F2050-C

ITERATIOAL COURT OF ARBITRATIO, EW DELHI.

2010

GOOD HEALTH COMPAY

V.

ITELLECTUAL PROPERTY DEPARTMET OF MARU

MEMORIAL FOR THE CLAIMAT

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TABLE OF COTETS

IDEX OF AUTHORITITES ...................................................................................................... 4

STATEMET OF JURISDICTIO ........................................................................................... 6

QUESTIOS PRESETED ......................................................................................................... 7

STATEMET OF FACTS ........................................................................................................... 8

SUMMARY OF PLEADIGS ................................................................................................... 11

PLEADIGS................................................................................................................................ 14

1. THE MANUFACTURE AND SALE OF SURE CURE BY BLP AMOUNTS TO AN INFRINGEMENT OF THE

RIGHTS GRANTED TO GHC UNDER ARTICLE 28 OF THE TRIPS AGREEMENT. ................................. 14

2. THE GRANT OF COMPULSORY LICENSE TO FIZER PHARMA BY THE INTELLECTUAL PROPERTY

DEPARTMENT OF MARU IS VIOLATIVE OF THE PATENT RIGHTS OF GHC. ....................................... 20

3. THE REMUNERATION PROVIDED BY MARU TO GHC IS INADEQUATE. ....................................... 24

4. THE REQUEST OF THE INTELLECTUAL PROPERTY DEPARTMENT OF MARU FOR BLP TO

DISTRIBUTE SURE CURE IS IN VIOLATION OF THE DECLARATION ON THE TRIPS AGREEMENT AND

PUBLIC HEALTH AND THE IMPLEMENTATION OF PARAGRAPH 6 OF THE DOHA DECLARATION ON

THE TRIPS AND PUBLIC HEALTH. .................................................................................................. 25

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5. AN INJUNCTION ALONG WITH DAMAGES AND COMPENSATION FOR LOST PROFITS IS DUE TO GHC.

....................................................................................................................................................... 26

PRAYER ...................................................................................................................................... 28

4

IDEX OF AUTHORITITES

Books

1. Carlos M. Correa, Patent Rights, in INTELLECTUAL PROPERTY AND INTERNATIONAL

TRADE: THE TRIPS AGREEMENT 205 (Carlos M. Correa & Abdulqawi A. Yusuf eds.,

1998).

Cases

American

1. Graver Tank & Manufacturing Co. v. Linde Air Products Co., 339 U.S. 605 (1950).

2. Sanitary Refrigerator Company v. Winters, 280 U.S. 30 (1929).

English

1. Catnic Components Ltd. v. Hill & Smith Ltd., [1982] R.P.C. 182 (H.L.).

2. Improver Corp. v. Remington Consumer Products Ltd., [1989] R.P..C. 69.

3. Kirin-Amgen Inc. v. Hoechst Marion Roussel, [2004] UKHL 46.

German

1. BGH Case No. X ZR 168/00 (Mar. 12, 2002), as translated in 33 I.I.C. 873

(Schneidmesser I [Cutting Blade I]) (Germany).

Japanese

1. Tsubakimoto Seiko v. THK K.K., 52 MINSHŪ 113 (Supreme Court of Japan) (Japan).

Indian

1. Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries, A.I.R. 1982 S.C. 1444

(Supreme Court of India) (India).

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2. Raj Parkash v. Mangat Ram Chaudhary, A.I.R. 1978 Del 1 (High Court of Delhi) (India).

3. Ravi Kamal Bali v. Kala Tech, 2008 (5) Bom C.R. 138 (High Court of Bombay) (India).

4. Ritushka Negi v. Adarsh Pharma, (2004) 29 P.T.C. 108 (High Court of Madras) (India).

Statutes

English

1. The Patents Act, 1977.

Indian

1. The Patents Act, 1970, No. 39 of 1970.

World Trade Organisation Materials

1. Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15., 1994.

2. Implementation of paragraph 6 of the Doha Declaration on the TRIPS Agreement and

public health, Sept. 1, 2003, WT/L/540 and Corr.1.

3. World Trade Organisation, Declaration on the TRIPs Agreement and Public Health-

Ministerial Declaration of 14 November 2001, WT/MIN(01)/DEC/2, 41 I.L.M. 755

(2002).

