1. The Regulatory Landscape: Regulation 10(1)(c) and the Broadening of the “Capital” concept

1.1. The interaction between South African intellectual property law and the South African Exchange Control Regulations of 1961 (the 1961 Regulations) creates a complex compliance environment impacting, inter alia, the externalisation of computer software developed in South Africa and cross-border software development. The primary hurdle from an exchange control perspective is Regulation 10(1)(c) of the 1961 Regulations, which prohibits the export of capital – or any right to capital – from the Republic without exchange control approval.

1.2. A pivotal shift occurred in June 2012 with the introduction of Regulation 10(4), which definitively expanded the definition of the term “capital” as it is used in Regulation 10(1)(c), to include any intellectual property right, whether registered (like patents or trademarks) or unregistered (like copyright). By also expanding the meaning of “exported from the Republic” to include “the cession, assignment, or transfer of any intellectual property right” to a non-resident, Regulation 10(4) effectively brought all transfers of South African computer software to non-residents within the ambit of the exchange control regime.

1.3. For the sake of completeness we point out that on 17 April 2026 the Minister of Finance published the draft Capital Flow Management Regulations in terms of section 9(1) of the Currency and Exchanges Act No. 9 of 1933 (Draft CFM Regulations) for public comment. The stated aim of the Draft CFM Regulations is, amongst others, to incorporate “crypto assets” into the realm of exchange control regulation. Of note for current purposes is that the definition of “capital” in the Draft CFM Regulations is the same as that contained in Regulation 10(4) of the 1961 Regulations discussed above insofar as it relates to intellectual property. Moreover, regulation 12(4) of the Draft CFM Regulations is essentially the same as Regulation 10(1)(c) of the 1961 Regulations. The restriction on the sale, transfer or assignment of intellectual property belonging to a South African resident to non-resident persons will therefore continue to remain in place if the Draft CFM Regulations were to become law. There is one difference though and that is that regulation 12(4) of the Draft CFM Regulations is styled as being subject to “regulation 21(6)” of the Draft CFM Regulations. This reference to “regulation 21(6)” appears to be a drafting error though, as there is no regulation 21(6) in the Draft CFM Regulations. (To avoid confusion regarding the interpretation thereof, this error will need to be corrected before the Draft CFM Regulations come into effect.)

1.4. For purposes of this article, we deal with the legal position as set out in the 1961 Regulations, which are currently still in force. (Apart from the abovementioned incorrect reference to “regulation 21(6)”, the operative provisions of the Draft CFM Regulations are in any event substantially the same as those of the 1961 Regulations as far as the export of intellectual property rights are concerned, and the reasoning set out in this article will therefore not be affected if the Draft CFM Regulations were to come into effect in their current form.)

2. Dispensation available in terms of the Currency and Exchanges Manual

2.1. In the context of Regulation 10(1)(c), Section B.2(A)(iii) of the Currency and Exchanges Manual for Authorised Dealers provides for a dispensation whereby Authorised Dealers (South African commercial banks) may, subject to certain exceptions, approve the outright sale, transfer and assignment by South African residents of intellectual property to unrelated non-resident parties at an arm’s length and a fair and market related price, provided they view the sale, transfer or assignment agreement concerned and an auditor’s letter or intellectual property valuation certificate which confirms the basis for calculating the sale price.

2.2. The dispensation is subject to the following conditions:

2.2.1. It excludes sale and lease back agreements: This means that if a South African resident or entity sells intellectual property to a non-resident and but then seeks to continue to lease that same intellectual property from the non-resident, the dispensation does not apply. Such arrangements may therefore not be approved at Authorised Dealer level and direct approval from the Financial Surveillance Department of the South African Reserve Bank (“FinSurv“) is required;

2.2.2. The parties to the transaction must be unrelated: This means that a party should not have a direct or indirect interest in the other/the ability to control the other/exercise significant influence over the other in making financial and operating decisions/be under common control (e.g. belong to the same group, or parent, subsidiary, fellow subsidiary, or associate). If the parties are related the Authorised Dealer may not grant the approval and direct FinSurv approval is required;

2.2.3. Repatriation of Proceeds: All inward funds emanating from the transactions mentioned must be repatriated to South Africa within a period of 30 days from the date of becoming entitled thereto;

2.2.4. Reporting Requirements: The transaction must be reported under category 210 on the FinSurv Reporting System.

3. The “Control” Test: Authorship under the Copyright Act

3.1. From a copyright perspective, the point of departure in determining whether an “export of capital” has occurred in the context of the externalisation of computer software developed in South Africa or cross-border software development is to establish who the “author” of the intellectual property is at the moment of its creation. To establish who the “author” of a computer program is, a number of factors need to be taken into account. Under the South African Copyright Act No 98 of 1978 (Copyright Act), works are divided into various categories for purposes of establishing authorship. Computer programs are treated as sui generis In terms of the Copyright Act, the “author” of a computer program is “the person who exercised control over the making of the computer program.” (This differs from, for example, literary, musical or artistic works, where the author is the person who first makes or creates the work.)

3.2. Accordingly, in an instance where a non-resident person or company has exercised “control” over the making of a computer program (and is thus the “author” of such computer program) from the outset, then technically the non-resident owns such intellectual property from inception. It follows that, in such a scenario, no sale, transfer or assignment would have occurred as regards the vesting of such intellectual property in the non-resident, which means that no export of capital as contemplated in Regulation 10(1)(c) has taken place and, strictly speaking, the parties therefore do not need to obtain exchange control approval.

3.3. The term “control” is not defined in the Copyright Act. This issue is addressed by the Supreme Court of Appeal (SCA) decision in Haupt t/a Soft Copy v Brewers Marketing Intelligence (Pty) Ltd and Others 2006 (4) SA 458 (SCA) (Haupt v Brewers Marketing) (discussed below).

