Fifth Annual 2010 LAWASIA INTERNATIONAL MOOT COMPETITION. Against: GOOD HEALTH COMPANY DIRECTOR OF INTELLECTUAL PROPERTY, STATE OF MARU

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1 F2030-C Fifth Annual 2010 LAWASIA INTERNATIONAL MOOT COMPETITION IN THE INTERNATIONAL COURT OF ARBITRATION, NEW DELHI, INDIA Against: GOOD HEALTH COMPANY CLAIMANT DIRECTOR OF INTELLECTUAL PROPERTY, STATE OF MARU RESPONDENT MEMORIAL FOR CLAIMANT

2 TABLE OF CONTENTS INDEX OF AUTHORITIES... 5 QUESTIONS PRESENTED STATEMENT OF FACTS SUMMARY OF PLEADINGS PLEADINGS...18 I. THE ACTION OF THE INTELLECTUAL PROPERTY DEPARTMENT OF MARU WAS UNJUSTIFIABLE UNDER ARTICLE 31 OF THE TRIPS AGREEMENT IN PARTICULAR AND IN GENERAL A. Maru Government s action was unjustifiable under article 31 of TRIPS Agreement The Government of Maru failed to obtain compulsory license due to its unjustifiable proclaimation of the national emergency status a condition under Article 31(b) of the TRIPS Agreement Even when the national emergency was justifiably proclaimed, Maru government s right of compulsory licensing was unlawfully obtained because it did not meet the other conditions under Article 31 of TRIPS B. Under TRIPS policy, the Government still has to assure not to cause damage to GHC - the patent owner by its actions

3 II. THE FAILURE OF MARU INTELLECTUAL PROPERTY DEPARTMENT TO RECOGNIZE ANY INFRINGEMENT BEYOND THE LITERAL TERMS OF PATENT VIOLATES ARTICLE 28 OF TRIPS A. Under Article 31 of Vienna Convention 1969, Article 28 of TRIPS could be interpreted to recognize the non-literal infringement of patent taking into account the doctrine of equivalents B. The production of Sure Cure is a patent infringement under the doctrine of equivalents III. THE ACTIONS OF THE INTELLECTUAL PROPERTY DEPARTMENT OF MARU WERE INVALID AND UNJUSTIFIABLE UNDER DOHA DECLARATION ON TRIPS AGREEMENT AND PUBLIC HEALTH (DOHA DECLARATION) A. National emergency situation in Maru was not proclaimed officially by the competent authorities of Maru: B. Even if there was an official declaration of national emergency, public health crisis could not constitute national emergency in Maru IV. THE ACTIONS OF INTELLECTUAL PROPERTY DEPARTMENT OF MARU WERE INVALID AND UNJUSTIFIABLE UNDER THE IMPLEMENTATION OF THE PARAGRAPH 6 OF THE DOHA DECLARATION ON THE TRIPS AND PUBLIC HEALTH (DECISION)

4 A. Maru s action of not preventing Fizer from exporting Miracle Cure to Porta and other countries was out of the exception defined in paragraph 2 of the Decision Porta and other neighboring countries were under no evidence to be eligible importing countries set out in the Implementation of the Paragraph 6 of the Doha Declaration Even if Porta and other neighboring countries were eligible importing countries, the action of Maru exporting Miracle Cure to these countries was invalid and unjustifiable because they all failed to follow conditions set out in the Decision. 32 B. Maru did not pay adequate remuneration to GHC according to Article 31(h) of TRIPS and Paragraph 3 of the Decision V. THE ACTION OF INTELLECTUAL PROPERTY DEPARTMENT OF MARU WAS INVALID AND UNJUSTIFIED, THEREFORE, GHC SHOULD BE AWARDED AN INJUNCTIVE REMEDY AND LOST PROFITS A. The unjustified actions of Intellectual Property department of Maru should be stopped by the means of an injunctive relief An injunctive relief is an equitable remedy for the GHC: GHC satisfied the conditions of grating a injunctive relief B. GHC should be awarded the order of loss of profits for its loss caused by invalid actions of Maru Intellectual Property Department

5 1. GHC satisfied the requirements to seek a remedy for the profits that the patentee would have made but for the infringement GHC should be awarded the lost profits due to the diverted sales and price erosion PRAYER FOR RELIEF

6 INDEX OF AUTHORITIES UNITED NATIONS RESOLUTIONS AND DOCUMENTS Implementation of the Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health, Decision of 30 August , 31, 32, 33 Implications of the Doha Declaration on the Trips Agreement and Public Health - Health Economics and Drugs Series No WHO/EDM/PAR/2002.3, page 16, (last visited August 24, 2010) The Doha Declaration on the TRIPS Agreement and Public Health United Nations, Vienna Convention on the Law of Treaties, 23 May World Intellectual Property Organization, Basic Proposal for the Treaty and the Regulations, document PLT/DC/3 of December 21, World Intellectual Property Organization, Substantive Patent Law Treaty (on May 14 to 19, 2001) World Trade Organization, Agreement on trade-related aspects of intellectual property rights (TRIPS Agreement)... passim CASES 575 F.2d 1152, 1156, 197 U.S.P.Q. (BNA) 726, (6th Cir. 1978) F.2d at 1156, 197 U.S.P.Q. (BNA) at

