Patents Amendment Bill: Department briefing

Meeting report

ECONOMICS AND FOREIGN AFFAIRS SELECT COMMITTEE
25 October 2005
PATENTS AMENDMENT BILL: DEPARTMENT BRIEFING

Acting Chairperson: Ms M Temba (ANC, Mpumalanga)

Documents handed out:
Patents Amendment Bill [B17-2005]
Patents Amendment Bill PowerPoint Presentation
Patents Act No. 57 of 1978

SUMMARY
The Department of Trade and Industry (DTI) explained the aims and objectives of the Patents Amendment Bill. This included noting that corporations were possibly exploiting people’s traditional knowledge to patent certain biological material for medicinal and other purposes. The Amendment Bill aimed to address this. If it was passed, the Amendment Bill would require bio-prospecting corporations to furnish certain information before they could register a patent, which included:
- producing evidence that they had the Department of Environmental Affairs and Tourism’s (DEAT) permission to bio-prospect;
- disclosing the source of the biological material that they wished to patent;
- disclosing which indigenous communities, or individuals, had furnished them with the information about the usefulness of the material that they wanted to patent;
- embarking on a co-ownership agreement with these ingenious communities or individuals;
- and embarking on a benefit-sharing agreement with these indigenous communities or individuals.

In this way, the Amendment Bill would offer some protection to the holders of traditional knowledge. It would also reduce bio-piracy and the misappropriation of South Africa’s biological resources.

In the ensuing discussion, Members noted that there needed to be an extensive educational campaign around the Amendment Bill. If there were not, the Amendment Bill would be ineffective as people would be unaware of their rights. In addition, Members enquired whether the Bill would be retrospective; whether a patent holder would be able to prevent people from using the patented material for other purposes; and whether indigenous communities would be able to effectively protect their interests through co-ownership agreements.

MINUTES
The Chairperson, Ms N Ntwanambi (ANC, Western Cape) was unable to attend the meeting as she was ill. In her absence, Ms N Temba (ANC, Mpumalanga) was nominated as the Acting Chairperson.

Patents Amendment Bill: Department of Trade and Industry briefing
Mr J Strydom (Legal Advisor) began by noting that the Amendment Bill was aimed at altering certain sections of the Patents Act. Mr M Netshitenzhe (DTI Director: Commercial Law and Policy) then provided the definition of a patent. He also explained the process that one needed to follow in order to register a patent for a new industrial, technological or agricultural invention. He noted that patents could also be registered for genetic and biological material. He added that DEAT was responsible for the protection of South Africa’s genetic and biological resources.

Mr Netshitenzhe noted that many indigenous South Africans possessed knowledge about the medicinal uses of certain plants and herbs. Currently, large corporations were getting these people to disclose this knowledge. Once they had done this, these corporations would patent the herb or plant for medicinal purposes. These companies were, therefore, pirating traditional knowledge. As a result, there was a need to protect the holders of indigenous knowledge. Cabinet had approved the Patent Amendment Bill and the Policy on Indigenous Knowledge Systems to protect the holders of indigenous knowledge. Indeed, the Amendment Bill aimed to curb the misappropriation of genetic/biological resources, and to prevent bio-piracy.

Mr Netshitenzhe noted that new legislation, such as the Biodiversity Act and other related laws, would be used in conjunction with the Amendment Bill to prevent bio-piracy. He explained there was legislation that required corporations, which were bio-prospecting, to seek permission to do so from DEAT and the South African National Biological Institute (SANBI). DEAT and SANBI also required these corporations to disclose whether they were using traditional knowledge, derived from communities or individuals, to bio-prospect. Added to this, if the Amendment Bill was passed, it would require corporations that wished to register a patent to follow certain procedures, which included:
- producing documents that demonstrated that they had permission from DEAT to bio-prospect;
- disclosing the source of the genetic resources that they wished to patent;
- disclosing which indigenous communities, or individuals, had provided them with the information about the usefulness of the material that they wished to patent;
- undertaking a co-ownership agreement with these ingenious communities or individuals;
- and undertaking a benefit-sharing agreement with these indigenous communities or individuals.

Mr Netshitenzhe commented that thirteen countries had introduced similar patent laws to the proposed Amendment Bill. Indeed, a number of Latin American countries were starting to legislate for the protection of indigenous knowledge and biological material at a regional level. This also meant that such laws, including the proposed Amendment Bill, were not contrary to the multilateral agreement on Trade-Related Intellectual Property Rights (TRIPS). He added that developing countries were lobbying for the protection of traditional knowledge at the World Trade Organisation (WTO) and at the World Intellectual Property Organisation (WIPO). However, developed countries were resisting this.

Mr Netshitenzhe noted that the Amendment Bill would be enforceable on a national level. Regionally, however, South Africa needed to influence other countries to legislate accordingly. Once this was achieved, there could possibly be a regional agreement similar to the one that was concluded by the Latin American countries.

Mr Netshitenzhe stated that there would need to be co-ordination between DEAT and the registrar of patents for the stipulations in the Amendment Bill to be effectively enforced. Added to this, the Biodiversity Act would need to be linked to the Patents Act. It was only through proper co-ordination that bio-piracy and the exploitation of indigenous knowledge could be curbed. Mr Netshitenzhe added that the government would also need to educate the public about the Amendment Bill. If people were aware of their rights, they would not be easily exploited.

