Member Article

IP landscape

While the world is in the grip of the deadly COVID-19 pandemic, the patenting of pharmaceutical and biological compositions and the launch of generic products is even more hotly debated than before, particularly in the world's developing and least-developed countries.

For many years, in the context of the devastating local HIV epidemic, organisations such as the Treatment Action Campaign and Medicines Sans Frontiers have challenged the government on the inadequacy of local IP laws to provide access to medicines. In particular, these organisations called on the government to amend the Patents Act to raise the bar in terms of which pharmaceutical companies would be able to register patents for drugs in South Africa. Partially in response to these calls, in 2018 the government published the Intellectual Property Policy of The Republic of South Africa Phase I (the IP Policy), which, among other things, proposes:

• to amend the Patents Act to provide for substantive examination; and
  
  
• to make the application process for compulsory patent licensing less onerous.
  
  

Further, the IP Policy addresses the government's use of the Doha Declaration provisions in terms of the Agreement on Trade-Related Aspects of Intellectual Property Rights to promote access to medicines for all through the use of government 'walk-in' rights in a national emergency, which would include a pandemic such as COVID-19. In addition, the IP Policy considers the use of parallel import measures provided for by the Medicines and Related Substances Act (the Medicines Act).

Unfortunately, the legislative wheels turn slowly, so South Africa is left with the currently available options for access to diagnostic kits and reagents, drugs and biologics for the diagnosis and treatment or prevention of local COVID-19 infections.

Therefore, what mechanisms are available at present to provide for access to medicines and diagnostics?

Existing access to medicines provisions

As mentioned, South Africa is a signatory to the Doha Declaration, which allows for measures to be taken to protect public health and promote access to medicines for all, including the use of compulsory licences, the terms on which these licences are granted and the right to determine which situations qualify to circumvent patent monopoly rights. At present, the Patents Act includes the following various provisions which give effect to the measures set out by the Doha Declaration:

• A minister of state may use an invention for public purposes on agreed on conditions (Section 4).
  
  
• A minister may acquire any invention or patent on behalf of the state on agreed on conditions (Section 78).
  
  
• Compulsory licences may be applied for on various grounds (Section 56):
  
  
  • Of particular relevance in regard to the issue of affordable access to medicines, Subsection (1)(c) provides that a compulsory licence can be applied for where the demand for the patented article in South Africa is not being met to an adequate extent and on reasonable terms. The courts have indicated that 'adequate extent' means sufficient for South Africa's needs and that a lack of 'reasonable terms' may be evidenced by public dissatisfaction with pricing. Although the decisions to award a compulsory licence are made by the commissioner of patents on a case-by-case basis, it seems that a lack of access to affordable medicine would meet the requirements for such a compulsory licence application.
    
    
  • Further, although more limited in application, Subsection (1)(e) provides that an applicant for a compulsory licence may apply on the ground that the price of the patented article is excessive compared with the country of manufacture where the demand for the patented article in South Africa is being met by importation but where the price charged in South Africa is excessive in comparison with countries where the patented article is manufactured and there is no good reason for the substantially higher price.
    
    

Outside of the Patents Act, the Medicines Act includes measures supporting the supply of affordable medicines. Section 15C of the Medicines Act provides that the minister of health can, despite the Patents Act, limit certain rights of owners of medicines and, therefore, the infringing acts of third parties can be allowed in certain circumstances.

In a more limited provision, the Medicines Act also sets out that the minister can prescribe conditions on which a generic medicine can be imported by a person that is not the holder of the registration certificate for a registered medicine. However, the medicine must have originated from the original manufacturer's site of manufacture.

Patent revocation and infringement proceedings

Another option, albeit a costly one, for generics manufacturers is to apply for revocation of a granted patent that is invalid. Any person may apply to the court to have a patent with invalid claims revoked. The court will make the decision as to whether to uphold or revoke the patent. In the event that the court decides that the patent should be upheld, it may do so with the condition that certain amendments are made. Where the court decides that amendments are necessary or where the patentee applies for amendments to be made during the revocation proceedings:

• the court has a discretion as to the awarding of costs; and
  
  
• the conduct of a patentee that knowingly allowed an invalid patent to remain on the register will be taken into account. In this event, the patentee may have costs ordered against them.
  
  

In infringement proceedings in respect of a patent which has been amended, the court may refuse to award damages in respect of any acts of infringement committed before the amendment. Further, the court may take into consideration the patentee's conduct in knowingly allowing the specification and claims to be maintained in an invalid form. The court may also consider the conduct of the patentee that has allowed the specification and claims to remain invalid when deciding the date from which damages are to be calculated.

Patent infringement and Bolar provisions

Before generics can be launched on the market, manufacturers must obtain registration from the South African Pharmaceuticals Regulatory Authority (SAHPRA). The requirements for registration of a generic drug before use or sale in South Africa include:

• providing test results which show the efficacy, safety and stability of the product; and
  
  
• submitting a sample of the product to the SAHPRA.
  
  

Importantly, South Africa has no research or scientific use exclusion in its Patents Act. Accordingly, scientific research on a patented invention may amount to an act of infringement.

However, Section 69(A) of the Patents Act provides that it is not an act of infringement of a patent to make, use, exercise, offer to dispose of, dispose of or import the patented invention on a non-commercial scale solely for purposes reasonably relating to obtaining, developing and submitting information required under any law regulating the manufacture, production, distribution, use or sale of any product. Therefore, obtaining registration for a generic product before the expiry of the patented drug is not an infringing act under the Patents Act. This registration process for a generic drug is usually started by the generic manufacturer approximately five years before the expiry of a patent. However, stockpiling of a patented product is not allowed in terms of this section and will amount to infringement.

Comment

The reality is that the amendment of legislation is a lengthy process and, given the severity of the global COVID-19 pandemic, it is essential that the existing mechanisms for access to medicine are explored more vigorously and that the government is lobbied to be more proactive in putting these mechanisms to use, which would in turn be in keeping with South Africa's undertaking as a signatory to the Doha Declaration.

For further information on this topic please contact Joanne van Harmelen at ENSafrica by telephone (+27 21 410 2500) or email ([email protected]). The ENSafrica website can be accessed at www.ensafrica.com.