Fix The Patent Laws

The 2012/2013 South African Health Review provides an analysis of the draft IP policy

Posted on | April 5, 2013 | No Comments

The 2012/2013 South African Health Review was launched on 2 April 2013. The first chapter of the publication reviews ‘Health policy and legislation’ in the country. The chapter includes a useful analysis of the draft intellectual property policy for South Africa, as well as the ruling in the recent docetaxel case. The chapter, which has been republished below, was drafted by Andy Grayi, Yousuf Vawdaii and Caron Jackiii

  1. Discipline of Pharmaceutical Sciences, University of KwaZulu-Natal
  2. School of Law, University of KwaZulu-Natal
  3. Discipline of Telemedicine and Telehealth, University of KwaZulu-Natal

The full South African Health Review, which is published by Health Systems Trust, can be found online at http://www.hst.org.za/publications/south-african-health-review-2012/13

1.     Intellectual property – an unfinished agenda

Although a new intellectual property policy was to be released for comment by the Department of Trade and Industry (DTI) in July 2012, this has not happened. A regulatory impact assessment of the draft policy is currently underway and is expected to serve before the Cabinet in December 2012. The draft policy is therefore expected to be ready for public consultation in early 2013. An early draft has been circulated to certain interest groups. This draft proceeds on the basis that, while South Africa needs to align its policy and legislation to international treaties and norms, they must be consonant with the developmental stage appropriate to this country. The objectives of the policy are therefore, amongst others: “to develop a legal IP framework to empower all strata of citizens; one that provides a conducive environment for economic opportunities; the policy is to apply alongside other government policies to contribute to development; it would interface with related new emerging issues; and to improve and strengthen enforcement”. The draft is presented in 17 chapters and only those sections which have an impact on health are discussed here:

  • Chapter 1 focuses on the four main types of intellectual property (IP): trademarks, copyright, patents and designs. It includes recommendations to amend legislation to incorporate the Doha Declaration “flexibilities”; incentive schemes in areas of IP that advance developmental goals, such as poverty alleviation and health; and the necessity for competition law to be applied to patent law where there is over-concentration, dominance or abuse by IP holders. It argues against “general blanket data protection” of information submitted to regulators, as this would frustrate generic entry. Interestingly, the document identifies the need to explore alternatives to IP, such as subsidies or prize fund, but does not develop this theme further.
  • Chapter 2 deals with IP and its impact on public health. It recommends the use of compulsory licences and parallel importation to introduce affordable medicines; the balancing of trade and health interests in patent protection; an increase in public funding for research and development into diseases of poor; IP, competition and trade policies to be in harmony with health policy objectives; provisions for entry of generic competition; trade and health departments to reconcile their policy stances and address the pricing of drugs to ensure access; and stricter rules to apply to patenting.
  • Chapter 5 deals with competition, public policy, compulsory licensing and technology transfer. It warns that trade and investment treaties pose the danger of undermining sovereignty, and recommends against adopting the World Intellectual Property Organization (WIPO) Roadmap seeking a harmonised patent regime, which could lead to policy compromises.
  • Chapter 8 deals with institutional capacity, and notes that South Africa is weak in relation to institutional capacity, and skilled and experienced personnel. It thus uses a depository system instead of a substantive search and examination method for patent applications. It recommends that the country’s meagre resources not be used for IP administration (presumably enforcement); and that it adopt a multifaceted approach for the registration of patents (a combination of the depository and examination systems).
  • Chapter 9 deals with the international architecture of IP, noting that this is co-ordinated mainly by the WIPO and WTO which cater primarily for the needs of the developed countries and their private sector. However, other organisations such as the WHO, WCO and other UN agencies are also impacted upon. Further problems identified are: the problem of medicines in transit through Europe being impounded; the fact that WIPO technical assistance does not focus on flexibilities; and developed countries demanding TRIPS-plus standards in negotiations with developing countries. It recommends that the  Department of Trade and Industry ‘cautiously filter advices’ coming from developed countries and institutions such as WTO and WIPO; and that South Africa not enter into trade agreements that undermine the  exceptions and flexibilities it is entitled to, or which are TRIPS-plus.
  • Chapter 10 deals with IP and development, noting that IP confers both costs and benefits to individuals, companies and society; that developed countries used IP as flexible tool to propel them to industrialisation, but are now demanding ‘harmonisation’, making it virtually impossible for developing countries to ‘catch up’; It recommends the implementation of the Doha Development Agenda; reconciling IP and competition policy; increased incentives for technology transfer; increased funding to promote indigenous scientific and technological capability; and that South Africa does not support the ‘global enforcement and harmonisation of patent’ agendas.
  • Chapter 15 deals with enforcement of IP, and proffers a ‘bare minimum’ obligations approach, and resistance to TRIPS-plus requirements in policy, law, and trade agreements.

