The current position is that South Africa recognizes in Section 31 of the South African Patents Act a right of priority based on an earlier patent application filed in "a convention country". In terms of Section 2(vi) of the Patents Act "a convention country" is defined as a country which the President, with a view to the fulfilment of any treaty or convention, has by proclamation declared to be a convention country. At present, the countries so declared to be convention countries are all member countries of the Paris Convention. South Africa is in the process of preparing an amplified list of countries, including all WTO Member countries, to form part of an appropriate proclamation.

Section 45(1) of the Patents Act at present provides as follows: "The effect of a patent shall be to grant to the patentee in the Republic, subject to the provisions of this Act, for the duration of the patent, the right to exclude other persons from making, using, exercising or disposing of the invention, so that he shall have and enjoy the whole profit and advantage accruing by reason of the invention." Although the South African Courts have not yet had the opportunity of interpreting the term "dispose of" in the context of section 45(1), it is expected that the ordinary grammatical meaning will be attached to the term, so that it will be interpreted to be wider in scope than "selling" and would probably include letting, distributing, donating, selling, and offering for sale. Accordingly, it is expected that the "offering for sale" of a patented article would be actionable in South African law as it presently stands. At present, the importation of a patented article is not clearly covered by the provisions of section 45(1). However, the term "exercising" has a wide scope, and the phrase "so that he shall have and enjoy the whole profit and advantage accruing by reason of the invention" is regarded as indicative of the intention of the legislature that only the patentee should stand to benefit under the patent. To remove any uncertainty, the Intellectual Property Laws Amendment Bill currently before Parliament, includes in clause 40 an amendment of section 45(1) of the Patents Act, to expressly mention the acts of "offering to dispose of" and "importing" the invention as acts of infringement. Once this Bill is approved by Parliament, section 45(1) will be fully compatible with Article 28 of the TRIPS Agreement. As regards the phrase "so that (the patentee) shall have and enjoy the whole profit and advantage accruing by reason of the invention", the current interpretation is that this phrase operates in a manner to expand the exclusive rights given to the patentee, rather than to restrict the enforcement of the rights.

The Intellectual Property Laws Amendment Bill was considered by the Portfolio Committee for Trade and Industry, a parliamentary committee, on 12 and 19 May 1997. According to available information, the Bill will be put before the General Assembly of Parliament on 29 May 1997. Thereafter it has to be referred to the Council of Provinces for consideration and approval. After that, certain administrative steps have to be attended to, whereupon the Act will be published and promulgated. This is expected before the end of the Parliamentary session of this year.

It should be stressed that South Africa has not yet acceded to the ARIPO Treaty.

