By Nayana
The Supreme Court last week delivered a special determination under Article 121 of the Constitution, holding that several clauses of the proposed new Intellectual Property Act were inconsistent with the equality provisions of the Constitution.

The impugned clauses were all from the chapters relating to patents. A patent gives the inventor of a new product or process the exclusive right to exploit his invention commercially for a given period, in this case 20 years. The patent holder has the exclusive right to determine the price at which he will sell his product, and the exclusive right to determine to whom, if anyone, he will assign or transfer the patent or grant a license to manufacture the product, and on what terms.

Patent law is thus inherently monopolistic, but is regarded as a necessary incentive to encourage scientific and industrial research and invention. However it is also widely recognized that in certain circumstances the public welfare may have to take precedence over the commercial rights of the patent holder. This is so especially where the subject matter of the patent is a product essential to public health and well-being and the patent holder is either unable or unwilling to make a sufficient quantity of it available to the public at an affordable price.

The need for special measures to mitigate the harshness of patent laws has been especially recognized where there are wide global disparities in scientific knowledge and manufacturing capacity. Nowhere is this more so than the pharmaceutical industry where, according to a 1998 WHO study, 84 per cent of the world’s patents are owned by the developed world.

Some developing countries with a pharmaceutical manufacturing capacity such as India varied their patent law in such a way as to enable their own manufacturers to develop and market cheaper equivalents of the drugs made by multinationals. Such practices benefited not only the Third World countries where the drugs were made but also others, like Sri Lanka, which had the option of importing from these countries instead of directly from the western multinationals.

With the advent of the World Trade Organization (WTO) all countries were obliged to sign up to the Agreement on Trade Related Intellectual Property Rights (TRIPS) which sought to do away with such practices. Under its terms, all member States are obliged to accord to the nationals of other member States, treatment no less favourable than that accorded to their own nationals.

In recognition of the different levels of economic development prevalent around the globe, the WTO prescribed different time frames for each group of countries to amend their intellectual property laws. Sri Lanka’s grace period has now ended and few would dispute the fact that some changes have to be made.

What is significant, however, is that even the TRIPS Agreement lists certain exceptions to the exclusive rights conferred by a patent, that countries are entitled to make in the public interest. These include the right to use the subject matter of a patent without authorization of the patent holder in situations of national emergency or extreme urgency. In addition, where a patent holder has failed to grant a license to use a patent on reasonable commercial terms and conditions, he may be compelled by law to do so. The Agreement also authorizes measures against anti-competitive practices by the patent holder.

These exceptions were further amplified in the "Doha Declaration on the TRIPS Agreement and Public Health" that followed a Ministerial meeting held at Doha in 2002 under the auspices of the WTO.

According to this Declaration, its signatories agreed that "the TRIPS Agreement does not and should not prevent members from taking measures to protect public health ... 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 medicines for all".

The declaration affirmed the right of member States to issue compulsory licenses and to determine the grounds on which such licenses are granted. It also affirmed that "national emergency" includes public health crises relating to HIV/AIDS, tuberculosis, malaria and other epidemics. Provisions relating to the right of a member State to determine its own regime for exhaustion of intellectual property rights are widely interpreted as leaving the door open for "parallel importing" by which a country can obtain a patented drug from the cheapest source without necessarily having to buy on the patent holder’s terms.

Many developed as well as developing countries have incorporated such measures into their domestic law. However, for reasons best known to themselves, the Sri Lankan authorities chose not to include these mitigatory measures to protect their own nationals in the Bill that was gazetted and placed before Parliament.

Nor was this an accidental omission. At least some of these mitigatory measures had been included in the original draft Bill that was prepared by a committee of legal experts. These clauses appear to have been pulled out at the last minute before the Bill was gazetted.

This adoption of the TRIPS Agreement without the mitigatory measures that are allowed under its terms formed the subject matter of the legal challenge that was raised against the Bill by three Sri Lankan petitioners. Their principal submission was that the Bill as it stood was a denial of the right to equality and the equal protection of the law. The petitioners relied on the principle already accepted by the Supreme Court in other cases, that it is a violation of Article 12(1) to treat unequally situated persons as if they were equals.

The Bench comprising the Chief Justice with Justices Shirani Bandaranayake and J. A. N. De Silva accepted the petitioners’ arguments and affirmed that the equality clause applies not only to executive action but also to legislative action, i.e. the framing of laws.

During the course of the argument the three Counsel appearing for the respective petitioners submitted an agreed list of amendments to the Bill which they said would meet their objections. However the refusal of the Attorney-General’s representative to consider any amendments left the Court with no option but to make a finding that "clauses 62, 83, 84, 87, 90, 91, 92, 93 and 94 are inconsistent with Article 12(1) of the Constitution". Accordingly the Bill will either have to be passed by a two-thirds majority in Parliament or withdrawn and re-drafted.

Bio-science also came into the picture, perhaps for the first time in an application under Article 121. The TRIPS Agreement lists certain matters that are not patentable including plants and animals "other than micro-organisms" as well as essentially biological processes for the production of plants and animals. Micro-organisms are therefore patentable, but are not defined. The draft Sri Lankan bill followed the same wording.

The petitioners argued that the lack of a definition could lead to this section being abused. Pharmaceutical companies (sometimes in disguise) could visit countries rich in bio-diversity like Sri Lanka, capture naturally occurring micro-organisms and patent them in their own countries. This would be an abuse of patent law since there is no inventive step involved, but patent laws in the countries where these companies operate conveniently permit such practices by choosing their own definition of micro-organism.

Attorney-at-Law Jagath Gunawardena, appearing for wildlife and nature photographer Nihal Fernando who was one of the petitioners, produced a US patent that had been obtained in respect of the micro-organism "sreptisporangium fragile" that had been found in a paddy field 5 miles from Jaffna.

Hence it was argued that Sri Lanka must limit the definition of micro-organisms to "transgenic micro-organisms" i.e. those which "express a characteristic not attainable normally by the species under natural circumstances but which has been added by means of direct human intervention in its genetic composition". This definition was said to be based on the Brazilian law on the same subject.

The Supreme Court has accepted this argument, and directed that this definition be added to the relevant section of the Bill if it is to be brought into conformity with Article 12(1).