Intellectual Property Rights In South Africa: An Economic Review Of Policy And Impact

The Edge Institute 
Intellectual property rights (IPRs) are at the centre of several current policy debates, both nationally and internationally, ranging from music piracy and geographical indications in wine labelling to generic alternatives for patented pharmaceuticals.

In order to engage in these debates, a thorough understanding of the pros and cons of the various IPRs as well as their alternatives is essential. This paper is the first step toward a comprehensive economic review of the intellectual property regime in South Africa, and is aimed at reintroducing economics into the intellectual property debate and evaluating the appropriateness of South Africa's laws for its stage of development and economic policy framework.

A discussion of the economic theory of IPRs is followed by a review of the available empirical research. Special attention is given to the impact of IPRs on developing countries, focussing particularly on the impact of the WTO Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS). The paper finds that the appropriate level of IPR protection depends on a number of factors and that developing countries should aim to fully exploit the flexibilities provided by the TRIPS Agreement. The flexibilities that TRIPS provides, such as parallel imports and compulsory licensing, should be fully exploited by South Africa and future extensions of TRIPS need to be carefully assessed for their appropriateness to the South African economy and developing economies in general.
The review of South Africa's IPR regime reveals a rather mixed picture of the state of IPR protection in South Africa. IPR laws are considered 'state of the art', yet their implementation is often found wanting. In addition, whereas adequate intellectual property protection is cumbersome for domestic inventors to obtain, it is at times so ferociously defended when (mainly foreign) patent owners are involved, that technology dissemination could be hampered.

The last section of this paper contains a set of proposals for further research on intellectual property law in South Africa, which is required for a more thorough evaluation of the IPRs regime.