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Singapore Patents Law Tackles Public Health Issues and Also Paves the Way for Competition
A review of recent amendments to Singapore's Patent Act in light of the Doha Amendments.
Disclaimer: The opinions expressed in
this article are the sole responsibility of the author and the interviewees
and do not necessarily reflect any position or policy of IPOS. While every
effort has been made to ensure that the information contained in this article
is correct, neither the author nor IPOS can accept any responsibility for
any errors or omissions or for any consequences resulting therefrom. Nothing
in this article is intended to amount to legal advice and professional opinion
should be sought on a case by case basis.
The Doha Amendments
What if Singapore needs huge supplies of a patented medicine to address a public health problem but lacks the production capability and is unable to import sufficient supplies from the patent owner, even though a compulsory license is granted in the exporting country?
In light of SARS, HIV/AIDS, tuberculosis, malaria,
and the devastating effects they have on lives and a country's socioeconomic
development, public health issues need to be addressed collaboratively with
the rest of the world so that governments can be operationally ready to tackle
the problems when they surface and ensure access to medicines in situations
of national emergency. The Patents Act already has provisions to enable the
Singapore Government to do anything in relation to a patent invention in times
of a national emergency or other circumstances of extreme urgency. However,
with the amendments to the Singapore Patents Act which came into effect on
1st December 2008, in particular, ss 2, 56, 60, 62 and 66, the provisions
implemented a system that provided more specifically for Singapore to be allowed
to import medicines manufactured under compulsory licenses in other countries
if Singapore lacks production capacity for the same, while ensuring intellectual
property rights holders are remunerated, and subject to certain other conditions.
This system originated from a declaration made in 2001 during a World Trade
Organisation ('WTO') Ministerial Conference held at Doha. That declaration
subsequently evolved into a protocol to amend Article 31 of the TRIPS Agreement,1
which originally required a 'predominant' portion of what is produced under
a compulsory license to be consumed domestically; this requirement limited
the amount available for export by a country with manufacturing capacity to
a needy country. After accepting the amendments to the TRIPS agreement, Singapore
correspondingly amended her Patents Act. The above amendments to the Patents
Act are therefore conveniently called the Doha Amendments.
It is imperative to note that when Singapore has the intention to import during
a national emergency or other circumstances of extreme urgency, Singapore,
in compliance with the procurement processes required by the system, would
have to, inter alia, notify the TRIPS Council of its intention to use the
system as an importer.2 The country that exports to Singapore would also have
to notify the TRIPS Council.3 Such notifications will be made publicly available
by the WTO Secretariat through a dedicated page on the WTO website. Interestingly,
the system has so far been activated just once in 2007 for Rwanda4 to import
and Canada5 to export for two years packs of TriAvir, a fixed-dose combination
product of Zidovudine, Lamivudine and Nevirapine, to treat HIV/AIDS.
The Competition Amendments
Are 'tying' arrangements anti-competitive? Are agreements that require a patent licensee to pay royalties after the expiry of the patent an abuse of monopoly rights by the patent owner? Originally, all these arrangements were presumed anti-competitive and deemed void, even though not all may be effectively so. In the light of Singapore's competition regime, it is felt that terms covered under ss 51 and 52 of the Patents Act would be more appropriately analysed and dealt with under that regime. With effect from 1 December 2008, a new s 50A applies, the effect of which is to restrict the application of ss 51 and 52 to those arrangements made before the commencement of the new s 50A. This portion of the Patents Act amendment is therefore conveniently called the Competition Amendments. The author interviewed several Competition Law practitioners for their views on the difference in assessment of these agreements and its possible consequences under the Competition Act. Mr Cavinder Bull, Senior Counsel, of Drew and Napier opined that 'an interesting difference in the examination of such terms is that, if prohibited under the Competition Act, the prohibition would be essentially in respect of the "conduct" of the licensor, rather than it simply being a prohibited "term". The consequence of this is that the Competition Commission of Singapore has a wide range of remedies at its disposal, and may impose a financial penalty on the licensor, rather than simply voiding the contractual term'.
What are the effects of the Competition Amendments? The Senior Minister of State for Law, Associate Professor Ho Peng Kee, in the second reading of the Patents (Amendment) Bill in August 2008, highlighted that for the holders of patent rights, the amendments would likely give them more flexibility in imposing such terms. Practitioners share the view that there would be more freedom as well. There is optimism that the amendments may afford more of a possibility for the valid inclusion of such provisions in contracts. However, instead of being void ab initio, establishing the validity of such clauses will not be as straightforward as before, given that economic assessments will need to be made regarding the position of the licensor, the competitive effect of the term, and all the circumstances relating to its imposition, Mr Bull noted. Mr Martin Schweiger, a European Patent Attorney and a Singapore registered patent agent as well as a foreign lawyer practising in Schweiger and Partners (Singapore), cautions that practitioners need to be aware of potential pitfalls when advising on license agreements because any license agreement may later turn into a professional liability issue.
Further, such an approach of having terms covered
under ss 51 and 52 of the Patents Act regulated under the Competition Law
is consistent with trends in the US and UK. Mr Bull observed that the US and
the European authorities have generally taken a conservative approach to analysing
whether a condition can be commercially justified. Although the right to exploit
an intellectual property right is accepted, where it is determined that the
primary purpose of imposing a tying clause is a dominant licensor's own commercial
interests, rather than technical interoperability for instance, the term is
likely to come under greater scrutiny. Whilst the ultimate approach of the
Competition Commission of Singapore is uncertain, it is unlikely that an overly
liberal interpretation of what is 'commercially justified' will be adopted.
Acknowledgments
The author thanks the following persons for their views and assistance: Mr Cavinder Bull (Senior Counsel), Mr Scott William Clements, Mr Martin Schweiger, Mr Ang I-Ming, Ms Isabel Chng, and in particular, Mr Alvin Sim who represented Singapore in the Technical Cooperation Workshop on the TRIPS Agreement and Public Health held in Geneva. The author also acknowledges the permission of IPOS to use its Guide To The 2008 Patents Amendments found at http://www.ipos.gov.sg/NR/rdonlyres/71A02C51-8783-4C13-A309-11CBE31450F3/5960/PatentsAmendmentsAct20083Oct09.pdf for this present article. All references with hyperlinks were last accessed December 2008.
Constance Leong6
Intellectual Property Office of Singapore
Notes
1 Singapore is a member of the TRIPS Agreement (Agreement on Trade-Related
Aspects of Intellectual Property Rights).
2 http://www.wto.org/english/tratop_e/trips_e/public_health_notif_import_e.htm
3 http://www.wto.org/english/tratop_e/trips_e/public_health_notif_export_e.htm
4 http://docsonline.wto.org/imrd/gen_searchResult.asp?RN=0&searchtype=browse&q1=%28+%40meta%5FSymbol+IP%FCN%FC9%FC%2A+%29+&language=1
5 http://docsonline.wto.org/imrd/gen_searchResult.asp?RN=0&searchtype=browse&q1=%28+%40meta%5FSymbol+IP%FCN%FC10%FC%2A+%29+&language=1
6 Constance Leong, LLM (London); Advocate &
Solicitor (Singapore); Solicitor (England & Wales); the Registry of Patents,
Intellectual Property Office of Singapore (IPOS).