses who are involved in the parallel importation of motorbikes. The report did not make it clear exactly what the proposed measures comprised, but it did suggest that they involved special testing of bikes that are brought into the country by parallel importers, together with some system of issuing certificates for such bikes. Measures that, the report suggested, would not only require parallel importers to raise their prices, but might even put them out of business altogether, leaving authorised suppliers as the only source of motorbikes in the future. Amongst the protesters were the Parallel Importer of Motorcycles Traders Association of SA and Cosatu, which said that it was worried about job losses.

So just what are parallel imports, or ‘grey goods’ as they are sometimes known? Well, a foreign manufacturing company will normally appoint an authorised distributor for its product in South Africa. That distributor is then responsible for sales of the product, after-sales service and, of course, marketing, advertising and all those other good things that go into brand-building. A parallel importer is someone who buys that same manufacturer’s product in another country and imports it into South Africa for resale. The reason why the parallel importer bothers to do this is quite simple- the product is often so much cheaper abroad that the parallel importer can undercut the authorised distributor and still make a profit.

Needless to say the authorised distributor does not like the parallel importer, because the parallel imports threaten the authorised distributor’s business. The manufacturer generally doesn’t like the parallel importer much either – not only does it have to deal with complaints from an unhappy authorised distributor, but it also has no control over what the parallel importer does with the brand. But can the manufacturer or the authorised distributor actually do anything to stop the parallel imports?

Parallel importation is certainly legal under trade mark law. That’s because Section 34 (2) (d) of the Trade Marks Act provides that a trade mark registration is not infringed by ‘the importation into, or distribution, sale or offering for sale in the Republic, of goods to which the trade mark has been applied by or with the consent of the proprietor.’ This makes perfect sense if you bear in mind that a trade mark is essentially an indicator of origin, and that trade mark law is basically there to ensure that there is no consumer confusion. In the case of a parallel import, the consumer gets exactly what they expected, namely a product that was made by or under the control of the company that owns the trade mark – contrast this with the situation where the consumer buys a rip-off or counterfeit, where they get something very different from what they expected.

There is a proviso to this, and that is that the parallel importer must be quite open about the fact it is not an authorised distributor. That’s because Section 25 (2) of the Consumer Protection Act provides that ‘a person who markets any goods that bear a trade mark, but have been imported without the approval or licence of the registered owner of that trade mark, must apply a conspicuous notice to those goods in the prescribed manner and form.’

So, if you’re a parallel importer you should be OK provided that you make it clear that you are not the authorised distributor of the product. But there are other legal matters to consider, and the first of these is copyright. Copyright might be an issue where the product that’s being imported bears a trade mark that consists of more than just a name, but also something that could be described as an artistic work – this might be a logo, or it might simply be a stylised form of a name. There was a case a number of years back where a foreign manufacturer successfully used copyright law to stop parallel importation of cassette tapes. But it was an extraordinarily contrived thing: time to concentrate hard…

The Copyright Act provides that copyright is infringed where someone imports an article into South Africa in circumstances where they knew that the making of that article would have been an infringement if the company that made it had in fact made it in South Africa. To use this provision, the cassette tape manufacturer had to go through a number of hoops: it had to assign the South African copyright in the label to the authorised distributor; it then had to warn the parallel importer that it was importing articles that – had they been made by the manufacturer in South Africa – would have infringed the authorised distributor’s copyright; finally when the parallel importer ignored the warning (probably because it didn’t understand it!) it could sue for infringement. There has, as far as I’m aware, never been another case like this and one wonders whether – in an age where intellectual property law is considered in the light of constitutional and competition law and policy – the same result would be achieved if a similar case ever went to the highest court.

Finally it’s worth remembering that, in the fairly rare event of the product that’s imported being covered by a patent or a design registration, there may well be an issue. Section 45 of the Patents Act says that a patentee has the ‘right to exclude others.. from importing the invention’, whereas Section 20 (1) of the Designs Act says that the owner of a design registration has the right to exclude ‘other persons from …importing … any article included in the class in which the design is registered and embodying the registered design.’

Related articles
by Mike Poverello

Public Office – a way to pillage the state?

