Tuesday, 5 November 2013

RSA: IP Policy Submissions: A reply to Counterfeit drugs illustrates need for tough enforcement - Disagree but don't be dismayed

Now that the deadline for submitting comments on the draft IP policy has come and gone, its time to make sense of them all. AfroLeo's recent post entitled Counterfeit drugs illustrates need for tough enforcement   referred to a joint submissions made by academics from, or affiliated to UCT and UKZN (with his comments in red). The authors of the joint submission wish to respond to some of Afro-Leo's remarks. We are aware that it is up to the DTI to consider the submissions and craft an appropriate policy, but are of the view that there may have been some misunderstanding of our submission and wish to clarify some points. For ease of reference, the entire post will be reproduced here, with our replies in blue

Counterfeit drugs illustrates need for tough enforcement

"Counterfeit drug syndicates are flooding the Zimbabwe market with consignments of fake anti-retroviral drugs (ARVs), expired medicines and sex enhancers, putting the lives of thousands of people at risk" the Zimbabwe Independent reveals throughAllAfrica on 25 October. Some of these drugs are being supplied from South Africa.

The Economist - Poison Pills
The news is horrific but nothing unusual to this blog (see here for example) which regards counterfeiting as Africa's single largest IP problem. The Economist recently highlighted the global problem citing how difficult it is for "poor countries" to take advantage of technologies that help identify and track fake drugs (see article beneath pic alongside). 

Against that backdrop, Afro Leo was dismayed to read some of the comments over the weekend in the "Academics" submissions on RSA's draft IP policy regarding IP enforcement. 


"Special care should be taken to avoid customs/border enforcement of patents and civil trademark violations, especially with respect to medicines." (ed: patent enforcement is of course not part of our anti-counterfeit legislation While enforcement of patents is not currently part of anti-counterfeit legislation the submission was aimed at the policy which is somewhat ambivalent on whether state resources should be devoted to enforce patents. On page 42 the draft policy states: "South Africa should also foster the enforcement of IP in its entirety. As for now, only trademarks and copyright are enforcement is emphasised." but fake (and even generic drugs) frequently infringe registered trade marks which, as illustrated by article require effective customs enforcementHere our key concern is that the distinction between generic and counterfeit drugs be maintained and that border control of IPRs is not used to block the transit of generics in circumstances where this is not justified - See an article on this aspect  by Caroline Ncube entitled 'Enforcing patent rights against goods in transit : a new threat to transborder trade in generic medicines' in the SA Merc LJ (here).  Additionally, the public interest is properly served by removing substandard and harmful substances from the market, an objective best achieved through capacitating the medicines regulator to ensure that only medicines that are safe, efficacious and of assured quality are sold to the public. We also wish to point out that substandard medicines are at least partly a function of access failure  - desperate patients are exploited by charlatans because they have no other way to access affordable medicines.

A subsequent, yet related question is: who should enforce (as in human and financial resources) private IPRs?  We caution that customs enforcement is problematic, particularly in instances where customs is not adequately trained in dealing with IPRs. We note that it is in order to rectify such deficiencies that firms like Adams & Adams are intensively engaged in training customs across AfricaWe are not alone in questioning whether customs officials have the capacity to distinguish whether a particular product infringes a trademark. According to the Afro-IP report of a paper given by Judge Harms (here) the judge intimated that " there is no clarity about the justification for customs action in relation to goods in transit or transshipment" and " in SA at least, the laws are contradictory and do not take into account the ordinary principles of criminal procedure" and "customs are not really equipped to deal with the problems".


"Improving IP enforcement through, for example, reducing the availability of certain enforcement mechanisms such as interdicts, which may actually benefit the general populace, (ed - certainly not when it comes to counterfeit drugsGreat care must be taken to distinguish between fake medicines i.e. those with no active ingredients or possibly harmful ingredients and generic medicines which are bio-equivalent to brand name medicines. A medicine may be sub-standard without any trademark implications, and whether it should be distributed in South Africa is the province of the Medicines Control Council, whereas whether a medicine infringes a trademark is best decided by a court. The category of counterfeit drugs only confuses these issues and is unhelpful. As reported previously on Afro-IP (here) an anti-counterfeiting law that failed to distinguish between counterfeit and generic medicines was struck down because it was over-broad by the Kenyan High Court

whereas strengthening enforcement will almost always work to the advantage of rights holders, often at considerable cost to the public purse. (ed, we are all rights holders. We agree, we are all rights holders, but we are also all re-users, re-creators and reverse engineers. We used the term 'rights holder' at that point in our submission to identify those who identify themselves as 'rights holders' for rhetorical purposes, thus emphasising their rights while disavowing their reliance on the works of others.
The cost of enforcement can be expensive (often borne by the enforcer because damages are so difficult to prove or recover, and cost awards inadequate) but without it, the potential benefits of IP protection (fostering innovation, wealth and job creation etc) become useless. It may be interesting to note that the cost of enforcement in RSA is significantly cheaper than in other parts of the worldThe role of IP in fostering innovation, creativity and development in a country is at best uncertain: it can be an incentive but at the same time - through creating far reaching monopolies - it can also be a considerable stumbling block for innovative activity. A new book (coming out in December 2013) aims to shed more light on the complex relationship between IP protection on the one hand and innovation and development on the other (De Beer et al., Innovation and Intellectual Property: Collaborative dynamics in Africa UCT Press (2013) see an overview of the research on which this book is based here).


"In our view, the issue of enforcement – while being important – is a subsequent issue to creating topical and progressive IP regimes in our country." (ed - this cannot be. A topical and progressive IP regime is ineffective without proper enforcement - the two are at least equally important. The article illustrates this as much as a death caused by a motorist with fake brake pads.) We are in agreement - our point is that you start with a properly nuanced (read topical and progressive) IP regime then you set up proper enforcement mechanisms. We take issue with the enforcement of an inappropriately balanced IP system, not with enforcement (by right-holders at their own expense) in general. 

"once copyright enforcement begins in earnest, then, without well-developed mechanisms in place to secure non-infringing channels of access to knowledge, many learners will be in a precarious situation." (ed the reality is that copying is endemic to our society and copyright enforcement inadequate. We refer readers to the book Access to Knowledge in Africa: The Role of Copyright  UCT Press (2010) (free full text download) an output of the African Copyright and Access to Knowledge Project which found that due to inadequate provision for exceptions and limitations for educational purposes, “access to learning materials in the study countries is obtained mainly through copyright infringement.” The shortcomings of current South African copyright laws are detailed in this chapter as are recommendations for reform.  
One in every three businesses uses infringing or pirated software or is under licensed because they are using "learner" licenses, specifically available by software providers to facilitate access to knowledge. We are not aware of any rigorous research that supports the narrative of widespread software infringement, but we do know that several years ago the Business Software Alliance admitted to estimating the number alleged infringements in South Africa without doing any survey work in South Africa ( see report here). As scholars we prefer empirically verified research so would be delighted if anyone could point us to any on this subject. We wish to refer Afro-IP readers to research that questions conventional wisdom about piracy and enforcement -  the Social Science Research Council's Media Piracy in Emerging Economies Report which was the outcome of an independent, large-scale study of music, film and software piracy in emerging economies, with a focus on Brazil, India, Russia, South Africa, Mexico and Bolivia.

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