Merchandise Marks Amendment Bill: finalisation

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Trade and Industry

28 October 2002
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TRADE AND INDUSTRY PORTFOLIO COMMITTEE
29 October 2002
MERCHANDISE MARKS AMENDMENT BILL: FINALISATION



Chairperson: Dr Davies

Relevant Documents

Merchandise Marks Amendment Bill B63-2002
Amendments agreed to (Appendix 1)
Cape Media Corporation (Appendix 2)

SUMMARY
Input was heard from the Department, Cape Business Chamber, Cape Media Corporation
and the United Cricket Board. While all agreed that ambush marketing should be prevented they disagreed on the degree of protection given to major sponsors and the level of power given to the Minister.

The Committee then proposed amendments that narrowed the definition of "event", ensured that there was proper consultation by the Minister before designating an event to be a protected event, reducing the period of protection and ensuring that sufficient opportunities for small businesses, particularly those from previously disadvantaged communities, are provided. The Bill was passed with these amendments.

MINUTES
Ms Ludin from the department reviewed the rationale behind the Merchandise Marks Amendment Bill as she went through each clause. She spent some time giving practical examples of the benefits of the Bill (see
original briefing).

Cape Business Chamber oral submission
Mr Boise made a brief presentation about his organisation's view of the Bill. He stated that his organisation understood and welcomed the motive of the Bill but that certain factors should be taken into account. He argued that the Bill did not take into consideration small businesses, especially informal traders. He also stated that the Minister's powers were too broad. He concluded by stating that the Bill needed to balance big and small business.

Cape Media Corporation oral submission
Mr Pienaar of Brian Bacon Associates welcomed the principle of the Bill but argued that there was too much power given to the major sponsors. He felt that the restrictions of the Merchandise Marks Amendment Bill were contrary to the TRIPS agreement because they were in conflict with the interests on non-sponsors.

Please refer to Appendix 2

United Cricket Board oral submission

Ms Bodasing of Spoor & Fisher representing UCB and others, noted that it understood the principle behind the amendment as expanding the scope of property rights. The move to curb ambush marketing and the protection of sponsors was welcomed. She reckoned that the Minister's powers would not be unfettered and the public interest would be a priority for the Minister. She was in favour of the Bill and said that it was positively anti-competitive in a sense that it protected intellectual rights.

Discussion
One member commented that the Bill was badly structured and ambiguous.

The Chairperson was not sure what Clause 2 of the Bill meant.

Ms Ludin explained that the clause empowered the Minister to carry out his investigation in order to determine if an event could be designated as protected from ambush marketing.

The Chairperson suggested that the words "and proper consultation" should be added after the word "investigation" in 15A (1)(a). The amendment was agreed to.

Ms September (ANC) commented that the explanation of what constituted a protected event was confusing and she reminded the department that they were legislating for the country and the Bill could not be passed as it was.

Prof. Turok (ANC) suggested that the protection period should be changed from two months to one month in 15A (1a)(ii) of the amendment. The amendment was agreed to.

The committee also agreed that the word "conference", "cultural" and "religious" in Clause 1 be deleted from the definition of "events". The deletion was agreed to.

Mr. Pienaar suggested that the word "intentionally" be inserted after "indirectly, is" in 15A (3)(c) of the amendment. The amendment was agreed to.

Upon the suggestion of the Chairperson it was resolved that the Bill should clearly state the protection of small business from disadvantaged backgrounds. Hence in 15(1)(b) it will read:

and the Minister is satisfied that the organisers have created sufficient opportunities for small businesses and in particular those of the previously disadvantaged communities.

Voting
The Chairperson read the motion of desirability and the Bill was passed subject to the agreed amendments.

The meeting was adjourned

Appendix 1
AMENDMENTS AGREED TO: MERCHANDISE MARKS AMENDMENT BILL [B 63-2002]

CLAUSE 1

1. On page 2, in line S and 9, to omit 'conference', 'cultural' and religious'.
2. On page 2, in line 14, to omit 'conference'

CLAUSE 2

1. On page 2, in line 23, after "investigation" to insert "proper consultation".
2. On page 3, in line 1 to omit "two" and to substitute ''one''.
3. On page 3, in line 2 to omit "months" and to substitute "month"
4. On page 3, in line 4, after interest, to insert;

and the Minister is satisfied that the organisers have created sufficient opportunities for small businesses and in particular those of the previously disadvantaged communities.

5. On page 3, in line 16 , after "is" to insert "intentionally"
6. On page 3, in line 17, to omit "alludes" and to substitute "alluding".

Appendix 2
CAPE MEDIA CORPORATION SUBMISSION
 

First Deliberated by Portfolio Committee on Justice
and Constitutional Development
at 08H30 on Friday 25 October 2002

Further Submissions with regard to
MERCHANDISE MARKS AMENDMENT BILL
For Further Deliberation at 09H00 on Tuesday 29 October 2002

It is respectfully submitted that the provisions of the proposed Merchandise Marks Amendment Bill, if enacted, will restrict the legitimate commercial activities of all concerns who are not official sponsors of the event which is designated.

Such restrictions on the legitimate business interests of non-sponsors is in conflict with the obligations of the country in terms of the TRIPS Agreement.