4. Jurisprudential Interpretation of “Control”: Haupt v Brewers Marketing

4.1. The Supreme Court of Appeal (SCA) decision in Haupt v Brewers Marketing remains the definitive authority on the “control” test. In its judgment, the SCA clarified that “control” is a factual inquiry into the power of the controller to direct the development process. The SCA established that a party may be the author of a computer program, even if it lacks the technical proficiency to write the source code itself, provided it:

4.1.1. Directs the End Result: That is, the controller defines the specific functionality and the path which the developer must follow;

4.1.2. Exercises Commands: The actual creator must be subject to the commands of the controller regarding how and when the work is produced;

4.1.3. Provides Continuous Supervision: This involves frequent reviews, iterations, and the power on the part of the controller to reject work which does not meet the controller’s vision.

4.2. Based on this “control” test, simply providing a high-level “functional specification” is rarely enough to establish authorship. For example, if the developer is left to its own devices to solve technical problems, then the developer remains the author.

4.3. An attempt to vest ownership of the intellectual property in a computer program (which was developed in South Africa) in a non-resident will be viewed as an assignment of the intellectual property as contemplated in Regulation 10(1)(c), unless the non-resident passes the “control” test (and is thus the author of the computer program and owner of the intellectual property therein from the outset). For this reason, maintaining records of detailed instructions, feedback logs, and technical directions issued by the non-resident controller will be very important in case the “control” element is ever challenged.

5. Eligibility and Section 37 Domicile

5.1. Even if “control” is established as described above, the computer program must still be a work that is eligible for copyright protection in South Africa. This requires the “author”, at the time the work is made, to be a “qualified person” within the meaning of section 3(1) of the Copyright Act. A “qualified person” in this sense includes South African citizens or entities, or persons domiciled in a country that has been gazetted under Section 37 of the Copyright Act.

5.2. The current list of gazetted countries includes all major jurisdictions such as the United Kingdom, Spain, Canada, Denmark, Switzerland, to name but a few. If the non-resident “controller” is domiciled in a jurisdiction which is not so gazetted, the computer program will not be a work that is eligible for copyright protection in South Africa, alternatively ownership may default back to the local developer.

6. Conclusion: Risk Mitigation in Practice

6.1. Due to the manner in which authorship is established in respect of other categories of works, the reasoning set out above with regard to computer programs does not apply to other works such as (for example) literary works, musical works or artistic works.

6.2. As regards computer programs it is recommended that, out of an abundance of caution, application should be made for exchange control approval in any event, i.e., even where on the facts a non-resident:

6.2.1. has exercised “control” over the making of a computer program in such a way that the “control” test is passed;

6.2.2. is the “author” of the computer program and is thus also the owner of the copyright from the outset.

6.3. In such circumstances, the abovementioned dispensation is available, provided the parties are unrelated and there is no sale and lease back. During the application process, the fact that the parties are unrelated must be proven and full disclosure of the relevant company structure and other relevant facts must be made to the Authorised Dealer concerned. If pursuant to such application and disclosure, exchange control approval is then granted, any potential concerns as to whether or not there was sufficient direction and “control” of the development of the computer program on the part of the non-resident “controller”, will have been addressed and there can be no contravention of Regulation 10(1)(c). In this way the externalisation of the intellectual property will have been effectively de-risked. As matters of this kind may be complex, it is recommended that appropriate legal advice be obtained from an early stage so as to ensure compliance at all stages of the process.

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Brand owners take note. Effective 2027 China will amend its Trade Mark Law. Efforts to curb trade mark hoarding are further prioritised coupled with more stringent accountability.

China passed a fifth revision to its Trade Mark law in June 2026, effective 1 January 2027.

Significant changes include enforcement measures by the State Council against bad faith registrations and State Council non-use cancellations, the recognition of well-known marks and online trade mark use. The opposition period is reduced from three to two months on publication, increasing efficiency.

Bad Faith

Bad-faith applications and the hoarding of registrations or “trade mark squatting” remains a significant issue for brand owners who are active in China. If someone else owns your mark without your authorisation, your preferred agent or distributor may be reluctant to act on your behalf. Imports could also be detained at customs. The revision sees a shift towards further enforcement against bad faith registrations amending the existing provision from “not for the purpose of use” to disallowing marks that are “not intended for use and clearly exceeding normal production and business needs” with the State Council permitted to impose fines and revoke trade marks.

Non-use cancellations

An applicant should have a bona fide intention to use a trade mark for the goods and services for which registration is sought in the relevant territory. Generally, a registered a trade mark may be vulnerable to cancellation for non-use if it has not been used for a certain period, being three years in China. Non-use cancellations commonly require active steps by an interested third party.

Some territories, such as the U.S.A. require a Declaration of Use and specimens of use on filing the application and/or on renewal to maintain a registration. While Declarations of Use may have been tabled in drafting China’s fifth revision, the final revision does not stipulate Declarations of Use.

Despite this, ex officio cancellations will be allowed whereby the State Council may cancel trade marks that have become generic or have not been used for three consecutive years without legitimate reason. This is a significant change as non-use cancellations may also now be initiated by the authorities.

Well-known marks

A well-known mark or famous mark is a trade mark that has achieved such a degree of recognition among the relevant public that it is afforded a broader scope of protection than ordinary trade marks, beyond the goods or services for which it is registered and without registration.

The fifth revision recognises well-known marks however the onus to establish well-known status remains high requiring substantial evidence of market recognition, including survey evidence, revenue, advertising expenditure, media coverage and decided on a case by case basis. This is a significant introduction whereby marks which imitate a well-known mark or mislead the public to the detriment of the rightful owner will not be registered and that use forbidden.

