26
July 1996
Carroll
J
This
is an appeal under
Section 75 of the
Patents Act, 1964 against an Order of the
Controller of Patents, Designs and Trademarks (the Controller) made on the 2
June, 1995. The Order provided for compulsory licences in respect of two
patents for the life of the patents to come into force with effect from the
date they were executed by the parties.
The
Plaintiffs applied for and obtained on the 21 February, 1996 an Order for the
hearing of a point of law by way of preliminary issue.
The
preliminary issue of law is in the following terms:-
1.
Do the provisions of the Agreement on Trade Related Aspects of Intellectual
Property Rights oblige the Controller of Patents or the Court to refuse the
grant of compulsory licences pursuant to
Section 42 of the
Patents Act, 1964 to
the second named Defendant on any date after the aforementioned agreement
became known to this date?
2.
In the event that the Controller had jurisdiction to grant such licences, can
the licences have any validity after the date of application of the aforesaid
agreement to the State?
The
facts on which the case is based are as follows:-
On
the 8 November, 1991 and the 13 February, 1992 respectively the second
Defendants ("Clonmel") applied under
Section 42 of the
Patents Act, 1964 (the
1964 Act) for patent licences in respect of Patent Licence No: 45456 and Patent
Licence No: 51604 owned respectively by the first Plaintiff and the second
Plaintiff.
The
Patents Act, 1992 (the 1992 Act) was enacted on the 27 February, 1992 and came
into force on the 1 August, 1992. Section 5 repealed the
Patents Act 1964
subject to the provisions of the First Schedule. Provision 13 of the First
Schedule provided that any application for a licence under
Section 42 of the
1964 Act which was pending at the commencement of the 1992 Act should be
decided under the provisions of the 1964 Act.
On
the 15 December, 1993 the final version of the World Trade Organisation
Agreement (the WTO Agreement) was agreed. Annex 1C thereto included the final
version of the Agreement on Trade Related Aspects of Intellectual Property
Rights (TRIPS).
On
the 15 April, 1994 the WTO Agreement (including TRIPS) was formally signed at
Marrakesh on behalf of the State.
The
Controller of Patents heard the application for compulsory licences on the 28
and 29 July and the 2O and 21 September, 1994.
On
the 15 November, 1994 the State ratified the WTO Agreement (including TRIPS).
The ratification was signed on behalf of the State at Geneva. On the same day
the European Court of Justice delivered its advisory opinion (No 1/94) on the
competence of the European Union (EU) to conclude the WTO Agreement (including
TRIPS). The Court decided that the EU had joint competence with Member States
to conclude the TRIPS Agreement.
On
the 22 December, 1994 there was a Council decision (94/900/EEC) to ratify the
WTO Agreement (including TRIPS).
On
the 30 December, 1994 the European Union, Ireland and other Member States
deposited instruments of ratification of the WTO Agreement in Geneva.
On
the 1 January, 1995 the WTO Agreement (including TRIPS) entered into force,
Ireland became a member of the World Trade Organisation on the 1 January, 1995.
Submissions
were made to the Controller in relation to TRIPS in February, 1995.
On
the 22 June, 1995 the Controller made an order granting compulsory licences to
Clonmel. The written grounds for his decision were delivered on the 3 July,
1995. He held that TRIPS had no application in the internal legal system of the
State as it had not been enacted into domestic law.
On
the 1 January, 1996 the transitional year provided for by Article 65(1) of
TRIPS expired.
The
Plaintiffs' submissions dealt with:-
(a)
The direct effect of the TRIPS Agreement as a matter of community Law.
(b)
The meaning and effect of
Section 46(3) of the
Patents Act 1964.
(c)
The obligations under international law undertaken by the State and the
requirement to act in good faith and not contrary to public policy.
I
propose to deal with
Section 46(3) first.
Section
46(3) provides:-
"No
order shall be made in pursuance of any application under
Sections 39 to
43 of
this Act which would be at variance with any treaty, convention, arrangement or
engagement applying to the State and any convention country."