Miscellaneous

1. The Protocol on the Interpretation of Article 69 of the European Patent Convention.

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STATEMET OF JURISDICTIO

The Claimant has approached the International Court of Arbitration under the arbitration

agreement between the Claimant and the Intellectual Department of Maru which provides for

this dispute to be resolved by private arbitration. The agreement provides that the parties have

agreed to conduct the arbitration proceedings pursuant to the “Understanding on Rules and

Procedures Governing the Settlement of Disputes” of the World Trade Organisation. The

Claimant humbly submits to the jurisdiction of this Court of Arbitration.

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QUESTIOS PRESETED

1) Whether the failure of Maru to recognize any infringement beyond literal infringement is

in violation of its obligations under Article 28 of the TRIPs Agreement and whether the

action of the Intellectual Property Department in inviting BLP to export Sure Cure to

Maru is in violation of GHC’s rights under Article 28 of the TRIPs Agreement.

2) Whether the action of the Intellectual Property Department of Maru in compulsorily

licensing Miracle Cure to Fizer Pharma was consistent with its obligations under the

TRIPs Agreement in general, Article 31 of the TRIPs Agreement in particular and the

Declaration on the TRIPs Agreement and Public Health and the Implementation of

paragraph 6 of the Doha Declaration on the TRIPs Agreement and Public Health.

3) Whether the actions of the Intellectual Property Department of Maru in inviting BLP to

export and sell Sure Cure in Maru are in compliance with the Declaration on the TRIPs

Agreement and Public Health and the Implementation of paragraph 6 of the Doha

Declaration on the TRIPs Agreement and Public Health.

4) Whether the actions of the Intellectual Property Department of Maru are valid on all or

any of the above-mentioned questions and if they are not, what remedies should be

awarded.

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STATEMET OF FACTS

Maru is a small country, with an economy supported by tourism. Good Health Company

[hereinafter “GHC”] is a pharmaceutical giant with its headquarters in Hori. GHC developed a

new drug ‘Miracle Cure’ which promised to be efficacious in treating a wide variety of flues.

The drug was protected by a number of patents in Hori as well as in all countries including Maru

which were members of the Patent Cooperation Treaty. Pursuant to discussions with Maru

government, GHC established a new company in Maru, GHC-Maru. GHC also conducted

clinical trials of Miracle Cure which was subsequently found to be successful in treating humans.

Towards the end of 2009, Maru was affected by an unknown disease which claimed a lot of

lives. The flu was rapidly spreading across the provinces of Maru and neighbouring countries as

well. Miracle Cure was found to be effective in treating this ‘killer flu’ and GHC was asked to

produce more of the drug. Fearing that GHC-Maru would not be able to produce sufficient

quantities of the drug in time, the Director of the Intellectual Property Department of Maru asked

Fizer Pharma, a fierce competitor of GHC, to produce Miracle Cure at Fizer’s manufacturing

base in Porta, a neighbouring country, and export the same to Maru. GHC-Maru was directed to

make available the test results and technical know-how for manufacturing Miracle Cure to Fizer.

Fizer’s understanding was that initially the manufactured drug would only be exported to Maru

and once the outbreak of the flu was curbed in Maru, it would be permitted to produce and

export Miracle Cure to Porta and other neighbouring countries. The Intellectual Property

Department would pay GHC-Maru $20 per vaccine, the estimated cost of production of the drug;

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the Department would subsequently be reimbursed by Fizer. Upset by the Intellectual Property

Department’s decision, GHC-Maru filed a formal protest with the Director of the Intellectual

Property Department; however, the Director dismissed GHC-Maru’s complaint stating that it was

within his power to invite other pharmaceutical companies to manufacture Miracle Cure for a

public purpose. GHC then filed a suit against the Government of Maru for infringement of its

patent rights but the court upheld the Director’s decision.

In the meantime, the Director contacted Better Life Pharmaceutical [hereinafter “BLP”], a

pharmaceutical company in Ulka, asking it to distribute its drug ‘Sure Cure’. Sure Cure was very

similar to Miracle Cure, the only difference being that it uses corn oil instead of palm oil to

neutralize the toxic effect of the active ingredient. In an earlier litigation in Hori, Sure Cure had

been held to violate GHC’s patent under the doctrine of equivalents. GHC sought a preliminary

injunction in the Intellectual Property Court to prevent export of Sure Cure to Maru. However,

the Court decided against Maru stating that courts in Maru have never recognized any form of

infringement other than literal infringement. A subsequent writ filed by GHC-Maru was

dismissed by the Constitutional Court.