Dependent Patents The present provisions of section 55 of the Patents Act in regard to compulsory licences in the case of dependent patents, are not fully in compliance with Article 31(l) of the TRIPS Agreement. However, in clause 44 of the Intellectual Property Laws Amendment Bill currently before Parliament, section 55 of the Patents Act is amended by the addition of the following provision: "Provided that the Commissioner shall not grant such a licence unless: (a) the invention claimed in the dependent patent involves an important technical advance of considerable economic significance in relation to the invention claimed in the prior patent; (b) the proprietor of the dependent patent granted the proprietor of the prior patent on reasonable terms a cross licence to use the invention claimed in the dependent patent; and (c) the use authorised in respect of the prior patent is not assignable except with the assignment of the dependent patent." It is submitted that this amendment will bring section 55 of the Patents Act in line with the requirements of Article 31(l) of the TRIPS Agreement. Abuse of Patent Rights Section 56 of the Patents Act in its present form is not fully in compliance with Article 31(a), (d), (e), and (g) of the TRIPS Agreement. Clause 45 of the Intellectual Property Laws Amendment Bill at present before Parliament, introduces several amendments into section 56 to bring it into compliance with Article 31 of the TRIPS Agreement. More specifically the following will be amended: - Section 56(4)(a) is amended to provide that the Commissioner (of Patents) shall consider the application for a compulsory licence on its merits to comply with Article 31(a) of the TRIPS Agreement. - Section 56(5) is amended to provide that any compulsory licence granted shall be non exclusive and shall not be transferable except to a person to whom the business or part of the business in connection with which the rights under the licence were exercised, has been transferred to comply with Article 31(d) and (e) of the TRIPS Agreement. - Section 56(4) is amended by the insertion of a paragraph (c) to provide that a compulsory licence shall be terminated if the circumstances which led to its grant cease to exist and, in the opinion of the Commissioner of Patents, are unlikely to recur to comply with Article 31(g) of the TRIPS Agreement. It is submitted that the amendments to section 56 to be effected by clause 45 of the Intellectual Property Laws Amendment Bill will bring the South African law on compulsory licences in substantial compliance with Article 31 of the TRIPS Agreement. In response to question No. 3(b) from the US, it is repeated that section 56(4) of the Patents Act as amended now obliges the Commissioner of Patents to consider the application for a compulsory licence on its merits, and further provides that a compulsory licence granted shall be terminated if the circumstances change. This means that the Commissioner is obliged to hear the evidence of both parties before exercising his discretion. In response to question No. 3(c) from the US, in regard to the granting of a compulsory licence in circumstances where the patented product is being imported rather than produced within South Africa, the following should be noted: In the first place, the Intellectual Property Laws Amendment Bill provides, in clause 45, for the deletion of section 56(2)(b) of the South African Patents Act, which at present provides for the granting of a compulsory licence in circumstances where the working of the invention in South Africa is prevented or hindered by the importation of the patented product. A compulsory licence may still be granted, in terms of section 56(2)(e) of the South African Patents Act, in circumstances where the patented product is being imported and the price of such patented product is excessive in relation to the price charged therefore in other countries where the patented product is being manufactured. It is submitted that the granting of a compulsory licence in these circumstances would be in the interest of the public. The granting of a compulsory licence in circumstances where there is a failure to work the patented invention on a commercial scale within prescribed time limits, is in compliance with Article 5 of the Paris Convention, and specifically Article 5(2) and (4). It should further be noted that there is no reported case in South Africa yet in terms of which a compulsory licence has been granted. More specifically in response to question No. 4 from Japan, it may be explained that use of a patented invention without the authorization of the patentee is permitted by the Patents Act in the following instances: Section 4: It is provided that a patent shall have the same effect against the State as it has against a person, provided that a Minister of State may use an invention for public purposes on such conditions as may be agreed upon with the patentee, or in default of agreement, on such conditions as are determined by the Commissioner of Patents on application by such Minister and after hearing the patentee. It is evident that the patentee is given an opportunity to be heard and to contest the application for use by the Minister. There is no recorded instance of this provision being employed. Section 55: Provision is made in this section for the granting of a compulsory licence in the case of a so called dependent patent. As explained above, the section is being amended by the Intellectual Property Laws Amendment Bill to be in compliance with Article 31 of the TRIPS Agreement. Section 56: This section provides for the granting of a compulsory licence in the case of abuse of patent rights. As explained above, this section is being amended by the Intellectual Property Laws Amendment Bill to be in compliance with Article 31 of the TRIPS Agreement. Section 78: In terms of this section, the Minister (of Trade and Industry) may acquire, on behalf of the State, any invention or patent on such terms and conditions as may be agreed upon with the patentee. It is evident that this section specifically envisages the authorization or agreement of the patentee. Section 79: This section provides for the assignment of an invention relating to armaments as defined in the Armaments Development and Production Act, 1978, to the Minister of Defence, acting on behalf of the State. Again the cooperation of the proprietor of the invention/patentee is necessary to achieve such assignment. In terms of section 79(8), the said Minister shall pay to the proprietor of the invention or patent such reasonable compensation as may be agreed upon, or in the default of agreement, as may be determined by arbitration or by the Commissioner of Patents. It is submitted that the provision of section 79, relating to armaments as defined in the Armaments Development and Production Act, is in the public interest. Again there is no recorded instance of this provision being invoked. Section 80: This section provides for the possibility that where the Minister is of the opinion that it is in the national interest that a patent application, specification, drawing or other document relating to an invention should be kept secret, he may acquire the invention on behalf of the State, in accordance with the provisions of section 79 of the Act. In terms of section 80(3) provision is made for the payment of reasonable compensation to the proprietor of the invention, where such proprietor has suffered loss or damage. The compensation will be as agreed upon with such proprietor, or, in default of agreement, may be determined by arbitration or by the Commissioner of Patents. The explanation given above in regard section 4 of the South African Patents Act, also applies specifically to question No. 5 from the US. As explained, the provisions of section 4 are seen to be in compliance with Article 30, which provides that Member states may provide limited exceptions to the exclusive rights conferred by a patent. The fact that provision is made in section 4 for an agreement with the patentee or, in default of agreement, for conditions to be determined by the Commissioner of Patents after hearing the patentee, is seen as providing the patentee an opportunity of presenting and pursuing his legitimate interests. This is viewed as falling within the provisions of Article 30 of the TRIPS Agreement.

