PATENTS AMENDMENT BILL, 2005
[Announced in Government Gazette no. 27529 of 26-04-2005]
Comments and Submissions
by
SA Institute of Intellectual Property Law
Adams & Adams
Bowman Gilfillan Inc.
D.M. Kisch Inc.
______________________________________________________________
1. INTRODUCTION
The Patents Amendment Bill, 2005 aims to introduce into the Patents Act, 1978 (the Act) a requirement for a patent applicant to lodge a statement stating whether or not the invention is directly derived from an indigenous biological or genetic resource, or is based on or derived from traditional knowledge or traditional use. The Bill as published provides that an application shall not be given a lodging date until such time as a statement containing such information has been lodged.
Furthermore, the Bill aims to introduce into the Act a further ground for the revocation of a patent, namely if the said statement contains a false statement or representation which the patentee knew to be false at the time when the statement was made.
The need for, and indeed the merit of, such a disclosure requirement has been the subject of international debate for some time in the context of the Convention on Biological Diversity (CBD) and the efforts to reconcile the provisions of the CBD with those of the TRIPS agreement (Agreement on Trade-Related Aspects of Intellectual Property Rights) of the WTO.
The parties making and advancing the comments and submissions contained in this document (hereinafter referred to as ‘the parties’), support and endorse the principle of a disclosure requirement as contained in the Bill. The parties believe that it is appropriate for South Africa to give effect to the objectives of the Convention on Biological Diversity (which South Africa ratified on 2 November 1995), and South Africa’s National Environmental Management: Biodiversity Act no. 10 of 2004, by the enactment of legislation to form part of the country’s patent law as contemplated in the Patents Amendment Bill, 2005.
However, the parties perceive that seriously prejudicial consequences will follow should the current provision of the proposed section 30(3A)(b) remain unchanged, as will be explained in more detail below, The parties will propose an amendment to the current wording of section 30(3A)(b) which will, it is submitted, present an alternative and will still achieve the objective of the Bill.
2. CONTEXT OF THE BILL
The Bill should be viewed against the background of a number of international issues and developments, and in the context of different debates which are in progress in the international arena.
As background information, some of the international developments and debates have been set out in Annexure A.
3. PROVISIONS OF THE BILL
3.1 The main provisions of the Bill are the following:
- that an applicant for a patent has to state whether or not the invention was directly derived from an indigenous biological resource or a genetic resource;
- that the applicant also has to state whether or not the invention was based on or derived from traditional knowledge or traditional use;
- that the application will not be given a lodging date until the statements referred to above have been lodged;
- that the registrar may call upon the applicant to furnish proof as to his/her title or authority to make use of the indigenous biological resource or the genetic resource or the traditional knowledge or traditional use; and
- that a false statement or representation which is material and which the patentee knew to be false at the time of the statement will be a ground for revocation of the patent.
In addition, definitions of three key concepts will be introduced.
The different provisions are dealt with below in the order in which they appear in the Bill
3.2 Definition of ‘indigenous biological resource or genetic resource’
A proposed definition of ‘indigenous biological resource or genetic resource’ is to be inserted into section 2 of the Act; this definition refers to the existing definition of the concepts in section 1 of the National Environmental Management: Biodiversity Act no. 10 of 2004 (the Biodiversity Act). It is submitted that the reference in the proposed definition to a ‘genetic resource’ in addition to an ‘indigenous biological resource’ introduces an element of interpretational uncertainty and a lack of clarity, unless the ‘genetic resource’ is also defined as an indigenous resource.
Section 1 of the Biodiversity Act has two separate definitions for ‘indigenous biological resource’ and ‘genetic resource’ respectively. The former definition, although covering a wider concept to include inter alia genetic material, is focused on a biological resource which is indigenous or derived from an indigenous species. The definition of ‘genetic resource’ is more restricted and also includes genetic material, but is not limited to material which is indigenous or derived from an indigenous species.
It is important to note that the definition of ‘indigenous biological resource’ in the Biodiversity Act is wide enough to cover genetic material and indeed refers to ‘genetic material’, as does section 80(2) of the Biodiversity Act (where the concept ‘indigenous biological resources’ is defined in greater detail for purposes of Chapter 6); however, such genetic material will be material derived from indigenous species. It is proposed, therefore, that the definition to be introduced into the Patents Act should relate to ‘indigenous biological resource’ and to ‘indigenous genetic resource’.
Furthermore, taking into account that the effect of the Bill, once passed into law, will be territorial; and taking into account that the objective of the Bill must be presumed to relate to the monitoring and thus the disclosure of the use of indigenous biological and indigenous genetic resources, it is submitted that it is in line with the policy objective that the proposed definition should be amended to relate to indigenous genetic resources.
Submission: The definition should be amended to read:
‘indigenous biological resource or indigenous genetic resource’ means an indigenous biological resource or a genetic resource of an indigenous species as defined in section 1 of the National Environmental Management: Biodiversity Act, 2004 (Act No 10 of 2004).