GHC sought the interference of Hori’s Commerce Minister in the matter. He contacted Maru’s

Commerce Minister under whose charge the Intellectual Property Department of Maru was in

order to resolve the dispute amicably. Consequently, an agreement was arrived at between the

Intellectual Property Department of Maru and GHC to refer the matter to arbitration which was

to be conducted by a panel of three arbitrators constituted by mutual consent between the parties.

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The panel is to look, inter alia, into questions of compliance of the actions of the Intellectual

Property Department with the TRIPS Agreement, also in the context of the Doha Declaration on

TRIPS and Public Health. At present, the matter is before this International Court of Arbitration

at New Delhi.

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SUMMARY OF PLEADIGS

1. THE MAUFACTURE AD SALE OF SURE CURE BY BLP AMOUTS TO A IFRIGEMET OF

THE RIGHTS GRATED TO GHC UDER ARTICLE 28 OF THE TRIPS AGREEMET.

A strictly literal interpretation of the patent claims would violate Article 28 of the TRIPs

Agreement. The objective behind a liberal construction of the claims is based on the notion that

introduction of minor insubstantial changes to an invention does not render it any less of an

infringement than if it had literally copied the patented invention. Further, it is clear that Maru

recognizes the doctrine of equivalents, under which the sale and manufacture of Sure Cure is an

infringement of the patent granted to GHC for Miracle Cure as is clear from numerous cases. It is

also shown that even if the purposive construction is applied, as recognized in English law, there

is still an infringement of the GHC patent. Lastly, it is argued that even if a strictly literal

interpretation is applied, it still leads to the conclusion that the above action amounts to an

infringement of the GHC patent.

2. THE GRAT OF COMPULSORY LICESE TO FIZER PHARMA BY THE ITELLECTUAL

PROPERTY DEPARTMET OF MARU IS VIOLATIVE OF THE PATET RIGHTS OF GHC.

The TRIPs Agreement provides for compulsory licensing, but it must comply with the Preamble

and other general provisions of TRIPs, which advocate upholding intellectual property rights in

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order to promote innovation and further development. This has not been done in the case at hand.

Additionally, this particular compulsory license disregards the procedural requirements under

Article 31, the Declaration on the TRIPs Agreement and Public Health and Implementation of

Paragraph 6 of the Doha Declaration on the TRIPs and Public Health. Therefore, the compulsory

license is void.

The remuneration provided by Maru to GHC is inadequate. Under Article 31(h), the member

nation granting the compulsory license must pay the right holder adequate remuneration taking

into account the economic worth of the authorized patent, but the remuneration granted covers

only the unverified estimated cost of production. Also, the valuation by the court is not

acceptable due to allegations of bias.

3. THE REQUEST OF THE ITELLECTUAL PROPERTY DEPARTMET OF MARU FOR BLP TO

DISTRIBUTE SURE CURE IS VIOLATIO OF WTO ORMS.

The Declaration on the TRIPs Agreement and Public Health and the Implementation of

Paragraph 6 of the Doha Declaration on the TRIPs and Public Health have been contravened, and

Maru has enforced inadequate legal and extra-legal means to protect the patent.

4. A IJUCTIO ALOG WITH DAMAGES AD COMPESATIO FOR LOST PROFITS IS DUE TO

GHC.

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The Court of Arbitration is akin to a judicial authority. So, Article 44 of the TRIPs Agreement

provides for the grant of an injunction, which may be granted against Sure Cure. Article 45

mentions the damages which may be claimed. These damages extend to compensation for loss of

profits owing to the compulsory license granted and for the introduction of the patent-infringing

Sure Cure in the market.

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PLEADIGS

1. THE EXPORT AD SALE OF SURE CURE BY BLP AMOUTS TO A IFRIGEMET OF THE

RIGHTS GRATED TO GHC UDER ARTICLE 28 OF THE TRIPS AGREEMET.

1.1 A strictly literal interpretation of the patent claims would be a violation of Article 28

of the TRIPs agreement.

The object of a patent claim is to provide the owner of such a right to have a monopoly over his

invention for a limited period of time. The scope of such a right is to a large extent determined

by the interpretation of the patent claim.1 A patent claim may be interpreted in either of the

following two ways: 1) by adhering to a strictly literal construction of the patent claim with no

deviance from what is set out in the wording of the claim or 2) by adopting a broader approach

of looking at non-literal infringement as well.

