Sunday, October 7, 2012

Critique of the Industrial Properties Bill, 2009 (Uganda) and Policy recommendations for Intellectual Property Law Reform

Table of Contents List of Abbreviations and Acronyms General Background Justification for reform in Industrial Property Legislation Introduction Analytical Assessment of Key provisions of the Bill and Policy options Recommendations Conclusion LIST OF ABBREVIATIONS AND ACRONYMS ARIPO Africa Regional Industrial Property Organization COMESA Common Market for East and Central Africa EAC East African Community GATS General Agreement on Trade in Services GATT General Agreement on Trade and Tariffs ICT Information and Communication Technology IPRs Intellectual Property Rights TRIPS- Agreement on Trade-Related Aspects of Intellectual Property Rights UNCST Uganda National Council for Science and Technology URSB Uganda Registration Services Bureau WIPO World Intellectual Property Organisation WTO World Trade Organisation General Background The Republic of Uganda, a small land locked country in East Africa (sandwitched between Kenya, Tanzania, Rwanda, the Democratic Republic of Congo and the South Sudan) signed the agreement establishing the World Trade Organisation (WTO) in April 1994, and ratified the same in October the same year thus being legible to become one of the founder members of the WTO. She also enjoys membership t the East African Community (EAC), the Common Market for Eastern and Southern Africa (COMESA) as regional bodies, and the African Union (AU) as a Continental body. The WTO, upon inception, set up to do its work (encouraging free trade practices) among its member countries. In pursuit of this, it [WTO] makes agreements that seek to encourage free trade, fair and honest dealing among WTO member countries. One of such agreements is the “Agreement on Trade-related Aspects Of Intellectual Property Rights” (hereinafter called TRIPS Agreement), created interalia, with a desire to reduce distortions and impediments to International trade, and taking into account the need to promote effective and adequate protection of Intellectual Property Rights (IPRs), and to ensure that measures and procedures to enforce IPRs do not themselves become barriers to legitimate trade. Justification for reform in the Industrial property legislation. Uganda currently pursues a National Development Plan hinged on the need for sustainable Growth, Employment, and Socio-Economic Transformation for Prosperity. One of the ways to achieve this is through having a sound and well-articulated Intellectual Policy legal framework. Unfortunately, owing largely to her colonial history, the present existing legal framework comprising of old and archaic English Law like the UK Designs (Protection) Act , the Patents Act and the Uganda National Council for Science and Technology Act do not support the socio-economic realities that have happened in Uganda since Independence and with the ratification to the TRIPS Agreement. TRIPS is a WTO agreement that was negotiated in the Uruguay Round of negotiations from 1986 to 1994 by the members of the WTO (80% of the world’s nations and the vast majority of the world’s trading nations) that sets out certain rules regarding intellectual property rights. Once the member countries agreed to the provisions, it became an official agreement of the WTO that must be ratified by member country governments in their own parliaments. The effect of this was to create a world standard of intellectual property protection. Agreements ratified by the WTO set out certain minimum standards; member countries reserve the right to go above and beyond the provisions of the agreements as long as domestic legislation does not controvert the conditions set out by the WTO agreements. The purpose of the TRIPS agreement is to establish a uniform set of rules across the globe that would provide adequate standards of protection for intellectual property and provide greater predictability and stability in international economic relations. At this point it is important to note that the TRIPS agreement applies to all forms of intellectual property: from copyrights to trade secrets, however, this paper will focus on the TRIPS agreement as it relates to Uganda’s Industrial Property Bill, 2009. The regulation of intellectual property rights has not always been of primary importance in the international arena. In the latter half of the twentieth century, the proliferation of high-technology devices, and the means to reproduce them at low relative cost, has made it essential to preserve an environment that encourages innovation. Industries that invested heavily in research and development, such as the information technology industry, were seeing their work pirated by other companies and sold for a fraction of the price offered by the inventors. This created an environment that was more profitable to “second-movers” as opposed to first-movers and thus heavily discouraged innovation. Before the enactment of the TRIPS agreement, international intellectual property rights were governed by the Paris Convention on the Protection of Industrial Property which was first drafted in 1883. It was widely recognized in