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LAWASIA MOOT COMPETITION

2010

IN THE INTERNATIONAL COURT OF ARBITRATION

NEW DELHI, INDIA

GHC/GHC-MARU

Claimant

v

INTELLECTUAL PROPERTY DEPARTMENT

OF THE GOVERNMENT OF MARU

Respondent

MEMORIAL FOR THE RESPONDENT

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TABLE OF CONTENTS

STATEMENT OF JURISDICTION ................................................................................... IX

QUESTIONS PRESENTED .................................................................................................. X

STATEMENT OF FACTS ................................................................................................... XI

SUMMARY OF PLEADINGS ......................................................................................... XIV

PLEADINGS ............................................................................................................................ 1

I. THE ACTIONS OF THE INTELLECTUAL PROPERTY DEPARTMENT OF

MARU WAS VALID AND JUSTIFIABLE UNDER AGREEMENT ON TRADE-

RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS IN GENERAL

AND ARTICLE 31 ................................................................................................................... 1

A. The compulsory license for imports issued to Fizer is valid ........................................ 1

1. Maru did not need to obtain authorization from GHC/GHC-Maru as it faced a national

emergency, pursuant to TRIPS Article 31 ................................................................................. 1

2. The domestic supply requirement under Article 31(f) of TRIPS is no longer required

after 2001 ................................................................................................................................... 5

3. The scope and duration of the use of Miracle Cure produced by Fizer did not violate

TRIPS ......................................................................................................................................... 7

4. The legal validity of the compulsory license was subjected to and confirmed by an

independent judicial review of decision of the Maru domestic court ........................................ 8

5. Adequate remuneration had been paid to GHC/GHC-Maru............................................... 9

B. Release of test results and know-how protected is essential and practical ............... 10

II. ARTICLE 28 TRIPS DOES NOT REQUIRE MEMBERS TO RECOGNIZE ANY

INFRINGMENT BEYOND THE LITERAL TERMS OF A PATENT ........................... 11

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A. Textual analysis unambiguously excludes the obligation to recognize NLI ............. 11

B. Contextual analysis supports no obligation to recognize NLI.................................... 12

1. Article 1.1 TRIPS supports no obligation to recognize NLI ............................................ 12

2. Article 4bis of Paris Convention supports no obligation to recognize NLI ...................... 13

3. The principle of restrictive interpretation supports no obligation to recognize NLI ........ 13

C. Purposive analysis suggest no obligation to recognize NLI........................................ 14

1. The trade objectives of TRIPS do not support the obligation to recognize NLI .............. 15

2. The IPR objectives do not support the obligation to recognize NLI ................................ 15

D. Supplementary analysis suggest no obligation to recognize NLI .............................. 16

1. The circumstances of conclusion suggest no obligation to recognize NLI. ..................... 17

III. THE ACTION OF MARU PURSUANT TO THE IMPORT SCHEME IS VALID

AND JUSTIFABLE ............................................................................................................... 18

1. The Doha Declaration and Implementing Decision is non-binding ........................... 18

2. The Doha Declaration is non-binding, where there are no sanctions for breach .............. 18

3. The Implementing Decision is non-binding where there are no sanctions for breach ...... 18

B. Even if the Declaration and Decision are binding, Maru is in compliance ............... 19

1. Maru is an eligible importing country under the Decision ............................................... 19

2. Maru has complied with the trade diversion safeguards ................................................... 20

IV. REMEDIES ................................................................................................................... 21

A. No recommendation to be granted ............................................................................... 21

B. No compensation to be awarded ................................................................................... 21

V. CONCLUSION AND PRAYER FOR RELIEF .......................................................... 22

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INDEX OF AUTHORITIES

Books

Abbott, Legal Options for Implementing Paragraph 6 of the Ministerial Declaration on the