(a) As regards the excepted time frame for the adoption of the new Bill, see the reply to the follow-up question to question No. 1. (b) Section 56(2) of the South African Patents Act provides for the granting of a compulsory licence in circumstances where "the working of the invention in the Republic on a commercial scale or to an adequate extent is being prevented or hindered by the importation of the patented article". Clause 45 of the Intellectual Property Laws Amendment Bill provides for the deletion of this subsection. Once the amendment is promulgated, importation of the patented product will no longer constitute a ground for the granting of a compulsory licence, but will in effect be considered equal to the working of the patent in South Africa, as required by Article 27.1 of the TRIPS Agreement. In the case of section 56(2)(e), however, the circumstances in which patent rights will be deemed to be abused, thus providing grounds for the granting of a compulsory licence, do not relate to mere importation as such. The circumstances as set out in section 56(2)(e) are that: - the demand for the patented product in South Africa is being met by importation; and - the price charged by the patentee in South Africa is excessive in relation to the price charged by the patentee in the country of manufacture. A comparable provision is containted in section 56(2)(c) in respect also of domestically produced products, where it is provided that the rigths in a patent will be deemed to be abused where the demand for the patented product in South Africa is not being met to an adequate extent and on reasonable terms (which would include a reasonable price). The competent authority for considering the application for a compulsory licence, and thus for determining whether or not the local price of the imported product is excessive, would be the Commissioner of Patents (section 56(1) as amended by clause 45 of the Intellectual Property Laws Amendment Bill). The Commissioner of Patents is a Judge of the High Court of South Africa (Section 8 of the Patents Act 57 of 1978). The Commissioner of Patents must consider the application for a compulsory licence on its merits (section 56(4)(a) of the Patents Act as amended by Clause 45 of the Amendment Bill). If the Commissioner is of the opinion that the grant of a compulsory licence is not justified, he may refuse the application (section 56(4)(b) of the Patents Act). It is not possible to predict what criteria will be used to determine whether the price for an imported product is excessive, since this is within the discretion of the Commissioner. No reported case is available in which a compulsory licence has been granted on the basis of section 56(2)(e). As regards the provisions of section 80, there is no detailed definition of the concept "national interest" as used in section 80. There is no recorded case in which section 80 has been invoked.

