Big pharma and agriculture in the patents crosshairs

Changes to the Companies Act and the way it is administered turned the Companies and Intellectual Property Commission (CIPC) into a powerful body in 2011. It became responsible for policing adherence to corporate memorandums of incorporation and the behaviour of directors, giving rise to a “compliance notice” system that is civil in every sense of the word — unless there is a continuing failure to comply.

The rule changes also made provision for proactive monitoring, which has been at the root of many of its high-profile actions recently.

“We read newspaper articles …and say: ‘Hey, hang on, there is noncompliance here,’ then we go and investigate,” said CIPC commissioner Rory Voller. This has led the CIPC to consider a number of matters linked to state capture, even as other government agencies said they required complaints, or solid evidence, before they could act.

Similar changes to the obligations and powers of the CIPC with regard to intellectual property are expected in the near future. Although South Africa’s new policy on intellectual property is still a draft, the CIPC is training 18 patent examiners and will soon be employing 20 more to prepare for the shift to an examining patent system. Where previously patents in South Africa simply had to be filed and stood until challenged, the new system will make the CIPC responsible for determining whether patents are valid.

The mere suggestion of a move towards such a system in recent years made pharmaceutical companies consider setting up supposedly local grass-roots organisations — in reality run from Washington — to lobby against it, in an incident civil society organisations dubbed Pharmagate. Later, the Mail & Guardian found that several supposedly independent local agricultural organisations had repeated, verbatim, the objections to the new patent system raised by global seed company DuPont Pioneer.

Those two sectors may have been right to be worried. “The important areas will be pharmaceuticals and agriculture,” said Voller on the body’s initial areas of focus for patent examinations.

The CIPC is also the natural home for a national register of the owners of companies. By law, companies must provide their shareholder registers on demand, but in reality shareholders often enjoy effective anonymity. Between antiterrorism and anti-money laundering regulations there is an inevitable need to keep track of ownership, and the CIPC is already in discussions with South Africa’s Financial Intelligence Centre about mechanisms.

“We’re 100% going there,” said Voller. “It’s going to take us a bit of time to do it, but we have people working on it right now.” —