7 Am. Seating Co. v. USSC Group, Inc., 514 F.3d 1262, 1268 (Fed. Cir. 2008) Amstar Corp. v. Envirotech Corp., 823 F.2d 1538, 1543, 3 U.S.P.Q.2d 1412, 1415 (Fed. Cir. 1987) Andrew Corp. v. Gabriel Elecs., Inc., 785 F. Supp. 1041, 1046, 23 U.S.P.Q.2d 1019, 1023 (D. Me. 1992) Boyden Power-Brake Co. v. Westinghouse, 170 U.S. 537, 544 (1898) Carbice Corp. of America v. American Patents Dev. Corp., 283 U.S. 27, 33 (1931) Central Soya Co. v. Geo. A. Hormel & Co., 723 F.2d 1573, 1579, 220 U.S.P.Q. (BNA) 490, 494 (Fed. Cir. 1983) Charles Greiner & Co. v. Mari-Med Mfg. Inc., 962 F.2d 1031, 1036, 22 USPQ2d 1526, 1529 (Fed.Cir.1992) Chiron Corporation and Others v Organon Teknika Limited Claude Neon Lights v. E. Machlett & Son, 36 F.2d 574, 576 (2d Cir. 1929) Continental Oil Co. v. Cole, 634 F.2d 188, 191 (5th Cir. 1981) Datascope Corp. v. SMEC, Inc., 879 F.2d 820, 825, 11 U.S.P.Q.2d 1321, 1324 (Fed. Cir. 1989) Del Mar Avionics, Inc. v. Quinton Instrument Co., 836 F.2d 1320, 1327, 5 U.S.P.Q.2d 1255, 1260 (Fed. Cir. 1987) ebay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006)

8 Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd., 535 U.S. 722, 731 (2002) Graver Tank & Mfg. Co. v. Linde Air Products Co., 339 U.S. 605, 609 (1950)... 25, 26, 28 Hilton Davis Chemical Co. v. Warner-Jenkinson Co., Inc., 62 F.3d 1512, 1517 (Fed. Cir. 1995) In re Mahurkar Double Lumen Hemodialysis Catheter Patent Litigation, 831 F. Supp. 1354, 1384 (N.D. Ill. 1993)... 42, 43 Kalman v. Berlyn Corp., 9 U.S.P.Q.2d 1191, Kaufman Co. v. Lantech, Inc., 926 F.2d 1136, , 17 U.S.P.Q.2d 1828, (Fed. Cir. 1991) Lam, Inc. v. Johns-Manville Corp., 718 F.2d 1056, 1069 (Fed. Cir.1983) Livesay Window Co. v. Livesay Indus., Inc., 251 F.2d 469, 473, 116 U.S.P.Q. 167, 170 (5th Cir. 1958) London v. Carson Pirie Scott & Co., 946 F.2d 1534, 1538, 20 USPQ2d 1456, (Fed.Cir.1991) Milgo Electronic Corp. v. United Business Communications, Inc., C.A.10 (Kan.) 1980, 623 F.2d 645, 206 U.S.P.Q Novozymes A/S v. Genencor Int l, Inc., 474 F. Supp. 2d 592, 613 (D. Del. 2007) Perkin-Elmer Corp. v. Westinghouse Elec. Corp., 822 F.2d 1528, 1532 (Fed. Cir. 1987) Polaroid Corp. v. Eastman Kodak Co., 16 U.S.P.Q.2d 1481, 1492 (D. Mass. 1990)

9 Praxair, Inc. v. ATMI, Inc., 479 F. Supp. 2d 440, 444 (D. Del. 2007) Ristvedt-Johnson, Inc. v. Brandt, Inc., 805 F. Supp. 557, 563 (N.D. Ill. 1992) Rite-Hite Corp. v. Kelley Co., Nos & (Fed. Cir. June 17, 1994) Rite-Hite Corp. v. Kelly Co., Inc., 56 F.3d 1538, 1545, 35 U.S.P.Q.2d (BNA) 1065, 1069 (Fed. Cir. 1995) Royal Typewriter Co., 168 F.2d 691, Sanitary Refrigerator Co. v. Winters, 280 U.S. 30, 42 (1929) State Industries, Inc. v. Mor-Flo Industries, Inc., 883 F.2d 1573 (Fed. Cir.1989) TiVo Inc. v. EchoStar Commc ns Corp., 446 F. Supp. 2d 664 (E.D. Tex. 2006) Union Paper-Bag Mach. Co. v. Murphy, 97 U.S. 120, 121 (1877) W.R. Grace & Co. - Conn. v. Intercat, Inc., 60 F. Supp.2d 316, 325 (D. Del. 1999) Warner-Jenkinson Co., Inc. v. Hilton Davis Chemical Co., 520 U.S. 17, 39 (1997) Winans v. Denmead, 56 U.S. (15 How.) 330, 347 (1853) Yale Lock Mfg. Co. v. Sargent, 117 U.S. 536 (1886) NATIONAL LAWS India Patent Act (Amendment) Minister of Justice, Legal and Parliamentary Affairs of Zimbabwe, Declaration of Period of Emergency, May 2002 (HIV/AIDS) (Notice, 2002)

10 The Constitution of India... 29, 30 TREATISES AND OTHER BOOKS European Commission Trade, Legal Issues Related to Compulsory Licensing under TRIPS Agreement Sumanth Addanki, Economics and Patent Damages: A practical guide 3 (Nat'l Econ. Res. Associates, Inc. Working Paper No. 21, November 1993) JOURNAL ARTICLES AND ESSAYS Bernard H. Chao, After ebay, Inc. v. Mercexchange: The Changing Landscape For Patent Remedies, 9(2) Minn. J.L. Sci. & Tech (2008) Bic Leisure V. Windsurfing: The Federal Circuit Catches The Big One And Leaves The Supreme Court On Shore To Dry, 4 FEDCBJ 167, 189 (1994) Doris Estelle Long, The Impact of Foreign Investment on Indigenous Culture: An Intellectual Property Perspective, 23 N.C.J. INT L L. & COM. REG. 229, 265 (1998) I.P.Q. 1997, 4, , James Love, Remuneration Guidelines for non-voluntary Use of a Patent on Medical Technologies, Health Economics and Drugs, TCM Series No.18, WHO/TCM/ Remuneration guidelines for non-voluntary use of a patent on medical technologies, Sisule F. Musungu, South Centre Cecilia Oh, WHO, 40 CIPIH Study Paper 4C, The use of Flexibilities in TRIPS by developing countries: Can they promote access to medicines?

