The “i” in Knowledge

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A VIEW ON INDIGENOUS KNOWLEDGE IN SOUTH AFRICA

“… knowledge, unique to a given culture or society, which accumulates over generations, as communities interact with their environment …”

Even though certain manifestations of indigenous knowledge have already been recognised and protected by the Patents Amendment Act of 2005, the President recently assented to The Intellectual Property Laws Amendment Act 28 of 2013 which was published in the Government Gazette on 10 December 2013 (hereafter referred to as “the Act”). The Act will only come into operation on a date fixed by the President by proclamation in the Gazette.

The function of the Act is to provide for the recognition and protection of certain manifestations of indigenous knowledge as a species of intellectual property. The following are to be amended:

  • The Performers’ Protection Act of 1967

to provide for the recognition and protection of performances of traditional works, by providing copyright protection to the performance of a traditional work, whether it is in the form of  an artistic work, dramatic work, literary work or a musical work as defined in the Copyright Act;

  • The Copyright  Act of 1978

to provide recognition and protection for indigenous knowledge by providing the indigenous community from which the knowledge/work originated and acquired its traditional character, the right to authorship and the right to receive royalties and benefits associated with the economic exploitation of the works;

  • The Trade Marks Act  of 1993

to provide for the recognition of indigenous terms and expressions and for the registration of such terms and expressions as trade marks and to provide for further protection of geographical indicators, collective trade marks and certification marks in so far as they relate to indigenous cultural expressions or knowledge; and

  • The Designs Act of 1993

to provide recognition and registration of indigenous designs which can either be an aesthetic or functional design with an indigenous or traditional origin and a traditional character.

The Act also makes statutory provisions which provide for the establishment of a National Council in respect of indigenous knowledge, a National Database for the recording of indigenous knowledge and a National Trust and Trust Fund for the purposes of indigenous knowledge.

Ultimately the Act aims to empower communities and prevent exploitation of their knowledge. Communities will be able to form business enterprises in order to commercialise the traditional knowledge and rightfully benefit from it economically. The Act has however come under criticism a more in-depth review of certain aspects of the Act will follow in future.

Should you have any queries relation to Indigenous Knowledge, please feel free to contact us and one of our specialists will assist you.

MRF
info@rademeyer.co.za

(Likelihood of) Confusion?

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A VIEW ON SIMILAR BRANDS AND TRADE MARKS

The rule of thumb in trade mark law when deciding whether infringement has taken place is to view the products side by side in order to ascertain whether the ordinary consumer is likely to be confused into thinking the products originate from the same source.

Can you tell the difference between the below fragrances at first glance? We think Prada will have a strong case against Preferred Fragrance for trade mark infringement as it has established a reputation in the trade mark as well as the get-up of the product, namely the girly pink packaging, the shape of the bottle and the ‘party girl’ logo, which elements Preferred Fragrances has copied.
            
The Ukrainians are up in arms after Germany company Henkel released a toilet freshener which resembled the Ukrainian flag, to the extent that Henkel has now removed the product from the market in Eastern Europe.
           
Starbucks lost their case against Black Bear Micro Roastery’s CHARBUCKS coffee blend as the Court did not believe CHARBUCKS could impair the distinctiveness of the internationally well known STARBUCKS brand. We agree with this ruling – when the marks are compared side by side, there is no resemblance between the brands and it is evident that The Black Bear Micro Roastery has not intended to pass itself off as Starbucks.
                       
Rovio, the makers of the popular ANGRY BIRDS game, is suing the manufacturer of golf clubs trading under the name ANGRY CLUBS for trade mark infringement. We believe the golf club manufacturer will succeed in proving that goods offered under the respective marks are not sufficiently similar to cause confusion in the market place.
             
As intellectual property practitioners, we always emphasise to our clients the importance of creating and using a trade mark that is distinctive and original to avoid confusion in the market place or, worse, legal action by third parties. The above cases demonstrate the importance of devising an original trade mark and protecting one’s trade mark as well as the get-up that is associated with the product so to prevent others from benefitting from the goodwill and reputation one has established in the brand.

