National Intellectual Property Policy (Phase 1) & its implementation

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Trade, Industry and Competition

03 November 2020
Chairperson: Mr D Nkosi (ANC)
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Meeting Summary

Intellectual Property Policy of South Africa – Phase I (2018)

The Portfolio Committee on Trade and Industry met on a virtual platform with the Department of Trade, Industry and Competition for a briefing on the national Intellectual Property policy and the first phase of the implementation of the policy.

The Department informed the Committee that the current Patents Act was a 1978 Act. Legislative reforms included the development of an Amended Patents Act and the development of a Designs Act. The Patents Bill and Design Bill had been prepared and would be submitted to Cabinet for approval for public consultation. Work on South Africa’s accession to the Madrid Protocol was at an advanced stage. The Madrid Protocol would provide for the protection of business brands in multiple jurisdictions. It was a simple and cost effective system.

At the Companies and Intellectual Property Commission, work on the process for substantive search and examination was underway with the training of patent examiners and the development of supportive ICT infrastructure for implementation. The Commission was working in ongoing collaboration with the European Patent Office and the World Intellectual Property Organization.

The Committee determined that when there were phases of implementation, it was critical that Members be given an understanding of where the matter had come from, how it had developed and what the expectations and outcomes of the policy were.

Members asked what role South Africa had in respect of the Nagoya Protocol on Access and Benefit Sharing. How did the draft policy or Bill assist in promoting public health as compared to India’s health policy, for example? Were there any cases that one could speak of where there had been an interface with the benefits of the Intellectual Properties policy going to beneficiation, localisation and so on? What was the programme moving forward in terms of protecting South Africa’s patent industry? How could the Department fast track the Draft Bill that would amend the Patent Act?

Members commented on the pharmaceutical aspect of the Intellectual Properties policy. Was the dtic dealing with trade liberalisation in terms of dagga? The Eastern Cape produced a lot of “ganja” but the industry was not well-established. Were there programmes to deal with that industry?

The Chairperson expressed concern at the time that the process was taking as the draft Intellectual Properties policy and the phased implementation dated back to 2017.

Meeting report

Opening Remarks
The Chairperson greeted the Committee Members and everyone who was connected on the online platform. He stated that the management committee would look at the programme for the rest of the year in its next meeting and inform the Members of the way forward for the rest of the quarter. There were priority issues that would be addressed.

He informed the Committee that the main item would be the presentation on the first phase of the Intellectual Property (IP) policy.

The Secretary confirmed that the meeting was quorate and representative. He presented the agenda.

The Chairperson said that it was a briefing on phase 1 and the implementation thereof and there would be follow ups on the next IP policy phases and processes. The purpose was to inform the Committee on how the IP policy was being rolled out, proposed amendments to the legislation and the roles and responsibilities of the Department of Trade, Industry and Competition and the Companies and Intellectual Property Commission (CIPC), as well as and other departments. The IP function had been split between the Consumer and Corporate Regulation Division (CCRD) and the former International Trade and Economic Development Division. The latter developed policy and the former developed legislation and implemented policy. As a result, a policy gap might have inadvertently developed as there was uncertainty about the translation of the IP policy into law.

The Chairperson welcomed Ambassador Xavier Carim, DDG Trade Policy, Negotiations and Cooperation Division, who was leading the team from the Department of Trade, Industry and Competition (dtic) and his colleagues from dtic: Ms Niki Kruger, Chief Director: Trade Negotiations; Ms Elizabeth Van Renen, Director: SADC, and Mr Marumo Nkomo, IP Legal Advisor.

Presentation on IP Policy by dtic
Amb Carim introduced the presentation. He informed the Committee that the current Patents Act was a 1978 Act and a draft Patents Bill and a draft Designs Bill would shortly be submitted to Cabinet.

Amb Carim stated that the development of the Intellectual Property policy began with Cabinet approval in 2008 and, from July 2016, the IP policy was driven by the Inter-Ministerial Committee on IP (IMPC). The IMCIP comprised 11 Departments: dtic, Health, International Relations and Cooperation; Basic Education; Higher Education; Science & Technology; Communications and Digital Technologies; Sports, Arts and Culture; Agriculture, Land Reform and Rural Development; Mineral Resources and Energy; and Environment, Forestry and Fisheries.