Allowing for a strictly literal interpretation of patent claims has been found in most jurisdictions

to be a fraud on the rights of the patentee. The objective behind a more liberal construction of the

claims is based on the notion that introduction of minor insubstantial changes to an invention, if

the eventual result is that the device performs substantially the same function in substantially the

same way to obtain substantially the same result, does not render it any less of an infringement

than if it had literally copied the patented invention.2 In English law, the position is laid down in

Kirin-Amgen Inc. v. Hoechst Marion Roussel3 which is mirrored in Article 69 of the European

1 Carlos M. Correa, Patent Rights, in INTELLECTUAL PROPERTY AND INTERNATIONAL TRADE: THE TRIPS

AGREEMENT 205 (Carlos M. Correa & Abdulqawi A. Yusuf eds., 1998). 2 Graver Tank & Manufacturing Co. v. Linde Air Products Co., 339 U.S. 605 (1950). 3 Kirin-Amgen Inc. v. Hoechst Marion Roussel, [2004] UKHL 46 [hereinafter ‘Kirin-Amgen’].

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Patent Convention4 and Section 125 of the Patent Act, 19775 which holds that patents must be

given purposive construction rather than literal construction such that persons with practical

knowledge in the field in which the invention was intended to be used would understand that

strict compliance with a word or phrase in the claim to the exclusion of any variant is essential.6

The position of German law on the subject is also determined by Article 69 of the European

Patent Convention and test largely influenced by the Catnic case7 and the Improver case8 in the

Schneidmesser I (Cutting Blade I).9 Countries like Japan which had earlier adopted a literal

interpretation of patent claims have now adopted non-literal infringement as the appropriate

standard for affording sufficient protection to the rights of the patentee. The Ball Spline case10

laid down the test for the doctrine of equivalents, thus, discarding a literal interpretation of the

patent claims. Thus, state practice in this area indicates strongly that a strictly literal construction

does not provide for effective protection of rights of the patentee and a broader approach of

recognizing non-literal infringement as well is the appropriate standard to be followed in

interpreting patent claims. Finally, it is argued that the laws of the State of Maru which are in

pari materia with the Indian law also hold that if the over all effect of the invention is the same,

4 The Protocol on the Interpretation of Article 69 of the European Patent Convention states that “Article 69 should not be interpreted as meaning that the extent of the protection conferred by a European patent is to be understood as that defined by the strict, literal meaning of the wording used in the claims, the description and drawings being employed only for the purpose of resolving an ambiguity found in the claims. Nor should it be taken to mean that the claims serve only as a guideline and that the actual protection conferred may extend to what, from a consideration of the description and drawings by a person skilled in the art, the patent proprietor has contemplated. On the contrary, it is to be interpreted as defining a position between these extremes which combines a fair protection for the patent proprietor with a reasonable degree of legal certainty for third parties.” 5 Section 125 of the Patent Act, 1977 states that “ (1)An invention for a patent for which an application has been made or for which a patent has been granted shall, unless the context otherwise requires, be taken to be that specified in a claim of the specification of the application or patent, . . . as interpreted by the description and any drawings contained in that specification, and the extent of the protection conferred by a patent shall be determined accordingly.” 6 Catnic Components Ltd. v. Hill & Smith Ltd., [1982] R.P.C. 182 (H.L.) [hereinafter ‘Catnic’]; Kirin-Amgen, supra note 3. 7 Catnic, supra note 6. 8 Improver Corp. v. Remington Consumer Products Ltd., [1989] R.P..C. 69. 9 BGH Case No. X ZR 168/00 (Mar. 12, 2002), as translated in 33 I.I.C. 873 (Schneidmesser I [Cutting Blade I]) (Germany). 10 Tsubakimoto Seiko v. THK K.K., 52 MINSHŪ 113 (Supreme Court of Japan) (Japan).

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trifle variations will not make a difference. It is hereby, submitted that the a strictly literal

interpretation would be in violation of the rights provided under Article 28 of the TRIPS

Agreement as it would render the patent practically useless by allowing anyone to commit fraud

on the patent by making minor and immaterial changes to the invention.

1.2. The State of Maru recognizes the doctrine of equivalents, under which the export and

sale of Sure Cure is an infringement of the patent granted to GHC for Miracle Cure.

