CIPC to introduce Substantive Search and Examination

February 1st, 2018
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By Bheki Zulu, Maanda Phosiwa, Mehluli Ncube

The much anticipated draft Intellectual Property (IP) Policy has been published by the Department of Trade and Industry (DTI). The draft IP Policy seeks to introduce structural reforms to the IP landscape in South Africa (SA), and illustrates SA’s intention to speak with one voice when it comes to IP matters. One of the structural reforms proposed by the draft IP Policy is the introduction of substantive search and examination. Although the idea of substantive search and examination has been a longstanding issue in the DTI, it was first proposed in SA’s first draft IP policy in September 2013.

In preparation of the introducing substantive search and examination of patents in SA, the Companies and Intellectual Property Commission (CIPC), has looked at the capacity required for such a system. To examine a patent application, the examiner must be knowledgeable in the technical field to which the invention relates. Currently, patent attorneys draft applications, which are ‘supposedly’ within the confines of the patent law with a clear defined scope of protection. It can be said that patent attorneys examine applications before such applications are filed with the CIPC. To address the lack of capacity at the CIPC to conduct substantive search and examination, the CIPC has been proactive and is currently training 18 patent examiners. The level of technical expertise of the patent examiners in training is exceptional and covers a number of technological areas. With the training being offered, by the time substantive search and examination becomes law in SA, the CIPC will be competent to conduct substantive search and examination. The number of the patent examiners in training may seem less in relation to the number of patent applications filed annually at the CIPC – some 9 000. However, it would be detrimental for the CIPC to hire a lot of patent examiners at this stage. It is envisaged that once the current examiners are fully trained, it will be relatively easy to train new patent examiners.

The proposed introduction of substantive search and examination of patent applications have already elicited different reactions from different stakeholders in the patent law fraternity. Currently, SA has a depository system whereby patent applications are only examined for formalities. As long as a patent application complies with formality, the applicant will be granted a patent with no regard to the merits of the invention (patentability of claimed invention). The support to the current depository system is fundamentally understood to be based on two aspects, namely, the time it takes to grant a patent (provided the application meets all the required formalities) is faster, and that it is believed that the depository system is cost effective as the number of duplications between the applicant and the CIPC is minimal.

However, the reality is that most patent applications granted using the depository system, lacks certainty as the validity of the invention has not been tested prior to a patent being granted. Validity of granted patents is left to be tested by South African courts when there are disputes. The process of testing patent validity through the courts is an expensive and time consuming exercise. Generally, it takes a couple of years for the court to hear and decide on a patent matter. The process also includes the services of specialised advocates, which adds to the cost for the interested party to the dispute (including the applicant). On top of that, most judges officiating on the patent matter are not knowledgeable in testing the validity of the patent or in any technical field the matter relates to, which leads to some decisions being reversed on appeal to the Supreme Court of Appeal. All this adds to the costs the applicant and any interested party must consider in order to test the validity of any patent, granted by the CIPC. The cost and complexity of using the court also impacts on innovation in the country, as individuals and small businesses are unable to
afford the associated costs. As much as the depository system is simple and fast, the cost of testing the validity of any invention for which a patent is granted, is very high and is time consuming, which discourages individuals and small businesses to be actively involved in the innovation, as they generally do not possess the financial muscle to pursue a court case.

In that light, the introduction of substantive search and examination seeks to ensure that the invention that the application relates to, meets the patentability requirements as set out in the South African Patents Act 57 of 1978. Substantive search and examination should not be viewed as adversarial. Instead it should be understood to be a cooperative investigation between the examiner and the applicant, which seeks to ensure that the applicant is granted a patent only for that to which the applicant is entitled in accordance with the patent laws. Once competency has been built at the CIPC, administering the substantive search and examination process will be seamless. Currently, 90% of about 9 000 patent applications, received by the CIPC annually are international applications, and in most cases have their corresponding foreign applications in other countries where substantive search and examination gets conducted.

It has become a trend globally for patent offices to share examination practices. Currently the IP5 have established a global dossier, which enables examiners from various offices across the world to share examination reports. These reports are available to other patent offices and enables the CIPC, as a patent office, to access patent information of international applications, including their examination reports. Therefore, examination of those applications in SA will mainly be a matter of ensuring that the invention to which the application relates complies with SA’s requirements. The remaining 10% (domestic patent applications) are ordinarily split into applications that become Patent Cooperation Treaty (PCT) applications and domestic National Phase applications. Considering all these factors, the number of fresh patent applications an examiner in SA will have to deal with is very low and achievable. The CIPC will need 18 examiners, each examiner examining one patent application per week, which will result in 864 domestic patent applications examined per year as the statistics stands.

Yes, there will be delays at the early stages, each and every country experiences teething difficulties when implementing substantive search and examination. Some countries that have been conducting substantive search and examination for a long time still experience backlogs, which results in delays and such delays come inherent with the system of substantive search and examination. First world countries like Japan take an average of 15 months to examine a patent application, but third world countries like Brazil, take an average of five years. Expecting SA to deliver examination at the rate done by first world countries is just short of expecting miracles. However, SA aims to introduce substantive search and examination on a phase-in basis, by starting with prioritising certain technology sectors and fully fledged substantive search and examination on local applications, while continuing to build capacity and complying with international treaties such as the Agreement on Trade-Related Aspects of Intellectual Property Rights, which allow for flexibility in patent prosecution. Such an approach has taken well-founded research and has properly benchmarked it by considering what other IP offices – who took similar approaches – on introducing substantive examination have done.

One of the main challenges faced by users or prospective users of the patent system is the cost associated with filing for a patent application. The official filing fee is currently R 590, however, the cost to have the patent application drafted and filed by a competent patent legal practitioner from a law firm normally ranges from R 15 000 to R 30 000. It is worth noting that the high costs involved are not the official filing costs but are costs required to elicit the service of a competent legal practitioner. The introduction of substantive search and examination will most definitely increase the duplication between the CIPC and the applicant (through patent legal practitioners), which will result in an increase in the costs for the applicant. However, the quality of the patents granted by the CIPC will increase as well. The proposed substantive search and examination of patent applications may result in a change in official filing fees due to introduction of search and examinations fees. The DTI, working together with the industry, is looking at ways to address the potential adverse effect in terms of cost after introducing substantive search and examination.

Another challenge faced by SA is patent law awareness. Patent law is ordinarily viewed by the general public as reserved for the elite due to the cost associated with it. Regardless of the type of system being used, as long as awareness is not addressed and systems put in place to abate certain perceptions, it will always be costly to the general public. Small and medium-sized enterprises and individual inventors are repelled and frustrated from participating in the patent system by the cost, whereas large companies have the resources to pay exorbitant fees to legal practitioners and participate in the system irrespective the type of system.

When all has been said and done, the sun has risen and SA has to brace itself for the changes that come with substantive search and examination.

Bheki Zulu MSc Physics (University of Zululand), Maanda Phosiwa MSc Veterinary Science (UP) LLB (Unisa) and Mehluli Ncube MSc Physics (Wits) are patent searchers and examiners at the Companies and Intellectual Property Commission in Pretoria.

 This article was first published in De Rebus in 2018 (Jan/Feb) DR 22.

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