The IP policy was important in respect of key national issues, such as Public Health. The policy encouraged local manufacturing of medicines, devices and diagnostics, including through appropriate patentability criteria and exceptions; provided for parallel importation to allow for imports of more affordable medicines; ensured that compulsory licenses provisions were brought in line with international best practice and provided for exceptions to patent protection for research and experimental purposes.

At the Companies and Intellectual Property Commission (CIPC), work on the process for substantive search and examination was underway with the training of patent examiners and the development of supportive ICT infrastructure for implementation. CIPC was working in ingoing collaboration with the European Patent Office (EPO) and the World Intellectual Property Organization (WIPO).

The dtic and CIPC were involved in the legislative reforms which included the development of an Amended Patents Act: the draft Bill that had been prepared and would be submitted to Cabinet shortly. The dtic and CIPC had also worked on the development of a Designs Act which would be submitted to Cabinet together with the Patents Bill. Work on SA’s accession to the Madrid Protocol was at an advanced stage. The Madrid Protocol would provide for the protection of business brands in multiple jurisdictions. It was a simple and cost effective system.

(See Presentation)

Discussion
The Chairperson stated that it seemed to be a process that was taking a lot of time as the draft policy and the phased implementation dated back to 2017. That was some time before and the Portfolio Committee had changed significantly since 2017. The current Committee might need to get a sense of how the current policy and legislation had evolved. When there were phases of implementation, it was critical that Members had an understanding of where the matter had come from, how it had developed and what the expectations and outcomes of the policy were. That was an important space for those who were to monitor the purpose and challenges. How was the dtic team managing the situation and which areas were challenges that had to be looked at closely?

He added that the Portfolio Committee (PC) had to get a good background to the process so that it could assist the dtic and monitor the process.

Ms T Mantashe (ANC) appreciated that when the work had begun, there had been gazettes etc. to conscientize citizens, but she did not think that the legislation had reached people who were not previously exposed to their rights in terms of IP. She explained that a man in East London had been battling for years to get a patent for his concoction or medicine for people with high blood pressure or heart disease. The medicine had not been patented, despite years of trying. She imagined that there were probably a lot of people in a similar position. She wanted such people to be made aware of the IP policy.

Ms Mantashe noted that the Department did not want to tramp on other people’s toes in terms of international treaties but it had to prioritise its own people and make sure that they were made aware of the benefits of IP as the people had a lot of indigenous knowledge that was not known. She asked that DDG Carim provide the Committee with a list of the treaties that the PC had to be aware of.

Mr W Thring (ACDP) thanked the Ambassador for the crisp presentation. He agreed that the Committee be involved in the processes with regards to the draft Bill and any other Bills that might be in the pipeline.
He asked Amb Carim what role SA had in respect of the Nagoya Protocol on Access and Benefit Sharing (Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization to the Convention on Biological Diversity) with respect to genetic resources. What was the nature of those genetic resources?

He noted that India had a medicine policy that made imported drugs available to the population at reduced rates which overrode big companies or monopolies in respect of such drugs. How did the draft policy or Bill assist in promoting public health as compared to India’s approach, for example?

Mr Thring asked how the IP policy interfaced with localisation, beneficiation, agriculture and biotechnology, amongst others, as indicated in the presentation. Were there any cases that one could speak of where there had been an interface with the benefits going to beneficiation, localisation and so on?

Mr S Mbuyane (ANC) commented on comparative advantages in terms of trade liberalisation and privatisation and the process of the creative industry promotion to develop SA’s economy. What was the programme moving forward in terms of protecting SA’s creative industry? How could the dtic fast track the draft Amendment Bill of the Patent Act?

He commented on the pharmaceutical aspect of the issue. Was the dtic dealing with trade liberalisation in terms of dagga? The Eastern Cape was producing a lot of ‘ganja’ but the industry was not well-established. Were there programmes to deal with the industry?

Mr Mbuyane also asked how the process with WIPO was moving forward.

Amb Carim thanked Members for the questions. IP was a complex and contested field, especially concerning what type of protection was needed, where, under what type of intellectual property, and so on.
In response to the Chairperson’s comments about the time it took for the processes to unfold, he agreed that it took a long time because of the complexity of the matter and especially the possibility of contestation. The Department needed to do lots of consultations at inter-governmental level and then with stakeholders to develop the policy thinking around the matter. He suggested that, although Members were extremely busy, there might be a possibility for an extended session in which experts could come in and expand on policy thinking. The Chairperson and the Committee could consider such an approach.