The law in Maru is in pari materia with Indian law. While there are no specific provisions

regarding patent infringement and interpretation of the patent claims in the Patents Act, 1970 in

India, the courts have established certain standards to judge the patent law. The Supreme Court

of India held in Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries11 that in order

to ascertain the extent of a patent the court must not simply look at the patent claim but it must

first, look at the full description of the invention and then look at what is claimed. Further, the

Delhi High Court held in Raj Parkash v. Mangat Ram Chaudhary12 that “unessential features in

an infringing article or process are of no account. If the infringing goods are made with the same

object in view which is attained by the patented article, then a minor variation does not mean that

there is no piracy."13 The court went on to say that if the overall effect obtained is the same, a

trifle variation will not make any difference. If the infringing article was made with the same

object in view which is achieved by the patented article, then the minor variation does not mean

11 Bishwanath Prasad Radhey Shyam v. Hindustan Metal Industries, A.I.R. 1982 S.C. 1444 (Supreme Court of India) (India). 12 Raj Parkash v. Mangat Ram Chaudhary, A.I.R. 1978 Del 1 (High Court of Delhi) (India). 13 Id.

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that there is no infringement if he makes what is in substance the equivalent of the patented

article. More recently, the Bombay High Court has also acknowledged the doctrine of

equivalents in Ravi Kamal v. Kala Tech.14 The Madras High Court acknowledged in Ritushka

(egi v. Adarsh Pharma15 that the doctrine of equivalents is applicable. Thus, it is submitted that

it is abundantly clear that the laws of Maru recognize the doctrine of equivalents.

A reading of the facts shows that BLP has distributed Sure Cure which is a drug similar to

GHC’s Miracle Cure. The only difference between Miracle Cure and Sure Cure is that while the

former contains an extract of the ‘Climbing Nightshade’ combined with palm oil, the latter

contains the same extract combined with corn oil. Under the doctrine of equivalents, if the

alleged product performs substantially the same function same function in substantially the same

way to obtain substantially the same result as the patented product, then it amounts to an

infringement.16 In the facts before us, corn oil performed the same function as palm oil, i.e. to

neutralize the toxic effect of the extract. The two products are identical in every other way.

Hence, it is submitted that Sure Cure performs substantially the same function in substantially

the same way to obtain substantially the same result as Miracle Cure.

1.3. Arguendo, based on the ruling in the Kirin-Amgen case,17

which is followed by the

courts of the State of Maru, the sale and manufacture of Sure Cure is an infringement of

the patent granted to GHC for Miracle Cure.

14 Ravi Kamal Bali v. Kala Tech, 2008 (5) Bom C.R. 138 (High Court of Bombay) (India). 15 Ritushka Negi v. Adarsh Pharma, (2004) 29 P.T.C. 108 (High Court of Madras) (India). 16 Sanitary Refrigerator Company v. Winters, 280 U.S. 30 (1929); Graver Tank & Manufacturing Co. v. Linde Air Products Co., 339 U.S. 605 (1950). 17 Kirin-Amgen, supra note 3.

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1.3.1. The decision of the Intellectual Property Court of Maru implying that the Kirin-Amgen

case18 advocates literal interpretation is erroneous.

The order of the Intellectual Property Court of Maru states that courts of Maru follow the ruling

in Kirin-Amgen Inc. v. Hoechst Marion Roussel.19 It must be pointed out that the Intellectual

Property Court’s implication that the Kirin-Amgen case advocates a literal interpretation of the

patent claim is a blatantly incorrect reading of the case. In this case, the House of Lords stated

that a patent specification should be given a purposive construction rather than a literal

construction.

1.3.2. The Kirin-Amgen case20 advocates purposive construction of the patent claims, under

which the sale and manufacture of Sure Cure would be an infringement of the patent granted to

GHC for Miracle Cure.

The test in the Kirin-Amgen case21 was derived largely from Catnic Components Ltd. v. Hill &

Smith Ltd.,22 in which it was held that a product with any variant which has no material effect on

the way the invention works falls within the scope patent protection. In the given case, the only

variant between Sure Cure and Miracle Cure is the substitution of palm oil with corn oil. The

moot question remains whether this substitution has a material effect on the way the invention

works. It is amply clear from the facts that both palm oil and corn oil perform the exact same

function, i.e., to neutralize the toxic effect of the extract. Hence, it can be stated that replacing

18 Kirin-Amgen, supra note 3. 19 Kirin-Amgen, supra note 3. 20 Kirin-Amgen, supra note 3. 21 Kirin-Amgen, supra note 3. 22 Catnic, supra note 6.

19

one with the other does not have any material effect on the invention as they perform the same

function leading to same result.

Thus, it is amply clear that even an application of the test laid out in Kirin-Amgen Inc. v. Hoechst

Marion Roussel23 leads to the conclusion that Sure Cure infringes on the patent granted to GHC

for Miracle Cure.

1.4. Arguendo, even if you apply a strictly literal construction to the patent claims in

question, BLP’s Sure Cure infringes GHC’s patents.