Section 56(2)(e) of the South African Patents Act sets out circumstances in which the rights under a patent are deemed to be abused, and on the basis of which a compulsory licence may be granted. The existence of section 56(2)(e) in the light of the provisions of Article 27.1 of the TRIPS Agreement is justified on the following basis: (a) Section 56(2)(e) does not result in the forfeiture of the patent concerned, so that patent rights continue to be available to the patentee; nor does it results in the patentee being deprived of the right to exploit the patent, so that patent rights continue to be enjoyable by the patentee, as provided for in Article 27.1 of the TRIPS Agreement. (b) In terms of section 56(5) as amended by Clause 45 of the Intellectual Property Laws Amendment Bill No. B1/97, any compulsory licence granted will be non-exclusive, so that the patentee is not deprived of his right to exploit the patent, by importation of patented products or otherwise. (c) In terms of sections 56(4) and (7) any compulsory licence granted may be subject to conditions, including a condition precluding the licensee from importing patented products into South Africa in competition with the patentee, and including the terms and conditions (e.g. appropriate remuneration) usually stipulated in voluntary licences to ensure appropriate reward to the patentee. Accordingly, the patentee will continue to enjoy benefits under the patent. (d) Mere importation of patented products by the patentee does not provide a ground for section 56(2)(e) to be invoked; the fact of importation has to be coupled with the fact of excessive pricing in comparison to the price in the country of manufacture. Section 56(2)(e) does not entail discrimination on the basis of mere importation; the abuse being addressed by section 56(2)(e) is importation coupled with excessive pricing. (e) Once the abuse addressed by section 56(2)(e) ceases to exist, e.g. if the local pricing of imported products is no longer excessive, the compulsory licence shall be terminated in terms of section 56(4)(c) as amended by Clause 45 of the Intellectual Property Laws Amendment Bill. (f) Section 56(2)(e) is in line with the provisions of Article 5 of the Paris Convention, in particular Article 5(2). (g) Imported patented products are not dealt with less favourably than domestically produced patented products. Section 56(2)(c) provides that patent rights are deemed to be abused where the demand in South Africa for the patented product is not met to an adequate extent and on reasonable terms. This subsection is applicable to domestically produced patented products; if the demand for such articles is not met on reasonable terms (e.g. as regards price), the patent rights will be deemed to be abused.

It is correct that section 43(3) of the Patents Act provides that a Convention patent application automatically becomes open to public inspection eighteen months after the earliest priority date claimed. A non Convention application, on the other hand, becomes open to public inspection when it is published in the Patent Journal pursuant to acceptance. Such acceptance must take place within eighteen months from the date of the application (except in certain specified circumstances). It is emphasized that the aforegoing differentiation is not made on the basis of the nationality of the applicant, but on the basis of the nature of the application (i.e. whether convention priority is claimed or not). Applicants of South African nationality are treated in the same manner as applicants who are nationals of other countries in regard to the type of application filed. Article 2 of the Paris Convention requires that national treatment should be extended also to nationals of other Member countries. Article 2 of the TRIPS Agreement requires that this principle be adhered to. It is submitted that the South African position is in accordance with this principle.

At present time it is only in regard to the recognition of priority rights that national of Paris Convention Member countries get treatment different from the nationals of other countries. South Africa is in the process of preparing a suitable proclamation for publication to provide that the nationals of WTO Member countries will also enjoy recognition of priority rights. In regard to all other aspects, national treatment is accorded to the nationals of all other countries.

Clause 72 of the Intellectual Property Amendment Bill amends section 20 of the Designs Act by the addition of the following subsection: "(3) Notwithstanding subsection (1), the rights of the registered proprietor of a registered design in the form of an integrated circuit topography shall not be infringed by a person who (a) makes an article embodying the registered design or a design not substantially different from the registered design for private purposes or for the sole purpose of evaluation, analysis, research or teaching; (b) imports or disposes of an integrated circuit embodying the registered design which has been unlawfully produced or an article incorporating such an integrated circuit and proves that at the time of acquiring the integrated circuit or article he or she was not aware and had no reasonable grounds of becoming aware that the integrated circuit or article embodies a registered design which had been unlawfully produced: Provided that when the person receives sufficient notice that the registered design was unlawfully produced, the person may dispose of any stock of such integrated circuits or articles but shall be liable to pay to the registered proprietor a sum calculated on the basis of a reasonable royalty which would have been payable by a licensee or sub licensee in respect of the registered design concerned." After the publication of the Amendment Bill, it was noted that the words "for private purposes or" were accidentally omitted from paragraph (a) of the proposed amendment; these words have since been inserted. It is submitted that, once the Amendment Bill is passed and section 20 of the Designs Act amended, the provisions will be in line with Article 35 of the TRIPS Agreement.