Amb Carim acknowledged that within the dtic, different branches were involved in the policy and implementation. Ms Evelyn Masotja, Deputy Director General: Consumer and Corporate Regulation Division (CCRD) had led the processes around developing national legislation. The International Trade and Economic Development branch policy approached the matter from its international engagements at the World Trade Organisation (WTO) and if the matter came up in bilateral of other foreign agreements. There had to be close co-operation between the two branches. CIPC (Companies and Intellectual Property Commission) was also an important partner that reported to the dtic. They all worked closely with the Minister. He agreed that it took time for the kind of consultations that had to be undertaken with all relevant bodies.

Amb Carim agreed with Ms Mantashe that it was a critical issue as the IP regime in SA was not developed to support informal or small inventors such as the one referred to by Ms Mantashe. One of the policy directives set out in the document was precisely to try and close those gaps. Part of the issue was an outreach programme to reach the people to make them aware of the importance of intellectual property, but it was very technical and scientifically based regime. The dtic wanted to ensure that there were greater efforts by government to reach out to those communities. The dtic wanted to reach out to the type of person referred to by Ms Mantashe. The Patents Bill was considering the role of utility models to provide some kind of protection to such individuals. Sometimes the discussion was very technical and quite difficult.

He added that to offer some degree of protection, utility models were being considered in the Patent Act as one way of offering a degree of protection to such types of inventors and inventions. He mentioned the Indigenous Knowledge Act which was yet to be put in place because regulations being developed by another department, not the dtic, and the Act would come into effect as soon as the regulations were published. The intention of the Act was to protect individuals and communities in SA from a company or corporate that benefitted from indigenous knowledge. If one took the active ingredient from a local remedy, commercialised it and profited from it, there would be measures to ensure that there was some form of disclosure and some form of benefit sharing, although it was extremely complex and not straight forward. That was the intention of the Indigenous Knowledge Act. The objective of the Act was to provide protection from abuse of traditional remedies, particularly from big companies and multi-nationals that would simply abuse the situation.

Amb Carim informed Mr Thring that he would request a colleague to address the matter of the Nagoya Protocol on Access and Benefit Sharing Protocol. SA had protocols to protect the country’s genetic resource pools of fauna and flora but it fell under the Department of Environmental Affairs but one of his colleagues would assist in that regard.

He asked for a repeat of the second issue raised by Mr Thring.

Amb Carim stated that the IP interfaced with localisation and agriculture, etc.  The issue was the protection provided by the patent, how it was patented, how easy it was to patent and the strength of such a patent were all questions relating to innovation and how inventions were applied for industrial purposes. Innovations and technology were essential for industrial development. The dtic had looked at the process around the world and, in particular, had looked at how China had developed its abilities on patents and there might be lessons to be learned from that and how one increasingly improved domestic abilities for innovation that fed into the industrial processes and allowed a country to advance. One needed appropriate IP legislation to facilitate and to protect the industrial development. It was a process that needed to unfold and one needed a system to support such a trajectory. Those questions would be the subject of further discussion in the dtic.

Mr Thring repeated his question. India had a policy that allowed important medicine needed for the population to be developed generically and sold at a reduced rate that overrode the monopoly of certain corporates that sold certain drugs.  How did the draft of the SA legislation assist SA’s national drug plan in promoting public health?

Amb Carim said that he was not an expert on the Indian drug policy but in the presentation he had pointed to a number of interventions identified in the policy to promote local production. The one was looking at the IP regime to encourage and facilitate domestic production. How did one support a greater supply of medical production of various types? Secondly, was the role of parallel imports. In the current regime, parallel imports were allowed but the conditions needed to be clarified so that where other countries supplied and produced affordable medicine, SA wanted to use that provision to be able to import those products, even though the patents for the same medicines had not run out in SA. He had also spoken of compulsory licensing but it was difficult to apply the provision, especially where current patents remained in place, but where there was insufficient production and supply in SA. The government could resort to forcing a producer on a compulsory licence to expand production at a lower cost, but the process was onerous. The reforms would facilitate that and bring it more in line with the World Trade Organisation (WTO). SA had to catch up in that aspect of access to medicine. The other important aspect was the role of voluntary licences where companies produced medicines according to an international licence but produced those medicines at more affordable rates in SA. The key element was to make medicines more affordable.

