[WSIS CS-Plenary] Weekend reading from 'the south'

[Tracey Naughton]

Two IPR stories from the south...........

Sorry, no translated versions,

Stories below.

Tracey Naughton
 



Rooibos trademark
With pics by Jeff Barbee

 

By Christina Stucky

 

The protea cynaroides, Table Mountain, the sprinbok. And rooibos. The herbal
tea with the warm honey aroma sits comfortably in this line up of
quintessentially South African emblems. But because of a bizarre turn of
events, the US trademark on the word “rooibos³ is held by an American woman,
whose name ­ and, by all accounts, business acumen ­ could come straight out
of the television series “Dallas³.

The South African rooibos industry has already spent more than R1.5 million
in legal fees trying to have the trademark expunged in the United States.
Now the department of trade and industry and the government of the Western
Cape are weighing in with substantial financial assitance for the legal
battle which has dragged on for several years. At stake is not only the
national pride but also the potentially huge US market for rooibos tea and
its products.

The name Virginia Burke-Watkins is enough to make the facial muscles of
otherwise stoic Afrikaner farmers and businessmen twitch. Described by a US
paper as a “Dallas socialite³, Burke-Watkins has owned the trademark on the
word “rooibos³ in the United States since 2001. This entitles her to
royalties on every single packet of tea and every beauty product bearing the
word “rooibos³ sold in American supermarkets and health food stores. Rooibos
Ltd, the Clanwilliam-based company that is litigating against Burke-Watkins
on the trademark issue, has as its logo a stylised steaming tea cup with the
word rooibos ­ it is therefore not allowed to sell its products in the
United States, according to US patent law. The case has been painstakingly
slow. It is currently still sitting with the US patent office, though it may
be transfered to a federal court this month.

SP Tredoux, Rooibos LtdŒs company secretary and employee of 27 years, says
he has sympathy even for the US patent office, “but not for this person who
is sticking to her guns and insists (rooibos) is her name. In Canada, we can
sell rooibos. What¹s the difference between Canada and the US ­ it¹s just
one person and her stubbornness.³

According to an article in the Salt Lake Tribune, dated January 2004, a
Utah-based firm has lodged a complaint against Burke-Watkins who has
“zealously defended that trademark, even taking on the South African
government, along with numerous health products stores³. The Utah company,
Nutraceutical, along with 8000 of its retail partners allegedly received
letters from Burke-WatkinsΠattorneys demanding $5000 (R33500) payments for
“trademark violations³ as well as promises to cease sales of “unapproved
Rooibos-labeled products³. Nutraceutical accuses Burke-Watkins of  business
interference, trade libel and slander, false statements and unfair
competition and simultaneously wants the trademark to be invalidated.
According to the newspaper report, Nutraceutical “condemns the letters (from
Burke-Watkins) as being part of a ’shakedown operationŒ.³

Like Nutraceutical (and other US distributors that have taken Burke-Watkins
to court), Rooibos Ltd asserts that rooibos is a generic word and should
never have been allowed to be registered as a trademark in the first place.
While Burke-Watkins apparently concedes that rooibos is merely the Afrikaans
word for “red bush³, she claims the word was unkown in the US until she
began to market it across the United States. “We brought Rooibos to the
United States. We promoted it and now people ar saying we can¹t do this? We
say, ’why not?Œ,³ says Burke-Watkins, quoted in the US paper.

The “we³ refers to her and South African Annique Theron who first introduced
Americans  ­ and, it could be argued, the world  ­ to the wonders of
rooibos. Theron first highlighted the healing abilities of rooibos tea on
colicky babies, going on to write the book Babies, Allergies and Rooibos Tea
in 1974. The book is now known under the title Allergies  an Amazing
Discovery.  She further researched rooibosΠproperties and used extracts in
her line of  beauty products, Annique Rooibos. After 25 years of devoted
research to rooibos, she decided to venture into the American market. There
she hired Burke-Watkins as her US agent under the holding company Forever
Young. 

According to Annique Rooibos¹ public relations office, in response to
questions from The Sunday Independent, “Dr Theron soon realised she would
have to protect her invention and product line by registering the
trademarks. If she failed to do this she faced the danger that some US
companies could register rooibos as a trademark and use the South African
formulas (brand name).³ “Rooibos³ and “Annique³ were registered as legal
trademarks in 1994 in the name of Forever Young CC.

The legal wrangling over the trademark began in 1997 and by 2001, Theron,
then aged 72, had apparently become “mentally and emotionally drained³ by
the on-going litigation. She sold the trademark to Burke-Watkins for $10.
“Many people asked why she transferred the trademark to an American citizen.
It was a natural choice and a moral obligation to transfer the trademark to
Ms Burke-Watkins because she was (and still is) the exclusive distributor
for the Annique Rooibos tea and Annique Rooibos skin care products.  Ms
Burke-Watkins had contributed to all marketing and legal costs over the nine
years that Dr Theron and she had promoted rooibos in the US,³ according to
Theron¹s PR office.