The issue of intellectual property and access to medicines remains a contested one, and the recent judgment handed down in the Supreme Court of Appeal on 26 July 2012– in the matter between Aventis Pharma SA and Others v Cipla Life Sciences and Others (with the Treatment Action Campaign intervening as amicus curiae)[i] – commonly known as the “Docetaxel” case – is examined here. While essentially a dispute as to whether a holder of a pharmaceutical patent can obtain an interdict against an alleged infringer, this was a significant test case for the extent to which courts are required to apply broad constitutional principles (in this instance, the right of access to health care services and medicines) in intellectual property disputes. The principle that public interest applies in IP disputes had already been established in a previous unsuccessful application for a compulsory licence.[ii] The disputed patent in the “Docetaxel” case related to a composition of unpatented products which, when combined, facilitate the intravenous administration of docetaxel, a treatment for cancer. The holder of the patent (Aventis Pharma SA) maintained that the generic manufacturer (Cipla Life Sciences) had infringed its patent by registering and commencing the manufacture and marketing of a cheaper version of the medicine. Cipla countered that the patent is invalid on account of ambiguity and lack of novelty and inventive step, essential requirements for patentability under South African law. A key complication is the fact that the South African patents office does not conduct substantive examinations as to the merits of each patent application, nor is there any opportunity for an interested party to oppose such applications. Thus these court proceedings presented a first opportunity for any tribunal to consider the substantive merits of the docetaxel patent.

In its submissions, TAC argued that the provisions of the Patents Act (Act 57 of 1978) must be interpreted in a manner consistent with the Constitution and the rights of the patent holder need to be balanced with those of persons requiring, but unable to afford, the relevant medication. Secondly, when considering the requirement of ‘balance of convenience’ in interdict proceedings which potentially threaten the right to access medicines, the party requesting the interdict must prove that its grant will not harm the public interest. Thirdly, while the evidence to enable the court to assess whether the rights of cancer patients would be harmed is inadequate, on the available information on the record, the interdict-seeker failed to discharge its onus of proof. And finally, it argued that, in line with courts in the USA and India, the court must assess whether a satisfactory alternative remedy (such as damages) is available to the party seeking an interdict.

In its judgment, the Court accepted TAC’s argument that the broader public interest, and not merely those of the litigating parties, ought to be considered when determining the balance of convenience in interdict proceedings, citing both South African and US Supreme Court case law. However, it concluded that the public interest would not be served by denying an interdict on the facts of this case. It noted that Cipla’s opposition was based on commercial considerations, namely, its need to establish a presence in the generics market. Furthermore, it noted that there was no evidence before it that Aventis could not continue to meet the demand for the medicine, nor was Cipla able to demonstrate that its product offered either superior medicinal benefits, or more than a marginal saving on the cost of its generic version of docetaxel in relation to Aventis’ generic version (marketed as Docetere). And finally, it held that there would be no material disruption of medicine supply to patients should the interdict be granted.

While the court made a concession to the consideration of the public interest when determining the balance of convenience, its judgment was not unexpected given the constraints imposed by the legislation and the mindset of the judiciary.

The court took a rather narrow view on the question of awarding damages (royalties) as an alternative to the interdict, holding that this would be tantamount to granting a compulsory licence. As the court acknowledged that the issue of patent validity still stood to be determined in the revocation proceedings, the awarding of damages would certainly have been a less restrictive means of resolving an interim dispute. This approach is out of step with other jurisdictions such as India and the USA.

The decision once again highlights the need for the amendment of South African patent laws to specify and properly apply the strict standards of novelty and inventive step required for the granting of a patent, and to prioritise the public interest in disputes concerning life-saving medicines.

The decision also highlights the perversity of the ‘right’ of patent holders to frustrate generic competition, and hence access to cheaper medicines, by introducing their own generic versions when such a threat is imminent. No interrogation was undertaken as to the motives of Aventis (in the same manner that Cipla’s commercial motives were foregrounded) in registering and marketing Docetere only at the stage that Cipla was on the verge of launching a generic docetaxel, and the long-term impact of such practices on accessibility and affordability of medicines.

South Africa, like many middle-income countries and particularly those in the emerging Brazil, Russia, India, China, South Africa. (BRICS) group[1], is trying to balance industrial policy and concerns about access to healthcare technologies. In this regard the experiences of India are instructive for a number of reasons. India did not grant patent protection on medicines in terms of its 1970 patent legislation, an industrial policy choice which enabled it to grow its local pharmaceutical manufacturing capacity.[iii] The proliferation of local companies manufacturing generic versions of medicines patented and marketed expensively elsewhere has enabled India to supply cheaper products to many countries in the developing and developed world, earning it the reputation of the ‘pharmacy of the poor’.

