South Africa - Anticipated Increase in Official Fees for Patents and Designs

Earlier in 2019, the Companies and Intellectual Property Commission (CIPC) indicated that official fees for South African patents and designs were to be increased. In addition, a distinction was in future to be drawn between small and large entities, insofar as the filing and renewal of patents and designs are concerned. It was initially expected that the fee increase would be effective as from 1 July 2019, but the changes were put on hold. It has now been advised that the date of implementation is likely to be 1 October 2019, although that could also change. It is understood that the official fees for patent & design applications, and for corresponding renewals, will increase significantly insofar as large entities are concerned. In addition, a general 5% official fee increase will be applied to all other official fees, and provision is to be made for a regular annual increase of 5% going forward. The anticipated revised official fees for applications and renewals are set out below. These are subject to confirmation once the changes have been officially promulgated.

Action	Current official fee (ZAR)	Proposed official fee (ZAR)
Patent application (small entity)	590.00	590.00
Patent application (large entity)	590.00	1100.00
Patent renewal (small entity)	Variable 85.00 - 206.00	140.00
Patent renewal (large entity)	Variable 85.00 - 206.00	1400.00
Design application (small entity)	240.00	240.00
Design application (large entity)	240.00	540.00
Design renewal (small entity)	Variable 77.00 - 149.00	100.00
Design renewal (large entity)	Variable 77.00 - 149.00	1000.00

The proposed definition of a small entity is complex and is based on the definition of a "small enterprise" as contained in the National Small Enterprise Act, No. 102 of 1996, as amended (*see relevant extract below). In many instances it may be difficult to ascertain readily whether an applicant or patentee qualifies as a small entity. It is believed (at this stage at any rate) that it may be preferable to pay official fees at the large entity rate unless one is absolutely certain that the patentee qualifies for the lower rate. Furthermore, it is understood that applicants claiming small entity status will be required to lodge a prescribed declaration attesting to the fact that they qualify for the reduced rates, at the time an application is filed (or possibly within a few months of filing). Similarly, owners renewing and wishing to take advantage of the small entity reductions will likewise be obliged to lodge a declaration attesting to the fact that they comply with the requirement for small entity status, at the time of making a renewal payment. If no such declaration is lodged, large entity rates will apply. Future developments and confirmation of the implementation date will be reported in due course. *Extract from the South African National Small Enterprise Act 102 of 1996: "Small enterprise" means a separate and distinct business entity, together with its branches or subsidiaries, if any, including co-operative enterprises, managed by one owner or more predominantly carried on in any sector or subsector of the economy mentioned in column 1 of the Schedule and classified as a micro-, a small or a medium enterprise by satisfying the criteria mentioned in columns 3 and 4 of the Schedule. The Schedule referenced above is contained in the South African Small Business Amendment Act 26 of 2003. The table below excludes the rules for "small", "very small" and "micro" enterprises, as the cut-off for qualification for reduced official fees is a "medium" enterprise.

Column 1	Column 2	Column 3	Column 4	Column 5
Sector or subsector in accordance with the Standard Industrial Classification	Size of class	The total full-time equivalent of paid employees	Total turnover	Total gross asset value (fixed property excluded)
Agriculture	Medium	100	R5m	R5m
Mining and Quarrying	Medium	200	R39m	R23m
Manufacturing	Medium	200	R51m	R19m
Electricity, Gas and Water	Medium	200	R51m	R19m
Construction	Medium	200	R26m	R5m
Retail and Motor Trade and Repair Services	Medium	200	R39m	R6m
Wholesale Trade, Commercial Agents and Allied Services	Medium	200	R64m	R10m
Catering, Accommodation and other Trade	Medium	200	R13m	R3m
Transport, Storage and Communications	Medium	200	R26m	R6m
Finance and Business Services	Medium	200	R26m	R5m
Community, Social and Personal Services	Medium	200	R13m	R6m