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F2010-R
LAWASIA MOOT COMPETITION 2010
IN THE INTERNATIONAL COURT OF ARBITRATION
NEW DELHI, INDIA
2010
GOOD HEALTH COMPANY
Claimant
v.
DIRECTOR OF INTELLECTUAL PROPERY, STATE OF MARU
Respondent
MEMORIAL FOR THE RESPONDENT
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TABLE OF CONTENTS
TABLE OF CONTENTS ............................................................................................................. 1
INDEX OF AUTHORITIES ........................................................................................................ 4
STATEMENT OF JURISDICTION ........................................................................................... 8
QUESTIONS PRESENTED ........................................................................................................ 9
STATEMENT OF FACTS ......................................................................................................... 10
SUMMARY OF PLEADINGS .................................................................................................. 13
PLEADINGS ............................................................................................................................... 15
I. THE ACTIONS OF THE INTELLECTUAL PROPERTY DEPARTMENT (“IPD”)
WERE VALID AND JUSTIFIABLE UNDER TRIPS IN GENERAL A ND ARTICLE 31
OF TRIPS IN PARTICULAR ................................................................................................... 15
A. Interpretation of the TRIPS Agreement ...................................................................... 15
B. The IPD’s actions were consistent with and provided for under the objectives and
principles of TRIPS................................................................................................................ 16
C. The actions of the Respondent have complied with Article 31 of TRIPS. .................. 17
1. Article 31(b) ............................................................................................................... 18
2. Article 31(c) and Article 31(g) ................................................................................... 21
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3. Article 31 (h) .............................................................................................................. 22
4. Article 31(i) and Article 31(j) ..................................................................................... 22
II. THE FAILURE TO RECOGNIZE ANY INFRINGEMENT BEYOND TH E
LITERAL TERMS OF THE PATENT IS NOT A VIOLATION OF A RTICLE 28 OF
TRIPS. .......................................................................................................................................... 25
A. Maru has autonomy to determine the scope of protection to be afforded to patent
right holders. ......................................................................................................................... 25
B. The doctrine of equivalents amounts to and encourages anti-competitive practices. 26
1. The regulation of anti-competitive practices under TRIPS and Maru’s law .............. 26
2. Doctrine of equivalents amounts to an anti-competitive practice .............................. 27
C. The literal approach to patent claims construction is more relevant today ............... 28
III. THE ACTION OF THE INTELLECTUAL PROPERTY DEPART MENT WAS
VALID AND JUSTIFIABLE AS PER THE “DECLARATION ON TH E TRIPS
AGREMENT AND PUBLIC HEALTH (ADOPTED ON 14 NOVEMBER 2001) AND
IMPLEMENTATION OF PARAGRAPH 6 OF THE DOHA DECLARATI ON ON THE
TRIPS AND PUBLIC HEALTH (DECISION OF 30 AUGUST 2003) ................................. 30
A. Maru is allowed to import Miracle Cure from Fizer Pharma under Doha Declaration 31
1. Doha Declaration as a waiver to Article 31(f) ........................................................ 31
2. Maru has no manufacturing capacity ...................................................................... 32
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B. In the alternative that the Claimant’s manufacturing capacity is taken into account,
the importation from Porta is still within the ambit of Para 2 of the Implementation
Decision. ................................................................................................................................ 34
C. Lastly, Maru is allowed to import Miracle Cure from Porta on public policy
grounds. ................................................................................................................................. 35
IV. REMEDIES THAT SHOULD BE AWARDED TO GHC/GHC-MARU ASSUMING
THE ACTIONS OF THE INTELLECTUAL PROPERTY DEPARTMENT OF MARU
ARE NOT JUSTIFIED UNDER (I) AND/OR (II) AND/OR (III ). ........................................ 36
A. In relation to the Respondent’s action in engaging Fizer Pharma to manufacture the
Miracle Cure. ........................................................................................................................ 36
1. The remuneration of USD20 per unit is more than sufficient because a state has a
right under international law to take regulatory measures without compensation. ........... 36
B. In relation to the Respondent’s action in importing Sure Cure from BLP .................... 40
1. Injunction should not be granted. ............................................................................... 40
2. No compensation should be made because the Claimant did not suffer any loss ... 41
PRAYER FOR RELIEF............................................................................................................. 42
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INDEX OF AUTHORITIES
TREATIES AND CONVENTIONS
Agreement on Trade Related Aspects of Intellectual Property Rights, Annex 1C of
the Marrakesh Agreement Establishing the World Trade Organization, signed in Marrakesh,
Morocco on 15 April 1994, Marrakesh Agreement Establishing the World Trade Organization,
The Legal Texts: The Results Of The Uruguay Round Of Multilateral Trade Negotiations 320
(1999), 1869 U.N.T.S. 299, 33 I.L.M. 1197 (1994) .............................. 15, 16, 17, 26, 28, 31, 41
The Canadian Foreign Investment Promotion and Protection Agreement. .................................. 39
Vienna Convention on the Law of Treaties, May 23, 1969, art 31.1, 1155 U. N. T. S. 331, 34 .. 15
WORLD TRADE ORGANIZATION (WTO) DOCUMENTS, PUBLICATI ONS AND
PANEL DECISIONS
Canada Patent Protection of Pharmaceutical Products, WT/DS114/R (March 17, 2000), at 7.91
(hereinafter known as the “Canada Dispute”) ..................................................................... 17, 19
Doha WTO Ministerial 2001, Declaration on the TRIPS Agreement and Public Health, adopted
Nov. 14, 2001, WT/ MIN(01)/ DEC/ 2 (Nov. 20, 2001) ............................ 18, 19, 20, 31, 32, 35
Implications of the Doha Declaration on the TRIPS Agreement and Public Health, World Health
Organization, (WHO/ EDM/ PAR/ 2003.3). ............................................................................. 33
United States – Standards for Reformulated and Conventional Gasoline, Report of the Appellate
Body WT/DS2/AB/R (April 29, 1996) at 17. ........................................................................... 16
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World Trade Organization, Implementation of Paragraph 6 of the Doha Declaration on the
TRIPS Agreement and Public Health, WT/L/540 (Aug. 30, 2003) .................................... 32, 34
INTERNATIONAL CASES AND ARBITRATION DECISIONS
Interhandel Case (Switzerland v. United States of America) (separate opinion of
Judge Cordova), ICJ Reports 1959 ........................................................................................... 24
SGS Société Générale de Surveillance S.A. v. Republic of the Philippines ICSID Case No.
ARB/02/6, 29 January 2004, 8 ICSID Reports 518 .................................................................. 24
The Lotus Sea Case. PCIJ Series A, No 10 .................................................................................. 37
The North Sea Continental Shelf Cases (FRG v Denmark; FRG v The Netherlands) (1969) ICJ
Rep 3 ......................................................................................................................................... 37
MUNICIPAL CASES AND LAWS
Brazil Industrial Property Law Act ............................................................................................... 20
Graver Tank & Manufacturing Co. v. Linde Air Products Co., 339 U.S. 605 (1950).................. 28
Indian Patents Act 1970 ................................................................................................................ 41
Kirin-Amgen v Hoechst Marion Roussel 2004 UKHL 46 ..................................................... 26, 29
Medicines and Related Substances Control Amendment Act of South Africa ............................ 20
Monopolies and Restrictive Trade Practices Act 1989 of India ............................................. 27, 28
TREATISES, DIGESTS AND BOOKS
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A.A. Cançado Trindade, The Application of the Rule of Exhaustion of Local Remedies in
International Law, Cambridge, Cambridge University Press, 1983 ......................................... 24
Arthur W. Rovine, “Contemporary issues in international arbitration and mediation: The
Fordham papers 2007”, 2nd Conference of Fordham University School of Law in June 2007,
Martinus Nijhoff Publishers. ..................................................................................................... 40
C. Wilfred Jenks.[London: Stevens and Sons Ltd.; Dobbs Ferry, New York: Oceana
Publications. 1964. xl ................................................................................................................ 24
Chittharanjan Félix Amerasinghe, Local remedies in international law (1990), Cambridge
University Press ......................................................................................................................... 24
The International Law on Foreign Investment by M. Sornarajah ................................................. 37
JOURNALS AND ARTICLES
David Palmeter & Petros C. Mavroidis, “The WTO Legal System: Sources of Law” 92 AM. J.