11 MISCELLANEOUS MATERIALS Carlos Correa, Integrating Public Health Concerns Into Patent Legislation In Developing Countries, (last visit 7th September 2010) Carlos M. Correa, Implementation of the WTO General Council decision on Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health, 2004, page 10, (last visited 24 th August 2010) Frederick M. Abbott and Rudolf V. Van Puymbroeck, 2005, Compulsory licensing for Public Health: A guide and model documents for Implementation of the Doha Declaration Paragraph 6 Decision, /Rendered/PDF/334260rev0pub.pdf (last visited 24 th August, 2010) 30, 32 Frequently Asked Questions, America Palm Oil Council, (last visited 24 th August, 2010) Health Benefits Of Corn Oil, The Corn Refiners Association, (last visited 24 th August, 2010) Manisha Singh Nair, Drafting and Interpretation of Patent Claims, (last visited 7th September 2010)

12 Neal E. Solomon, Lost Profit Analysis For Patent Infringement Damages, (last visit 30 August 2010) 35 Usha K. Pillai, L-RAMP - The Role of Patent Law in Public Interest, (last visi:7th September 2010)

13 STATEMENT OF JURISDICTION GHC/GHC-Maru and Intellectual Property Department of Maru have agreed to submit the present dispute before the International Court of Arbitration, New Delhi and pursuant to the "Understanding on Rules and Procedures Governing the Settlement of Disputes of WTO for resolution. The acceptance of Arbitration authority is in accordance with Article 25 of the Dispute Settlement Understanding (hereafter referred as DSU) which contains a general reference to arbitration providing that in the case of disputes concerning issues that are clearly defined by the parties, the parties may resort to arbitration as an alternative means of dispute resolution to the Panel Procedure; and pursuant to the written agreement between the parties. The Arbitral Tribunal is requested to give solutions on the basis of the rules and principles of conventions to which GHC is a Party, as well as applicable rules of national law. The Arbitral Tribunal is requested to decide on the issues submitted and or make recommendation which shall not include the amount of the compensation. The parties agree, pursuant to article 25 of DSU and the written agreement between them that the award of the Arbitral Tribunal shall be final and binding on the parties involved. 12

14 QUESTIONS PRESENTED 1. Whether the actions of Intellectual Property Department of Maru were valid and justifiable under TRIPS in general and Article 31 of TRIPS in particular. 2. Whether failure to recognize any infringement beyond the literal terms of patent violate Article 28 of TRIPS. 3. Whether the actions of Intellectual Property Department of Maru were valid and justifiable as per Declaration on the TRIPS Agreement and Public Health (adopted on 14 November 2001) and Implementation of Paragraph 6 of Doha Declaration on the TRIPS Agreement and Public Health (Decision of 30 August 2003). 4. If the actions of Intellectual Property Department of Maru are not justified then what remedies should be awarded to GHC/GHC-Maru. 13

15 STATEMENT OF FACTS Maru is a small country with a relatively democratic form of government. The economy of Maru is mainly tourism, hotel restaurant and retail business. In early 2009, a new government of Maru adopted an open door policy allowing foreign investment in all areas of economy in order to diversify the economy of Maru. Subsequently, Good Health Company (hereinafter GHC ), one of the largest pharmaceutical companies in the world with its headquarter in Hori, had a discussion with the Commerce Minister of Maru about the plan to set up a pharmaceutical company in order to help Maru in diversifying it economy. GHC also suggested conducting clinical trial of the new Miracle Cure which is a new drug to treat a wide range of new types of flu viruses. It is protected by a number of patents covering the chemical composition of the drug, its method of manufacturing and its manner of use. GHC s proposal was supported by the Maru government. Shortly thereafter, GHC established a new company in Maru (GHC-Maru) and starting the clinical trial of the Miracle Cure. Each person taking part in the clinical trial was awarded US$20 which was more than the earnings of a week. The clinical trial of the Miracle Cure was considered as a breakthrough in the medical science and GHC is the only company which can manufacture this drug. At the end of the year 2009, a disease named killer flu which was a combination of bird flu and swine flu struck one of the provinces of Maru, starting from the death of a 7-yearold boy and then transmitting to other people not only in Maru but also in neighboring countries. The spread of killer flu affected the tourism and the economy of Maru significantly. The remained samples of the Miracle Cure from the clinical trials were administered to many patients and produced positive response. As the results, GHC was the only company that could produce the Miracle Cure to control the disease. It was also authorized to produce the Miracle Cure for export. GHC made great deal of effort to produce the Miracle in order to keep up with the demand from countries around the globe. 14

16 For fear of GHC s insufficient capability to produce enough Miracle Cure, the Director of Intellectual Property Department of Maru invited Fizer Pharma, one of the largest competitors of Maru, to manufacture the Miracle Cure. Fizer Pharma was allowed to access all test result and know-how of producing the Miracle Cure. The Director of Intellectual Property Department of Porta agreed not to interfere with the manufacturing of Miracle Cure in Porta. Fizer Pharma started to produce the Miracle Cure which was initially sent to Maru and then exported to other neighboring countries. The Intellectual Property Department of Maru agreed to pay GHC US$20 per vaccine as compensation. The Intellectual Property Department of Maru would be reimbursed all these payments by Fizer Pharma. GHC then brought an infringement action against the Government of Maru for infringing its patent rights by allowing other companies to have access to the proprietary information and to produce the Miracle Cure without its permission. However, the court decided that Maru had the right to use the patented drugs to combat the illness affecting the people of Maru and that US$20 per unit compensation was more than fair. After that, anticipating that GHC would prevent the people of Maru from accessing the Miracle Cure, the Director of Intellectual Property Department of Maru requested another fierce competitor of GHC - Better Life Pharmacy (BLP) from Ulka to distribute its drug Sure Cure. BLP was paid US$50 per unit for each unit delivered to Maru. Sure Cure had been held to infringe the GHC patent in a law suit in Hori under the doctrine of equivalents because of their similarity [Miracle Cure contains an extract of the Climbing Nightshade (Solanum dulcamara) combined with palm oil which neutralized the toxic effect of the extract. Sure Cure is also a combination of an extract of Climbing Nightshade but corn oil is used in place of palm oil to neutralize the toxic effects of the extract]. However, the IP court of Maru refused to recognize a non-literal infringement. Both parties agreed that the dispute should be resolved by private arbitration pursuant to the "Understanding on Rules and Procedures Governing the Settlement of Disputes of WTO. 15

