202001.30

Africa: foreign direct investment, trademarks and domain names


The management of international trademark and domain name portfolios is closely linked to investments made by companies, including those made abroad. Investments imply, in many cases, a commercial presence on the host territory, which must imperatively be accompanied by trademark and domain name registrations at the national level and, where appropriate, at the regional level.

Foreign direct investment in Africa

The 2017-2018 report of the United Nations Conference on Trade and Development (UNCTAD), entitled World Investment Report. Special Economic Zones, published on June 12, 2019, reveals that, in a gloomy global climate, marked by a constant slowdown in foreign direct investment (or FDI), Africa manages to fare well with growth in 11% FDI (unctad.org, World Investment Report. Special Economic Zones, June 12, 2019, Figure 1.2 FDI inflows, by region, 2017–2018 (Billions of dollars and per cent), p. 3). These figures show that foreign companies are not turning away from Africa. On the contrary, they are betting on the African continent.


unctad.org, World Investment Report. Special Economic Zones, 12 June 2019, Figure 1.2 FDI inflows, by region, 2017–2018 (Billions of dollars and per cent), p. 3

unctad.org, World Investment Report. Special Economic Zones, 12 June 2019, Figure 1.2 FDI inflows, by region, 2017–2018 (Billions of dollars and per cent), p. 3


The main host countries are the following ones:


Source : UNCTD, “Foreign direct investment to Africa defies global slump, rises 11%”, UNCTD.ORG, 12 June 2019.

Source : UNCTD, “Foreign direct investment to Africa defies global slump, rises 11%”, UNCTD.ORG, 12 June 2019.


As for the main investors, they have their headquarters in the following countries:


Source : UNCTD, “Foreign direct investment to Africa defies global slump, rises 11%”, UNCTD.ORG, 12 June 2019.

Source : UNCTD, “Foreign direct investment to Africa defies global slump, rises 11%”, UNCTD.ORG, 12 June 2019.


Foreign direct investment in Africa, brands and domain names

There must be a correlation between FDI on the one hand and the registration of trademarks and domain names on the other. Protecting intangible assets is equivalent to securing investment. That explains the reason why all the bilateral and multilateral investment treaties in force include a clause incorporating intellectual property rights in the definition of investment. However, the intensity of this correlation seems difficult to measure. Indeed, such a study would need to take into account, with regard to trademarks, the proportion of foreign investors who have registered their trademarks through a subsidiary located in the host country. These data are not always available. Also, the task of verifying a correlation between FDI and domain names registered under ccTLDs is even more complex. To achieve this, it would be necessary, on the one hand, to isolate the domain names registered by foreign investors and, on the other hand, to verify, among these, the domain names which are capable of constituting an intellectual property right having with regard to the conditions of domestic law. Furthermore, as with trademarks, the proportion of foreign investors who have registered their domain names through an subsidiary located in the host country should also be taken into account. Suffice to say that the demonstration seems impractical. At the very least, we can identify a few data without drawing a definitive conclusion.

Trademarks

With regard to trademarks, research carried out using the statistical database of the World Intellectual Property Organization (WIPO) reveals that, between 2016 and 2018, 68.9% of the trademark applications made with the African Intellectual Property Organization (AIPO) come from non-resident applicants (R: 31.1 / NR: 68.9%). On the other hand, this formidable gap is reversed in Egypt (R: 65 / NR: 35) and is reduced in South Africa (R: 59.7 / NR: 40.3%). In Ethiopia (R: 49.5 / NR: 50.5) and Morocco (R: 57.4 / NR: 42.6), the ratio is more balanced. However, AIPO figures seem to point in the direction of a correlation between FDI and trademark registrations by non-residents.

Domain names

Each trademark must correspond to at least one domain name, this is the aphorism of IP Twins. The filing of a trademark in a given country or region must, as far as possible and according to the conditions in force, be simultaneous with the registration of the domain name under the TLD designating that country or region. Thus, a South African trademark “TRADEMARK” must correspond to the domain name(s) trademark.co.za, trademark.org.za, trademark.net.za or trademark.web.za. Likewise, an AIPO trademark “TRADEMARK” must correspond to the domain name trademark.africa. If the registration of a domain name is subject to the existence of a registered trademark, everything must be done to register or acquire the domain name concerned as soon as possible.

Concerning the national level (ccTLD), we regret that the registries of the countries that benefit from FDI the most do not systematically deliver the registration statistics for domain names. However, as mentioned above, it is not very easy to see a correlation between IDEs and ccTLDs. At the very least, it can be noted that, over specific periods, African ccTLDs grow faster than others. In its report titled CENTRstats Global TLD Report, published in January 2019, the Council of European National Top-Level Domain Registries (CENTR), emphasized the strong growth of African ccTLDs (6.1% against 2.9 for American ccTLDs, 1.9% for Asian ccTLDs, 2.3% for European ccTLDs) (CENTR, CENTRStats Global TLD Report 2019/1).

What about other geoTLDS? First, it is crucial to give first-rate importance to .AFRICA. Any commercial strategy with an African component should be accompanied by the registration of domain names under the .AFRICA TLD which, beyond offering visibility on the African continent, indicates an aspiration to develop commercial relations with African companies, and individuals.


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As for the African cityTLDs, to date, there are only three, namely: .CAPETOWN, .DURBAN, .JOBURG, all administered by the dotAfrica registry (registry.africa). Here again, a commercial presence in Cape Town, Durban or Johannesburg implies the registration of domain names with the corresForeign direct investment, FDI, Intellectual property, Trademarks, Domain names, Domain name portfolio management, Business strategy, Investment protection, Africa, Egypt, South Africa, Ethiopia, Morocco, Congo, .AFRICA, geoTLDs , cityTLDs, ccTLDs, .CAPETOWN, .DURBAN, .JOBURGponding TLD, not only to guarantee certain local visibility but also to limit the risks of cybersquatting. It is likely that, in the coming years, other cities will consider proposing the creation of their cityTLD, particularly Lagos, Cairo and Kinshasa which each have more than 10 million inhabitants, but also many others because of their cultural and historical influence or their force of tourist attraction.

About IP Twins

IP Twins is an ICANN-accredited domain name registrar with 15 years of experience in domain name strategy and management. We represent trademark holders in UDRP proceedings.

We deliver security certificates tailored to your needs in order to ensure the safety of visitors to your website.

IP Twins also offers anti-counterfeiting and anti-cybersquatting monitoring services. Detective, our monitoring software, identifies online counterfeits and cybersquatting. We collect evidence and remove references to counterfeits from hundreds of marketplaces, social networks and the web in general.

Should you need to complete these investigations, our team based in China can help.

Do not hesitate to contact us at info@iptwins.com.