The patent claim of GHC covers “a delivery agent such as palm oil, which is mixed with the

active ingredient, such that the delivery agent delivers the active ingredient to a human.” The use

of the word ‘such as’ clearly indicates that what is intended to be covered in the patent claim is

not just the specific delivery agent palm oil, but any delivery agent which will have the same

effect which palm oil has when combined with the active ingredient. Therefore, it is clear that

substitutes for palm oil like corn oil which perform the same function as palm oil are also

covered in the patent claim. Hence, even if you apply a literal interpretation of the patent claim,

delivery agents which are equivalents of palm oil are covered by the claim. In the present case,

BLP’s Sure Cure is identical in every other respect to GHC’s Miracle Cure except in that it uses

corn oil as the delivery agent instead of palm oil. Since GHC’s patent claim is wide enough as to

include delivery agents which act as substitutes to palm oil, BLP’s Sure Cure clearly infringes

GHC’s patent claim.

23 Kirin-Amgen, supra note 3.

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2. THE GRAT OF COMPULSORY LICESE TO FIZER PHARMA BY THE ITELLECTUAL

PROPERTY DEPARTMET OF MARU IS I VIOLATIO OF THE PATET RIGHTS OF GHC.

2.1. The TRIPs Agreement in general provides for compulsory licensing, but the same must

comply in essence with the Preamble and other general provisions of TRIPs.

As has already been established in the previous argument, under Article 28, a patent confers the

right of protection from unauthorized use by non-holders of the patent. Under Articles 30 and 31,

exceptions may be allowed to Article 28, but such exceptions are subject to other provisions of

the TRIPs Agreement.

The Preamble to the TRIPs Agreement declares that the Agreement aims to inter alia, primarily

promote effective and adequate protection of intellectual property rights. Additionally, Article 7

of the TRIPs Agreement declares that the protection and enforcement of intellectual property

rights must “contribute to the promotion of technological innovation and to the transfer and

dissemination of technology… and in a manner conducive to social and economic welfare, and

to a balance of rights and obligations.” Under Article 8, which may be used by the Intellectual

Property Department of Maru to justify the compulsory license on the basis of protecting public

health, it is suggested that the measures used to prevent the abuse of intellectual property rights

by right holders must be in accordance with the other provisions of the TRIPs Agreement.24

Measures to protect public health are also subject to the remaining provisions of the TRIPs

Agreement.25

24 Agreement on Trade-Related Aspects of Intellectual Property Rights, art. 8(a), Apr. 15., 1994 [hereinafter ‘TRIPS

Agreement’]. 25 Id. at art. 8(b).

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It is submitted that one can conclude that the general provisions of the Agreement have not been

given due regard in granting the compulsory license. The said compulsory license curbs the

potential and willingness for technological innovation by non-voluntarily providing Fizer

Pharma with the know-how and test results, so that Fizer Pharma could take undeserved

advantage, at no cost of its own, of the resources and effort GHC had put into the research for

and development of Miracle Cure. This episode would definitely discourage further innovation.

An imbalance of rights and obligations is very much apparent in favour of the Government and

thus, the license is invalid.

2.2. The compulsory license also violates Article 31 of the TRIPs Agreement in particular.

Article 31 of the TRIPs Agreement declares that

“Where the law of a Member allows for other use26 of the subject matter of a patent

without the authorization of the right holder, including use by the government or third

parties authorized by the government, the following provisions shall be respected:

(b) 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 a

national emergency or other circumstances of extreme urgency or in cases of public

non-commercial use. In situations of national emergency or other circumstances of

26 “Other use” refers to use other than that allowed under Article 30 of the TRIPs Agreement.

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extreme urgency, the right holder shall, nevertheless, be notified as soon as

reasonably practicable.”

Further provisions under Article 31 outline the procedural requirements for issuing a compulsory

license, which, it is argued, have not been met. Therefore, the compulsory license is void.