Specific reference is made to the following Articles:-

AGREEMENT ON TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS
(TRIPS AGREEMENT) (1994) *

"Members,
Desiring to reduce distortions and impediments to international trade, and taking into account the need to promote effective and adequate protection of intellectual property rights, and to ensure that measures and procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade;"

Article 7
Objectives

"The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations."

Article 8
Principles

"1. Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of this Agreement.

"2. Appropriate measures, provided that they are consistent with the provisions of this Agreement, may be needed to prevent the abuse of intellectual property rights by right holders or the resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology."

Article 17
Exceptions

"Members may provide limited exceptions to the rights conferred by a trademark, such as fair use of descriptive terms, provided that such exceptions take account of the legitimate interests of the owner of the trademark and of third parties."

Article 20
Other Requirements

"The use of a trademark in the course of trade shall not be unjustifiably encumbered by special requirements, such as use with another trademark, use in a special form or use in a manner detrimental to its capability to distinguish the goods or services of one undertaking from those of other undertakings. This will not preclude a requirement prescribing the use of the trademark identifying the undertaking producing the goods or services along with, but without linking it to, the trademark distinguishing the specific goods or services in question of that undertaking."

Section 8
Control of Anti-Competitive Practices in Contractual Licences
Article 40

"1. Members agree that some licensing practices or conditions pertaining to intellectual property rights which restrain competition may have adverse effects on trade and may impede the transfer and dissemination of technology.

2. Nothing in this Agreement shall prevent Members from specifying in their legislation licensing practices or conditions that may in particular cases constitute an abuse of intellectual property rights having an adverse effect on competition in the relevant market. As provided above, a Member may adopt, consistently with the other provisions of this Agreement, appropriate measures to prevent or control such practices, which may include for example exclusive grantback conditions, conditions preventing challenges to validity and coercive package licensing, in the light of the relevant laws and regulations of that Member."

Section 1
General Obligations
Article 41

"1. Members shall ensure that enforcement procedures as specified in this Part are available under their law so as to permit effective action against any act of infringement of intellectual property rights covered by this Agreement, including expeditious remedies to prevent infringements and remedies which constitute a deterrent to further infringements. These procedures shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse.

2. Procedures concerning the enforcement of intellectual property rights shall be fair and equitable. They shall not be unnecessarily complicated or costly, or entail unreasonable time-limits or unwarranted delays."

CAPE MEDIA SUBMISSION 2
First Deliberated by Portfolio Committee on Justice and Constitutional Development at 08H30 on Friday 25 October 2002

Further Submissions with regard to
MERCHANDISE MARKS AMENDMENT BILL
For Further Deliberation at 09H00 on Tuesday 29 October 2002

It is respectfully submitted that the provisions of the proposed Merchandise Marks Amendment Bill, if enacted, will restrict the legitimate commercial activities of all concerns who are not official sponsors of the event which is designated.

Such restrictions on the legitimate business interests of non-sponsors is in conflict with the obligations of the country in terms of the TRIPS Agreement.

Specific reference is made to the following Articles:-

AGREEMENT ON TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS
(TRIPS AGREEMENT) (1994) *

"Members,
Desiring to reduce distortions and impediments to international trade, and taking into account the need to promote effective and adequate protection of intellectual property rights, and to ensure that measures and procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade;"

Article 7
Objectives

"The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations."

Article 8
Principles

"1. Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of this Agreement.

"2. Appropriate measures, provided that they are consistent with the provisions of this Agreement, may be needed to prevent the abuse of intellectual property rights by right holders or the resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology."

Article 17
Exceptions

"Members may provide limited exceptions to the rights conferred by a trademark, such as fair use of descriptive terms, provided that such exceptions take account of the legitimate interests of the owner of the trademark and of third parties."

Article 20
Other Requirements

"The use of a trademark in the course of trade shall not be unjustifiably encumbered by special requirements, such as use with another trademark, use in a special form or use in a manner detrimental to its capability to distinguish the goods or services of one undertaking from those of other undertakings. This will not preclude a requirement prescribing the use of the trademark identifying the undertaking producing the goods or services along with, but without linking it to, the trademark distinguishing the specific goods or services in question of that undertaking."


Section 8
Control of Anti-Competitive Practices in Contractual Licences
Article 40

"1. Members agree that some licensing practices or conditions pertaining to intellectual property rights which restrain competition may have adverse effects on trade and may impede the transfer and dissemination of technology.

2. Nothing in this Agreement shall prevent Members from specifying in their legislation licensing practices or conditions that may in particular cases constitute an abuse of intellectual property rights having an adverse effect on competition in the relevant market. As provided above, a Member may adopt, consistently with the other provisions of this Agreement, appropriate measures to prevent or control such practices, which may include for example exclusive grantback conditions, conditions preventing challenges to validity and coercive package licensing, in the light of the relevant laws and regulations of that Member."

Section 1
General Obligations
Article 41

"1. Members shall ensure that enforcement procedures as specified in this Part are available under their law so as to permit effective action against any act of infringement of intellectual property rights covered by this Agreement, including expeditious remedies to prevent infringements and remedies which constitute a deterrent to further infringements. These procedures shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse.

2. Procedures concerning the enforcement of intellectual property rights shall be fair and equitable. They shall not be unnecessarily complicated or costly, or entail unreasonable time-limits or unwarranted delays."

 

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