COMMISSION OF INQUIRY INTO THE RATIONALISATION OF THE PROVINCIAL AND LOCAL DIVISIONS OF THE SUPREME COURT

THIRD AND FINAL REPORT

VOLUME 1
BOOK 2


TABLE OF CONTENTS

THE COMMISSION'S RECOMMENDATIONS IN REGARD TO PROPOSALS THAT THERE SHOULD BE ESTABLISHED IN SOUTH AFRICA :

(A) A SPECIALIST COURT FOR INTELLECTUAL PROPERTY
LAW MATTERS ; AND

(B) A SPECIALIST INSOLVENCY COURT

INTRODUCTION

SECTION (A)

CHAPTER 1

THE AMBIT OF INTELLECTUAL PROPERTY LAW AND THE EXISTING JURISDICTIONAL POSITION IN SOUTH AFRICA

1.1 THE AMBIT OF INTELLECTUAL PROPERTY LAW IN SOUTH AFRICA

1.2 A BRIEF OUTLINE OF THE EXISTING JURISDICTIONAL POSITION IN SOUTH AFRICA IN REGARD TO THE ADJUDICATION OF INTELLECTUAL PROPERTY MATTERS

CHAPTER 2

THE PROPOSAL BY THE SOUTH AFRICAN INSTITUTE FOR INTELLECTUAL
PROPERTY LAW THAT A SPECIALIST COURT FOR INTELLECTUAL
PROPERTY LAW MATTERS SHOULD BE ESTABLISHED

CHAPTER 3

SOME OF THE SUBMISSIONS SET FORTH IN A WRITTEN RESPONSE TO THE COMMISSION BY MR D.F. SHEPPARD OF ADAMS AND ADAMS, PRETORIA

CHAPTER 4

A SUMMARY OF THE MAIN ORAL SUBMISSIONS IN REGARD TO THE ADJUDICATION OF INTELLECTUAL PROPERTY LAW MATTERS MADE TO THE COMMISSION BY VARIOUS INTERESTED PARTIES AT MIDRAND DURING APRIL 1996

CHAPTER 5

THE COMMISSION'S INVITATION TO OTHER INTERESTED PARTIES TO RESPOND IN WRITING TO THE PLEA FOR THE CREATION OF A SPECIALIST INTELLECTUAL PROPERTY LAW COURT MADE ON BEHALF OF THE INSTITUTE AT THE PUBLIC HEARINGS AT MIDRAND

CHAPTER 6

REACTIONS TO THE CIRCULAR AND A FURTHER PUBLIC SITTING OF THE COMMISSION TO DEBATE THE ISSUE OF A SPECIALIST INTELLECTUAL PROPERTY LAW COURT

6.3 THE CAPE BAR MEMORANDUM

6.4 THE FINDLAY MEMORANDUM

6.5 THE AD MEMORANDUM


CHAPTER 7

A SUMMARY OF THE FURTHER ORAL SUBMISSIONS IN REGARD TO A SPECIALIST INTELLECTUAL PROPERTY LAW COURT MADE TO THE COMMISSION BY VARIOUS INTERESTED PARTIES AT THE BLOEMFONTEIN SITTING ON 21 AUGUST 1996

CHAPTER 8

THE COMMISSION'S INVESTIGATIONS ABROAD INTO THE ISSUE OF A SPECIALIST INTELLECTUAL PROPERTY LAW COURT

CHAPTER 9

THE ROLE AND THE FIELD OF JURISDICTION OF THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

9.1 THE UNITED STATES COURTS OF APPEALS IN THE FEDERAL SYSTEM

9.2 THE REASONS UNDERLYING THE ESTABLISHMENT OF THE COURT OF APPEALS FOR THE FEDERAL CIRCUIT

9.3 THE AMERICAN SOLUTION TO THE PROBLEM OF THE LACK OF A NATIONALLY UNIFORM RESOLUTION OF PATENT LAW DISPUTES WAS SHAPED BY A LEGAL PHILOSOPHY DISTRUSTFUL OF SPECIALIST COURTS

9.4 THE COURT OF APPEALS FOR THE FEDERAL CIRCUIT IS NOT A "SPECIALIST" COURT IN THE ORDINARY SENSE OF THE WORD

CHAPTER 10

THE BROAD GUIDE-LINES ADOPTED BY THE COMMISSION AND ITS MAIN FINDINGS OF FACT IN REGARD TO THE PROPOSAL FOR THE ESTABLISHMENT OF A SPECIALIST INTELLECTUAL PROPERTY LAW COURT

CHAPTER 11

THE COMMISSION'S RECOMMENDATION IN REGARD TO THE PROPOSED SPECIALIST INTELLECTUAL PROPERTY LAW COURT


SECTION (B)

CHAPTER 1

THE PROPOSAL BY THE ASSOCIATION OF INSOLVENCY PRACTITIONERS OF SOUTH AFRICA THAT A SPECIALIST INSOLVENCY COURT SHOULD BE ESTABLISHED

1.1 THE JURISDICTION OF THE HIGH COURT

1.2 THE ASSOCIATION OF INSOLVENCY PRACTITIONERS OF SOUTH AFRICA [ AIPSA ]

1.3 THE PROJECT COMMITTEE'S WRITTEN RESPONSE

1.4 THE PROJECT COMMITTEE'S REQUEST

1.5 TO 1.7 THE AIPSA MEMORANDUM

1.8 THE AIPSA PROPOSAL

CHAPTER 2

A SUMMARY OF THE MAIN ORAL SUBMISSIONS IN REGARD TO THE CREATION OF A SPECIALIST INSOLVENCY COURT MADE TO THE COMMISSION BY INTERESTED PARTIES AT MIDRAND DURING APRIL 1996

CHAPTER 3

THE COMMISSION'S INVITATION TO OTHER INTERESTED PARTIES TO RESPOND IN WRITING TO THE PLEA FOR THE CREATION OF A SPECIALIST INSOLVENCY COURT MADE ON BEHALF OF THE ASSOCIATION OF INSOLVENCY PRACTITIONERS OF SOUTH AFRICA [ AIPSA ] AT THE PUBLIC HEARINGS AT MIDRAND

CHAPTER 4

REACTIONS TO THE CIRCULAR AND A FURTHER PUBLIC SITTING OF THE COMMISSION TO DEBATE THE ISSUE OF A SPECIALIST INSOLVENCY COURT

4.3 THE CAPE BAR MEMORANDUM

4.4 THE FINDLAY MEMORANDUM

4.5 THE ELOFF LETTER

4.6 THE ALS LETTER

CHAPTER 5

A SUMMARY OF THE FURTHER ORAL SUBMISSIONS IN REGARD TO A SPECIALIST INSOLVENCY COURT MADE TO THE COMMISSION BY VARIOUS INTERESTED PARTIES AT THE BLOEMFONTEIN SITTING ON 21 AUGUST 1996

CHAPTER 6

THE COMMISSION'S INVESTIGATION ABROAD INTO A NUMBER OF FOREIGN BANKRUPTCY COURTS

6.2 A NOTE ON U S BANKRUPTCY COURTS ; THE MAIN FORMS OF RELIEF AVAILABLE UNDER U S BANKRUPTCY LAWS ; AND THE ROLE OF THE U S TRUSTEE

