Continued from last week
The Government also needs to ensure health needs of the people.
Unlike in developed countries, therefore, the impact of IPR legislation will be felt more by the people in developing countries. It is then the responsibility of the State to introduce a properly planned system of State financing and/or compulsory licensing to prevent escalation of drug prices in countries like Sri Lanka.
Therefore, it is necessary to strike a balance between the two. In other words, there is a need for harmonisation between the two towards social justice.
It is in this context that the Supreme Court’s judgment in In Re Intellectual Property Bill is very important. The judgment in Re Intellectual Property Bill (SC Special Determination No.14/2003) can be commended as one that impacts on millions of Sri Lankans as well as generations to come. The Supreme Court per learned Chief Justice Sarath N Silva CJ., with Justice ….. agreeing adopted a very farsighted approach and analysed the likely effect of the proposed legislation on the millions of poor consumers and industrialists in a developing country like Sri Lanka.
The Court took special note of the rights of the patients, and also effectively addressed the issues of patenting plants and micro-organisms. This judgment is a great victory not only to Sri Lanka, but also to all those in the developing and the least developed world now faced with the ultimatum of drafting IP laws in conformity with the TRIPS Agreement and related topics in the future.
The Supreme Court in this case stated that: “The provisions in Article 12(1) guarantee equal rights as well as equal protection and provision of the TRIPS Agreement cannot be applicable to developed and developing countries equally without attributing due consideration to such rights with particular reference to the mitigatory provision in the Agreement” (Ibid at p 7).
“Producers of patented products and processes and their agents in developed nations and consumers of such products in developing countries such as Sri Lanka cannot be taken as parties that are similarly circumstanced. There is ample justification to treat them differently as they cannot be put on an equal footing” (Ibid at p 7).
The mitigatory provisions referred to in the judgment are found in the TRIPS agreement as well as the Doha Declaration which recognised this problem by stating that the ‘TRIPS agreement does not and should not prevent Governments from taking measures to protect public health.’ These mitigatory provisions can be utilised by countries to protect the interests of the right to health of the people. Therefore, a clear understanding of the same is essential in attempting to harmonise the protection of IPR and human rights.
The TRIPS agreement and the Doha Declaration contain certain mitigatory provisions, which can be used to further the protection of human rights in certain instances. The Declaration is the outcome of the WTO 4th ministerial meeting held in Doha, Qutor in 2001. The Doha Declaration is considered by many as a recognition of the challenges faced by developing countries following the failure of the Seattle Ministerial Meeting.
Under the heading ‘TRIPS and Public Health’, the Declaration identified the rights of the Government in three instances: Compulsory licensing, national emergencies and Government use and parallel importing.
The above three are outlined below:
Compulsory licensing
Compulsory licensing is the granting of a licence to use a patent without the consent of the patent holder. This is, however, subject to the payment of adequate compensation to the patent holder. Article 31 of the TRIPS agreement permits compulsory licensing in specific instances. According to the text, such licensing is permitted to a Government or a third party where the proposed user has made efforts to obtain authorisation from the rights holder on reasonable commercial terms and conditions and that such efforts have not been successful within a reasonable period time, unless there exists a national emergency.
The agreement states that: The rights holder shall be paid adequate remuneration considering the circumstances of each case, taking into account economic value of the authorisation (Article 31(h)). Such use shall be authorised predominantly for the supply of the domestic market of the Member authorising such use (Article 31(f)).
The Declaration on the TRIPS and Public Health has adopted a more liberal attitude and states that: “Each member has the right to grant compulsory licences and freedom to determine the grounds upon which such licences are granted.” The importance of compulsory licensing was correctly stressed in the Supreme Court determination on the Intellectual Property Bill.
National emergencies and Government use
In a national emergency, the Government is permitted to issue licences without the authorisation of the patent holder, and this is not subjected to restrictions contained in Article 31of the TRIPS agreement. The ‘Government use or ‘non- commercial use is of greater importance to developing countries considering the high level poverty.
The distinction between Government use provision and compulsory licences would lie primarily in the nature or purpose of the use of the patent. In the case of the Government use’, it should be limited to the public, non-commercial purposes, whereas compulsory licences would also cover private and commercial use.
Government use is a flexible concept where a Government retains a final authority to use patents for a public good for non-profit purposes. With regard to Government use, the patent holder is granted compensation.
Parallel importing
The TRIPS agreement and the Doha Declaration allow for parallel importing, which is the import and resale of patented products. Article 6 of the TRIPS agreement leaves it to the Members to decide as to the adoption of principles with regard to parallel imports. The Doha Declaration reaffirms this in paragraph 5(d). As such an importer can freely import and resale of products from a manufacturer in another country. This right to import patented product is not implicit and must be included in the laws within the country.
The principles with regard parallel importing are widest and most flexible under the principle of ‘international exhaustion of rights’ where a patented product from any other country can be imported. This has now been recognised by most countries as the principle underlined parallel imports. These mitigatory provisions were not initially included in the Intellectual Property Bill and were later incorporated after the Supreme Court’s determination to that effect.
