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South African Official Fees for Patents and Designs to Increase

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In March 2019 the South African Companies and Intellectual Property Commission (CIPC) announced a fee increase in the official fees for patents and designs which was to take effect on 1 April 2019. This notice was, however, withdrawn prior to its implementation following requests from industry that more time be given to comply with the changes. Comments were also provided that the entity status definition was problematic as universities, non-profits and individuals were not expressly given the benefit of the lower scale of fees.

We are now expecting a new official notice to be published and the new fees to take effect towards the end of 2019 or in early 2020. While we expect the entity status definition to be clarified, we do not expect the quantum of the proposed fee increases to change.

The most significant fee adjustments are as follows:

Existing Fee (ZAR1) New SMME Fee (ZAR1) New Corporate Fee (ZAR1)
Patent application 590 590 1,100
Annual patent renewal (from third year onwards) 1402 140 1,400
Design application 240 240 540
Annual design renewal (from third year onwards) 1002 100 1,000

1 USD 1 = ZAR 14,60 at current exchange rates
Average amount. The current actual amount varies slightly per year

A corporate entity is one that does not qualify as a small, medium or micro enterprise (SMME) in terms of the National Small Business Amendment Act, which defines an SMME as an entity that, together with its branches or subsidiaries has: i) fewer than 100 employees (up to 200 in some industry sectors), ii) a turnover less than an amount that varies between ZAR 4 million and ZAR 50 million depending on the sector, and iii) total gross assets excluding fixed property less than an amount that varies between ZAR 2 million and ZAR 18 million depending on the sector.

As mentioned above, we expect this definition to be updated when the new notice is issued to entitle individuals, universities and not for profit entities to also enjoy the lower scale of fees.

Other official fees will increase by 5% with no distinction made between SMME and corporate entity fees. Future 5% annual increases in all official fees are also proposed.

To pay fees at the SMME level, a new Declaration of Entity Status Form P27 for patents and Form D19 for designs will be created.  To claim the SMME rate, the form must be lodged on application or payment of renewal fee, once per application. If no Declaration of Entity Status is submitted, the application or renewal will be billed at the corporate rate.

Recommendation

We expect that most patent and design applicants will be considered corporate entities once the new rules come into effect.

In South Africa it is possible to bulk-pay renewal fees for the entire life of the patent or design. This can also be done while the application is still pending.

South African patent and design proprietors may therefore wish to bulk-pay all remaining renewal fees for the life of the relevant patents or designs before the new fees become effective.

Please contact us or your usual Von Seidels contact should you be interested in this option.