IN THE INTERNATIONAL COURT OF ARBITRATION GOOD HEALTH COMPANY DIRECTOR OF IP, STATE OF MARU SUBMISSIONS OF COUNSEL FOR THE CLAIMANT

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1 IN THE INTERNATIONAL COURT OF ARBITRATION BETWEEN: GOOD HEALTH COMPANY CLAIMANT -AND- DIRECTOR OF IP, STATE OF MARU RESPONDENT SUBMISSIONS OF COUNSEL FOR THE CLAIMANT DATE OF DOCUMENT: 10 th of September 2010 DATE OF FILING: 10 th of September 2010 FILED ON BEHALF OF: The Claimant 1

2 TABLE OF CONTENTS: Statement of Jurisdiction -3- Introduction -4- Statement of Facts -5- Questions Presented -8- List of Authorities -9- Grounds of Contention -11- Grounds of Contention Considered -12- Conclusions -33-2

3 STATEMENT OF JURISDICTION At the request of the Commerce Ministers of Maru and Hori, Good Health Company (herein 'GHC') and the Intellectual Property Department of Maru (herein 'IP Maru') have entered into a written agreement to enter into private arbitration. It is agreed that the Understanding on Rules and Procedures Governing the Settlement of Disputes will guide the arbitration. 3

4 INTRODUCTION: THIS MATTER INVOLVES A DISPUTE ARISING FROM THE MISAPPROPRIATION OF PROPRIETARY INFORMATION BY THE STATE OF MARU'S DIRECTOR OF INTELLECTUAL PROPERTY. 4

5 STATEMENT OF FACTS The Government of Maru implemented an open door policy to attract foreign investment in early Subsequent to this policy implementation, the pharmaceutical company Good Health Company (herein 'GHC') decided to create a subsidiary company in Maru (GHC- Maru) and to construct a new pharmaceutical manufacturing facility. As part of this expansion into Maru, GHC commenced clinical trials of their recently invented drug 'Miracle Cure'. This drug purports to treat a range of flu viruses (including avian flu) and is protected by patent (Patent No. 9,876,543) in all of the countries concerned in this matter. The initial clinical trials of Miracle Cure were successful. In late 2009, a deadly and previously unknown disease began to spread throughout Maru and eventually through to neighbouring nations. The symptoms of a normal flu, including a rising temperature, and eventual death (within a day or two) were recorded, and the disease was named killer flu. The successful administration of the Miracle Cure drug to a number of patients suggested that it may be a cure (or at least a temporary control) for the killer flu. Upon receiving news as to the apparent success of Miracle Cure in combating killer flu, GHC, evinced the intention to increase production and to speed up work on constructing the manufacturing facility in Maru. 5

6 Requests for the Miracle Cure drug increased with the spread of the killer flu, and the Director of the Intellectual Property Department in Maru, upon the request of the Maru Health Minister, asked Fizer Pharma (the largest competitor of GHC) to use its Porta-based manufacturing facility to produce GHC's Miracle Cure. In order to effect this, the Director of Maru's Intellectual Property Department ordered GHC to disclose all test results, technicalknowledge and other information to enable Fizer Pharma to manufacture Miracle Cure. The Director of Maru's Intellectual Property Department received the agreement of his good friend, Porta's Director of Intellectual Property, not to interfere in this matter. Fizer Pharma began the immediate production of Miracle Cure from it's Porta manufacturing facility. It was their understanding, promoted by the absence of contradiction by the Maru officials, that the initial batches would be distributed in Maru, but that subsequent to this Fizer Pharma would have free reign to produce and distribute Miracle Cure. The Intellectual Property Department of Maru paid GHC $20 per vaccine produced by Fizer Pharma, which Fizer Pharma reimbursed the department for. GHC objected to the forced disclosure of its proprietary information, and brought an infringement action against the Government of Maru. The presiding judge, a classmate of the Chairman of Fizer Pharma, found in favour of the Government of Maru, and arbitrarily denied a GHC request for another hearing with a different judge. His Honour denied the motion without convening the entire court. 6

