Exchange Controls Again Blocks Assignments of IP

Exchange Controls were amended on 8 June 2012 to prevent the assignment of intellectual property by a South African “resident” to a foreigner without the consent of the South African Reserve Bank. The cession of patents as security in favour of foreigners is similarly restricted.

This amendment drags us back to the position that existed before the Oilwell case. However, assignments effected before 8 June 2012 remain unaffected by this amendment and any transaction concluded in contravention of this amended Regulation 10(1)(c) is more probably not null and void “ab initio” (i.e. “from the beginning”).