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Update on IP Developments in South Africa

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15 June 2015

I am pleased to provide this update on IP developments in South Africa. In doing so the following key areas will be looked at briefly:

  • Filing statistics
  • Legislative developments
  • Patent examination
  • Relevant case law

Filing Statistics

On the Patent front, South Africa has seen a 12% increase in patent applications from 2013, with a total of 10792 patent applications being filed in 2014.

Patent applications from local applicants have been fairly steady and a total of 3108 applications were filed in 2014 reflecting a 2% decrease compared to the previous year. The number of applications from foreign clients, on the other hand, showed an 18% increase. In 2014, 7684 patent applications were filed by foreign applicants. South Africa therefore remains a net importer of patents.

In 2014 South African applicants filed 335 PCT international applications. This reflects a 3% decrease over the previous year. Many of these PCT international applications were filed through South African Universities where the bulk of innovation activities currently take place in the country. Innovation is therefore still at a low level despite initiatives by government to promote and stimulate innovation in South Africa.

On the Trademark front there were 14835 applications filed in 2014 from overseas applicants. This reflects a 6% increase over the previous year. Local South African applicants filed 20556 applications in 2014 which reflects a 6% increase over the previous year. The trademark filing numbers in South Africa from both local and foreign applicants have seen a steady increase since 2009.

There has been more interest in obtaining IP rights in other African countries. Economists predict that economic expansion will accelerate in Africa during the next decade and one can expect that IP owners will follow this development carefully to ensure that they have adequate IP protection in African countries.

Legislative Developments

In September 2013 the South African government released a new draft policy on Intellectual Property Rights, with the broad objective of stimulating the economy of SA and empowering its citizens, and with particular emphasis on public health and the pharmaceutical industry. Some of the key issues of the policy include a patent search and examination system and stricter criteria regarding the patentability requirements for medicines.

The proposals hope to circumvent the strategy of evergreening of pharmaceutical drug patents so as to bring down the price of available medicines by the introduction of cheaper generic alternatives.

The policy document has received criticism from both patent professionals and academics, for having both factual and legal shortcomings. There is no supporting data for many of its proposals. While some of the objectives of the draft IP policy may in theory have merit, many of the concepts proposed in the policy are generally vague and unrealistic. And the practical implementation of some of the concepts proposed in the policy may be unachievable in a developing country like South Africa. There is also no indication of priorities or time frames and no risk or impact assessment in relation to the local economy or on external commercial ties.

The implementation of the policy has not yet taken place and hopefully it will be reformulated in a more coherent and systematic manner through consultation with the IP fraternity and experts in industry both locally and abroad.

Case Law

On the patent front there have only been a handful of pharmaceutical patent cases heard by our courts. The fight remains between generic companies and originators. While the country as a whole seem to be concerned about increasing the availability of generics, our courts, as a general rule, remains pro-patentee.

One of the interesting developments has been in respect of divisional patent applications. The practice of filing divisional application was typically used to “divide out” different inventions into separate applications. However, our highest court has held that a divisional application can also have claims that cover the same invention as that of an earlier filed parent application on which it is based. Divisional applications are now no longer restricted to situations where an application discloses more than one invention and can now be used to provide multiple layers of protection for the same invention, with the divisional application being broader or narrower in scope that its parent application. The only requirement is that the claims of the two applications are not co-terminous, that is to say, do not have the same scope.

Patent Examination

South Africa currently has a registration system for patents. This has worked well mainly in view of the fact that there is a well-qualified patent profession in South Africa responsible firstly for the drafting and filing of complete patent applications on behalf of local applicants, and secondly to assist applicants and third parties in infringement and patent validity issues. The government has however indicated that it plans to implement a patent examination system. Exactly how this will be put in place remains to be seen. The main challenge being to find and train examiners in a country like South Africa where engineers and scientists are in short supply. Another challenge will be to ensure that quality examination takes
place amidst a patent landscape where technologies are becoming more complex which result in patents of increasing complexity. It is unlikely that an examination system will come into place within the next few years.

Conclusion

By and large, IP filings and implementation have been stable over the last few years. Although some of our IP laws require updating in some respects, the IP system has worked well as most of our IP laws have been based on United Kingdom legislation. To what extent the draft policy on IP and the government’s plans to introduce patent examination will improve or possibly disadvantage the IP system remains to be seen.

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By Bastiaan Koster. Patent Attorney and Trademark Specialist (For and published by Euromoney’s Patent Expert Guide 2015)

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