INT’L L. 398, 399-413(1998) ................................................................................................... 16
Hannes L. Schloemann & Stefan Ohlhoff, “Constitutionalization” and Dispute Settlement in the
WTO: National Security as an Issue of Competence”, 93 AM. J. INT'L L. ............................. 19
Johanna Kiehl, "TRIPS Article 31(B) and the HIV/AIDS Epidemic", (2002) 10 J. Intell. Prop. L.
143 ............................................................................................................................................. 18
Mark C. Lang, “What a Long Strange TRIPS It’s Been: Compulsory Licensing from the
Adoption of TRIPS to the Agreement on Implementation of the Doha Declaration” 3 J.
Marshall Rev. Intell. Prop. L. ii 2003-2004 .............................................................................. 20
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Thailand’s issuance compulsory licences as chronicled in Peng Jiang, Fighting the AIDS
Epidemic China’s Options under the WTO TRIPS Agreement 13 ALB. L.J. SCI. TECH. 223,
239 (2002) ................................................................................................................................. 20
OTHERS
CRS Report for Congress, Influenza Antiviral Drugs and Patent Law Issues (Nov. 18 2005) .... 31
Harvard Draft Convention on the International Responsibility of States for Injuries to Aliens .. 37,
39
OECD Report published Organization for Economic Corperation and Development ........... 37, 38
Press Release, Office of the Unites States Trade Representative, United States and Brazil Agree
to Use Newly Created Consulative Mechanism to Promote Cooperation on HIV/ AIDS and
Adress WTO Patent Dispute (June 25, 2001), at http://www.ustr.gov/releases/2001/06/01-
46.htm. ....................................................................................................................................... 19
Re-Statement of Foreign Relation Law of the United States. ....................................................... 37
The Concise Oxford Dictionary .................................................................................................... 33
the Multilateral Agreement on Investment Negotiating Text ....................................................... 37
UNITED NATIONS DOCUMENTS AND PUBLICATIONS
Draft Articles on the Responsibility of States for Internationally Wrongful Acts; Report of the
International Law Commission on the work of its Fifty-third session, Official Records of the
General Assembly, Fifty-sixth session, Supplement No. 10 (A/56/10), chp.IV.E.1 ................. 24
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STATEMENT OF JURISDICTION
Good Health Company (“GHC”) and the Director of Intellectual Property, State of Maru
(“Maru”) (collectively known as “the Parties”) have submitted the present dispute before this
Arbitral Tribunal, pursuant to the Arbitration Agreement entered into by the parties. The
arbitration shall be conducted pursuant to the Understanding on Rules and Procedures Governing
the Settlement of Disputes of WTO (“DSU”). The Parties shall accept any Judgment of the Court
as final and binding upon them and shall execute it in its entirety and in good faith.
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QUESTIONS PRESENTED
I.
Whether the actions of Intellectual Property Department were valid and justifiable
under TRIPS in general and Article 31 of TRIPS in particular;
II.
Whether failure to recognize any infringement beyond the literal terms of the patent violates
Article 28 of TRIPS.
III.
Whether the action of Intellectual Property Department was valid and justifiable as per
“Declaration on TRIPS Agreement and Public Health (adopted on 14 November 2001) and
Implementation of Paragraph 6 of the Doha Declaration on the TRIPS and Public Health
(Decision of 30 August 2003).
IV.
The remedies that should be awarded to GHC/GHC Maru if the actions of Intellectual Property
Department of Maru are not justified under I and/or II and/or III .
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STATEMENT OF FACTS
THE PARTIES
Maru, a country populated by 500,000 people has its economy centered on tourism, hotel,
restaurants and retail businesses. In 2009, the newly elected Government announced its intention
to diversify Maru’s economy.
Good Health Company (“GHC”) of Hori is one of the largest pharmaceutical companies
in the world. In 2009, GHC established a new company, GHC-Maru as part of its investment in
Maru. Their manufacturing and research plant in Maru was due to be operational in one year’s
time from the groundbreaking ceremony.
MIRACLE CURE AND THE KILLER FLU
Miracle Cure was developed in 2006 by GHC to treat a variety of new flu viruses. The
patent claims of Miracle Cure encompass the chemical composition of the drug, its method of
manufacture and its manner of use. Miracle Cure contains an extract of Climbing Nightshade, a
toxic plant, combined with palm oil which neutralizes the toxic effect and is administered orally.
Before setting up their manufacturing base in Maru, GHC started the clinical trial of the
Miracle Cure in Maru which was reported as a breakthrough in medical science.
At the end of 2009, the Killer Flu attacked Maru, killing a 7 year-old boy. The following
day, twenty people were reported to have Killer Flu-like symptoms. In the next few days, a large
number of people from the same province fell sick. Soon, people from other provinces were
reported to have exhibited the same symptoms. Fearing the disease, tourists raced to leave Maru,
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carrying the virus to neighboring countries. A travel advisory was issued by WHO against
traveling to Maru.
Miracle Cure was found to be able to treat the Killer Flu. The Chairman of GHC,
anticipating the increase of demand and the opportunity to make huge profits ordered the efforts
to set up the plant and produce more Miracle Cure in Maru be doubled. The Director of
Intellectual Property of Maru (“the Director”) also authorized GHC-Maru to produce Miracle
Cure to be exported.
THE GRANT OF COMPULSORY LICENCE TO FIZER PHARMA (“F IZER”)
Fearing that GHC might not produce enough Miracle Cure to combat the Killer Flu in
Maru, the Director invited Fizer, GHC’s largest competitor to manufacture Miracle Cure in their
manufacturing base in Porta to for Maru. GHC-Maru was notified of this when it was directed to
provide all information regarding the manufacture of Miracle Cure to Fizer. Fizer immediately
began manufacturing Miracle Cure in Porta. The Intellectual Property Department (“IPD”) paid
GHC $20 per drug sold, being the estimated cost to produce Miracle Cure, which will be
reimbursed by Fizer.
GHC filed a formal protest with the Director, who dismissed the complaint. GHC then
brought a patent infringement suit against the Government of Maru. The Government justified
their actions based on public health reasons. This was accepted by the Court, which held that the
USD20 compensation was “more than fair”. When it was later revealed that the Presiding Judge
was the classmate of the Chairman of Fizer at law school, GHC requested that the Presiding
Judge disqualify himself and reset the matter for another hearing but the motion was denied.
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IMPORTATION OF SURE CURE FROM BETTER LIFE PHARMACEU TICAL (“BLP”)
In anticipation that GHC will prevent Maru from having access to Miracle Cure, the
Director took further steps by importing Sure Cure from BLP in Ulka, a drug which is very
similar but not identical to Miracle Cure. It uses corn oil as the neutralizing agent for Climbing
Nightshade, instead of palm oil. BLP is paid USD50 for each Sure Cure imported into Maru.