6.3 THE UNITED STATES TRUSTEE

6.4 THE COMMISSION'S VISIT TO THE U S BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF ILLINOIS

6.5 THE COMMISSION'S VISIT TO THE U.S. BANKRUPTCY COURT, SOUTHERN DISTRICT OF NEW YORK

6.6 THE COMMISSION'S VISIT TO THE COMMERCIAL COURT OF THE ONTARIO COURT OF JUSTICE (GENERAL DIVISION)

CHAPTER 7

THE BROAD GUIDE-LINES ADOPTED BY THE COMMISSION AND ITS MAIN FINDINGS OF FACT IN REGARD TO THE PROPOSAL FOR THE ESTABLISHMENT OF A SPECIALIST INSOLVENCY COURT IN SOUTH AFRICA

CHAPTER 8

THE COMMISSION'S RECOMMENDATION IN REGARD TO THE PROPOSED SPECIALIST INSOLVENCY COURT


THIRD AND FINAL REPORT

PART THREE

THE COMMISSION'S RECOMMENDATIONS IN REGARD

TO PROPOSALS THAT THERE SHOULD BE ESTABLISHED IN SOUTH AFRICA :

(A) A SPECIALIST COURT FOR INTELLECTUAL PROPERTY LAW MATTERS ; And

(B) A SPECIALIST INSOLVENCY COURT

-----------------------------------------------------------------------------------------

INTRODUCTION

(1) In paragraph (1)(c)(i) of its Terms of Reference the Commission is required to make recommendations with reference to the need for improved access to justice for civil litigants in the Supreme Court (now the High Court) through the creation of specialist courts, such as the Commercial Court in Johannesburg.

(2) The South African Institute for Intellectual Property Law submitted to the Commission that there should be established in Pretoria a specialist court, exercising jurisdiction throughout South Africa, to deal with intellectual property matters. The proposal was supported by certain interested parties and resisted by others.

(3) The South African Insolvency Institute submitted to the Commission that wherever a Commercial Court now exists, or may in future be created, there should be established a specialist insolvency court in which Judges of the Commercial Court should preside. The proposal was supported by certain interested parties and resisted by others.

(4) PART THREE of the Third and Final Report consists of two separate sections.

(5) In SECTION (A) there are considered the written and oral submissions made to the Commission for and against the establishment of a specialist court for intellectual property law matters. The Commission's recommendation on the subject is set forth in Chapter 11 of SECTION (A) at page 55 of this Report.

(6) In SECTION (B) there are considered the written and oral submissions made to the Commission for and against the establishment of a specialist insolvency court. The Commission's recommendations on the subject are set forth in Chapter 8 of SECTION (B) at page 100 of this Report.

PART III                       SECTION (A)

CHAPTER 1

THE AMBIT OF INTELLECTUAL PROPERTY LAW AND THE EXISTING JURISDICTIONAL POSITION IN SOUTH AFRICA

1.1 THE AMBIT OF INTELLECTUAL PROPERTY LAW IN SOUTH AFRICA

1.1.1 In South Africa Intellectual Property Law derives from both the common law and statutory law. For the greater part the statutory law is encapsulated in the following four Acts :-

  1. The Patents Act, No 57 of 1978 ;
  2. The Trade Marks Act, No 194 of 1993 ;
  3. The Designs Act, No 195 of 1993 ; and
  4. The Copyright Act No 98 of 1978.

1.1.2 To the statutes enumerated in paragraph 1.1.1 above may be added a number of lesser-known enactments such as those relating to business names, merchandise marks, plant breeders' rights, performers' rights ; and also :-

The Registration of Copyright in Cinematograph Films Act, No 62 of 1977.

1.1.3 With the exception of the Copyright Act, No 98 of 1978, each of the statutes mentioned in paragraphs 1.1.1 and 1.1.2 above, provides for the maintaining of a REGISTRY which is situated in Pretoria.

1.1.4 The common law component of our Intellectual Property Law involves the principles of unlawful competition, passing-of and trade secrets.

1.2 A BRIEF OUTLINE OF THE EXISTING JURISDICTIONAL POSITION IN SOUTH AFRICA IN REGARD TO THE ADJUDICATION OF INTELLECTUAL PROPERTY MATTERS

1.2.1 The Patents Office and its Registrar are situated in Pretoria. The Registrar is the chief controller of the Patents Office. In terms of the Patents Act the Judge President of the Transvaal Provincial Division [ TPD ] is empowered to designate Judges or acting Judges of the TPD to be Commissioners of Patents.

1.2.2 The Commissioner of Patents exercises the same powers as a Judge in a civil action and he is bound by the same rules of court applicable in the High Court. The main function of the Commissioner of Patents is to serve as a court of first instance in the hearing of all actions involving patent rights, such as infringement and revocation proceedings. In addition the Commissioner of Patents hears appeals against the decisions of the Registrar of Patents. Appeals from the Court of the Commissioner lie to the Full Court of the Provincial Division. Further appeal to the Supreme Court of Appeal is possible. The Commissioner of Patents serves the entire Republic. However, unless he otherwise decides, proceedings before him take place in Pretoria. In effect, therefore, the TPD doubles as the Court of the Commissioner of Patents and exercises exclusive jurisdiction in patent matters.

1.2.3 The Trade Marks Office is in Pretoria. An officer for the Republic styled the Registrar of Trade Marks has, subject to the directions of the Minister of Trade and Industries, the chief control of the Trade Marks Office. The Minister may, whenever he deems it necessary, appoint a Judge or an advocate or an attorney to exercise any power or to perform any duty conferred or imposed upon the Registrar under the Act.

1.2.4 At the Trade Marks Office there is a register of trade marks which comprises all trade marks registered or deemed to be registered under the Act. The register constitutes prima facie evidence of the matters required by the Act to be inserted therein.

1.2.5 Any proceedings before the Registrar under the Act are disposed of at the Trade Marks Office unless he orders otherwise. In connection with proceedings before him the Registrar has the powers and jurisdiction of a single Judge in a civil action before the TPD.

1.2.6 In terms of sec 2(1)(vi) of the Act "court" means the TPD, but, in relation to any claim or counterclaim for removal or variation affecting any entry in the register arising from proceedings instituted in any other division of the High Court having jurisdiction in relation to the proceedings, includes that division in respect of such claim or counterclaim.

1.2.7 A person aggrieved by any decision or order of the Registrar may apply to the TPD for relief. The TPD has power to consider the merits of the matter, to receive further evidence, and to make any order it deems fit.

1.2.8 The TPD thus has virtually exclusive jurisdiction over all matters arising under the Act in respect of the removal, amendment, variation or other relief affecting an entry in the register. The TPD further has exclusive jurisdiction in appeals against decisions of the Registrar.

1.2.9 The Designs Act provides for the registration of designs and matters connected therewith. The Designs Office is in Pretoria. The Registrar of Designs has the chief control of the Designs Office at which a register of designs is kept. The register affords prima facie proof of any matter directed or authorised by the Act to be entered therein.

1.2.10 The Registrar of Designs has various powers under the Act to receive by affidavit or viva voce, and to award and tax costs but, unlike the Registrar of Trade Marks, he does not have the powers of a single Judge in a civil action.

1.2.11 In terms of sec 1 of the Designs Act "court", in relation to any matter, means the division of the High Court having jurisdiction in the matter. In terms of sec 42 any party to proceedings before the Registrar may appeal to the court against any order or decision of the Registrar, which is deemed to be an order or judgment of a magistrate in a civil action.