Burke-Watkins did not respond to questions sent to her, but according to
Theron¹s office, Burke-Watkins has no intention of keeping other rooibos
products out of the US market. She merely wishes to protect the Annique
Rooibos/Forever Young product line from the potential danger of products
“containing rooibos which are not of the same high quality as the rooibos
exported by Forever Young, or products which contain damaging additives
(that) may harm the good name of ’Annique RooibosŒ.³

These claims have done nothing to assuage the 300 vexed rooibos farmers in
the Cedarberg of the Western Cape. This area with a 300 kilometre radius, is
the only part of the world where rooibos can be grown ­ the Australians and
Californians tried, but failed. The rooibos growers and producers feel no
one, least of all a “greedy³ American should own the trademark on rooibos.

Total sales of rooibos have risen from 3900 tons in 1990 to 10'400 tons in
2003. In the same time period, exports increased from 432 tons to 6488 tons,
with the annual international turn-over now standing at R90 million. Of the
15 countries that import rooibos, Germany, Japan, and the Netherlands are
the biggest buyers of bulk rooibos, with Germans consuming about 73 percent
of total rooibos exports. The US and Germany are the world¹s biggest
importers of herbal products. You don¹t have to be JR Ewing to figure out
that the United States holds vast potential for rooibos producers.

According to Willem Engelbrecht, managing director of the Big Five Rooibos
Company, the US market is “very, very promising³, but it currently imports
only about 150 tons per year ­ of which about 100kgs were imported by
Burke-Watkins last year, according to Engelbrecht¹s research. Rooibos was
once sold as “Kaffir Tea³ in the US by the Battle Creek Food Company. Today
some US health shops try to get around the trademark by labelling it
“African red bush tea³.

Because rooibos production is restricted to a relatively small area, the
Cedarberg farmers may not be able to produce enough rooibos to meet the US
demand, if the court case is settled in Rooibos LtdŒs favour. “Rooibos
production already doesn¹t meet the demand,³ Engelbrecht says. He argues
that the court case is not only about market access but also about setting a
precedent. Other countries may follow in Burke-WatkinsΠfootsteps, if South
Africa doesn¹t take a stand. A similar case is the registration in the
Netherlands of the word “boerbull³, much to the anger of  South African dog
breeders. 

The department of trade and industry (DTI) has agreed to support Rooibos Ltd
with up to R2 million for the US litigation. The Western Cape is also
providing financial support. The case may be transfered to the Federal Court
of California this month. A ruling could be handed down within 6 months,
according to the DTI¹s MacDonald Netshitenzhe. “Our small-scale farmers need
protection in jurisdictions where we are operating as trading partners,³ he
says. Particularly in a globalised world, “it is important to protect your
generic names³.

Engelbrecht considers the court case “a statement³ to powerful countries
trying to steal the intellectual property of poorer, less powerful
countries. “If South Africa registered the name ’hamburgerŒ how long do you
think that would last? It shouldn¹t be necessary for the rooibos industry to
fight this battle. Rooibos is our national heritage. It should have been a
diplomatic process.³ Concerning Burke-Watkins, Engelbrecht echos the
sentiments of the Clanwilliam producers. “She just wants to make money. You
can¹t claim ownership of something that doesn¹t belong to you³.

 

 The San, the cactus and the money
 

By Christina Stucky

 

The wind whips across the barren landscape chasing tufts of thornbush
towards the horizon. Two spindle-thin men in leather loin cloths sell crafts
made of  leather and wood by the side of the road to tourists on their way
to the Kalahari Gemsbok National Park. Pelted by the wind and sand, they
stand, wave and smile simultaneously as an airconditioned car passes.

It is difficult to imagine that anyone would consider this forbidding
landscape cast in hues of beige and brown home. It is even more difficult to
imagine that here in this harsh soil grows a plant with a market potential
of billions of dollars. Yet both are true.

The story of the hoodia cactus and its wealth-generating potential for the
San of the Kalahari made international headlines when a profit-sharing
agreement was signed between the Council for Scientific and Industrial
Research (CSIR) and the San Council in March this year. The notion that a
cactus eaten by lithe San hunters to suppress their appetite and thirst
during long hunts was being developed for the fight against flab in the
North made for good news copy. For the San this agreement meant not only
large sums of money for development projects, but also the restoration of
their pride in their traditional knowledge.