economic and commercial circles that the Paris Convention was inadequate to address modern issues of concern in industries such as information technology and biotechnology: there were few rules dealing with patents, no minimum period of patent protection, and no mention of the exclusive rights of patent-holders. The TRIPS agreement was the modern-day solution to this problem; it took, as its foundation, the provisions of the Paris Convention and the majority of the provisions of the Berne Convention for the Protection of Literary and Artistic Works. To this foundation, the TRIPS agreement added several other specifications that addressed the inadequacies outlined above. Any nation that wanted to take part in the World Trade Organization was obliged to amend its intellectual property legislation to meet the guidelines set out in the agreement, thus creating a uniform international standard of protection for intellectual property rights. The provisions of the TRIPS agreement range from the plain to the controversial. Included in its terms is a minimum period of patent protection of twenty years from the date of filing for a patent. Significantly, the TRIPS agreement also invalidates the use of process patents by declaring that patent protection on a process extends to the product of that process. In addition to these provisions, the TRIPS agreement sets out two mechanisms that deal with international public health crises: compulsory licensing and parallel imports, issues of enforceability, and technology transfer from developed countries to the developing ones. Uganda, as a member to the WTO and upon ratification of the TRIPS agreement, assumed the responsibility to make its legal framework conform to the provisions of the TRIPS Agreement. Introduction Originally, Industrial Property had been understood to mean Patents, Trademarks, Industrial designs and Utility models. However, recently, technovations have been included within this ambit. A Patent is a Government grant of full and exclusive rights in the invention for a limited time to prevent others from selling, using or duplicating that invention. Trademarks are distinctive signs or indicators used by an individual, businesses, organisations or other legal entities to identify for consumers that the products or services on or with which that mark appears originate from a unique source, designated for a specific market, and to distinguish its products or services from those of other entities. Industrial designs are ornamental or aesthetic aspects that give an item or product a special or unique appearance for example colour, patterns, shape or surface. Utility models usually, are used to protect industrial innovations that are not as important as subjects of Patents. Whereas novelty is a great consideration in this aspect, inventive step is not. Finally, technovation refers to a solution to a specific technological problem proposed or suggested by an employee of a given firm or business entity for use by that firm within the scope of the work, trade or dealings of the firm in question but has not been used by the said firm. The TRIPS Agreement seeks a balance of rights and obligations between the private right, enumerated above, and the obligation “to secure social and cultural development that benefits all.” Article 7 declares that: “ . . . the protection and enforcement of IPR should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare and to a balance of rights and obligations.” Analytical Assessment of Key provisions of the Bill and Policy options In this part, I will analyze the key provisions of the Bill that I feel warrant attention. Firstly, Clause 3 seeks to establish the office of the Registrar. However, the same provision under (4), gives the Minister power to direct any officer to do any “act or thing”. This provision gives the Minister excess powers to influence the work of the registrar, and yet the registrar should have some independence and autonomy while discharging his/her functions. The Bill should expressly provide or such a number of Deputy Registrars or specific officers at the registry who can work with the guidance of the registrar, for instance Legal Officers. Furthermore, the office is established with no specified source of funding. This needs to be streamlined drawing from past and present experience where Government has created numerous departments which have been suffocated and rendered irrelevant and useless due to lack of operational budgets. Under Clause 5, the registrar is mandated to keep two separate registers for record purposes. The Bill should be modified to provide for online versions of the register to take full advantage of the ICT developments. This will also resolve problems resulting from poor manual record keeping leading to tedious inspection processes just like it is at the Registrar General’s office where information is kept in boxes and files piled in office. The same poor record keeping can be seen at the Lands Registry. Clause 8(3) (e) seeks to disregard plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes, and proposes exclusion of the said items and processes from patent protection. However, this provision