An arsenal of available interventions – but no move to use them

The South African Patents Act (the “Act”) provides for opportunity for acquisition or use of a patent by the government. However, the South African government has never used these provisions to free itself from the limited monopoly granted to a patentee – even in light of the country’s current challenges in the area of medicine.

While in normal circumstances, Intellectual Property (IP) right holders are granted protection over their IP, the COVID-19 pandemic has created a situation in which they may be forced, even temporarily, to allow third parties to use their IP rights for the benefit of public interest.

There is now a delicate balance that needs to be struck between the inherent incentive that IP protection, specifically patents, provides to innovate, and the urgent need to respond to the global risk of COVID-19.

Sections 4 and 78

Turning to the Act, Section 4 states that “A patent shall in all respects have the like effect against the State as it has against a person: Provided that a Minister of State may use an invention for public purposes on such conditions as may be agreed upon with the patentee, or in default of agreement on such conditions as are determined by the Commissioner (the Commissioner of Patents is a designated High Court judge) on application by or on behalf of such Minister and after hearing the patentee”.

In addition, Section 78 provides that: “the [Minister of Economic Development] may, on behalf of the State, acquire, on such terms and conditions as may be agreed upon, any invention or patent”.

Negotiated acquisition

It is clear from both Section 4 and 78 of the Act that the use of or acquisition by the State of a patent requires some form of negotiation between the State and the patentee, rather than a unilateral acquisition of rights to use or expropriate a patent by the State.

Some may argue that the negotiated acquisition may be a hindrance to the State when public interest is paramount.

At present, South African legislation does not provide for the waiving of the negotiated acquisition in the case of a national emergency or other circumstances of extreme urgency, even though South African legislation could include this in terms of Article 31(b) of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

TRIPS and Doha

The TRIPS Agreement authorises member states to “provide limited exceptions to the exclusive rights conferred by a patent” so long as these do not “unreasonably conflict” with normal patent exploitation or “unreasonably prejudice the legitimate interests of the patent owner, taking into account the legitimate interests of third parties”.

Interestingly, the Doha Declaration of 2001, which reaffirms the provisions of the TRIPS Agreement, allows each Member State “the right to determine what constitutes a national emergency or other circumstances of extreme urgency, it being understood that public health crises, including those relating to HIV/AIDS, tuberculosis, malaria and other epidemics, can represent a national emergency or other circumstances of extreme urgency”.

Despite the flexibilities granted in terms of Article 31(b) of TRIPS, and its mention in the South African IP Policy that was approved by our country’s Cabinet on 30 May 2018, the provisions have not been used, nor have they been adopted into South African legislation.

Compulsory licensing

In addition, the use of compulsory licensing in terms of Section 56 of the Act empowers the Commissioner of Patents to grant a compulsory licence to an “interested party”, including a government agency, without the consent of the patentee, if there has been an abuse of patent rights. No compulsory licence has ever been granted under a South African patent, even though there have been several applications to date.

Now, Government has recognised a need to reform its regime insofar as it relates to compulsory licensing, as the following extract from the IP Policy indicates: “South Africa’s unique challenges…will require the scope of compulsory licences to be strengthened and clarified in a manner that is fair and compliant... Following due process, guidelines will be introduced, including legal process for government use, and a renewed effort to facilitate the process of exporting IP goods, such as medicines, to the African continent”.

So, while it is clear that the South African government has an arsenal of interventions at its disposal, and that it has these on its radar, it is unclear why it hasn’t used the provisions of the Act, nor introduced further-reaching legislation, in light of burgeoning health issues.

 

Originally published in WIPR

Date published: 29/07/2020
Author: Marco Vatta, Spoor & Fisher