Kim Rademeyer – Partner
kim@rademeyer.co.za 

iPolicy

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AN OVERVIEW OF THE DRAFT NATIONAL IP POLICY

The Draft National Policy on Intellectual Property was released for public comment in September 2013. The policy aims to co-ordinate and streamline intellectual property legislation in South Africa. Some of the objectives of the policy include “to improve access to IP- based essential goods and services, particularly education, health and food” and to “introduce a public health perspective into the IP laws”. These objectives and the strong focus on health were largely as a result of years of campaigning by organisations like Medicines Sans Frontiers (MSF) and the Treatment Action Campaign (TAC) for cheaper medicines, the price of which these organisations believe are inflated by patents and protection offered thereunder.

While the policy covers a wide range of issues, it is unfortunately not always clear and somewhat ambiguous – an aspect which has received much criticism.

Not much is said about Registered Designs and Trade Marks in the policy apart from the suggestion that ambush marketing legislation, which was used during the 2010 Soccer World Cup, should be extended to cover all large sporting events.

Copyright was afforded a little more attention. The policy recommended against extending the terms of protection beyond 50 years, choosing not to follow many other developed countries. It also suggests that royalty administration and collection should be centralised in one state-run collecting society. Reference is also made to allowing reverse engineering of software, the objective of which is to allow for software to be adapted for local needs of creating “broad exemptions for education, research and library use” as well as fair rights use for internet users.

Patents received the most attention with a strong focus on the patent prosecution system in South Africa. The current system is a deposit based system in which patent applications are only examined as to their formalities. If the application complies with the formalities, the application can proceed to grant. A drawback of such is a system is that more “weak” patents are granted, which could prevent people from doing acts, which, without the existence of the patent, they should be entitled to do. Such patents can only be removed from the register through lengthy and costly revocation proceedings where the merits of the patent are then assessed and decided by the court.

The policy recommends that an examination system be implemented, where patent applications are examined as to their merits. An examination on the merits requires an investigation into whether the invention is novel and inventive. It is believed that this will reduce the amount on “weak” patents that are granted each year. The policy also recommends the adoption of a pre- and post-grant opposition procedure. This will allow all interested parties to challenge patents without having to engage in expensive litigation. The policy does, however, acknowledge that the adoption of an examination system would require a vast array of skilled persons and that South Africa may not have the capacity to implement such a system. The policy suggests the use of the resources and staff of universities and research institutions in the examination process.

The recommendation of an examination system was heralded by activist groups such as the TAC and MSF, who lobbied for the adoption and implementation of a patent examination system for all pharmaceutical patent applications as well as for the strengthening of patent requirements to prevent “evergreening”. Evergreening refers to making small changes to an existing drug which is about to reach the end of its term for patent protection, in order to gain a new patent. The policy addresses these concerns through the recommendation of an examination system. This, it is believed, will result in “stronger” patents being granted, as they have undergone examination and will lead to less patents being granted in the pharmaceutical industry which may prevent generic medicines from being produced.

While the policy is not always clear, it does set out some objectives which give an indication of where IP may be heading in the future. The policy reads much like a wish list and it will certainly be interesting to see how the laws will be adapted to fulfill these objectives.

Hillary Brennan – Practitioner
hillary@mrf.co.za

Need a (Basic) Will?

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NATIONAL WILLS WEEK – 7 TO 11 OCTOBER 2013

National Wills Week is a social outreach and access to justice initiative. During the week of 7 to 11 October 2013, MRF will offer the following complimentary* services to any member of the public as part of our participation in this year’s National Wills Week initiative:

  • a short explanation on the importance of having a properly and professionally drafted Will;
  • drafting of Basic Wills; and
  • advice on the appointment of an executor.

Consultations in relation to these services may be conducted free of charge at our offices in Ferndale. Directions to our offices can be found on our website, www.rademeyer.co.za. Please contact us on 011 886 3001 to book an appointment with one of our practitioners. Please note that consultations are strictly by appointment only. Alternatively you may e-mail us on info@rademeyer.co.za.

*Charges will be raised for redrafting/amending existing Will or for drafting Complex Wills involving Trusts.

MRF
info@rademeyer.co.za

Pa(per)tent Pitfalls

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Pitfalls of paper anticipation in South African patent law 

When attempting to patent an invention in South Africa, two main requirements must be met, the invention must be both novel and inventive. These two requirements are universal, albeit defined differently in different jurisdictions.