17 SUMMARY OF PLEADINGS (i) Article 31 of the TRIPS Agreement provides conditions for the lawful obtaining of compulsory licensing. The Government of Maru failed in meeting the condition of setting the national emergency status due to its malfunction to make an official proclamation. Moreover, even when the national emergency is justifiably proclaimed, other conditions under Articles 31 of TRIPS were not fully met, which leads to the Government s failure in obtaining the compulsory license. In addition, the TRIPS policy aims to stay in the balance between social interests and economic welfare, which means the Maru Government still have to assure the rights and benefits of the patent holders when granting compulsory license. (ii) TRIPS agreement remains silent about whether it covers infringements which are non-literal. Under Article 31 Vienna Convention on the Law of Treaties 1969, in case of such vagueness the doctrine of equivalents as a relevant rule of international law could be taken into account to recognize the non-literal infringement. In this case, with an immaterial change in the ingredients by using palm oil in the place of corn oil, Sure Cure and Miracle Cure were the same because they perform the same function in substantially the same way, and accomplish substantially the same result. Therefore, Sure Cure infringed GHC s patent under the doctrine of equivalents. The respondent s failure to recognize such infringement violated the exclusive right of GHC under Article 28 of TRIPS. (iii) Under the Doha Declaration on TRIPS Agreement and Public Health, Maru s action of granting compulsory license in case of national emergency was unjustifiable because Maru 16

18 authority failed to make a proclamation of the situation. Additionally, under Maru law, epidemics caused by the killer flu could not constitute national emergency. (iv) Maru s actions also violated the Implementation of Paragraph 6 of the Doha Declaration given to its failure to satisfy the conditions of waivers set out in the Implementation: First, Maru failed to meet the requirement of notification to the Council for TRIPS. Second, Porta and other neighboring countries were under no evidence to be eligible importing countries and even if they were, they failed to follow the importing countries obligations to notify WTO and to issue a compulsory license for the importation. Finally, Maru did not pay adequate remuneration to GHC (v) The actions of Maru Intellectual Property Department should be prohibited from continuing by the means of injunctive relief in order to compensate for the injury GHC has suffered. Moreover, GHC satisfied the requirements to seek a remedy for the profits that the patentee would have made but for the infringement. These profits include the lost profits due to the diverted sales and price erosion because of the respondent s infringement. 17

19 PLEADINGS I. THE ACTION OF THE INTELLECTUAL PROPERTY DEPARTMENT OF MARU WAS UNJUSTIFIABLE UNDER ARTICLE 31 OF THE TRIPS AGREEMENT IN PARTICULAR AND IN GENERAL The TRIPS Agreement allows WTO Members to use a number of different limitations and exceptions to patent rights, including cases where governments can authorize persons to use patents, even without the patent owner s permission. Article 31 of TRIPS permits governments to authorize non-voluntary use in a much wider array of circumstances, with the provisions required under the article. These Article 31 non-voluntary authorizations include: Compulsory licensing for private use: a non-voluntary authorization by the government that a third, private party may use a patent Government or Crown use: a non-voluntary authorization that a government entity or its contractor may use a patent Remedies to anti-competitive practices: to repair the harm caused by anticompetitive practices, governments may authorize third parties to use a patent. These authorizations are generally characterized as compulsory licensing, a term that may encompass a range of particular kinds of non-voluntary authorizations. 1 The case at hand, in which a non-voluntary authorization is granted by the government (the Government of Maru) to 1 James Love, Remuneration Guidelines for non-voluntary Use of a Patent on Medical Technologies, Health Economics and Drugs, TCM Series No.18, WHO/TCM/2005.1, p

20 cy. 3 A. Maru Government s action was unjustifiable under article 31 of TRIPS Agreement After the spreading of the killer flu, the Respondent granted Fizer Pharma the right to produce and supply Miracle Cure drug whose patent holder is GHC-Maru company. This action was explained by the Repondent that the country was facing a national emergency and that it was permitted under Aticle 31(b) TRIPS 4 without admitting the use was non-voluntary authorized or compulsory licenced. However, under Article 31, a State Memeber could only authorize non-voluntary user compulsory licensing in case of national emergency, other circumstances of extreme urgency or cases of public non-commercial use. Therefore, once admitting the national emergency as the ground to grant Fizer rights of manufacturing and supplying under Article 31, the Respondent also has to acknowledge its action as compulsory licensing. Article 31 TRIPS does not specifically pursue grounds on the basis of which compulsory licenses can be issued, but rather conditions and procedures that have to be respected when issuing them. 5 That is to say, Members are left the discretion in granting compulsory licenses, provided that the conditions and procedures imposed by Article 31 are met. Nonetheless, the 2 Id., Remuneration Guidelines for non-voluntary Use of a Patent on Medical Technologies, Health Economics and Drugs. 3 World Trade Organization, Agreement on trade-related aspects of intellectual property rights (TRIPS Agreement), signed in Marrakesh, Morocco on 15 April Corrections and Clarifications, 6, p.2 5 European Commission Trade, Legal Issues Related to Compulsory Licensing under TRIPS Agreement, page 4 (last visited 24 th August, 2010) 19

