On Tuesday, 27 February 2018, the representative of the Republic of South Africa delivered the following statement at the World Trade Organization’s TRIPS Council; South Africa delivered this statement under the agenda item on IP and the Public Interest: Regulatory Review Exception.
In addition to providing the Council detials of developments in South Africa regarding the regulatory review exception, South Africa poignantly reminded the WTO of the policy incoherence between the right to health and trade rules made manifest in the case of PMA v the President of the Republic of South Africa:
The intersection of IP and public health has long been an issue of contention not only in South Africa but the world over, and one without resolution to date.
The earliest legal recognition of the problem began as early as 1997, with amendments to the Medicines Act, and the subsequent case, PMA v the President of the Republic of South Africa. in this case a consortium of multinational pharmaceutical companies sought to block amendments to the Medicines Act in 1997 that would expand access to medicines. As a result of the legislative amendment, he USTR placed South Africa on the section 301 “Watch List” and urged the South African government to repeal its law. In June 1998 the White House announced a suspension of South Africa’s duty- free treatment under the US Generalized System of Preferences program. While hindsight is 20:20, this aggressive campaign actually hastened the mobilization of opposition to it. This case was a key factor leading to global dialogue around the potentially negative impact of IPRs on public health, culminating in the Doha Declaration on TRIPS and Public Health.
South Africa also reminded the WTO membership of the state’s obligation to “progressively realize the right to health”.
In addition to this, the state’s duty to progressively realize the right to health is captured in international instruments which South Africa has ratified such as the International Covenant on Economic, Social and Cultural Rights (ICESCR), the Convention on the Rights of the Child (CRC),Convention on the Elimination of all Forms of Discrimination against Women and Girls (CEDAW), the Convention on the Rights of Persons with Disability (CRPD), and regional treaties such as the African Charter on Human and Peoples’ Rights.
In relation to the regulatory review exception, South Africa provided the following information about its jurisprudence:
In order to expedite the availability of generic medicine on the market post patent, the Patents Act was amended in 2003 to include Section 69A, making provision for a statutory licence available to generic companies under a patent in specific circumstances effectively introducing a ‘Bolar’ type exception. This amendment was made following the decision in Stauffer Chemicals v Monsanto 1988(1) SA 805(T), which held that the experimental use of an invention amounted to infringement. The Court confirmed the interpretation of section 45(1) – in its form then – by finding that it entitled the patent owner to have and enjoy the whole profit and advantage of the invention, but that it does not prohibit the mere possession of an infringing article/product without an intention to use or dispose of it. The Court stated obiter that even experimental use of a patented invention will amount to an infringement in that the experiment uses the patented invention. In the Stauffer case the alleged infringer used the patented invention during the term of the patent to prepare for marketing registration of its own similar product, and the Court found that such activity in fact used the patented invention as a springboard to obtain an improper advantage. This could be viewed as gaining a commercial advantage; such use was found to constitute infringement. In order to address this situation, South Africa amended its Patent Act and introduced Section 69A.
South Africa provided the following update on Section 69A of its Patents Act:
69.A(1) It shall not be 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 and solely for the purposes reasonably related to the obtaining, development and submission of information required under any law that regulates the manufacture, production, distribution, use or sale of any product.
(2) It shall not be permitted to possess the patented invention made, used, imported or acquired in terms of subsection (1) for any purpose other than for the obtaining, development or submission of information as contemplated in that subsection.
In terms of South Africa’s current review of its IP laws, the delegation intimated at the possible broadening of the regulatory review exception to include “early experimental research” citing US case law, including Merck v. Integra Lifesciences, 545 U.S. 193 (2005).
South Africa is currently conducting a review of existing IP laws. Discussions around the “Bolar” exception has focused on whether the narrow marketing exception should also be extended to a broader category of activities, including early experimental research. Some stakeholders advocate an approach as exemplified by the US. Patent Act regulatory review exception, which covers both regulatory review and early research (e.g., pre-clinical) pathway. Reference is often made to Merck v. Integra Lifesciences, 545 U.S. 193 (2005) where the US Supreme Court found that exempts uses of patented inventions in pre-clinical research from infringement even when the research results are not eventually included in a submission to the FDA.
The full statement is reproduced in full.
SOUTH AFRICA’S STATEMENT IN THE TRIPS COUNCIL
INTELLECTUAL PROPERTY AND THE PUBLIC INTEREST: REGULATORY REVIEW EXCEPTIONS.
The intersection of IP and public health has long been an issue of contention not only in South Africa but the world over, and one without resolution to date.
The earliest legal recognition of the problem began as early as 1997, with amendments to the Medicines Act, and the subsequent case, PMA v the President of the Republic of South Africa. in this case a consortium of multinational pharmaceutical companies sought to block amendments to the Medicines Act in 1997 that would expand access to medicines. As a result of the legislative amendment, the USTR placed South Africa on the section 301 “Watch List” and urged the South African government to repeal its law. In June 1998 the White House announced a suspension of South Africa’s duty- free treatment under the US Generalized System of Preferences program. While hindsight is 20:20, this aggressive campaign actually hastened the mobilization of opposition to it. This case was a key factor leading to global dialogue around the potentially negative impact of IPRs on public health, culminating in the Doha Declaration on TRIPS and Public Health.