7 The Director of Maru's Intellectual Property Department then requested Better Life Pharmaceutical to distribute its drug Sure Cure, which has been held to breach the patent of GHC's Miracle Cure drug in Hori. As a result GHC sought a Mareva Injunction, which was denied as Maru did not recognise non-literal infringement. A writ of appeal was dismissed without opinion by the Constitutional Court of Maru. It was then agreed between the Commerce Minister of Hori and the Commerce Minister of Maru, that the matter should be settled by arbitration. A written agreement was signed between the two parties to the dispute. 7

8 QUESTIONS PRESENTED: (a) Whether the action of the Intellectual Property Department of Maru was valid and justifiable under TRIP S in general and Article 31 of TRIPS in particular; (b) Whether failure to recognise an infringement beyond the literal terms of the patent violates Article 28 of TRIPS; (c) Whether the action of the Intellectual Property Department was valid and justifiable as per the Declaration on the TRIPS Agreement and Public Health (adopted 14 th November 2001) and the implementation of Paragrah 6 of the Doha Declaration on the TRIPS and Public Health (decision of 30 th August 2003); (d) If the actions of the Intellectual Property Department of Maru are not justified under (a) and/or (b) and/or (c) then what remedies should be awarded to GHC/GHC-Maru. 8

9 LIST OF AUTHORITIES FOR THE CLAIMANT Legislation Declaration on the TRIPS Agreement and Public Health (2001) (herein the 'Declaration on TRIPS) Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health (2003) (herein the 'Doha Declaration') Trade-Related Aspects of Intellectual Property Rights (1994) (herein the 'TRIPS Agreement') Case Law Graver Tank & Manufacturing Co. Ltd v Linde Air Products Co (1950) 339 US 605 Declaration on the TRIPS adopted on the 14 November 2001, Annex to the TRIPS Agreement: (8th December 2005) In Re Pinochet [1999] UKHL 1 Reg. v. Rand (1866) L.R. 1 Q.B. 230; Reg. v. Gough Kirin-Amgen Inc. v. Hoechst Marion Roussel, [2004] UKHL 46 Catnic Components Ltd v Hill & Smith Ltd [1982] RPC 183, 243 Royal Typewriter Co. v. Remington Rand Inc., 168 F.2d 691, 692 (2d Cir. 1948) 9

10 Patent Cooperation Treaty (2002) Articles Hestermeyer, Human Rights and the WTO: The case of Patents and the Access to Medicine (Oxford 2007) Oxfam International: Undermining access to medicines: Comparison of five US FTAs. [ Books Shimon Shetreet, Judges on Trial: a study of the appointment and accountability of the English judiciary (1 st Ed, 1976). De Smith, Woolf & Jowel, Judicial Review of Administrative Action (5 th Ed, 1995). 10

11 GROUNDS OF CONTENTION: 1. The actions of Maru's Intellectual Property Department were invalid and were not justified in all the circumstances, and specifically in relation to Article 31 of the TRIPS Agreement. 2. Article 28 of TRIPS Agreement is breached by the failure to recognise an infringement beyond that of the literal terms of the miracle cure patent. 3. The actions of Maru's Intellectual Property Department were invalid and unjustified both under the Declaration on the TRIPS Agreement and Public Health and under the Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health. 4. The actions of Maru's Intellectual Property Department were not justified under the three preceding grounds of contention, and it is submitted that the remedies of damages for pecuniary and non-pecuniary losses, coupled with an injunction be made in favour of GHC. 11

