The Draft Intellectual Property Policy of the Republic of South Africa
The Draft Intellectual Property Policy (Draft IP Policy) of the Republic of South Africa was published on 25 August 2017 for public comment by 24 October 2017. This Draft IP Policy follows on from the IP Consultative Framework that was approved by the South African cabinet on 6 July 2016. Comments on the Framework can be found here: http://www.spoor.com/en/News/south-africas-long-awaited-ip-policy/
According to the Draft IP Policy, South Africa needs to transition towards a knowledge economy and an IP Policy is one of the core elements required to achieve this objective. The Draft IP Policy acknowledges that Section 25 of the South African Constitution already protects certain Intellectual Property Rights, and states that there is a need for a comprehensive IP Policy that will promote a holistic, balanced and coordinated approach to IP that is mindful of the many obligations under the South African Constitution.
A comprehensive IP Policy will be implemented in a phased approach with this document, in Phase 1, focusing on IP and public health, coordination in international forums, and the implementation of commitments undertaken in international agreements. This will be followed by a second phase that will focus on several remaining core concerns around IP.
The goals of the Draft IP Policy are:
- To consider the development dynamics of South Africa and improve how IP supports small institutions and vulnerable individuals in society, including in the domain of public health
- To nurture and promote a culture of innovation, by enabling creators and inventors to reach their full potential and contribute towards improving the competitiveness of our industries
- To promote South African arts and culture
- To solidify South Africa’s various international obligations, such as the Convention on Biological Diversity (CBD) and the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilisation (Nagoya Protocol on ABS), in the service of our genetic resources and traditional knowledge associated with genetic resources.
The strategy employed in the Draft IP Policy includes:
- Advancing a balanced and coordinated approach to IP that regulates IPRs in line with the South African Constitution
- Introducing key policy reforms that account for the development dynamics of South Africa
- Promoting innovation and a knowledge economy
- Leveraging competitive and comparative advantages to advance the transformation of the South African economy.
The Draft IP Policy recommends key reforms, which include:
- The introduction of substantive search and examination (SSE) for patents.
- The leveraging of flexibilities contained in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) to ensure that South Africa protects IP rights while simultaneously promoting public health, local manufacture, research and development, innovation, food security, environmental considerations, transfer of technology and broad socio-economic development.
- The promotion of regional cooperation and integration on IP.
- A commitment to all relevant international obligations to which South Africa is a party.
- The promotion of economic empowerment through, among other means, the implementation of the “utility model” to support the registration of patents by resident small, medium and micro-enterprises (SMMEs), historically disadvantaged individuals, and companies who are operating in the informal sector.
- A coordinated approach to creating awareness about IP among South Africans, so as to protect nationally-owned IP that is related to indigenous resources, traditional innovation and traditional knowledge.
- The creation of a system for protection for traditional knowledge which will safeguard misappropriation and exploitation, as well as promote further research and development into products and services based on traditional knowledge.
- The promotion of international best-practices in IP that align with South Africa’s development objectives.
The Draft IP Policy identifies the key areas that are to be focused on in Phase 1, in the short term. These are listed below:
1. IP and Public Health:
a. Local manufacture and export in line with industrial policy
b. Patent–substantive search and examination
c. Patent opposition
d. Patentability criteria
e. Disclosure requirements
f. Parallel importation
h. Voluntary licensing
i. Compulsory licences
j. IP & competition law.
2. International IP Cooperation:
a. Multilateral arrangements
1.a) Local manufacture and export in line with industrial policy
The Draft IP Policy aims to increase the local production of pharmaceuticals to meet domestic needs, as well as creating export opportunities within the African continent and beyond.
1.b) Patent–substantive search and examination
Currently South Africa makes use of a deposit system for patent applications; they are therefore not subjected to a substantive search and examination procedure.
The Draft IP Policy states that the examination of patent applications in South Africa is a key component of an evolved IP ecosystem. The document recognises that the introduction of an examination system will face capacity constraints and suggests a phased approach according to technology. While the main focus of the approach will be the examination of patent applications directed to pharmaceuticals, the intention is to identify a range of strategic sectors of technology for substantive examination. The author of the Draft IP Policy is of the view that the phased approach would not be in contravention of Article 27.1 of the TRIPS agreement, which provides that patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced, since patents in other areas would still be upheld.
1.c) Patent opposition
Currently there is no provision for an opposition procedure. A patent may only be challenged after grant in an application for revocation that must be brought before the Commissioner of Patents who is a High Court Judge.
The Draft IP Policy recommends that opposition procedures are made available both prior to and after grant. In the interim, due to capacity constraints, it is recommended that third parties be able to submit observations and that “existing provisions in administrative law be used in lieu of post-grant oppositions”.
1.d) Patentability criteria
The Draft IP Policy states that, in line with emerging best practice, patentability criteria will be developed in order to promote genuine innovation through the patent system in South Africa, and the criteria will be implemented through the process of patent examination. The criteria should form part of the Patents Act and also regulations and guidelines for patent examination. The author of the Draft IP Policy states that Article 27.1 of the TRIPS agreement gives a country like South Africa the flexibility to interpret and implement patentability requirements in a manner consistent with its constitutional obligations, developmental goals, and public policy requirements. Amongst other things, this would include the adoption of patentability criteria that address the country’s health and environmental concerns, as well as industrial policy objectives.
