Applications for Registration of Pharmaceutical Products and Infringement in Terms of South African Patent Law

The Question

Whether or not an application for registration of a generic pharmaceutical product with the Medicines Control Council of South Africa (the MCC) in terms of The Medicines and Related Substances Control Act 101 of 1965 , prior to the expiry of a patent on the product, is an act of patent infringement.

The Law

Section 45 of the Patents Act provides that the effect of a patent shall be to grant to the patentee in South Africa, for the duration of the patent, the right to exclude other persons from making, using, exercising, disposing or offering to dispose of or importing the invention, so that he or she shall have and enjoy the whole profit and advantage accruing by reason of the invention.

In other words, the acts of infringement provided for in South Africa patent law are making, using, exercising, disposing or offering to dispose of, or importing the invention.

Section 65 provides for the following remedies for infringement:

i. An interdict, i.e. a court order which prevents the infringer from continuing with his activities;

ii. Delivery up of any infringing product or any article or product of which the infringing product forms an inseparable part, i.e the infringer has to deliver up all infringing product which is in his possession, generally for destruction;

iii. Damages.

In lieu of damages, the patentee may at his or her option be awarded an amount calculated on the basis of a reasonable royalty which would have been payable by a licensee or sub-licensee in respect of the patent concerned.

Opinion

In our opinion, the mere act of making an application for the registration of a generic pharmaceutical product with the MCC, while a South African patent on the product is still in force, is not an act of making, using, exercising, dispensing or offering to dispose of or importing the product, and is thus not an act of patent infringement.

However, an application for registration of a generic pharmaceutical in South Africa requires an applicant, inter alia, to:

i. Provide results of tests which show the efficacy, safety and stability of the product; and

ii. Submit a sample of the product to the MCC.

Dealing with the first point, we believe that the submission of data relating to the product, including information on the efficacy, safety or stability of the product is not an act of making, using, exercising, dispensing or offering to dispose of or importing the drug, and is thus not an act of patent infringement.

However, the efficacy, safety and stability tests themselves, if carried out in South Africa, would amount to exercising of using the invention and thus be an act of infringement. In the only case in South Africa on this (Stauffer Chemicals Chemical Products Division of Chesebrough-Pond’s (Pty) Ltd v Monsanto Company 1987 BP 37), it was held that the act of conducting field trials with an agricultural product for the purpose of registering the product, prior to the expiry of a patent covering the product, was an act of patent infringement.

Nevertheless, if such tests are carried out outside South Africa, the submission of the test results in South Africa will not constitute an act of patent infringement for the reason set out above.

Dealing with the second point, in our opinion, the act of providing a sample to the MCC may be an act of disposing of the product, and thus constitute an act of patent infringement.

If the act of providing a sample is an act of patent infringement in South Africa, the following remedies may be available to a patentee:

If the patentee finds out about the intention to submit the sample, it could possibly apply for an interdict to stop the sample from being submitted and thus stop the application for registration until such time as the patent has expired.

If the patentee finds out about the submission of the sample before the product proceeds to registration, it could possibly bring an application against the generics company and the MCC for delivery up of the infringing product, for destruction. Without a sample, it could well be that the application for registration will be delayed until another sample can be submitted when the patent expires.

If the patentee finds out about the submission of the sample after it has been submitted, and after registration of the product, the patentee could ask for damages in respect of the amount of product submitted (which would be negligible). It is however unlikely that the patentee will be able to cancel the registration itself. In the case of Stauffer Chemicals Chemical Products Division of Chesebrough-Pond’s (Pty) Ltd v Monsanto Company 1987 BP 37, the court found that it could not order delivery up or cancellation of the registration certificate for an agricultural product.

Although there may be little that a patentee can do in terms of the Patent Law after an application for registration has been granted, the patentee may have an action in terms of the Common Law, based on unlawful competition. In an action based on unlawful competition, a patentee would have to argue that it will suffer damage arising from another party’s unlawful act of infringement of a patent right by submitting a sample to the MCC when the application for registration was filed. The patentee could also argue that the infringement of the patent has provided the other party with a springboard that has enabled it to enter the market much earlier than it would have done had the patent not been infringed. If the patentee is successful in an action based on unlawful competition, it may seek an interdict to stop the other party from continuing to market and sell the product for a period of time (for example the time it would have taken to obtain registration had the application been made after the patent expired), or damages. While we believe that this is a possibility, no one has yet brought such an action in terms of unlawful competition.

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David Cochrane

Spoor & Fisher

Date published: 2000/10/01
Author: David Cochrane

Tags: applications registration pharmaceutical products infringement patent law