TRIPS Agreement and Public Health (2002)………………………………….7

Carvalho, The TRIPS Regime of Patent Rights (Kluwer Law, 2005)……………12, 13

Celentano, Beyrer, Public Health Aspects of HIV/AIDS in Low and Middle Income Countries:

Epidemiology, Prevention and Care (New York: Springer, 2008)....……..7

Correa and Yusuf, Intellectual Property and International Trade: The TRIPS Agreement

(Kluwer, Netherlands, 2008)…………………………………………….15

Correa, Trade Related Aspects of Intellectual Property Rights: A Commentary on the TRIPS

Agreement, (Oxford University Press, 2007)…………………………5, 12, 14

Fisher, Fundamental of Patent Law: Interpretation and Scope of Protection (Hart, Portland,

2007)…………………………………………………………………..16, 17

Gardiner, Treaty Interpretation (Oxford University Press, 2008)………………..12, 14

Gervais, D, The TRIPS Agreement: Drafting History and Analysis (Thomas Reuters, London

2008)………………………………………………………………………..17

Hestermeyer, H, Human Rights and the WTO: The Case of Patents and Access to Medicine

(Oxford University Press, 2007)…………………………………..18, 19, 20

Qureshi, Interpreting WTO Agreement: Problems and Perspectives (Cambridge University

Press, 2006)………………………………………………………………11

Yang, Mercurio, Li, WTO Dispute Settlement Understanding: A Detailed Interpretation

(Kluwer Law International, 2005)……………………………………10

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Journal Articles

Anderson, “We can Work it Out: Co-op Compulsory Licensing as the Way Forward in

Improving Access to Anti-viral drugs”, (2010) 16 Boston University Journal of Science and

Technology Law…………………………………………………………..1

Arup, “Pharmaceutical Patent Networks: Assessing the Influence of India’s Paragraph 3(D)”,

(2010) 1Intellectual Property Quarterly..........................................3

Calmy, Hirschel, Cooper, Carr, "A New Era of Antiretroviral Drug Toxicity”, (2009)

Antiviral Therapy, 14(2)……………………………………………………………….7

Cameron and Gray, “Principles of International Law in the WTO Dispute Settlement Body”,

50 International and Comparative Law Quarterly..…………………12, 13, 14

Charnovitz, “The Legal Status of the Doha Declaration” (2002) 2

JIEL……………………………………………………………………………….….18

Flaer, Benjamin, Bastos, Younis, “Health Care Policy and the HIV/AIDS Epidemic in the

Developing World, More Questions than Answers”, (2010) 36 Journal of Health Care

Finance (Aspen), No. 4…………………………………………………………..6

Frankel, “WTO Application of ‘the Customary Rules of Interpretation of Public International

Law’ to Intellectual Property” (2005) 46 Virginia Journal of International

Law.........................................................................................................13

Gopakumar, “The WTO Deal on Cheap Drugs: A Critique” 7 J World Intell Prop….20

Grace, “Equitable pricing of newer essential medicines for developing countries: Evidence

for the Potential of Different Mechanisms”, (2003), DFID Health Resource

Centre………………………………………………………………………………….1

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Kaiser Family Foundation, "The Role of Part D for People with HIV/AIDS: Coverage and

Cost of Antiretrovirals Under Medicare Drug Plans",(2006) Medicare Drug Benefit, Report

#7548………………………………………………………………….7

Love, “Compulsory Licensing: Models For State Practice In Developing Countries, Access to

Medicine and Compliance with the WTO TRIPS Accord: Prepared for the United Nations

Development Programme”, (2001) Consumer Project on

Technology..……………………………………………………………………………9

Petersmann, “Ten Years of the WTO Dispute Settlement System: Past Present and Future”

(1997) 3 Journal of International Law & Policy............................................12

Roumet, “Access to Patented Anti-HIV/AIDS Medicine: The South African Experience”,