21 1. The Government of Maru failed to obtain compulsory license due to its unjustifiable proclaimation of the national emergency status a condition under Article 31(b) of the TRIPS Agreement National emergency is one of the conditions stated in TRIPS Agreement that provides its members the right of compulsory licensing without an unsuccessful prior attempt to obtain the authorization from the right holder. 6 However, in order to issue compulsory licenses, it is a common practice that the Government is mandatory to make an official and public declaration of the situation before the compulsory licensing right could be activated, 7 like the cases of Zimbabwe 8 and Argentina 9 in In fact, Maru did not issue any official document to recognize the national emergency. Rather, the action of compulsory licensing was concluded after a mere consultation between the Maru Intellectual Property Director and the Minister of Health. 10 As a consequence, the Respondent failed to meet the condition of national emergency under Article 31(b), led to the failure in obtaining the compulsory license. 6 Supra note 3, TRIPS Agreement., art 31(b). 7 Implications of the Doha Declaration on the Trips Agreement and Public Health - Health Economics and Drugs Series No WHO/EDM/PAR/2002.3, page 16, (last visited August 24, 2010) 8 Minister of Justice, Legal and Parliamentary Affairs of Zimbabwe, Declaration of Period of Emergency 8, May 2002 (HIV/AIDS) (Notice, 2002) 9 Executive Power of Argentina, A Declaration of Sanitary Emergency until 31 December 2002, (Decree 486, 12 March, 2002) 10 Moot Problem, 13, p.4. 20

22 2. Even when the national emergency was justifiably proclaimed, Maru government s right of compulsory licensing was unlawfully obtained because it did not meet the other conditions under Article 31 of TRIPS Firstly, compulsory licenses or other use could only be issued if the proposed user has made efforts to obtain authorization from the right holder on reasonable commercial terms and conditions, and that efforts have not been successful within a reasonable period of time. 11 This prior attempt requirement may be waived in case of the national emergency, or other circumstances of extreme urgency, or in case of public non-commercial use. 12 However, in case of national emergency or extreme emergency, the patent holder must be notified of the issuing of the compulsory license as soon as reasonably practicable. 13 However, the GHC-Maru has never been notified by the Respondent of the issuing of the other use, or the compulsory license in other word. The Respondent has allowed the GHC s rival company Fizer to access GHC s proprietary information of know-how of the Miracle Cure and to produce it without notifying GHC before the granting of compulsory license. 14 All the deals on producing Miracle Cure made between the Respondent and Fizer Pharma were built without the notification to GHC as the patent holder - although GHC is the only company which can manufacture or distribute the Miracle Cure. 15 Therefore, given the failure in notifying the drug patent holder GHC-Maru, the Respondent s right of compulsory license is not legally gained. 11 Supra note 6, TRIPS Agreement. 12 Id., TRIPS Agreement. 13 Id., TRIPS Agreement. 14 Moot Problem, 15, p Moot Problem, 6, p.2. 21

23 Secondly, in order to enjoy other use or compulsory license, a State Member also is bound to respect the conditions under the other paragraphs 16 of Article 31. These provisions take into account the scope and duration, exclusiveness, assignability, domestic market predominantly supply, termination, economic value and remuneration of such use. In the case of the Respondent, it failed to meet the condition of predominant supply for the domestic market. From the beginning of Miracle Cure production, Fizer understood that all the Miracle Cure produced in Porta would initially be sent to Maru, but once the killer flu was under control in Maru, it would be entitled to produce the Miracle Cure for distribution and use in Porta and neighboring countries. 17 In fact, although there is no declaration or evidence of an under-controlled killer flu, Fizer Pharma has already produced and exported Miracle Cure to Porta while the Government of Maru took no action to prevent those activities. 18 The Respondent may claim that it is not their but Fizer Pharma s action that violates the term provided under Article 31(f) because Fizer has exported the Miracle Cure without the authorization of the Respondent. Nevertheless, when compulsory licensing to Fizer the right of manufacturing a patented product, the Respondent is the direct party to be responsible for its and Fizer s actions in front of the patent holder GHC Company. In conclusion, the move of both Maru and Fizer showed their disrespect to supply the domestic market with sufficient amount of drug while the national emergency has never been declared to be under control. Consequently, provision under Article 31(f) is not ensured, which leads to the failure in gaining the compulsory license of the Respondent. 16 Supra note 6, TRIPS Agreement. 17 Moot Problem, 14, p.4 18 Corrections and Clarifications, 2, p.1 22

24 B. Under TRIPS policy, the Government still has to assure not to cause damage to GHC - the patent owner by its actions. It is the objective of the TRIPS Agreement that states: The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations. 19 In other word, the TRIPS Agreement heads forward to the balance of social interest and economic welfare. However, in this instant case, the Respondent has improperly alleged the national emergency as a ground to grant compulsory license to Fizer Pharma. Consequently, GHC lost the exclusive right of manufacturing and distributing its patented drug Miracle Cure in Maru since Fizer Pharma also has the same rights to the drug. Therefore, the right of Fizer Pharma to manufacture and distribute Miracle Cure granted under the compulsory license by the Respondent is unjustifiable with TRIPS policy of balancing the social and economic welfare. II. THE FAILURE OF MARU INTELLECTUAL PROPERTY DEPARTMENT TO RECOGNIZE ANY INFRINGEMENT BEYOND THE LITERAL TERMS OF PATENT VIOLATES ARTICLE 28 OF TRIPS A. Under Article 31 of Vienna Convention 1969, Article 28 of TRIPS could be interpreted to recognize the non-literal infringement of patent taking into account the doctrine of equivalents 19 Supra note 3, TRIPS Agreement., art 7. 23

