Intellectual Property Laws Amendment Bill: Department of Trade and Industry's responses on public hearings

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Trade and Industry

09 November 2010
Chairperson: Ms J Fubbs (ANC)
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Meeting Summary

The Department of Trade and Industry gave a brief historical overview of the process before providing the Committee with its initial responses to issues raised by stakeholders at public hearings on the Intellectual Property Laws Amendment Bill [B8 – 2010]. It had not responded to all submissions, only to key issues which were the following:
•The Bill was unconstitutional
•The Bill was contrary to international obligations South Africa had to honour
•Copyright protection of Indigenous Knowledge was not workable
•Collective ownership of Intellectual Property was not possible
•Some definitions in the Bill were problematic
•It was not appropriate for Indigenous Knowledge to vest in the National Fund which had no juristic persona
•The use of the current Intellectual Property system versus a sui generis system for Indigenous Knowledge
•The Bill did not cater for those seeking protection but who did not wish to disclose their knowledge
•The lack of a dispute resolution mechanism in the Bill
•The National Economic Development and Labour Council process had not been  considered
•The Bill was contrary to the World Intellectual Property Organisation
•The Bill did not address cross border community issues as Indigenous Knowledge might go beyond South Africa’s boundaries
•Representation on the National Council should expressly include Traditional Leaders
•Traditional Leadership should play a role in the identification of communities and the creation of trusts
•The Bill did not provide for retrospectivity
•There should be regulation of collecting societies and the distribution of royalties

Members felt that there were weaknesses in the approach and the crafting of the Bill, and asked what proposals  the Department had to put forward, if the Committee could be allowed to engage with information provided by Prof Esmé du Plessis in the previous briefing, what authority traditional leaders would have and what authority the amended Act would give traditional leaders, if the State would benefit or if it would seek the community which should benefit, and how the alternate dispute resolution would be constituted. They wanted a list containing all the submissions to the hearings indicating the ones the Department had considered so that the Committee could see which still needed to be considered. Members asked if no concerns were raised on the position of the registrar, and said that there was no mention of a timeframe to disclose information to the database. Would the State intervene and assist communities if they followed the legal route to protect their rights? Who would bear the costs of the National Council? Would funds be ring fenced for a specific community? Members also asked what level of cooperation existed with the Department of Science and Technology, how members of the Dispute resolution board would be elected, and, if appeals would be to the high court. They asked if the World Intellectual Property Organisation was producing a draft model law, if the Department was aware of the regulatory impact assessment that had been done, and, if so, if it would form part of what this Committee must consider. Members also asked about the status of Prof Du Plessis, how seriously the presentations of the Congress of Traditional Leaders of South Africa and of Orania were to be taken, what timeframes the Department had for the changes to be effected, and for clarity if the Constitution prevented legislation from being applied retrospectively.


Meeting report

Department of Trade and Industry Briefing
Ms Zodwa Ntuli, Deputy Director-General: Consumer and Corporate Regulation Division, Department of Trade and Industry, said the Department’s aim, in drafting the Bill, was to strike the right balance between the interests of all stakeholders concerned. The Department had not responded to all the submissions made at the hearings, only to the key ones. She proceeded to give a short historical background to the Bill

In 2004 the policy on Indigenous Knowledge Systems (IKS) had been adopted and the Patent Act was consequently amended in 2006 to encompass Indigenous Knowledge (IK).  The intention of the Amendments to Intellectual Property (IP) laws was to protect IKS (also called Traditional Knowledge) with an IKS policy consistent with the amendments introduced in the Patent Act of 2006.

In 2009 the World Intellectual Property Organisation (WIPO) General Assembly had decided that IP or sui generis systems could be part of treaty formulations. The Department had found that countries that had adopted a sui generis approach had started to investigate other avenues as well.

The Department had held broad and specific consultations and the Committee itself had had meetings with a range of bodies and people. The Department had held briefings on policy and on the Bill with the Committee.

The Department was looking at a package of solutions, as opposed to a single solution and these solutions would not be mutually exclusive and would complement each other.

