Newsletter
PATENT ACT UNDER AMEND-MENT
The Intellectual Property Office (IPO) has set about drafting amendments to the Patent Act, and held a number of public hearings. A summary of the major proposed amendments is provided be-low:
I.Items 1 & 2, Paragraph 1, Article 57
In order to balance the interests of patentees and generic drug manufacturers, Article 52 of the Patent Act as currently in force allows the holder of a drug patent to apply for patent term extension for two to five years, to offset the time required for obtaining drug permits from the relevant regulatory authorities. However, to enable ge-neric drug manufacturers to enter the market as soon as possible after patents on protected drugs have expired, experiments conducted by generic drug makers in preparation for applying for drug permits should be included within the activities that are deemed not to infringe on the said pat-ents.
Item 1, Paragraph 1, Article 57 of the Patent Act provides that invention patent right does not ex-tend to "practice of the concerned invention for research, educational, or experimental purposes, which is non-profit-seeking in nature." Para-graph 5, Article 40-2 of the Pharmaceutical Af-fairs Act (PAA) provides that protection under a "new drug" patent does not extend to pharma-ceuticals companies that conduct researches, education, or experiments prior to applying for a drug permit (otherwise, trials conducted during the life of a new drug patent in preparation for developing a generic version of the drug would not be deemed as an exception prescribed in Paragraph 1, Article 57 of the Patent Act).
Because there are inconsistencies in the provi-sions of the existing Patent Act and the PAA in this regard, the IPO has discussed with the De-partment of Health (DOH) on issues that may arise in practice, with regard to generic drugs.
As suggested by the DOH, Paragraph 5, Article 40-2 of the PAA should be repealed, and Item 1, Paragraph 1, Article 57 of the Patent Act should be amended to remove the references to "educa-tion" and "non-profit-seeking" activities. The statement of legislative intent submitted with the amendment bill should also expressly state that trials conducted by pharmaceuticals companies in preparation for applying for drug permits fall within the scope of research activities exempted from liability under Paragraph 1, Article 57 of the Patent Act. The DOH believes that this would resolve the problem.
Given the above, the IPO proposed to amend Article 57 of the Patent Act as follows:
In light of legislation in European countries, to add "non-commercial activities committed by a private person or entity" as an exception to patent right.
To expressly exempt "practicing the invention for purposes of research or experiment" from patent right.
II.Patent Protection on Animal and Plant Inventions
In order to implement a resolution passed on 23 August 2005 by the Executive Yuan's Biotech-nology Industry Guidance Taskforce, recom-mending that patent protection should be made available for animal and plant inventions, the IPO plans to allow animal and plant inventions to re-ceive patent protection. The gist of the proposed amendments is as follows:
The Patent Act currently in effect expressly forbids granting patents on animals and plants. The IPO proposes that this prohibition be eliminated.
Since "major biological means for the pro-duction of animals and plants" (e.g. sexual reproduction) are largely subject to random factors, technological intervention is generally not of decisive influence and the reproduci-bility of the aims or effects sought through such means is likely to be poor. As a result, the above-mentioned means do not meet the "practicability" requirement set forth in Para-graph 2, Article 26 of the Patent Act. More-over, it is likely that the technological inter-ventions employed in such means may easily have been accomplished by persons skilled in the art based on prior art. If so, they will not meet the patentability requirement of "inven-tive step" as set forth in Paragraph 2, Article 22 of the Patent Act. Thus, there is no need for the Patent Act to expressly bar such methods from being the subject of patent protection.
As for methods for human reproduction and human cloning, those are "contrary to public order, morality, or public health," and are unpatentable under the Patent Act.
In line with the extension of patent protection to animal and plant inventions, and in light of the nature of animal and plant patents, the IPO also proposed amendments to other relevant articles of the Patent Act (such as the scope of activities to which patent exclusivity does not extend).
III.Amendment Relating to Articles 76-1 and 76-2
Article 31 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) contains provisions on compulsory licensing, under which a World Trade Organiza-tion (WTO) member may grant a compulsory license for purposed of supplying a pharmaceu-tical product needed thereby in order to respond to a national emergency or other circumstances of extreme urgency, or for public non-commercial uses. However, Article 31 (f) requires products manufactured under such a compulsory license to be used predominantly to supply the country's domestic markets. Thus, although a majority of developing and least-developed countries can in theory issue compulsory licenses for pharmaceu-tical patents under the relevant provisions, if a country has no pharmaceuticals manufacturing capacity or insufficient capacity, it may be unable to obtain the drugs it needs.