Online use

The revision defines evidence of use of a mark on goods, packaging, commercial transaction documents, advertising, exhibitions and other commercial activities for the purpose of identifying and distinguishing the source of goods.  Other commercial activities includes evidence of use of the mark on the internet, e-commerce platforms, social media and digital advertising which should ease the burden of providing evidence of use in non-use cancellations and contentious matters.

Procedural revisions

Further changes include reducing the opposition term from three to two months and a one-year bar on filing only following a voluntary cancellation. Motion marks and sound marks are a further expansion. There is also a significant move to stringent control and accountability for trade mark agencies and practitioners who will be required to register their information with the State Council Trademark Authority with failures attracting hefty fines.

Practical take-aways

There is always the risk of non-use cancellations however particularly so in China as it is a common recourse in review proceedings where a trade mark has been refused due to a prior mark that may in turn be vulnerable to cancellation. The recognition of online use should assist brand owners in defending non-use cancellations. Considering the authorities will too have the ability to initiate cancellations of marks that have become generic or have not been used for three consecutive years without legitimate reason, brand owners are reminded to conduct regular portfolio reviews, keep records in order and ensure that registrations are in genuine use.

Please contact Werksmans Intellectual Property practice area for further advice and assistance.

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The Zambian Trade Marks Bill 2023 signed on 31 December 2025 has repealed the Trade Marks Act of 1958 (“the 1958 Act”), introducing the Zambian Trade Marks Act No. 11 of 2023 (“new Zambian TM Act”).

What does this mean for brand owners who have trade mark registrations in Zambia and those who are looking to protect their trade marks in Zambia.

The key changes under the new Zambian TM Act include:

1. The introduction of service marks classes 35-45 – Under the 1958 Act only goods classes 1-34 were recognised requiring the tailoring of goods specifications often with the recommendation to those rendering services in Zambia to consider a tailored class 16 referring to printed matter concerning those services, for example “printed matter including such matter for use in banking and financial affairs; printed matter including such matters in the energy sector or printed matter including such matter for use in telecommunications.” With the introduction of the new Zambian TM Act, brand owners are advised to evaluate their portfolio in Zambia and consider the addition of service classes. Below are the service class headings according to the 13^th edition of the Nice Classification :-

Class 35 – Advertising; business management, organization and administration; office functions.

Class 36 – Financial, monetary and banking services; insurance services; real estate services.

Class 37 – Construction services; installation and repair services; mining extraction, oil and gas drilling.

Class 38 – Telecommunications services.

Class 39 – Transport; packaging and storage of goods; travel arrangement.

Class 40 – Treatment of materials; recycling of waste and trash; air purification and treatment of water; printing services; food and drink preservation.

Class 41 – Education; providing of training; entertainment; sporting and cultural activities.

Class 42 – Scientific and technological services and research and design relating thereto; industrial analysis, industrial research and industrial design services; quality control and authentication services; design and development of computer hardware and software.

Class 43 – Services for providing food and drink; temporary accommodation.

Class 44 – Medical services; veterinary services; hygienic and beauty care for human beings or animals; agriculture, aquaculture, horticulture and forestry services.

Class 45 – Legal services; security services for the physical protection of tangible property and individuals; dating services, online social networking services; funeral services; babysitting.

2. Renewal period changes from seven to ten years – Previously renewals were due seven years from the date of application in the first period and fourteen years thereafter.  Trade marks registered under the 1958 Act remain valid until their current expiry dates, whereafter renewals will be governed by the new Zambian TM Act, due every ten years from the date of application.

3. Multi-class applications – The new Zambian TM Act changes the single class system to multi-class whereby one trade mark can cover numerous classes streamlining filing strategies, the management of portfolios generally and, in our experience, multi-class is likely to be more cost effective.  While we await regulations, the official fees continue to be payable on a per class basis.

4. International trade marks – Zambia has domesticated the Madrid Protocol and it is now possible to designate Zambia in an International mark. The Madrid system, comprising the Madrid Agreement and Protocol, is administered by the World Intellectual Property Organisation (“WIPO”) whereby members can register and manage international trade marks in multiple jurisdictions. Marks under this single, centralised system can be cost-effective and an alternative to filing in each individual country where multiple territories are concerned.

In our experience, designations in an international mark should still undergo national examination per territory.  For office actions a local representative may need to be appointed which may result in delays. Although South Africa is a member of WIPO and signatory of the Madrid Protocol, it has not yet acceded, and not yet adopted the International system.

5. Collective marks, geographical indications (GIs) sounds, shapes, colours, smells and packaging configurations are introduced in the new Zambian TM Act.

6. Well-known marks are now recognised in Zambia – Well-known marks are protected under the Paris Convention and do not need to be registered.   This means that even though a mark may not be registered in Zambia, if a mark qualifies as well-known a proprietor has enforcement options in terms of the new Zambia TM Act.  To be well-known, that mark must be well-known to the “relevant public”.

Presently in terms of the 2012 Zambian SCA ruling, DH Brothers (Pty) Limited vs Olewine Industries (Pty) Limited, the 1958 Act confers rights in respect of registered marks only, therefore not recognising common-law rights.   With the recognition of well-known marks it will be interesting to see whether this position will also change.

7. Anti-counterfeiting and trade mark infringement – the new Zambia TM Act introduces new and further civil, criminal and border control measures with remedies including injunctions, damages, delivery-up of infringing goods and relief on the basis of royalties.

Please contact Werksmans Intellectual Property practice area for further advice and assistance.

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What’s in a name – Trade marks and Brooklyn Beckham

Brooklyn Beckham, son to British born Victoria and Sir David has voiced his grievances with his family on social media, bringing his family’s influence over his public image into the spotlight.  He is concerned at what he views as undue attempts to ruin his marriage by the family with which he wants no part of – what then about the Beckham name?

