South Africa has a depository patent system, which means that patent applications made to the South African patent office are merely examined for compliance with the requisite formalities deemed necessary for the grant of a patent (i.e. consideration as to whether the correct official forms and fees).
Therefore, albeit that novelty, inventiveness (non-obviousness) and industrial applicability (Patent Act 57 of 1978 s25(1)) are a requirement in terms of the Patent Act 57 of 1978 (The Act). For patentability, no substantive search and examination of patent applications takes place in South Africa to verify that a patent application meets these requirements prior to the granting of the same. Potentially, this means that there could be a large number of granted patents on the South African Patents Registry that would not pass muster in examining jurisdictions. The patentability of a patent in South Africa can only be challenged post-grant via the court system. Arguments are made that this process is costly and can be protracted, hence is not facilitative enough to promote challenges being made to patents on the basis of their patentability (Reforming South Africa’s processing for granting patents to improve medicine access. S Afr Med J 2015;105(9):741-743) by individuals and by smaller businesses.
The issue of formal versus substantive patent examination in South Africa has seen much debate in recent years, as this issue is seen as a critical issue with respect to the access to affordable medicines. Activists, such as the Treatment Action Campaign (TAC), have argued that the lack of substantive examination in South Africa allows for the registration of potentially invalid patents by large pharmaceutical companies, which hikes up the prices of medicines making the same inaccessible to a large portion of the population and, in some instances, even affects the availability of such medicines within the public health system (Why Should South Africa Examine Pharmaceutical Patents? Briefing by TAC, MSF and RIS – January 2013). This is also considered an important policy issue within government. Proponents of these groups are of the view that substantive examination will prevent the registration of invalid patents and therefore perhaps allow for the entry of generic versions of these medicines into South Africa much sooner, which would then also influence the price of such medicines and, by inference, the access thereto (IBID).
As a means to address the various concerns raised about a need for patent law reform in South Africa, the Department of Trade and Industry (DTI) has issued three draft policies, the first in 2013, the second late last year, and the latest during the course of August 2017. The latter two policies are pertinent with respect to the issue of substantive examination.
The policies make it clear that the DTI are working towards implementing substantive examination in South Africa (Intellectual Property Consultative Framework – 6 July 2016). It is recognized that the current depository system places the costs associated with substantive examination (in the courts) on the party or parties challenging the validity of the patent, whereas there will be an increase in costs to the state under a substantive examination system (and also to applicants who will have to pay the prices associated with examination). It is also recognized that a substantive system will be more onerous for the state from a capacity point of view, hence there will be a need to implement a system that avoids backlogs in the granting of patents, whilst maintaining a high standard of examination. In order to avoid capacity constraints, the 2016 framework proposed two possible solutions (Intellectual Property Consultative Framework – 6 July 2016 paragraph 4.1.2.):
Prioritization of substantive examination for certain technology sectors
The idea behind this prioritization would be to implement substantive examination of pharmaceutical patent applications first and then to build up capacity slowly such that eventually all patent applications can be examined. It is argued in the framework that this amounts to differentiation and not discrimination, hence is allowable in terms of Art 27.1 of TRIPS (TRIPS: The Agreement on Trade-Related Aspects of Intellectual Property Rights to which South Africa is a signatory).
As a contingency against a backlog, to outsource examination to certain patent offices that are known to be highly efficient
No mention is made as to the possible cost implications associated with such outsourcing or to which offices would be considered candidates for such outsourcing. The 2017 (Draft Intellectual Property Policy of the Republic of South Africa –Phase I – August 2017) policy which focuses on a number of strategic objectives which are to be rolled out in a phased approach on the issue of SSE favors the first approach and reinforces that this amounts to differentiation between sectors for legitimate reasons rather than discrimination. The phased approach will focus on the most pertinent sectors first and gradually expand to include all sectors as capacity grows.
Alternative approaches to dealing with the possible capacity constraints have been suggested by interested stakeholders. These include a collaborative approach whereby examination reports issued in substantive examination jurisdictions are accepted for the purposes of showing patentability in South Africa (Reforming South Africa’s processing for granting patents to improve medicine access. S Afr Med J 2015;105(9):741-743). This approach would have to be carefully considered, such that only foreign jurisdictions that have patent laws substantially aligned with the laws in South Africa would be appropriate for such collaboration. The Companies and Intellectual Property Commission (CIPC), which handles, amongst other things, the administration of the patent system in South Africa, has hired twenty technically qualified individuals who are currently in the process of training to be the first patent examiners in South Africa. Therefore, it is clear that there is a very real intention to move forward with substantive examination in South Africa.
Precisely what this will mean from both a capacity point of view in the South African patent office and from a cost point of view for applicants is uncertain. However, it is clear that these answers are on the horizon. Dennemeyer & Associates South Africa, together with the rest of the Dennemeyer group worldwide, is well placed to help both local and foreign applicants in navigating these new waters, as the group has extensive experience in a variety of substantive examining jurisdictions, which will stand it in very good stead when substantive examination arrives in South Africa.
The authors contribute to this blog in their personal capacity. The views expressed are their own and do not necessarily represent the views of Dennemeyer IP Solutions, Dennemeyer & Associates, or Dennemeyer Consulting.