When obliged to recognise pharmaceutical product patents in terms of the World Trade Organization’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, India included a number of important ‘flexibilities’ in its 2005 legislation, in order to facilitate access to affordable medicines.[iv] Two provisions, relating to higher standards for patentability, and to the issuance of compulsory licences, have already been tested. India has utilised section 3(d) of its Patent Act to deny Novartis a patent on the anti-leukaemia drug imatinib (sold as Glivec) on the grounds that it did not meet the patent standards of being truly new and innovative. The decision has been challenged, and the case is proceeding. .[v] This was followed by the grant of a compulsory licence for a generic version of Bayer’s anti-cancer drug sorafenib (sold as Nexavar), on the basis that the local generic manufacturer Natco Pharma was able to supply the drug at 3% of Bayer’s price, which was exorbitant.[vi] Both these decisions by the Indian authorities are being challenged in the highest courts, and their outcomes are being keenly awaited as they will determine India’s future prospects as a major global supplier of low-cost essential medicines, as well as signalling to other countries whether they should consider adopting these ‘flexibilities’ in their domestic legislation.

With these elements in mind, it is suggested that the following issues be borne in mind when finalising South Africa’s IP policy:

  • It is important that the policy objectives clearly focus on the developmental aspects of all policy in post-apartheid South Africa and are consonant with the country’s development status. Further, the policy must benefit society as a whole, and ensure that it prioritises the most vulnerable and marginalised in our society: the poor, sick, infirm, elderly, children and other disadvantaged sectors.
  • The policy should be clear that extension to the patent period will not be permitted under any circumstances; and there should full disclosure in all pharmaceutical patent applications, including the use of the INN or generic name.
  • Additionally, the policy should ensure that key flexibilities which facilitate access to medicines (strict patents standards; a proper examination system; opposition procedures before and after the grant of a patent; compulsory licences on all permissible grounds, including for public health purposes; and an expeditious administrative procedure to deal with applications for compulsory licences) be incorporated.
  • Under no circumstances should data exclusivity be adopted. The current data protection rules, which protect clinical trial data submitted by an innovator from unfair commercial use, but which allow a regulator to reference the data for the purpose of approving a generic equivalent, are fully TRIPS-compliant, and should not be tampered with, nor conceded in trade or other negotiations.
  • It should be clarified that patents will not be granted for new uses and new formulations of existing medicines, that no legal barriers should be placed on parallel importation and compulsory licences, and that royalty rates should be legislated to facilitate licensing and avoid disputes in this regard.
  • There should be clear guidelines for the examination of patent applications, with the public interest being paramount, and the right of interested persons to challenge such applications entrenched in law, as is the case with some jurisdictions.

The DTI must consider the impact of IP on the development of local industry, as per its stated intentions in terms of both the proposed SA Pharmaceutical Sector Profile (unpublished), and the Industrial Policy Action Plan (2012/13 – 2014/15).[vii] In particular, it needs to acknowledge and address the reality that foreign pharmaceutical companies are the main beneficiaries of its lax patent laws and that, if examined properly, approximately 80% of patents would not have been granted.[viii],[ix]



[1] Brazil, Russia, India, China, South Africa


[i]. Cipla Medpro v Aventis Pharma (139/12) Aventis Pharma SA v Cipla Life Sciences (138/12) [2012] ZASCA 108 (26 July 2012)

[ii]. Syntheta (Pty) Ltd v Janssen Pharmaceutica NV & Another 1999 (1) SA 85 SCA.

[iii]. Basheer S. ‘Policy Style’ reasoning at the Indian Patent Office. Intellectual Property Quarterly 2005; 3: 309-323.

[iv]. Government of India. Patents (Amendment) Act 2005.

[v]. Grogan K. Novartis India patent case postponed to August 22. Pharma Times. 9 July 2012. Available at http://www.pharmatimes.com/Article/12-07-09/Novartis_India_patent_case_postponed_to_August_ 22.aspx

[vi]. Reuters. Analysis: India cancer ruling opens door for cheaper drugs. 13 March 2012. Available at http://www.reuters.com/article/2012/03/13/us-india-drugs-idUSBRE82C0IN20120313

[vii]. Department of Trade and Industry. Industrial Policy Action Plan (IPAP) 2012/13 – 2014/15. Available at http://www.info.gov.za/view/DownloadFileAction?id=162797

[viii]. .Vawda YA. Pharmaceutical innovation, incremental patenting and compulsory licensing country case study: South Africa. 2011. Available at http://www.fixthepatentlaws.org/?p=329

[ix]. Pouris A, Pouris A. Patents and economic development in South Africa: Managing intellectual property rights. South African Journal of Science 2011; 107(11/12): Art. #355, 10 pages. Available at http://dx.doi.org/10.4102/sajs.v107I11/12.355

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    fix the patent laws
    Fix the Patent Laws is a campaign co-founded by SECTION27, Treatment Action Campaign (TAC) and Doctors Without Borders (MSF) in 2011. Since then, the coalition has grown to include 38 other organisations fighting together to push South Africa to amend its patent laws to prioritise public health. Through this blog we will highlight how amending South Africa’s Patents Act 57 of 1978 will reduce the cost of medicines, improving the health and saving the lives of millions of South Africans.

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