(2010) 32(3) European Intellectual Property Review…………………..3

Shanker, “The Vienna Convention on the Law of Treaties, the Dispute Settlement System of

the WTO and the Doha Declaration on the TRIPS Agreement” (2002) 36 Journal of World

Trade……………………………………………………………….11

Tanner, “WTO TRIPS and its effect on the supply and development of medicines in China”,

Doctors and Society, (2006) 12 Hong Kong Medical Journal No. 1..……..…1

Taubman, “Rethinking Trips: 'Adequate Remuneration' for Non-Voluntary Patent Licensing”,

(2008) 11 The Journal of International Economic Law…………………..4

Tironi, “Pharmaceutical Pricing: A Review of Proposals to Improve Access and Affordability

of Prescription Drugs”, (2010) 19 Annals of Health Law……………....2

Vandoren and Van Eeckhaute, “The WTO Decision on Paragraph 6 of the Doha Declaration

on the TRIPS Agreement and Public Health – Making It Work” 6 J World Intell

Prop....................................................................................................................19

Weston R, “A Comparative Analysis of the Doctrine of Equivalents: Can European

Approaches solve an American Dilemma” (1998)39 IDEA……………………..15, 16

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Wu, “Raising the Right to Health Concerns Within the Framework of International

Intellectual Property Law”, (2010) 5 Asian Journal of WTO & International Health Law and

Policy……………………………………………………………….………..2

Yu, “The Objectives and Principles of the Trips Agreement”, (2009) 46 Harvard Law

Review..…………………………………………………………….…………….14, 15

International Jurisprudence

EC – Beef Hormones (AB Report)…………………………………………………..13

EC Measures Concerning Meat and Meat Products (Hormones) WT/DS26/AB/R,

WT/DS48/AB/R………………………………………………….……………………4

India – Patents (US) WT/DS50/AB/R………………………………………………...5

National Legislation

Brazilian Industrial Property Law (Law 9.279/96)……………………………………4

Treatises

Declaration on the TRIPS Agreement and Public Health, WTO Document

WT/MIN(01)/DEC/2…………………………………………………………………18

Dispute Settlement Understanding, WTO Doc. LT/UR/A-2/DS/U/1………………..21

Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public

Health, WTO Document WT/L/540…………………………………………..18

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Marrakesh Agreement Establishing the World Trade Organization 4 (1999), 1867 U.N.T.S.

154, 33 I.L.M. 1144 (1994)………………………………………………...18

Paris Convention for the Protection of Industrial Property 21 UST 1583, 828 UNTS

305.........................................................................................................…..…………13

Trade Related Aspects of Intellectual Property Rights……………...1, 2, 4, 5, 6, 10, 21

Vienna Convention on the Laws of Treaties 1155 U.N.T.S. 331 8 ILM 679 (1969); 63 AJIL

875 (1969)………………………………………………..…………………......3

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STATEMENT OF JURISDICTION

GHC/GHC-Maru has submitted the present dispute before this Court pursuant to the

“Understanding on Rules and Procedures Governing the Settlement of Dispute” of WTO

whereby GHC/GHC-Maru and Intellectual Property Department of the Government of Maru

(“IPD”) have accepted the jurisdiction of this Arbitral Tribunal under Arbitral Agreement to

resolve this dispute.

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QUESTIONS PRESENTED

I.

Whether the action of Intellectual Property Department of Maru was valid and justifiable

under TRIPS in general and Article 31 of TRIPS in particular.

II.

Whether failure to recognize any infringement beyond the literal terms of patent violates

Article 28 of TRIPS.

III.

Whether the action of Intellectual Property Department was valid and justificable as per

“Declaration on the TRIPS Agreement and Public Health (adopted on 14 November 2001)

and Implementation of Paragraph 6 of the Doha Declaration on the TRIPS and Public Health

(Decision of 30 August 2003).

IV.

If the actions of the Intellectual Property Department of Maru are not justified under (a)

and/or (b) and/or (c) then what remedies should be awarded to GHC/GHC-Maru.