When the validity of a patent is being tested, the above two requirements are formed into questions, i.e. 1. is the invention novel? And 2, provided the answer to 1 is a yes, then is that invention inventive?

The second question, inventiveness, is subjective, and is generally determined as to whether the invention is as a result of a logical step in the development or advancement within a particular industry. Stated another way: “could a person skilled in the art easily have taken that step?” If the invention is obvious to a person skilled in the art, the invention will not sustain a valid patent. Both questions must be answered in the affirmative to obtain a valid patent.

However, despite this, the Australia Federal Court of Appeal decided that a valid patent would be sustained in the absence of novelty when it dealt with this exact question in 2011 in Albany Molecular Research Inc v Alphapharm Pty Ltd (2011) FCA 120.

The case deals with chemical molecules and involves regioisomers, which are a type of isomer. Isomers are groups of chemical compounds that have exactly the same chemical formula, but different geometric structures.

Relevantly, it is often the case that a synthesis reaction intended to produce a particular compound which exists in the form of different isomers will necessarily result in a mixture of the different isomers, not all of which will be useful or desirable.

Therefore the question put to the court was as follows;

Albany Molecular Research Inc (‘AMR’) is the patentee of Australian patent no. 699799, which essentially claims fexofenadine compounds, and more particularly one specific pharmaceutically-effective regioisomer of those compounds.  Alphapharm Pty Ltd, (the respondents), manufacture and sell generic pharmaceutical products in which the active ingredient is fexofenadine hydrochloride.  It was not disputed that if the claims of AMR’s patent were valid, then the respondents’ products would infringe.

The AMR patent specification discloses, and claims, methods to prepare the desired fexofenadine regioisomer in a substantially pure form.

The claims to the methods were not in dispute, but the patent also includes claims directed to the resulting substantially pure compounds themselves (‘compound claims’).

The ultimate question in the case was whether a claim to a compound can be deemed valid when the compound is theorised in the prior art, but not known to exist, or have been produced, in an isolated form?

The court found that the claims, while not being novel, were indeed inventive, which resulted in the patent being deemed valid.

The reason for the apparent loop hole is the anticipation concept, stated differently the disclosure of a concept or the presence of an idea or the explanation of a theory.

The existence of the particular isomer had previously only been a theory. The laws of chemistry state that if a particular isomer has a central carbon atom connected to four different molecules, there will be a non-superposable mirror image, and hence each compound is therefore designated as either the L-isomer or the R-isomer. Whether any person had ever been able to isolate or recover or physically create a particular R or L isomer is irrelevant, the theory states that if one exists, so should the other.

What it all means, is that the novelty is anticipated by a theory, based on the relevant laws. The novelty is not destroyed by the actual physical presence of the isomer, it is destroyed by its theorised existence, the ‘paper anticipation’. A ‘paper anticipation’ of this nature will affect the drafting of specifications for patents of the molecular kind. More specifically, a ‘patent application’ of this nature should highlight the distinction that it is not the product to which a claim is made, but the method to obtain that product.

It is yet to be seen whether the decision of the full bench appeal in the Australian courts will be supported elsewhere. What may be said however is that a patent application dealing with chemistry, molecules, microbes, bio-molecules or the like, should identify where the novelty actually lies in the invention and what may or may not be claimed.

Monty Rademeyer – Partner
monty@rademeyer.co.za 

‘Evergreening’ Pharmaceutical Patents

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Novartis AG v. Union of India (UOI) and Others on April 2013

A landmark decision by the Indian Supreme Court to deny Novartis a patent for a modified version of its anti-cancer drug Glivec (imatinib) marks the end of a seven year long litigation battle fought by Novartis. This decision has come down hard on the common practice of “evergreening” of pharmaceutical patents by preventing the extension of patents on flimsy grounds.

In 1996 the United States granted Jurg Zimmerman a patent on behalf of Novartis for imatinib derivatives (N-phenyl-2-pyrimineamine). In 2000, Novartis filed for separate patents on the beta crystalline form of imatinib mesylate (the mesylate salt of imatinib), the patent was granted in 2005. When the law in India changed to allow the filing of product patents, Novartis attempted to patent imatinib in its beta crystalline form in India.

