The Regents of the University of California & Others v Eurolab (Pty) Ltd & Others

The Regents of the University of California (UC) registered South African patent No. 2007/10870 for enzalutamide (branded as Xtandi), a pharmaceutical compound for treating prostate cancer. The invention resulted from collaboration between UC and the Howard Hughes Medical Institute (HHMI). Of eight inventors, five were UC employees and three were HHMI employees. The patent application was filed on 29 March 2006 and was set to expire on 29 March 2026. UC obtained assignments from its five inventors in 2005 and 2006. The three HHMI inventors had assigned their rights to HHMI in 2003. UC and HHMI had entered into a Collaboration Agreement in 1986 whereby HHMI agreed to assign to UC rights in inventions made by its employees pursuant to research funded by UC. HHMI formally assigned its rights to UC in 2009. Eurolab (Pty) Ltd obtained regulatory approval for Enzutrix, a generic version of the patented compound. When UC threatened infringement proceedings, Eurolab launched an application under s 70 of the Patents Act 57 of 1978 for relief against groundless threats. Dis-Chem companies began distributing Enzutrix in 2024. UC and its licensee Astellas sought an interim interdict to prevent infringement. Dis-Chem countered with an application to revoke the patent under s 61(1)(a) on the ground that UC was not entitled to apply for the patent under s 27 as it had not obtained assignments from all inventors before filing. The Court of the Commissioner of Patents revoked the patent, finding UC had not secured assignments from HHMI inventors prior to filing.

• Whether the entitlement to apply for a patent under s 27 of the Patents Act must exist at the time of filing the patent application or at the time a revocation application is brought under s 61(1)(a)
• Whether UC had acquired the right to apply for the patent from all inventors at the time of filing
• Whether the 2009 assignment from HHMI to UC could cure any deficiency in entitlement at the time of filing
• Whether the 1986 Collaboration Agreement between UC and HHMI conferred on UC the right to apply for the patent
• Whether UC made material misrepresentations in Form P3 declaration warranting revocation under s 61(1)(g)
• Whether the invention lacked an inventive step and was obvious to a person skilled in the art under s 61(1)(c) read with s 25
• Whether UC established all requirements for an interim interdict
• Whether public interest considerations, including access to affordable cancer medication, should influence the grant of an interim interdict

The appeal was upheld with costs, including costs of two counsel. The Court set aside the Commissioner's order and substituted it with an order: (a) dismissing Eurolab's application under s 70 with costs on Scale C, including two counsel costs and expert witness fees; (b) dismissing Dis-Chem's counter-application for revocation with costs on Scale C, including two counsel costs and expert witness fees; and (c) dismissing UC's application for interim relief, with each party to pay its own costs regarding the interim interdict. The patent was not revoked.

The binding legal principles established are: (1) Under s 61(1)(a) read with s 27 of the Patents Act 57 of 1978, the entitlement to apply for a patent must exist at the time of filing the patent application. Revocation proceedings under s 61(1)(a) involve a retrospective assessment of whether the patentee was eligible to apply for the patent at the filing date. A subsequent assignment cannot retrospectively cure a deficiency in entitlement existing at the time of filing. (2) Under s 27, "any other person acquiring from [the inventor] the right to apply" encompasses not only persons who have received an actual assignment of the invention, but also persons who have acquired a contractual right to obtain such assignment from the inventor or from an entity (such as an employer) to whom the inventor has assigned rights. A contractual framework that grants an applicant the enforceable right to obtain assignments of inventions constitutes "acquiring the right to apply." (3) Section 72(3) of the Patents Act, which restricts admission of documents not entered in the register as evidence of title to a patent, does not preclude reliance on such documents to establish that an applicant had acquired the right to apply for a patent under s 27 for purposes of defending against revocation under s 61(1)(a). (4) In assessing obviousness under s 25(10), courts must guard against hindsight bias in expert evidence. The inquiry must focus on what would have been obvious to the skilled person having regard only to the state of the art at the priority date, without knowledge of the claimed invention. Where prior art teaches away from a particular modification (by showing preference for an alternative approach), this weighs against a finding of obviousness. (5) Even where a patentee establishes all elements for an interim interdict (prima facie right, irreparable harm, balance of convenience, no alternative remedy), a court retains discretion to refuse the interdict. In exercising this discretion, courts may consider broader public interest factors, including the impact on access to affordable medicines, particularly where the patent is imminently due to expire.

The Court made several non-binding observations: (1) Smith JA noted that cost considerations in pharmaceutical development are typically not a primary factor at early stages of drug development, and cost-based arguments for obviousness may be affected by hindsight bias if based on post-priority date publications. (2) Smith JA observed that patent protection ordinarily results in the public being denied access to generic drugs for the patent term, and it is common practice for pharmaceutical patentees to introduce competing products shortly before patent expiration in anticipation of generic competition. (3) Smith JA commented that protection of patents advances the public interest by fostering investment in pharmaceutical research, and companies are incentivized to invest only when confident the judiciary will uphold patent rights throughout their duration. Refusing an interdict solely to diminish a patentee's lawful monopoly would be improper. (4) Molemela P observed that once damages proceedings have been instituted, an application for relief against groundless threats under s 70 may become moot, as the alleged threatener has moved beyond threats to actual proceedings. (5) Molemela P commented on the significance of the parties' course of dealing over 18 years, including HHMI's continued receipt of royalties without challenge to UC's patent rights, as supporting the validity of UC's claim to have acquired rights from HHMI. (6) Baartman JA (dissenting) emphasized that patent applicants operate in a specialized field and have an obligation to acquaint themselves with legislative requirements. The responsibility for accuracy in patent declarations rests squarely on the applicant. She noted that errors by a Patent Prosecution Manager cannot be excused as mere clerical errors. (7) Baartman JA observed that South Africa's mundane patent registration requirements make the system dependent on applicants' good faith, and public interest favors encouraging challenges to patent validity given the lack of examination on registration. (8) Baartman JA commented that members of the public are entitled to rely on information filed in the patent register, and challenging this reliance defeats the register's purpose.

This judgment provides important clarification on patent law in South Africa: (1) It definitively establishes that entitlement to apply for a patent under s 27 must be assessed at the filing date, not at the date of revocation proceedings, aligning South African law with international jurisdictions (UK, Europe, USA). (2) It clarifies that "acquiring from [the inventor] the right to apply" under s 27 encompasses not only direct assignments but also contractual rights to obtain assignments, provided such rights exist at the filing date. (3) It addresses the admissibility of documents not recorded in the patent register under s 72(3), finding that such documents can establish the right to apply for purposes of s 61(1)(a) analysis. (4) It provides guidance on the obviousness inquiry under s 25, emphasizing the danger of hindsight bias in expert evidence and the importance of considering whether the prior art "teaches away" from the claimed invention. (5) It confirms that courts retain discretion to refuse interim interdicts in patent cases even where the patentee establishes a prima facie right, particularly where public interest considerations (such as patient access to affordable medication) are engaged and the patent is near expiry. (6) The judgment balances the important public interest in protecting patent rights to incentivize pharmaceutical innovation against countervailing public interests in access to affordable medicines. The case is significant for pharmaceutical patent litigation in South Africa, particularly regarding generic drug market entry near patent expiry.