Sure Cure is an infringement GHC’s patent under the doctrine of equivalents in Hori.
GHC requested a preliminary injunction and an immediate hearing before the Maru court. GHC
conceded that Sure Cure does not literally infringed Miracle Cure, as it uses corn oil and not
palm oil as the dispersant. GHC however claimed that Sure Cure is an infringement under the
doctrine of equivalents. The Court denied the request, on the basis that Maru’s law has never
recognized any form of non-literal infringement. A subsequent appeal writ to the Constitutional
Court was dismissed without opinion.
THE DISPUTE
Upon the request for assistance from GHC, the Commerce Minister of Hori called upon
his counterpart in Maru to reach an amicable resolution. It was agreed that the matters should be
resolved through private arbitration pursuant to a written agreement executed by the Parties.
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SUMMARY OF PLEADINGS
I. The actions of the IPD are valid and justifiable under TRIPS in general and Article 31 of
TRIPS in particular. IPD has acted consistently with the objectives and principles of TRIPS
contained in Articles 7 and 8. IPD has complied with Article 31 in relation to the grant of
compulsory licence. IPD is allowed to grant compulsory licence without the authorization of
GHC under subsection (b) as it was a case of national emergency and extreme urgency and GHC
has been duly notified of the grant. Further, IPD has complied with subsection (c) as the scope
and duration of the compulsory licence to Fizer Pharma was only for the period of the spread of
Killer Flu; and under subsection (g), it will be terminated once the Killer Flu ceased to exist and
is unlikely to recur. IPD’s action has also complied with subsection (h) as GHC was paid
adequate remuneration which is the USD20 for every unit of Miracle Cure produced under the
compulsory licence. Lastly, IPD’s action was in compliance with subsections (i) and (j) as the
court that reviewed the legal validity of the authorization and remuneration was independent.
II. The failure to recognize any infringement beyond the literal terms of the patent is not a
violation of Article 28 of TRIPS. Maru has the autonomy to determine the scope of protection to
be accorded to patent right holders under its domestic law. Thus, the refusal to recognize any
form of non-literal infringement including the doctrine of equivalents does not violate Article 28
as the IPD has fulfilled the minimum standard required of by TRIPS that is the literal
infringement standard. In the alternative, the refusal to recognize non-literal infringement in the
form of doctrine of equivalents is justified as a measure to restrict anti-competitive practices.
III. The actions of IPD were valid and justifiable as per “Declaration on TRIPS Agreement
and Public Health and Implementation of Paragraph 6 of the Doha Declaration. Firstly, the
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importation of Miracle Cure from Fizer Pharma under the compulsory licence is justified as
Maru has no manufacturing capacity to produce the drugs. Even if GHC’s manufacturing
capacity is taken into account, the import is still justified as GHC has insufficient manufacturing
capacity. Lastly, IPD’s action to import Miracle Cure from Porta is valid and justified on public
policy grounds.
IV. The remedies that should be awarded to GHC/GHC-Maru in relation to IPD’s grant of
compulsory licence to Fizer Pharma is USD20 as per the original compensation. In reality, no
compensation is due as the IPD’s action was a regulatory measure in international law. Therefore,
the USD20 remuneration rate offered by IPD is more than sufficient. In relation to IPD’s action
in importing Sure Cure from BLP, an injunction should not be granted as it would deny the
people of Maru their access to life-saving medicine. Further, no compensation is to be awarded
to GHC as they have not suffered any losses a result of the importation.
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PLEADINGS
I. THE ACTIONS OF THE INTELLECTUAL PROPERTY DEPARTM ENT (“IPD”)
WERE VALID AND JUSTIFIABLE UNDER TRIPS 1 IN GENERAL AND ARTICLE 31
OF TRIPS IN PARTICULAR
A. Interpretation of the TRIPS Agreement
According to Article 31 of the Vienna Convention of the Law of Treaties,2 a treaty is to
be interpreted in accordance with the ordinary meaning of the terms of the treaty, in their
context, and in light of the treaty's object and purpose. Subsequent agreements between the
parties regarding the treaty's interpretation or application, subsequent practice in the application
of the treaty that establishes agreement regarding its interpretation, and any relevant rules of
international law applicable in the relations between the parties are also to be taken into account.3
Further, supplementary means of interpretation may be used to confirm the meaning resulting
from application of Article 31 or to determine the meaning when interpretation yields
ambiguous, obscure, absurd, or unreasonable results.4
Although it is unclear as to whether the parties involved are signatories to the Vienna
Convention, the principles in the Convention are applicable in our present case. Pursuant to
1 Agreement on Trade Related Aspects of Intellectual Property Rights, Annex 1C of the Marrakesh Agreement
Establishing the World Trade Organization, signed in Marrakesh, Morocco on 15 April 1994, Marrakesh Agreement Establishing the World Trade Organization, The Legal Texts: The Results Of The Uruguay Round Of Multilateral Trade Negotiations 320 (1999), 1869 U.N.T.S. 299, 33 I.L.M. 1197 (1994) (hereinafter known as “the TRIPS Agreement”).
2 Vienna Convention on the Law of Treaties, May 23, 1969, art 31.1, 1155 U. N. T. S. 331, 34 (hereinafter known as “the Vienna Convention”).
3 Article 31(2)(a) of the Vienna Convention. 4 Article 32 of the Vienna Convention.
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Article 3.2 of the WTO’s Dispute Settlement Understanding, the existing rights and obligations
of the member states must be interpreted based on the customary interpretation rules of public
international law. Customary international law in WTO jurisprudence would include the Vienna
Convention.5
Therefore, the TRIPS Agreement should first be interpreted according to its text and
preamble. It is also to be interpreted according to prior decisions interpreting the Agreement,
customary international law, other relevant rules of international law. If reasonable interpretation
is unavailable through other means, one may also look at the preparatory work and
circumstances of the Agreement to construct the meaning of the provisions in the Agreement.6
Paragraph 5(a) of the Doha Declaration further provides that in applying the customary rules of
interpretation of international law, each provision of the TRIPS Agreement must be read in light
of its object and purpose, being Articles 7 and 8.
B. The IPD’s actions were consistent with and provided for under the objectives and
principles of TRIPS
It is submitted that the Respondent has at all material times acted consistently with the
principles and objectives of TRIPS as contained in Article 7 and Article 8 of TRIPS respectively.
Article 7 provides that:
“The protection and enforcement of intellectual property rights should contribute
to the promotion of technological innovation and to the transfer and
5 United States – Standards for Reformulated and Conventional Gasoline, Report of the Appellate Body
WT/DS2/AB/R (April 29, 1996) at 17. 6 David Palmeter & Petros C. Mavroidis, “The WTO Legal System: Sources of Law” 92 AM. J. INT’L L. 398, 399-
413(1998).
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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.”
The rights of the State to disseminate technology “in a manner conducive to the social
and economic welfare” of the public and the State as provided under Article 7 is further
supported by Article 8. Article 8.1 of TRIPS which lays out the principle of TRIPS states that:
“Members may, in formulating or amending their laws and regulations, adopt
measures necessary to protect public health and nutrition…”
The WTO Panel Report in Canada Patent Protection of Pharmaceutical Products7 stated
that Article 7 of TRIPS makes “the balance between the intellectual property rights created by
the Agreement and other important socio-economic policies of WTO Member governments” one
of the TRIPS key goals. According to the Panel, Article 8 also elaborates the socio-economic
policies in question, particularly to health and nutritional policies.8
Pursuant thereto, Member States can adopt measures necessary to protect public health,
the only proviso being that their actions are compliant with the TRIPS Agreement and that it has
balanced the rights and obligations of the parties affected. It is submitted in our present dispute,
public health must come first and the actions of the Respondent were consistent with the
objectives and principles of TRIPS to protect public health.