The Intellectual Property Appeal Board (IPAB) ultimately rejected the application stating that, the drug is a modified version of a known compound and that it failed to provide a significant increase in efficacy of the drug as required in section 3(d) of the Indian Patent Act. Section 3 of the Indian Patent Act indicates that the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance is not patentable.
Novartis appealed directly to the Supreme Court and argued that imatinib in beta crystalline form has enhanced efficacy over imatinib as previously patented. Novartis stated that the crystalline from has more beneficial flow properties, better thermodynamic stability and increased bioavailability.

The Supreme Court found that the application is neither novel nor non-obvious and that even though the product has increased physical efficacy, no evidence has been offered to indicate that the product has increased therapeutic efficacy.
According to Senior Advocate Anand Grover, “The judgement is a victory and will enable generic drug companies to continue manufacturing cheaper drugs which will be beneficial to many middle income countries.”

The debate surrounding ‘evergreening’ remains controversial. Many being of the opinion that this issue is “much ado about nothing” when considering the fact that the initial patent is not extended by filing a patent application for an improved or modified version of the drug and, therefore, nothing stands in the way of generic companies manufacturing and selling the drug as first patented.

This decision may possibly be a major stumbling block for pharmaceutical companies around the world which attempt to patent incremental improvements on existing drugs. However, this is not the case in non-examining countries, such as South Africa where patents are granted without examination. Novartis obtained a patent in South Africa on imatinib in beta crystalline form. The onus to disprove the patent’s validity, rests on generic companies or any other interested third party.

MRF
info@rademeyer.co.za

The (Social) Light

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MRF on Social Media

Social media has become a very powerful business tool especially in marketing and networking strategies. We at MRF have spent the better part of 2013 creating, updating and cultivating a presence on Facebook and Twitter and are very excited to launch our fresh new website in September 2013. We wish to invite you to like, follow, friend and view us on our various social media pages and profiles where you can keep updated on local and global developments in the legal sphere or simply show your support for the growth and development of our firm.

Patenting (Human) Genes

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The Monopoly on Genetic Human Genes

The US Supreme Court recently decided this very issue in the case of Association for Molecular Pathology, et al v Myriad Genetics, Inc.

Myriad Genetics (“Myriad”) carries out tests for BRCA genes, the genes responsible for diagnosing an elevated risk of breast and ovarian cancer. Patients can undergo genetic testing to see if they have mutations in their genes that are associated with a significantly increased risk of breast or ovarian cancer. Woman with the faulty gene have a three to seven times greater risk of developing breast cancer and also have a higher risk of ovarian cancer. This form of testing recently made news headlines when Angelina Jolie revealed that she underwent a double mastectomy after one of the BRCA genes was identified in her body.

Myriad obtained patent protection for the two human genes known as BRCA1 and BRCA2 which correlate with this increased risk, along with cDNA, which is a synthetic product that mirrors the coding sections of the BRCA genes.

These patents granted Myriad the right to control access to the BRCA genes and prohibited others from researching or doing diagnostic testing of the genes.

In their patents, Myriad claimed protection for every naturally-occurring version of those genes, including mutations, on the basis that they had invented something by isolating the genes from the body. The Association of Molecular Pathology (“AMP”) representing a variety of genetic researchers, medical organizations and patients, all of whom had been accused of infringing on Myriad’s patents on the BRCA genes, contended that human genes were not patentable on the basis that they are a product of nature. Patent protection cannot be obtained for products of nature by virtue of Section 101 of the United States Code and AMP alleged that the mere fact that the genes were isolated from the body did not mean that it was patentable.

The Supreme Court agreed with AMP and held that the BRCA1 and BRCA2 genes were naturally occurring and were therefore not patentable. However, it was held that the synthetically created genetic material, or cDNA, was patentable.

The decision has had mixed reviews. While the decision comes as a relief to geneticists who can now make use of the BRCA genes, companies involved in biotechnology research might find it to be a financial blow by limiting commercial incentives to continue researching into DNA.

In the wake of this decision, companies and universities announced that they will provide the tests for the BRCA genes. Myriad last week sued two such companies, Ambry Genetics and Gene by Gene, claiming that the tests infringed other patents owed by Myriad which had not been invalidated by the court.

The outcome of this on-going litigation will help to shape the biotechnology research industry and the way in which companies approach the protection of the fruits of their research and development.

