Right to health vs. patent right under IP Law | Sunday Observer

Right to health vs. patent right under IP Law

14 February, 2021

The right to health is a human right recognised by the International Human Rights Law. Similarly, Intellectual Property Rights (IPR) is seen as a human right of the inventor worthy of recognition. IPR is very much a private property right fully owned by the proprietor. However, the relationship between human rights and IPR has been the topic of discussion in the recent past.

The position with regard to International Human Rights Law is very clear – the socio economic and cultural (ESC) rights of the people are an indivisible part of human rights and must be respected, protected and fulfilled by the state.

The economic reality today, on the other hand, forces the State to turn away from these ESC rights, towards harnessing entrepreneurship and increasing trade and also on the grounds of resources conflicts. IPR too has increasingly come into conflict with ESC rights, especially the right to health. Intellectual Property Law is an essential piece of legislation in any country. The challenging tasks, therefore, is to ensure at least a basic level of harmonisation with human rights - such as, the right to health – that are imperilled by these laws.

International legal regime on the Right to Health

Today, health is viewed as a right, which encompasses the highest attainable standard of physical and mental health. Thus it embraces a wide range of socio-economic factors that promote conditions in which people can lead a healthy life.

The Universal Declaration of Human Rights, the International Covenant on Economic, Social and Cultural Rights (ICESCR), and several other international covenants recognise the obligation of the State to guarantee the enjoyment of the right to health.

The General Comment on the Right to Health issued by the United Nations Committee on Economic, Social and Cultural Rights outlines threefold obligations, to respect, protect and fulfil the right to health.

It specifics a minimum standard of obligation which must ensure the availability of minimum essential levels of primary healthcare at all times, irrespective of other considerations, such as resource constraints. At present, however, the right to health is not recognised in the Sri Lankan Constitution. Recognition of a justifiable right to health would be essential.

Patent Right 

The Intellectual Property Act No. 36 of 2003 replaced the Code of Intellectual Property Act No. 52 of 1979. Section 62(2) of the Intellectual Property Act (IPA) states that: ‘An invention may be, or may relate to, a product or process.

“The provisions in the Act give effect to the Agreement on Trade Related Intellectual Property, commonly referred to as the TRIPS agreement. An invention is patentable if it is new, involves an inventive step and is industrially applicable.

(i) An invention is considered new if it is not anticipated by prior art by the date of application or of the convention priority. (ii) An invention involves an inventive step if, having regard to the prior art relevant to the patent application claiming the invention, such inventive step would not have been obvious to a person having ordinary skill in the art.

(iii) An invention is industrially applicable if it can be made or used in any kind of industry. A patent is granted by the Intellectual Property Office upon the successful application made by the applicant.

The owner of a patent has exclusive rights during the valid period, to exploit the patented invention; to assign or transmit the patent; to conclude licence, contracts involving the patented invention.

From the point of view of the pharmaceutical industry, it must be noted that patents are of special significance. The marginal cost or the cost of manufacturing a drug is usually very low. However, these companies have incurred very high ‘sunk costs’ or initial investments for the research and development of these drugs.

By protecting their drugs through patents, the companies protect themselves from competition and can recoup the costs of research and development. The State must ensure that at least the minimum core obligations are fulfilled.

By enacting tougher patent laws the government provides for the continued profitability of pharmaceutical companies. But this burden of paying the dues for the companies cannot be at the cost of deteriorating health standards. Tougher patent laws will increase the extent of state obligations with regard to the provisions of health care, necessitating an increase in State expenditure on drugs. It is therefore important that State expenditure on health must increase with the introduction of tougher patent laws.

