(8)
Any order of the commissioner under this section shall be made with a view to avoiding the abuse found by the
commissioner to have been established.
..."
Abuse of the patent rights is the cornerstone of the provision. A jurisdictional fact which the appellant was required
to demonstrate under (2)(a) was thus that the "patented invention" was not being "worked" in the Republic on and
to the requisite scale or extent. With regard to subsection (2)(d) a jurisdictional fact to be proved was a "refusal" to
grant a licence on "reasonable terms".
The general rule, which can so far as this appeal is concerned be stated in its broad formulation and without
reference to its refinements, is of course that an applicant must make out its case in the founding papers. The case
which the appellant sought to make out has, as indicated, some unusual features. The licence it sought was one to
produce only the product "propiconazole" and only "for the purposes of export to countries where no
(corresponding) patent exists". This is amplified by the statement that it "does not seek a licence to sell
propiconazole or propiconazolecontaining compositions for use in South Africa". This is
View Parallel Citation
stated twice. The affidavit also makes it clear that no licence was
Page 449 of [1998] 4 All SA 445 (A)
sought in respect of the processes claimed (as appellant asserted that it had devised its own process based on
starting materials not considered in the patent).
Finally it is said that if it delayed manufacture until November 1996 (the expiry date) it would lose ground in the
external "generic fine chemical market". Its anticipated success in that field was said to be vital to its straitened
financial position (the result of an incorrect commercial decision taken by its distributor). Thus it proclaimed the grant
of the licence was "critical for [its] survival". This hardly suggests that any benefit to the South African public was a
serious consideration.
With that as a background one may turn to what is said in relation to the jurisdictional facts. The introduction is a
statement that "propiconazole in the form of a commercially useful formulation is sold in South Africa by [Ciba]"
which is recorded as an exclusive licensee and that the "active ingredient" is not (to the best of the deponent's
belief) manufactured by either Ciba or the patentee in South Africa. It is then said: "Thus the patented invention i.e.
the process for the production of propiconazole and propiconazole so produced, is not being worked in South Africa
on a commercial scale or to an adequate extent, and there is ... no satisfactory reason for such nonworking".
This amounts, in truth, to little more than a recitation of the words of the subsection and is not a statement of
facts from which the necessary legal conclusion can be drawn. The uses of and need for the product by the South
African public and the desirability and feasibility of local production are not addressed. In particular what is
overlooked is the fact that subsection (2) is a statutory code. Importation is a topic addressed in subsection 2(b)
and (e) (which are not invoked). For the purpose of subsection (2)(a) it will suffice if the patentee can show working
(in Afrikaans "geeksploiteer") in any form. Nonworking of the process claims is irrelevant because no licence is
sought for the processes. Working of the product claims by importation is conceded in the paragraphs quoted
above.
It is, in any event, also plainly established in the answering affidavits that the invention is being worked where it
is said that the market in South Africa (in the case of propiconazole) is being met by the importation by Ciba of the
active ingredient and the making up thereof into an emulsifiable concentrate in South Africa. The answering
affidavits in fact go further to state that the patentee and its licensee are "able fully to supply the South African
market on reasonable terms". For the sake of completeness I might add that in the answering affidavits it is also
asserted that sound economic reasons underlie the decision not to manufacture the active ingredient locally. These
considerations are of course only relevant to further inquiries which could arise if the initial allegation of abuse was
made out.
Since what I have set out above from the founding affidavits fails to establish an abuse there is no need to
consider the discretionary aspects of the inquiry which arise for example under subsections (7) and (8). I am thus of
the view that no abuse under subsection (2)(a) has been made out and that appellant failed to make out its case
on this ground.
View Parallel Citation
When it comes to subsection (2)(d) the founding affidavit is again lacking in essential facts. All that is stated is that
the patentee was requested to grant a licence. The founding affidavit reads "A royalty of 6% of [appellant's]
selling price was offered. If this was agreed to, [appellant] suggested a licence agreement incorporating this royalty
and including the usual provisions for such agreements could be drawn ... I submit that this was an offer for a
licence on reasonable terms. [The patentee] refused to grant a licence on these terms".
Page 450 of [1998] 4 All SA 445 (A)
Counsel for appellant conceded that the onus appellant bore included that of establishing as a jurisdictional fact the
reasonableness of the terms. What has been said in relation to subsection (a) above is apposite here. A bald