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STATEMENT OF FACTS

Good Health Company (GHC)/GHC-Maru

Good Health Company (GHC) was a pharmaceutical company based in Hori which

later expanded and incorporated in Maru as GHC-Maru. A new manufacturing plant was

established by GHC-Maru in Maru subsequently.

Patents of Miracle Cure

In 2006, GHC developed a new drug known as “Miracle Cure” for the purpose of

treating flu viruses including human flu and bird flu. GHC obtained a numbers of patents for

the Miracle Cure covering its chemical composition, method of manufacture and method of

use. These patents were initially obtained in Hori and were subsequently patented in all

countries which, as Maru, were members of the Patent Cooperation Treaty.

Miracle Cure had only gone through laboratory testing stage at the time when the

patents were obtained. Clinical trial of the drug began in Maru after incorporation of GHC-

Maru during which each patient who participated in the clinical trial was rewarded US$20.

The trial was later reported to be successful.

“Killer Flu” Epidemic

At the end of year 2009, a disease struck Maru and the disease was later identified as

the “killer flu”. The outbreak led WHO to issue a travel advisory against travelling to Maru.

Since the economy of Maru relied mainly on tourism, attack of the killer flu and absence of

tourist affected the economy of Maru significantly.

The blood tests of patients showed that the “killer flu” was caused by a new strain of

virus which was a combination of bird flu and swine flu. Unlike regular flu medicine, the

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Miracle Cure produced positive response in treating the patients. It was however unknown to

many whether the effect was temporary.

The news nonetheless resulted in an increasing global demand of the Miracle Cure

and GHC-Maru was authorized by local authority to produce the drug for export. For the

purpose of ensuring sufficient local supply of the Miracle Cure, the Director of Intellectual

Property Department of Maru (the Director) invited a Porta-based pharmaceutical company

Fizer Pharma (Fizer) to produce Miracle Cure for export to Maru. Technical information of

the Miracle Cure was sent to Fizer by GHC-Maru under an order by the Director. There had

been no prior discussions between the Government of Maru and GHC-Maru before the

decisions were made.

Based on the estimated cost of production by GHC in Hori, the Intellectual Property

Department of Maru (“Maru”) agreed to pay, as compensation, GHC $20 per vaccine

produced by Fizer and delivered to Maru. This payment was to be indemnified by Fizer. It

was Fizer‟s understanding that the company would be entitled to export Miracle Cure to other

countries once the “killer flu” was under control in Maru.

GHC-Maru subsequently filed a formal protest with the Director against its decision

to authorize Fizer to produce Miracle Cure. After receiving a reply by the Director, GHC-

Maru brought an infringement action against the Government of Maru. Judgment was

rendered in favour of the Government of Maru. It was later alleged that the decision was

unsound as the presiding judge was a former classmate of the Chairman of Fizer.

Non-Literal Infringement

On the other hand, the Director contacted Better Life Pharmaceutical (BLP), a Ulka-

based pharmaceutical company, to distribute a drug called “Sure Cure”. “Sure Cure” was a

drug similar but not identical to the Miracle Cure and had been held, in the court of Hori, to

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have infringed the GHC Patent under the “doctrine of equivalents”. Upon commencement of

the exportation of Sure Cure to Maru, GHC sought a preliminary injunction in the Intellectual

Property Court of Maru and requested an immediate hearing. The application was however

denied as the courts of Maru had never recognized any form of non-literal infringement. The

Constitutional Court of Maru dismissed a subsequent writ of appeal without opinion.

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SUMMARY OF PLEADINGS

The actions of the Intellectual Property Department of Maru were valid and

unjustifiable.