C. The actions of the Respondent have complied with Article 31 of TRIPS.
7Canada Patent Protection of Pharmaceutical Products, WT/DS114/R (March 17, 2000), at 7.91 (hereinafter known
as the “Canada Dispute”). 8 Ibid, at 7.24.
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Article 31 provides that, where the law of a Member allows for other use 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, requirements set out in subsections (a) to (l) be
respected by the Member State authorizing the use. It is submitted that the government has
complied with all the requirements set out, the contentious ones being (b), (c), (g), (h), (i) and (j).
1. Article 31(b)
Subsection (b) states that the use of a compulsory licence “…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.” The requirement to obtain authorization can be
waived “in the case of national emergency or other circumstances of extreme urgency” This is
provided that the right holder shall, nevertheless, be notified as soon as reasonably practicable. It
is submitted that our present case is one of national emergency and extreme urgency which
allows the Respondent to waive the requirement of authorization by the patent holder in Article
31(b).
The precise meaning of Article 31(b) has not been defined by WTO Panel. Declaration
on the TRIPS Agreement and Public Health, adopted Nov. 14, 2001,9 issued at the Doha
Ministerial Conference in November 2001, though not legally binding, may influence or compel
some Member States to utilize Article 31(b) by enacting public health legislation.10 In fact, a
petition by the United States against Brazil to the WTO’s Dispute Settlement Body (DSB) on a
9 Doha WTO Ministerial 2001, Declaration on the TRIPS Agreement and Public Health, adopted Nov. 14, 2001,
WT/ MIN(01)/ DEC/ 2 (Nov. 20, 2001) (hereinafter known as “the Doha Declaration”. 10 Johanna Kiehl, "TRIPS Article 31(B) and the HIV/AIDS Epidemic", (2002) 10 J. Intell. Prop. L. 143.
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compulsory licencing dispute has been withdrawn in light of the developments of the Doha
Declaration.11
It is conceded that though there is no express definition of “emergency” in international
law to conclude that it includes a public health emergency.12 It is further recognized that it is not
explicit on Article 31(b) that “national emergency” or “extreme urgency” includes public health
emergency.
However, States in the Doha Declaration agree that epidemics such as HIV/AIDS,
malaria and tuberculosis meet the definition of “national emergency”.13 It is submitted that
Article 31(b) must be interpreted purposively to establish that “national emergency” includes
cases of public health emergency. This is achieved by reading the whole of Article 31, and the
objective and purpose of the TRIPS agreement and any subsequent agreements – whether it
approves of public health objective.
Article 7 of TRIPS makes “the balance between the intellectual property rights created by
the Agreement and other important socio-economic policies of WTO Member governments as
one of the TRIPS’ key goals.”14 Meanwhile, Article 8 elaborates the socio-economic policies in
question, particularly on health and nutritional policies.15 Accordingly, it is clear that public
11 Press Release, Office of the Unites States Trade Representative, United States and Brazil Agree to Use Newly
Created Consulative Mechanism to Promote Cooperation on HIV/ AIDS and Adress WTO Patent Dispute (June 25, 2001), at http://www.ustr.gov/releases/2001/06/01-46.htm.
12 Hannes L. Schloemann & Stefan Ohlhoff, “Constitutionalization” and Dispute Settlement in the WTO: National Security as an Issue of Competence”, 93 AM. J. INT'L L. at 445.
13 Para 5(c) of the Doha Declaration. 14 Canada Patent Protection of Pharmaceutical Products WT/DS114/R (March 17, 2000), at 7.91. 15 Ibid, at 7.24.
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health is given weight under TRIPS. Pursuant to this, States have interpreted TRIPS as to allow
the issuance of compulsory licence for public health purposes.16
The Doha Declaration further underscores the importance of public health in TRIPS. It
reaffirmed the rights of Member States to interpret and implement TRIPS in a manner consistent
with the protection of public health and access to medicine for all.17 Para 5(c) of Doha
Declaration states that:
“Each member has the right to determine what constitutes a national emergency
or other circumstances of extreme urgency, it being understood that public health
crises, including those relating to HIV/AIDS, tuberculosis, malaria and other
epidemics can represent a national emergency or other circumstances of
extreme urgency [emphasis added].”
Therefore, based on Articles 7 and 8, with the Doha Declaration, that “national
emergency” would include public health crisis such as the Killer Flu as declared by the
Government of Maru. Hence, the issuance of the compulsory licence without obtaining the
authorization of the Claimant was justified under Article 31(b) of TRIPS.
Further, the Para 5(c) of the Doha Declaration recognizes that each member has the right
to determine what constitutes to national emergency or other circumstances of extreme urgency,
it being understood that public health crises. Therefore, there must be deference to the state’s
16 Article 68 of Brazil Industrial Property Law Act; Medicines and Related Substances Control Amendment Act of
South Africa; Thailand’s issuance compulsory licences as chronicled in Peng Jiang, Fighting the AIDS Epidemic China’s Options under the WTO TRIPS Agreement 13 ALB. L.J. SCI. TECH. 223, 239 (2002) and Mark C. Lang, “What a Long Strange TRIPS It’s Been: Compulsory Licensing from the Adoption of TRIPS to the Agreement on Implementation of the Doha Declaration” 3 J. Marshall Rev. Intell. Prop. L. ii 2003-2004.
17 Doha Declaration, para 4-5.
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judgment and Maru’s determination of the Killer Flu pandemic as “national emergency” should
not be called into question.
With the Killer Flu pandemic pending, not only has it affected the rice bowl of the
country, which is that of tourism,18 it is also killing people.19 The WHO had even issued a travel
advisory against travelling to Maru because of the Killer Flu.20 This was clearly a situation of
national emergency and one of extreme urgency.
Having justifiably waived this requirement, the Claimant was notified very promptly as
required when they were told to make available all test results and ‘know-how’ regarding the
manufacture of the Miracle Cure to Fizer Pharma.21
2. Article 31(c) and Article 31(g)
It is stated under subsection (c) that the scope and duration of the compulsory licence
“…shall be limited to the purpose for which it was authorized…”. Further, subsection (g)
provides that “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.;”
It is submitted that the authorization to produce Miracle Cure was given to Fizer Pharma
only to prevent the Killer Flu in Maru and not for distribution to other countries.22 It is further
submitted that the compulsory licence was going to be terminated once the Killer Flu ceases to
18 Moot Problem, Para 8, line 4-5. 19 Moot Problem, Para 7, line 5. 20 Moot Problem, Para 8, line 2-3. 21 Moot Problem, Para 13, line 11-14. 22 Moot Problem, Para 13, line 4-6.
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exist and is unlikely to recur, as per subsection (g). There was a unilateral understanding on the
part of Fizer Pharma that they will be able to distribute the drug after the flu has subsided, but
this has never been expressly or impliedly communicated to them by the Respondent. In fact, it is
the Respondent’s position that Fizer Pharma cannot use the compulsory licence to produce the
Miracle Cure for distribution outside of Maru after the Killer Flu has subsided. If the Claimant’s
stand is that the Killer Flu has ceased to exist and is unlikely to recur, they can in fact make
motivated requests for competent authority to review the continued threat of the Killer Flu.