Ms Ntuli said previously there had been cases of bio-piracy or misappropriation of genetic material and IK. The Department wanted communities to be able to exploit the benefits and the potential economic activities that could derive from IK.

The Department had already dealt with the Patent Act and this Bill was the next piece of legislation. The scope of the Bill covered four broad areas: the Amendment to the Performers Protection Act of 1967, the Amendment to the Copyright Protection Act of 1978, the Amendment to the Trade Marks Act of 1993 and the Amendments to the Design Act of 1933.

Submissions
had argued that the Bill had limitations, that is to say, that IK was not new and original, that the protection offered was of limited duration, that the identity of the individual creator or inventor would be difficult to pinpoint and that in some instances protection would be sought but not at the expense of disclosing trade secrets.

Ms Ntuli said that IK was not defined by time (when or who produced it) but rather the manner in which produced (in a traditional way). She emphasized that traditional knowledge had not stopped 100 years ago but continued to be practised and developed as it responded to changing circumstances like environmental changes.

Ms Ntuli said that the issue was not whether something had been published or not as IK was not in the public domain. The fact that IK was not protected did not make it public knowledge. The IP laws would create space for collective ownership. The terms of protection could be made longer or even indefinitely as they were indefinitely renewable just like Geographical Indicators (GI)

Mr Macdonald Netshitenzhe, Director: Commercial Law and Policy, Department of Trade and Industry, said issues raised in the submissions were as follows.

The Bill was unconstitutional
Only the court could decide on constitutionality; the State Law Advisors had certified that there was no contravention of the Constitution. The Bill had been tagged correctly under Section 75 of the Constitution.
The Constitution recognised customary law.  He said there was a perception that the Bill was thought to undermine expropriation and replied that there was a separate law for expropriation.

The Bill was contrary to international obligations which South Africa had to honour
It complied with the Paris, Berne, and Rome conventions and with the Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement and GI.

Copyright protection of IK was not workable
IK could belong to the State indefinitely whereas had it belonged to an individual it would be limited as per copyright law. The consent to use community IP could be through traditional leadership structures.

Collective ownership of IP was not possible
It was possible through companies, co-operatives, trusts etc. He referred to the example of Woolmark used by wool cooperatives and to the example of joint authorship of a book.

Some definitions in the Bill were problematic
Mr Netshitenzhe said that the definitions of indigenous community, traditional performances, author, traditional work, traditional IP and beneficiaries were complex matters and the Bill needed improvement.

It was not appropriate for IK to vest in the national Fund which had no juristic persona
It was intended to have a National Trust which would have a legal personality

The use of the current IP system vs. a sui generis system for IK
Mr Netshitenzhe said that “Rooibos” was a generic name and not a trade mark. The IP system database should not allow persons to take knowledge from the public and claim IP without informed prior disclosure, consent, agreement, or acknowledgement from the individual or communities concerned. He used the example of the Maoris where nothing of Maori origin should form part and parcel of IP system without their consent.
           
The Bill did not cater for those seek protection but did not wish to disclose their knowledge
Mr Netshitenzhe referred to Coca Cola and its secret recipe which used commercial law to enforce trade secret protection

The lack of a dispute resolution mechanism in the Bill
Mr Netshitenzhe conceded that this was needed as the Bill aimed at assisting indigent people. Alternate Dispute Resolution should be encompassed by the Bill, while Trade Mark, Copyright and Patent Tribunals and the National Council would have a dispute resolution role.


The Nedlac process had not been considered
Mr Netshitenzhe said the National Economic Development and Labour Council (Nedlac) report formed part of the consultative process and was presented to the Committee with clear areas of agreement and disagreement outlined.

The Bill was contrary to WIPO
The World Intellectual Property Organisation (WIPO) itself had collated  information since 2000 to protect Traditional Knowledge, and provision for the protection of IK was dealt with in Article 1 which included laws dealing with the protection of IK, for example Criminal law, IP law, Fisheries and Environmental law, special laws or a combination of those laws.