should exclude natural substances, generic drugs and medicines from patentability so as to encourage reverse engineering, and development of natural substance/object medicines. Clause 8(f) should also be amended to provide for any other day after 1st January 2016, just in case there is adjustment to the time frame. Clause 14 deals with prohibition or restriction of applications for patents containing information prejudicial to security of Uganda or safety of the public. However, the Bill fails or omits to attempt and define or explain what “information prejudicial to security or public safety” entails. Clarity is one of the key canons of legislative drafting. Therefore, there is need to shed some light on the said provisions by way of definition or explanation so as to avoid arbitrary enforcement in the guise of “public security, or interest” once the Bill becomes an Act. Clause 28 (13) and (14) provide for “mail box provisions” concerning applications for pharmaceutical patents. Within the TRIPS flexibilities is the provision that during the transition periods, the LDC countries do not need to make provisions for ‘mail box’ pharmaceutical patent applications in accordance with Article 70.8 of TRIPS. This article requires countries that do not yet have patent regimes to allow applications for pharmaceutical patents to be filed, which would be granted once these countries enact patent protections by January 1, 2016. In the long run, this would potentially hinder access to cheaper and more affordable medicines thus prejudicing the majority poor population of Uganda. Therefore, these provisions need to be modified to the effect that that applications for pharmaceutical products should only be filed after 1st January 2016 or such other date as may be extended in the future. Clause 38 (1) (c) grants the applicant or owner of an invention, where the patent has been granted in respect of a “new use”, of putting the patented product or process into a new use without the prior authorization of the owner of the patent. This clause should be modified to exclude traditional knowledge and genetic resources from “new use” patents so as to accord maximum protection to indigenous knowledge and resources. Clause 38(2) should also be amended to include other ways of owner exploitation of benefits of a patent, for example “use and pay”, where third parties accrue some benefits from the patent and pay the owner for such benefit derived/enjoyed. Clause 43(2) deals with parallel imports. It is important that Uganda takes advantage of the Doha Declaration and its parallel decision regarding Paragraph Six of the declaration. This requires a number of steps, among which include: 1) in most cases, compulsory licenses issued by importing and exporting countries, 2) the importing country’s establishment of insufficient or no local manufacturing capacity in the specified pharmaceutical sector, 3) importer notification to the WTO of its intention to use the system detailing product(s) requested and quantities (accompanied by confirmation of insufficient manufacturing capacity and that a compulsory license is or will be granted), and 4) notification of the exporting country’s compulsory license to the WTO and the conditions attached. It should also be noted that parallel imports are also of particular importance in meeting public health needs since the pharmaceutical industry generally sets differential prices globally for the same medicine. Thus, parallel importation of a patented medicine from a country where it is sold at a lower price, will enable more patients in the importing country to gain access to cheaper drugs. Paragraph 5(d) of the declaration explicitly reaffirms members’ freedom to determine their own regimes for the exhaustion of intellectual property rights without challenge. Clause 44 (e) (1) provides that it is not a patent infringement to use the patented invention without an authorization of the holder to manufacture or export to another country a patented health care where the export of the invention addresses a health need identified by the other country where the product is either not patented in the third country. This provision should be amended to include a reason that; because adequate remuneration would have been paid to the patent holder in the exporting country. In Clause 45, Uganda recognizes patents granted by ARIPO. However, there needs to be a provision providing for a local and international search to test the validity of such patent- to double check just in case ARIPO granted it in error or without regard to some material aspects. On clause 60 (1) (a), concerning preconditions for grant of compulsory licences, the Bill does not provide a period within which to seek a voluntary licence. This needs to be secured. Some jurisdictions are seeking to establish a minimum period of six months. Clause 61 (1) should be amended to provide for administrative procedure leading to grant of compulsory licences to private third parties. The TRIPS Agreement does not require members to make the grant a subject of judicial procedure. There is need to bring this provision in line with full flexibilities provided by the TRIPS