Trade marks

According to the United Kingdom Intellectual Property Office (“UKIPO”) and European Union Intellectual Property Office (“EUIPO”), as of 2000 Beckham and David Beckham are registered trade marks and Victoria Beckham as of 2002.  As of December 2016, Brooklyn Beckham, Cruz Beckham, Romeo Beckham and Harper Beckham are all registered trade marks in the UK and EU, with Victoria Beckham, as parent and guardian of … as the proprietor of each.

The registrations cover several classes including clothing, beauty, cosmetics and entertainment related goods and services,  the intent behind trade mark registration most likely rooted in the need to protect the children from exploitation and overexposure.  Trade marks are both class and territory specific and one of the benefits of trade mark registration is that it formalises the authority required for commercialisation.  In turn, the ability to negotiate agreements, for example brand endorsements, sponsorships and influencer, and importantly, legislation against unauthorised use.

Since Brooklyn is not the proprietor of these trade mark registrations if he were to attempt to commercialise, and therefore monetise his name, Victoria Beckham in her capacity as the proprietor and owner of the registrations could rely on the UK and EU trade mark registrations and allege trade mark infringement in the territory.

Defences

The question concerning ownership and use of personal names is not new.   In terms of the South African Trade Marks Act 194 of 1993 it may be a defence to use one’s personal name provided that this use is ‘consistent with fair practice’.

In the UK, Brooklyn may consider the ‘own name defence’, should an individual wish to use their own name in business and is in accordance with ‘honest practices’.  This may prove onerous given the commercialisation of the Beckham family name generally and reported “Brand Beckham” restrictions.

A further consideration is cancellation proceedings,  either on the grounds that the trade marks were filed in bad faith or that the marks have not been used for five years or more.

The UK and EU trade mark registrations for Brooklyn Beckham, Cruz Beckham, Romeo Beckham and Harper Beckham are due for renewal December 2026, the renewal term in the UK being ten years from application.  Should Victoria Beckham renew it may further prompt Brooklyn Beckham to formally challenge the validity of the marks.  Instead of a legal battle mom and son may negotiate which could include a co-existence or a licence or even assigning the registrations to Brooklyn.

Celebrities and sports stars

Pop stars Taylor Swift and Kylie Minogue and athlete Mo Farah for example have registered their names as trade marks in an effort to prevent commercial exploitation.  Jo Malone and Bobbi Brown, founders of high-profile cosmetic ranges famously sold and therefore assigned their trade marks to Estée Lauder and with that waiving associated rights to commercialise their names.  Karen Millen, UK fashion designer, lost all title to her name and battled her rights for future expansion when she sold her majority share in Karen Millen Holdings Ltd.

Chelsea FC and José Mourinho had entered a twenty year agreement in 2005, therefore preventing the professional football manager from authorising the use of his name on any merchandise linked to his name or any other football club until the agreement ended in 2025.

Around 2018 when tennis legend Roger Federer ended a twenty-year contract with Nike to contract with Uniqlo, Nike had already registered the mark RF in various territories for clothing and related goods. Federer has requested Nike to transfer the trade mark to himself, because the mark comprises his initials, which would surely be “in accordance with honest practice”.   Complicated by terms in their commercial agreements, it took two years to favourably resolve.

Terms of any agreement will always require careful consideration, and perhaps all too often the long-term consequences and commercial realities associated with intellectual property rights are not thoroughly considered.

Please contact the Werksmans Intellectual Property Team for further assistance.

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As of 1 December 2025, in an initiative administered by the Fair Competition Commission (“FCC”), Tanzania will implement Trade Marks Rights Recordation as a precondition for marks relating to goods which are imported into mainland Tanzania. This is in accordance with Section 11A of the Merchandise Marks Act, 1963 (as amended) and the Merchandise Marks (Recordation) Regulations, 2025.

Trade marks are territory specific however if the mark is not yet registered in Tanzania but elsewhere, those registrations are also valid for Recordation in support of the broader regulatory framework.

Tanzania joins other African countries in recognising that customs and intellectual property recordations with the relevant authorities proactively address anti-counterfeiting, protecting and defending intellectual property rights (“IPR”). IPR recordations assist authorities in recognising, seizing and detaining counterfeit or unauthorised goods particularly at borders and ports.

Section 11A of the Merchandise Marks Act, 1963 (as amended) provides that trade marks on imported goods into Tanzania shall be recorded with the Chief Inspector of the FCC.   Failure to comply may result in customs authorities seizing or denying clearance of unrecorded imports, assuming them to be unauthorised or counterfeit, disrupting supply chains and business operations.

As of 1 December 2025, only agents formally appointed through a valid Power of Attorney will be authorised to act on behalf of trade mark owners in all matters relating to Trade Mark Rights Recordation before the FCC. The Public Notice No. 352F published on 30 June 2025 can be accessed here.

To apply for Recordation, Applicants must submit the following:

• Full particulars of the applicant;
• Nationality or jurisdiction of incorporation of the trade mark owner;
• Place of manufacture of the goods;
• A sample or clear digital photographs of the goods;
• Details of licensees and the nature of their authorisation;
• Information on parent, subsidiary, or affiliated companies;
• Certified copies of relevant trade mark registration certificates;
• Proof of payment of the application fee.

The Chief Inspector is required to decide on the application within twenty-one days of receipt and communicate the decision within five days thereafter. Once approved, recordations are valid for one year and renewable annually. Any changes in ownership or registrant details must be promptly reported, and the recordation will be cancelled if the associated trade mark registration is revoked or cancelled.

A recordation register will be maintained by the Chief Inspector, and authorised individuals may request access or copies upon payment of the prescribed fee.