25 Article 28 of TRIPS confers exclusive rights on the patent holders; 20 however, it remains silent about whether it covers infringements which are non-literal. 21 There is either denial or acceptance regarding to this matter. 22 Traditionally, in case of such vagueness, any relevant rules of international could be taken into account in order to give the lights to such international treaty. 23 It is the fact that the recognition of non-literal infringements has been increased under the doctrine of equivalents which allows patentee to extend the scope of his patent claim beyond the literal terms. 24 This doctrine is an equitable rule in order to protect the patentees right and has been broadly recognized around the world. It is obvious that the doctrine of equivalents should be recognized in order to maintain the balance of the interests between the patent holders and the public for these reasons. Firstly, patent claims define the extent of the protection conferred by a patent, or the protection sought in a patent application. 25 The patentee is under obligation to describe his invention, in such full, clear, and exact terms, that the invention may be constructed and used. 26 However, the limitation of language prevents those who are seeking for patent s protection from precisely claiming all what included in his patents and, the value of the patents would be greatly diminished only by interpretation of their literal terms. 27 Then, the doctrine of equivalents which 20 Supra note 3, TRIPS Agreement., art Carlos Correa, Integrating Public Health Concerns Into Patent Legislation In Developing Countries, (last visit 7th September 2010) 22 Doris Estelle Long, The Impact of Foreign Investment on Indigenous Culture: An Intellectual Property Perspective, 23 N.C.J. INT L L. & COM. REG. 229, 265 (1998) 23 United Nations, Vienna Convention on the Law of Treaties, 23 May 1969, art. 31.3(c) 24 London v. Carson Pirie Scott & Co., 946 F.2d 1534, 1538, 20 USPQ2d 1456, (Fed.Cir.1991). See also Charles Greiner & Co. v. Mari-Med Mfg. Inc., 962 F.2d 1031, 1036, 22 USPQ2d 1526, 1529 (Fed.Cir.1992) 25 Manisha Singh Nair, Drafting and Interpretation of Patent Claims, (last visited 7th September 2010) 26 Winans v. Denmead, 56 U.S. (15 How.) 330, 347 (1853) 27 Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd., 535 U.S. 722, 731 (2002) 24

26 expands the scope of the patent claim can serve to protect a patentee from the imperfection of language. 28 Secondly, the role of patent law is to grant the patentees a set of exclusive rights during a fixed period of time and to protect their patents from any infringement. 29 With the failure to recognize the equivalent infringement, the purpose of patent law to protect the inventors fails to be served because permitting limitation of a patented invention leaves room for the unscrupulous copyist to be outside the reach of law by taking the copied matter outside the claim with unimportant and insubstantial changes and substitutions in the patent. 30 Thirdly, patent law encourages disclosure of information, spreading knowledge and industrial progress. 31 Narrowing the protection of patentees rights leads to concealment rather than disclosure of the invention, which is the primary purpose of the patent system and hence discourages creation and innovation. 32 As a result, both individual and public interests would be harmed. Lastly, the patentees have the rights to exploit their patents and restore the expenses that they have invested in the inventions. 33 Meanwhile, it is only by adding something immaterial to evade trespass on the area of a patents protection, copyists can gain the benefits which would have belonged to the patentees but for these infringements. Recognizing the equivalent 28 Claude Neon Lights v. E. Machlett & Son, 36 F.2d 574, 576 (2d Cir. 1929) 29 Bishawanath Prasad Radhey Shyam v. Hindustan Metal Industries, [A.I.R S.C. 1444, para. 17] 30 Graver Tank & Mfg. Co v. Linde Air Products Co., 339 U.S. 605, 609 (1950) 31 Chiron Corporation and Others v. Organon Teknika Limited [1995] F.S.R 325; Usha K. Pillai, L-RAMP - The Role of Patent Law in Public Interest, (last visi:7th September 2010) 32 Supra note 30, Graver Tank & Mfg. Co., 339 U.S. 605, Supra note 31, Chiron Corporation and Others v Organon Teknika Limited 25

27 infringements can prevent the infringers from stealing the benefit of the invention, 34 so that the legitimate rights of the inventors can be preserved. With such advantages, this doctrine has been broadly recognized and applied in domestic law. There is significant convergence between the U.S., E.U., and Japan in claim interpretation and application of the doctrine of equivalents. 35 The proper scope of a patent claim is one area that the world community struggles to harmonize. 36 There is no doubt that the doctrine of equivalents has become an important issue in harmonization of patent law. The official recognition of that doctrine in the international law is not in a distant future. In conclusion, under Article 31 of Vienna Convention on the Law of Treaties, the doctrine of equivalents could be taken into account when interpreting the article 28 of TRIPS in order to confer the patentees a broader scope of protection. B. The production of Sure Cure is a patent infringement under the doctrine of equivalents The test which has been traditionally applied to determine an infringement under the doctrine of equivalent is that Two devices which perform the same function in substantially the same way, and accomplish substantially the same result, are therefore the same, though they may differ in name or form. 39 Some cases apply a general insubstantial difference standard 34 Royal Typewriter Co., 168 F.2d 691, William T. Ralston,..,6 Chi.-Kent J. Intell. Prop Id. 37 World Intellectual Property Organization, Basic Proposal for the Treaty and the Regulations, document PLT/DC/3 of December 21, 1990, art World Intellectual Property Organization, Substantive Patent Law Treaty (on May 14 to 19, 2001), art Supra note 30, Graver Tank & Mfg. Co. v. Linde Air Products Co; See Union Paper-Bag Mach. Co. v. Murphy, 97 U.S. 120, 121 (1877); Sanitary Refrigerator Co. v. Winters, 280 U.S. 30, 42 (1929) 26