3.3 Definition of ‘traditional knowledge’ and ‘traditional use’
Definitions of ‘traditional knowledge’ and ‘traditional use’ are to be inserted into section 2 of the Act. It is agreed that it is necessary for these concepts to be defined. Both definitions make use of the concept ‘indigenous community’ to delineate the knowledge or use which will qualify as ‘traditional knowledge’ and ‘traditional use’. It may be argued that, since an ‘indigenous community’ is not defined in the Bill, the proposed definitions of ‘traditional knowledge’ and ‘traditional use’ lack clarity and certainty. It should be noted, however, that the Biodiversity Act itself uses the concept ‘indigenous community’ (eg in section 82(1)(b)) in the absence of a specific definition of this concept, which seems to indicate that the concept is capable of interpretation, for example by a court of law, and is thus not uncertain.
In this regard it may be noted that the term ‘indigenous’ is a defined term. It has a clear dictionary meaning (eg Collins Concise Dictionary, Concise Oxford Dictionary), namely originating or occurring or belonging naturally in a country.
It is submitted, therefore, that there is no need for a definition of ‘indigenous community’ to be included in the Bill.
However, since both the definitions of ‘traditional knowledge’ and ‘traditional use’ refer to a genetic resource, and taking into account the considerations outlined in paragraph 3.2 above as to the need to qualify a genetic resource as an indigenous genetic resource, it is proposed that, for the sake of consistency, the word ‘indigenous’ be inserted to qualify the term ‘genetic resource’ where it appears in both of the definitions.
Submission: It is submitted that the definitions of ‘traditional knowledge’ and ‘traditional use’ be amended by the insertion of the word ‘indigenous’ before the words ‘genetic resource’.
A new subsection (3A) is to be inserted after subsection (3) of section 30 of the Act. Section 30(3A)(a) will require every applicant who lodges an application for a patent accompanied by a complete specification to lodge with the registrar a statement stating whether or not the invention is -
(i) directly derived from an indigenous biological resource or a genetic resource; or
(ii) based on or derived from traditional knowledge or traditional use.
The manner in which the disclosure requirement has been phrased, namely the lodging of a statement stating whether or not the invention is derived from an indigenous biological resource or a genetic resource, or whether or not the invention is based on or derived from traditional knowledge or use, without requiring information regarding the nature or content of the biological or genetic resource or the traditional knowledge or use, indicates that the disclosure requirement is viewed as a formal requirement. This is in line with the proposals of some countries, eg Switzerland, in the course of the international debate around the issue.
The formulation of the Bill, namely to introduce the disclosure requirement as a formal requirement, is supported. Although no regulatory amendment consequent to the statutory amendment has been published yet, it is presumed that a form will be prescribed by means of which the required statement is to be submitted.
There is a second point of considerable importance flowing from the manner in which the disclosure requirement has been phrased, namely that the applicant must state whether or not the invention is derived from or based on an indigenous biological resource or a genetic resource or traditional knowledge or use. The provision will require also those applicants whose inventions have nothing to do with biological resources or indigenous knowledge or use, to lodge the required statement. The fact that all applicants are hit by the provision is of particular relevance in regard to the issue addressed in paragraph 3.5 below, namely the sanction or penalty which will apply when the prescribed statement is not filed in time.
As a third point, and for the same reasons as set out in paragraphs 3.2 and 3.3 above, it is submitted that the wording in paragraph (i) of proposed section 30(3A)(a) should be amended to include the reference to ‘an indigenous genetic resource’.
Submission: It is submitted that paragraph (i) of new subsection (3A)(a) should be amended by the insertion of the words ‘an indigenous’ before the words ‘genetic resource’.
New subsection 30(3A)(b) provides that a patent application shall not be given a lodging date until such time as the statement contemplated in ‘subsection (1)’ has been lodged. By way of a first comment, it is suggested that the reference to ‘subsection (1)’ constitutes an error; it is evident that the intention was to refer to ‘paragraph (a) of subsection (3A)’.
Furthermore, and as a second comment, it is pointed out that the denial of a lodging date because a formal, albeit an important, requirement has not been complied with at the time of filing constitutes a very serious and harsh sanction and, it is submitted, an inappropriate sanction in the circumstances, for the reasons set out below:
The reason why the allocation of a lodging date to an application is crucial, even though some formal requirements may be outstanding, is to be found in the fact that the South African patent system is a so-called first-to-file system: protection is granted to an invention on the basis of, and as from the date of, a filing. Should a filing date be denied, not only would no right be granted but the loss of right would in many cases be irreversible since the novelty of the invention may have been destroyed.