12 GROUNDS OF CONTENTION CONSIDERED: 1. The Intellectual Property Department of Maru directed GHC to make available all test results and now how regarding the manufacture of the Miracle Cure. In return, the director of IP of Maru awarded GHC US$20 compensation per vaccine. The issue in this regard is whether, under the TRIPS agreement, the actions by the director of IP of Maru are justified and valid. Under Article 31 1 of the TRIPS agreement looks at use of the subject matter of the patent without the authorization of the right holder. Article 31 specifically stipulates that this section also extends to unauthorized use by the government or third parties authorized y the government. Fizer Pharma is a third party who has produced the Miracle Cure without the authorization of GHC, however under the direction of the government. Thus this Article is particularly significant. Article 31 (a) 2 states authorization of such use should be considered on its individual merits. Prior to authorization of use, GHC should have been consulted and asked whether they possess the material and financial resources to produce the Miracle Cure on a mass scale. In the absence of GHC being able to meet such demands, authorization by the government for third party use would have been sufficient. However the director of IP failed to consider any 1 The TRIPS Agreement. 2 Ibid. 12

13 individual capabilities of GHC and rather made a general objective decision that was not based on GHC's ability to produce the drug. Article 31 (b) 3 requires that where the government, or a third party authorized by the government, has fails to obtain permission from the right holder: such use may only be permitted if, prior to such use, the proposed user has made efforts to obtain authorization from the right holder on reasonable commercial terms and conditions and that such efforts have not been successful within a reasonable period of time. This requirement may be waived by a Member in the case of national emergency or other circumstances of extreme urgency or in cases of public noncommercial use. In situations of national emergency or other circumstances of extreme urgency, the right holder shall, nevertheless, be notified as soon as reasonably practicable. In the case of public non-commercial use, where the government or contractor, without making a patent search, knows or has demonstrable grounds to know that a valid patent is or will be used by or for the government, the right holder shall be informed promptly. The first sentence of this section places a burden on the government or third party to exert some effort by any way shape or form in obtaining authorization prior to use. The director of IP exerted no effort n making contact with GHC nor, initiated any form of communication n order to acquire permission. Rather the facts stipulate that the director of IP, under his own discretion made his own decision to make available the patented information. It is evident 3 Ibid. 13

14 from the proceeding element of Article 31 (b) that the purpose of this negotiation is to ensure the right holder is given the opportunity to negotiate on reasonable commercial terms and conditions The absence of a negotiation means the absence of GHC's ability to receive commercial equality. It is evident there are considerable commercial interests at stake, and the director of IP has failed to take this into account. Furthermore such efforts must be unsuccessful within a reasonable period of time. The director cannot claim that any negotiations would have been unsuccessful. GHC would evidently be looking to protect their commercial interests however this no justification for denying them the opportunity to make a profit from their own product. The chairman indicated that GHC would be exerting double the effort and was opening the new factory n Maru within a week. Had the director exerted even the minutest effort in negotiating terms and conditions with GHC, this would have been brought to their attention and the likelihood that GHC could exceed production to meet demand without the interference of Fizer Pharma. Notwithstanding the above mentioned points, even in the absence of obtaining authorization from the right holder the only justification or validity the director may state is that their actions were as a result of a national emergency or extreme emergency. This is not evident from the director s actions. The right holder however must have been notified as soon as reasonably practicable. However the director of IP did not notify nor put GHC on notice, they simply demanded management to make available all test results and know-how regarding 14

15 the manufacture. For this reason it can be sad that the right holder was not informed promptly or at all for that matter. Article 31 (c) 4 states that the duration of such use shall be limited only to the purpose for which it was conferred. In addition Article 31 (f) requires that any such use shall be authorized predominantly for the supply of the domestic market of the Member authorizing such use. Under subsection (f) pharmaceutical products can be exported. According to the World Trade Organization (WTO) the annex to the protocol amending the agreement on 8 th December 2005, states that The obligations of an exporting Member under Article 31(f) shall not apply with respect to the grant by it of a compulsory license to the extent necessary for the purposes of production of a pharmaceutical product(s) and its export to an eligible importing Member(s). ANNEX TO THE TRIPS AGREEMENT 1. for the purposes of Article 31bis and this Annex 5 : (a) pharmaceutical product means any patented product, or product manufactured through a patented process, of the pharmaceutical sector needed to address the public health problems as recognized in paragraph 1 of the Declaration on the TRIPS 4 Ibid. 5 Ibid, Annex to the Trips Agreement: 8 th December