IPR v. human rights- need for harmonisation

In Re Intellectual Property Bill can be commended as a judgment that impacted on millions of Sri Lankans as well as on generations to come. Chief Justice Sarath N. Silva adopted a very farsighted approach and analysed the likely effect of the proposed legislation on the millions of poor consumers and industrialists in a developing country like Sri Lanka. The Supreme Court took special note of the rights of patients and effectively addressed the issues of patenting plants and microorganisms. This judgment is a great victory not only to Sri Lanka but to all those in the developing and the least developed world right now faced with the ultimatum of drafting IP laws in conformity with the TRIPS Agreement in the future. The Court stressed that people’s right to health must be accorded primacy. The mitigatory provisions referred to in the judgment are found in the TRIPs agreement as well as the Doha Declaration, on the TRIPS agreement and right to health which recognised this problem by stating that the ‘TRIPs agreement does not and should not prevent governments from taking measures to protect public health.’

These mitigatory provisions can be utilised by countries to protect the interests of the right to health of the people. Under the heading ‘TRIPS and Public Health’ the Doha Declaration identified the rights of governments in the following instances.

Compulsory licensing

Compulsory licensing is the granting of a licence to use a patent without the consent of the patent holder. This is, however, subject to the payment of adequate compensation to the patent holder. Article 31 of the TRIPS agreement permits compulsory licensing in specific instances.

According to the text, such licensing is permitted to a government or a third party where the proposed user has made efforts to obtain authorisation from the rights holder on reasonable commercial terms and conditions and that such efforts have not been successful within a reasonable period of time, unless there exists a national emergency.

The Declaration on the TRIPS and Public Health has adopted a more liberal attitude and states that ‘Each member has the right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted’. Looking at the domestic law one sees that section 86 of the IPA is identical to that in Article 31 of TRIPS.

The importance of compulsory licensing was correctly stressed in the Supreme Court determination on the Intellectual Property Bill. The Draft Bill did not contain provisions envisaged in the TRIPS agreement, nor did it contain those recognised under the Doha Declaration with regard to compulsory licensing.

The Supreme Court clearly stated that the exclusion of these mitigatory features in the Bill amounted to a violation of Article 12(1) of the Constitution relating to the equal protection of the law.

The Court noted that the TRIPS agreement is applicable to developed, developing and least developed countries which cannot be considered as equals. As such the enforcement of the TRIPS agreement is to be carried out with the regard to the special and differential needs of countries.

National emergencies and Government use

In a national emergency, the government is permitted to issue a licence without the authorisation of the patent bolder, and this is not subjected to the restrictions contained in Article 31 of the TRIPS agreement.

Section 86(2)(C) of the IPA states that the Director General of Intellectual Property may waive the requirements set out in 86 (2) (b) if he is satisfied with the existence of a national emergency or any other circumstance of extreme urgency, or in the case of a public non-commercial use for purposes such as national security, nutrition, health or for the development of a vital section of the national economy.

The latter part of Section 86(1)(c) referring to public non-commercial use is utilised liberally by many developed countries such as the United Kingdom, USA and Canada to issue compulsory licences. It must also be noted that with regard to government use the patent holder is granted compensation.

Parallel importing

The TRIPS Agreement and the Doha Declaration allow for parallel importing, which is the import and resale of patented products Thus an importer can freely import a patented product from a manufacturer in another country. This right to import patented products is not implicit and must be included in the laws within the country. The Supreme Court determination on the Intellectual Property Bill correctly stressed the importance of parallel importing to a developing country. Even though the imported goods are patented, this introduces the possibility of benefiting from the lowest prices available in the world market.

Section 86 (1)(iv) of the IPA provides for parallel imports, but does not directly refer to the international exhaustion of rights. In the light of the Doha Declaration and the reading of the TRIPS agreement, the present law is sufficient to permit parallel imports, in the widest sense of the international exhaustion of rights.

Access to affordable and quality medicinal drugs is an essential component of any form of effective healthcare. In recognition of this, the Sri Lankan government has formed a National Medicinal Drug Policy.

 (The writer is a retired Prof of Law at the University of Sri Jayewardenepura. He is an Attorney- at-Law and practised in Courts and holds a Ph.D in Law )