SMME Support

Is it mandatory to register my new business?
Not always. If yours is a small business in the form of a small, micro- or medium-sized enterprise (SMME) or a start-up, you do not have to register it.

It can operate without registration as either a sole ownership or a partnership, although in both cases you must register with tax authorities and file tax returns.

In South Africa, a private companies a legal entity that is separate and distinguishable from the shareholders who own it.

Public companies are listed on the Johannesburg Securities Exchange. They must have at least three directors, be audited, and produce audited financial statements, which are tabled annually with their shareholders.

Both types of company, private and public, are registered with the Companies and Intellectual Property Commission (CIPC).

It’s important to be aware that, even if you do register a company, this does not mean that your IP rights are secure. To do this, you may need to apply for a trade mark.

What is a trade mark?

A trade mark serves as a badge of origin. It generally consists of a logo, name, signature, word, letter, slogan, numeral, shape, configuration, pattern, ornamentation, colour, container for goods or any combination of these that identifies the brand owner of a product or service.

Trade marks serve to build brand awareness and business goodwill. They can create consumer confidence in a product, via its association with a brand the consumer recognises and trusts.

Trade marks can take just about any form, provided that they are distinctive and capable of being represented graphically. The stronger or more distinctive the trade mark, the easier it is to register and protect.

By registering your trade mark, you can prevent others from counterfeiting your goods and benefiting unlawfully from your brand equity.

What do the symbols TM, ® and © mean?

The TM symbol is used to let others know that you claim the exclusive use of the trade mark. Generally, this symbol is used for a trade mark that has not yet been registered, in cases where you want to indicate that it is in use. Many companies will opt to use the TM symbol for new goods or services in advance of and during the application process.

The ® symbol is used to indicate that a trade mark (words, phrases or logos to represent products and/or services) is registered and has been legally protected. This symbol can only be used by the owner or licensee in combination with a registered trade mark, in the regions in which you possess a valid trademark registration. It is an offence to use the ® if you do not own a registered trade mark.

The © symbol is used to indicate the subsistence of copyright and is used as a disclaimer to third parties. However,  copyright subsists automatically in material works resulting from the skill and labour of the author – a copyright notice acts merely to draw this to the attention of others.

Is it compulsory to register a trade mark?

No, but trade mark registration has several advantages.

These include notifying the public of a claim of ownership of the trade mark, a legal presumption of ownership nationwide, and the exclusive right to use the mark on or in connection with your products or services. Trade marks can also serve as an asset when making a proposal to a potential sponsor or investor.

Registration will make it easier for you to take action against unauthorised use of your trade mark by others. You can also act against counterfeiters.

Does a trade mark registration in one country provide protection in other countries?

No – trade marks are territorial. However, under the provisions of various treaties, a trade mark in one country may be used as the basis for filing applications to register a trade mark in other countries. If you are interested in obtaining trade mark registrations outside of South Africa, please contact us for more information.

How long does a trade mark registration last?

Trade mark registration usually lasts 10 years from the date of filing. Trade marks can also be renewed (this is every 10 years in South Africa) and, as long as they are renewed and used properly, they can last indefinitely.

What’s a domain name, and why do I need one?
Each device on the Internet has a unique numeric Internet Protocol (IP) address that identifies its location on the web. These strings of numbers can be difficult to remember, so the system of “domain names” was created to provide memorable identifiers – like “spoor.com”, for example.

Domain names serve as valuable corporate assets and unique business identifiers. Registering a domain name for your brand also blocks the registration of your specific brand name by ill-intentioned third parties (called “cybersquatters”).

Spoor & Fisher is able to register all domain extensions available on the market today, and to renew and/or enforce these as needed.

What is copyright and how does it apply to me?

Copyright is a form of intellectual property (IP) that protects works resulting from (a not trivial) degree of skill, judgment or labour. Books, music, art, photographs, logos, architectural works and even computer software can be protected by copyright.

Copyright applies broadly to numerous facets of daily life and applies across borders.

However, while copyright protects the expression of ideas, it does not protect the ideas or concepts themselves. For example, copyright can protect a particular photograph of a flower, but other people may still create their own photographs of the same flower.

It’s not possible to register copyright, apart from copyright in films. Copyright exists automatically when the work is created, if it fits into a category that is recognised and protected by the Copyright Act, like drawings, computer programs, art works (including logos), literature, and music.

Various exclusive rights are available to copyright owners, including the rights to reproduce the work, adapt the work, make derivative works and distribute copies. For instance, you may not own the copyright in your logo if it was created for you by a third party and you do have the appropriate agreement in place. In cases like these, we can help you with the transfer of that copyright to you.

What are patents, and how do they apply to me?

Patents protect the originality of inventions. Not every small or medium-sized business will benefit from building a patent portfolio, but it’s important to carefully consider whether or not to pursue patent protection.

A patent will help you to protect your business and inventions from your competitors and mitigate the risk of being exposed to claims of patent infringement by competitors and other third parties.

There are different kinds of patent protection to consider:

Utility models can be obtained for processes, machines, articles of manufacture, or compositions of matter that are deemed new, useful and non-obvious. This allows you to prevent the unauthorised commercial use of your invention, for a fixed period of time. It is often used for mechanical innovations and will work well for you if yours is a small or medium-sized business that wants to make minor changes to existing inventions.

Design patents protect ornamental (non-functional) designs and a “registered design” is a form of monopoly right that is granted on the outward appearance of an article, protecting the way it looks rather than the underlying inventive concept.

Because patents are national rights rather than international rights, it is generally necessary to file a patent application in each country where protection is required.

If cash flow is tight, can I postpone applying for patent protection?

An invention will only qualify for patent protection if it is novel and inventive on the “priority date”, that is, on the date when the first application for a patent is filed.

If you sell or disclose your invention, or you use it commercially, before the priority date, you will destroy the novelty of your invention and disqualify it for protection later.

You also run the risk that someone else will invent the same invention and either disclose the invention publicly (destroying novelty so that you cannot apply for a patent) or obtain patent protection that excludes you from dealing in the invention without infringing their patent.

That being said, patent protection can be expensive. It is a good idea to develop your patent filing strategy in light of forecasted cash flow.

If I commission a service provider to provide services to me, who owns the IP that results from those activities?

This depends on the type of IP.

For instance, an application for patent protection of an invention may be made by the inventor. But an application for registration of a design in cases where the author of the design executes the work for another person, may be made by the person for whom the work was executed.

The Copyright Act provides that the author of a work owns any copyright subsisting in that work. For literary and artistic works, the author is the person who created the work, but for computer programs, the author is the person who “exercised control” over the making of the computer program. This could be the commissioning party and not the service provider.

There are also exceptions to these ownership provisions. But the fact that one pays for work to be conducted does not necessarily mean that one will own the IP that results from the performance of that work.

How can I ensure that I own the IP that results from work conducted with or by a South African university or a public research council?

There is legislation that regulates the ownership of IP that emanates from R&D conducted with public funds. A private entity wanting to own IP resulting from R&D conducted by a South African university or a public research council must ensure that this R&D is privately funded (i.e. that the full cost of the R&D is paid for by the private entity).

If you have questions about trade marks, copyright, domain names, patents, IP ownership, or even business registration, please contact us.

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