“We read in the papers about the hoodia being used by the CSIR ­ or misued,³
says Andries Steenkamp, one of about 800 Khomani San, part of the
100Œ000-strong San population in southern Africa. “The perception was built
that there are no San people left, so we don¹t have to be asked. They
thought they could get away with it, without asking the San. But they didn¹t
get away with it,³ he says, smiles and pauses. “We think the hoodia cactus
can change our lives.³

Earlier this month, Steenkamp was appointed to the newly formed Hoodia Trust
as one of seven South African San representatives. One representative from
the CSIR and the San¹s lawyer Roger Chennells are also on the trust. It will
administer the money the San receive from the hoodia¹s development and
marketing as an anti-obesity drug. Once the trust is formally registered in
South Africa early next year the money will be divided up equally among the
San councils of South Africa, Botswana, Angola and Namibia. One quarter of
the income will be used to run the trust and the Working Group of Indigenous
Minorities of Southern Africa (Wimsa). The first payment of about R260000
was made several months ago.

The deal is considered groundbreaking. Research institutions and
corporations are, finally, giving indigenous knowledge its due respect and
financial reward. For the first time, holders of traditional knowledge will
receive royalties from the development and marketing of a drug.

“I¹ve got a lot of respect for the organisation (CSIR), though we had to
force them to come back to the truth,³ says Steenkamp. “They tried to say
these San don¹t exist anymore, but now they accept the mistake they made. We
now have a good relationship.³

The San will receive 8 percent of what is known as “milestone income³ during
the three- to four-year development phase, and 6 percent of the royalties
once the drug hits the pharmacy shelves. The drug has an estimated market
potential of $1-8 billion. The agreement should herald the end of the “a
crate of beer for your ancient knowledge³ era. Yet, although this historic
deal is a step in the right direction, it is not perfect.

For one, the patent rights for P57, as the active ingredient of the hoodia
cactus is known, remains with the CSIR. The research institution signed a
licensing agreement with Phytopharm, a small UK company, which in turn
entered into a commercialisation agreement with US-multinational Pfizer
(home of Viagra). Pfizer has recently pulled out of the deal and Phytopharm
is looking for another partner to develop and market P57 as a prescription
drug. 

“While this agreement must be heralded as a historic breakthrough, certain
concerns impede a wholehearted endorsement,³ writes environmental policy
analyst Rachel Wynberg in her paper entitled “Sharing the crumbs with the
San³. “Most notably, the San will receive only a fraction of a percent ­
less than 0.003 percent - of net sales. Monies received by the San will be
extracted from royalty and milestone payments obtained by the CSIR, whereas
profits received by Phytopharm and Pfizer will remain unchanged. The San, in
other words, will receive only a miniscule sliver of a large, well-iced
cake.³

The problem, says Haidee Swanby of Biowatch South Africa, lies with the
intellectual property rights (IPR) system and “the way the (North) thinks
about intellectual property³. The agreement with the San stipulates that
they cannot use their knowledge of the hoodia in any other commercial
application. “If Phytopharm and the CSIR make money, the San make money, but
they cannot take the hoodia elsewhere,³ she says. “The CSIR are just
packaging the knowledge of the San but why should they own the content?³

There is no perfect model for protecting indigenous knowledge, argues
Swanby. The typical model, she explains, still involves a large research
institution following a lead on a plant, doing years of expensive research,
turning it into a drug, marketing it and hoping that the money from the
sales will trickle down to the communities. The emphasis is on selling the
patent for large amounts of money, even though patenting traditional
knowledge is, in fact, a contradiction in terms. The patent system works
best for the North, the holders of technological knowledge, not for the
South, the source of biodiversity and traditional knowledge.

Alternative models seek to support communities to apply their traditional
knowledge and market its products. In Nambia, for instance, communities are
using their knowledge to extract oil from the Morula tree and market it
themselves. “They make small amounts of money every day without selling off
their knowledge forever and getting large chunks of money every few years,³
says Swanby. 

The IPR model also requires a definable partner within communities. That,
too, poses problems. The hoodia grows in various countries in the region,
but only the San of South Africa, Botswana, Angola and Namibia are reaping
the financial benefits because they are represented by San organisations.
The San in Zambia and Zimbabwe, which have also been using the hoodia for
centuries, will not get any money under the profit-sharing agreement. “In
South Africa and Namibia we are far more organised and recognised. The San
in Zambia and Zimbabwe are not organised,³ says Steenkamp.

Despite the problems with what Swanby calls “the practicalities³ of
profit-sharing agreements, the hoodia-deal has become a “wake-up call for
corporations³. The money will allow the San not only to fund development and
job-creation projects but also to protect its cultural heritage and
traditional knowledge. Part of the money is to be used by the Khomani San to
expand a “veld school³, where children are taught plant knowledge and are
educated in the almost-extinct !Nu language.

Marianna Witbooi, a 25-year-old single mother living in Witdraai, hopes the
hoodia-money will create jobs for the youth. “They are getting bored. Many
youth get pregnant, others go for theft, because there is nothing to do,³
she says. Witbooi moved to Pretoria because of work but she felt “caught³ in
the city. The Kalahari soon called her back, she says. She believes the
hoodia has brought hope and pride to the San. “I feel very good because
through the hoodia cactus issue, the San will be developed. It will show
that the San still exist.³