The activity at a country’s patent office can be indicative of both the research and development activity of its local industry and the perception held by foreign companies of the country’s receptiveness to novel or emerging technologies. In this regard one must look, respectively, at the patent application trends of South African entities and of foreign entities. A good example of the former is the extensive local patent portfolio resulting from the Pebble Bed Modular Reactor project, pointing to extensive local research and development activity in the nuclear energy field, whilst an example of the latter is the large number of patents recently granted by the South African Patent Office on applications made by Shell International for inventions which appear to relate to the recovery of shale gas.
The PBMR example is however, regrettably an outlier in an otherwise dreary and rather worrying statistical picture of local activity at our Patent Office. In reality, there has been a sharp decline in patent applications originating from local industry over a 20 year period stretching from 1990, with the number of patent applications originating from local industry in 2010 being about 55% of that in 1990. Even more concerning is, with reference to statistical figures made available by the World Intellectual Property Organisation, how poorly we are performing in comparison to our BRICS partners, particularly India. Figure 1 shows the number of patent applications filed at the respective patent offices of India and South Africa from 2000 to 2010 as a factor of the patent applications filed at the respective patent offices in 2000. Clearly, patent application filings in India have grown impressively by a factor of almost 5, whilst the number for South Africa has effectively remained static. This is only one of many possible examples.
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Comparing the gross domestic product (GDP) for the two countries over the same period (as shown in Figure 2) with the patenting activity shown in Figure 1, it is noteworthy that India has shown an increased rate of GDP growth over South Africa’s rate of GDP growth, in line with its higher rate of growth in patent activity. South Africa’s GDP has also grown, albeit significantly slower than that of India, but its GDP growth is not echoed by patenting activity at the South African Patent Office. The question can therefore be asked why, whilst apparently growing economically (even if too slowly), South Africa’s patenting activity is not keeping up with its economic growth.
One reason for the disconformity between South Africa’s economic growth and its patenting activity could possibly be a lack of local technology-based competition, with competition in the local industry being based on brand and business model development rather than on technology development. One could even go further and suggest that there is, in fact, a shortage of capacity in the local industry to allow effective technology-based competition to take place and that the dominant holders of market share in the various sectors of industry in which research and development do take place are in a somewhat unthreatened position locally, perhaps causing such dominant companies to take a somewhat indifferent view on patent protection. Whilst there may possibly be a financial argument (at least in the short term) in support of the apparent patent-shy approach of local industry, this approach increases the vulnerable position in which the local industry finds itself in relation to the lack of enforceable protection for its technology and ignores the tremendous potential to generate annuity income from licensing protected technology. Another reason for the lack of local patenting activity might be that local industry is merely uneducated as to the advantages and, in fact, the necessity for using the patent system, not only to their own long term economic benefit, but also to the benefit of the industry and the South African economy at large. A third reason sometimes advanced for the lack of local patenting activity is the so-called brain drain from South Africa over the last two decades, although this is difficult to quantify.
If a company regards itself as a leader in its particular sector of industry, or has an intention of growing in stature to such a position through its existing technology and its further development thereof, it must seriously consider, and obtain expert advice on, securing its research and development investment in pursuing such growth by means of patent and/or registered design protection. Not doing so may very well, in the globalised environment in which we find ourselves, result in our research and development merely ending in foreign entry into the local market on the basis of our own technology. Without patent and/or registered design protection you effectively have no recourse against ‘copycats’. In contrast, a patent (directed to the functionality of an invention) and/or a registered design (directed to the appearance of an article of manufacture) grants you the right to exclude all others from making, using, exercising, disposing or offering to dispose of, or, importantly, importing your patented invention or an article embodying your registered design.
Whatever the reasons for this, the sad truth at the moment is that the South African patent system is disappointingly under-exploited by South Africans, regrettably lowering the level of local competition and rendering the local market vulnerable to foreign exploitation or dominance. The use of the patent system by South Africans is essential if businesses are serious about retaining and expanding their market position, both locally and internationally.