Agreement. Furthermore, clause 61(2) (e) talks of “equitable” remuneration, and yet Article 31 (h) provides for “adequate” remuneration. There is need to bring this provision in conformity with the TRIPS language to avoid misinterpretation. Under clause 66 (2), there is a drafting error. The opening line should read; “An order under subsection 1 shall remain in force…” 66(3) disregards payment of compensation to the owner, licence holder or anyone with interests in a patent. This Contravenes the TRIPS Agreement that provides for adequate remuneration. Clause 66(4) does not provide for an independent review prior to the Minister’s written order. This is likely to occasion injustice. The language of Clause 73 needs to be modified to read that and industrial design is registerable if it is new and original (not just new). Furthermore, in Part XIII (Industrial designs), the Bill does not address securing protection for textile designs as provided for under Article 25(2) of the TRIPS Agreement, and neither does it satisfy itself on duration of protection of Industrial designs as provided for under Article 23(6) of Trips specifying a period of at least 10 years. There is therefore need to take advantage of these TRIPS flexibilities. Clause 102 (8) needs to be amended to include partner States of East African Community so as to take advantage of the East African Common Market Protocol and the benefits that accrue therefrom, and the need for harmonization of laws and policies. Recommendations There is urgent need to implement the suggested reforms. I would propose immediate tabling, discussing and passing of the Bill so as to address deficiencies being caused by the existing inadequate legal regime. Training of the entire various stake holders like enforcement bodies would be a right step in the right direction to ensure effective capacity building. Establishing of effective, functional and well-networked databases at relevant departments like the National Council for Science and Technology. There is urgent need to pass a National Intellectual Property Policy to assist in establishing of key IP institutions. There is great cause to harmonize all the IP Laws and policies across the East African community member countries. Conclusion As it has been observed, the relentless march of intellectual property rights needs to be stopped and questioned. Developments in the new technologies are running far ahead of the ethical, legal, and regulatory and policy frameworks needed to govern their use. More understanding is needed –in every country- of the economic and social consequences of the TRIPS agreement. Many people have started to question the relationship between knowledge ownership and innovation. Alternative approaches to innovation, based on sharing, open access and communal innovation, are flourishing, disproving the claim that innovation necessarily requires patents. Promotion of Uganda’s responsibility to conform to International standards and obligations under TRIPS and any other treaties on Intellectual Property rights must be accompanied by well-articulated and defined measures that protect public interest concerns in areas of health [for scourges like HIV/AIDS, malaria, tuberculosis], nutrition, food and national security, community rights over traditional knowledge and environmental conservation programs and initiatives. REFERENCES Acts of Uganda Patents Act UK Designs (Protection) Act Uganda National Council for Science and Technology Act Journals Abbot, Frederick, (1998), “The enduring enigma of TRIPS. A challenge for the world economic system”, Special Issue Trade-Related Aspects of Intellectual Property Rights (TRIPS), Journal of International Economic Law, vol.1, No.4. Kumar, Nagesh, (1997), Technology Generation and Technology Transfer in the World Economy: Recent Trends and Implications for Developing Countries, The United Nations University, Institute of New Technologies, Maastricht. Reichman, J., (1996/1997), “From free riders to fair followers: global competition under the TRIPs Agreement”, New York University Journal of International Law and Politics, vol. 29, No.1-2. Other texts Anthony C.K Kakooza; The Civil, Administrative and Criminal Law standards in Intellectual enforcement in Uganda: The Good, the Bad and the Hoped-for Samuel Wangwe et al; Commission on Intellectual Property Rights country Case Study for Study 9: Institutional Issues for Developing Countries in IP Policy-Making, Administration and Enforcement in Uganda, Economic and Social Research Foundation, Dar es Salaam Tanzania *WTO Deals with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible. (http://www.wto.org/ last accessed 1st October, 2012 4:30 pm) Cap. 218 Laws of UgandaCap. 216 Laws of Uganda Chapter 209 Laws of Uganda Article XVI.4 of the agreement establishing the WTO enjoins all member countries to ensure that all domestic/national Laws and regulations are brought to conformity with obligations under the agreement. Uganda Law Reform Commission Report on IPB, 2004 Patents Act, Cap. 216 Laws of Uganda Burundi Industrial Property Bill The UNDP "Human Development Report 1999", Page 73

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