The
Plaintiff submits that TRIPS is a treaty, convention, arrangement or engagement
applying to the State and any convention country and that the subsection is in
accordance with Article 29.6 of the Constitution. This provides:-
"No
international agreement shall be part of the domestic law of the State save as
may be determined by the Oireachtas."
"Any
convention country" is defined by
Section 93 of the
Patents Act 1964 which
enables the government by order to declare that any country specified in the
order is a convention country for the purposes of
the Act and that the country
shall be a convention country for the purposes of
the Act while the order
remains in force with respect to that country.
At
the time of Clonmel's application there were two extant Statutory Instruments
made under
Section 93. These were SI 314 of 1976 and SI 223 of 1987. Under SI
314 of 1976 (the
Patents Act, 1964 (Section 93) (Declaration) Order 1976) India
was declared a convention country. Under SI 223 of 1987 (the Patents, Designs
and Trademarks (International Arrangements) Order, 1987) the State declared
each country specified in the schedule to the Order to be a "convention
country" for the purposes of the 1964 Act. All of the member countries of the
EU are convention countries under this statutory instrument as well as many
others.
Both
statutory instruments were revoked on the 30 January, 1996 which was one month
after the expiration of the transitional year provided for in Article 65(1) of
TRIPS. SI 314 of 1976 was revoked by SI 38 of 1996 (Patents International
Arrangements Order 1996) and SI 223 of 1987 was revoked by SI 37 of 1996,
(Designs and Trademarks (International Arrangements) (Amendment) Order, 1996).
The
Plaintiffs submitted that the clear intention of
Section 46(3) of the
Patents
Act 1964 was to ensure that in relation to
Sections 39 to
43 the Controller did
not act inconsistently with any obligation undertaken then or in the future by
the State pursuant to international agreements and further that the terms of
international agreements with convention countries should be complied with by
the Controller when granting licences under the 1964 Act. See Parke Davis &
Co v Comptroller of Patents, Designs and Trademarks [1954] AC 321 where the
House of Lords held that an almost identical subsection (S 45(3) of the English
Patents Act, 1949, from which Section 46(3) derives its origin) had no
application because the grant of a compulsory licence for food or medicine was
not forbidden by the relevant convention. It seems that if the relevant
convention had forbidden the grant, then it could not have been made.
The
Plaintiffs refer to Article 27(1) of TRIPS which provides that no
discrimination as to field of technology is permitted in respect of enjoyment
of patent rights. They submit that
Section 42 of the
Patents Act 1964 which was
applied by the Controller is predicated on a specific discrimination in favour
of licences in the fields of medicine and foodstuffs.
Article
27(1) of TRIPS provides:- "Subject to the provisions of paragraphs 2 and 3
(which are not applicable to this case)', patents shall be available for any
inventions whether products or processes, in all fields of technology, provided
that they are new, involve an inventive step and are capable of industrial
application. Subject to paragraph 4 of Article 65, paragraph 8 of Article 70
and paragraph 3 of this Article, '(none of which have relevance to this
application)' patents should be available and patent rights enjoyable without
discrimination as to the place of invention, the field of technology and
whether products are imported or locally produced".
Section
42(1) of the
Patents Act 1964 provides:-
"(1)
Without prejudice to the foregoing provisions of
this Act, where a patent is in
force in respect of --
(a)
a substance capable of being used as food or medicine or in the production of
food or medicine; or
(b)
a process for producing such a substance as aforesaid; or
(c)
any invention capable of being used as, or as part of a medical, surgical or
other remedial device,
the
Controller shall, on application made to him by any person interested, order
the grant to the applicant of a licence under the patent on such terms as he
thinks fit, unless it appears to him that having regard to the desirability of
encouraging inventors and the growth and development of industry and to such
other matters as he considers relevant, there are good reasons for refusing the
application."
