European Union

South Africa

Patents (including Plant Variety Protection)

[Follow-up question from the EC] What is the time frame foreseen for the adoption of the new Bill? Is the act of importation of the patented product from a WTO country considered equal to the exploitation of the patent in South Africa as required by Article 27.1 of the TRIPS Agreement? Could the Government of South Africa explain how the sentence "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" is compatible with Article 27.1 of the TRIPS Agreement? What criteria will be used to determine that the price of an imported product is "excessive"? Which is the competent authority for performing this task? Is there a more detailed definition of the terms "national interest" as provided in section 80 and/or does case-law exist on this issue?

(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.