Firstly, the patent holder has to be notified as soon as is possible.27 No official notification was

given to GHC about the compulsory license being issued in favor of Fizer Pharma, and purely

directions were given to the management of GHC-Maru to make available the know-how and

test results to Fizer Pharma. Secondly, the scope and duration of use of the license is supposed to

be limited to the purpose for which it is authorized.28 In the present case, it is apparent that no

strict instructions were issued to Fizer Pharma to cease the production of Miracle Cure once the

flu epidemic was controlled. In fact, it must be noted that Fizer Pharma was under the impression

that once the flu was under control in Maru, the company was authorized to continue distribution

and use in Porta and neighbouring countries. Furthermore, the Director of the Intellectual

Property Department took no action to prevent the same from occurring. This inaction is in

violation of Article 31(c) and 31(f) of the Agreement. The latter says that use under license shall

be authorized predominantly for the supply of the domestic market of the member nation

authorizing such use, which is definitely not the case in the current circumstances, as use and

distribution in other markets is also being allowed. Finally, the granting of license should be on

the basis of some reasonable ground. Mere conjecture that GHC-Maru may be unable to meet the

local demand is not sufficient ground to grant the license to Fizer Pharma, especially in light of

27 Supra note 24, at art. 31(c). 28 Supra note 24, at art. 31(c).

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the fact that the purpose behind GHC opening another facility in Maru was to cater to the market

in Maru.

2.3. Procedural requirements for compulsory licensing other than the ones enumerated

under the TRIPs Agreement have also not been given due regard.

Paragraph 5(a) of the Declaration on the TRIPs Agreement and Public Health declares that each

provision of the TRIPs Agreement is to be interpreted in light of the object and purpose of the

Agreement, as mentioned in the principles and objectives.29 The objectives of the TRIPs

Agreement and the underlying principles are enumerated under the Preamble, Article 7 and

Article 8 of the Agreement, as have been mentioned previously. It is thus submitted that this

grant of compulsory license is in violation of the Declaration on the TRIPS Agreement and

Public Health, as it does not take into account the principles and objectives of the Agreement.

The Implementation of Paragraph 6 of the Doha Declaration on the TRIPs and Public Health30 is

also violated in the present case. It is first submitted that the reference to exporting members

under Clause 2 of the Implementation should be interpreted to include importing members as

well, and the same burden should apply on the former as well. Thus, the importing member

nation must specify the name of the product and quantity of the same and must declare that only

the amount necessary for meeting the requirements under emergency or urgency shall be

produced under the license. The Government of Maru did not specify the quantity it wanted Fizer 29 World Trade Organisation, Declaration on the TRIPs Agreement and Public Health-Ministerial Declaration of 14 November 2001, WT/MIN(01)/DEC/2, 41 I.L.M. 755 (2002) at ¶ 5(a). 30 Implementation of paragraph 6 of the Doha Declaration on the TRIPS Agreement and public health, Sept. 1, 2003, WT/L/540 and Corr.1.

24

Pharma to produce, nor did it ensure that only the amount of Miracle Cure essential for

controlling the flu would be produced. No effort was made to prevent production beyond the

requirements. Therefore, this non-compliance shall also lead to the invalidity of the compulsory

license.

2.4. The remuneration provided by Maru to GHC is inadequate.

Under Article 31(h) of the TRIPs Agreement, the member nation granting the compulsory

license must pay the right holder adequate remuneration taking into account the economic worth

of the authorized patent. GHC has been provided with only $20 per vaccine, which covers only

the unverified estimated cost of production of Miracle Cure by GHC in Hori. This figure was

arrived at based on unilateral computations without the consultation of GHC. Also, for a similar

drug, Sure Cure, which has been established to infringe the patent which GHC possesses and

which performs identical functions as Miracle Cure, BLP was granted a compensation of $50 per

unit of vaccine. This differential remuneration is indicative of the fact that the valuation of

Miracle Cure is flawed, especially as, with the progress of time, there must have been an

increased supply of both vaccines, which would have led to a fall in the market price of the

vaccines.

In addition, it is also mentioned that any decision on the remuneration to be provided may be

subject to judicial review or independent review by a higher authority in Maru.31 This judicial

review has occurred in the present case, when the intellectual property court in Maru decided that

31 Supra note 24, at art. 31(j).

25

the Director of the Intellectual Property Department was authorized to take necessary action and

the valuation of $20 was ‘more than fair’. However, one must note that this decision was tainted

with bias, apparent or actual, as the presiding judge of the intellectual property court in Maru

decided was a classmate of the chairman of Fizer Pharma in law school, and the former denied

the motion for his disqualification without convening the entire court. This action contravenes

the fair and equitable procedure outlined for adjudication, which the member nations have to

provide for disputes arising out of the TRIPS Agreement. Furthermore, the principles of natural

justice are violated, as no man is permitted to be a judge in his own cause. Therefore, it is

submitted that the valuation by the court is not acceptable as the basis of remuneration paid, and

the $20 per unit for Miracle Cure is an incorrect and inadequate valuation.