The
Plaintiffs submit that the derogation from Article 27(1) of TRIPS contained in
Article 70(6) of TRIPS ceased to apply on the 15 December, 1993 which was the
date on which the final version of TRIPS was agreed, whereas the Controller did
not make his decision until June 1995.
Article
70(6) provides:-
"Members
shall not be required to apply Article 31 or the requirement in paragraph 1 of
Article 27 that patent rights shall be enjoyable without discrimination as to
the field of technology, to use without the authorisation of the right holder
where authorisation for such use was granted by the Government before the date
this agreement became known."
The
Plaintiffs submit that under Article 70(6) licences in breach of Article 27(1)
could not be granted by the Controller after the date the agreement became
known (ie 15 December 1993, the date when the final version was agreed).
Alternatively, where a licence had been granted after this date it could not
continue in effect after the 1 January, 1996 (ie the end of the transitional
year provided for by Article 65(1) of TRIPS).
Another
relevant article is Article 65 paragraphs (1) and (6) which provide:- "(1)
Subject to the provisions of paragraphs (2)), (3) and (4) (which are not
relevant to this application) no member shall be obliged to apply the
provisions of this agreement before the expiry of a general period of one year
following the date of entry into force of the WTO Agreement."
(6)
A member availing itself of a transitional period under paragraphs (1), (2),
(3) or (4) shall ensure that any changes in its laws, regulations and practice
made during that period do not result in a lesser degree of consistency with
the provisions of this agreement."
The
Plaintiffs submit that since the compulsory licences were the only ones granted
since the
Patents Act 1964 was enacted therefore this was a new practice
contrary to Article 65(5).
Article
70(1) provides:
"This
Agreement does not give rise to obligations in respect of acts which occurred
before the date of application of the Agreement for the Member in question."
The
Plaintiffs submit that this refers to acts of infringement by third parties
before the date of application. There are three different dates referred to
within this Article, date of application [in para (1)], date of acceptance [in
para (4)] and date before the Agreement became known [in para (6)]. The
Plaintiffs submit that the date of application is the 1 January, 1995 not the
end of the transitional year, January, 1996. They submit that acceptance is the
same as ratification and the deposit of the instrument of ratification is the
date of acceptance ie 30 December, 1994. The date when the Agreement became
known is the date of the adoption of the final Act on the 15 December, 1993.
Alternatively, if the date of the adoption of the final Act is not the date the
Agreement became known, it must be the 15 April, 1994 which was the date the
WTO Agreement was signed.
I
will deal with the issues raised by those arguments in turn.
The
first issue is whether TRIPS is a treaty, convention, arrangement or engagement
applying to the State and any convention country. It was not argued that the
WTO Agreement including TRIPS was not a treaty or convention, etc applying to
the State but it was argued by Clonmel:-
1.
that it applied only to bilateral treaties ie the State and any convention
country
2.
that there are no longer any convention countries since the repeal of SI 314 of
1976 by SI 38 of 1996 and SI 223 of 1987 by SI 37 of 1996, therefore there can
be no treaty between the State and a convention country.
The
first argument cannot succeed by virtue of the
Interpretation Act, 1937.
Section 11 of that Act provides that the singular includes the plural unless a
contrary intention appears -- which it does not. The second argument also fails
by virtue of
Section 22 of the same Act.
Subsection 1(c) and (e) provide that
unless the contrary appears which it does not, the revocation of a statutory
instrument should not affect any right, privilege, obligation or liability
acquired, accrued or incurred under the revoked instrument or prejudice any
legal proceedings pending. Subsection (2) provides that any legal proceedings
civil or criminal in respect of any right, privilege, obligation or liability
acquired, accrued or incurred under the revoked Statutory Instrument may be
instituted, continued or enforced as if the statutory instrument had not been
revoked.
If
Section 46(3) conferred a right on the Plaintiffs not to have a compulsory
licence granted because this would be in breach of a treaty between the State
and any convention country, then the revocation of the statutory instruments
does not affect the issue. The proceedings must be continued as if they had not
been revoked.