Hillary Brennan – Candidate Practitioner
hillary@mrf.co.za

Business (Not) as Usual

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REPERCUSSIONS OF THE NEW COMPANIES ACT

The Companies Act No. 71 of 2008 (‘the new Act’) came into effect on 1 May 2011. The new Act has modernised and simplified South African company law and has been brought into line with international best practices and other South African legislation. It has changed the face of company law in South Africa with increased accountability and transparency, the phasing out of Close Corporations and a new set of auditing requirements.One of the major changes brought about by the new Act is that no new Close Corporations (CCs) may be registered. CCs already existing before 1 May 2011 may continue to operate. However, the new Act and amendments to the Close Corporation Act No. 69 of 1984 (‘the CC Act’) allow CCs to be converted into private companies.There are many reasons why it is advisable to convert a CC into a small private profit company. All CCs have to meet the requirements of the CC Act and certain sections of the new Act which places an onerous strain on the CC. The new Act distinguishes the rights and duties of shareholders from those of directors whereas the CC Act does not separate the rights and duties of owners and managers where they are both members of the CC. Furthermore, the enhanced accountability and transparency requirements of the new Act promote a new level of corporate governance responsibility of shareholders and directors of companies, a concept with which the outdated CC Act is unfamiliar.

Auditing requirements have undergone a complete transformation with the new Act. A Public Interest Score (PI Score) has been formulated to assess whether a close corporation or company requires an audit or independent review and which financial reporting standards apply. The PI Score considers factors such as the average number of employees, total turnover and total outstanding third party liabilities. It is important to conduct a PI Score assessment before converting your company constitution or registering a new company so that you are aware of what is required of your company.

Under the old Companies Act, companies were governed by a Memorandum of Articles and Articles of Association. The new Act has introduced a single, comprehensive document known as the Memorandum of Incorporation (MOI).

A transitional period of two years ran from 1 May 2011 until 1 May 2013 wherein the Companies and Intellectual Property Commission (CIPC) waived the official lodgement fees to encourage companies existing prior to the effective date to amend their company constitution in line with the new Act.

Where a company existing prior to 1 May 2011 did not adopt a MOI by 30 April 2013, its existing constitution is deemed to be its MOI and any provisions that conflict with the new Act would be null and void. Therefore, we strongly recommend that companies existing prior to 1 May 2011 convert their Memorandum of Articles and Articles of Association into an MOI to ensure that its company constitution is up to date.

MRF is able to assist in all company secretarial work including incorporation of all types of companies under the new Act, conversion of a Memorandum of Articles and Articles of Association into an MOI and conversion of CCs into private profit companies. Please contact our offices for a quotation.

Kim Rademeyer – Partner
kim@rademeyer.co.za

A (Bright) Light at the End of the Tunnel

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A BRIEF ON BUSINESS RESCUE

In today’s competitive economy, many businesses are finding it difficult to stay afloat thus causing financial distress. Such financial distress may be caused by, for example, fewer goods being bought by customers, less need for services being rendered which affect the bottom line of the business or banks refusing to lend capital to assist in the running of a business. As a result of this distress often a business is not able to pay its debts as they become due and payable and the reasonable possibility exists that the business could be insolvent within a period of six months. For some, they may feel that there is no other option but to start liquidation proceedings.The new Companies Act (Act 71 of 2008) has brought hope to these financially distressed businesses with the introduction of business rescue proceedings in terms of Chapter 6 thereof, by providing for the assistance of the rehabilitation of a company that is financially distressed.This assistance could be in the form of:

  1. providing temporary supervision of the company;
  2. management of the affairs, business and property of the company;
  3. placing a temporary hold on the rights of claimants against the company or in respect of property in its possession; and
  4. the development and implementation of a plan to rescue the company by:
  • restructuring its affairs, business debt and liability;
  • maximizing the likelihood of the business continuing its existence; and
  • ensuring a better return for creditors other than that which would result if the business were to be  liquidated.
Business rescue proceedings can be brought voluntarily or via an application to court. Each option has different requirements and time periods which need to be strictly adhered to.RADEMEYER ATTORNEYS is able to provide further information as to the different options available under business rescue as well as the requirements involved. Please do not hesitate to contact our offices if you require any further information regarding the above.
Kim Rademeyer – Partner
kim@rademeyer.co.za
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