The actions of the Intellectual Property Department of Maru was valid and justifiable

under AGREEMENT ON TRADE-RELATED ASPECTS OF INTELLECTUAL

PROPERTY RIGHTS IN GENERAL AND ARTICLE 31

Intellectual Property Department of Maru was not required to obtain prior

authorization from GHC/GHC-Maru as the State was free to interpret what constituted a

“national emergency”. The outbreak of “killer flu” in Maru was a “national emergency” and

was therefore within the scope of the conditions for waiving a requirement to obtain prior

authorization as stipulated in article 31(b) of TRIPS.

Also, the scope of licence was limited for the purpose of export of Miracle Cure to

Maru. Maru should not be held responsible for Fizer‟s misinterpretation of the license.

Finally, there was an independent review system regarding the granting of a

compulsory license in Maru. Compensation paid to GHC/GHC-Maru was also adequate as

evidenced by the judicial comments by the Court of Maru.

TRIPS ARTICLE 28 REQUIRES MEMBERS TO RECOGNIZE INFRINGEMENT

BEYOND THE LITERAL TERMS OF A PATENT

A literal interpretation of TRIPS Article 28 unambiguously excludes the obligation to

recognize non-literal infringement of patents (“NLI”). The provision only provides protection

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for products under “subject-matter”, and does not provide for “equivalents of subject-matter”.

Thus, members should not be imposed obligations not existing under TRIPS. A further

analysis based on the context, purpose and objects support an interpretation that does not

obliged members to recognize NLI.

Accordingly, as there is no obligation to recognize NLI under TRIPS, the Respondent does

not have any liability.

THE IMPORT SCHEME BREACHED THE DOHA DECLARATION AND

IMPLEMENTING DECISION, AND IS INVALID AND UNJUSTIFIABLE

Regarding the obligations of the Respondent to comply with the Doha Declaration

and the Implementing Decision, it is firstly submitted that the agreements are legally non-

binding, and thus compliance in voluntary. The Doha Declaration is non-binding, because it

expresses merely political goals, while the Implementing Decision is not a decision under the

WTO decision-making mechanism, and thus, is of no legal effect. Furthermore, even if it is

of legal effect, it is only binding for those that rely on the alleged waiver.

However, even if the agreements are binding on the Respondent, it is submitted that

the Respondent has fulfilled with such obligations. The Respondent is an eligible importing

country, and it has complied with the trade diversion safeguards under the Decision.

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PLEADINGS

I. The actions of the Intellectual Property Department of Maru was valid and

justifiable under AGREEMENT ON TRADE-RELATED ASPECTS OF

INTELLECTUAL PROPERTY RIGHTS IN GENERAL AND ARTICLE 31

A. The compulsory license for imports issued to Fizer is valid

The patentee‟s right of exclusion is limited through a device known as the

"compulsory license" – a government may grant the license to produce a patented product or

process without the consent of the patent owner, provided the owner receives an adequate

remuneration.1

1. Maru did not need to obtain authorization from GHC/GHC-Maru as it faced a national

emergency, pursuant to TRIPS Article 31

As a matter of law, Agreement on Trade-Related Aspects of Intellectual Property

Rights (“TRIPS”)2 Article 31 explicitly authorizes World Trade Organisation (“WTO”)

Member countries to provide for different forms of compulsory licenses, defined as

“authorization permitting a third party to make, use or sell a patented invention without the

patent owner‟s consent”3. Such licenses may be granted for reasons relating to public health,

emergency, lack of exploitation, refusal to deal, anticompetitive practices or other national

interests which allows a government to temporarily override a patent4.

1 Tanner, “WTO TRIPS and its effect on the supply and development of medicines in China”, Doctors and

Society, 2006 12 Hong Kong Medical Journal No.1, 84 – 86.

2 1869 UNTS 299; 33 ILM 1197 (1994).

3 Grace, “Equitable pricing of newer essential medicines for developing countries: Evidence for the Potential of

Different Mechanisms”, DFID Health Resource Centre, 2003, 38.