The
Controller argued that the Application for compulsory licences under Section 43
made on the 8 November 1991 and the 13 February 1992 predated the agreement on
TRIPS and that Section 46(3) cannot be read as facilitating summary termination
of a property right. However, any right under Section 42 was always subject to
the infirmity that it could be affected by a treaty and it would be necessary
for the Defendants to look to the transitional provisions of the Treaty to
ascertain their rights.
The
next issue is how
Section 46(3) of the
Patents Act 1964 is to be interpreted
with particular reference to Art 29.6 of the Constitution namely "No
international agreement shall be part of the domestic law of the State, save as
may be determined by the Oireachtas". The arguments were all directed to a
constitutional interpretation of the subsection and no constitutional challenge
was mounted to S 46(3) and the Attorney General was not a party.
The
Controller argues that it must be presumed that the Oireachtas did not intend
to abdicate its responsibility under Article 15.2.1 for making laws. Section
46(3) cannot be read as envisaging a situation whereby the provision of a
treaty which is not part of the domestic law of the State renders a provision
of the 1964 Act a dead letter. Section 46 assumes jurisdiction continues,
therefore it cannot be read so that a treaty would set Section 42 at nought. It
cannot be read so that Article 27 of TRIPS is given effect, because this would
allow the Government to legislate for the State. It would amount to the repeal
of an act of the Oireachtas by virtue of an international treaty which was not
part of domestic law.
Clonmel
argued that the transitional provisions of the 1992 Act which continued Section
42 in existence for pending applications was enacted after the Dunkel Draft
(the first draft of TRIPS) became known on the 20 December 1991. This is in all
material respects identical to the final text of TRIPS. Therefore, the
legislators knew of it and therefore they must have intended that the existence
of TRIPS would not prevent the grant of a Section 42 licence. It would be
illogical for the Oireachtas to include provision for the continuation of
applications for licences under
Section 42 of the
Patents Act 1964, in the
knowledge that an international treaty would soon be signed which would prevent
the grant of any licence under
Section 42.
Clonmel
did not attempt to interpret what exactly was meant by
Section 46(3). The
Controller submitted that at most,
Section 46(3) should be taken as saying that
in exercising his functions, the Controller must have regard to any treaty, etc
and where he has a choice or discretion, he should not make an Order
inconsistent with the provisions of a treaty capable of guiding, informing or
defining the exercise of functions under
Sections 39 to
43 while ultimately
leaving the relevant portions of the 1964 Act intact.
In
interpreting
S 46(3) the first thing to note is that it is prohibitory. No
Order can be made by the Controller if the subsection applies. It overrides the
mandatory provision in
s 42 requiring the Controller to grant a licence unless
there are good reasons for refusing. Also, it applies whether it is invoked or
not. Both the Controller and Clonmel criticised the Plaintiffs because they did
not raise this subsection in their submissions. It is regrettable that they did
not but that does not prevent them raising the argument in this Court.
The
next thing to note is that the subsection has a very limited application. It
deals with two specific areas, the compulsory grant of a licence or compulsory
endorsement of a licence where there has been an abuse of monopoly rights
(Sections 39 to 41 and
Section 43) and the compulsory grant of a licence in the
area of food and medicine (Section 42).
In
interpreting the section the Court is obliged to give effect to plain and
unambiguous words. The primary meaning is to be followed (see Howard v
Commissioners of Public Works [1994] 1 IR 101).
