Draft Policy on Patents – Passages from India?

Posted on Oct 22, 2013

Draft Policy on Patents – Passages from India?


The Draft National Policy on Intellectual Property (DNPIP) of South Africa was published on 4 September 2013 for public comments. Despite the fact that the DNPIP is not conducive to a systematic and consequential analysis of it and displays an alarming lack of understanding and/or knowledge of existing South African IP law one cannot overlook the repetitive element of requirement for “stronger patents” which the DNPIP states will be achieved through implementation of a search and examination system as well as pre- and post-grant opposition proceedings.

There are different views among the IP experts and practitioners as to the complications such systems may bring about inclusive of the barrier to patenting for South African SME’s and entrepreneurs, not to mention the lack of capacity to implement such systems/proceedings.

Is there merit in these recommendations made by the DNPIP? Does the document provide any analyses that could guide the reader that the draftsmen of the DNPIP based its recommendations on the models of other countries with similar economies, such as India where recent Patent Law amendments on patentable subject matter was tested in its Courts? Is our patent law, like the President, about to be affected by Indian influences?

In an attempt to answer these questions the specific aspects relevant to the India model are:

  1. TRIPS flexibility provisions
  2. Patent examination and provision for pre- and post-grant oppositions.

TRIPS flexibility provisions

The TRIPS Agreement incorporates certain “flexibilities.” These aim to permit developing and least-developed countries to use TRIPS-compatible norms in a manner that enables them to pursue their own public policies, either in specific fields like access to pharmaceutical products or protection of their biodiversity, or more generally, in establishing macroeconomic, institutional conditions that support economic development.

Member countries can exploit creative solutions to transpose into their national law those concepts that the TRIPS Agreement articulates such as novelty and inventiveness; or of situations of extreme urgency for the purposes of compulsory licenses.

Article 27 (1) of TRIPS defines patentable subject matter. Article 31 of TRIPS enunciates the flexibility of compulsory licensing without defining these requirements clearly.

Although provisions of the TRIPS Agreement permit the grant of compulsory licences to enable generic production of medicines, countries without domestic manufacturing capacity cannot avail themselves of this flexibility. The option of importing generic medicines is hampered by the restriction in the TRIPS Agreement that requires production under compulsory licence to be predominantly for the supply of the domestic market (section 31(f)). This has raised concern that exporting countries may have difficulties exporting sufficient quantities to meet the needs of those countries with insufficient or no manufacturing capacity. Paragraph 6 of the Doha Declaration (of Nov 2001) recognised this problem in that “WTO members with insufficient or no manufacturing capacities in the pharmaceutical sector, could face difficulties in making effective use of compulsory licensing under the TRIPS Agreement” and thus instructed the TRIPS Council to find an expeditious solution to this problem and to report to the General Council before the end of 2002.

On 30 August 2003 the General Council of the WTO adopted the Decision on Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health (the August Decision). The WTO solution is essentially a waiver of the export restriction, thereby allowing the total amount of production under a compulsory licence to be exported. The full impact of this depends on the extent to which national laws allow for it, and will require specific changes to national laws of TRIPS Member countries.

The DNPIP states as two of its objectives (item 10 and 13 on page 4):

10. To improve national compliance with international treaties of which South Africa is a member.”

“13. Introduce a public health perspective into national IP laws and adopt a common and united stand among different government agencies on improving access to medicines.

Within the document on page 12 this statement and these recommendations are made:

“The WTO administers the TRIPS Agreement, which has patent flexibilities suitable to cure access to public health, in particular by developing countries such as South Africa. Further, the WTO Doha Development Agenda process resolved to allow TRIPS to have further patent flexibilities. South Africa has a massive disease burden, e.g. AIDS, HIV, TB, Hepatitis, Cancer and Heart Diseases. Patent flexibilities can easily alleviate access to medicines.


– South Africa must change the Patents Act to incorporate patents flexibilities as contained in the TRIPS Agreement after the Doha Decisions.

– The Patents Act should be amended to be amenable to issues related to access to public health.”

The Law in context to the DNPIP

To contextualise the recommendations one has to consider the relevant provisions of the law. As the DNPIP does not identify the specific TRIPS flexibilities that can be used an assessment of the extent to which the South African IP law requires amendment is rather difficult. For the purpose of this paper, let’s assume (from the various references to these aspects throughout the DNPIP) that the flexibilities with respect to Patent Law would be the requirements for patentability and compulsory licensing.