3. Article 31 (h)
Subsection (h) 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.”
The Intellectual Property Court of Maru had held that the compensation of USD20 to the
Claimant for every unit of Miracle Cure that Fizer Pharma produces to be “more than fair”. The
decision was made after hearing the Claimant’s submissions and the Director’s reply on the
adequacy of the compensation.23 The deliberation by the Court clearly involved consideration of
all the relevant factual circumstances of the case, the position the parties and all the submissions
of the parties. The Claimant is enjoying USD20 net profit as they do not incur any cost of
producing the Miracle Cure that Fizer Pharma supplies. Hence, it is submitted that the Claimant
was paid adequate remuneration, which is more than fair.
4. Article 31(i) and Article 31(j)
23 Moot Problem, Para 16, line 8-9.
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Subsection (i) states that “the legal validity of any decision relating to the authorization
of such use shall be subject to judicial review or other independent review by a distinct higher
authority in that Member.” Further, subsection (j) states, “any decision relating to the
remuneration provided in respect of such use shall be subject to judicial review or other
independent review by a distinct higher authority in that Member;”
It is submitted that the Respondent has at all material times complied with these
subsections as the Court that review the legal validity of the compulsory licence and the
consequent remuneration was independent and fair.
(a) The decision of the Maru Court was fair and independent pursuant to subsections
(i) and (j)
The Court that reviewed the legal validity of the authorization and remuneration was
independent. On the facts, the Presiding Judge made his decision based on the Director’s reply,24
thus taking into account all facts that were presented before him. The Claimant was given a fair
hearing and a chance to make their submissions before the court. There was no evidence that his
judgment was impaired by virtue of him being the classmate of the Chairman of Fizer Pharma at
law school.
(b) Any allegation of appearance of bias is inadmissible as the Claimant has not
exhausted local remedies on this matter
It is submitted that the decision of the Court cannot be disputed before this Arbitral
Tribunal based on the doctrine of exhaustion of local remedies. It is a settled principle of
24 Moot Problem, Para 16, line 8.
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international law that where a State and an alien agree to arbitrate their disputes, any local
remedies must first be exhausted. 25 The main reason for the existence of this doctrine is the
absolute necessity of harmonizing international and national jurisdictions, ensuring the respect
due to the sovereign jurisdictions of States to which foreigners are subject.26
The fact that the Respondent has submitted to the jurisdiction of this Arbitral Tribunal
does not bar the application of the principle of exhaustion of local remedies. A Tribunal may
have jurisdiction over a case, but it nevertheless may decide that a certain claim is
inadmissible.27 It is submitted that the allegation of bias concerns the admissibility of the case,
and it is challengeable regardless of submission to jurisdiction.
Thus, the Claimant’s failure to exhaust all local remedies by appealing to the highest
court in relation to the allegation of bias precludes them from claiming the same before this
Honourable Arbitral Tribunal. It is this submitted that this Honourable Arbitral Tribunal should
not consider any allegation of bias in determining whether the review of the compulsory licence
was independent pursuant to subsections (i) and (j).
25 Article 44(b) of the Draft Articles on the Responsibility of States for Internationally Wrongful Acts; Report of the
International Law Commission on the work of its Fifty-third session, Official Records of the General Assembly, Fifty-sixth session, Supplement No. 10 (A/56/10), chp.IV.E.1; C. Wilfred Jenks.[London: Stevens and Sons Ltd.; Dobbs Ferry, New York: Oceana Publications. 1964. xl and 777 and 28; A.A. Cançado Trindade, The Application of the Rule of Exhaustion of Local Remedies in International Law, Cambridge, Cambridge University Press, 1983, 527-37; Chittharanjan Félix Amerasinghe, Local remedies in international law (1990), Cambridge University Press.
26 Interhandel Case (Switzerland v. United States of America) (separate opinion of Judge Cordova), ICJ Reports 1959.
27 SGS Société Générale de Surveillance S.A. v. Republic of the Philippines ICSID Case No. ARB/02/6, 29 January 2004, 8 ICSID Reports 518.
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II. THE FAILURE TO RECOGNIZE ANY INFRINGEMENT BEYON D THE
LITERAL TERMS OF THE PATENT IS NOT A VIOLATION OF A RTICLE 28 OF
TRIPS.
A. Maru has autonomy to determine the scope of protection to be afforded to patent
right holders.
Article 28(1) states that:-
“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 for these purposes that product;”
The Claimant has claimed that the Respondent’s failure to recognize Sure Cure’s
infringement of Miracle Cure’s patent based on the doctrine of equivalents28 is unjustified
pursuant to Article 28 of TRIPS. However, it is submitted that that the Respondent has not acted
in violation of the obligations imposed by Art 28 by refusing to recognize any form of non-literal
infringement of the patent in question.29
The purpose of TRIPS is to harmonize intellectual property norms by providing universal
minimum standards to be implemented in the domestic law of the Member States. TRIPS do not
28 Para 18 of the Moot Problem. 29 The patent in question is “Miracle Cure, Patent No. 9,876,543” issued by the Maru Patent Office on January 5
2010, per Appendix A to the Moot Problem.
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however mandate uniform law. Thus, Member States have the autonomy to impose increased
standard of protection if they desire but they should not be penalized for not doing so.30
It is submitted that the minimum standard should be the literal infringement as it provides
sufficient protection for patent right holders. As such, the refusal to recognize any infringement
beyond the non-literal claims of the patent on our facts is not unjustified as recognition of literal
infringement is the minimum standard that is required of by Article 28. The Respondent is not
compelled to impose an increased standard of protection in the form of protection against non-
literal infringement.
Patent law is intended to give the patentee the full extent, but not more than the full
extent of the monopoly which a reasonable person skilled in the art, reading the claims in
context, would think the patentee was intending to claim.31 The literal-infringement approach in
Kirin-Amgen that was applied by the Maru court could more than enough protect the patent
rights of the Claimant. However, the Claimant themselves have conceded that the Sure Cure does
not literally infringe the Miracle Cure’s patent.32 Had they not conceded, the court may have held
in their favour based on the standard of literal infringement that was enunciated in the case of
Kirin-Amgen. Thus, it is submitted that the standard of literal infringement is a sufficient
standard of protection, and the Respondent has thus complied with Article 28.
B. The doctrine of equivalents amounts to and encourages anti-competitive practices.
1. The regulation of anti-competitive practices under TRIPS and Maru’s law
30 Article 1(1) of TRIPS. 31 Kirin-Amgen v Hoechst Marion Roussel 2004 UKHL 46, Para 48. 32 Moot Problem, Para 18, line 10-12.
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The Preamble of TRIPS states that care has to be taken so that “measures to enforce
intellectual property rights do not themselves become barriers to legitimate trade”. It is explicit
from Article 8(2) and 40(2) that TRIPS allows Member States to implement measures to control
and mitigate anti-competitive practices.
Article 8(2) provides that Member States may adopt appropriate measures which “may be
needed to prevent the abuse of intellectual property rights by right holders or the resort to
practices which unreasonably restrain trade or adversely affect the international transfer of
technology.”
Article 40(2) provides that TRIPS shall not “… prevent Members from specifying in their
legislation licensing practices or conditions that may in particular cases constitute an abuse of
intellectual property rights having an adverse effect on competition in the relevant market.”.
Thus, TRIPS allows for Member States to impose measures to regulate and restrict anti-
competitive practices. Furthermore, under Maru’s law, every monopolistic trade practice is
presumed to be prejudicial to public interest per se.33 Thus, Maru’s law itself allows for the
regulation of anti-competitive practices that are prejudicial to public interest.