On 14 November 2001, the WTO Ministerial Conference in Doha adopted the Declaration on the TRIPS Agreement and Public Health, which recognized the connection between the TRIPS Agreement and public health, and instructed the Council for TRIPS to propose solutions to the problem. In accordance with the Declaration, on 30 August 2003 the WTO General Council adopted a decision on the Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement in Public Health, which states that the condition under Article 31 (f) of the TRIPS Agreement that pharmaceutical products produced under compulsory license must pre-dominantly supply domestic markets can be waived under specific circumstances, and which proposes to adjust the criteria to be considered when determining remuneration under TRIPS Article 31 Subparagraph (h), to prevent dual re-muneration. Until such time as the TRIPS Agreement is amended, members can implement it according to the above decision.
On 6 December 2005, the WTO General Council adopted the Protocol Amending the TRIPS Agreement. Under Article 10 Paragraph 3 of the Marrakesh Agreement Establishing the WTO, the amendment to the TRIPS Agreement will take effect when two thirds of WTO members have accepted the protocol.
In Taiwan, provisions concerning compulsory licensing are contained in Articles 76 to 78 of the Patent Act. Article 76 Paragraph 1 provides that products produced under a compulsory license must be predominantly used to supply domestic markets. To enable people in Taiwan to use the compulsory licensing mechanism to assist de-veloping and least-developed countries in law-fully obtaining the pharmaceutical products they need, the IPO has proposed two new provisions as follows:
Article 76-1
"To assist a country with insufficient or no manufacturing capacities in the pharmaceuti-cal sector in obtaining pharmaceutical prod-ucts that it needs to treat HIV/AIDS, tuber-culosis, malaria, and other infectious diseases, the Patent Authority may, on application, grant an applicant a compulsory license to practice a patent in order to supply such a country with a needed pharmaceutical product, for importation into that country.
Application for a compulsory license may be made under the preceding paragraph only if the applicant has been unable to negotiate a license under reasonable commercial terms and conditions within a reasonable period of time. But, this shall not apply if the needed pharmaceutical product is already the subject of a compulsory license in the importing country.
If the importing country is a WTO member, the applicant shall, when making an applica-tion in accordance with Paragraph 1 above, submit documents to prove that the importing country has performed the following actions:
1.It has notified the TRIPS Council of the name and quantity of the pharmaceutical product needed.
2.It has informed the TRIPS Council that it has no or insufficient manufacturing ca-pacities in the pharmaceutical sector and wishes to be an importing country. But if the importing country is a least-developed country, the applicant need not submit such evidentiary documents.
3.The needed pharmaceutical product is not patented in the importing country, or is patented but is the subject of a compul-sory license that has been granted or is about to be granted.
A least-developed country as stated above refers to a least-developed country as an-nounced by the United Nations (UN).
If the importing country is not a WTO member, an applicant shall, when making an application in accordance with Paragraph 1 above, submit documents to prove that the importing country has undertaken the fol-lowing actions:
1.It has given written notice to a diplomatic agency of the Republic of China (ROC) stating the name and quantity of the needed pharmaceutical product.
2.It has consented to prevent the re-exportation of the needed pharmaceu-tical product."
Article 76-2
"The entire quantity of a pharmaceutical product manufactured under a compulsory li-cense granted in accordance with the provi-sions of the preceding article shall be exported to the importing country, and the quantity permitted to be manufactured under the li-cense shall not exceed the quantity notified by the importing country to the TRIPS Council or to a diplomatic agency of the ROC.
The external packaging of a pharmaceutical product manufactured under a compulsory li-cense granted in accordance with the provi-sions of the preceding article shall bear an in-dication of the basis for license in accordance with the content specified by the Patent Au-thority; the product's packaging and color or shape shall be sufficient to distinguish it from product manufactured by the patentee or its licensees.
A compulsory licensee shall provide appro-priate remuneration to the patentee. The amount of such remuneration shall be set by the Patent Authority with regard to the eco-nomic value in the importing country of patent rights in the needed pharmaceutical product, and taking into account the Human Devel-opment Index published by the UN.
Before exporting such a pharmaceutical product, a compulsory licensee shall publish on an Internet website the quantity, name, destination, and distinguishing features of the product.
Issuance of a product permit for a pharma-ceutical product manufactured and exported under a compulsory license granted in accor-dance with the provisions of the preceding ar-ticle shall not be subject to the restrictions set forth in Paragraph 2, Article 40-2 of the Pharmaceutical Affairs Act."
In addition to the topics for amendment outlined above, the IPO intends to conduct a comprehen-sive review of the Patent Act's provisions on de-sign patents. We will continue to follow the progress of the amendments and keep our readers informed.