As explained above in regard to patents, South Africa has not yet acceded to the ARIPO Treaty.

It is correct that Article 32 of South Africa's Constitution Act provides that everyone has the right of access to information held by the State, and to information held by another person that is required for the exercise or protection of any rights. However, it should be noted that Article 32(2) provides that national legislation must be enacted to give effect to this right, and such national legislation has not yet been enacted. Furthermore, Article 36 of the Constitution provides that the rights granted as part of the Bill of Rights (including the right of access to information) may be limited in terms of laws of general application and to the extent that the limitation is reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom, taking into account all relevant factors including (a) the nature of the right; (b) the importance of the purpose of the limitation; (c) the nature and extent of the limitation; (d) the relation between the limitation and its purpose; and (e) less restrictive means to achieve the purpose. It is submitted that laws such as the Fertilizer, Farm Feeds, Agricultural Remedies and Stock Remedies Act 36 of 1947, and the Medicines and Related Substances Control Act 101 of 1965 are laws of general application which are on the statute book of South Africa. Furthermore, it is submitted that the continued confidentiality of information held in terms of these Acts is reasonable and justifiable in an open and democratic society. Accordingly, it is submitted that the position in South Africa in regard to the access to confidential information is in substantial compliance with Article 39 of the TRIPS Agreement.

South African legal jurisprudence has developed in administrative law, in particular around sections. The legislature, mindful of this fact, enacted section 240 of the Constitution, which provides for a transitional arrangement. Section 23 of Schedule 6(3), it is submitted, empowers the relevant department to enact a legislation in this regard within three years after coming into effect of the Constitution (i.e. February 1997 – February 2000). In view of the above, relevant legislation will be enacted in due course.

The formulation of the order, and the execution of the order in Anton Piller proceedings are strictly controlled by the Courts in South Africa, specifically in view of avoiding possible abuse by applicants. The purpose of an Anton Piller proceeding in South Africa is to protect evidence, not to serve as a discovery tool. The order is usually formulated to permit a Sheriff to list and copy relevant documents, whereafter confidentiality can be imposed by a Court order obtained by the defendant, before the documentation is made available to the applicant. South African jurisprudence as applied by our Courts in fact enforces the necessary safeguards in the formulation and execution of an Anton Piller order, to maintain confidentiality of information.

Article 40 of TRIPS records the Agreement of members that some licensing practices or conditions pertaining to intellectual property rights, which restrain competition, may have adverse affects on trade and may impede the transfer and dissemination of technology. South Africa confirms this position. Article 40.2 provides that members will not be prevented from specifying in their legislation certain practices or conditions which may constitute an abuse of intellectual property rights. Members may adopt appropriate measures to prevent or control such practices. The South African Patents Act has the following relevant provisions: Section 57: This section provides that any contract, insofar as it relates to a licence under a patent, shall terminate on the date on which the patent under which the licence was granted, expires, is revoked or otherwise ceases to protect the invention. Section 90: This section provides as follows: (1) Any condition in a contract relating to the sale of a patented article or to a licence under a patent of which the effect will be: (a) to prohibit or restrict the purchaser or licensee from purchasing or using any article or class of articles, whether patented or not, supplied or owned by any person other than the seller or licensor or his nominee; (b) to prohibit or restrict the licensee from using any article or process not protected by the patent; (c) to require the purchaser or licensee to acquire from the seller, licensor or his nominee any article or class of articles not protected by the patent; (d) to require or induce the purchaser to observe a specified minimum resale price in respect of any article or class of articles protected by the patent; or (e) to prohibit or restrict the making, using, exercising or disposing of the invention concerned in any country in which the invention is not patented, shall be null and void. (2) Nothing in this section shall (a) affect any condition in a contract whereby a person is prohibited from selling any goods other than those of a particular person; or (b) affect any condition in a contract for the lease of or a licence to use a patented article, whereby the lessor or licensor reserves to himself or his nominee the right to supply such new parts of the patented article, other than ordinary articles of commerce, as may be required to put or keep it in repair. No corresponding provisions appear in the Trade Marks Act, Copyright Act or Designs Act. It should be pointed out that South Africa has a well developed common law system of unlawful competition, on the basis of which anti competitive practices may be challenged. South Africa also has on its statute book the Maintenance and Promotion of Competition Act 96 of 1979, in terms of which certain anti competitive practices may be challenged.

