Legislation For South Africa’s New IP Policy Likely After Elections Next Year

Legislative changes giving effect to South Africa’s recently published Intellectual Property Policy “Phase 1” will not take place during this term of government, the country’s trade minister has said. Meanwhile, a side-by-side comparison with the 2017 draft legislation shows a series of changes in the final policy, and the pharmaceutical industry is complaining but appears determined to continue investing in the country.

The new approved South Africa IP Policy is available here [pdf].

After nine years of development, there were successive moves during the past two weeks in bringing the policy to the light of day. These included the Department of Trade and Industry (DTI) publishing the policy shortly after Cabinet – government’s highest decision-making body – adopted the policy.

DTI Minister Rob Davies explained the process to follow. “We will meet in the Inter-Ministerial Committee on IP (IMCIP), we will now assess what in the policy we can implement immediately,” he said. “We won’t be introducing, in this term of Parliament, changes in terms of substantive new laws. That won’t happen in this term of government…. Legislation will have to wait for the new term.”

General elections will be held in South Africa next year.

Davies, speaking to Intellectual Property Watch, explained that deliberations are underway on the necessary groundwork for legislative changes to which the policy gives effect.

He confirmed that in the meantime the substantive examination of patents is going ahead.

IP stakeholders and commentators on the development of South Africa’s IP policy were unsurprised by the content contained in the final IP Policy Phase 1.

“For the most part, existing arguments in some areas have been strengthened, but there are no fundamental changes from the 2017 policy recommendations,” concluded Prof. Brook Baker of the Northeastern University School of Law in Boston (US), after he compared the draft IP policy of 2017 with the IP Policy Phase 1.

In written correspondence with Intellectual Property Watch, he pointed out differences in content between the current IP policy and the 2017 draft. These include:

“Page 9, newly quoted evidence from studies by WIPO, Lerner and Stiglitz on the lack of a connection between heightened IPRs and development.

Page 15, new reference to civil society studies and consultants.

Page 16, new paragraph on the problem of limited sources of supply and exclusion of local production.

Page 18, new sentence in 1^st paragraph arguing for the legality of differentiated treatment under TRIPS and new paragraphs on South Africa having hired capable, well qualified patent examiners who have received extensive training and noting examination in Egypt, Ethiopia and ARIPO [African Regional IP Office].

Page 19, change emphasizing steps will be taken to avoid abuse of opposition procedures.

Page 20, new paragraphs further explaining the rationale for opposition procedures.

Pages 23-25, greatly expanded discussion of parallel importation. differentiating it from allowing counterfeit medicines and emphasizing the requirements of registration, among other issues.

Page 28, a promise that compulsory licensing procedures will revised “in a manner that is both more effective and efficient than the status quo currently allow” and an expanded discussion of US law on government use.

Page 29, dropped the last bullet point from the draft policy on government use.

Pages 31-35, new section discussing rule of law, legal certainty and security on investments, basically touting that the consultation process has been extensive, the policy results rational and that safeguards, including rights of appeal have been accounted for.”

Tobias Schonwetter, director of the Intellectual Property Unit at the University of Cape Town, has been a long-time IP Policy commentator and contributor to the public participation process in developing the policy.

He wrote to Intellectual Property Watch: “I am particularly pleased to see that the [government] still intends to finally introduce a (phased) substantive search and examination system for patents in South Africa and provides additional reasons why we should do this and why it is indeed possible for a country like South Africa – something that has been questioned by some.”

“It is obvious that this final version of the policy was enriched by additional empirical evidence as well as references to relevant research in this area, and it is also clear that stakeholder feedback was taken into account seriously and critically,” Schonwetter added. “For instance, as requested by our team at the IP Unit, additional clarity was added to the section on parallel importation. I also welcome the new section of rule of law, legal certainty & security of investment, which links the proposed reform initiatives to, e.g., Constitutional guarantees and requirements.”

Pharma: ‘We Are the Goose that Lays the Golden Egg’

However, the Innovative Pharmaceutical Association of South Africa (IPASA), which includes large pharmaceutical companies such as Pfizer, Roche, GSK and Merck as members, issued a cautious response to the publication of the long-awaited IP Policy.

IPASA CEO Konji Sebati said in a written response to Intellectual Property Watch that the content of the published policy was not a surprise given that the association had been actively commenting on clauses in the policy for the last three years. “There were clauses where we had fundamental differences but the government has incorporated some of our concerns,” she said.

In response to the possible effects the policy could have in terms of its application in the country, Sebati said, “South Africa is in dire need [of] foreign direct investment and our President went on a roadshow for exactly that – to attract investors – and so anything that plans to abrogate IP is hardly progressive.”

“We read with interest the utterances at a press conference announcing the policy approval by Cabinet. It is unfortunate, to say the least, that patents are still viewed as a barrier to access. When more than 70 percent of medicines on South Africa’s Essential Medicines List are off patent and yet patients do not access them due to dysfunctional healthcare infrastructure systems,” she said.

“We have no issue with substantive search and examination at all because we too do not want frivolous patents granted. However, the anti-patent sentiments that keep popping up on the so-called evergreening, clearly show very poor understanding of incremental innovation and the value that has brought to medicine advances over the years,” Sebati said. “Is there any comparison between the archaic system of taking 2 tablets every 4 hours for 10-14 days instead of one tablet a day for 3 days? A slow-release patch you change monthly? Is there much to argue about that? That is what incremental innovation does and has done: made treatment easy and efficient, less invasive and increasing compliance.”

But the pharmaceutical industry will continue to invest, she said.

“Having said all this and facing these unfortunate sentiments, the research-based pharmaceutical industry will continue undeterred to spend billions on research and development to find medical cures for unmet medical needs for communities,” said Sebati. “As the world continues to face antimicrobial resistance and unprecedented non-communicable diseases, the industry will keep its “eye on the ball” and do what needs to be done, and keep enabling a robust generic industry. We are the goose that lays the golden egg.”

 

Image Credits: MSF-Stefan Heunis