SOUTH AFRICA: Intellectual property rights failing

South Africa's current intellectual property rights regime is failing to support the national system of innovation and is actively disadvantaging local inventors while facilitating exploitation by foreign interests, according to new research to be published in the September edition of the South African Journal of Science.

The hard-hitting paper, authored by researchers Anastassios Pouris of the Institute for Technological Innovation at the University of Pretoria and Anthipi Pouris of the National Research Foundation, argues that while foreign inventors are able to protect their inventions in South Africa very cheaply, the same does not apply to local researchers who battle to protect their inventions abroad owing to far higher costs.

In addition, local registration does not automatically confer international patent protection.

Analysing data based on university patent registrations, the authors show that only 58 out of the 280 patents registered in South Africa by academics between 1996 and 2006 - in other words, 20% of cases - secured international protection.

"We suggest that South African inventors are not able to protect their inventions abroad and they also run the danger that they disclose their inventions to foreigners by patenting only locally," argue Pouris and Pouris.

Entitled "Patents and Economic Development in South Africa: Managing intellectual property rights", the paper argues that the current South African intellectual property rights regime not only facilitates exploitation by foreign interests, but is also detrimental to the country's development efforts because it fails to support national innovation.

Its authors claim the current system also creates substantial social costs and fails to meet the international standards around disclosure of information pertaining to patent applications and grants. They call on South African authorities to bring the patent system up to international standards.

In South Africa, patenting is regulated by the South African Patent Act 57 of 1978 in term of which the Companies and Intellectual Property Registration Office (Cipro) is the custodian of all patent applications.

Because South Africa is a 'non-examining country', Cipro has no responsibility for examining and establishing the novelty or inventive merit of each application - with a number of "adverse consequences" for the efficacy and quality of the system, write Pouris and Pouris.

In fact, the authors argue that the strength of South Africa's showing in the index of patent rights - 12th out of 63 countries - is an "unintentional effect" of the non-examining approach which allows any idea, with appropriate drafting, to be protected by Cipro.

Other consequences of the non-examining approach, the paper argues, include the granting of patents which fall into excluded categories (such as computer software), and a considerable social cost to individual companies which then have to monitor the patent applications of their competitors in order to prevent an unlawful patent or an infringement on their own domains.

South Africa's non-examining approach makes its patenting regime one of the cheapest in the world - up to 30 times cheaper than other countries. According to Pouris and Pouris, this opens the system up to "frivolous and useless patents" which increase "uncertainty, search and monitoring costs by interested patentees and which make more difficult the dissemination of prior art by the useful or real inventions".

The non-examining system, they argue, also means that applicants receive patents on previously known or only trivially-modified inventions which confer potential market power, may restrict access, raise prices and enable the patent holder to use litigation as a competitive weapon without providing incentives, making genuine advances or disclosing such advances to the public.

"In other words, granting patents for inventions that are not new or useful or that are obvious, unjustly rewards the patent holder at the expense of real inventors, consumer and social welfare," the authors write.

Pouris and Pouris argue that a comparative assessment indicates a substantial number of grants would not have been awarded under a different regime.

The fact that no online search facilities exist for South African patents is a major problem. Internationally, the publication of patent applications and grants is a central mission of patent offices because such disclosure of information constitutes the 'payment' society receives in return for the exclusive rights of exploitation conferred by the patent.

But in South Africa, all searches at Cipro are "carried out by hand (if at all)...through a card-based system".

Pouris and Pouris note that although the Department of Science and Technology has developed legislation - the Intellectual Property Rights from Publicly Financed Research and Development Act 2008 - to provide more effective use of intellectual property emanating from publicly financed research and development, the Act remains silent on issues related to the activities of Cipro, which falls under a separate department, Trade and Industry.

While Pouris and Pouris suggest that the introduction of thorough search and examination facilities is of "paramount importance" to the South African system, they suggest that until such capacity is developed, applications should be sent overseas for novelty searches and examination.

The researchers also recommend the creation of a website through which all information pertaining to patent applications and their potential benefits are publicly disclosed.

* This article will be published in the South African Journal of Science in September. It is reported on here with permission.