SOUTH AFRICA Law and Practice Contributed by: Russell Bagnall, Danie Dohmen, Sophia Smallbones and Ramon Pereira, Adams & Adams Attorneys
damages. There are no punitive damages for wil - ful infringement nor is the concept of account of profits applied. The question of transfer pricing would become relevant to the damages calcula - tion if used between affiliate and parent company. Infringement and damages are separated in South Africa. If a court finds that a patent has been infringed, it may order an enquiry into dam - ages suffered by the plaintiff. A plaintiff may then institute an action for damages. Damages are rarely litigated in South Africa and experience has shown that parties usually settle on the quantum. A patentee or licensee may, at its election, claim a reasonable royalty in lieu of damages. If the patentee has entered into exclusive or non- exclusive licence agreements, the commercial terms of those agreements may be relevant in assisting a court in determining what damages or royalty would be payable. It is well settled law in South Africa that, in cir - cumstances in which damages are difficult to calculate, a court is required to take a robust approach based on the relevant market and the loss suffered by the patentee to arrive at an appropriate or reasonable estimate. Damages accrue from when the infringement first took place. However, the prescription peri - od for damages in South Africa is three years, subject to being interrupted by proceedings for infringement. Thus, a party can claim damages for acts of infringement that took place up to three years before proceedings for infringement were instituted. Interim awards are not made in South Africa. Interest is payable from when the damages amount is determined. The Prescribed Rate of Interest Act applies, and the interest rate prescribed is amended from time to time.
There are no reported cases in South Africa where a respondent in a preliminary injunction application has been awarded damages, either on the strength of an undertaking made by a pat - entee, or otherwise, in circumstances in which the preliminary injunction was wrongly granted. Neither are there any reported cases in South Africa where a third party has claimed damages for the wrongful grant of a preliminary injunction. However, parties have settled damages claims in circumstances in which the preliminary injunc - tion was found to have been wrongfully granted. 5.5 Legal Costs A successful party in patent litigation proceed - ings in South Africa is usually entitled to recover from the unsuccessful party what is termed the “taxed party and party costs” through an award of costs made by the court. Legal costs are recoverable only after proceedings have been instituted but may include costs for pre-litigation work. There are no court fees payable in South Africa. If the court is of the opinion that the party to whom costs have been awarded has been put to unnecessary expense, or if the opposing party and/or their legal representatives have not acted with bona fides, alternative costs scales with higher tariffs may be ordered. Parties can expect bills of costs to be taxed within 3 to 6 months of being submitted to the Registrar. A party can typically expect to recover 30 to 40% of their legal costs. In some cases, the court may choose to order only a portion of the costs in favour of the suc - cessful party. Factors that influence this decision can be whether the successful party succeed - ed on all grounds and the amount of court time spent on dealing with issues in respect of which it was unsuccessful.
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