4 See also Anderson, “We can Work it Out: Co-op Compulsory Licensing as the Way Forward in Improving

Access to Anti-viral drugs”, 2010 16 Boston University Journal of Science and Technology Law, 167.

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While a WTO Member must normally negotiate with the patent holder for

authorization prior to issuing a compulsory license, that requirement is waived “in the case of

a national emergency or other circumstances of extreme urgency,”5 such as a public health

crisis.

There are four situations where prior authorization is not required: “national

emergency,” “other circumstances of extreme urgency,” and “public non-commercial use”

under Article 31(b), and to “remedy practice determined after judicial or administrative

process to be anti-competitive,” under Article 31(k).

By carefully consideration, Article 7, 8 and 31(b) have outlined the pre-conditions to

how Members should exercise flexibilities designed to balance intellectual property rights

with considerations of public interests such as public health. Members should design their

domestic laws to address both intellectual property interests and social and economic welfare

by balancing rights and obligations. Referring to Article 7, members may use flexibilities to

address public health events that adversely affect socio-economic sectors and Article 8

stipulates that in the event of a national emergency, a Member may authorize a license to a

third party to quell the emergency, as it may be needed “to prevent the abuse of intellectual

property rights by right holders”6 in order “to protect public health and nutrition”

7.

These conditions have been fulfilled by Maru facing an unprecedented public health

emergency, the “killer flu”.8 Moreover, the original inventor GHC-Maru is not totally

dispossessed. It may continue to manufacture as many Miracle Cure vaccines as it may

please, either for local consumption or for export.

5 TRIPS Article 31(b).

6 See also Tironi, “Pharmaceutical Pricing: A Review of Proposals to Improve Access and Affordability of

Prescription Drugs”, 2010 19 Annals of Health Law, Loyola University Chicago School of Law, 311.

7 TRIPS Article 8.1.

8 See also Wu, “Raising the Right to Health Concerns Within the Framework of International Intellectual

Property Law”, 2010 5 Asian Journal of WTO & International Health Law and Policy, 141.

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Members have the discretion to define and determined the grounds of “national

emergency”, “circumstances of extreme urgency” and “public non-commercial use”9 that

necessitates compulsory licenses to be granted without prior negotiations with the patent

holder, given by the “flexibilities” in Paragraph 5 of the Declaration. The “killer flu” in

Maru was completely novel and cannot be a previously known event10

. It was a disease

unknown at that time and later blood tests showed a new strain of virus which was

combination of bird flu and swine flu. The compulsory license was issued due to an

overriding public interest - a situation of necessity where rapid action was required, such as

the case of an epidemic as the “killer flu”.11

Paragraph 5(c) of the Doha Declaration12

also includes a presumption: “it being

understood that public health crises, including those relating to HIV/AIDS, tuberculosis,

malaria and other epidemics, can represent a national emergency or other circumstances of

extreme urgency”. It can therefore be inferred that the “killer flu” should be categorized as

“emergency” as it is not restricted to only a short-term problem, but a long-lasting situation,

as are the cases with the epidemics specifically mentioned for illustrative purposes under the

authoritative source of the Declaration. The reference made to HIV/AIDS13

etc. demonstrate

that a recurrent “killer flu” should be classified as an “emergency”.

The ambiguity in the provision is whether a Member may waive the authorization

requirement when the public health crisis is taking place in a third country. In dealing with

9 Declaration on the TRIPS Agreement and Public Health, (“the Declaration” or “Doha Declaration”) WTO

Document WT/MIN(01)/DEC/2 (“the Declaration” or “Doha Declaration”) ¶ 3-5, VCLT Article 31.3(a).

10 See also Arup, “Pharmaceutical Patent Networks: Assessing the Influence of India‟s Paragraph 3(D)”, 2010

1Intellectual Property Quarterly, 15-43.