The following article featured in the Business Day highlights the endemic problems of a moral-less society with an unbridled desire to attain wealth at all costs. True this is not just a South African problem, one just has to look at the corrupt activities of ‘politicians’ and ‘big western bankers’ to realise the despair that has  been wrought for so many unwitting citizens, many of whom face a future of utter misery. With so much talk of anti-corruption measures and witch-hunts against whistleblowers, the article provides a down-to-earth explanation as to what it means to hold public office.

The abuse of public power and the plundering of state resources have become so pervasive in SA that events such as these can no longer be regarded as isolated episodes of delinquent public officials, each acting individually. Instead they should rather be ascribed to a political culture born of a profound misconception of the very notion of public office, held by sizeable numbers of public office-bearers ranging from the highest echelons of the executive to junior police officers and public servants. This misconception causes office-bearers to act in a way that is diametrically opposed to what public office requires.

Public office bestows power and authority on the public office-bearer. It demands that citizens recognise and yield to the authority that accompanies it, be it the meagre authority of the junior public servant, the often intrusive authority of the policeman, or the far-reaching authority of the president or ministers. Public office commands respect by virtue of the power vesting in the public office-bearer and from the fact that public office-bearers do not act in their own interest but in pursuit of the public good. But the rewards that accompany the highest positions of public office extend much further. They are publicly applauded and venerated or placed in a position to receive these honours.

However, there is a stark flip side to the public office, which is as essential to public office-bearing as the power and rewards that come with it. This is that the authority and honour of public office are rooted in a profound sacrifice, requiring the office-bearer to sacrifice his private self for the sake of the public good. The higher the public office, the more drastic the sacrifice of the private self must be.

These two aspects are equally vital to public office: the power and the honour as well as the sacrifice of the office-bearer’s private self. The state is rooted in this two-pronged premise and its survival depends on it. Hence, public office does not turn the office-bearer into some magnified private person, entitling him to private gain that is beyond the reach of the ordinary private person. Public office-bearers must sacrifice the private self for the sake of, and in exchange for, public authority.

The occupant of public office discharges his responsibilities strictly in accordance with the prescribed script of the public office concerned; he must act lawfully in accordance with the precepts of the office in question. This is not to say that he must act mechanically, because the way in which public office is discharged may vary from mediocre to exceptionally virtuous, yet always within the confines of the script of the office concerned. Hence, the office-bearer may never act outside the powers inherent in the relevant public office as laid down in law, leaving no space for private detours beyond the ambit of the script.

But there is mounting evidence of a deviant culture that is causing public office in this country [South Africa] to be widely and profoundly misunderstood by many incumbents, identifying it with only its first aspect — its power and honours — yet ignoring and rejecting the second and equally essential aspect — the service to the public good and the sacrifice of the private self.

In fact, precisely the reverse seems to be identified with public office, namely that public office somehow entitles public office-bearers to exploit the power and authority of public office to achieve maximum private gain for the office-bearer — and to receive public accolades for these “successes”. When this occurs, the public office-bearer becomes the exact opposite of what he should be, namely a freebooter, a privateer, harming the public good and robbing the state. And when privateering increases as the evidence of a culture of abuse of public office for private gain is mounting, the gloomy prospects of a faltering state loom large. The larger the number of these privateers, the more the state descends into an assemblage of competing marauders rendering patronage to their own retinue with no regard for the rest, who have to fend for themselves while witnessing the unfortunate spectacle of the receding state. Article by: Koos Malan, professor of public law at the University of Pretoria – Business Day news paper July 2012.

Related articles
by Mike Poverello

Burden of proof – cross-border data exchange

The continuous development in international communication media together with the never ending expansion of the global trade arena have impacted both positively and negatively on international contractual dispute resolution. It is common cause that once a dispute has been characterised as of a contractual nature and the lex fori has been established, the next step is to ascertain which law is the lex causa or so called “Proper Law” of the agreement.

This article is focused on the assertion of the proper law of an agreement, after it has been established that the lex fori is South African law, in situations where parties  electronically concluded an agreement and whilst doing so omitted to exercise their autonomy to record the law which they are intent on governing the agreement, alternatively in situations where one cannot establish whether the parties contemplated and tacitly implied that a specific legal system would govern the agreement at the time when their agreement was concluded when the lex fori was already established as South African law. Read the full paper here!

Related articles