16 Agreement and Public Health (WT/MIN(01)/DEC/2). It is understood that active ingredients necessary for its manufacture and diagnostic kits needed for its use would be included; (b) eligible importing Member means any least-developed country Member, and any other Member that has made a notification to the Council for TRIPS of its intention to use the system set out in Article 31bis and this Annex ( system ) as an importer, it being understood that a Member may notify at any time that it will use the system in whole or in a limited way, for example only in the case of a national emergency or other circumstances of extreme urgency or in cases of public noncommercial use. It is noted that some Members will not use the system as importing Members and that some other Members have stated that, if they use the system, it would be in no more than situations of national emergency or other circumstances of extreme urgency; (c) Exporting Member means a Member using the system to produce pharmaceutical products for, and export them to, an eligible importing Member. The production of the Miracle Cure by Fizer in Porta was during the state national emergency, however the production of the Miracle Cure by Fizer after the Killer Flu was under control was not use during an extreme emergency or national emergency as per the 16

17 annex to the TRIPS agreement. Thus Article 31(f) has been breached because of the extent that Fizer was allowed to use the know how beyond the scope given. Article 31 (g) authorization for such use shall be liable, subject to adequate protection of the legitimate interests of the persons so authorized, to be terminated if and when the circumstances which led to it cease to exist and are unlikely to recur. The competent authority shall have the authority to review, upon motivated request, the continued existence of these circumstances. At the stage when the Killer Flu was under control, Fizer Pharma continued to export the Miracle Cure. This was a breach of Article 31 (g) as the circumstances which led to the authorization cease to exist. Article 31 (h) 6 states that the right holder shall be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization. GHC was only minutely compensated for the cost of the drug. However this compensation did not take into account the remuneration the cost of research and development, opening new factories and the numerous trials undertaken. Furthermore, Fizer received $50US per vaccine, while GHC only received $20US. This is evidently not adequate remuneration. 6 The TRIPS Agreement. 17

18 Article 7 7 states that the protection of IP rights should contribute to the promotion of technological innovation and to the mutual advantage of users and producers of technological knowledge. There has not been mutual advantage for GHC, in fact there has been no advantage for GHC. The transferring of information without GHC consent was to the disadvantage of GHC and they suffered as a result. They expended financially in research and development and have not been compensated adequately for this expansion. Hestermeyer Holdger 8 in his book titled Human rights and the WTO argues that there is an evident conflict between human rights law and patent law is in conflict. He states that circumstances where life saving medicine is patented, a conflict arises when with human s rights law which overlooks the existence of the patent and instead considers the necessity to distribute the medicine. The same argument that entitles human rights laws to prevail is the same argument that can be used n this context to recognize the significance of economic rights. According to the Oxfam International Journal 9 Currently, 90% of research funds go to only 10% of the world's disease burden. The people of Maru and the human race in general are entitled to live saving medicine. However this should not come at the complete disregard for the economic rights that GHC and such originations should be entitled to. Where is the incentive 7 Hestermeyer, Human Rights and the WTO: The case of Patents and the Access to Medicine_(Oxford 2007) 8 TRIPS Agreement. 9 Oxfam International: Undermining access to medicines: Comparison of five US FTAs. [ 18

