New Draft South African IP Policy Receives Initial Positive Reactions

The civil society collective formed to pressure the South African government to reform its patent act has cautiously welcomed the release of the country’s draft intellectual property policy.

The Treatment Action Campaign (TAC), Médecins Sans Frontières (MSF, Doctors without Borders) and Section 27 welcomed the announcement that the Department of Trade and Industry (DTI) has called for public comment on the much anticipated National Policy on Intellectual Property.

The draft policy document [pdf] was made public in the government gazette last week. Stakeholders can make use of a 30-day public consultation period until 4 October to make submissions to the policy.

Industry reactions to the draft were not immediately available.

For almost two years, the TAC, MSF and Section 27 have called for reforms to South Africa’s IP laws including, amongst others, the adoption and implementation of an examination system for all pharmaceutical patent applications, “as required by Section 34 of the Patents Acts as well as strengthening patentability criteria to prevent evergreening and promote high standards of medical innovation.”

Evergreening refers to making small changes to an existing drug which is about to come off patent, in order to gain a new patent.

In a press statement, the TAC, MSF and Section 27 said that while the policy consultation is only the start of the legislative process, “the principles outlined in the document set the stage for changes that promise to increase competition in the pharmaceutical sector and lower the price of medicines in South Africa.”

“A key challenge noted by the policy is that at present, South Africa does not examine patent applications – instead, the current system allows pharmaceutical companies to obtain multiple patents on the same drug, even for inventions that do not fall under the country’s definition of innovation,” they said. “This allows companies to extend the life of their monopolies, block competition from generic manufacturers, and charge inflated prices for medicines in both the public and private sector.

“To remedy this, the policy notes that South Africa should set a higher standard for innovation, so patents are not granted for simply combining existing medicines, or registering new uses for previously patented drugs. At the same time, the policy notes the need for a substantive patent examination system, which should better ensure criteria for granting a patent [are] upheld,” the statement reads.

It is on this point that Pharma Dynamics, a generic pharmaceutical company based in Cape Town, lauded the draft IP policy as a “massive stride” towards improving the access to and affordability of healthcare in South Africa.

Pharma Dynamics CEO Paul Anley said: “After years of urging authorities to address the stranglehold of originator drug companies on the market, it appears that the general public will finally start reaping the fruits of a market free of patent manipulation… The policy document recommends that the Medicines Control Council is capacitated and strengthened in order to avoid regulatory delays that hamper access to affordable healthcare. We believe that the proposals will bring new products to market faster and therefore increase competition and reduce the cost of medicine.”

Generally, stakeholders of the IP policy held a circumspect view of the document.

Intellectual property lawyer Andrew Rens said of the draft policy: “The policy that South Africa should abandon its anomalous deposit system, and instead require substantive examination, is welcome if overdue. “

“The establishment of pre- and post-grant opposition will enable South African entrepreneurs to challenge attempts to patent them out of business without having to engage in expensive litigation. Pre- and post-grant opposition have worked rather well in India,” he said.

“An important difference between South Africa and India is that prior to updating its patent act India did not permit patents on pharmaceutical formulae at all,” said Rens. “However, South Africa has not only permitted patenting of pharmaceuticals it has failed to examine the patent applications.”

“Therefore, when South Africa introduces pre- and post-grant opposition it must be clear that all the patents already registered are subject to post-grant opposition. Since those patents have not been substantively examined there should be an expedited review process for patents that have already been registered,” Rens said in a written response.

Rens also commented on the recent Marrakesh Treaty and the fact that there is no mention of it in the draft policy.

In Marrakesh, Morocco, on 28 June – the final day of a World Intellectual Property Organization diplomatic conference – 51 countries signed a new international treaty to improve access to published materials for the visually impaired.

“South Africa was very involved in the process that resulted in the Marrakesh Treaty so it is a little surprising that the policy makes no mention of the need for exceptions for the visually impaired, said Rens.

“Perhaps the drafters see the need to amend the 1978 Copyright Act in accordance with the Marrakesh Treaty as so obvious it doesn’t need to be stated. In any case, amendment of the current legislation to enable the visually impaired and print disabled to enjoy the same right to read as the rest of us is urgent and priority should be reflected in the policy,” he said.

Other stakeholders were still mulling a considered response when Intellectual Property Watch polled reaction to the draft IP policy, but many expressed optimism with the process of a new IP policy for the country.

Tobias Schonwetter, director of the Intellectual Property Unit in the Department of Commercial Law at the University of Cape Town (UCT) said that he, together with colleagues are currently studying the policy and will submit our comments within the 30 day timeframe. “I am very excited to engage with this as it will shape future lawmaking in the area of IP,” he said.

[Update:] The draft policy also states South Africa’s opposition to a proposal at the World Intellectual Property Organization to give additional rights to broadcasters, according to Knowledge Ecology International.