2. Doctrine of equivalents amounts to an anti-competitive practice
It is submitted that the Respondent’s refusal to recognize the doctrine of equivalents is
allowed and justified under TRIPS. This is because the application of the doctrine of equivalents
would amount to the endorsement of anti-competitive practices which is inconsistent with the
33 S. 32 of the Monopolies and Restrictive Trade Practices Act 1989 of India, which Maru’s law is pari materia with.
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TRIPS regime.34 The doctrine that is said to protect against practicing a ‘fraud on a patent’ is
used to extend a patent to a composition which could not be patented. A monopoly is thus
obtained on an unpatented and unpatentable article.35
Extending protection beyond the literal terms of the patent through the doctrine of
equivalents creates substantial uncertainty about where the patent monopoly ends. As a result,
competitors are unable to determine what an infringing act under the doctrine of equivalents is or
what a legitimate alternative to the patented product is. Hence, it is submitted that the doctrine of
equivalents amounts to and encourages anti-competitive practices. The Respondent’s refusal to
recognize it is allowed and justified under Article 8(2) and Article 40(2) of TRIPS.
Further, the insistence to apply the doctrine of equivalents is prejudicial to Maru’s public
interest, and offensive towards the sovereignty of Maru to regulate its own public interests. The
Respondent is thus justified in not recognizing the doctrine of equivalents.36
C. The literal approach to patent claims construction is more relevant today
It is submitted that the literal approach adopted by the Maru court is more relevant today
in relation to the construction of patent claims, as opposed to the doctrine of equivalents. The
doctrine of equivalents has lost its appeal today and the literal approach as established in the case
of Kirin-Amgen37 is more relevant. The case of Graver Tank which established the doctrine of
34 Article 8(2) and Article 40(2) of TRIPS. 35 Graver Tank & Manufacturing Co. v. Linde Air Products Co., 339 U.S. 605 (1950) (hereinafter known as “Graver
Tank”). 36 S. 32 of the Monopolies and Restrictive Trade Practices Act 1989 of India. 37 Supra note 31.
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equivalents was decided in sixty years ago.38 This was when the United States was experiencing
the industrial revolution. Many corporations were coming up with new inventions and these
corporations obviously did not want their inventions copied by others. Unfortunately, patent law
was not yet developed at that time to provide sufficient protection for these corporations. As a
result, many competitors got away with making insubstantial changes to the invention and
calling it their own. This proved detrimental as there was no longer any incentive for inventors to
invent new technology. Because of this, the Supreme Court established the doctrine of
equivalents. This doctrine served the United States well for the latter part of the twentieth
century, but it is no longer relevant in our world today.
The case of Kirin-Amgen was decided very recently in 2005 in the House of Lords.
Previously, the courts in the United Kingdom recognized the “pith and marrow” principle which
was similar to the doctrine of equivalents. However, their Lordships in Kirin-Amgen put an end
to the “pith and marrow” principle.39 Their Lordships stated that with the development of patent
law today, patentees will have adequate legal advice when drafting a patent claim. This would
mean that the comprehendible alternatives to the ingredients of the invention would have been
included in the patent claim by the lawyer. Lord Hoffman stressed in the case that patent law
does in fact seek to provide the full extent of monopoly that is claimed, but not more than that. If
the alternative ingredient is not even comprehended by the patentee when drafting his patent,
there is no reason the courts should afford protection of the patentee’s patent to the extent of the
aforesaid alternative ingredient, although it is an insubstantial substitution.
38 Supra note 35. 39 Paragraph 34 of Kirin-Amgen, supra note 31.
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It is further submitted that the literal approach is a better approach as the doctrine of
equivalents does not encourage technological development and advancement. The doctrine of
equivalents looks at the end product and not the patent claim. If the alleged infringing product
does substantially the same thing in substantially the same way, it would be held to be an
infringement of the patented product although it may differ in form or shape. This would mean
that even if the alleged infringing product is made with more superior technology, with higher
efficiency and minimum wastage of raw material and resources hence making it cheaper for the
consumer, it would count for nothing as the manufacturer of the alleged infringing product will
not be able to manufacture his product because it will be held to be an infringement of the
patented product. This would make the patent claim redundant, and stifle innovation and
advancement of technology.
It is thus submitted that although the doctrine of equivalents was necessary at the time it
was established, with the vast development of patent law over the past six decades, modern
patent law is now competent to provide sufficient protection for patent right holders by looking
at the patent claim literally. By not adopting the literal approach and actually looking at the
patent claim, it would be a mockery of the development of patent law over the years. Therefore,
the Respondent’s rejection of any form of non-literal infringement, specifically the doctrine of
equivalents is justified and in line with modern patent law.
III. THE ACTION OF THE INTELLECTUAL PROPERTY DEPART MENT WAS
VALID AND JUSTIFIABLE AS PER THE “DECLARATION ON TH E TRIPS
AGREMENT AND PUBLIC HEALTH (ADOPTED ON 14 NOVEMBER 2001) AND
IMPLEMENTATION OF PARAGRAPH 6 OF THE DOHA DECLARATI ON ON THE
TRIPS AND PUBLIC HEALTH (DECISION OF 30 AUGUST 2003)
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A. Maru is allowed to import Miracle Cure from Fizer Pharma under Doha
Declaration
1. Doha Declaration as a waiver to Article 31(f)
Article 31 of the TRIPS Agreement allows Member States to grant compulsory licence
for other use 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.40 In our present
case, the Respondent has granted a compulsory licence to Fizer Pharma, a pharmaceutical
company based in Porta. The grant of compulsory licence to a company outside of Maru to
produce the Miracle Cure to be imported back to Maru is inconsistent with Article 31(f). Article
31(f) provides that the compulsory licence shall be authorized predominantly for the supply of
the domestic market of the Member authorizing such use.41 This means, all the Miracle Cure
produced by Fizer Pharma can only be used and distributed in Porta, and not Maru.
The effect of Article 31(f) is to prohibit productions of generic drugs for export to
countries without manufacturing capabilities. This leaves many poor and developing states which
have no manufacturing capacity without access to generic medicine as they cannot utilize
compulsory licences to manufacture their own drugs in another state that has superior
manufacturing capacity for their domestic use.42
40 Article 31 of the TRIPS Agreement. 41 The TRIPS Agreement. 42 CRS Report for Congress, Influenza Antiviral Drugs and Patent Law Issues (Nov. 18 2005); World Trade
Organization, Declaration on the TRIPS Agreement and Public Health, Para. 6, WT/MIN(O1)/DEC/2 (adopted Nov. 20, 2001) (hereinafter referred to “the Doha Declaration”).
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Paragraph 4 of the Doha Declaration states that the TRIPS Agreement does not and
should not prevent Members from taking measures to protect public health. Accordingly, while
reiterating the commitment to the TRIPS Agreement, the Doha Declaration affirms that the
TRIPS Agreement can and should be interpreted and implemented in a manner supportive of
WTO Members' right to protect public health and, in particular, to promote access to medicine
for all.43
Hence, the WTO General Council issued a decision in 200344 that allows Member States
to import generic versions of drugs produced using compulsory licences under certain strict
conditions, thus permitting a waiver of Article 31(f). Therefore, states that could not manufacture
generic drugs domestically for urgent needs can now issue compulsory licences to
pharmaceutical companies in other countries, and these drugs can in turn be imported back into
the state for their domestic use.