19 to research and develop such life saving medicine for companies such as GHC. Without the millions of dollars they spent and the effort exerted in developing this drug, there would be no cure or even a treatment for the Killer Flue. Human rights are should not be disregarded or ignored, however by the same token economic rights should not be disregarded either. Furthermore Article 7 states there must be a balance of rights and obligation. There does not appear to be an evident balance in rights, the director of IP had an obligation of confidence which it breached. it was in the social and economic welfare of the people of Maru and internationally who were exposed to the threat of this disease. Notwithstanding this point the director or IP neglected the social and economic welfare of GHC. This poses the question to be asked, whose welfare exactly needs to be taken into account? Is it merely the welfare of the people with blatant disregard to commercial or economic rights. Or should there be a balance regarding these rights? It cannot be said that the TRIPS agreement does not recognize such commercial rights, rather protection of these IP rights are the sole purpose of the existence of the TRIPS agreement. The next Article to be examined is Article 8 which concerns the principles of the TRIPS agreement. This Article in paragraph one states that members to the TRIPS agreement may amend their laws to protect public health and nutrition and to promote the public interest in sectors of vital importance. However in allowing countries to do this, they must ensure they abide by the TRIPS agreement and any collateral contracts are consistent. Evidently the 19

20 Miracle Cure drug is of vital importance. However a mere necessity of public health concerns is not enough to rely on, the introduction of this must be consistent with TRIPS. As evident Article 7 has not been adhered to, had this been the case and as a result an action under Article 8 would be justified. Under paragraph 2 it states that appropriate measures may be taken to prevent the abuse of IP rights. From the present facts it is evident that there were no appropriate measures taken, as it appears there is an absence of any measures all together. GHC was not notified nor consulted of the decision to provide Fizer with the confidential information. This was a decision taken by the director of IP alone and should have been taken in conjunction with, and under the cooperation of GHC. The mere existence of the TRIPS agreement is to confer rights to the owners of innovations or creations. Article 28 is particularly important in this regard. This Article states prevents third parties from making, using, offering for sale, selling, or importing the patented product without the owner s consent. The actions of the director of the IP department resulted in the patented product being made, used, sold and imported without the consent of GHC who hold the patented rights. In addition Article 28, paragraph 2, also confers a right upon the owners the right to assign, or transfer by succession, the patent and to include licensing concessions. This right was denied by the director as they took it upon themselves to give the right to Fizer co. 20

21 The director of IP is has also breached Article 30 of the TRIPS agreement. While there will be an argument that Article 30 was not breached and that legitimate interests of third parties had to be taken into account, TRIPS clearly states that there must be no unreasonable conflict with a normal exploitation of the patent. In addition the Article states that there must not be unreasonable prejudice to the patent holder. Third party interests are evident in this case, and there was prejudice. In Re Pinochet 10 it was held that once it is shown that the judge is himself a party to the cause, or has a relevant interest in its subject matter, he is disqualified without any investigation into whether there was a likelihood or suspicion of bias. This case argued that where a judge is a party in his own case he should disqualify himself. While it may be argued that the judge presiding in this case was not a party in his own case as the case suggests, the mere fact that his interest or possible interest was not disclosed is also sufficient to argue his involvement was not impartial. The court held in this case that the mere fact of his interest is sufficient to disqualify him unless he has made sufficient disclosure 11. His honour referred to this as automatic disqualification. 2. Article 28 stets out the rights conferred on the patent holder. Below is an extract of Article 28: In Re Pinochet [1999] UKHL 1 11 Judges on Trial, (1976), p.303; De Smith, Woolf & Jowel, Judicial Review of Administrative Action, 5th ed. (1995), p

22 Rights Conferred 1. A patent shall confer on its owner the following exclusive rights: (a) where the subject matter of a patent is a product, to prevent third parties not having the owner's consent from the acts of: making, using, offering for sale, selling, or importing (6) for these purposes that product; (b) where the subject matter of a patent is a process, to prevent third parties not having the owner's consent from the act of using the process, and from the acts of: using, offering for sale, selling, or importing for these purposes at least the product obtained directly by that process. 2. Patent owners shall also have the right to assign, or transfer by succession, the patent and to conclude licensing contracts. Notwithstanding the fact that the Sure Cure drug does not literally infringe the patent, it nevertheless breached the doctrine of equivalents. This doctrine was examined in the case of Kirin-Amgen Inc. v. Hoechst Marion Roussel. 13 The issue in this case was whether or not a subsequent product can infringe an initial product's (patented product) patent because of the way it was made. In other words, can a difference in the way a product is made be substantial enough to claim there has been no infringement. Reference in the Kirin-Amgen case was 12 TRIPS Agreement. 13 Kirin-Amgen Inc. v. Hoechst Marion Roussel, [2004] UKHL 46). 22

