Should India Invoke Section 157A of Patents Act in the Context of Covid-19?

 We’re pleased to bring to you a guest post by Shirin Syed, looking at the potential application of Article 73(b) of WTO TRIPS / Section 157A of the Indian Patents Act in the context of Covid-19. Shirin is an IP researcher and scholarship awardee from Texas A&M University, School of Law, USA for the fall of 2020.

Should India Invoke Section 157A of Patents Act in the Context of Covid-19?

Shirin Syed

In response to the COVID-19 pandemic as a global priority, the recent WHA resolution (PDF) has called upon countries for the removal of unjustified obstacles related with the provisions of international treaties including TRIPS and Doha Declaration on the TRIPS Agreement and Public Health. However, IP barriers in the context of COVID 19 go beyond medicines and are not confined to patents alone. Therefore, the use of flexibilities needs a new approach in the COVID 19 context.

In this context, the Executive Director of the South Centre called upon the Directors General of the World Health Organization (WHO) and WTO as well as the United Nations Secretary-General “to support developing and other countries, as they may need to make use of article 73(b) of the TRIPS Agreement to suspend the enforcement of any intellectual property right (including patents, designs and trade secrets) that can potentially obstruct the procurement or local manufacturing of the products and devices necessary to protect their populations”. This write up discusses the use of this option in the context of the Indian Patents Act.

Security exception under TRIPS Agreement

The exception gives the freedom to member states to take any action including suspension of IP rights and allows disclosure of information in case it goes against their essential security interest. Three contexts are referred in this regard viz., First, fissionable materials and their derivatives; Secondly, arms traffic or implementation of war and measures taken at time of war or other emergency in international peace and security; And third, member states can suspend the obligation to implement obligations under the UN charter for the maintenance of international peace and security.

The advantage of using it is that it can be applied across the board to all types of IP such as copyrights, industrial designs or trade secrets to address a public health emergency. For example, the design of face masks can be under protection under trademarks or design protection can create barriers in the manufacturing of ventilators, masks, or PPE. Further, Article 73 does not set any procedural obligations for its invocation and thus gives ample space to take the necessary action in ‘other emergency in international relations’.

Many experts believe that measures to contain the pandemic falls within the scope of “necessary for the protection of its essential security interests”. The UNCTAD Resource Book on TRIPS and Development notes that  pandemics such as HIV could be qualified as “emergencies in international relations” under Article 73(b)(iii).

Russia-Ukraine case and Article 73

The language of Article 73(b) of WTO TRIPS Agreement is mirrored by Article XXI of the WTO General Agreement on Tariffs and Trade (GATT). The WTO Panel which examined Russia’s invocation of Article XXI to deny the right to transit of goods from Ukraine upheld the action of Russia. However, the Panel also held that though a WTO Member has the freedom to determine what constitutes an essential security interest, the Panel has the jurisdiction to examine whether the Member’s determination is in good faith, and on the objectivity of the measures concerned.

Another point of debate could relate to the meaning of the term “other emergency in international relations” in Article 73(b)(iii). This raises the question of whether a health emergency like a pandemic falls within the scope of the term “other emergency in international relations.” In the present situation, many WTO Members have declared health emergencies and in the absence of a definition or explanation of the said term, a Member has the freedom to determine what constitutes “other emergency in international relations.” The WTO Member has the flexibility to define the term and to include not only military emergencies but also other emergencies including health emergencies.

The Russia-Ukraine Panel cited the dictionary definition of “emergency” that includes “a situation, esp. of danger or conflict, that arises unexpectedly and requires urgent action”, and a “pressing need … a condition or danger or disaster throughout a region” (para 7.72). However, the Panel took a narrow view on this and stated:

“An emergency in international relations would, therefore, appear to refer generally to a situation of armed conflict, or of latent armed conflict, or of heightened tension or crisis, or of general instability engulfing or surrounding a state. Such situations give rise to particular types of interests for the Member in question, i.e. defence or military interests, or maintenance of law and public order interests” (para 7.76).