Therefore, it is submitted that Respondent’s importation of the Miracle Cure
manufactured by Fizer Pharma from Porta for their domestic use under the compulsory licence is
allowed under the Doha Declaration and the Implementation Decision.
2. Maru has no manufacturing capacity
Pursuant to Paragraph 2(a)(ii) of the Implementation Decision, Member States can import
drugs produced under the compulsory licence as an eligible importing member if they have
established that they have insufficient or no manufacturing capacity. It is submitted that the
43 The Doha Declaration, Para 4, supra note 3. 44 World Trade Organization, Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and
Public Health, WT/L/540 (Aug. 30, 2003) (hereinafter referred to “the Implementation Decision”).
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Respondent is permitted to import Miracle Cure produced by Fizer Pharma in Porta for the
domestic market of Maru because Maru has no manufacturing capacity.
The Annex to the Implementation of Paragraph 6 of the Doha Declaration on the TRIPS
Agreement and Public Health is to be referred to determine whether a state has insufficient
manufacturing capacity. Pursuant to Para (ii) of the Annex, “any capacity owned or controlled
by the patent owner” in the pharmaceutical sector has to be excluded from consideration when
assessing the manufacturing capacity of the state. This exclusion is justified as the patent owner,
being a private company, can at any time withdraw its investment in the Member State.
Assuming that the patent owner’s capacity is taken into account, the withdrawal of the
investment would leave the state without any manufacturing capacity. This would leave the
Member State without any recourse as they cannot rely on the Implementation Decision despite
having insufficient manufacturing capacity after the patent owner withdrew its investment. Thus,
the Annex prevents this by excluding from the onset the patent owner’s manufacturing capacity.
It is submitted that with the exclusion of the Claimant’s manufacturing capacity, the state
of Maru in itself would have no manufacturing capacity as defined under Para 2(a)(ii).
“Manufacturing” is the making of articles by physical labor or machinery, especially on large
scale.45 The “capacity” in the pharmaceutical sector includes the capacity to either produce active
ingredients or the availability of pharmaceutical formulations, or both.46
45 The Concise Oxford Dictionary, pg 617. 46 Implications of the Doha Declaration on the TRIPS Agreement and Public Health, World Health Organization,
(WHO/ EDM/ PAR/ 2003.3).
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The economy of Maru centers on tourism, hotels, restaurants and retail businesses.47
There is no evidence of a pharmaceutical industry, state-owned pharmaceutical plant, or state
owned pharmaceutical machinery in Maru. Therefore even if Maru possesses the active
ingredients to produce the Miracle Cure, they do not have the “manufacturing capacity” to do so
as they do not have any manufacturing facility in the state, having excluded the Claimant’s
manufacturing facility in this case.
Hence, Maru is allowed under Paragraph 2 of the Implementation Decision48 to import
Miracle Cure from Porta.
B. In the alternative that the Claimant’s manufacturing capacity is taken into account,
the importation from Porta is still within the ambi t of Para 2 of the Implementation
Decision.
It is submitted in the alternative that even if the Claimant’s manufacturing capacity is to
be taken into account, the importation of the Miracle Cure from Fizer Pharma is still justified as
the Claimant has insufficient manufacturing capacity based on Paragraph 2(a)(ii) of the
Implementation Decision.
In fact, the Claimant has acknowledged its own lack of manufacturing capacity. The
Chairman of GHC in the Board meeting has stated that their current manufacturing plant in Hori
cannot meet the demand of the Miracle Cure in light of the spread of the Killer Flu, which
necessitated them to begin manufacturing in their uncompleted factory in Maru. 49 It was further
47 Para 1 Moot Problem, line 3. 48 The Implementation Decision, supra note 5. 49 Para 12 Moot Problem, line 13- 14.
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stated that the Claimant needed one week before the factory in Maru can start manufacturing the
Miracle Cure, and it would have taken them at least a month to produce sufficient Miracle Cure.
It is imprudent for the Respondent to wait for the same when the people’s lives are at stake. It
was reported that a boy died within a day after contracting the Killer Flu. Subsequently, twenty
people were reported to have the same symptoms. 50 In the next few days, a large number of
people from the same province fell sick and the number of patients infected with the Killer Flu
was increasing day by day.
The lives of the people of Maru should not be subjected to such a wait. It is an unjustified
risk to force the people to have to wait for a month in order to obtain access to the Miracle Cure.
Many might have died by that time because of the insufficient supply of drugs to combat the
pandemic. Therefore, as the Claimant has insufficient manufacturing capacity, Maru is an
eligible importing member. Hence, the Respondent is allowed under the Para 2 of the
Implementation Decision to import drugs manufactured by Fizer Pharma in Porta.
C. Lastly, Maru is allowed to import Miracle Cure from Porta on public policy
grounds.
Paragraph 4 Doha Declaration states that TRIPS Agreement does not and should not
prevent members from taking measures to protect public health. Accordingly, the TRIPS
Agreement can and should be interpreted and implemented in a manner supportive of WTO
members' right to protect public health and, in particular, to promote access to medicine for all”51
for public policy reasons.
50 Para 7 Moot Problem, line 5. 51 2001 Doha Declaration, specifically Para 6 of Doha Declaration.
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The Respondent’s action in granting the compulsory licence to Fizer Pharma clearly falls
within the ambit of Paragraph 4. The compulsory licence is firstly granted in order to protect the
public’s health and secondly to ensure that the people are able to get access to the Miracle Cure.
Maru and its neighboring states are facing a public health crisis as the Killer Flu is spreading
quickly and the Claimant was not able to manufacture sufficient Miracle Cure for the people to
combat this pandemic.52
The Claimant indicated that they needed one week before more Miracle Cure could be
produced. The Miracle Cure is needed immediately as the Killer Flu is capable of killing a
person within a day of infection. In order to ensure there is sufficient supply of the Miracle Cure
without having to wait, the only reasonable step is thus to engage Fizer Pharma to produce the
Miracle Cure at the same time. The Claimant should not be given the benefit of doubt when the
people’s lives are at stake. In such a grave situation, the Respondent's action is reasonable for the
interest of the public, and as a matter of public policy.
IV. REMEDIES THAT SHOULD BE AWARDED TO GHC/GHC-MARU ASSUMING
THE ACTIONS OF THE INTELLECTUAL PROPERTY DEPARTMENT OF MARU
ARE NOT JUSTIFIED UNDER (I) AND/OR (II) AND/OR (III ).
A. In relation to the Respondent’s action in engaging Fizer Pharma to manufacture the
Miracle Cure.
1. The remuneration of USD20 per unit is more than sufficient because a state has a right
under international law to take regulatory measures without compensation.
52 Para 12 Moot Problem, line 14- 15.
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(a) The right to regulatory takings without compensation is an inherent right of the
state in international law.
Customary international law allows a state to take non-discriminatory regulatory
measures to take an alien’s property without compensating the party under certain circumstances.
This customary international law53 is established based on a widespread state practice and opinio
juris that has developed over the years.54 The circumstances that allow for a non-compensable
regulatory taking include protection of public interest or maintenance of public order, public
health and morality.