The Bill did not address cross border community issues as IK might go beyond SA boundaries
Mr Netshitenzhe said that IK crossed border boundaries while IP was territorial. It could not be legislated extra territorially. He used the example of South African Breweries Miller (SAB Miller) which, in seeking to use Mount Kilimanjaro in its branding, had to consult with Kenya and Tanzania.

Representation on the National Council should expressly include Traditional Leaders
Mr Netshitenzhe acknowledged that representation by traditional leaders on the National Council would enhance role of the Council.

Traditional Leadership should play a role in the identification of communities and the creation of trusts
Mr Netshitenzhe acknowledged that traditional leaders, as the custodian of information of citizens, had a role to play and could facilitate meaningful dispute resolution

The Bill was not providing for retrospectivity
Mr Netshitenzhe said that was a matter for Parliament to decide and could be motivated for by the Committee.

There should be regulation of collecting societies and the distribution of royalties
There should be a clause on the regulation of collecting societies and on the regulation of royalties and its distribution.

Ms Ntuli, in answering the question of how the Bill would impact existing rights, said that people who had accrued rights would be protected. If these rights had been wrongfully acquired, Parliament should consider further steps to protect accrued rights.

Discussion
Ms J Tshivhase (ANC) asked if the Department could assist in the search and discovery of a Venda drum used in battle in the past by Venda kings which had been lost, as this was part of the Venda heritage which needed to be shown to future generations.

Ms C September (ANC) felt that there were weaknesses in the approach and the crafting of the Bill. She asked what proposals the Department had to put forward with regard to the Bill. What should the Committee consider? She asked that Committee be allowed to engage with information provided by Prof Du Plessis in the previous briefing. She was not sure what the Department was saying regarding the Nedlac agreement. She asked if the Department was saying that there was consensus and the Department had not turned back from that consensus.

Ms September was surprised to hear that Parliament could not legislate extra- territorially and used the examples of the African Parliament and the African Union.

A Member asked what authority traditional leaders would have. What authority would the amended act give traditional leaders?

Ms C Kotsi (COPE) asked if the Trust would be the legal entity if an author could not be identified, if the state would benefit or if it would seek the community which should benefit. If one wanted to avoid the legal route, how would the alternate dispute resolution be constituted, would it be a Board? She wanted a list containing all the submissions to the hearings indicating those the Department had considered so that the Committee could see which still needed to be considered.

Dr A Lotriet (DA) asked if no concerns were raised on the position of the registrar. She was not clear how and whether funds would get back to communities. She was not convinced by the expropriation argument, and asked if the Department was considering one bill or a hybrid which included sui generis.

Mr J Smalle (DA) said that there was no mention of a timeframe to disclose information to the database. Would the state intervene and assist communities if they went the legal route to protect their rights? Who would carry the council costs? Would funds be ring fenced for a specific community?

Adv A Alberts (FF+) said it appeared the manner of protection was on a piecemeal basis rather than a holistic approach. He asked what the level of cooperation with the department of Science and Technology was. He said current copyright law did not make provision for permanent copyright, and asked the Department to elaborate how this would occur, from a commercial point of view. How would members of the Dispute resolution board be elected? Would it be similar to the Council for Conciliation Mediation and Arbitration (CCMA) and if there was an appeal, would it be to the high court?

Mr T Harris (DA) said everyone agreed that IK need to be protected. It was how this would occur that was at issue. He said the majority of submissions at the hearings were in favour of a sui generis approach and he believed therefore the need for a new law.  He asked if  WIPO was producing a draft model law and if therefore the Department should not wait till it came. He asked that Ms Ntuli give the examples concerning novelty that she had mentioned. He said that Ms Ntuli had talked about the difficulty of identifying individuals but it was his understanding that one identified communities rather than individuals. He said that Ms Ntuli had talked of the difficulty of writing law for borderline cases and that his view was that legislation should be comprehensive enough to cover all cases. He was confused on how the Nedlac agreement seemed to have stalled and how would it be implemented. He said the prescribed manner for the disbursing of funds had not been clarified. Was the Department aware of the regulatory impact assessment that had been done? If it was, would the regulatory impact assessment form part of what this Committee had to consider. What was the status of Prof Esmé du Plessis, who had presented the draft Bill in her capacity as part of the standing advisory committee to the Minister in the previous meeting, and was it her draft Bill that the Department was putting forward?

