ETP2601

Assignment 6

UNIVERSITY EXAMINATIONS

ASSIGNMENT 6

ETP2601
Entrepreneurial Skills

40 Marks

Primary Lecturer: Mr W Sambo

Secondary Lecturer: Dr NM Mmako

Please read all the chapters to answer this assignment

Answer all the questions.

Instructions:
(1) Submit your answers as a single document in PDF format. It is preferable for you to
type your answers (Font: Arial 12) and then convert your document to PDF format for
submission. However, if this is not possible, you may also write your answers down
and scan them to a PDF file. Please write legibly.
(2) Start with a cover page stating the module code (ETP2601) and your student
number.
(3) Make sure that each question is clearly numbered.
(4) Please ensure that your PDF document is NOT encrypted to a “secured” mode and
that it is NOT password protected as these files cannot be marked. Virus infected files
will also not be marked.
(5) Submit your answers in one PDF document by using the Assessment Info tool on
myUnisa.
(6) You need to answer the questions in your own words. Plagiarism will not be
tolerated and may result in disciplinary action if detected.
(7) Please include the following declaration at the end of your assignment. I,
…………………, with student number,………………… hereby declare that I have read
the Unisa policy on plagiarism and the student disciplinary procedures documents,
made available on the myUnisa module site, and I understand what constitutes
plagiarism, collusion and academic fraud. I declare that this this assesment is my own
original work and that I have not allowed anyone else to borrow or copy my work.

1
 ETP2601
Assignment 6

(Read the case study below and answer the questions that follow)

INTELLECTUAL PROPERTY (IP) MANAGEMENT OF THE SONG “MBUBE”

Solomon Linda
Born: 1909 Ladysmith, South Africa
Died: 8 October 1962 Johannesburg, South Africa
1939: Solomon Linda records “Mbube” and assigns copyright to Gallotone
1949: The Weavers record “Wimoweh”
1961: The Tokens record “The lion sleeps tonight”. The song racks up three
centuries of radio play in the US alone.
1994: The song used in the musical version of Disney’s “The Lion King”.
2000: Rolling Stone magazine estimates that “Mbube” and its progeny have
earned at least 20 m USD in composer royalties over the decades.

In 1962, Solomon Linda passed away a pauper, his family too poor to afford a
headstone for his grave. The British Copyright Act of 1911 (the Imperial Copyright Act)
was incorporated into the South African Copyright Act of 1916 which was in force in
1939. The Imperial Copyright provided a so-called reversionary interest whereby
copyright reverted to the deceased estate 25 years after the death of the author.

In 1987, the copyright in “Mbube” reverted to the executor of Solomon Linda’s estate
who could then enforce the rights in South Africa and in any country that was formerly
part of the British Empire, including the UK. But Abilene Music (claimed owner of “The
lion sleeps tonight”) was located in the US and could not be sued in South Africa, or
could they? Spoor and Fisher opted to sue the most prominent and high-profile
licensee of the song against which it was possible to secure jurisdiction before a South
African court, i.e. Walt Disney Enterprises Inc. This could be done by "attaching" some
200 registered trademarks owned by Walt Disney Enterprises in South Africa, in effect
holding the Disney trademarks hostage to provide security for the enforcement of
payment of a debt. After much legal wrangling, discussions took place and a settlement
agreement was reached which included the following:

2
 ETP2601
Assignment 6

• Abilene undertook to pay the executor an undisclosed amount for compensation of

past uses and to pay royalties going forward.
• It was acknowledged that Solomon Linda would henceforth be designated as co-
composer of “The lion sleeps tonight”.

And finally, in 2006 a trust fund for the heirs of Solomon Linda was set up.

Question 1

In your view, why did Spoor and Fisher institute action against Disney and certain other
licensees in the Solomon Linda case? (3)

Question 2
What lesson does this teach heirs of other authors who never benefited from the
copyrighted works of their forebears? (4)

Question 3

In a case of a written material, what would have been the general guidelines in respect
of copyright infringement. (5)

3
 ETP2601
Assignment 6

(Read the following case study and answer the questions that follow)

THABILE CALCULATES HER MARK-UP FOR HER PRODUCT

Thabile has bought a corner shop. She intends to buy cold drinks from a supplier to
sell to customers. The cold drink costs R5.00 per bottle. Her overheads will add 2,5%
to the cost of a bottle of cold drink. Thus, the final cost of a bottle of cold drink will be
R5,00 + 2,5% = R5,13 per bottle.

The industry-standard mark-up on cold drinks is 25%. Thabile decides to stick to this
as she does not want to price herself out of the market. She calculates the selling price
using the formula:
Cost + mark-up = selling price
R5,13 + 25% = R6,41
She decides to round this off to the nearest 10 and to sell the cold drink at R6,40 per
bottle.

Her profit on a bottle will be:

Selling price – cost = profit
R6,40 – R5,13 = R1,27 per bottle

Thabile is quite cautious. She does not want to charge too much for her product or to
make too little profit. She therefore decides to use a lower profit margin of 15% because
she has a new business. Her selling price on a bottle will then becomes R5,13 + 15%
= R5,90. Her profit will thus become R5,90 – R5,13 = R0,77.
Source: The global SME business toolkit

Question 4
Identify the pricing method used by Thabile and justify your answer with information from
the case study. (4)

Question 5
What sources can be used to find the correct mark-up percentage for Thabile? Motivate
your answer. (6)

4
 ETP2601
Assignment 6

Question 6

Explain the advantages and the disadvantages of lowering the price from R6,40 to R5,90
per bottle. (6)

Question 7
Thabile now wants to formalise her business operations by registering it and she appoints
you as her business advisor. While she intends to register her business, she does not
have a name for the business in mind but insists she wants to go on with the registration
immediately. Will she be able to register a business that has no name? As a business
advisor briefly explain to her what she has to do in order to register her business in her
case. (6)

Question 8

The first case study “Mbube” and the one in previous assignment “Oh Vuyo” are based
on the issues of interllectual propery which is a big thing in South Africa. Recent issues
could be observed in the case of Please call me with Vodacom and such suggest
businesses need to be aware of issues regarding this concept. Discuss the concept of
intellectual property (IP) and identify various forms that businesses need to familiarise
themselves with. (6)

©
UNISA 202 4