Article 10(5) Harvard Draft Convention on the International Responsibility of States for
Injuries to Aliens recognizes the existence of a category of non-compensable takings. It states
that an uncompensated taking of an alien’s property or a depravation of the use or enjoyment of
property of an alien by the State in the maintenance of public order, public health or morality
shall not be considered wrongful. Also, the Organization for Economic Co-operation and
Development (OECD) quoting The Canadian Foreign Investment Promotion and Protection
Agreement (FIPA) states that non-discriminatory regulatory actions are the state’s right to
regulate and hence, no compensation is required to be made.55 The OECD, quoting Article 3 of
The Multilateral Agreement on Investment (MAI) Negotiating Text also states that a contracting
party may adopt, maintain or enforce any measure that it considers appropriate to ensure that the
53 Crystallized from widespread state practice and opinio juris - The Lotus Sea Case. PCIJ Series A, No 10; The
North Sea Continental Shelf Cases (FRG v Denmark; FRG v The Netherlands) (1969) ICJ Rep 3. 54 inter alia The International Law on Foreign Investment by M. Sornarajah, pg. 127; Article 10(5) Harvard Draft
Convention on the International Responsibility of States for Injuries to Aliens; OECD Report published Organization for Economic Corperation and Development; the Multilateral Agreement on Investment Negotiating Text; Re-Statement of Foreign Relation Law of the United States.
55 Working Papers on International Investment Number 2004/4 - "Indirect Expropriation" and the "Right To Regulate" in International Investment Law).
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investment activity is undertaken in a manner sensitive to health, safety or environmental
concerns.56 Such exercise is within the power of the state and hence no compensation is required.
Lastly, the Re-Statement of Foreign Relations Law of the United States stated that a
regulatory measure is justified only if it is non-discriminatory. And it being a regulatory
measure, the state is not responsible for loss of property or other economic disadvantages
resulting from bona fide regulation commonly accepted as within the power and rights of the
state.
Such a right must be given to the states to prevent the state from being exploited. If the
state has no right over an alien’s property, the foreign investors can at any time revoke their
investments or refuse to allow the States to use their properties even in situations of national
emergencies. Thus, a state’s right to take regulatory measures is to for the interest of the state
and its people.
(b) The grant of the compulsory licence to Fizer Pharma is a regulatory measure.
It is submitted that the Respondent’s action in engaging Fizer Pharma to manufacture
Miracle Cure is a regulatory measure. As submitted above,57 the grant of the compulsory licence
was for the interest of the health of the people of Maru generally, which falls under the ambit of
circumstances that constitutes as a regulatory measure.58 It is therefore submitted that no
compensation is in fact needed, provided that the regulatory taking is non-discriminatory.
(c) The regulatory taking was non-discriminatory 56 Ibid. 57 Page 35 of this Memorial. 58 Harvard Draft Convention on the International Responsibility of States for Injuries to Aliens; The Canadian
Foreign Investment Promotion and Protection Agreement.
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An action is considered to be non-discriminatory under the WTO regime if it is
consistent with the National Treatment and Most Favoured Nation (MFN) principles. These
principles are embodied in Article 3 and Article 4 of the TRIPS Agreement respectively.
The National Treatment principle under Article 3 provides that each Member shall accord to the
nationals of other Members treatment no less favourable than that it accords to its own nationals
with regard to the protection of intellectual property. The MFN principle under Article 4
provides that any advantage, favour, privilege or immunity granted by a Member to the nationals
of any other country shall be accorded immediately and unconditionally to the nationals of all
other Members.
It is submitted that there is no evidence on the facts to show that the Respondent has
treated the Claimant less favourably than Maru’s own nationals, nor was there evidence to show
that the Claimant was deprived of any advantage, favour, privilege or immunity that has been
granted to the nationals of other countries.
The only fact that could tangentially suggests any disparity of rights and privilege is the
fact that BLP from Ulka was paid USD50 for every unit of Sure Cure imported to Maru, whereas
the Claimant was paid USD20 for every unit of Miracle Cure produced by Fizer Pharma in Porta
under the compulsory licence. However, it is submitted that the difference in remuneration and
payment is justified. Firstly, Sure Cure and Miracle Cure are two different products altogether,
the former using corn oil as its delivery agent and the latter using palm oil.59 In addition, there
are many variables (e.g import fees, manufacturing costs, custom levy etc) that could account for
the difference in pricing for both products. Therefore, it is inconclusive to suggest that the
disparity in the payment for Sure Cure and Miracle Cure is an evidence of unfair treatment.
59 Para 17 Moot Problem, line 9-10.
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It is further submitted that the Respondent has at all material times accorded the
Claimant fair treatment consistent with the principles of National Treatment and MFN. The
Respondent has not deprived the Claimant of any of its economic rights. The decision to license
out the Claimant’s patent was not made based on the Claimant’s nationality, but on a logical
appreciation of the fact that the Miracle Cure was the only known medicine at that time that
could combat the Killer Flu. It is further asserted that the decision to issue the compulsory
licence and to import Sure Cure was not made discriminatorily as it was made in light of the fact
that the Claimant could not produce enough Miracle Cure for the pandemic.
B. In relation to the Respondent’s action in importing Sure Cure from BLP
1. Injunction should not be granted.
An injunction is an equitable remedy in the form of a court order, whereby a party is
required to do, or to refrain from doing, certain act.60 A patent holder whose patent rights have
been infringed may seek for injunctive relief to prevent further infringement to his or her patent,
and it is to be granted at the discretion of the judicial authority.61
It is submitted that injunction on the importation of Sure Cure should not be granted
because it will leave the people of Maru with no cure for the Killer Flu. In light of this, the
importation of the Sure Cure ensures that the people of Maru to have access to life-saving drugs.
In the event that the injunction is granted, the people of Maru will lose their only alternative to
the Miracle Cure.
60 Arthur W. Rovine, “Contemporary issues in international arbitration and mediation: The Fordham papers 2007”, 2nd Conference of Fordham University School of Law in June 2007, Martinus Nijhoff Publishers. 61 Section 108(1) of the Indian Patents Act 1970; Article 44(2) of the TRIPS Agreement.
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2. No compensation should be made because the Claimant did not suffer any loss
The Claimant may claim for compensation which is assessed based on either recovery
of profits, or damages for infringement to their patent.62 Following this, the quantum of
compensation should be assessed based on the profits that the Claimant would have made had it
not for the alleged infringement i.e the loss that they have suffered due to the alleged
infringement.
It is contended that the Claimant did not suffer any loss. Based on this, the Claimant
should not be entitled to any compensation. The Claimant could not have produced enough
Miracle Cure even if the Respondent had not imported Sure Cure from BLP. Thus, the
importation of Sure Cure did not cause the Claimant to suffer any loss. In fact, the Respondent is
already buying all the Miracle Cure that could be produced by the Claimant. Hence, the Claimant
is not entitled to any compensation since the Claimant did not suffer any loss.
62 Article 45 of the TRIPS Agreement and S. 108 of the Indian Patents Act 1970.
F2010-R
42
PRAYER FOR RELIEF
On the basis of the foregoing facts and points of law, Good Health Company respectfully
requests this Arbitral Tribunal to:-
I. Declare that the actions of the Intellectual Property Department were valid and justifiable
under TRIPS in general and Article 31 of TRIPS in particular;
II. Declare that the failure to recognize any infringement beyond the literal terms of the
patent is not a violation of Article 28 of TRIPS.
III. Declare that the action of the Intellectual Property Department was valid and justifiable
as per “Declaration on TRIPS Agreement and Public Health (adopted on 14 November 2001)
and Implementation of Paragraph 6 of the Doha Declaration on the TRIPS and Public Health
(Decision of 30 August 2003).
IV. To award remedies as prayed submitted by the Respondent if the actions of the
Intellectual Property Department of Maru are not justified under I and/or II and/or III.
Respectfully submitted,
Counsel for the Respondent.