23 made to Lord Diplock's statement in the case of Catnic Components Ltd v Hill & Smith Ltd 14. His Honour held that "A patent specification should be given a purposive construction rather than a purely literal one. This is the approach that ought to be taken in the International Court and adopted in the present case. Of greater significance to the present case is the definition of the doctrine of equivalents given by U.S. Judge Learned Hand in the case Royal Typewriter Co. v. Remington Rand Inc 15. His honor stated that the purpose of the doctrine of equivalents was to "temper unsparing logic and prevent an infringer from stealing the benefit of the invention". Essentially this decision looks at the fundamental purpose of the TRIPS agreement and the concept of protecting IP rights in general. In applying this definition and the previous explanations of the doctrine of equivalents and the literal approach it becomes evident that the Sure Cure drug does not literally infringe patent 9,876,543. However there is a remarkable similarity between Sure Cure and the Miracle Cure. The mere difference was the use of 'palm oil'. This alteration is so minute and insignificant to constitute a different or a new drug. As a result, it becomes evident that regardless of the absence of a literal infringement, there should be recognition of an equivalent infringement. 14 Catnic Components Ltd v Hill & Smith Ltd [1982] RPC 183, Royal Typewriter Co. v. Remington Rand Inc., 168 F.2d 691, 692 (2d Cir. 1948) 23

24 Graver Tank & Manufacturing Co. v. Linde Air Products Co also upheld the significance of the doctrine of equivalents claiming that not accepting the application of the doctrine of equivalents would mean there would be no incentive for inventors to make inventions if a third party can benefit some way or another from their patents. The doctrine of equivalents acts as a safeguard for protection. Maru may never have adopted the doctrine before, however the world we live in today, with the technology we possess today demands the need for a safeguarding measure such as this doctrine to protect inventions. It is this day and age that calls for the need of the doctrine to be implemented. Failure to recognize the doctrine of equivalents means GHC cannot reap the benefits of Article 28 when they are entitled to do so. Under subsection 2, GHC should have had the right to assign, transfer or create a license contract with a company of their choice to manufacture the desired quantity of the Miracle Cure. In the event that GHC is incapable of meeting worldwide demand, it would have been simple for GHC to begin to create negotiations with companies in order to increase manufacture. In the absence of adopting the doctrine of equivalents Article 28 will subsequently be breached. Subsection 1(a) states that the act of making, using, or importing a patented product is prohibited without the owner s consent. The director of IP failed to obtain the owner s consent, as well as the manufactures of the Sure Cure drug. GHC should have exclusive rights to the Miracle Cure and all production associated with that. The Sure Cure 24

25 drug is so similar to the Miracle Cure that distribution of this drug constitutes a form of making, using, selling and importing a patented drug which is the Miracle Cure. The Sure Cure is essentially a replica, or an almost identical copy of the Miracle Cure. Thus, failure to recognize the equivalent breach denies GHC the rights conferred by Article 28, and as a result breaches this Article. 3. Maru is a member of the World Trade Organisation. The Intellectual Property Department of Maru (herein IPDM ) must adhere to the obligations of the World Trade Organisation and in particular the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement). Good Health Company (herein GHC ) has patent rights over Miracle Cure, a drug it produces that treats flu viruses. The Patents include the chemical composition of Miracle Cure, it s method of manufacture and its use. GHC headquarters are in Hori. The patents were initially obtained in Hori and were subsequently patented by all countries that are members of the Patent Cooperation Treaty 16 of which Maru is a member. 16 Patent Cooperation Treaty (as in force from April 1, 2002). 25

