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14 August 2019
Section 45 of the Patents Act provides that a patent grants the patentee the right to exclude other persons from making, using, exercising, disposing or offering to dispose of or import the invention so that they can enjoy the whole profit and advantage accrued from the invention for the patent's duration.
In the case of infringement of these patent monopoly rights, the patentee can claim:
Before a generic or biosimilar medicine can be launched in South Africa, the manufacturer must obtain registration from the South African Health Products Regulatory Authority (SAHPRA). The registration requirements for a generic drug before it can be used or sold in South Africa include:
Section 69(A)(1) of the Patents Act, which was introduced in 2002, prescribes certain non-infringing acts. For example, it is not an act of infringement to make, use, exercise, offer to dispose of, dispose of or import a patented invention on a non-commercial scale solely for purposes reasonably relating to obtaining, developing or submitting information required under any law regulating the manufacture, production, distribution, use or sale of any product.(1)
Therefore, obtaining registration for a generic or biosimilar product before the originator product patent expires is not an infringing act under the Patents Act.
However, Section 69(A)(2) of the Patents Act provides that the patented invention made, used, imported or acquired in terms of Section 69(A)(1) may not be possessed in South Africa for any purpose other than obtaining, developing or submitting information as required for regulatory approval in South Africa.
This means that a generic or biosimilar manufacturer may not stockpile a product before the relevant patent's expiry date with a view to commercial sales immediately after the patent expires, as this would amount to patent infringement.
Interestingly, South Africa has no general research or scientific use exclusion included in the Patents Act. Accordingly, scientific research on a patented invention may amount to an act of infringement.
Notably, with respect to the copying of an innovator's label or the contents of a dossier covering a specific indication or treatment regimen, the regulator would likely consider this as a possible infringement of the innovator's copyright in the label (or dossier).
The registration process for a generic drug or biosimilar is usually started by the generic manufacturer about four to six years before the patent expires. At present, there are severe delays with obtaining product registration by the SAHPRA, although the regulatory body has indicated that it is committed to resolving the backlog within the next two years.
South Africa is in the process of reviewing all existing IP laws, particularly in the context of access to medicines. It appears that the type of changes to be made in respect of the Bolar exception will relate to whether the narrow exception should be extended and, if so, to what. In particular, it is likely that an early experimental research exclusion will be included, such as for pre-clinical research.
There is uncertainty as to whether any changes will be made to allow for the stockpiling of medicines, but at this stage, it seems possible that this will continue to be viewed as use of the patented invention as a springboard to obtain an improper advantage and therefore prohibited.
In summary, making, using, exercising, offering to dispose of, disposing of or importing a patented medicine on a non-commercial scale before the patent expires solely to obtain regulatory approval is allowed, as such generic or biosimilar manufacturers should consider starting the registration process approximately five to six years before any originator product patent expires.
However, generic or biosimilar products cannot be stockpiled before a patent expires, with a view to begin commercial sales immediately after the patent has expired, as any such activity would amount to an infringement of the patent in question.
It remains to be seen whether South Africa's laws may change to allow stockpiling of generic medicines.
For further information on this topic please contact Joanne van Harmelen at Edward Nathan Sonnenbergs Inc by telephone (+27 21 410 2500) or email (firstname.lastname@example.org). The Edward Nathan Sonnenbergs Inc website can be accessed at www.ensafrica.com.
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.
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