Is IP a thread in Gordhan’s Gordian Knot?

Published Date: February 23, 2016

This article entitled “What can we expect in Gordhan’s Budget” published by Independent Online and citing Bloomberg as author predicts a difficult speech for the Finance Minister who needs “must contend with dwindling revenue as commodity prices plunge, the worst drought in more than a century and slowing economic growth”.

There is of course no mention of intellectual property, a trade mark, copyright, patents, designs, brands etc so one would be forgiven for thinking that this is not about IP but you would also be mistaken if you thought that IP was not a component at all:

  • as the article predicts we can expect an attempt to restore lost confidence in South Africa damaged by December’s axing of finance minister Nene and the surrounding controversy. The perception of South Africa in the eyes of investors has lead to a significant drop in the rand. The techniques for addressing this crisis are no different to those strategies used by big brands to protect the goodwill in their brands in times of crisis.
  • the effect of the drought on the country has been devastating, especially on those whose livelihoods depend on the land but also for the country as a whole. IP does not produce rain in the literal sense but it protects those who have solutions for the drought and may create revenue streams. For example IP is relevant when looking at alternative crops or methods of farming, brand diversification (occurs when brands used on produce are used to help create demand for related services, creating revenue streams for farmers), protecting knowhow used in farming applicable across other sectors etc.
  • addressing growing debt and the effect of probable higher taxes requires an element of revenue creation. IP can be effective in raising money, securing debts for money flow and increasing revenue streams. We see an example of this in the IP Amendment Act of 2013 where the government is attempting to create jobs and revenue from traditional communities.
  • in coming to a solution for #feesmustfall, Universities are forced to sweat their own assets of which IP is a potentially significant component. The more self funding the University, the less reliant they are on fees and the more sustainable they will be in the current environment. For example, a significantly large portion of College funding in the states comes from the brands used and licensed in the football and basketball leagues. There is legislation in place to do that too in South Africa which has established tech transfer offices at universities designed to commercialise University funded IP projects.

Don’t expect Gordhan to untie this Gordian knot with intellectual property but it could be important in facilitating the changes that are likely to occur, for better or worse.

Darren Olivier
Partner | Attorney

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