26 As a result of killer flu epidemic in Maru, the Director of the IPDM at the request of the Health Minister of Maru invited Fizer Pharma in near-by Porta to produce GHC s Miracle Cure for export to Maru. The Health Minister of Maru feared that GHC may not be able to produce enough Miracle Cure. The Director of IPDM instructed GHC to produce all know how and tests regarding the manufacture of Miracle Cure to the Fizer Pharma Facility in Porta. The Director of IPDM also consulted with his good friend, Dr Francis, the Director of the Intellectual Property Department of Porta. Dr Francis agreed not to interfere with the manufacture of the Miracle Cure in Porta. GHC asserts that the relationship between the Director of IPDM and Dr Francis should be treated as a conflict of interest. The IPDM agreed to pay GHC $20 per vaccine that Fizer Pharma produced. This was the production cost estimated by GHC in Hori. Fizer Pharma agreed to reimburse the IPDM for its payments to GHC. GHC claims that IPDM should not have allowed Fizer Pharma access to its proprietary information and have allowed them to produce Miracle Cure without its permission. GHC protested the release of this information and took the matter to Court. The presiding judge dismissed the GHC infringement action it lodged against the Government of Maru. 26

27 GHC learned that the presiding judge was a friend of Fizer Pharma. GHC requested the presiding judge to disqualify himself, vacate the decision and reset the matter for another hearing. The Presiding Judge denied the motion without convening the entire court. GHC asserts here that the presiding judge as a result of his relationship with Fizer Pharma gives rise to a conflict of interest that should have been addressed prior to the commencement of GHC s action in court. As Maru is a member of the WTO, the IPDM are obligated to follow the Declaration on the TRIPS Agreement and Public Health (herein Declaration ) (adopted on 14 November 2001). The Declaration stresses the importance on WTO members right to protect public health and, in particular to promote access to medicines for all. 17 GHC in this regard has invested a huge amount of money and time into inventing Miracle Cure to aid the prevention the flu epidemic. GHC produced substantial quantities of Miracle Cure from its headquarters in Hori. The Director of the IPDM approved GHC in Maru to produce Miracle Cure for export, to which the Chairman of GHC instructed the Board of GHC to start the factory in Maru within a week to keep up with the demand for Miracle Cure. 17 Declaration on the TRIPS Agreement and Public Health adopted on the 14 November Refer to 4. 27

28 At no stage did GHC concede that they would not be able to keep up with the demand for Miracle Cure. In fact with increase in production of Miracle as a result of the implementation of the new production factory in Maru, production would have been greatly increased. GHC asserts that as a result of not being consulted on GHC s potential capability of production of more Miracle Cure, the action of the IPDM was invalid and not justifiable. The Declaration provides flexibilities to the right of members to ensure that their intellectual property rights are protected for the development of new medicine. 18 In providing these flexibilities whilst maintaining WTO members commitment to the TRIPS agreement, the Declaration maintains that each member has the right to grant compulsory licences and the freedom to determine the ground upon which such licences are granted. 19 GHC Maru were not consulted on the potential issuing of compulsory licences in this regard. Under the Declaration WTO a member with insufficient or no manufacturing capacity in the pharmecutical sector will be enforced to grant a compulsory licence over their patent if a member state has a public health crises in which they hold a drug or medicine that could help. GHC asserts that the production plant in Hori, along with the implementation of the production plant in Maru would be able to provide such capacity as to be sufficient to meet 18 Declaration on the TRIPS Agreement and Public Health adopted on the 14 November Refer to Declaration on the TRIPS Agreement and Public Health adopted on the 14 November Refer to 5(b). 28