1.2.12 Under the Copyright Act the Registrar of Copyright is the person appointed as Registrar of Patents under sec 7 of the Patents Act.

1.2.13 The Copyright Act contains no definition of "court", and consequently any court of competent jurisdiction may hear matters under the Act. In practice, however, copyright infringement actions are generally pursued in the High Court.

1.2.14 In terms of sec 29 of the Copyright Act the Judge from time to time designated as Commissioner of Patents under the Patents Act is also "the Copyright Tribunal". The tribunal's function is defined in sec 30 as being the determination of disputes arising between licensing bodies, or other persons from whom licences are required and persons requiring licences or organisations claiming to be representatives of such persons.

1.2.15 The Registration Office for Copyright in Cinematograph films is in Pretoria. An officer styled the Registrar of Copyright has the chief control of the Office.

1.2.16 In terms of sec 1 of the Registration of Copyright in Cinematograph Films Act "court", in relation to any matter, means the division of the High Court having jurisdiction in respect of that matter.

1.2.17 In connection with proceedings before him the Registrar of Copyright has all the powers and jurisdiction of a single Judge in a civil action before a provincial division of the High Court having jurisdiction at the place where the proceedings before the Registrar are held. A party to proceedings before the Registrar (other than sec 11 informal proceedings) may appeal to the court against any decision or order pursuant to such proceedings.

CHAPTER 2

THE PROPOSAL BY THE SOUTH AFRICAN INSTITUTE FOR INTELLECTUAL PROPERTY LAW THAT A SPECIALIST COURT FOR INTELLECTUAL PROPERTY LAW MATTERS SHOULD BE ESTABLISHED

2.1 The South African Institute of Intellectual Property Law [ "the Institute" ] is a voluntary association formed in 1954, whose members are practitioners in the field of intellectual property law.

2.2 In order to qualify for fellowship of the Institute a practitioner must be an attorney of the High Court who has passed a series of examinations conducted under the auspices of the Patents Examination Board or the Institute. The examinations cover the entire spectrum of intellectual property law. The examination is structured to enable a practitioner to qualify either as a patent attorney or as a trade mark practitioner. The qualification for patent attorney is statutory ; that for trade mark practitioner is set by the Institute.

2.3 The membership of the Institute currently consists of 91 Fellows ; 24 Associate and 73 Student members. Members of the Institute practise mainly in the Pretoria and Johannesburg areas, but also in Midrand, Randburg, Sandton, Durban and Cape Town.

2.4 In a written response dated 23 June 1995 the then President of the Institute [Mr D.M. Dold] submitted on behalf of the Institute that there should be created a specialist court having jurisdiction throughout the Republic for the adjudication of intellectual property law matters. A copy of the Institute's written response is to be found in Appendix "L" at pages 79 to 81 of VOLUME II of this Report.

2.4.1 The written response indicated that what the Institute had in mind was a court based "at least to some degree" on the English model of the :-

2.4.2 In its written response the Institute pointed out that for smaller actions there is also a specialist Patent County Court having jurisdiction in England and Wales. The County Patent Court, so the Institute said, had not been a great success ; and it did not wish to reproduce this part of the English model.

2.4.3 Regarding the seat of the specialist court, the composition of its Bench, and the jurisdiction to be exercised by it, the essential features of the Institute's proposal were the following :-

2.4.3.1 The specialist court should have its seat at Pretoria, not only because of its status as a capital city but because all the relevant registries are located there. The court should be named "the Intellectual Property Court".

2.4.3.2 A Judge with experience of intellectual property law and practice would be appointed as the permanent President of the Court. His appointment should not be a political one. Fundamental to the success of the Court is the ability and experience of its President.

2.4.3.3 Two or three other Judges should be designated to be available for the specialist court on an ad hoc basis.

2.4.3.4 The specialist court would have exclusive jurisdiction throughout South Africa in respect of (a) patents ; (b) designs ; (c) trade marks ; and (d) cinematograph films.

2.4.3.5 The specialist court would exercise concurrent jurisdiction with the various divisions of the High Court in respect of copyright and non-statutory intellectual property matters such as passing-off, trade secrets and confidential information cases.

2.4.4 In support of its proposal for an Intellectual Property Court the Institute's written response urged the following :-

2.4.5 The Institute's written response concluded by expressing a wish to make oral representations to the Commission.

CHAPTER 3

SOME OF THE SUBMISSIONS SET FORTH IN A WRITTEN RESPONSE TO THE COMMISSION BY MR D.F. SHEPPARD OF ADAMS AND ADAMS, PRETORIA

3.1 Mr D.F. Sheppard is a partner in Adams and Adams in Pretoria, and a specialist in patent litigation before the Court of the Commissioner of Patents. Until 1969 Mr Sheppard practised as a chartered patent agent in the United Kingdom. He practised initially in a small London firm of patent agents, and then moved to the patent department of a pharmaceutical company near Maidenhead which was the British subsidiary of a very large American organisation. There he ended up by doing patent work which, apart from the USA and Canada, took him throughout the world.

3.2 By letter dated 23 June 1995 Mr Sheppard addressed to the Commission a written response as a submission made by him with the support of other litigation partners in his firm. A copy of his written response is to be found in Appendix "M" at pages 82 to 86 in VOLUME II of this Report. In April 1996 Mr Sheppard further made oral representations to the Commission [ see VOLUME III at pages 121-127 ] at a public sitting at Midrand. Here it is convenient to quote extracts from some of the submissions set forth in Mr Sheppard's written response.

3.3 In para 2.3 of his written response [ see page 83 in VOLUME II ] Mr Sheppard writes :-

3.4 Dealing with the adjudication of patents by the Commissioner of Patents under the current system, Mr Sheppard observes in paragraph 5.2 of his response [ see page 85 in VOLUME II ] :-

3.5 As to the present quality of patent litigation in South Africa Mr Sheppard makes the following comments in paragraphs 5.4 and 5.5 [ see pages 85 - 86 in VOLUME II ] of his letter :-

CHAPTER 4

A SUMMARY OF THE MAIN ORAL SUBMISSIONS IN REGARD TO THE ADJUDICATION OF INTELLECTUAL PROPERTY LAW MATTERS MADE TO THE COMMISSION BY VARIOUS INTERESTED PARTIES AT MIDRAND DURING APRIL 1996

4.1 In amplification of the two written responses respectively described in Chapters Two and Three above, oral submissions were made to the Commission by a number of interested parties during public sittings held at Midrand over several days during April 1996. Extracts from these oral submissions are to be found at pages 121 to 147 in VOLUME III of this Report.

4.2 The first speaker on Intellectual Property Law to address the Commission at Midrand was Mr D.F. Sheppard. In the course of his oral submissions Mr Sheppard handed in [ see para 9 at page 122 in VOLUME III ] the Report of the Proceedings of the 702nd Ordinary General Meeting of the Chartered Institute of Patent Agents held in London on 17 January 1996. This included an address by Mr Justice Jacob, the senior Patents Judge in the Chancery Division. A copy of the said Report is to be found in Appendix "N" at pages 87 to 93 in VOLUME II of this Report.