Intellectual Property Bill (Decisions of the Supreme Court in Parliamentary Bills 2001-2003.) P 20 bearing the title Intellectual property Bill.
In the matter of petitions under Article 121(1) of the Constitution
Present: Sarath N. Silva – Chief Justice, Shirani A. Bandaranayake – Judge of the Supreme Court J. A. N. de Silva – Judge of the Supreme Court
S.C Special Determination
No.14/2003 Dr. Kamalika Abeyratne, No. 91A, 5th Lane Colombo 3. Petitioner.
Counsel: Ms. I. R. Rajapakse with S. Daluwatte for the Petitioner.
Saleem Marsoof PC – Additional Solicitor General with Shavindra Fernando – Senior State Counsel and N. Wigneswaran, State Counsel for the Attorney – General.
S.C Special Determination
No.15/2003. Centre for Policy Alternatives (Guarantee) Ltd, No. 24/2, 28th Lane Sir Ernest De Silva Mawatha, Colombo 7. Petitioner:
Counsel: M. A. Sumanthiran with Buddhika Ilangatillake, S. Anthony and S. Kannag – Isweran P.C. for the Petitioner. Saleem Marsoof, P.C. Additional Solicitor General with Shavindra Fernando, Senior State Counsel and N. Wigneswaran, State Counsel for Attorney – General.
S.C. Special Determination
No.16/2003 Nihal Fernando No. 18 Skelton Road, Colombo 5. Petitioner Counsel: Jagath Gunawardane with Ms. Lilanthi De Silva for the Petitioner
Saleem Marsoof, PC, Additional Solicitor – General with Shavindra Fernando, Senior State Counsel and N. Wigneswaran, State Counsel for Attorney – General.
The Court assembled at 10.00 a.m. on June 6, 2003 and at 1.30 p.m. on June 9, 2003.
A Bill bearing the title ‘Intellectual Property’ was placed on the Order Paper of Parliament of May 21, 2003. Three Petitions numbered as above have been presented, invoking the jurisdiction of this Court in terms of Article 121 (1) of the Constitution to determine whether the Bill or any Provision thereof is inconsistent with the Constitution. The Attorney General has been given due notice of the Petitions.
The Counsel representing the Petitioners and the Additional Solicitor – General were heard before this Bench at the sittings held on June 6 and 9, 2003.
The petitioners contended that Clause 84, 90, 91, 92, 93 and 94 of the Bill are inconsistent with Articles 3 and/or 4 (d), 12(1) and 14(1) g of the Constitution and that if they are to be become law, they must be passed by a two-thirds (2/3) majority in Parliament.
The petitioners also contended that although they are mainly concerned with the Clauses referred to earlier, which are found in Chapters XIV to XVII, that it would be necessary to refer to other areas, which would include other Clauses. Accordingly, the Petitioners contended that Clauses 62, 83 and 87 of the Bill are also inconsistent with Articles 3 and / or 4(d), 12(1) and 14(1) g of the Constitution.
The Bill seeks to provide for the law relating to Intellectual Property and for efficient procedure for the registration, control and administration and to amend the Customs Ordinance and the High Court of the Provinces (Special Provisions) Act, No.10 of 1996.
Clauses 83 and 84
The present Bill consists of 11 parts and 43 Chapters, Clause 83, which is in Chapter XIV, deals with the Duration of a patent and Clause 84, which is in Chapter XV, provides for the rights of an owner of a Patent. The contention of the petitioners is that these two clauses would make provision for the grant of a patent for 20 years in respect of products and processes. The owner of such a patent, it was contended, would have the exclusive right for 20 years to exploit the patented invention to assign or transmit the patent and to conclude licensing contracts in respect of such inventions.
The petitioners further contended that, in accordance with the terms of Patent Chapters read with Articles 3 and 4 of the Trade Related Intellectual Property Rights (TRIPS) Agreement, the Government will not be able to accord to its own citizens or corporate entities any protection or privileges which are not granted to foreign persons or corporate entities.
These provisions in effect would allow the foreign patent holders of any product or process, including medicinal drugs and the processes for their manufacture, to control the supply and price of such drugs in the Sri Lankan market.
This would result in the increase of the prices of such medicine in the market as the aforementioned provisions will have the effect of removing the power of the Sri Lankan authorities or a Sri Lankan citizen from obtaining medicines for the ‘People of Sri Lanka’ at the cheapest available price and from a source of their choice.
The contention of the petitioners, therefore, is that these provisions are violative of Article 12(1) of the Constitution. In support of this contention, the petitioners drew our attention to the Report on ‘TRIPS and Health Section in the South-East Asia Region’ published by the World Health Organization (WHO) which sets out the consequences of adherence to the TRIPS agreement on the health of people in the South and East Asian countries, including Sri Lanka.
To be continued next week