29 the Member s needs of Miracle Cure. 20 Therefore the Maru Government in granting a compulsory licence to Fizer Pharma was invalid and not justifiable. Fizer Pharma in being granted the compulsory licence is under the impression that under its obligations as an exporting member, all of the Miracle Cure it produces must be sent to Maru, however after the killer flu was under control, Fizer Pharma believes they are entitled to begin their own production of Miracle Cure for exportation to Porta and other neighbouring countries. This would be contrary to the obligations of an exporting member. 21 That is, that under the compulsory licence, the exporting member is only required to produce the amount necessary to meet the needs of the eligible importing member (Maru) and further Miracle Cure is only to be exported to the Member(s) which has notified its needs to the Council for TRIPS. 22 The Doctrine of Equivalents ( Doctrine ) is used as a preventative measure to stop potential parties from infringing the rights of patent holders by preventing them from copying products and manufacturing them as their own. The Doctrine was further explained in Graver Tank v 20 Implementation of Paragraph 6 of the DOHA Declaration on the TRIPS Agreement and Public Health. Refer to Annex. 21 Implementation of Paragraph 6 of the DOHA Declaration on the TRIPS Agreement and Public Health. Refer to Implementation of Paragraph 6 of the DOHA Declaration on the TRIPS Agreement and Public Health. Refer to 2(b)(i). 29

30 Linde, 339 U.S. 605 (1950) where the court held that a patentee may invoke this doctrine to proceed against the producer of a device if it performs substantially the same function in substantially the same way to obtain the same result. The Director of the IPDM contacted Better Life Pharmaceutical ( BLP ) from Ulka requesting it to distribute its drug called Sure Cure. Sure Cure is a drug that is very similar to Miracle Cure. The main difference between Sure Cure and Miracle Cure is that Sure Cure uses corn oil to neutralise the toxic effect of the key ingredient Climbing Nightshade, whereas Miracle Cure uses palm oil to neutralise the toxic effect of key ingredient Climbing Nightshade. In this regard GHC asserts that under the Doctrine of Equivalents, BLP in their production of Sure Cure has infringed the rights of GHC as a patent holder of the equivalent drug Miracle Cure. Further in support of this claim, the Hori Court held that Sure Cure infringed the GHC patent under the Doctrine of Equivalents. However GHC in Maru was unsuccessful in this claim in consideration of the Hori outcome as the Maru Court has never recognised any form of infringement of non-literal infringement. 4. As a result of the abovementioned breaches, it is respectfully submitted that the following remedies be made out in favour of GHC: 30

31 Damages for pecuniary losses- under Article 45 of the TRIPS agreement the judicial authorities shall have the authority to order the infringer to pay the right holder damages adequate to compensate for the injury, that the right holder has suffered because of an infringement of that person s intellectual property right. The infringer must have knowingly, or with reasonable grounds to know, engaged in the infringing activity. GHC under the abovementioned submits that the Director of the IPDM pay the right holder damages adequate to compensate for the injury GHC has suffered due to the infringement of their intellectual property right over Miracle Cure. Under Article 45, GHC also seeks to have appropriate attorney-fees reimbursed and to order the recovery of profits that Fizer Pharma received from the sale of Miracle Cure. Damages for non-pecuniary losses- in addition to the abovementioned damages, it is submitted that GHC should also be compensated for its non-pecuniary losses, including but not limited to the damage GHC's reputation has sustained in the release of its patented information to its competitor, and the lost production time for GHC's factory whilst fighting for it's intellectual proprietary rights. 31

32 Mandatory Restorative Injunction- in order to prevent Fizer Pharmaceuticals from continued use of the wrongfully obtained information subject to the Miracle Cure patent, an injunction should be granted to protect GHC from further losses. Under Article 46 GHC can seek other remedies. GHC, if successful under a claim of breach against the Director of IPDM, can also seek to have the goods that have found to be infringing, without compensation of any sort, disposed of outside the channels of commerce in such a manner as to minimise the risk of further infringements. 32

33 CONCLUSIONS: It is respectfully submitted that the individual and cumulative effect of grounds 1 to 3 of the above points of contention is such as to render Maru's Director of Intellectual Property liable to the remedies set out in the fourth ground of contention. Use of the exceptions to the basic principles of the TRIPS Agreement are not justified in this case. Furthermore the TRIPS Agreement generally, and specifically Article 28, 30, and 31 have been breached by the Maru Intellectual Property Department. 33