Mr Netshitenzhe concluded that the Bill would address the unfairness in the trading system, and would empower traditional knowledge holders to determine their own economic future. In addition, the Bill would enshrine the goals of the Biodiversity Act. South Africa was one of the richest countries in generic resources, and it urgently needed to legislate to protect itself against bio-piracy and the misappropriation of biological material.

Discussion
Mr J Sibiya (ANC, Mpumalanga) commented that it was likely that corporations had already used people’s traditional knowledge to patent biological material for medicinal purposes. These corporations would not have offered these people any form of payment or compensation. In the light of this, the Acting Chairperson, Mr D Gamede (ANC, KwaZulu-Natal) and Mr Sibiya asked whether the Amendment Bill would be retrospective. Would people be compensated if their knowledge had been used by corporations to register patents in the past?

Mr Netshitenzhe responded that the Amendment Bill would not be retrospective. He explained that it was highly unusual for any piece of legislation to apply retrospectively. Added to this, some of the patents relating to certain South African plants had already expired because they were older than twenty years. This meant that they were in the public domain. However, he noted that people’s whose knowledge had been abused in the past could take legal action against the offending party.

Mr Netshitenzhe noted that in Peru, where legislation similar to the Amendment Bill existed, corporations were compelled to undertake social projects for the communities whose traditional knowledge they were using. This included building schools and clinics. A similar initiative could possibly be considered in South Africa. This would ensure that communities benefited from the proceeds that were being derived from their knowledge.

Mr J Sibiya commented that most of the people who possessed traditional knowledge resided in remote rural areas. He and the Acting Chairperson asked whether the government would educate these people about the Amendment Bill. People needed to be aware of the legislation. This would ensure that they could not be exploited.

Mr Netshitenzhe responded that it was vital to have an awareness campaign around the Amendment Bill. The Ministry, the Select Committee and the Portfolio Committee on Trade and Industry perhaps needed to work together to form, and lead, such a campaign. Members could be involved in educating their constituencies about the Amendment Bill. Added to this, the traditional healers and chiefs could be involved in an education campaign. Mr Netshitenzhe added that perhaps the Amendment Bill should be delayed until there was an educational campaign in place. Indeed, the Portfolio Committee on Trade and Industry had also highlighted that an effective educational campaign was a prerequisite for the Bill’s success. Nonetheless, DEAT and the Department of Science and Technology had an awareness campaign around indigenous knowledge systems. DTI would be working with these Departments to include education on the Amendment Bill in their campaigns. However, one needed to realise that these Departments had broad campaigns. As a result, one would have to monitor whether including education on the Amendment Bill in these Departments campaigns was succeeding. Educating people about the Amendment Bill could possibly require a focussed campaign.

The Acting Chairperson commented that the provincial legislators and local government officials needed to be made aware of this Bill. They too could then be involved in educating the public about the Bill.

A representative of the State Law Advisor noted that government had undertaken workshops around the National Credit Bill. This had increased the public’s awareness and understanding of the National Credit Bill. She suggested that perhaps a similar initiative could be undertaken around the Patents Amendment Bill. Even though there would be a period during which people could object to the registering of a patent; they would fail to do so if they were not aware of their rights. The Acting Chairperson added that perhaps DTI could make resources available to Members so that they could hold workshops in their constituencies. Indeed, DTI could be involved in such workshops.

Mr Netshitenzhe responded that perhaps the Acting Chairperson should write to the Minister and suggest that workshops on the Amendment Bill be held. The problem, however, was that few people came to the public hearings on the Bill even though it had been advertised. Added to this, it was no use having workshops with well educated people. One needed to rather reach the people in the rural areas, as it was these people that possessed traditional knowledge.

Mr Gamede (ANC, KwaZulu-Natal) enquired whether a patent holder would have the right to prevent other people from using the biological material that they had patented. Mr Netshitenzhe responded that different people could use a single plant species for different purposes. No one could actually patent the plant itself: they could only patent inventions that were derived from the plant. The state needed to ensure that it had sovereignty over plants. This would allow the state to maintain rights over plants for the benefit of the public. However, the issue of sovereignty did not need to be outlined in the Patents Amendment Bill: it rather had to be outlined in the Biodiversity Act and Environmental Management Act.

Mr Sibaya observed that if the Amendment Bill were passed, it would promote the co-ownership of patents by corporations and communities. However, people from poor communities were vulnerable. These people would, in all likelihood, not know how to negotiate such contracts. In addition, there could possibly a problem of fronting. If fronting did take place, the indigenous communities would see little benefit from such agreements. He asked how the government proposed to avoid such problems.

Mr Netshitenzhe responded that communities would be able to form trusts, or other legal entities, which could negotiate the co-ownership agreements. Furthermore, SANBI would also assist communities, or individuals, to negotiate co-ownership agreements. The Minister of Environmental Affairs and Tourism would also not approve a bio-prospecting permit if there were no benefit sharing agreement. Nonetheless, there would possibly be certain problems around fronting.

The meeting was adjourned.