Commercial IP

Our expertise includes brand valuation, IP valuation, due diligence, the drafting of agreements, advice on exchange control and taxation issues relating to intellectual property and peripheral legislative issues that affect the use of intellectual property such as those relating to the Consumer Protection Act.

Brand valuation

The brands of a business are often said to be one of its most valuable assets. For that reason, it is essential for any business to value its brands at least every two to three years so as to have a realistic indication of their value.

Of course, there would be little point in attributing a value to a brand without using credible valuators who conduct a valuation according to accepted international standards. At Von Seidels, our IP professionals have experience conducting brand valuations and valuations of other types of IP, including patents, in accordance with internationally accepted standards and valuation methodologies in a wide range of industries and for different purposes, such as:-

• valuations for the purposes of due diligence exercises in commercial transactions;
• valuations of trade marks and patents for the purpose of obtaining finance from banks where registered trade marks and patents can be hypothecated as security;
• valuations for the purposes of the sale of a trade mark;
• valuations for auditing purposes; and
• valuations of brands and trade marks in deceased estates.

Taxation of intellectual property

When IP is purchased, sold or whenever revenue is generated as a result of licensing IP, tax implications are likely to arise. For that reason, it is important to structure an IP portfolio and IP license agreements so that they are as tax efficient as possible, but also in a manner that still ensures that a business’ IP rights are structured in a way that is technically acceptable in terms of South Africa’s IP legislation.

At Von Seidels we are commercially astute and will take into account tax implications when advising on IP portfolios. For complicated tax structures, we may sometimes be required to work together with a business’ auditors or specialist tax consultants so as to assist a business to obtain a tax efficient but technically sound IP structure.

Exchange control

South Africa’s exchange control Regulations have recently been amended expressly to include intellectual property rights as “capital” for the purpose of the Regulations. The effect of assigning any intellectual property rights from a South African resident or entity to a non-South African entity or resident without the approval of the South African Reserve Bank is that the assignment is deemed null and void. For that reason, it is important:-

• before registering IP in South Africa, to consider possible Exchange Control restrictions;
• before launching capital investment projects in South Africa, to obtain Exchange Control advice on any IP that is likely to be created in South Africa and the exchange control implications;
• with respect to mergers and acquisitions, to obtain IP specific Exchange Control advice; and
• importantly, whenever IP is to be transferred to a non-South African resident or entity, to obtain Reserve Bank approval.

Other commercial issues

South Africa’s general commercial law framework obviously impacts IP, especially the Consumer Protection Act which has touched just about every aspect of South African law. For that reason, when providing advice, our professionals take a dynamic approach that takes into account South Africa’s broader commercial framework.