The new draft of the intellectual property (IP) policy, released by the department of trade and industry, paves the way to end the country’s “extraordinarily and unjustly high” rate of granting patents. The policy was published in the Government Gazette two weeks ago for comment, and has been welcomed by activists and academic experts in the field.
Tobias Schonwetter, director of the Intellectual Property Unit at the University of Cape Town, called it “a much-improved, important and indeed laudable step in the right direction” compared with the department’s previous IP policy document, published in 2013.
South Africa is one of the most generous grantors of patents in the world, according to the department’s policy document.
The South African patent system is a depository system – the claims made about how unique something is only get interrogated if a third party challenges them.
The Companies and Intellectual Property Commission receives about 9 000 patent applications a year, said Tshiamo Zebediela, the agency’s spokesperson.
About 4 500 get accepted, mainly because the rest do not comply with formalities, such as incorrectly filed documents. If the paperwork is in order, you will almost certainly get your patent.
India and Brazil grant only 19% and 14% of all patent applications, respectively, compared with the roughly 60% granted in South Africa.
“These figures suggest an abuse of our deposit system. So-called inventions that substantively do not deserve patent protection are nevertheless being patented in the country. This is to the detriment of society as South Africans are being forced to pay higher than necessary monopoly prices for products that actually do not deserve monopolistic patent protection,” Schonwetter told City Press.
“Clogging the system with undeserving patents further hampers the market entry of newcomers with real innovations, and thereby stifles the broader innovation ecosystem.”
Instead of a depository system, India and Brazil have substantive search and examination (SSE) systems – similar to the one the department proposes for South Africa. In the case of India, its stronger patent system is credited for setting the scene for that country’s huge generic pharmaceutical industry.
An SSE should result in fewer patents for “undeserving” inventions, said Schonwetter.
At the Companies and Intellectual Property Commission, preparations are at an advanced stage to develop a new patent regime. The body has trained 18 examiners and expects to handle a workload of 1 000 patent examinations in a year, said Zebediela.
“In the meantime, we are continuously training our examiners to ensure that they produce a high-quality examination when the legislative process is completed.”
DRUGS AND MORE
The most important controversies about IP usually involve drugs, so the department of trade and industry wants more rigorous patent interrogation to start there, as well as in “a range of strategic sectors, including the health sphere and beyond”. These will be identified based on “development and public interest considerations”.
In July, Schonwetter’s unit co-published a report on how the developing world’s IP regime needs an overhaul. Patents are, at best, a necessary evil to incentivise research and inherently produce economic inefficiencies, they argued.
The developing world is generally engaged in technological catch-up with the developed world, meaning its IP systems need to be different.
Overly generous IP protection limits local development and leads to large royalty payments that usually go back to the developed world.
Two effects of generous patenting are, firstly, “evergreening”, where small changes to a medicine lead to endless extensions of the patent. Another problem is the creation of a “patent thicket”, where a patent on one technology inhibits research into others.
The paper’s proposals to deal with the rich world-biased IP regime globally “generally support” the department’s new plan, said Schonwetter.
These include convenient mechanisms for challenging patent applications and better use of the “flexibilities” allowed for in the Agreement on Trade-Related Aspects of Intellectual Property Rights, under the World Trade Organisation.
The agreement generally pushes the world’s IP regime towards the developed world’s interests, but has provisions and exemptions that countries such as South Africa barely use.
The department’s new policy at least “shows awareness” of these flexibilities and a willingness to use them, said Schonwetter.
But vagueness remains when it comes to key considerations, such as the procedure for opposing patent applications and the use of so-called compulsory licences, he said.
The big institutional change will be the SSE system for adjudicating patent applications.
Fix the Patent Laws, a coalition of 34 civil society groups – including Section 27 and the Treatment Action Campaign – has preliminarily welcomed the policy.
The Innovative Pharmaceutical Association of SA (Ipasa), which counts large pharmaceutical companies such as Pfizer, Roche, GSK and Merck as members, also said it largely welcomed the policy. But, it added, several parts needed “clarity”.
Ipasa’s list of elements that need work covers almost all the key parts of the policy: patentability criteria, parallel importation, exceptions, voluntary and compulsory licences, and patent opposition procedures.
“We want to believe that the spirit of the whole exercise ... is not meant to be a punitive process towards innovative research-based biopharmaceutical companies, as we have been assured, but a process that will ensure balance,” said Ipasa.
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