International Intellectual Property laws with respect to pharmaceuticals patents in Africa, part 1

Written by an Austin Patent Attorney in 2009 and recently updated in 2012, this blog series will examine how South Africa complies with TRIPS and advocates that South Africa will benefit in the long term from strong international patent protection and intellectual property laws. Further, this blog post advocates that intellectual property and patent laws and policies include more factors then just black letter law.

This year marked the 31th anniversary of the Acquired Immune Deficiency Syndrome (AIDS) epidemic.[1] Currently over one in five adults in South Africa are infected with the AIDS virus.[2] A survey completed at the end of 2007 showed that approximately 5.7 million people in South Africa were living with AIDS.[3] Furthermore, AIDS causes almost one thousand deaths every day in South Africa.[4] Unfortunately, the costs to combat AIDS can be extremely high with annual drug expenses exceeding $15,000($US) per individual.[5] Another problem is that developing countries lack the necessary technology to produce antiviral drugs internally.[6]

In 1994, the World Trade Organization formed the Trade-Related Aspects of Intellectual Property Rights (herein after “TRIPS”).[7] The purpose of TRIPS was to strengthen patent protection worldwide.[8] Prior to TRIPS, there was a need to implement worldwide patent protection due to the fact that developed nations desire strong enforcement of patent rights.[9] Developing nations, however, prefer weaker patent rights to allow access to patents while their economies develop.[10] Typically, these countries have poor health care systems, unstable governments and poverty and join international intellectual property agreements, such as TRIPS, in order to gain political advantages, such as aid and trade, from developed countries. [11]

TRIPS allow compulsory licensing so long as the entity or individual applying for a compulsory license first attempts to obtain a voluntary license from the patent holder.[12] If the attempt to gain a compulsory license is unsuccessful, the government may issue a compulsory license. [13] Additionally, TRIPS allows for the parallel importation of AIDS antivirals. Parallel imports are goods that are purchased in a developing nation then sold to a third party, who later resells the goods in a developed nation for higher costs.[14]

In 1997, Nelson Mandela, the Prime Minister of South Africa, enacted the Medicines and Related Substances Act (herein after “SAMRSA”) to make AIDS drugs in South Africa more accessible and affordable.[15] Specifically, section 15(C)(b) of SAMRSA grants the Prime Minister power to  “prescribe the conditions for importation of a medicine which is: identical in composition; meets the same quality standards, has the same name as that of another medicine already registered in South Africa, but which is imported by someone other than the holder of the original registration certificate, and which originates from any site of manufacture.”[16]

Moreover, Article 31 of TRIPS grants all individual member nations the power to issue compulsory licenses when certain conditions are met;[17] however, the Prime Minister of South Africa may bypass the compulsory license provisions if South Africa is in a “national emergency or other circumstance of extreme urgency.”[18] Correspondingly, pharmaceutical companies in developed nations threatened sanctions in response to monetary damages caused by the act. [19]The pharmaceutical manufacturers argued if the companies discounted the cost of antiviral drugs to countries in need they would lose required research and development funds for future drugs of the same nature. [20]Additionally, these companies argued that it is unfair, illegal, and violates antitrust laws to force them to lose profits for patented drugs.[21]

The main principle of patent policy is to give an inventor a limited monopoly in exchange for public disclosure of the invention so the pharmaceutical companies can reclaim the cost of researching and developing the drug. [22]Thus, if pharmaceutical companies are unable to recover research and development costs there will be no incentive to make antiviral drugs targeting poorer nations. [23]The complexity of intellectual property increases, however, with more international trade agreements. [24]

I. INTELLECTUAL PROPERTY RIGHTS IN SOUTH AFRICA

            Intellectual property is property that results from original creative thought, including patents, copyrights, trademarks and trade secrets.[25] In a free-market approach to intellectual property law, the creator of the invention retains the rights to make, sell, or use her invention; however, if there is no legal protection there is nothing that prevents another from copying the invention and using it.[26] This section examines the patent rights granted under TRIPS, the effect of TRIPS in South Africa, stronger protection granted through TRIPS-Plus agreements and possible amendments to TRIPS.