In
my opinion, the Oireachtas were saying in
Section 46(3) that in relation to
these two limited areas, if the State entered into a treaty at variance with
Sections 39 to
43, the Controller was prohibited from making an Order. The
subsection must be interpreted as referring to treaties which could only comply
with the section some time in the future because there were no convention
countries when
the Act was passed. These could only come into existence by
order under
S 93. The Oireachtas therefore, in this subsection were intending
to confer in the future the status of domestic law on the provisions of any
treaty with a convention country which was at variance with applications under
Sections 39 to
43. The effect of conferring the status of domestic law would be
that the Treaty would override the provisions of
Sections 39 to
43. The Act
delegated to the Government the power to enter into a treaty with limited
effect in domestic law without reverting back to the Oireachtas. It is not a
question of the Government repealing a section of
the Act. The Oireachtas
provided that in a certain event (ie, a treaty with a convention country), then
Section 42 (inter alia) would not apply. The clear words of the subsection do
not allow for the interpretation contended for by the Controller. In the
absence of a constitutional challenge the subsection has the benefit of the
presumption of constitutionality and is in accordance with the provisions of
Articles 29.6 of the Constitution.
As
to Clonmel's argument that because the Oireachtas continued
Section 42 in
existence for pending applications after they knew the import of TRIPS via the
Dunkel Draft, they must have intended that TRIPS would not prevent the grant of
a
Section 42 licence, this argument cannot be sustained. All the Oireachtas did
in paragraph 13 of the First Schedule was to say that any pending applications
under
Section 42 should be decided under the provisions of the
Patents Act 1964
Act and the 1964 Act included
Section 46(3). The 1992 Act was enacted on the 27
February, 1992. It is not correct to say that the Oireachtas must have known
then that a treaty would soon be signed. The final version of the WTO Agreement
was not agreed until the 15 December 1993. Right up to that time there was no
guarantee that any agreement would be achieved.
It
is not contested that
Section 42 does permit discrimination as to the field of
technology in respect of enjoyment of patent rights contrary to Article 27(1)
of TRIPS. What is in issue is whether Article 27(1) applied at the time of the
Controller's decision so as to prevent a grant of licences under
Section 42 or
alternatively whether it applies now. There are a number of issues arising
here:-
1.
Does Article 70(6) apply ie was authorisation for use permitting discrimination
contrary to Article 27(1) granted by the Government after the date the
agreement became known. This raises two questions
(i)
whether the government includes the Controller.
(ii)
what is the date the agreement became known.
Alternatively,
2.
Does Article 70(1) apply, ie was the order of the Controller an "act" which
occurred before the date of application to the member in question. This raises
the questions
(i)
whether the Order/Grant of a licence is an "act"
(ii)
what is the date of application.
Alternatively,
3.
Is Article 70(6) an exception to Article 70(1).
4.
Does Article 65(1) mean that TRIPS is not applicable before the expiry of one
year following the entry into force of the Treaty ie the 1 January 1966.
Alternatively,
5.
Does Article 65(6) mean that the grant of compulsory licences during 1965 is a
change in "practice" during the transitional year.
In
relation to dates, it appears to me that the dates mentioned in TRIPS occur in
the following sequence:
The
date it became known
The
date of acceptance
The
date of entry into force and
The
date of application.
Under
Article 65(1), it is clear that entry into force is used in a different sense
to date of application and comes before it. Therefore the date of entry into
force must be 1 January, 1995 and the date of application must be 1 January,
1996.
In
Article 70, three dates are referred to, date of application (subsection 1),
date of acceptance (subsection 4) and date the agreement became known
(subsection 6). It is clear that the date TRIPS became known is different to
the date of acceptance and the date of application and must of necessity
predate them.
Clonmel
says the date TRIPS became known was the date the Dunkel Draft was published
(20 December 1991). The draft could have been changed at any time but as a
matter of fact, it became known in 1991 and some years later was ratified in
that form. Clonmel submits there is nothing to be said for the selection of the
date of the 15 December, 1993 which was the date the final version of TRIPS was
agreed and which the Plaintiffs put forward as the appropriate date.
On
one view, it is possible that the date TRIPS became known was the date of the
Dunkel Draft since Clonmel applied after that date for one of the compulsory
licenses presumably in the knowledge that the law in relation to compulsory
licenses would change. Also the
Patents Act 1992 which did change the law was
passed on 27 February, 1992 and presumably this also affected the decision to
apply. On another view, the date the final version was agreed would be more
logical as up to then anything could be changed. The date the Controller made
the Order was the 3 July, 1995 which was not only after the Dunkel Draft and
the approval of the final version but was also after the signing of the Treaty
on the 15 April, 1994. Therefore in so far as Article 70(6) is concerned the
Controller's order was made long after TRIPS became known and it is not
necessary for me to decide whether the date it was made known was 20 December,
1991 or 15 December, 1993.