Please contact the Werksmans Intellectual Property Team for further assistance.

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Introduction

Artificial Intelligence’s (“AI“) rapid development presents both innovation opportunities and legal challenges, especially in intellectual property (“IP“). As AI systems produce increasingly valuable outputs, questions arise about who, if anyone, can claim ownership, particularly from an originality and authorship perspective under the South African Copyright Act 98 of 1978 (“the Copyright Act“).

We explore how AI-generated works interact with copyright rules, especially in cases where AI tools are the primary creators and the requirements of authorship and originality become particularly contentious. For copyright protection to apply, the legal requirements of authorship and originality must be met, enabling a party to claim rights over the work. Without clear ownership or the ability to establish authorship, there is no legal basis to prevent third parties from using such works without authorisation.

Authorship

The definition of “author” in the Copyright Act identifies the author of computer-generated works as the person who made the necessary arrangements for the creation of the work. This enables AI-generated content to potentially qualify for copyright protection, provided a human directed the process.

South African case law, including Payen Components SA Ltd v Bovic CC and Haupt v Brewers Marketing Intelligence (Pty) Ltd, distinguishes between computer-aided works (where the human retains authorship by using the computer as a tool) and computer-generated works (where minimal human input complicates authorship claims), with the legal focus of the latter shifting to whether the user providing the inputs or instructions qualifies as the author.

It is argued that AI developers could be considered authors based on their role in designing AI tools but this view is not yet settled in South African law. Current legal reasoning leans toward recognizing the human user as the author (providing instructions to the AI tool). However, granting authorship to AI developers could lead to impractical outcomes and undermine the core principles of copyright law and other intellectual property laws which seek to encourage creativity and innovation in exchange for a monopoly for a limited period of time.

It is critical to note that authorship does not shield individuals who use generative AItools from copyright infringement risks. Generative AI systems are trained on large datasets that often include copyrighted material, raising the possibility that AI-generated content may be “substantially similar” to protected works. In copyright law, this similarity can constitute infringement even without direct copying. Thus, users may be deemed authors of works that unintentionally infringe on existing copyrights, exposing them to legal liability despite their creative input.

Originality

Originality is a core requirement for copyright protection under the Copyright Act, which, while not requiring novelty, demands that a work result from a human author’s own skill, effort, and intellectual judgment. This presents challenges for AI-generated content where human involvement is minimal, such as simply inputting a prompt and making superficial edits, as such works are unlikely to meet the originality threshold.

Although works reflecting meaningful human input may still qualify, what constitutes “sufficient” involvement remains a fact-specific legal question. The issue is further complicated by the way generative AI systems are trained on vast datasets, often incorporating pre-existing copyrighted materials, which raises concerns about derivative works and the originality of outputs. Assigning copyright to AI system developers risks absurd outcomes, akin to granting software vendors rights over all user-generated content, while granting it to users based on minimal input could dilute the value of genuine creative effort. This tension highlights the difficulty of applying traditional copyright principles to AI-generated works and underscores the need for legal clarity. Ultimately, the current legal framework suggests that works lacking meaningful human input are unlikely to qualify for copyright protection under South African law.

Foreign Law

In the United States (“US“), copyright protection for AI-generated content is determined by the extent of human creative input. The US Copyright Office maintains that only works having human authorship are eligible for protection, a stance reinforced by case law such as the “monkey selfie” decision[1] and a 2023 federal ruling rejecting copyright for an image created solely by AI.[2]

While AI can be used as a tool, such as for editing or arranging content, mere reliance on detailed prompts is generally insufficient to establish authorship. However, when a human meaningfully selects, modifies, or integrates AI-generated material into a broader creative work, those contributions may qualify for protection. This approach has already led to the creation of hybrid works, such as comic books combining human-authored text with AI-generated images.

The European Union (“EU“) adopts a human-centric approach, requiring that a work reflect the author’s free creative choices and intellectual inventiveness. This presents challenges for AI-generated content, particularly where human input is minimal. Article 50 of the EU Artificial Intelligence Act introduces transparency obligations for generative AI providers but does not resolve the issue of copyright ownership. As a general rule, EU law excludes fully autonomous AI outputs from protection, while AI-assisted works may qualify if the user’s contribution is sufficiently creative. Where human involvement is limited to prompting with minimal editing, the resulting work is unlikely to meet the originality threshold or qualify for copyright.

In the UK case of Nova Productions Ltd v Mazooma Games Ltd, the court had to consider the authorship of computer-generated works. The definition of “author” of computer generated works in the UK Copyright, Designs and Patents Act mirrors the definition in the Copyright Act (being the person who makes the arrangements necessary for the creation of the work). The court considered the question of who the author of a computer-generated artistic work was which consisted of bitmap files which were graphics (created by one of the directors) and found that the frames were computer-generated artistic works and held that the director had undertaken the arrangements necessary for the creation of the work as he designed the appearance of the elements of the game, the rule and logic of the computer program and he wrote the program that generated the artistic work.

China has taken a progressive stance, recognising copyright in AI-assisted works where the human user demonstrates sufficient intellectual input. In the case of Li v Liu, decided in 2023, the Beijing Internet Court found that an image created using Stable Diffusion was copyrightable because the user’s prompt engineering and aesthetic decisions reflected original intellectual achievement. Similarly, in Tencent v Shanghai Yingxun, the court upheld copyright in an AI-generated article, attributing authorship to Tencent as it had creative control over the process. While Chinese courts have affirmed protection for AI-assisted works, they have not yet ruled on the copyrightability of fully autonomous AI outputs. Nonetheless, the prevailing position in the country is that copyright vests in the natural or juristic person who exercises creative direction over the AI system.