4.3 Dealing with the address by Mr Justice Jacob in the said Report Mr Sheppard said, inter alia, the following [ see paras 11 & 12 at pages 122-123 in VOLUME III ] :-

4.4 Mr Sheppard stressed [ see paras 15 to 17 at pages 123-124 in VOLUME III ] that a specialist court needed not a single Judge but a group of Judges. He sought to illustrate his point with reference to the single Judge sitting in the Patent County Court in London. This Court has not proved successful. Mr Sheppard continued [ see para 18 at page 124 in VOLUME III ] by saying :-

4.5 During the Midrand Public sittings oral submissions in support of a specialist Intellectual Property Court were made by the following interested parties : (a) Mr Chris Job (who had meanwhile succeeded Mr D.M. Dold as the President of the Institute) ; (b) Mr M. le Roux, the managing partner of D.M. Kisch Inc ; and (c) Dr T. Burrell.

4.6 In elaboration of their oral submissions the above-mentioned three speakers handed in to the Commission : (a) Heads of Submission ; and (b) Supporting Documentation. Copies of these two documents are respectively to be found in Appendix "O" [ at pages 94 to 110 ] and in Appendix "P" [ at pages 111 to 122 ] in VOLUME II of this Report.

4.7 Appended to the Institute's Heads of Submission is a letter dated 9 April 1996 by the Registrar or Patents to the President of the Institute, the second paragraph of which reads as follows :-

4.8 In the course of his oral submissions Mr le Roux [ at paragraphs 34 & 35 at page 134 in VOLUME III ] remarked :-

4.9 In developing the argument in favour of specialisation the spokesmen for the Institute thereafter proceeded [ see paras 36 to 44 at pages 135-136 in VOLUME III ] to deal first with design law and then with trade mark law :-

4.10 The desirability that in respect of certain matters a specialist intellectual property court should exercise jurisdiction concurrently with the High Court was also explored [ at paras 48 to 52 at pages 137-138 in VOLUME III ] :-

4.11 In the course of his oral submissions Mr le Roux described thus the benefits which would flow from a specialist court [ see para 45 at pages 136 - 137 in VOLUME III ] :-

4.12 Stressing that foreign companies would not invest in South Africa if their intellectual property were not capable of vigorous enforcement in our courts [ see paras 54 & 55 at pages 138-139 in VOLUME III ] Mr le Roux cited statistics [ see paragraphs 56 & 57 at page 139 in VOLUME III ] to show the strong foreign flavour in patent and trade mark litigation :-

4.13 Dealing with the Institute's submission that the President of the proposed specialist court should be a permanent appointment [ see para 62(A) at page 140 in VOLUME III ] Mr le Roux also put forward [ see para 63 at page 140 in VOLUME III ] an alternative arrangement "but very much as a second choice" :-

4.14 From the ensuing discussion between the Commission and the spokesmen for the Institute [ see paras 64 to 68 at pages 141-142 in VOLUME III ] it became clear, however, that in regard to this critical issue opinions within the Institute were divided :-

4.15 Dealing with the right of appearance in the proposed specialist court Mr le Roux [ see para 75 at page 143 in VOLUME III ] said :-

4.16 A member of the Commission, Mr Maluleke, thereupon voiced his disquiet at the fact that while an advocate would enjoy the right of appearance the ordinary attorney would be the victim of discrimination [ see para 76 at page 144 in VOLUME III ]. In response to a question by Mr Maluleke, the following historical explanation [ see paras 78 & 79 at page 144 in VOLUME III ] was given on behalf of the Institute :-

4.17 On behalf of the Institute, it was lastly urged, [ see paras 90 to 94 at pages 146-147 in VOLUME III ] that since the basic infrastructure was already in place, the establishment of a specialist intellectual court would not entail any significant capital expenditure on the part of the Government :-

CHAPTER 5

THE COMMISSION'S INVITATION TO OTHER INTERESTED PARTIES TO RESPOND IN WRITING TO THE PLEA FOR THE CREATION OF A SPECIALIST INTELLECTUAL PROPERTY LAW COURT MADE ON BEHALF OF THE INSTITUTE AT THE PUBLIC HEARINGS AT MIDRAND

5.1 Following upon the public sittings at Midrand in April 1996 the Commission issued to all interested parties a circular calling attention to the nature of the oral submissions made at Midrand and summarising, inter alia, the effect of the Institute's proposal for the establishment of a specialist intellectual property court.

5.2 The circular contained an urgent request to all interested parties to make written responses to the Commission, by not later than 31 August 1996, dealing with the issue of a specialist intellectual property court. Appended to the circular were copies of the Institute's written response dated 23 June 1995 to the Commission and the Heads of Submission handed in at the Midrand hearing by the Institute's spokesmen.

CHAPTER 6

REACTIONS TO THE CIRCULAR AND A FURTHER PUBLIC SITTING OF THE COMMISSION TO DEBATE THE ISSUE OF A SPECIALIST INTELLECTUAL PROPERTY LAW COURT

6.1 In response to the circular described in Chapter Five the Commission received the following three memoranda :-

6.3 THE CAPE BAR MEMORANDUM :

6.3.1 In paragraphs 7 and 8 of the Cape Bar Memorandum the following arguments against the creation of a specialist intellectual property court were marshalled :-

6.4 THE FINDLAY MEMORANDUM :

6.4.1 In a covering letter to the Findlay Memorandum the Chairman of the Society of Advocates of Natal informed the Commission as follows :-

6.4.2 In a comprehensive analysis by its author the Findlay Memorandum details reasons for its opposition to the Institute's proposal for a specialist intellectual property court having its sole seat in Pretoria, and having exclusive jurisdiction in matters involving an intellectual property element. Hereunder follow a number of extracts from the Findlay Memorandum :-

6.4.3 In paragraph 12.5 [ see page 133 in VOLUME II ] the following is said :-

6.4.4 In paragraph 13.1 of the Findlay Memorandum [ see pages 133-134 in VOLUME II ] it is said :-

6.4.5 Paragraph 13.4 of the Findlay Memorandum [ see page 135 in VOLUME II ] is in the following
terms :-

6.4.6 Paragraphs 13.8 and 13.9 of the Findlay Memorandum [ see pages 137-138 in VOLUME II ] read as follows :-

6.5 THE AD MEMORANDUM :

6.5.1 The AD Memorandum was prepared at the request of Corbett CJ. Each of its authors has had long and very extensive experience in intellectual property litigation both at the Bar and on the Bench. The AD Memorandum was approved by all the other Judges of Appeal.