Amb Carim noted that Mr Mbuyane had asked extensive questions about Cannabis. He was not sure of the question, but SA had an IP regime that had been put in place in a previous era and had to be updated and brought in line with the Constitution and with developments at an international level. Part of the legislative reform would try to deal with that. IP that gave rise to new technologies and new ways of doing things was very important for industrial development. In SA, the comparative advantage was mineral resources but that did not mean that other resources and a strong industrial base could not be developed with the right policies, including a strong IP regime that was supportive of the industrial trajectory. What it meant in specific areas would vary, but it would facilitate technological development to move up the development chain.

He added that cannabis and trade liberalisation had not been raised in any of the discussions on IP, nor had there been a request to look at tariff liberalisation by other countries or by SA.  He suspected that as the regulations became clear, those types of issues would be addressed.

The Chairperson noted that there was already a cooperation in respect of dagga/cannabis. Lesotho and eSwatini were on the agricultural belt, together with KwaZulu-Natal and the Eastern Cape where that product grew. The courts had made a decision that would have a huge impact on products relating to textile and clothing made from dagga. The focus was not the negative side of smoking dagga.

Mr Marumo Nkomo, Legal Advisor, dtic, responded to Ms Mantashe’s question about how people at grassroots level could benefit from the IP policy. The policy was proactive in that respect and one of the interventions proposed was to introduce a fee reduction on patents registered by individuals and small businesses. Another method of support offered to people at grassroots level was the opportunity to make use of the Inventor Assistance and Support Programme in which the services of IP law firms, which were very expensive, would be available because the law firms would volunteer services on a pro bono basis. That was the reason that SA had joined the programme under the World Intellectual Property Organisation (WIPO).  An important intervention was looking at the way in which the IP system had been quite exclusionary in terms of the demographics and was untransformed. The intention was to make the IP system more accommodating to people from a disadvantaged background.

Mr Nkomo responded to Mr Thring on the Nagoya Protocol on Access and Benefit Sharing Protocol which dealt with biopiracy whereby a country would make use of the genetic resources of other countries without acknowledging them or providing any benefit to the people who lived in the country of origin. The Protocol addressed access and benefit sharing and those countries had to show how they shared the benefits with the indigenous communities. That concept had already been introduced in SA through the Department of Environmental Affairs with the National Environmental Management: Biodiversity Act. An Amendment to the Patent Act that came into effect in 2007 required that when applied for a patent, one had to indicate whether biological resources had been used and if so, one had to comply with the National Environmental Management: Biodiversity Act and compete the required P26 form.

He added that the question about India was important because India had taken advantage of the fact that when the Trade-Related Aspects of Intellectual Property Rights (TRIPS) had come into effect, India was not obliged to provide patent protection for pharmaceutical products. It did that to be able to reverse engineer drugs and was able to build a huge generic drugs industry. Only in 2005 did India have to provide patent protection according to TRIPS but, to retain its comparative advantage as a drug producer, it had developed certain tools to retain its dominance in that field. SA had looked at those tools. The DDG had already referred to the fact that SA could require companies to produce genetic forms of medicine but SA had never used that mechanism because the law was complex and the Department of Health had not negotiated that successfully.  Parallel importation was another mechanism explored. Those approaches had been studied and would be tailored to the local context.

Adv Rory Voller, Commissioner, Companies and Intellectual Property Commission (CIPC), stated that he could provide some information on the implementation aspects of the first phase of the policy implementation. The CIPC was involved in two areas, in particular. One was the area of substantive examination of patents as explained by Ambassador Carim. The second group of inspectors was well into the training. The first batch of inspectors had received some of the best training in the world and were well able to identify pattern criteria and a second batch had begun training.

When he had presented the CIPC budget to the Committee, Adv Voller had mentioned that implementation of the IP policy was moving ahead of the legislative process. The CIPC needed the legislative process to move forward as it was a challenge, as the Chairperson had said in his opening remarks, and so CIPC had to work very closely, as they had been doing, with colleagues in dtic. When moving forward and addressing training requirements, CIPC had to be well informed and well-equipped in terms of infrastructure so that they were ready to receive patents when the legislation went live. The first batch of patent inspectors, of whom 18 out of 20 were still in training, were dealing with real, live patents, even though they could not take any action as the legislation was not yet in place. The second batch of patent examiners had been trained, mostly online, but would be ready when their two-year training was up.