Evaluation and the Way Forward

A consistent theme across the US, EU, and China is the emphasis on meaningful human involvement as a prerequisite for copyright protection in AI-generated content.

Each jurisdiction recognises that when a human exercises sufficient control, such as selecting inputs, refining outputs, or integrating AI-generated material into a broader creative work, authorship and ownership may be validly attributed. Conversely, works created autonomously by AI, without human creative input, generally fall outside the scope of copyright protection. While the specific thresholds for originality may differ, the core requirement of substantive human authorship remains universally upheld.

This international consensus offers valuable guidance for South Africa, particularly as the Copyright Act’s requirements of authorship and originality. Though our courts have yet to directly confront the issue, existing legal principles suggest that AI-assisted works with significant human input could qualify for protection as a computer-generated work. In contrast, entirely AI-generated works are unlikely to meet the standards of authorship and originality, both of which demand human skill, labour, and intellectual contribution.

Granting copyright to AI developers would also be problematic, as it would extend rights to parties who did not create the specific work or exercise creative control, an outcome that undermines the fundamental purposes of copyright law.

These positions remain speculative in the absence of statutory or judicial clarity. As AI technology continues to evolve rapidly, South Africa must adopt a proactive legal stance. This should provide certainty, align with the foundational principles of the Copyright Act, and reflect a balanced understanding of modern technological realities.

Drawing on international approaches, such as the US’s insistence on human authorship, the EU’s emphasis on intellectual effort, and China’s recognition of human-guided AI outputs, can help shape a workable and principled framework. Notably, China’s case-by-case method, which considers prompt selection, parameter refinement, and aesthetic judgment, offers a practical standard for assessing authorship. By grounding copyright protection in demonstrable human creativity and control, South Africa can maintain a balanced and credible system that rewards genuine intellectual effort while avoiding the pitfalls of extending rights to purely algorithmic outputs.

Notwithstanding the above, successfully claiming authorship does not resolve the underlying infringement risk. Because AI models train on existing, often copyrighted, data, their outputs may unintentionally replicate protected elements to a degree that constitutes infringement. Creators must therefore remain vigilant, as they could be held liable if their AI-assisted work is deemed substantially similar to an existing copyrighted piece, irrespective of their own creative contributions.

Therefore, when using AI systems or tools to create works, it is advisable to maintain detailed records of the human input involved in the creative process. While such documentation may help support claims of authorship and ownership, it is important to note that courts assess these matters on a fact-specific, case-by-case basis, and there is no guarantee that such records will be accepted as proof of copyright entitlement.

[1] Naruto v. Slater, 888 F.3d 418 (9th Cir. 2018).

[2] Thaler v. Perlmutter, No. 1:22-cv-01564 (D.D.C. 2023).

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“Aldi Sign”

“Thatchers TM”

Background

Section 10(3) of the UK Trade Marks Act 1994 provides that if a trade mark owner can show its trade mark has a reputation in the UK, there is a link between the trade mark and alleged infringer’s sign in the mind of the average consumer, and that use of the sign by the alleged infringer takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark, that use is without due cause and infringing.

In 2022 the UK High Court had dismissed Thatchers case of trade mark infringement in terms of UK Trade Mark Act 1994 – Sections 10 (1), 10 (2) and 10 (3) – simultaneously dismissing Thatcher’s claims of passing off against Aldi. 

Appealing on the ground that the High Court had erred in its interpretation and application of Section 10 (3) of the UK Trade Marks Act 1994, Thatcher’s contended thatthe Aldi Sign takes unfair advantage of its Thatchers TM.

Where a mark is not registered but used passing off may need to be established in that territory and succeeding in a passing off is generally very onerous.  It requires extensive evidence of use of the mark to prove goodwill and repute and that, as a consequence of unauthorised use, that goodwill and repute has suffered harm.  Passing off is commonplace where lookalikes, copying and dupes are at issue.

Generally, however, trade mark registration evidences exclusivity and ownership and any unauthorised use of a same/similar mark for same/similar goods/services in the territory concerned may be an infringement in terms of the relevant trade mark legislation.   This CoA  judgment therefore turns on the Thatchers TM, a registered UK trade mark granted in May 2020 and the infringement thereof by Aldi.

Decision

Founded in 1904 Thatchers produced only apple-based ciders until 2018. With market research identifying a gap in the market for a citrus-based cider Thatchers Cloudy Lemon Cider was introduced, Thatchers TM filed in 2020 and Thatchers Cloudy Lemon Cider extensively marketed.  Promotional expenditure from  August 2020 to August 2022  exceeded  £2.9 million across the UK and between February 2020 and August 2023 Thatchers sold 11.6 million litres, £29.6 million in sales at retail value of its Thatchers Cloudy Lemon Cider. 

Favouring Thatchers and reinforcing the importance and significance of trade mark registration the CoA considered :

Global Assessment  Concluding that a consumer would assume a link between the Aldi Sign and Thatchers TM, the CoA affirmed that a global assessment of the marks rather than focussing on the separate elements of each is required.  This test requires consideration of the visual, aural and conceptual similarities of the two marks based on the overall impression and any dominant features.  Aldi’s use of the same faint lines affirmed copying.

Benchmarking Aldi benchmarked Thatchers Cloudy Lemon Cider to develop its Taurus Cloudy Lemon Cider with its taste, quality and package design as its barometer.  Using Taurus on its range of ciders since at least 2013 it then began using the Aldi Sign shortly after Thatchers Cloudy Lemon Cider, that packaging very different to its other Taurus products with Taurus in black on a pale yellow background for the lemon cider, instead of its usual Taurus in white on a black background.   

The CoA said it would be possible to show that a product is lemon-flavoured without such a close resemblance, and that the resemblance therefore “cannot be coincidental “.