6.5.2 While endorsing the notion that South Africa should have a strong intellectual property regime [ see page 139 in VOLUME II ] paragraph 2 of the AD Memorandum proceeds to say :-

6.5.3 In paragraph 3 [ see pages 139-140 in VOLUME II ] the AD Memorandum makes the following points :-

6.5.4 That the group of intellectual property lawyers engaged in actual court work is a small one is stressed in paragraph 4 [ see pages 140-141 in VOLUME II ] of the AD Memorandum :-

6.5.5 In paragraphs 5 and 6 of the AD Memorandum [ see pages 141 to 144 in VOLUME II ] its authors examine the history of earlier attempts in South Africa at specialisation in the adjudication of patent cases :-

6.5.6 As to whether in intellectual property matters a specialist court is desirable at all, paragraph 7 of the AD Memorandum [ see pages 144-145 in VOLUME II ] contains the following observations :-

6.5.7 In paragraph 8 of the AD Memorandum [ see page 145 in VOLUME II ] doubt is expressed as to whether the volume of intellectual property cases would be sufficient to warrant the attention of three or four permanent judges :-

6.5.8 The AD Memorandum concludes with two paragraphs numbered 9 and 10 respectively [ see pages 145 to 146 in VOLUME II ]. Paragraph 9 stresses the importance of having generalist judges of wide experience. Paragraph 10 urges the abolition of the Commissioner's Court :-

CHAPTER 7

A SUMMARY OF THE FURTHER ORAL SUBMISSIONS IN REGARD TO A SPECIALIST INTELLECTUAL PROPERTY LAW COURT MADE TO THE COMMISSION BY VARIOUS INTERESTED PARTIES AT THE BLOEMFONTEIN SITTING ON 21 AUGUST 1996

7.1 At the Bloemfontein sitting the following interested parties addressed the Commission on the subject of the proposed specialist intellectual court : (1) Harms JA ; (2) Schutz JA ; (3) Mrs E.D. du Plessis (a member of the Institute who is Vice-Chairperson of the Statutory Intellectual Property Advisory Committee and who was at the time also the President of the Law Society of the Transvaal) ; (4) Mr M. le Roux (one of the Institute's spokesmen who had already made oral submissions at the Midrand hearings) ; and (5) Eloff JP. In addition brief replies to what other speakers had said were delivered by Harms JA, Schutz JA and Mrs du Plessis.

7.2 Mr Justice L.T.C. Harms briefly recited the qualifications of the two authors of the AD Memorandum. Harms JA himself was the first Chairman of the Intellectual Property Advisory Committee. He is now the Vice-Chairman of the Paris Convention, which dates from the last century, and which governs intellectual property other than copyright. He was responsible for the present Trade Marks Act and the present Designs Act. Both Harms JA and Plewman JA practised extensively in intellectual property litigation at the Bar. Harms JA described Plewman JA as having been probably the most experienced intellectual property practitioner in the country and someone who had thereafter had extensive judicial exposure to the same work. Both authors of the AD Memorandum had been involved in the present Patents Act and the amendments to the Copyright Act.

7.3 Harms JA pointed out [ para 8 at page 210 in VOLUME III ] that appointment as a Judge of Appeal required general and non-specialist legal competence rather than purely specialist qualifications :-

7.4 Harms JA told the Commission [ para 23 at page 213 in VOLUME III ] that he believed that the record of non-specialist Judges in the field of intellectual property law might be better than that of specialist Judges ; and that the former had delivered some of the leading Appellate Division judgments on the subject. He cited [ para 23 at page 213 in VOLUME III ] the following example :-

7.5 A patent attorney required scientific knowledge, so explained Mr Justice Harms, for the reason that scientific knowledge is indispensable in the drafting of a patent specification [ para 17 at page 212 of VOLUME III ]. Should however, the patent in question become the subject of a legal dispute, scientific knowledge was not essential for the decision of the case :-

7.6 In the course of his oral submissions [ para 21 at page 213 in VOLUME III ] Harms JA expanded on the objections to a specialist court mentioned in the AD Memorandum :-

7.7 In regard to copyright [ paras 24 to 27 at pages 213 to 214 in VOLUME III ] Harms JA made the following observations :-

7.8 Turning to the United States of America [ paras 29 to 31 at page 214 in VOLUME III ] Harms JA explained that in that country the creation of a specialist Appeal Court for patent cases [ the Court of Appeals for the Federal Circuit in Washington DC ] had become necessary in order to resolve conflicts :-

7.9 In concluding his main address [ paras 32 & 33 at page 215 in VOLUME III ] Harms JA made clear that he fully appreciated the skills of members of the Institute and, indeed, their fitness for judicial office ; and that his opposition to the Institute's proposal was based on principle :-

7.10 By way of replication [ paras 1 & 2 at page 235 in VOLUME III ] Harms JA dealt further with the role of the Registrar of Trade Marks :-

7.11 In a brief main address Schutz JA [ para 1 at page 216 in VOLUME III ] endorsed the remarks earlier made by Harms JA. He went on [ paras 3 & 4 at page 216 in VOLUME III ] to say the following :-

7.12 By way of reply to other speakers [ paras 5 and 6 at page 237 in VOLUME III ] Schutz JA made the following observations :-

7.13 An interested party very well equipped to make submissions to the Commission on the subject of a specialist intellectual property court was Mrs E.D. du Plessis. Apart from being a member of the Institute, she is Vice-Chairperson of the Statutory Intellectual Property Advisory Committee and the President of the South African chapter of the International Association for the Protection of Intellectual Property. A partner in a very large firm of patent attorneys, she was formerly an Associate Professor in Mercantile Law at UNISA in which capacity she lectured in Intellectual Property Law. Last but not least, Mrs du Plessis is the Chairperson of the Standing Committee on Intellectual Property Matters [ "the Standing Committee" ] of the Association of Law Societies [ "the ALS" ].

7.14 At the Bloemfontein sitting Mrs du Plessis handed in a document [ "the du Plessis Memorandum" ] dated 21 August 1996 in which she sets forth her views in regard to the concept of a specialist intellectual property court. A copy of the du Plessis Memorandum is to be found in Appendix " T " in VOLUME II of this Report. The views expressed in the du Plessis Memorandum were further developed by Mrs du Plessis in the course of her oral representations to the Commission.

7.15 In her introductory remarks to the Commission [ para 4 at page 217 in VOLUME III ] Mrs du Plessis informed the Commission that she was addressing the Commission without the mandate of the Standing Committee, but that the latter would in due course make its own written submission to the Commission.

7.16 Under cover of a letter dated 5 February 1997 the ALS forwarded to the Commission a document [ "the Standing Committee's Memorandum" ] entitled :-

" Specialist Intellectual Property Court

Comments by the Standing Committee on Intellectual

Property Law of the Association of Law Societies"

7.17 A copy of the Standing Committee's Memorandum is to be found in Appendix " U " at pages 164 to 181 in VOLUME II of this Report. It is signed by Mrs du Plessis on behalf of the Standing Committee's other members (Dr O.H. Dean, Mr A. van der Merwe and Mr M. von Seidel). The contents of the Standing Committee's Memorandum correspond closely with the contents of the du Plessis Memorandum handed in by Mrs du Plessis at the Bloemfontein sitting.

7.18 In the light of what has been mentioned in paragraphs 7.14 to 7.17 above it is necessary here to mention only those matters in the oral representations of Mrs du Plessis which are not fully traversed in the du Plessis Memorandum.