3. THE REQUEST OF THE ITELLECTUAL PROPERTY DEPARTMET OF MARU TO BLP TO

DISTRIBUTE SURE CURE IS I VIOLATIO OF THE DECLARATIO O THE TRIPS AGREEMET

AD PUBLIC HEALTH AD THE IMPLEMETATIO OF PARAGRAPH 6 OF THE DOHA

DECLARATIO O THE TRIPS AD PUBLIC HEALTH.

It has been established in previous arguments that the drug Sure Cure infringes the patent GHC

has on Miracle Cure. Further, the majority of the procedural guidelines the Implementation of

Paragraph 6 of the Doha Declaration on the TRIPS and Public Health, under which Maru is the

eligible importing member,32 have not been complied with, as is established under the previous

argument. The fact that an infringement of the patent held by GHC was allowed and a claim by

32Clause 1(b), Implementation of paragraph 6 of the Doha Declaration on the TRIPS Agreement and public health, Sept. 1, 2003, WT/L/540 and Corr.1.

26

GHC was dismissed by the courts of Maru, even though the same has been upheld in courts in

other jurisdictions, suggests that adequate legal and extra-legal measures in accordance with the

TRIPs Agreement have not been implemented to prevent the misuse of Sure Cure as a means to

consume the market share of Miracle Cure. The Declaration on the TRIPs Agreement and Public

Health also advocates the protection of patents to encourage development and innovation, while

protecting public interest.33 The actions of the Government of Maru are no encouragement for

the same.

4. A IJUCTIO ALOG WITH DAMAGES AD COMPESATIO FOR LOST PROFITS IS DUE TO

GHC.

The International Court of Arbitration is deemed to be a judicial authority as required under

Articles 44 and 45, as it is to decide on the basis of and is bound by the laws of Maru, and the

decision of the Court of Arbitration is binding on both the parties involved.

The TRIPs Agreement provides for an injunction and damages as relief in favour of the patent

holder. Under Article 4434 of the Agreement, the judicial authorities have the power to order a

party to refrain from further infringement of the patent and the rights of the patent holder. In the

case at hand, it is apparent from the previous arguments that there has been a violation of the

patent held by GHC for Miracle Cure. As the same has been established, GHC may demand an

injunction preventing further infringement by BLC by continuing the production and distribution

33 Supra note 29, at ¶ 3. 34 Supra note 24, at art. 44.

27

of Sure Cure in the market. Additionally, Fizer Pharma cannot be allowed to continue to produce

Miracle Cure under the compulsory license, which is invalid as procedural guidelines have not

been adhered to. As the license is not valid, the limitation of remedy to remuneration under

Article 44(2) shall not apply. In any case, the remuneration provided is quite inadequate, as

illustrated in the previous argument.

Also, Article 4535 details the damages the infringer may have to pay the right holder. These

damages, in this case, may extend to compensation for loss of profits owing to the invalid

compulsory license granted to Fizer Pharma, which produced Miracle Cure for the Maru market.

Also, the Government of Maru did not take action against the continuation of this production

subsequent to the end of the emergency or situation of extreme urgency. Further compensation

may be demanded for the infringement of the patent held by GHC by Sure Cure, which has

previously been established to infringe the patent for Miracle Cure. Sure Cure managed to enter

the market on the behest of the Government of Maru, which provided BLP a compensation of

$50 per unit as against $20 for Miracle Cure. Further damages amounting to the expenses owing

to arbitration are due to GHC.

35 Supra note 24, at art. 45.

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PRAYER

In light of the issues raised, arguments advanced and authorities cited, the Claimant humbly prays

that the International Court of Arbitration may be pleased to:

1. Grant a permanent injunction in the favour of the Claimant restraining the Intellectual

Property Department of Maru from allowing BLP to export and sell Sure Cure in Maru.

2. Grant a permanent injunction in the favour of the Claimant restraining the Respondent from

compulsorily licensing Miracle Cure to Fizer Pharma.

3. Give an award for compensation for lost profits to GHC for the damages suffered by them

due to the action of the Intellectual Property Department of Maru in granting the

compulsory licence to Fizer Pharma.

4. Give an award for compensation for lost profits due to the action of the Intellectual Property

Department of Maru in allowing BLP to export and sell Sure Cure in Maru.

5. Grant an award for the costs of the arbitration.

And pass any other orders that this Court of Arbitration deems fit in the interests of equity, justice

and good conscience.

F2050-C,

Counsel for the Claimant.