Mr B Radebe (ANC) raised the issue of who the most important stakeholders were on this issue and said it was the Traditional healers and leaders. He questioned how seriously the presentations of Congress of Traditional Leaders of South Africa (Contralesa) and Orania were going to be taken. He said the Bill still needed to be changed and asked the Department what timeframes it had for the changes to be effected.

The Chairperson wanted clarity if the Constitution prevented things from being applied retrospectively

Ms Ntuli said that Prof Du Plessis was part of the standing advisory committee whose members, as experts, gave independent advice to the Minister.
 
Mr Netshitenzhe said that the Nedlac report had been tabled but the final decision lay with the Committee.

Regarding the disbursing of funds as prescribed, he said that it was not clear because these were empowering sections of the Bill; the details would be in the regulations.

Mr Netshitenzhe said that the decision not to adopt GI as standalone legislation was a matter of national choice but the current legislation was working and the Department did not want to disturb it. He said that WIPO was developing a model law but treaty formulation took a long time. The Bill addressed current conditions and it would be South Africa’s prerogative to ratify the international treaty if it was in the country’s interests.

Regarding the Tshivhase drum, Mr Netshitenzhe said that the Bill dealt with IP, so the Department of Trade and Industry was not the relevant Department to respond.

Adv Rory Voller, Director Legal and Regulatory Services (Companies and Intellectual Property Registration Office), Department of Trade and Industry, said that the Bill proposed the establishment of communal structures in areas to establish purposeful vehicles to deal with rights, royalties, etc. The role of the traditional leader would be as trustee of the vehicle or to set up a board to issue payout of royalties. On expropriation he said that the expropriation measure would come in effect if the Identity of a community was of unknown; then royalties would go to State which would hold them in trust pending any claims

Adv Voller said that the alternate dispute resolution would be similar to existing tribunals. Currently the Companies Act was also proposing a Companies Tribunal for arbitration and mediation.

Adv Voller said, regarding the costs of running the Council and remuneration, that the Minister would consult with the Minister of Finance and there would probably be a dual funding model.

Prof Du Plessis, member of the Standing Advisory Committee to the Minister of Trade and Industry, said the case of the drum was an example of where IK had manifestations  that would fit into IP while others, like burial rights, would not. The drum was not itself an item of IP but what could be protected was the three dimensional (3-D) shape of the item and its design, thus its unauthorised replication could be controlled

Prof Du Plessis said that the Bill to amend copyright, trademark, design and performances could be rendered in a form which would include Nedlac’s concerns by ensuring that the Minister consulted with the other Ministers and non-governmental organisations (NGOs), for example, traditional healers and their representatives.

There was a possibility to re-word the document to give effect to all of the definitions.

Prof Du Plessis said that there was no such thing as extra territorial IP; it was territorial law. There was no world trademark, patent or copyright although there could be regional ones through a multilateral registration.

Prof Du Plessis said the Bill should perhaps be reworded to indicate clearly that it was not expropriation as was normally interpreted, but rather that the state was intended as the last resort should the creator or community not be identified.

There would be clear indication that any funds accruing to the trust would be applied to the community concerned.

Prof Du Plessis said that specifics would have to be set out in the regulations, for example, over the allocation of funds. Concerning timeframes for disclosure on a database, she said that the database was a recording system to develop a database of the IK wealth of the country so as to prevent unauthorised foreign bodies benefiting from IK. The time frame was not important and people could come at anytime.

The Department was not seeking to amend the Patent Act - novelty was relevant for designs

Prof Du Plessis said that it was ideal from a holistic approach to have one piece of legislation sui generis, but this was not possible. Holism came from fact that IK was drawn into IP although she recognised that not all of IK would be covered by IP, for example, burial sites.

The Chairperson said the next scheduled meeting would be on Friday, 12 November 2010 and asked if the Department could avail itself for a meeting at 16h00 on Thursday, 12 November 2010 to complete the current discussion. The Department confirmed that it could.

The meeting was adjourned.

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