Change in patent law will boost competition and benefit public
The draft intellectual property policy of the Department of Trade and Industry has been subjected to much debate on these pages between those seeking to preserve the status quo and those in favour of an overhaul.
Now, as the policy nears finalisation, a clear understanding of what the status quo entails might just be the best argument for why it should go.
The entire legal framework is unjustifiably skewed in favour of patentees. Not only does it provide patent protection significantly in excess of what is required by international law, it goes far beyond what is considered appropriate for a developing country – beginning with the fact that we use a "depository system" in which applicants merely do the paperwork and pay a fee for patent protection, instead of applying for it and being evaluated.
There are five crucial ways in which the system benefits patentees at the expense of competition and public interest.
First, it places the onus to prove that a patent is invalid on the party seeking to invoke its invalidity. A common theme running through the case law is that those who object to the grant of exclusive rights in a patent bear the onus to establish that the patentee is not entitled to exercise such rights.
In circumstances where patents are granted in the absence of substantive examination, the onus requirement is unjustifiable and goes against international norms.
In countries such as Australia, Ireland and Japan, where certain forms of intellectual property are granted without substantive examination, the onus in such cases is on the holder of that right to establish its validity.
Second, it recognises the continued validity of a patent found to be invalid in infringement proceedings in which the defendant has not sought to revoke the patent.
In 2016 the Supreme Court of Appeal recognised that an infringement action may be successfully defended by relying on a patent’s invalidity, without seeking to revoke the patent in question. The consequence of such a finding is that even if a court were to find that a particular invention is not patentable, the patent in question would remain valid in the absence of a counterclaim for revocation.
In dismissing the appeal, the court made a number of troubling findings. To quote, 'Ours is a nonexamining country and an alleged inventor is entitled to a patent for his supposed invention without having to satisfy anyone of its merit or validity.'
This is a remarkable finding. It means a patentee may be entitled to continue to benefit from market exclusivity in respect of an invention that has been found to be wanting in court. But until the patent is revoked – through a revocation that takes several months and costs millions of rand – it remains in force.
Third, it allows for a patent’s specifications to be amended easily when its validity is under attack. In a case heard by the appeals court in 1999, a patentee – when faced earlier with a counterclaim for revocation – had applied to the commissioner of patents for the amendment of the patent in question.
The application for the amendment, which was granted by the commissioner, appears to have been made with a sole purpose: to defeat the counterclaim for revocation.
In dismissing the appeal, the court made a number of troubling findings. To quote, "Ours is a nonexamining country and an alleged inventor is entitled to a patent for his supposed invention without having to satisfy anyone of its merit or validity. He does not have to give any reasons for his choice of wording. Should he sue for infringement, he has no duty to assist the alleged infringer in establishing whether his monopoly is valid or not."
At some level, there is consistency in the court’s decision: if the patent system in SA is ordinarily stacked in favour of a patentee, why should it be any different in respect of amendments? But as a matter of fairness, if the onus to establish the invalidity of a patent lies on the party seeking to have the patent revoked, surely the patentee should bear the onus to justify the grant of the amendment?
Fourth, it imposes substantial procedural hurdles on those seeking to litigate by limiting the choice of legal representatives. Any party seeking to revoke a patent has to comply with the Patents Act, which states that only a patent attorney may represent a party in its dealings with the commissioner of patents.
To become a patent attorney, an admitted attorney first needs to pass particular examinations. And as the patents examination regulations make clear, not just any attorney qualifies to take the prescribed examination.
To enrol for the exams, an admitted attorney must be in possession of a "technical or scientific diploma" involving a "three-year course of study", and demonstrate significant "practical experience".
Consider a public interest law centre that seeks to represent a nonprofit organisation working in the field of access to healthcare. Should a decision be taken to apply for the revocation of a patent, the centre’s attorneys would most likely be unable to handle the matter themselves. Instead, the centre would be compelled to fund the services of a patent attorney.
Finally, we have a glut of patents. The practical effect of the depository system is that we uphold patents that would never pass in comparable countries. We grant patents at a rate far in excess of what Brazil and India do. In 2015, Brazil approved 14% and India 19% of all patent applications received. The comparable rate in SA was 60%.
Simply put, several thousand patent applications that have been denied in Brazil and India are legally upheld in SA.
The cost of this high approval rate is that South Africans are paying money overseas, as well as being denied access to medicines, all because the system cannot distinguish quackery from innovation.
Under the circumstances, a call to maintain the status quo must be seen for what it is: a call to preserve an intolerable burden on society. It must remain unanswered. The draft intellectual property policy is an urgent and necessary corrective.
• Berger is a member of the Johannesburg Bar and serves on the expert advisory group of the Medicines Patent Pool. Prabhala is a fellow of the Shuttleworth Foundation and works on innovation and access to medicines in India, Brazil and SA with the AccessIBSA project.