It is correct that section 2 of the Maintenance and Promotion of Competition Act excludes from the provisions of the Act any right acquired under the Trade Marks Act, Designs Act, Patent Act and Copyright Act. However, in terms of section 2(2) of the Competition Act, the exclusion shall be construed so that any person shall not retain or be granted any right of enhancing or maintaining prices or restricting competition directly or indirectly by way of a restrictive practice as defined in the Act. It is evident, therefore, that although the statutory rights are in fact placed in a category separate from similar common law intellectual property rights, the limitation of section 2(2) applies to the statutory rights, i.e. they may not be used in a manner to constitute a restrictive practice. It should be understood that the Maintenance and Promotion of Competition Act is intended to promote free and fair competition, and such is not perceived to be contrary to the spirit of Article 40 of the TRIPS Agreement. Although an exception is made in relation to statutory intellectual property rights, abuse of such rights will not be tolerated, in accordance with section 2(2) of the Act.

Answer to questions 11, 12 and 13 Section 15c to be introduced into the Medicines and Related Substances Control Act 101 of 1965 by the Amendment Act No. 90 of 1997, grants the Minister of Health the power to determine that the rights granted in terms of the Patents Act to the patentee of a patented medicine will not apply in certain circumstances, namely to acts in respect of such medicine which has been put onto the market by the owner of the medicine or with his consent. This is viewed (e.g. by pharmaceutical manufacturers) as being contrary to South Africa’s obligation in terms of Articles 27 and 28 of TRIPS. However, TRIPS does allow the use of patented subject matter without the authorisation of the patentee, under certain circumstances (Articles 30 and 31). TRIPS also allows the adoption by member countries of measures necessary to protect inter alia public health, and measures to prevent the abuse of intellectual property rights by right holders (Article 8). It should be noted that the Medicines Amendment Act has not yet been put into effect, partly because regulations to provide for its implementation have not yet been finalised. Accordingly, the parameters within which the power granted to the Minister of Health will be exercised, are still to be laid down. Until such time as the regulations have been finalised, a more complete response to this question is not possible.

See the reply to question No. 3 from the EC.

See the reply to question No. 3 from the EC.

Answer to questions 11, 12 and 13 Section 15c to be introduced into the Medicines and Related Substances Control Act 101 of 1965 by the Amendment Act No. 90 of 1997, grants the Minister of Health the power to determine that the rights granted in terms of the Patents Act to the patentee of a patented medicine will not apply in certain circumstances, namely to acts in respect of such medicine which has been put onto the market by the owner of the medicine or with his consent. This is viewed (e.g. by pharmaceutical manufacturers) as being contrary to South Africa’s obligation in terms of Articles 27 and 28 of TRIPS. However, TRIPS does allow the use of patented subject matter without the authorisation of the patentee, under certain circumstances (Articles 30 and 31). TRIPS also allows the adoption by member countries of measures necessary to protect inter alia public health, and measures to prevent the abuse of intellectual property rights by right holders (Article 8). It should be noted that the Medicines Amendment Act has not yet been put into effect, partly because regulations to provide for its implementation have not yet been finalised. Accordingly, the parameters within which the power granted to the Minister of Health will be exercised, are still to be laid down. Until such time as the regulations have been finalised, a more complete response to this question is not possible.