7.19 Dealing with decisions by the Registrar of Trade Marks [ paras 13 and 14 on page 219 in VOLUME III ] Mrs du Plessis stressed the following :-

7.20 Explaining the rationale for a specialist court [ para 17 at page 220 in VOLUME III ] Mrs du Plessis said :-

7.21 In regard to the reluctance shown in the past by patent agents to make use of their right of audience in the Court of the Commissioner [ para 27 at page 222 in VOLUME III ] Mrs du Plessis remarked :-

7.22 Turning to the somewhat controversial issue of the composition of the specialist court [ paras 35 to 37 at pages 223-224 in VOLUME III ] Mrs du Plessis took the following stance :-

7.23 As to the size of the reservoir of talent from which appointments to a specialist court might be made [ paras 38 & 39 on page 224 in VOLUME III ] Mrs du Plessis took a rosier view of the situation than Harms JA had done :-

7.24 On behalf of the Institute Mr M. le Roux [ paras 4 to 8 at pages 227-228 in VOLUME III ] stressed that the Institute's proposal was not based on self-interest :-

7.25 Mr le Roux explained [ paras 9 to 12 at page 228 in VOLUME III ] that in truth the creation of a specialist court involved no more than a modest enlargement of the present jurisdictional scheme of things :-

7.26 Lastly Mr le Roux intimated [ para 17 at pages 229-230 ] that the Institute might well be prepared to compromise on the matter of a permanent President for the specialist Court :-

7.27 In the course of his oral representations to the Commission [ paras 1 to 4 at page 231 in VOLUME III ] Eloff JP made plain his view that the adjudication of Patent cases was well within the capabilities of a generalist Judge :-

7.28 The Judge President of the Transvaal furthermore doubted [ paras 9 to 11 at page 232 in VOLUME III ] whether the volume of Patent work was sufficient to occupy a Judge fully :-

7.29 Eloff JP [ para 13 at page 233 in VOLUME III ] warned against the tendency towards eccentricity sometimes displayed by specialist Judges :-

CHAPTER 8

THE COMMISSION'S INVESTIGATIONS ABROAD INTO THE ISSUE OF A SPECIALIST INTELLECTUAL PROPERTY LAW COURT

8.1 In regard to the desirability or otherwise of establishing a specialist intellectual property court in South Africa the Commission has corresponded with and has also consulted directly with a number of Judges, practitioners and legal academics in other countries, all of whom have special knowledge and skills in the field of intellectual property law and in the adjudication of intellectual property litigation. In particular the Commission has discussed the merits of the Institute's proposal with intellectual property lawyers in Australia and New Zealand, in the United States of America and in London.

8.2 Neither New Zealand nor Australia has a specialist intellectual property court. In Australia a jurist with extensive knowledge of intellectual property litigation, not only in the Antipodes but also in the United Kingdom, the United States and Germany, is the Hon Mr Justice Ian Sheppard of the Federal Court of Australia.

8.3 In a letter dated 30 August 1996 [ "the Sheppard letter" ] Mr Justice Sheppard was kind enough to give the Commission the benefit of his views on the merits and demerits of the establishment of specialist courts in the area of intellectual property law. A copy of the Sheppard letter is to be found in Appendix " V " at pages 182 to 185 in VOLUME II of this Report.

8.4 It is convenient to quote in paragraphs 8.5 to 8.9 hereunder from the introductory passage and thereafter from the bulk of paragraphs 1 to 4 in the Sheppard letter.

8.5 In the introductory passage of the Sheppard letter [ at page 182 in VOLUME II ] the learned writer says the following :-

8.6 Paragraph 1 of the Sheppard letter [ see page 182 in VOLUME II ] , reads as follows :-

8.7 Paragraph 2 of the Sheppard letter [ see page 183 in VOLUME II ] reads as follows :-

8.8 Paragraph 3 of the Sheppard letter [ see page 183 in VOLUME II ] reads as follows :-

8.9 Paragraph 4 of the Sheppard letter [ see pages 183 to 184 in VOLUME II ] reads :-

8.10 During its visit to Sydney the Commission had the advantage of discussing specialist courts in general and a specialist intellectual property court in particular with many jurists. These included Gummow J, a very distinguished member of the High Court of Australia, the Chief Justice of the Federal Court, the Hon Mr Justice M.E.J. Black (from whom the Commission received every possible assistance) ; and a number of Sydney-based Judges of the Australian Federal Court.

In addition, and through the good offices of Mr David Hammerschlag (who formerly practised as an attorney and later as an advocate in Johannesburg, and who is now a busy commercial lawyer in Sydney) the Commission had the advantage of listening to the views of a number of leading practitioners including two senior counsel.

8.11 Suffice it to say that none of the various opinions expressed to the Commission by the lawyers mentioned in 8.10 above appeared to be at variance with the view expressed in the Sheppard letter to the effect that in Australia the idea of specialist courts in the area of intellectual property law finds no support.

8.12 During its stay in Chicago the Commission paid a visit to the offices of the firm of Pattishall, McAuliffe, Newbury, Hilliard & Geraldson L.L.P, a firm specialising in intellectual property law. Under the auspices of Mr David C. Hilliard the Commission was given the benefit of a most instructive presentation by a number of the firm's litigation partners.

8.13 In the course of the presentation the historical origins of the US Court of Appeals for the Federal Circuit [ " the CAFC " ] were explored and discussed. The genesis of the CAFC is dealt with in some detail in Chapter Nine of this Report. In addition Mr Hilliard presented to each member of the Commission a copy of his firm's "Trademark and Unfair Competition" Deskbook written by Beverley W. Pattishall, David C. Hilliard and Joseph N. Welch II. The Deskbook is printed for the use of the firm and its clients but it is used also by the Federal Judges as part of their intellectual property training programme. The Deskbook has provided the Commission with valuable background information.

8.14 During the Commission's visit to Washington DC, and at 1200 I Street NW, its members enjoyed the privilege of being the guests of the intellectual property law firm of Finnegan, Henderson, Farrabow, Garrett & Dunner, L.L.P. The firm has offices also in Tokyo and Brussels. The Commission is deeply appreciative of the firm's hospitality and of the outstanding arrangements made by one of its senior partners, Mr Stephen L. Peterson, who planned the elaborate and stimulating programme which enabled the Commission to visit the various Courts and to consult with the various intellectual property law experts. Mr Peterson is a skilled intellectual property lawyer with vast experience of litigation in this field in many countries. Throughout the three days Mr Peterson, in total neglect of his busy office, not only accompanied the members of the Commission everywhere but at the same time gave them his invaluable tutelage. Mr Peterson furnished the Commission with much instructive contemporary legal literature on the subject of the U.S. Court of Appeals for the Federal Circuit. In addition he presented each member of the Commission with a useful history of the Court published by authorisation of the U.S. Judicial Conference Committee. From this work excerpts are quoted in Chapter Nine [ in paragraphs 9.2.1 and 9.4.2 ].

8.15 Among the Judges, practitioners, officials of the US Patent and Trademark Office and legal academics to whom Mr Peterson introduced the Commission, and from whom its members received useful advice, some of the more notable are mentioned in 8.15.1 to 8.15.11 hereunder :-

8.16 During the Commission's brief stay in London the Chairman and the Hon R.N. Leon were able to listen for some hours to an interlocutory motion being argued in Chancery before Mr Justice Robin Jacob ; and upon the adjournment of his Court they had the benefit of a short but useful general discussion with him. Mr Justice Jacob stressed the crucial importance of keeping discovery proceedings in intellectual property cases within manageable limits.

CHAPTER 9

THE ROLE AND THE FIELD OF JURISDICTION OF THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

9.1 THE UNITED STATES COURTS OF APPEALS IN THE FEDERAL SYSTEM

9.1.1 The hierarchy of courts in the U.S. federal judicial system may be likened to a pyramid. At the base of the pyramid are the 94 U.S. District Courts of general jurisdiction spread nationwide. From the trial judgments of the District Courts (sitting with or without a jury) appeals lie to the middle layer of thirteen United States Courts of Appeals. The apex of the pyramid is the United States Supreme Court with its nine Justices which hears appeals from the judgment of the courts below it. Making its own discretionary selection of what appeals it will hear the Supreme Court hands down annually opinions in no more than some 150 cases. In most cases involving federal law the Circuit Courts of Appeals are, therefore, effectively the Courts of last resort.

