DTI’s patent law proposals could send SA tumbling down global rankings – BizNews.com, 18 November 2014

If patent rights are abrogated by the DTI, local innovators will have yet more reason to follow South African-born Mark Shuttleworth and Elon Musk in deciding to live, work – and innovate – abroad.

By Anthea Jeffery 

In 2012 China received more than 650 000 patent applications, the highest of any country in the world. For the second consecutive year, China outstripped the United States, which received roughly 540 000 patent applications in 2012. However, the US has long been in the forefront of innovation and has for many years led the world in the number of patent applications it receives.

Next in line in the global innovation stakes in 2012 was Japan, with more than 340 000 patent applications. Thereafter came South Korea, with close on 190 000 patent applications, followed by the European Patent Office with nearly 150 000, Germany with 61 000, and the Russian Federation with 44 000.

South Africa is a minnow by comparison, for it received only some 7 500 patent applications in 2012. South Africa is nevertheless the only African state to have a significant number of patent filings. In 2012, by contrast, Kenya had 259 patent applications, Rwanda had 70, and Zambia had 38. Many sub-Saharan African countries, including Botswana, Burundi, Ghana, Lesotho, Mauritius, and Zimbabwe, received no patent applications at all.

South Africa has long stood out on the African continent for its strong system of patent rights. However, it now risks losing this important status – as well as the direct investment and technology transfer its effective patents regime has helped to attract.

This risk is a direct result of the proposed changes to patent law now in the policy pipeline and soon to be put before Parliament by the Department of Trade and Industry (DTI). The proposals, if enacted into law, will give the State wide powers to take or bypass patent rights. Patents will also become harder to obtain – and easier for competitors to use for their own benefit.

Yet patents play a vital part in spurring on innovation by giving inventors the sole right to produce and sell their inventions for some 20 years. Patents also protect inventors against people who try to copy their innovations and thereby reap an unwarranted reward from the creativity, insight, hard work, and costly research of others.

The DTI says its proposals are needed to bring down the price of medicines and save lives, but the changes are unlikely to achieve these goals. They will also extend far beyond the health sector, raising questions as to why they need so broad an ambit if the aim is simply to help the sick.

If the proposals are enacted into law, the predictable result will be to choke off local innovation. Yet the DTI is simultaneously trying to promote local research and development (R&D) through various incentive schemes, because it knows the importance of invention for investment, growth, and jobs.

Innovative South Africans have been responsible for many important inventions over the years. These include:

  • the Cryoprobe, used in cataract surgery on British prime minister Margaret Thatcher and President Nelson Mandela;
  • the Lodox scanner, which provides full body X-ray images in 13 seconds and is used in many hospital trauma units;
  • the RoboBEAST, a 3-D printer that cheaply prints artificial Robohands of any size; and
  • the world’s first digital laser, developed by the Council for Scientific and Industrial Research in 2013

South Africa needs more local innovation of this kind – not changes to patent law that seem calculated to discourage this.

The proposals could also help to fuel a brain drain that South Africa can ill afford. Countries with strong patent protection are good at attracting inventors, while countries that do the opposite find it harder to retain the scarce skills on which innovation depends.

Again, the global figures tell the story. Between 2006 and 2010, the US attracted close on 120 000 immigrant inventors, 57% of the world total, and far more than any other country. Most of these skilled individuals came to it from China, India, Germany, and the United Kingdom.

China and India suffered the greatest loss of inventors over this period, most of whom went to the US. It is only in recent years, as Chinese patent protection has strengthened, that China has begun to attract a large number of immigrant inventors from both Asia and the rest of the world.

Again, the risk is clear. If patent rights are abrogated by the DTI, local innovators will have yet more reason to follow South African-born Mark Shuttleworth (internet security) and Elon Musk (the Tesla electric car and the SpaceX Dragon space craft) in deciding to live, work – and innovate – abroad.

*Anthea Jeffery holds law degrees from the University of the Witwatersrand and from Cambridge, and a doctorate in law from the University of London. Dr. Jeffery is head of policy research at the IRR, and her books include BEE: Helping or Hurting?, Business and Affirmative Action, People’s War: New Light on the Struggle for South Africa, and Chasing the Rainbow: South Africa’s Move from Mandela to Zuma.

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