28 which means that something is deemed equivalent if there is only an insubstantial change between each of the features of the accused products or processes and the patent claim. 40 In this instant case, Sure Cure of BLP fails to meet the requirements of novelty and inventive step 41 when seeking a patent of an invention. Despite the absence of literal identity, Sure Cure infringes the GHC s patent of Miracle Cure under the doctrine of equivalents because it is a mere copy of the Miracle Cure with an immaterial change. Firstly, Sure Cure s composition is similar to the Miracle Cure s except that it substitutes palm oil for corn oil to neutralize the toxic extracted from the Climbing nightshade [Solanum dulcamara]. They are activated and taken effect by combining with that toxic in order to treat the killer flu. 42 There is no doubt that the two compositions are alike. Thus, both of these oils do the same function, insubstantially the same way to obtain substantially the same result, which satisfies the triple identity test: 43 function way result to determine equivalence. Secondly, it is obvious that palm oil is very similar to corn oil. They are extracted from vegetables and contain many fatty acids. 44 Both of them have the same effect in several fields, such as cooking, drying, cosmetics manufacturing, etc. 45 Moreover, neutralizing substance is a non-essential element in a drug s ingredients. It is the toxic extract but not the neutralizing acid that plays an important role in reducing the effect of killer flu virus. Therefore, using corn oil instead of palm oil is an insubstantial change. The characteristic and the effect of this drug are 40 Hilton Davis Chemical Co. v. Warner-Jenkinson Co., Inc., 62 F.3d 1512, 1517 (Fed. Cir. 1995) 41 Supra note 3, TRIPS Agreement, Art Moot Problem, 17, p.6 43 Warner-Jenkinson Co., Inc. v. Hilton Davis Chemical Co., 520 U.S. 17, 39 (1997) 44 See Frequently Asked Questions, America Palm Oil Council, (last visited 24 th August, 2010); Health Benefits Of Corn Oil, The Corn Refiners Association, (last visited 24 th August, 2010) 45 Id., Frequently Asked Questions. 27

29 not changed much because of this replacement. The change for the purpose of avoiding infringement is colorable only. 46 Moreover, the clinical trial success of the Miracle Cure was a breakthrough in medical science and GHC was the only company which had an effective treatment for the killer flu disease. 47 The Miracle Cure covered a pioneering invention 48 that should be entitled to a broader range of equivalents and greater scope of protection. 49 In conclusion, Article 28 could be interpreted to cover the non-literal infringement under the doctrine of equivalents. By refusing to recognize the infringement of BLP, the Intellectual Property Department of Maru violates GHC s exclusive rights as the patent owner of Miracle Cure under the article 28 of the TRIPS. III. THE ACTIONS OF THE INTELLECTUAL PROPERTY DEPARTMENT OF MARU WERE INVALID AND UNJUSTIFIABLE UNDER DOHA DECLARATION ON TRIPS AGREEMENT AND PUBLIC HEALTH (DOHA DECLARATION) A. National emergency situation in Maru was not proclaimed officially by the competent authorities of Maru: 46 Supra note 30, Graver Tank & Mfg. Co. v. Linde Air Products Co., 339 U.S. 605, 612 (1950) 47 Moot Problem, 6, p.2 48 Boyden Power-Brake Co. v. Westinghouse, 170 U.S. 537, 544 (1898) 49 See Miller v. Eagle Mfg. Co., 151 U.S. 186, 207 (1894 ( [i]f the invention is broad or primary in its character, the range of equivalents will be correspondingly broad, under the liberal construction which the courts give to such inventions. ); Perkin-Elmer Corp. v. Westinghouse Elec. Corp., 822 F.2d 1528, 1532 (Fed. Cir. 1987) ( [a] pioneer invention is entitled to a broad range of equivalents. ); Continental Oil Co. v. Cole, 634 F.2d 188, 191 (5th Cir. 1981) ( [a] pioneer or generic patent which opens a new path is entitled to broader protection than a patent which merely improves upon that which is already known. ) 28

30 Doha Declaration entitles the Government to the right of issuing compulsory licenses in case of national emergency. 50 It has been mentioned above that no such declaration of this situation has been made by the Government of Maru before the issuing of compulsory license took place. Moreover, under the Maru law, it is the Maru President s exclusive authority to declare the national emergency. 51 Even if the argument of Director of Intellectual Property Department referred to a national emergency, 52 such conclusion could not be deemed as an effective proclamation. Consequently, the conclusion of national emergency of Director of Intellectual Property Department of Maru came after the consultations with the Minister of Health was an improper action and undue for that reason. In other words, the national emergency in Maru was not proclaimed officially by the competent authorities of Maru. B. Even if there was an official declaration of national emergency, public health crisis could not constitute national emergency in Maru It is admitted, with that rational of Paragraph 5 (c) of the Doha Declaration, the killer flu or any other epidemics can represent a national emergency and the authorities of Maru have the right to determine criteria for as well as the elements constituting of national emergency. 53 However, it is noted that, under the Maru laws, national emergency does not include public health crisis. The national emergency could be declared only in cases of war, external aggression or armed rebellion in the whole or a part of national territory The Doha Declaration on the TRIPS Agreement and Public Health, paragraph 5(b) 51 The Constitution of India, Art. 352 (1) 52 Corrections and Clarifications, 6, p.2 53 Supra note 50, Doha Declaration, sub paragraph 5(c) 29