9.1.2 Twelve of the thirteen circuits are territorial in their jurisdiction. Eleven of these circuits are designated numerically : the First to the Eleventh Circuits. The Twelfth circuit is the District of Columbia Circuit. In each circuit there is a United States Court of Appeals. Each circuit hears appeals from the federal district courts located with its own circuit. The jurisdiction of each circuit is therefore geographically limited.

9.1.3 The United States Court of Appeals for the Federal Circuit [ " CAFC " ] established by Congress in 1982 has its headquarters in Washington DC although it may ( and does, when enough cases justify the expense of travel ) sit elsewhere in the country. Although it is co-equal with the twelve territorially structured federal intermediate appellate courts the jurisdiction of the CAFC is not territorially limited. Its jurisdiction extends nationwide and is defined by reference to subject-matter of the cases. In particular (although this represents only a portion of its case-load) the CAFC has jurisdiction over appeals from federal district courts in patent cases throughout the country. The CAFC also hears appeals from trade mark decisions of the Patent and Trademark Office, but it does not hear appeals from district court trade mark actions.

9.2 THE REASONS UNDERLYING THE ESTABLISHMENT OF THE COURT OF APPEALS FOR THE FEDERAL CIRCUIT

9.2.1 As pointed out by Harms JA [ see para 7.8 at page 32 in Chapter Seven ] one circuit of the Courts of Appeals is not bound by the judgment of another. Mr George Hutchinson of Finnegan Henderson [ see para 8.15.1 at page 44 in Chapter Eight ] explained to the Commission that, apart from the modest annual output of opinions by the U.S. Supreme Court, that court had down the years displayed a disinclination to deal with patent appeals. What further exacerbated the problem is described thus by Senior Judge Marion T. Bennett of the CAFC :-

Uncertainty in the field of patents was detrimentally affecting business and the industrial community. Across the country there was a pressing need for uniformity in the interpretation and application of patent laws in order to achieve judicial decisions conducive to industrial research and business productivity. The CAFC was created in order to achieve uniformity of decisions in the critical area of patent law without the need for the Supreme Court to resolve conflicts between circuits.

9.3 THE AMERICAN SOLUTION TO THE PROBLEM OF THE LACK OF A NATIONALLY UNIFORM RESOLUTION OF PATENT LAW DISPUTES WAS SHAPED BY A LEGAL PHILOSOPHY DISTRUSTFUL OF SPECIALIST COURTS

9.3.1 In its discussions with many American lawyers the Commission encountered an almost universal aversion to specialist courts functioning outside the ordinary mainstream judicial system.

9.3.2 The Commission soon became aware of a strong American tradition favouring generalist Judges. It is feared in the U.S.A. that the narrowness of the work of a specialist court tends to doctrinal isolation and short-sighted vision. It is felt that the essential talent of a Judge is his faculty of judging ; and that this aptitude is best developed and honed by the widest exposure to the law in all its ramifications.

9.3.3 In an article in the Houston Law Review Vol 32 (1995) No 1, 67 John B. Pegram writes at p 125 :-

9.4 THE COURT OF APPEALS FOR THE FEDERAL CIRCUIT IS NOT A "SPECIALIST" COURT IN THE ORDINARY SENSE OF THE WORD

9.4.1 In creating the Court of Appeals for the Federal Circuit Congress resolved the most powerful objection to the proposed new court - the dangers inherent in specialisation - by the broad range of jurisdiction which it bestowed upon the court. The CAFC has almost plenary jurisdiction over patent law because it has been given the jurisdiction of the CCPA to review decisions of the Patent and Trademark Office, the power of the Court of Claims to review its trial division's adjudication of patent disputes against the United States, and the jurisdiction of the regional circuit courts over appeals from cases arising under patent law. But in addition it has been given jurisdiction spanning a broad range of legal issues and types of cases. This ensures that its Judges have no lack of exposure to a wide variety of legal problems. The breadth of its jurisdiction is indicated in 9.4.2 below.

9.4.2 Writing the foreword to the history of the CAFC (the work cited in footnote 1 to para 9.2.1 at page 48 above) the late Chief Judge Helen W. Nies of that Court said the following (at page xii) :-

In addition to the matters mentioned above the CAFC has also been given jurisdiction over the U.S. Courts of Veterans.

9.4.3 The CAFC is statutorily constituted of twelve Judges. Congress has authorised it to sit in panels of three or more judges. These panels do not specialise. Instead panel membership rotates and each panel has a cross-section of cases randomly assigned to it. Chief Judge Archer told the Commission that patent cases represent roughly 25% of the CAFC's caseload.

9.4.4 It is interesting to notice the career and to examine the legal background of Chief Judge Glenn L. Archer before his appointment to the CAFC. After law school graduation and admission to the Bar of the District of Columbia in October 1954, he took a Commission as a first lieutenant in the Judge Advocate General's Office of the U.S. Air Force. Returning to Washington in December 1956 he entered private practice with a law firm in which he became a partner in 1960. During his 25 years of private practice Judge Archer specialised in tax and corporate law. In 1981 President Reagan nominated him to be Assistant Attorney-General for the Tax Division in the Department of Justice, and he was confirmed by the Senate in December 1981. The Tax Division conducted and was responsible for all tax refund, tax collection, and related civil tax litigation in the courts of the United States. In October 1985 President Reagan nominated Judge Archer to be a Circuit Judge of the United States Court of Appeals for the Federal Circuit. He was confirmed by the Senate and took his oath of office in December 1985.

CHAPTER 10

THE BROAD GUIDE-LINES ADOPTED BY THE COMMISSION AND ITS MAIN FINDINGS OF FACT IN REGARD TO THE PROPOSAL FOR THE ESTABLISHMENT OF A SPECIALIST INTELLECTUAL PROPERTY LAW COURT

10.1 The Commission accepts unreservedly that the proposal of the South African Institute for Intellectual Property ["the Institute"] for the establishment in South Africa of a specialist intellectual property court is not inspired by motives of self-interest.

10.2 The Commission accepts that it is essential for the proper industrial and commercial development of South Africa that it should have a sound and effective intellectual property regime.

10.3 The Commission is satisfied that at the present time in South Africa intellectual property rights enjoy satisfactory protection; and that this is recognised to be the position in other countries.

10.4 The Commission finds that the Court of the Commissioner of Patents is functioning well. The Commission finds that it is expedient (and indeed essential) for the Registrar of Trade Marks to perform both administrative and judicial functions; and that the latter are satisfactorily performed by him.

10.5 The Commission accepts that a sound grasp of the principles of intellectual property law (or any one of its diverse branches) and practical experience of their application in litigation is important alike for a practitioner presenting a case to the court and for the Judge who has to decide the matter. But this is no less true for tax law, company law, the law of negotiable instruments, ever-burgeoning administrative law - and, indeed, for any other intricate branch of the law.

10.6 The Commission is opposed to the notion that the adjudication of intellectual property law matters should be the exclusive preserve of a specialist court. The Commission considers to be well-founded the apprehension of American jurists that a specialist court tends towards doctrinal isolation, tunnel vision; and not infrequently, idiosyncratic Judges.