This narrow view may result in the exclusion of a pandemic like COVID-19 within the meaning of “other emergency in international relations”. However it should be noted that the Panel considers a “general instability engulfing or surrounding a state” as an emergency within the scope of the term and a pandemic is a potential threat to the stability of the state. It is also important to note that the concept of security has broadened over the years and it goes beyond the conventional understanding of military context and includes any kind of instability of the state emanating from various factors such as environment, health, food, economic etc. Hence, this narrow view of the Panel should not deter WTO Member States from taking these measures as the Panel’s views do not set any precedents.

It is also important to note that unlike GATT and the General Agreement on Trade in Services (GATS), the TRIPS Agreement lacks an overarching  public health emergency exception  and therefore Article 73 should be considered to include public health emergencies in the light of the Doha Declaration which is widely viewed as an interpretive and an enabling  tool to include health emergencies as part  of the “other emergency in international relations”.

Thus, Member States are free to use flexibility in the TRIPS to address IP barriers related to medical products.

In another recent case, the WTO panel followed the Russia-Ukraine jurisprudence and (partially) upheld the use of innovation of Article 73 while coding the legality of suspension of sports broadcasting rights of Qatar based firm by the Saudi Arabia. The Panel upheld the suspension of enforcement measures under Article 41 and 42 but held the suspension of criminal procedure against the Saudi firm, which illegally broadcasted the signals of the Qatar firm. Readers can refer to the recent SpicyIP Post on this topic.

Indian context

India incorporated Article 73 in its IP legislations except the Copyright Act. Though the provisions of  “government use” and ‘compulsory licence’ in the Patents Act have its own limitations such as the usage is restricted only to authorised entities, cooling period of three years, time consuming process of granting and excess discretionary powers to the Controller of the Patent office – making the whole process a cumbersome exercise which will not be relevant in an emergency situation like the current pandemic. Hence, the blanket provision to all IPs such as the security exception would be more effective. The security exception in Article 73 of TRIPS has been incorporated in  Section 157A  of the Indian Patent Act.

It empowers the Central Government to not disclose any information relating to any patentable invention which is detrimental to the interest of security of India. The Government can also revoke any patent which it considers necessary in the interests of security of India, by issuing a notification in the Official Gazette. The provision explains that “security of India” includes any action necessary for the security of India which relates to (i) fissionable materials or (ii) to the traffic in arms, ammunition and implements of war and other goods and materials related directly or indirectly for the purpose of supplying a military establishment. The explanation seems to explain invoking this section for the security of India in the time of war. But at a closer look at clause (b)(iii) we find that besides war it indicates ‘other emergency in international relations’ which has not been defined specifically. It is clear that 157A of the Act empowers the central government to suspend or even revoke patents in the security interest of India, which includes the “other emergencies in international relation. It could be argued that the scope of Section 157A does not cover situations like health emergencies and covers only the traditional notion of security  i.e. in the military context. However, as shown above, it is clear that the notion of security has expanded over a period of time and includes issues which pose threat to life and properties of people in a country, which do not necessarily emanate from military or war. [Editor’s note: Readers may also consider this argument in light of the recent post on Nationalism, Drugs and Public Interest].

Concluding thoughts

Since the IP concerns related to the present COVID-19 pandemic are not confined to a single patent but related to many patents,  the need to use a large number of patents by many actors without the permission of the patent holders can be effectively facilitated by invoking section 157A in comparison to provisions like compulsory or government use which has a wider scope and straightforward approach required in the present situation.

There may be a chance at being challenged at the WTO, especially on the scope of the term ‘other emergency in international relation’, however, this concern should not dissuade India from pushing forward its usage. Hence, Section 157A can prove to be an ideal way to expedite and access the required technologies and know-how to contain COVID-19.