The relevant provisions of the Law

Patentability – South Africa

Addressing the specific aspect with relevance to Indian law (section 3(d) of the Indian (Amendment) Patent Act of 2005), section 25 of the South African Patents Act (Patents Act 57 of 1978 as amended) (The SA Patents Act) is relevant.

The SA Patents Act currently provides in section 25(1) that:

 “A patent may, subject to the provisions of this section, be granted for any new invention which involves an inventive step and which is capable of being used or applied in trade or industry or agriculture.”

It further provides in section 25(9) that:

In the case of an invention consisting of a substance or composition for use in a method of treatment of the human or animal body by surgery or therapy or of diagnosis practised on the human or animal body, the fact that the substance or composition forms part of the state of the art immediately before the priority date of the invention shall not prevent a patent being granted for the invention if the use of the substance or composition in any such method does not form part of the state of the art at that date.”

As such South African law allows for the patent protection for new use of know substances.

Patentability – India

The Patents (Amendment) Act of 2005 of India (the third of three amendments to the Patents Act of 1970) extends the product patent protection to the areas of pharmaceuticals and agricultural chemicals.

The specific amendment defining non-patentable subject matter of relevance to this paper is section 3(d), which currently reads:

The mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant.

Explanation – For the purposes of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations and other derivatives of known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy.”

As the amendment of the Indian Patent law is an attempt to prevent evergreening, and extended monopolies, section 3(d) stipulates that only those pharmaceutical “derivatives” that demonstrate significantly enhanced “efficacy” are patentable. In this regard, section 3(d) draws a vivid distinction between “evergreening” and incremental innovation. By allowing only derivatives with added efficacy to be patentable, section 3(d) encourages further improvement and development of existing technologies that help bring improved products to the market, thereby also addressing public health needs.

The DNPIP recommendations

There is only one reference to amendment of legislation with respect to new use of known products in the DNPIP, which we find in Chapter 2 on page 23. Here it is recommended that:

South African legislation should allow strict rules to apply to patenting as competition principles may be undermined. This should exclude diagnostic, therapeutic and surgical methods from patentability, including new uses of known products, as is the case under the TRIPS Agreement.”

As the drafter motivates the change with reference to competition principles that are not identified. It is hard to say what particular competition issue. It may be that the recommendation seeks to address “evergreening”. There is no analyses or any reference whatsoever to comparative laws of any country, or even any reference to case law applying the enforcement of these provisions such as the recent case in India.

It is therefore the opinion of the author that it cannot be argued that the Indian legislative changes with respect to non-patentability of new uses for known substances influenced the drafters of the DNPIP.

Compulsory licensing

Compulsory licensing is incorporated into the SA Patents Act in sections 55 (dependent patents) and 56 (abuse of right). (Similar to article 84 of the Indian Patents Act of 1970 as amended).

The DNPIP I Chapter 2 on page 24 recommends that:

Compulsory licensing should be introduced in South Africa in line with international treaties, such as the Doha Decision 6 of the WTO negotiations on Trade and Public Health”.

There is no specific reference in the DNPIP that models of other countries should be followed.

However, with all due respect, the current South African law needs no amendment with respect to compulsory licensing, it is merely a matter of application and use. With the debate on access to healthcare it is rather strange that South African Courts have not yet granted a compulsory licence for a pharmaceutical-based patent. In addition to the SA Patents Act South Africa has in 1997 introduced section 15C to the Medicines and Related Substances Act 101 of 1965, which in essence addresses the necessary access to medicines (to our knowledge this Act has never been put into operation).

The drafters of the DNPIP do not seem to be aware of this legislation as no mention is made thereof.

Patent search and examination

The South African prosecution system is a deposit based system in which patent applications are only examined as to their formalities. I.e. patent applications are not examined for novelty, inventive step and utility, if a patent application complies with the required formalities, the application can proceed to grant. Thus the risk exists that this system is likely to result in grant of multiple patents on e.g. a single medicine, and to allow evergreening to occur.