10.7 The Commission agrees with the suggestion made in the AD Memorandum that as a qualification for judicial appointment:-

10.8 The Commission shares the view expressed in the Cape Bar Memorandum :-

10.9 The Commission agrees with the following statements in the Findlay Memorandum :-

10.10 The Commission agrees with the following view expressed by Mr Justice Ian Sheppard of the Federal Court of Australia [in the Sheppard letter] :-

10.11 In the case of the United States the position since 1982 has been that effectively the Court of Appeals for the Federal Circuit ["The CAFC"], rather than the US Supreme Court, has been the court of last resort for patent law disputes. For the reasons set forth in Chapter Nine of this Report the Commission is satisfied that the CAFC is a generalist rather than a specialist court.

10.12 The Commission considers that the above-quoted observations of Mr Justice Sheppard apply with particular force to the Supreme Court of Appeal in South Africa. It is instructive in this connection to notice from the South African Law Reports the outstanding contribution to intellectual property law reflected in the many judgments delivered over an appellate career of 23 years by the former Chief Justice, Mr Justice MM Corbett, who came to the Appellate Division as a generalist Judge.

10.13 The Commission finds that the pool of suitably qualified persons (and it is accepted that their qualifications are excellent) from whom appointments to the Bench of a specialist intellectual property court might be made is unacceptably small.

10.14 In the light of past experience the Commission considers it improbable that in future more patent practitioners will appear personally in the Court of the Commissioner or (should such be established) a specialist intellectual property court.

10.15 The Commission is satisfied that it will be difficult to find a suitable candidate for appointment as President of a specialist intellectual property court. This difficulty is fully appreciated by more than one member of the Institute.

10.16 Scarce judicial manpower should be deployed productively and economically. Leaving aside the merits of specialist Judges as opposed to generalist Judges, the Commission is not satisfied that the volume of intellectual property litigation in South Africa is sufficient to keep Judges in a specialist court productively and economically occupied.

CHAPTER 11

THE COMMISSION'S RECOMMENDATION IN REGARD TO THE PROPOSED SPECIALIST INTELLECTUAL PROPERTY LAW COURT

The unanimous recommendation of the Commission is that a specialist intellectual property law court should NOT be established in South Africa.

SECTION (B)

CHAPTER 1

THE PROPOSAL BY THE ASSOCIATION OF INSOLVENCY PRACTITIONERS OF SOUTH AFRICA THAT A SPECIALIST INSOLVENCY COURT SHOULD BE ESTABLISHED

1.1 The Jurisdiction of the High Court

1.2 The Association of Insolvency Practitioners of South Africa [ AIPSA ] is a voluntary association which is in the process of seeking statutory recognition. AIPSA has 250 members. Approximately 98% of the total number of insolvency practitioners in South Africa belong to AIPSA. Its members include persons who take appointments as trustees, liquidators, curators, receivers for creditors etc.

1.3 Under cover of a letter dated 26 July 1995 by the Secretary of the Project Committee for the Review of Insolvency Law of the South African Law Commission [ the Project Committee ] there was sent to the Commission a written response by the Project Committee dealing with Specialised Insolvency Courts. A copy of the Project Committee's written response is to be found in Appendix " W " at pages 186 to 188 in VOLUME II of this Report.

1.4 The Project Committee's written response concluded with the following two paragraphs :-

1.5 On 11 April 1996 and at a public sitting of the Commission held at Midrand the Commission was addressed successively by the following three persons on behalf of AIPSA : Professor M. Katz ; Mr L.F. Pereira ; and Dr E. de la Rey. Each in turn proposed the establishment of a specialist insolvency court as part of the Commercial Court wherever a Commercial Court now exists [ Johannesburg ] or may in future be created. Before he addressed the Commission Professor Katz handed in a memorandum [ the AIPSA Memorandum ] setting out the essence of AIPSA's submissions in relation to the proposed specialist insolvency court. A copy of the AIPSA Memorandum is to be found in Appendix " X " at pages 189 to 194 in VOLUME II of the Report.

1.6 In paragraph 5 of the AIPSA Memorandum it is stressed that in the context of insolvency law it is helpful to distinguish between those functions which are purely judicial and those which are administrative. It is said that judicial functions include the hearing of the following seven matters : (1) applications for winding up ; (2) applications for liquidation ; (3) applications for judicial management ; (4) applications for curatorship ; (5) applications for sequestration ; (6) schemes of arrangement and offers of compromise ; (7) all insolvency matters arising from the provisions of the Insolvency Act, 1936 and the Companies Act, 1973, including the challenging of impeachable transactions. Administrative matters on the other hand -

1.7 Under the heading "Purpose" paragraph 5 of the AIPSA Memorandum describes the objectives of a specialist insolvency court as including the benefits of :-

  1. high levels of skills ;
  2. high levels of experience ;
  3. the attainment of speed ; and
  4. the development of the law.

1.8 The AIPSA Memorandum concludes with the following paragraph :-

" 8. PROPOSAL

8.1 Taking cognisance of the aforegoing it is proposed that in those Provincial Divisions where a Commercial Court exists or is established there should be established as a part of that Court a Specialist Bankruptcy Court. Naturally this does not take cognisance of the problems that exist at present with the Commercial Court arising from the fact that it requires the consent of both parties. This is a limitation which should be eliminated.

8.2 The suggestion in paragraph 8.1 above appears to accord with the position which exists in England. There the Bankruptcy Court is a part of the Chancery Division.

8.3 It is also pointed out that in Canada the Bankruptcy Court is part of the Commercial Court. This arises by way of the Rules of the High Court.

8.4 Thus, in those Provincial Divisions where the volume of commercial work does not justify a Commercial Court, so too would there be little purpose served in establishing a Bankruptcy Court.

8.5 In those Divisions where a Commercial Court is established, a separate insolvency Court could be formed as a part of the Commercial Court. This would enable, for example, all of the Commercial Court judges to be available for the Insolvency Court.

8.6 In addition to the aforegoing suggestion a distinction would be made between Judicial and Administrative functions along the lines set out in paragraph 5 above."

CHAPTER 2

2.1 A SUMMARY OF THE MAIN ORAL SUBMISSIONS IN REGARD TO THE CREATION OF A SPECIALIST INSOLVENCY COURT MADE TO THE COMMISSION BY INTERESTED PARTIES AT MIDRAND DURING APRIL 1996

2.2 In amplification of the AIPSA Memorandum oral submissions were made to the Commission at Midrand on 11 April 1996 by Professor Katz, Mr Pereira, Dr E. de la Rey and Adv M.B. Cronje. In addition certain information regarding interrogations under the Insolvency Act and the Companies Act was furnished to the Commission by Mr J. Stuart, Deputy-Master of the Transvaal Provincial Division and Mr R. Mandelstam, a senior Johannesburg Magistrate. [ see pages 80-92 in VOLUME III of this Report ].

2.3 In the course of his oral submissions [ see pages 80-82 in VOLUME III ] Professor Katz dealt seriatim with the submissions set forth in the AIPSA Memorandum. He pointed out that before one could formulate any specific proposal for the establishment of a specialist insolvency court it was necessary to examine the environmental factors :-

2.4 Professor Katz stated that in considering the criterion of accessibility the fact that we had a Special Income Tax Court did not provide a helpful analogy :-

2.5 Pointing out that at the moment bankruptcy was dealt with in a multiplicity of statutes, Professor Katz mentioned that the Project Committee would probably recommend a consolidated statute dealing comprehensively with all facets of insolvency :-