No investment yet an increase in sales Aldi’s sales of Taurus Cloudy Lemon Cider increased in comparison to others in the Taurus range yet with no evidence of any investment and no evidence from Aldi to show that it would have achieved equivalent sales without the Aldi Sign and that link or connection with the Thatchers TM.

Unfair advantage Aldi did not contend that it had not obtained an unfair advantage by using the Aldi Sign which assisted it to sell its Taurus Cloudy Lemon Cider.  Aldi benefitted from Thatchers development and promotion of Thatchers Cloudy Lemon Cider rather than competing on its own merits.

Not in accordance with Honest Practices  The CoA said it would have been reasonable for Aldi to have carried out a trade mark search but it did not disclose any legal advice it obtained.  Aldi was aware of the repute in Thatchers TM, it intended to take advantage and had no justification for using the Aldi Sign.  The CoA therefore concluded that Aldi’s use of the Aldi Sign was not in accordance with honest practices in industrial and commercial matters, rather that it was unfair competition.

Contact the Werksmans Intellectual Property Team for further advice.

Reference :- Thatchers Cider Company Limited v Aldi Stores Limited [2025] EWCA Civ 5

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A registered trade mark is vulnerable to revocation or cancellation for non-use if it has not been used for the goods and/or services for which it is registered for a certain amount of time.  In most instances this time period is five years and is calculated from the date of registration, as in South Africa and the European Union.

On 5 June 2024 in proceedings brought by Supermac against the European Union Intellectual Property Office (“EUIPO”) and McDonalds, the General Court held that McDonald’s had in fact failed to establish genuine use of its BIG MAC European Union Trade Mark {“*EUTM”) in respect of “chicken sandwiches”, “foods prepared from poultry products” and in the service class for “services rendered or associated with operating restaurants and other establishments or facilities engaged in providing food and drink prepared for consumption and for drive-through facilities; preparation of carry-out foods”. 

The General Court therefore partially annulled and altered the decision of the EUIPO and consequently those goods and services have been revoked from the EUTM for BIG MAC aside from “meat sandwiches.”   While McDonalds can still use the mark BIG MAC in the European Union (“EU”) this ruling means that it no longer has exclusivity to BIG MAC for chicken sandwiches, foods prepared from poultry products and those restaurant services for which protection has been revoked.

BACKGROUND

In respect of EUTMs, once non-use is raised the burden shifts to the owner of the mark to prove genuine use of the mark for at least five consecutive years in the Territory for the relevant goods and services.  Evidence of genuine use in at least one member country of the EU is required.

Proceedings between Supermac and McDonalds go back to 2015 when McDonald’s opposed Supermac’s EUTM for Mc. In 2017 Supermac retaliated with an action to revoke its EUTM for BIG MAC on the basis of non-use.  Those proceedings were upheld in January 2019 whereafter McDonald’s successfully appealed in March 2019, with that successful appeal brought before the General Court by Supermac.

EVIDENCE AND GENUINE USE

When assessing whether use of a trade mark is genuine regard must be had to all the facts and circumstances relevant to establishing whether the commercial use of the mark in the course of the trade is real. 

The General Court considered the EU Regulations that provide that evidence of use must establish :-

the place, time, extent, and nature of use of the trade mark;

that the type of evidence be confined to packages, labels, pricelists, catalogues, invoices, photographs, newspaper advertisements and statements in writing clearly showing the trade mark.

The evidence that McDonalds had submitted to the EUIPO Cancellation Division were printouts of advertising posters in France, screenshots of television advertisements broadcast in France in 2016 and screenshots from MacDonalds France Facebook account from 2016 see below by way of illustration :-

The General Court held that this evidence did not show any regularity and recurrence that the BIG MAC goods were distributed and was therefore insufficient to establish that commercial use of BIG MAC for “chicken sandwiches” was real. Furthermore the evidence did not include prices at which those goods where marketed.

At paragraph 24 of the General Court judgment  “genuine use of a trade mark cannot be proved by means of probabilities or presumptions, but must be demonstrated by solid and objective evidence of actual and sufficient use of the trade mark on the market concerned ”.

IMPLICATIONS FOR BRAND OWNERS

This judgment is a reminder that even well-known brands may face cancellation or partial cancellation proceedings. 

In defending proceedings for revocation or cancellation the evidence adduced should clearly show the mark and that the mark is used in commerce in respect of the relevant goods and or services and during the relevant time.  Token or once off use may be insufficient.

Brand owners should retain evidence of use and maintain comprehensive records.   Brand portfolios should be regularly reviewed and protection obtained for all forms of the mark, for all relevant goods and/or services and in all relevant Territories.

Please contact the Werksmans Intellectual Property Team for further advice.

*A European Union trade mark (“EUTM”) registration covers all 27 countries of the European Union, namely Austria, Belgium, Bulgaria, Croatia,  Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Romania, Spain, Sweden, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia.  An EUTM registration is effective from both a cost and time perspective in that trade mark protection is attained in all the countries concerned by means of having to file only one trade mark application.

References

Judgment of the General Court (Sixth Chamber) Case T‑58/23 – Supermac (Holdings) Ltd vs McDonald’s International Property Co. Limited.

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Over the past month or so, the world has been spoilt for choice with fiesta of sporting events from WIMBLEDON to the UEFA EURO’s.  And it has to be mentioned that the Spanish were victorious in both events – with commiserations to the English fans!

Behind all of the sport, trade marks and intellectual property play a significant role.  The well-known WIMBLEDON logo is instantly recognisable even if WIMBLEDON were to be excluded from the mark –

On the topic of WIMBLEDON, we celebrate the achievements of Kgothatso Montjane, who secured the Ladies’ Wheelchair Doubles title.    This is a proud moment for the country.

