THE LIKELIHOOD OF AN INFRINGEMENT OF PATENTS DURING THE NATIONAL LOCKDOWN
South Africa has begun a nationwide military-patrolled lockdown, joining other African countries which have imposed strict restrictions and shutdowns in an attempt to stop the spread of the coronavirus. Some 57 million people are restricted to their homes during South Africa’s 21-day total lockdown which began on Friday, 27 March 2020.
During this time plenty of medical-related technology will be needed and used to help solve this crisis and pandemic at hand, however, a lot of this technology is patented. What are the issues relating to the enforcement of patents in the face of a public healthcare emergency, such as that of the current COVID-19 pandemic?
Currently, a large amount of research, resources and energy is being poured into discovering a vaccine/cure for COVID-19. Once discovered this will most likely be patented and it is rather optimistic to believe that these products will be ready to hit the market as soon as they’ve been discovered.
Presently, there are numerous healthcare products already patented which are essential for managing the COVID-19 pandemic. There are also various reports of patents being asserted against providers of medical products to medical practitioners and hospitals who are all struggling to deal with the pandemic at hand. A good example of this happened in Italy where threats of infringement proceedings were made against the engineers who were 3D printing copies of patented respirator valves after a community hospital had run out and was unable to get replacements from the authorised supplier.
It is good to note that the objective of the patent system is to encourage improvements in technology thereby driving innovation for the greater good of society and to reward inventors of such innovation. The patentee is given the right to exclude unauthorised persons from using the invention patented, thereby restricting access to the protected invention.
There is an unavoidable tension between a patentee’s rights on one hand and broader access to novel medical technologies on the other. This issue becomes especially problematic in the current COVID-19 pandemic faced worldwide.
The patent system in South Africa is regulated by the South African Patents Act (hereafter ‘the Act’). Section 45 of the Act sets out the rights of the patentee. These rights include the right to exclude others from “making, using, exercising, disposing or offering to dispose of, or importing” the invention claimed in the patent.
Furthermore, the Act contains provisions which may be invoked in a crisis, such as the present COVID-19 pandemic. These provisions include the following: Section 4 which stipulates that a patent shall have the equivalent effect against the state as it has against any other person “provided that a Minister of State may use an invention for public purposes on such conditions as may be agreed upon with the patentee, or in default of agreement on such conditions as are determined by the commissioner on application by or on behalf of such Minister and after hearing the patentee” and section 56 which affords the grant of compulsory licences in the case of the abuse of patent rights. Section 56 further sets out the conditions in which patent rights will be regarded as abused. It is noteworthy to mention that a compulsory licence can only be issued by the Court of the Commissioner of Patents. This is done on application by an interested person and the entire process of implementing this provision is difficult to do in practice.
Both section 4, as well as section 56 of the Act mentioned above, necessitate for applications to be made in court. This is rather tricky to do during a time of state emergency especially with section 4 demanding the court application to be brought by the relevant Minister.
Section 15C of the Medicines and Related Substances Control Act stipulates that the Minister of Health may impose conditions for the supply of more affordable medicines including allowing parallel importation of a patented medicine, notwithstanding contravention of the Patents Act. This provision may not be particularly helpful where unavailability arises from excessive global demand.
Taking the above into consideration it seems as though there is a great limitation on accessing relaxations on patent protection. Due to this, representatives and healthcare professionals will most possibly take the approach of – asking for forgiveness, rather than authorization when it comes to the use of patented inventions during this time of need and state emergency.
The remedies available to a patentee who alleges that his patent is being infringed upon includes an interdict, damages, or in lieu of damages, a reasonable royalty – as defined in section 65 of the Act. Taking this into consideration, urgent enforcement of a patent would be done by an interim interdict, which would again necessitate a court to consider the patentee’s prospects of success in an action for final relief on the patent, whether the patentee would be sufficiently compensated by a damages award, the balance of convenience to the corresponding parties and whether the patentee has acted expeditiously in pursuing interim relief. As it stands currently, the government lockdown in South Africa will continue until 16 April 2020, and we expect that courts will not consider any patent infringement proceedings to be heard as they are not considered urgent.
So what is the infringer’s risk of liability in monetary terms? A damages claim requires the patentee to prove damages. This is difficult for a patentee to prove where the patented product is practically unavailable due to shortages or prohibitive pricing. This means that an infringer’s liability in conditions such as these would be limited to an amount calculated based on a reasonable royalty which would have been payable by a licensee or sub-licensee in respect of the patent concerned.
Should you or anyone you know be contemplating the issues mentioned above we urge you to seek expert advice from a professional prior to taking any action in respect thereof. Please do not hesitate to contact us on (021) 100-45-45 or at email@example.com