31 In short, because the wording of the Doha Declaration is so broad, the procedure of granting compulsory licenses in case of national emergency varies from countries to countries, provided that such measures are consistent with the Doha Declaration and national law. However, in this instant case, such declaration of national emergency on the ground of public health crisis would be deemed as fictional in order to grant the right to compulsory licensing improperly. IV. THE ACTIONS OF INTELLECTUAL PROPERTY DEPARTMENT OF MARU WERE INVALID AND UNJUSTIFIABLE UNDER THE IMPLEMENTATION OF THE PARAGRAPH 6 OF THE DOHA DECLARATION ON THE TRIPS AND PUBLIC HEALTH (DECISION) A. Maru s action of not preventing Fizer from exporting Miracle Cure to Porta and other countries was out of the exception defined in paragraph 2 of the Decision Maru failed to predominantly supply the Miracle Cure for the domestic market. However, this obligation can be waived with respect to the compulsory license granted by the exporting country if the following 4 conditions are met: 55 Firstly, the importing country must be an eligible importing Member. 56 Secondly, the eligible importing Member must provide a notification to the Council for TRIPS Supra note 51, The Constitution of India. 55 Frederick M. Abbott and Rudolf V. Van Puymbroeck, 2005, Compulsory licensing for Public Health: A guide and model documents for Implementation of the Doha Declaration Paragraph 6 Decision, ered/pdf/334260rev0pub.pdf (last visited 24 th August, 2010) 56 Implementation of the Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health, Decision of 30 August 2003, sub paragraph 1(b) 57 Id., Decision of 30 August 2003, sub paragraph 2 (a) 30

32 Thirdly, the exporting country must notify the Council for TRIPS about the grant of the compulsory license. 58 Lastly, the compulsory license must be subject to the following conditions of the quantities 59 as well as the labeling or marking Porta and other neighboring countries were under no evidence to be eligible importing countries set out in the Implementation of the Paragraph 6 of the Doha Declaration. An eligible importing country is understood as a least developed country or any WTO Member States that has notified the TRIPS Council about its intent to use the system as an importer. Least developed-country Members of the WTO are automatically eligible to import under the System 61 and non-least developed countries must follow the conditions: (a) the Minister has made a prior determination that there is insufficient or no manufacturing capacity with respect to the Pharmaceutical Product(s) in question in accordance with one of the ways set out in the Annex to the Decision; and (b) The Minister, or other appropriate authority of Member has notified the World Trade Organization s Council for TRIPS of its intention to use the System as an importer. In this instant case, however, Porta and other neighboring countries were under no evidence to be developing or least developed country and they had not notified the Council for TRIPS of their intension to use the system as an importer. They are not eligible importing countries under Sub-paragraph 1(b) of the Decision. As a result, Maru could rely on the Decision to export Miracle Cure product to Porta and other countries. 58 Id., Decision of 30 August 2003, sub paragraph 2 (c) 59 Id., Decision of 30 August 2003, sub paragraph 2 (b)(i) 60 Id., Decision of 30 August 2003, sub paragraph 2 (b)(ii) 61 Supra note 56, Decision of 30 August

33 Besides, the compulsory license provision of Maru 62 allows the exportation of products produced under compulsory licenses, however, only to countries with insufficient capacity of producing that patented drug instead of any nations. It is obliged that the proposed importer must prove the its insufficient manufacturing capacity. In this instant case, however, report about such manufacturing capacity has never been notified by Porta to the TRIPS Council as a proof of its insufficiency. As a result, Fizer could not export the Miracle Cure to Porta and other countries because they, as proved, were under no evidence to be countries with insufficient capacity of producing the patented drug. 2. Even if Porta and other neighboring countries were eligible importing countries, the action of Maru exporting Miracle Cure to these countries was invalid and unjustifiable because they all failed to follow conditions set out in the Decision. The notification set forth in the Decision is not part of the license but is included because the issuing of this notification is a condition to Decision-compliant authorization of a compulsory license 63. As an exporting country of Miracle Cure which was produced under compulsory license, Maru failed to meet the requirement of notification to the Council for TRIPS about the grant of the compulsory license 64, along with the conditions attached to it, the providing information about the licensee, the product(s) and the quantity(ies) for which the license was granted, the country(ies) of destination, the duration of the license, and the website that provides specified information about the license. 62 India Patent Act (Amendment) 2005, art. 92 A (1) 63 Supra note 55, Compulsory licensing for public health - a guide and model documents for implementation of the Doha Declaration Paragraph 6 Decision. 64 Supra note 56, Decision of 30 August 2003, sub paragraph 2(c) 32

34 In addition, Porta and other neighboring countries did not satisfy the conditions of issuing a compulsory license to import a patented Miracle Cure: In order to import Miracle Cure produced by Fizer its patent was also in force, Porta and other neighboring countries without sufficient manufacturing capacity in pharmaceuticals must have issued a compulsory license for the importation pursuant to the special conditions set forth in the Decision 65 which governs that such compulsory licenses grant must be in accordance with Article 31 TRIPS. 66 B. Maru did not pay adequate remuneration to GHC according to Article 31(h) of TRIPS and Paragraph 3 of the Decision. Paragraph 3 of the Decision indicates that adequate remuneration to the patent holder pursuant to Article 31(h) of the TRIPS Agreement 67 shall be paid by the exporting Member, and waived to the importing Member. For the exporting Member, adequate remuneration should be determined taking into account the economic value to the importing Member of the use that has been authorized in the exporting Member. However, the terms adequate remuneration are not defined in the Decision. It gives the freedom for WTO Members to determine the appropriate method of implementing the Decision, within their own legal system and practice, and this extends to the standards they apply for reasonable royalties, or adequate remuneration. 68 In this instant case, neither Porta nor any other countries but Maru has to be responsible for the remuneration to GHC according to Paragraph 3 of the Decision. However, the remuneration was somehow not adequate under the Decision for the following reasons: 65 Carlos M. Correa, Implementation of the WTO General Council decision on Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health, 2004, page 10, (last visited 24 th August 2010) 66 Supra note 56, Decision of 30 August 2003, sub paragraph 2(a)(iii) 67 Supra note 3, TRIPS Agreement, article 31(h) 68 Supra note 1, Remuneration guidelines for non-voluntary use of a patent on medical technologies, p. 5 33