Adv Voller noted that CIPC had worked closely with dtic to ensure that there were focussed programmes. CIPC had worked closely with the European Patent Office (EPO), the Intellectual Property Office of the United Kingdom (IPO) and with colleagues in BRICS (Brazil, Russia, India, China, South Africa), all of which had been very valuable.

The second aspect of the implementation of the IP policy that CIPC was involved in had been raised by Ms Mantashe and it related to how the Commission could empower smaller entities and SMMEs to understand and to access the benefit of the global IP system. CIPC ran a programme called ‘IP for SMMEs Capacity Development Programme’, and it had been running for many years in collaboration with IPO. Colleagues in dtic and various entities collaborated on the programme which was rolled out to all provinces. An online programme had been offered and CIPC had offered the train the trainer programming.

Adv Voller stated that CIPC worked with a particular group in BRICS. There was a dedicated road map and workstreams that CIPC reported on each quarter and the country received articles, strategies and training in some of the best strategies and articles in the world. There had been a massive explosion of IP systems in China and a massive increase in the number of IP applications received from that particular jurisdiction. SA was a member of the Heads of IP group (HIPO) was very supportive of SA and SA was Head of the SMME group within HIPO intellectual property office. Annually CIPC, the dtic and other partners hosted an IP Colloquium. Participants came from numerous sectors throughout SA and from outside the borders of the country and over two days, the colloquium engaged in discussions about patentability and participants brought along their patents for discussion and afterwards the knowledge could be applied to their work.

Adv Voller informed the Members that CIPC assisted dtic in offering the Inventor Assistance and Support Programme. SA had been the fourth country in the world to sign up for that programme. Many SA citizens had been awarded patents after going through the programme during which they had been ably assisted by the IP Lawyers Association working on a pro bono basis. He could provide statistics in that regard.

Adv Voller invited Ms Mantashe to send him details of those who needed assistance with obtaining patents and he would ensure that they received guidance and support in that regard. CIPC also looked at trademarks as well as copyright. He was envisaging an IP Learning Academy which would allow the SA economy to grow as a result of patents. CIPC would work closely with the SA Research Institutions. CIPC had held 30 training programmes in the past year.

Adv Voller stated that those were his few words that he was delighted to be able to share with the Committee.

Conclusion of presentation
The Chairperson said that KwaZulu-Natal and Eastern Cape connected SA to eSwatini and Lesotho in respect of the geographic area in which cannabis was grown and he thought it would be a good idea to look at that geographic area in respect of developing cannabis. He commented that medicines were generic or non-generic and not enough information was available for ordinary people to know the difference but he always asked for “generic” because he thought it had something to do with SA and that it was locally generated or manufactured in SA. He did not know if it was better in price or benefit but he frequently had discussions with family members about the difference between and the benefit of generic versus non-generic medicines.

Amb Carim stated that he had forwarded a copy of the policy document and would provide a copy of the document to any Members who did not have a copy. The IP regime was an old regime that needed to be updated to bring it in line with the Constitution and in line with the transformation intentions in public health, in particular, but also in line with broader socio-economic development goals. The IP regime would have to undergo an evolution.

He stated that international obligations set standards which had a great deal of flexibility and so there was a great deal of variation in the ways in which different countries applied the standards. There was flexibility and there was space for meeting SA’s IP regime and so SA would be able to meet the various social and economic objectives that the country had set for itself. In public health, proposals would be put forward that would take public health forward. Likewise, the IP regime would be used to promote industrialisation, etc. In the context of law making, there would be different views on IP and all of those views would have to be taken into account in making a judgement. It was a complex area but very critical in meeting SA’s development needs.

Amb Carim assured the Chairperson that the Department would be at the disposal of the Members should they require anything.

The Chairperson thanked the Ambassador for his informative input.

Committee business
Minutes: The following minutes were presented -
13 October 2020
20 October 2020
21 October 2020
23 October 2020
27 October 2020
Mr Thring stated that he had either attended all meetings or sent his apologies but his name was missing from the minutes of 20 and 21 October 2020.

All sets of minutes were adopted by the Committee with the above corrections to Mr Thring’s attendance.

Concluding remarks
The Chairperson informed Members that there would be no meeting the following day. There would be a management committee meeting to determine further details about the Committee’s business for the rest of the quarter until Parliament went on recess. Members would receive a copy of the amended programme the following day.

He thanked all Members, the dtic and all who had attended the meeting.

The meeting was adjourned.


 

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