The
date of signing was 15 April, 1994 and the date of deposit of the instrument of
ratification was 31 December, 1994. On one view, until the instrument was
deposited, the process of acceptance was not complete. But on the other hand
why mention the date of acceptance as distinct from the date of entry into
force if they are separated by only one day. To have some relevance they must
be dates separated by some time. Taking that rationale it seems to me that the
date of first signing, 15 April, 1994 was the date of acceptance.
The
real question here is whether the Order made by the Controller can be equated
to an authorisation for use permitting discrimination contrary to Article 27(1)
by the Government.
The
Controller argues that the Order of the 2 June, 1995 cannot be regarded as
having been granted by the Government.
Section 63(3) of the
Patents Act 1992
provides that he is independent in discharge of his functions conferred on him
by the 1992 Act "or any other enactment" which must include the residual
functions under the 1964 Act.
I
am afraid that I do not accept this argument. Under the
Patents Act 1964,
section 77(2) provides that the Controller should act under the general
superintendence and direction of the Minister. In deciding this appeal under
the transitional provisions of the 1992 Act, paragraph 13 of the First Schedule
specifically says that applications pending at the commencement of the 1992 Act
should be decided under the provisions of the 1964 Act. Therefore, it is the
1964 Act alone which is relevant.
The
Controller also submits that in Article 31 there is reference to both the
government and the competent authority. Since the Controller is the competent
authority, therefore he cannot be the Government. However, in Article 31, the
Article was dealing with use by the Government under compulsory licences (inter
alia) and was providing safeguards to be respected, among which were provisions
for the competent authority
(a)
to review the continued existence of circumstances which led to such use, and
(b)
to have authority to refuse termination of authorisation if and when conditions
which led to such authorisation are likely to recur.
In
such cases it is appropriate that a competent authority would be referred to as
distinct from a government. It has not been proved that the Controller is or
would be the competent authority referred to in Article 31. It seems to me that
the purpose of Article 70(6) was to prevent a rush of grants of licences in
breach of Article 27(1) by a Government after that Government knew there would
be a provision in TRIPS to prevent such grants after it entered into force.
"Government" obviously does not apply to someone over whom the Government have
no control but it seems to me that if the Government have control over the
person who granted the authorisation, such authorisation can be described as
having been granted by the Government.
In
relation to Article 70(1) it does not appear to me to be necessary to decide
whether "act" includes the grant of a licence or not. Article 70(6) is a
derogation from Article 27(1). This derogation ceased to apply at the latest on
the 31 December, 1993. There would be no point in having a derogation from
Article 27(1) which had ceased before the date TRIPS was accepted, if no
obligations arose until the date of application. According to Article 65(1), no
member is obliged to apply TRIPS before the expiration of one year following
the date of entry into force of the WTO Agreement. In order to give a sensible
interpretation to Article 65(1) and Article 70(1) and (6), it seems to me that
regardless of what the word "acts" means in Article 70 (1), it is subservient
to the provisions of Article 70(6) and the controller being under the direct
control of the Minister could not grant licences under
Section 42 in breach of
Article 27(1) after the date TRIPS became known. He granted them not only after
the drafts were known (ie the Dunkel Draft and the final Act) but it was even
after the date of signing which was the 15 April, 1995. Since he could not
grant them after the draft became known, Art 65(1) is subservient and does not
apply and Art 65(6) is irrelevant. Therefore, the answer to question 1 of the
preliminary issue of law is "yes" and the second question does not arise.
Since
the Plaintiffs succeed on the interpretation of
S 46(3) it is not necessary to
deal with the further arguments raised by the Plaintiffs.