It has been reported that the UEFA EURO 2024 hosted by Germany was seen by 5 billion viewers.  Although the EURO’s logo is amended slightly depending on the host country, it is also easily recognisable as shown below –

On home turf, we have the rugby home tests with Irish, Portuguese, New Zealand and Argentina gracing our shores which is always a source of excitement and part of the social fabric, with South Africans standing behind the SPRINGBOK trade marks, with the following mark needing no explanation –

The South African Rugby Union is vigilant in the protection of its trade marks against unauthorised use which includes an extensive anti-counterfeiting program which includes customs being empowered to detain goods which are suspected to be counterfeit, which leads to the seizure thereof if found to be unauthorised.  Additional steps include regular monitoring of authorised usage in the market place, on social media and other platforms.

A further sporting extravaganza to look forward to is the Olympic Games, to be hosted in Paris from 26 July 2024.   The International Olympic Committee (“IOC”) is serious about the protection of its marks and symbols, having its own Olympic Charter which has a section on the “Rights over the Olympic Games and properties” which includes the Olympic symbol, flag, motto, emblems, anthem, flame and torches.  A country hosting the Olympic Games must enforce the guidelines by either promulgating new legislation or amending existing laws to assist with the protection of Olympic Properties.

Although the local French legislation will not extend to South Africa, do not be tempted to use the OLYMPIC trade marks and other Olympic Properties, such as the well-known 5 interlaced rings logo, as the IOC has registered a number of trade marks in South Africa for a wide range of goods and services. 

A final word on the subject of sport and Spain, according to reports, before Kylian Mbappé’s move to Real Madrid, he applied to trade mark his name ‘Mbappé’, and filed a new application for his goal celebration, being an image of his celebration which was previously trade marked showing a figure in black, white, and grey, frozen in motion with a smiling pose, crossed arms, and hands under the armpits.   We do realise that Mbappé is French but his move to Real Madrid is significant if consideration is also had to the fact that as of May 2024, Forbes valued Real Madrid as the world’s most valuable soccer club brand, at $6.6 billion.

Advice should be obtained before using proprietary trade marks, not only to avoid litigation proceedings but also to respect the time, effort and money which trade mark owners have spent which have resulted in them becoming recognised and admired around the world. 

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Generative Artificial Intelligence (“GenAI”) is machine-learning based and which is trained using data from a wide range of sources, with GenAI tools being able to create new content, including images, content, software, audio, songs and video when responding to the prompts of users.  These prompts are in the form of short, written explanations requiring the tool used to create a specific output.  Examples of popular GenAI tools are ChatGPT and CoPilot, but there are many more. 

The difficulty which arises from an intellectual property (“IP”) perspective is that the data used in the training process most likely consists of various categories of data sets, including information which is free to use and protected information, or a combination of both. The data which is used is usually in the form of proprietary copyright material which in most territories is not registered but will come into existence if certain requirements are met.  For example, in South Africa, copyright will come into existence when two requirements are met, i.e. that the work is in a material form and original.  Originality is not in the sense that is unique, but that the author has spent sufficient time, effort and skill in the creation of the work and that it is not copied from other works. 

As GenAI is here to stay, there is a need to navigate this new frontier until such time as legislation or other guidelines are put into place. 

On 5 April 2024, the Department of Communications and Digital Technologies launched South Africa’s AI Planning Discussion Document (“Discussion Document”), which includes the need for Disclosure Requirements with the proposal that global practices be considered in policy making. 

With regard to the Discussion Document, Preeta Bhagattjee, the head of the Werksmans Technology and Innovation team, and Savanna Stephens have written the piece – The AI National Policy: South Africa’s initial step to establish an AI policy and regulatory framework

The Discussion Document lists regulatory concerns notably Copyright Abuse and alignment with the World Intellectual Property Organisation (“WIPO”).    WIPO has issued a useful document entitled “Generative AI Navigating Intellectual property” according to which –

Generative AI introduces numerous risks and questions. Businesses and organizations should contemplate implementing suitable policies and providing training to employees regarding the technology’s opportunities and limitations. This proactive approach is crucial in navigating the challenges associated with the use of generative AI.

According to WIPO, GenAI and IP have many touch points and uncertainties and sets out a number of considerations that may be useful to businesses and organisations in this new field including in relation to confidential information, IP infringement, open-source obligations, deepfakes (rights and likeness and voice), IP rights and ownership of AI outputs.   The document provides a checklist which may be of use to businesses and organisations which have the use of AI tools and GenAI in its sights, so as to establish responsible practices which includes the following –

• Staff policies and training;
• Risk monitoring and risk profile management;
• Record-keeping;
• AI tool assessment;
• Data assessment;
• AI outputs

A key factor from an IP perspective would be the retention of records, so as to be able to prove subsistence of any IP and possibly to defend any IP infringement claims. 

An interesting development in the USA, is the presentation of a Bill entitled “Generative AI Copyright Disclosure Act of 2024” (“the US Bill”) to the US Congress during April 2024.  If implemented, it would require a person who creates a training dataset or alters a training dataset in a significant manner that is used in the building of a GenAI system, to submit a notice to the US Copyright Register which contains the following –

• a sufficiently detailed summary of any copyrighted works used in respect of created datasets or the alteration of a dataset in a significant manner; and
• the URL for such dataset (if the training dataset is publicly available on the internet)

The US Bill aims to enhance transparency and accountability in the use of copyright materials for training GenAI systems.   Unlike in South Africa, copyright can be registered in the USA and the US Bill seeks to establish a publicly available database containing such notices.

If regard is had to the above and while there is a lacuna in respect of guidelines and legislation in relation to the use of AI tools and GenAI, we strongly suggest that AI policies be put into place, also taking IP into consideration. Please reach out to our IP team and Technology and Innovation team members regarding the above.

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