Granting of a compulsory license for pharmaceuticals

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In the event that an interested person discovers, through what ever means, a patented product that is still in force, and that person wishes to make use of that patent in South Africa, the person may approach the Patentee for the grant of a voluntary license and/or a compulsory license. When it comes to compulsory licensing, the South African Patents Act is largely compliant with the TRIPS Agreement and the Doha Declaration. In particular, section 56 of the South African Patents Act is applicable when applying for such a license, based on a so-called “abuse of rights”. In terms of Section 56, at the request of any interested person, a compulsory license may be granted if one of the following conditions, deemed an abuse of the patent, are met:

  • The patented invention is not being worked in the Republic on a commercial scale or to an adequate extent, after the expiry of a period of four years from the filing date of the patent application or three years from the date of grant of the patent, whichever period expires last, and there is no satisfactory reason therefor (in opinion of Commissioner of Patents).
  • The working of the patented invention does not meet the demand in the Republic to an adequate extent and on reasonable terms.
  • On account of refusal of the Patentee to grant a license on reasonable terms and the establishment or development of trade and industry is being prejudiced and it is in the public interest to grant a licence.
  • The demand in the Republic is being met through importation and the price charged by the Patentee, his licensee or agent for the patented invention is excessive in relation to the price charged therefor in countries where the patented invention is manufactured by, or under licence from, the Patentee. 

Although a Patentee has a Patent Certificate and the exclusive rights to the patented invention for the duration of the patent, a compulsory license may be granted upon request and if one or more of the above requirements have been proven in court.  A compulsory licensee bears the same rights and obligations as any other licensee of the patent, subject to any conditions which may be imposed by the court. The compulsory licence provisions should not be seen as a threat to Patentees. These provisions merely aim to ensure that there is in fact exploitation of patented inventions in South Africa and that patent rights are not exercised in such a manner as to prejudice the development of the relevant industry.  For more information on compulsory licences in South Africa, please contact our Patents Team.