The South African draft IP Policy: Patents and Health in South Africa

The long-awaited South African draft National Policy on Intellectual Property (the draft IP Policy) which was published on 4 September 2013 has recently led to an unfortunate furore in the media.

On 17 January 2014, Money MSN published a report based on a document that was leaked from the Innovative Pharmaceutical Association South Africa (IPASA), an industry lobby group comprising the local subsidiaries of innovator pharmaceutical companies. The document  is a plan for a campaign prepared by U.S.-based consultancy Public Affairs Engagement, to delay and modify the draft IP Policy.

This news report was followed quickly by passionate statements to the press by the South African Health Minister Aaron Motsoaledi who was very critical of the campaign.

IPASA has since distanced itself from the campaign, saying that the plan was reviewed and subsequently rejected by  IPASA  members.

This furore erupted over the question of patents, public health and access to medicine as dealt with in the draft IP Policy. In South Africa, which has an alarmingly high incidence of HIV/AIDS as well as other diseases such as tuberculosis, malaria, hepatitis, cancer, diabetes and heart disease, one can understand that there is a passion to ensure that there is access to medicine, but it is important to keep a cool head and deal with this critically important question calmly.

The broader objectives of the draft Policy include: the development of a framework that should empower all strata of South African society, to contribute to development, to improve IP enforcement, to promote research and development, to improve national compliance with international treaties, to introduce a public health aspect perspective into national IP laws, to ensure that IP laws are appropriate to the level of development and innovation in a country, to engender confidence and attract investment, and to promote public education and awareness of IP in South Africa.

Unfortunately, the draft IP policy has not been drafted coherently, it contains unsubstantiated statements, and it also contains incorrect statements on the law.

Despite this, it would appear that the following suggestions/recommendations are made:

  • South Africa should maintain its sovereignty over the grant of patents and the validity of patents in South Africa.
  • The South African Patents Act should be amended to incorporate the flexibilities as highlighted in the Doha Declaration on TRIPS and
  • Public Health; and in particular:
    (a) the provisions for compulsory licensing, and
    (b) the provisions for parallel importation.
  • South Africa should not enter into bi-lateral trade agreements with countries that compromise the flexibilities afforded in terms of TRIPS.
  • Technology transfer contracts should be standardised to regulate restricted/prohibited technologies subject to export controls and maximum percentages.
  • South Africa should consider implementing substantive patent examination and make allowance for pre- and post- grant opposition of patents. Currently, South Africa has a deposit based patent system with no opposition procedure.
  • Extension of patent term because of regulatory delays is not desirable. Currently there is neither provision in the South African Patents Act for the extension of term of a patent, nor for the issue of Supplementary Protection Certificates (SPCs).
  •  South Africa should develop incentive schemes for IP generation to achieve its developmental goals, particularly poverty alleviation and health. Public funding for research on health problems in South Africa must be increased
  • Regulations/guidelines on licencing should be developed to encourage utilisation of patents in South Africa.
  • A suggestion is made for patent rights to be enforced administratively by a Patent Tribunal. Currently patent rights are enforced in the High Court in South Africa.

In particular, the draft IP Policy states that South Africa should make provisions in its laws that will facilitate the entry of generic competitors as soon as a patent has expired on a medicine. The draft IP Policy recognises that Section 69A of the SA Patents Act (introduced by an amendment in 2002) already has a Bolar-type provision for obtaining regulatory registration of a medicine in South Africa prior to the expiry of a patent, but which excludes stockpiling. It would appear that the draft IP Policy therefore suggests maintaining the status quo on the entry of generic medicines on to the South African market.

The draft IP Policy also states that South African legislation should exclude diagnostic, therapeutic and surgical methods from patentability, including new uses of known products. The South African Patents Act already excludes methods of treatment of the human or animal body by surgery or therapy or of diagnosis practised on the human or animal body from patentability. The use of the wording “including new uses of known products” has raised serious concern in the pharmaceutical sector. Given that the reference to methods of treatment is incorrect, it is unclear whether or not the IP Policy means to exclude patents directed to a known compound for use in a new method of treatment from patentability. If so, this would mean that current Section 25(9) of the Patents Act which specifically provides that a patent may be granted to a known compound for use in a new method of treatment (provided the new use is inventive) would have to be deleted. In the writer’s view, an amendment of this nature would be contrary to the TRIPS agreement including the flexibilities as highlighted in the Doha Declaration.

Interested parties were invited to submit comments on the draft Policy by 17 October 2013. Comments were submitted by individuals, academic institutions, industry groups, non-governmental organisations and law firms in South Africa. In the main, commentators agree with the broad objectives of the draft IP Policy, but many have expressed concern that the document is incoherent, contains unsubstantiated statements, and also contains incorrect statements on the law. This leads to uncertainty as to what the draft IP Policy means, what it intends to achieve, and the compliance of some of the recommendations with TRIPS.

Minister Rob Davies (the Minister of Trade and Industry whose department was responsible for drafting the document) has given assurances that South Africa will comply with its obligations under international treaties. In a news report Intellectual Property Watch quotes Minister Davies as saying “We are moving in a direction in striking a balance between innovation, affordable medicines and to modernise our IP regime”.

The Department of Trade and Industry held a workshop on the draft IP Policy with legal practitioners on 9 October 2013. A subsequent workshop with all stakeholders which was planned for 15 October 2013 was postponed, and the writer has recently been advised that the workshop has been “postponed until further notice”.

The 2014 South African general election will be held on 7 May 2014, to elect a new National Assembly as well as new provincial legislatures in each province. A concern has been raised that the IP Policy could be adopted in a hurry because of the upcoming general election. As stated before, the draft IP Policy is, unfortunately, an incoherent document which has glaring errors and finalisation in its current form will not assist in striking a balance between innovation, affordable medicines and modernisation of our IP regime. It is hoped that the postponed workshops will take place so that a full public consultative process can take place, and it is also hoped that a revised, coherent and substantively and legally correct document will be circulated for further comment from stakeholders including legal experts before it is signed.

Any amendments to the South African Patents Act are quite a way off. A draft Bill will have to be prepared and follow the correct legislative process, which would include an opportunity for the public to submit comments on the Bill. The Bill will be debated in Parliament and voted on. The Bill must thereafter be assented to and signed by the President. The process for passing legislation in South Africa will typically take 3 years from the introduction to Parliament, although this can be accelerated if there is the necessary political willpower.

In conclusion, it is hoped that the draft IP Policy is revised and that a revised document is circulated for further comment from stakeholders including legal experts before it is signed. Any amendments to the South African Patents Act are quite a way off, and the public will be given an opportunity to submit comments during the legislative process. This article was first published on the Managing Intellectual Property website - February 2014, What’s behind the drug patent furore in South Africa

Date published: 2014/03/10
Author: David Cochrane

Tags: patent news south africa intellectual property ip