It is general practice, internationally, to accord a filing/lodging date even through certain formal requirements are not met at the time of lodging the application. This practice is in conformity with Article 3 of the European Convention relating to the Formalities required for Patent Applications, 1953. This Convention was based on Article 15 of the International Convention for the Protection of Industrial Property, Paris 1883 (the Paris Convention), and in terms of Article 9 was open to accession by all member states of the Paris Convention. South Africa acceded to the Paris Convention on 1 December 1947 and to the European Convention on Formalities on 28 November 1957. In fact section 30(6) of the South African Patents Act is based on Article 3 of the European Convention, which states that an application shall not be denied its date of filing on formal grounds, if the application as filed is accompanied by a specification, drawings and the filing fee.
To deny a lodging date in the circumstances contemplated in the proposed section 30(3A)(b) would constitute a contravention of the provisions of the European Convention on Formalities.
See in this regard also Article 11 of the PCT (Patent Cooperation Treaty) to which South Africa acceded on 16 March 1999, and where similar minimum requirements are set out for the allocation of a filing date.
(d) Furthermore, the requirement of the proposed section 30(3A)(a) applies to all applicants, namely those with inventions involving biological resources as well those with inventions wholly unrelated to biological resources. To visit a serious sanction such as that contemplated in the present proposed section 30(3A)(b), which will cause irrevocable loss of rights, also on the latter category of applicants, would no doubt elicit serious criticism and would erode the confidence in the IP system of South Africa. This could lead to a drop in patent filings and a consequent decrease in foreign investment.
Submission: It is submitted that paragraph (b) of proposed subsection (3A) should be amended to prevent or deny acceptance of the application until such time as the required statement has been lodged. This would be in line with the position in regard to other formal requirements.
The following wording is suggested:
‘An application contemplated in paragraph (a) of subsection (3A) shall not be accepted until the statement contemplated in paragraph (a) of subsection (3A) has been lodged with the registrar.’
The Bill provides that paragraph (g) of section 61(1) be amended to provide for a ground for revocation when the disclosure statement lodged in terms of new section 30(3A) contains a false statement or representation which is material and which the patentee knew to be false at the time when the statement or representation was made.
The principle of this provision is supported.
Submitted on behalf of:
SA Institute of Intellectual Property Law
Adams & Adams
Bowman Gilfillan Inc.
D.M. Kisch Inc.
July 2005
Annexure A
CONTEXT OF THE BILL
The Bill should be viewed against the background of the following issues and developments:
The explanatory memorandum published with the 2005 Bill states (in paragraph 4: OBJECTS) that the Bill will benefit and empower the holders of genetic and biological resources and the practitioners of indigenous knowledge, and will make it possible to outlaw bio-piracy, ie trafficking in biological material for developing inventions without the prior approval of the relevant authority.
The question has been debated, as part of the implementation strategies of the CBD, of whether an obligation should be placed on researchers and inventors to disclose use made by them, in the course of their research or innovative activity, of biological or genetic materials or of traditional use or knowledge regarding such materials. The objective of such a disclosure obligation would be to monitor the use of scarce biological and genetic resources and to maintain biological diversity, and also to curtail bio-piracy.
The CBD contemplates (Article 15) the regulation of access to genetic and biological resources on the basis of informed consent, and requires the implementation of a financial mechanism based on benefit-sharing.
It is important to note that the CBD makes specific reference (Article 16) to the principle of the recognition of, and the need to ensure consistency with, the adequate and effective protection of intellectual property rights. CBD contracting states are to ensure that intellectual property rights are supportive of and do not run counter to the objectives of the CBD. However, the question remained as to the manner in which the principles of the CBD were to be put into effect in the context of intellectual property laws.
An important feature of the Guidelines is the call, also in Appendix II, on WIPO and other international organisations to undertake further information gathering and analysis projects with regard to, inter alia, the impact of intellectual property regimes on access to and use of genetic resources, and the need for consistency of disclosure requirements in the context of international legal obligations (such as those flowing from TRIPS). WIPO is also invited to prepare a technical study on methods consistent with obligations in treaties administered by WIPO, for requiring disclosure within patent applications of, inter alia, the use of genetic resources and associated traditional knowledge and practices in the development of claimed inventions, and evidence of prior informed consent.
Finally, Appendix II notes the interrelationship between the TRIPS Agreement and the CBD, and that this interrelationship is being examined by the TRIPS Council in terms of Article 19 of the Doha Declaration, 2001.
In Chapter 6 of the Biodiversity Act provision is made for the regulation of bio-prospecting for genetic material derived from indigenous biological resources. The term ‘bio-prospecting’ is defined (section 1) to include research on, and extraction or development of, genetic resources for commercial or industrial application. Such activities would include the creation and patenting of new inventions. The concept ‘indigenous biological resource’ is defined generally (section 1) with reference to any living or dead animal, plant or other organism of an indigenous species, and the concept ‘indigenous species’ is defined as a species that occurs, or has historically occurred, within the borders of the Republic of South Africa. ‘Indigenous biological resource’ is also defined more specifically (section 78) for purposes of Chapter 6. A permit system is provided for (section 78), requiring informed consent from persons or communities making available or giving access to indigenous biological resources, and providing for benefit-sharing agreements (section 80).