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.

The general principle in infringement proceedings is that the patentee has the onus of proving infringement. However, the burden of proof is shifted in the case of a patent for a process of obtaining a new product, but only in regard to proving that such a product produced by a third party was obtained by the patented process. In this regard section 67(2) and (3) provides as follows: "67.(2) If the invention for which a patent is granted is a process for obtaining a new product, the same product produced by a person other than the proprietor of the patent or a licensee under that patent shall, unless the contrary is proved, be deemed, in any proceedings, to have been obtained by that process. (3) In considering whether any person has discharged the onus imposed upon him by subsection (2), the commissioner shall not require him to disclose any secret process used by him in producing the product concerned, if it appears to the commissioner that it would be unreasonable to do so."

In the response to Japan in reply to the question regarding the protection of undisclosed information, it is indicated that confidential information (including trade secrets) is protected against unauthorized disclosure or use on the basis of the common law in South Africa. Insofar as the use in the response of the terms "substantial compliance" in regard to Article 39.2 of the TRIPS Agreement may have created uncertainty, the request is made for the word "substantial" to be cancelled from the relevant paragraph of the response. The relevant common law principles require, for undisclosed information to qualify as protectible subject matter in the absence of express contractual provisions providing for confidentiality, that the information should meet with requirements in accordance with the standards set out in Article 39.2 of the TRIPS Agreement. The legal position does not deviate from the provisions of Article 39.2. The protection extends to unauthorized use of trade secrets by third parties.

Specific provision is made for the preservation of confidentiality in regard to information submitted by an applicant for purposes of the registration of a pharmaceutical substance or an agricultural chemical in the following manner: 5.1 Medicines and Related Substance Control Act No. 101 of 1965: Section 34 provides as follows: "Preservation of secrecy 34. No person shall, except for the purpose of the exercise of his powers or the performance of his functions under this Act, or for the purpose of legal proceedings under this Act, or when required to do so by any competent court or under any law, or with the written authority of the Director General, disclose to any other person any information acquired by him in the exercise of his powers or the performance of his functions under this Act and relating to the business or affairs of any person, or use such information for self gain or for the benefit of his employer." 5.2 Fertilizers, Farm Feeds, Agricultural Remedies and Stock Remedies Act No. 36 of 1947: Section 17 provides as follows: "Preservation of secrecy 17. Any person who discloses except to the Minister or to any other person for the purpose of the performance of his duties or the exercise of his functions under this Act or when required to do so by any court or under any law, any information acquired by him in the exercise of any duty or function under this Act, in relation to the business or affairs of any other person shall be guilty of an offence and liable on conviction to a fine not exceeding five hundred pounds or imprisonment for a period not exceeding twelve months." Unfair commercial use is not addressed expressly, except for the prohibition on self gain or any benefit to the employer in the Medicines Act. The circumstances under which such information could be disclosed are set out in the two sections quoted above.

It is correct that section 25(2) of the South African Patents Act provides that computer programs shall not constitute inventions for the purposes of the Act. However, section 25(3) provides that subsection (2) shall prevent such a program to be treated as an invention "only to the extent to which a patent or patent application relates to that thing as such". This position is in line with the position in Britain. It is submitted that the instances as set out in question No. 1(a) and (b) from the US could qualify for patent protection in terms of South African law, inasmuch as these instances do not relate to mere computer programs as such. Accordingly, it is submitted that the South African position complies with Article 27 of the TRIPS Agreement, inasmuch as inventions based on or involving computer programs are patentable.

See reply to question No. 1 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.

In terms of section 25(4)(b) any variety of animal and plant shall not be patentable under the Patents Act, nor any essentially biological process for the production of animals or plants. Plant varieties can be protected under the Plant Breeders' Rights Act No. 22 of 1964.

It is confirmed that micro-organisms, and non-biological and microbiological processes and the products thereof constitute patentable subject matter in South Africa. Section 25(4)(b) of the Patents Act provides as follows: "(4) A patent shall not be granted (a) ... (b) for any variety of animal or plant or any essential biological process for the production of animals or plants, not being a micro-biological process or the product of such a process". This provision is interpreted to mean that the following do not fall within the exclusion: - micro-organisms - micro-biological processes and the products of such processes - non-biological processes for the production of animals or plants.

See reply to question No. 1 from the EC.

See reply to question No. 3 from the EC.

See reply to question No. 3 from the EC.

In terms of the common law of South Africa, confidential information or trade secrets are given protection against unauthorised disclosure or use by others. The requirements to rely on such protection on the basis of common law principles are in substantial compliance with the provisions of Article 39.2 of TRIPS.

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.