A licence under a patent may be defined as a negative covenant not to sue for infringement. A patent licence is thus one way of avoiding a suit for infringement. If a patent holder refuses to grant a licence to a generic company on reasonable terms, the generic company can apply for a compulsory licence under Section 56 of the Patents Act (57/1978), provided that certain prescribed provisions are met. These provisions are not readily met and no compulsory licences have been granted in terms of this section to date. In order to expedite the availability of generic medicine on the market post patent, the Patents Act was amended in 2003 to include Section 69A, making provision for a statutory licence available to generic companies under a patent in specific circumstances. This amendment was made following the decision in Stauffer Chemicals v Monsanto 1988(1) SA 805(T), which held that the experimental use of an invention amounted to infringement.

In terms of the exception provided for in Section 69A, it shall not be an act of infringement of a patent to make, use, exercise, offer to dispose of, dispose of, or import a patented invention on a non-commercial scale and solely for purposes reasonably related to obtaining, developing and submitting information required under any law that regulates the manufacture, production, distribution, use or sale of any product.

However, Section 69A specifically states that it shall not be permitted to possess the patented invention made, used, imported or acquired for any purpose other than for obtaining, developing or submitting information as contemplated above.

Section 69A thus enables generic manufacturers of pharmaceutical products to obtain regulatory approval of generic equivalents of patented products with the relevant authorities in South Africa, prior to expiry of the patent. These Bolar-type(1) provisions are applicable only to obtaining the information necessary for registration and registration itself. They do not permit manufacturing and stockpiling of a generic product prior to the date of the patent expiry, with a view to commercial sale directly after the patent expiry date. Any evidence of such stockpiling could lead to seizure and attachment orders, as well as interdicts being granted.

For further information please contact At Van Rooy or Christina Louw at KISCH IP by telephone (+27 11 324 3000) or email ([email protected] or [email protected]). The KISCH IP website can be accessed at www.kisch-ip.com.


(1) Originating from Roche Products Inc, Appellant v Bolar Pharmaceutical Co Inc, Appellee 733 F2d 858 (Federal Circuit 1984).