IP rights in the world’s largest free trade area

Africa’s single market presents a wealth of opportunity if IP rights holders can navigate the complexities of the continent, says Mohamed Jameel Hamid of Adams and Adams.

Inspired, perhaps, by the success of the European Union, the African Union concluded The Agreement Establishing The African Continental Free Trade Area (AfCFTA agreement) in 2018, to create the world’s largest free trade area, consisting of more than 50 countries. This exciting development will bolster trade in Africa considerably and intellectual property owners would be well-informed to develop a meaningful IP strategy to take advantage of this growth market.

The African Continental Free Trade Area

AfCFTA will create a single market for goods and services in Africa, which will boost economic growth and enhance the continent’s competitiveness internationally. The agreement was signed on March 21, 2018, in Kigali, Rwanda, by 44 African countries, and it entered into force on May 30, 2019, after surpassing the threshold of ratification by 22 member states.

The AfCFTA will be the world’s largest free trade area encompassing 54 of the 55 African Union member states, with a combined population of 1.3 billion people and a total Gross Domestic Product (GDP) of $3.4 trillion. The only African country that has not yet joined the agreement is Eritrea.

"It is estimated that the AfCFTA could increase intra-African trade and generate a cumulative gain of $450 billion by 2035."

The AfCFTA will create a continental market with free movement of goods and services, promote industrial development and regional integration, reduce poverty, and make Africa more competitive in the global economy. It is estimated that the AfCFTA could increase intra-African trade and generate a cumulative gain of $450 billion by 2035.

Trademark rights in Africa

The IP landscape in Africa is diverse. Some jurisdictions operate strictly as first-to-file jurisdictions, while others recognise user rights and well-known marks.

The development of IP law on the continent has been uneven, but great strides have been made in the last decade. Trademark registers are better maintained and, once a mark is registered, proprietors can enforce their rights successfully. There, however, remain some nuances that are still being addressed, such as jurisdictions where registration is only permitted for goods (not services) and where foreign trademark applicants must first prove pre-existing trademark registrations in other countries to register their marks.

With the assistance of the World Intellectual Property Organization (WIPO), many registries in Africa have seen the gradual migration of paper-based systems to digital environments. The migration has been tedious, and some registries continue to straddle both electronic and manual records.

To ease the registration of IP rights in Africa, two regional IP systems were founded. The Organisation for African Intellectual Property (Organisation Africaine de la Propriété (OAPI)) covers 17 predominantly former French protectorates and the African Regional Intellectual Property Organisation (ARIPO) comprises 22 member states. These regional IP systems operate well, save for concerns over the enforcement of ARIPO trademark registrations in some jurisdictions (as is the case with the Madrid system in Africa), due to the lack of domestication into the national laws.

AfCFTA protocol on IP rights

The AfCFTA agreement recognises that the successful implementation of a free trade area will require some harmonisation of standards and regulations of the diverse legal and other governing systems in Africa. It, therefore, includes several protocols, including the AfCFTA Protocol on Intellectual Property Rights (the IPR Protocol).

The IPR Protocol is a legal agreement between the member states to promote and protect IPR across the continent. It was adopted on January 21, 2021, and is one of the seven protocols that make up the AfCFTA Agreement.

It aims to create a harmonised framework for the protection and enforcement of IPR, as well as establish a modern system of IP protection that reflects African countries’ needs and priorities while meeting international standards. It outlines the protection and enforcement of various forms of IPR, including patents, trademarks, copyrights, trade secrets, and geographical indications.

The IPR Protocol establishes minimum standards for the protection of IPR, including provisions on the duration of protection, the scope of protection, and the conditions for granting and enforcing IPR. It also recognises the need for cooperation between member states, in respect of IP, to ensure that African countries can fully participate in the global IP system.

Why invest in Africa?

According to the African Development Bank, Africa’s GDP will average about 4% in 2023 and 2024, which is expected to outperform the rest of the world. In addition, Africa has a middle-class population of around 350 million people which is expected to double by 2050. This presents a sizeable market opportunity for businesses worldwide.

Africa’s infrastructure deficit is estimated at around $150 billion per year. This presents considerable opportunities for businesses in the infrastructure sector, particularly in areas such as energy, transport, and telecommunications.

According to the United Nations Conference on Trade and Development, foreign direct investment flows to Africa increased by 18% in 2020, despite the pandemic and, in 2021, hit a record $83 billion. This demonstrates the resilience of the African business environment and the potential for continued growth and investment.

Developing a trademark strategy for Africa

As in the rest of the world, trademark squatters have cottoned on to the value of IPR and have developed nefarious strategies to take unfair advantage of these rights in Africa. They often file marks that are confusingly similar to well-known brands, which causes difficulties in jurisdictions where user rights or well-known marks are not recognised, the so-called first-to-file jurisdictions. In such cases, a legitimate trademark proprietor may find itself unfairly locked out of a market.

Trademark proprietors need to consider the complexities of obtaining trademark rights in Africa, including the duration between filing and registration, as well as the downstream enforcement of trademark rights. Regional and international filing systems are in many cases not properly domesticated into national laws and this results in the acquisition of IP rights that may be vulnerable to cancellation.

The practical considerations that should feature in an IP strategy for Africa must include:

1. The IP that can be protected in a particular jurisdiction.
2. The time to registration (which can be from six months to several years).
3. The costs of obtaining and maintaining trademarks must be weighed against expensive litigation costs to recover a mark.
4. Whether a jurisdiction has special requirements, such as first-to-file or if user rights are recognised.
5. The benefits of using regional filing systems and considering whether a country acceded to the Madrid Protocol and/or provides for priority claims.
6. Considerations where efficiency (ie, use of a regional or other protocol) may compromise the enforcement rights of the proprietor eg, where a country has not amended its domestic laws to give effect to international/regional instruments.
7. The requirements to record licensees.

Once rights are secured in an African jurisdiction, the next focus should be proactive and reactive enforcement of IP rights, such as taking anti- counterfeiting measures, policing of IPR, and an effective watch service in Africa.

Regional and international filing systems are in many cases not properly domesticated into national laws and this results in the acquisition of IP rights that may be vulnerable to cancellation.

As IP laws are not uniform in Africa, it is important to secure advice from an expert in African trademark law, with an extensive African footprint, given the diverse laws and practical issues faced by African registries. 

Mohamed Jameel Hamid is a partner at Adams and Adams. He can be contacted at: jameel.hamid@adams.africa