Corporate Law (Business Age)

Corporate Law

Patent rights on WTO perspectives

By Rudra Sharma

Inventing goods with added quality demands a huge amount of research and development before the goods come in the market. The inventor would be adversely affected if his products are easily copied by other producer who have not invested in the Research and Development (R & D) of the invention. Therefore, a kind of monopoly is provided to the inventor over his invented goods for certain period of times so that the inventor is reimbursed for his investment. This monopoly right provided to the inventor through the protection of law enforced by the state is known as patent right.

This is the very ground to provide patent to any inventor ad, that’s why patents are granted to the inventors. Patent right can be defined as an exclusive right granted to the inventor for his invention. In other words, patents are granted by a government authority conferring an exclusive right to make, use or sell an invention generally for the period of 20 years. Twenty years is general practice that most of the nations provide patent for such a period of time. In Nepal also there is legal provision for similar period of time. First, the patent is provided for seven years upon filing a patent application which is eligible for renewal for another two more terms.

The logic to provide patent rights for only twenty years is that the investor is supposed to be reimbursed the cost of R & D within that period of time. Another ground is that it may cause injustice to the general public if such monopoly right of patent is granted for an indefinite period of time. Therefore, the invention is supposed to come to public domain after 20 years or after the time protected for patent. Once it comes in public domain, everyone can produce the product and the person who had invested in R & D would no longer continue to exercise the monopoly right.

However, it generally does not happen in practice. Because, the inventor who holds the patent keeps many trade secrets undisclosed, though, he has to disclose certain trade secrets upon filing the patent application. Besides, he obviously earns goodwill during the time. Therefore, the producers who come later may not actually compete. But the former patent holder must compromise if he is taking excess profit due to strength of his patent.

An absolute novelty of the product is the prerequisite of the patent. Means anyone seeking patent right must invest something novel. However, it is submitted that the product seeking patent should possess’ absolute novelty. But what is ‘novel’ is one of the most contentious issue. There is no agreeable international standard of absolute novelty, nor is there an international agreement or uniform set of guidelines for implementing the universal eligibility criterion of novelty.

Nonetheless, it may be said that these are the matter subject to international law.

Another word associated to ‘novelty’ is ‘non-obviousness’. Means, the product or invention or innovation seeking patent should be non-obvious to the public till it was invented.

An obvious next step is not patentable

Meanwhile, there are other two words which need to be mentioned here. They are ‘invention’ and ‘innovation’. Inventions are the technical solution to problems and innovations is the practical application of new ideas including invention in the production system of goods and services in a socio-economic setting.

Therefore, a patent applicant should prove the novelty of his product of invention. Article 29 of the Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement inter alia provides for the condition to be satisfied by the patent applications. The applicant shall disclose the invention in a manner sufficiently clear and complete and also indicate the best mode for carrying out the invention at the filing date (or the priority date).

Priority date is such date whereby a patent holder can claim patent right from a specific date. The term’ propriety date’ also relates to Patent Cooperation Treaty (PCT). For example, if ‘A’ has filed a patent application on February 2 in country X. And, B has filed another patent application over the same product or invention on February 3 in country Y, then A’s right supersedes B’s right. B has to surrender due to A’s priority date.

There are some exceptions of patent too. For instance, compulsory licensee. Compulsory license means the period when the exclusive monopoly right over patent is breached for the benefit of the people at large. For example, X has patent right over a particular rice. Suddenly, there occurred famine in the country. X unreasonably hiked the price of the rice. At that time, the nation can breach the patent right by providing compulsory license to someone to produce the particular rice for the sake of general public.

However, such compulsory license should not unnecessarily prejudice the legitimate interest of the patent owner, taking into account the legitimate interest of the third parties. Compulsory licensing should involve prior unsuccessful attempts to negotiate with the title holder to acquire a voluntary license, and they should be non-exclusive, temporary license, granted predominantly for the supply of the domestic market. This means, the nation who provides compulsory license should first try get voluntary license from the patent holder. Even if the compulsory license is granted, products by compulsory license can not be for exporting purpose. It should be exclusively for domestic consumption only. Such provision are stated in Trade Related Aspects of Intellectual Property Rights (TRIPS).

Having Intellectual Property (IP) rights or patent right is not enough. They must be enforceable. This is covered in part 3 of TRIPS agreement which says that governments have to ensure that intellectual property rights including patent can be enforced under their laws and that the penalties for the infringement are tough enough to deter further violations. IPRS are territorial in character and so are the patents. Although all the members of the international instruments, patents are granted under the national laws and therefore, the rights are also national in scope.

Countries seeking to implement high standards of inventive activity may not agree with the local standard prescribed in national law. Since patent rights are national in scope, there are two extremes regarding its implementation. It happened so probably because of the difference between the provisions of national laws and international instruments. Between these two extreme positions, implementing a refined ‘non obvious’ standard in a reasonable fashion, without arbitrary results, also requires a high level of technical skill and costly resources.

International standards provide high standards of protection to Intellectual Property (IP) rights including patent and national legislation in many developing and least developing countries are lagging behind to cope up with the international instruments. And, that is the very seed of conflict regarding patents under which the whole polity of World Trade Organization (WTO) reels around.

The author is a Law Journalist