South Africa has been a key driver of the now global recognition that the duty owed by states to safeguard public health is not inconsistent with their concomitant responsibility to honour international treaty obligations. Paragraph 4 of the Doha Declaration on TRIPS and Public Health states as follows:
“We agree that the TRIPS Agreement does not and should not prevent members from taking measures to protect public health. Accordingly, while reiterating our commitment to the TRIPS Agreement, we affirm that the Agreement can and should be interpreted and implemented in a manner supportive of WTO Members’ right to protect public health and, in particular, to promote access to medicines for all.”
In addition to this, the state’s duty to progressively realize the right to health is captured in international instruments which South Africa has ratified such as the International Covenant on Economic, Social and Cultural Rights (ICESCR), the Convention on the Rights of the Child (CRC),Convention on the Elimination of all Forms of Discrimination against Women and Girls (CEDAW), the Convention on the Rights of Persons with Disability (CRPD), and regional treaties such as the African Charter on Human and Peoples’ Rights.
In order to expedite the availability of generic medicine on the market post patent, the Patents Act was amended in 2003 to include Section 69A, making provision for a statutory licence available to generic companies under a patent in specific circumstances effectively introducing a ‘Bolar’ type exception. This amendment was made following the decision in Stauffer Chemicals v Monsanto 1988(1) SA 805(T), which held that the experimental use of an invention amounted to infringement. The Court confirmed the interpretation of section 45(1) – in its form then – by finding that it entitled the patent owner to have and enjoy the whole profit and advantage of the invention, but that it does not prohibit the mere possession of an infringing article/product without an intention to use or dispose of it. The Court stated obiter that even experimental use of a patented invention will amount to an infringement in that the experiment uses the patented invention. In the Stauffer case the alleged infringer used the patented invention during the term of the patent to prepare for marketing registration of its own similar product, and the Court found that such activity in fact used the patented invention as a springboard to obtain an improper advantage. This could be viewed as gaining a commercial advantage; such use was found to constitute infringement. In order to address this situation, South Africa amended its Patent Act and introduced Section 69A.
Section 69A provides as follows:
“69.A(1) It shall not be 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 and solely for the purposes reasonably related to the obtaining, development and submission of information required under any law that regulates the manufacture, production, distribution, use or sale of any product.
(2) It shall not be permitted to possess the patented invention made, used, imported or acquired in terms of subsection (1) for any purpose other than for the obtaining, development or submission of information as contemplated in that subsection.”
It will be noted that the exception is not limited to pharmaceutical products; it applies to any invention (in any field of technology) in respect of which any law requires the submission of information for the manufacture, distribution or sale of a product. This would for example cover pharmaceutical and agrochemical products which require marketing authorization before such products may be put on the market.
The main import of this section is that it is permissible for a generic manufacturer of pharmaceutical, veterinary or agricultural products to obtain registration of generic equivalents of patented products with the registration authorities in South Africa, prior to the expiration of the relevant patent.
South Africa is currently conducting a review of existing IP laws. Discussions around the “Bolar” exception has focused on whether the narrow marketing exception should also be extended to a broader category of activities, including early experimental research. Some stakeholders advocate an approach as exemplified by the US. Patent Act regulatory review exception, which covers both regulatory review and early research (e.g., pre-clinical) pathway. Reference is often made to Merck v. Integra Lifesciences, 545 U.S. 193 (2005) where the US Supreme Court found that exempts uses of patented inventions in pre-clinical research from infringement even when the research results are not eventually included in a submission to the FDA.
While South Africa’s IP Policy Review is still continuing, there are broad practices in various jurisdictions that allow countries who have not yet implemented this flexibility to do so with confidence and prior examples of sound regulatory practice. In this regard a valuable resource can be found on the WIPO website, “WIPO Lex”, contains a comprehensive database with national IP laws and international agreements. On this point, during the December 2017 meeting of the Standing Committee on the Law of Patents, the WIPO Secretariat compiled a draft reference document on exception regarding acts for obtaining regulatory approval from authorities (SCP/27/3).
Since the Secretariat has been doing some work in the area of exception regarding acts for obtaining regulatory approval from authorities, it would be very useful for the Secretariat to report what it has been doing in this respect. The Proponents would greatly value such a contribution as an add on to our outreach and experience sharing on exception regarding acts of obtaining regulatory approval from authorities.
Madam Chair, before I end this intervention, I would like to pay tribute to a global hero and the father of the post-apartheid South Africa. As mentioned in the introduction, it was his administration that took steps to address access medicine. Many of us would not realize that this year marks a century since his birth. I mention this because I regard him as a universal standard bearer. He is a peak of moral authority, rising above the soulless wasteland of the 20th century; he is a universal symbol for goodness and wisdom, for the ability to change, and the power of reconciliation.
Thank you Madam Chair.
END
27.02.2018