The Draft IP Policy mentions Australia, which in 2012 adopted legislation that upwardly adjusted the standards of patentability in Australia.
1.e) Disclosure requirements
The Draft IP Policy provides that in terms of Article 29(1) of the TRIPS agreement, an applicant for a patent must disclose the invention in a manner sufficiently clear and complete for the invention to be carried out by a person skilled in the art. The patent law in South Africa already provides that a complete patent specification must sufficiently describe, ascertain and, where necessary, illustrate or exemplify the invention and the manner in which it is to be performed.
The Draft IP Policy recommends that applicants be asked to provide information regarding the examination of corresponding patent applications in other countries. This will assist the examiners during the search and examination procedure.
1.d) Parallel importation
In the Draft IP Policy it is stated that it needs to be clarified that parallel importation of medicines, as contemplated in Section 15C of the Medicines and Related Substances Act 101 of 1965, does not constitute infringement of the Patents Act.
Article 30 of the TRIPS Agreement allows Members to provide limited exceptions to patent rights. The Draft IP Policy mentions the following exceptions:
The Draft IP Policy recognises that South Africa has a so-called Bolar exemption in its Patent Act which allows a party to obtain regulatory approval for a product prior to the expiry of a patent covering the product.
Currently, the South African Patents Act does not include a “research exemption”. The Draft IP Policy appears to go further than a research exemption, stating, with reference to pharmaceutical products, that it is essential to facilitate research, development and testing of IP products in the commercial and industrial sectors prior to the expiry of the patent term.
The Draft IP Policy recognises that voluntary licences have been granted in the health sector and in particular that this has led to lower prices for and greater accessibility to antiretroviral drugs. The document recommends greater transparency in respect of the terms of these licences, and encouragement to conclude such licence agreements.
The Draft IP Policy mentions that compulsory licences are an important mechanism to ensure affordability of essential goods and to restrain anti-competitive practices. The document mentions that currently the grant of a compulsory licence is subject to an expensive judicial process and infers that there should be a less expensive and less complicated administrative process to apply for a compulsory licence.
The Draft IP Policy mentions that, currently Section 4 of the Patents Act entitles a Minister of State to use an invention for public purposes, but requires negotiation on conditions of use, and if agreement cannot be reached then the State may approach the Commissioner of Patents to determine the conditions. The Draft IP Policy suggests that prior negotiations and determination by the Commissioner of Patents should not be required, and that the law should be amended so that the State can take advantage of flexibilities provided in the TRIPS agreement.
Compulsory licences for export
The Draft IP Policy states that the South African Government is cognisant that of the limitations of “Paragraph 6”, and will engage stakeholders to find ways of ensuring simpler implementation. This is a reference to the implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health which relates to compulsory licences for local manufacture and export.
IP and Competition Law
The Draft IP Policy mentions recent competition law cases involving IP and public interest. In 2001, instead of using the provisions of the Patents Act, a complaint was lodged with the Competition Commission against pharmaceutical companies which held patents on a number of ARV pharmaceuticals in South Africa. This led to a settlement and the patentees agreed to licence the patents to South African pharmaceutical companies and as a result these pharmaceuticals have been made available successfully in SA.
The Draft IP Policy recommends the clarification of the scope of intersection between competition law and IP. In this regard, the document states that both competition law and patent law can be used to implement competition-related TRIPS flexibilities and advance consumer welfare.
2.a) Multilateral arrangements
South Africa will explore legal instruments and international treaties that are critical to advance the objectives of the Draft IP Policy. This will include:
- Locarno Agreement Establishing an International Classification for Industrial Designs (1968);
- Strasbourg Agreement Concerning the International Patent Classification (1971);
- Vienna Agreement Establishing an International Classification of the Figurative Elements of Marks (1973);
- Nice Agreement Concerning the International Classification of Goods and Services for Marks (1979);
- Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (1989);
- Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired or Otherwise Print Disabled (2013).
2.b) Convention on Biological Diversity (CBD)
South Africa is considered to be the third most biologically diverse country in the world. South Africa has already implemented aspects of the CBD, for example the National Environmental Management: Biodiversity Act, 2004 (Act No. 10 of 2004) (NEMBA or Biodiversity Act) and the Bioprospecting, Access and Benefit Sharing (BABS) Amendment Regulations of 2015, and is a signatory to the Nagoya Protocol. South Africa will continue to implement the CBD and its protocols and remain positively engaged internationally.
2.c) World Health Organisation (WHO)
South Africa will continue to participate in R&D initiatives and multilateral IP forums in a coordinated fashion ensuring that the positions adopted are consistent.
2.d) Political Formations such as BRICS
South Africa will aim to leverage BRICS cooperation to advance its objectives.
Phase 2 will focus on:
- Intellectual Property Rights (IPRs) and the informal sector
- Branding of South African goods and services (collective marks, certification marks and GIs)
- Safeguarding South Africa emblems and national icons
- Commercialisation of IP
- IP localisation and beneficiation
- IP awareness and capacity building
- IPRs and the environment/climate change/green technologies
- IP in agriculture, IP and biotechnology, genetic resources and genomic sovereignty.