In a patent search and examination system the patentability of an invention is assessed by qualified patent examiners who conduct prior art searches to compare the claimed invention to any publications made earlier than the priority date of an application for a patent. A search and/or examination report is then issued. In an examination report the patentability of the claimed invention is discussed in view of the cited prior art. A patent applicant can make certain amendments to the patent claims of the application overcome the prior art citations and objections of the examiner and thereby ensuring that the patent is valid in view of prior art.

In many forms scattered throughout the DNPIP are recommendations that relate to the introduction of a “search and examination” system for patents:

“There is an outcry by users of the patent system that South Africa needs strong patents that can survive the test of competitiveness throughout the world. This can be achieved if a substantive Search and Examination of Patents system is followed.”

“Cabinet should consider approving the establishment of a substantive Search and Examination of Patents to have strong technologies.”

“This also means that South Africa may need to create a Substantive Search and Examination since it is using a depository system that inherently grants weak patents.”

“Cabinet should consider approving the establishment of a Search and Examination Office to have strong technologies.”

Despite the fact that these recommendations contain incorrect factual statements, it is not clear at all whether any particular country’s model was considered, or will be considered. There are statements contained in the DNPIP that South Africa as a developing country should follow “similar economies such as Brazil, India and Egypt are granting fewer patents due to the fact that they use the Substantive Search and Examination of Patents. India, in particular, has a pre-opposition and post-grant opposition.”

Later on in the DNPIP this statement is made:

“As mentioned earlier, South Africa uses a registration system that is not per se able to scientifically critique “newness”, “obviousness”, “novelty” and “usefulness in trade or agriculture”. Due to this, weaker patents are granted. Coupled with the fact that the South African Patent Act does not have “pre-opposition” and “post-opposition” procedures as described earlier, the registration is allowing “weaker” patents that are pliable to frustrate access to public health. Similar economies such as Brazil, India and Egypt are granting fewer patents due to the fact that they use the Substantive Search and Examination of Patents. India, in particular, has a pre-opposition and post-grant opposition.”

No supporting data of the referenced countries are provided to allow any conclusions as to whether a particular country’s system for search and examination will be followed.

Pre-and Post-grant oppositions

Pre-grant opposition proceedings allows a third party to oppose the grant of a patent during the prosecution of an application after the publication of the application. The requirements and regulations for this form of proceedings differ from jurisdiction to jurisdiction.

A post grant opposition is a second opportunity for third parties to oppose the validity of a patent after grant thereof.

The DNPIP seems to confuse the pre- and post-grant opposition proceedings with the search and examination proceedings of a patent (as is clear from the citation in the paragraph on search and examination above).

Search and Examination is focussed on the prosecution of the application between applicant and examining office, whereas pre-and post-grant oppositions concerns interference by third parties. Although before a patent tribunal as opposed to a court, it is not formally part of the prosecution of the patent.

We believe the intent of the DNPIP to mention the opposition proceedings in compliment to search and examination as the DNPIP includes a specific section on Pre- and Post-Opposition of Patents. Unfortunately this is not clear from the document.

Despite this misunderstanding, is there any reference to other countries systems for pre-and post-grant oppositions on which the recommended system for South African IP law could be built?

The DNPIP in this context makes reference to similar economies that should be considered:

A country like India resorted to pre- and post-grant opposition to facilitate a possibility of opposing weaker patents as described above. The South Africa Patents does not prescribe for such. This procedure has been a success to challenge “weaker” patents or patents that do not meet the requirements of “newness”, “novelty”, “obviousness” and “usefulness for trade/agriculture”.

The purpose of the opposition proceedings to provide a more affordable forum to have patents invalidated that do not meet the “newness”, “novelty”, “obviousness” and “usefulness for trade/agriculture“.

 “A cost and benefit analysis should be conducted through the Regulatory Impact Assessment (RIA) process and benchmarks should be based on similar economies such as India, Brazil and Egypt.”

Unfortunately the DNPIP does not contain any empirical data regarding any potential investigation on the cost, lack of institutional capacity (which was the reason why opposition proceedings were removed from the 1952 Act when the 1978 Act was adopted) or any foreign comparative analyses into regimes such as India.

It can thus be concluded that the DNPIP was not per se influenced by the Indian pre- and post-grant opposition proceedings, other than recognising that these do exist and may potentially be an example South Africa may consider.

Dr MM Kleyn

Fellow of the Chair of Intellectual Property Law