11 Negotiating Group on TRIPS, including Trade in Counterfeit Goods, Meeting of Negotiating Group of 12-14

July 1989, Note by the Secretariat, GATT document MTN.GNG/NG11/14 (12 September 1989) 2 (Swiss

delegation). 12

Declaration on the TRIPS Agreement and Public Health, (“the Declaration” or “Doha Declaration”) WTO

Document WT/MIN(01)/DEC/2

13 See also Roumet, “Access to Patented Anti-HIV/AIDS Medicine: The South African Experience”, 2010 32(3)

European Intellectual Property Review, 137-141.

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interpretation of treaties, the principle of in dubio mitius as a supplementary means of

interpretation 'in deference to the sovereignty of states'14

has been applied, which stipulates

that '[i]f the meaning of a term is ambiguous, that meaning is to be preferred which is less

onerous to the party assuming an obligation.”15

Therefore Maru submits that in this case of

ambiguity, the meaning that is more favourable to the Government of Maru, meaning it is

permissible under TRIPS to waive the prior authorization requirement in a third country

should prevail.

In the unlikely event of this “killer flu” not categorized as an “emergency” under the

meaning of the Declaration, a country is free to implement a legislation to grant compulsory

license upon "lack of local manufacturing" as in the case of Brazil in 2001. (The "Brazilian

model" is a developing world government using all means available to provide ARV drugs

for all its citizens with HIV/AIDS under Article 68 of the Brazilian Industrial Property Law16

which permitted the granting of a compulsory license when there is a lack of local

manufacturing of the patented product.) As a result, it is still open for Maru to grant a

compulsory licence where there is a lack of local production, provided that Maru has

incorporated a national legislation and seeked to boost its sufficient local production of

“Miracle Cure”.

It would be consistent with the TRIPS principles and subsequent agreements to

interpret the provision to allow Fizer in Porta exporting under the Decision to a developing

country experiencing a national emergency to waive the authorization requirement.17

14

Taubman, “Rethinking Trips: 'Adequate Remuneration' for Non-Voluntary Patent Licensing”, 2008 11 The

Journal of International Economic Law, Oxford University, 13.

15 Appellate Body Report, EC Measures Concerning Meat and Meat Products (Hormones) WT/DS26/AB/R,

WT/DS48/AB/R, 16 January 1998. 16

Brazilian Industrial Property Law (Law 9.279/96).

17 TRIPS Article 8.1; The Declaration, ¶ 4-5, (“The TRIPS Agreement does not and should not prevent

Members from taking measures to protect public health… Accordingly, … [it] should be interpreted and

implemented in a manner supportive of WTO Members' right to protect public health and, in particular, to

promote access to medicines for all.”).

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Furthermore, Member countries shall have the ability to implement the Agreement in a way

that protects the public health.18

It is submitted that the Tribunal “must not add to or

diminish rights and obligations provided in the WTO Agreement.”19

In this case, TRIPS must

be understood to allow Maru to grant a licence for the manufacture of Miracle Cure in this

event of a national emergency taking place in Maru. Therefore, it was reasonable to waive the

prior authorization requirement.

Moreover, the Decision articulates the requirements for a Member country to grant a

compulsory licence to manufacture and export a patented pharmaceutical product to a

developing Member state. The text of the Decision does not require the manufacturing

Member to seek a voluntary licence in order to manufacture and export the pharmaceutical in

the case of a national emergency. Therefore, it should be assumed that the manufacturing

Member may waive the requirement of prior authorization as articulated in Article 31(b).

Except a required by Article 31(b), there is no obligation to notify the patent owner

about the intention to grant a compulsory license and the conditions thereof.20

2. The domestic supply requirement under Article 31(f) of TRIPS is no longer required

after 2001

A valid compulsory license for imports had been issued to Fizer‟s facility in Porta as a

result of the national health emergency. The production by Fizer is predominantly for the

supply of domestic market in Maru, complying with Article 31(f) - combating domestic

“killer flu”. One limitation on the grant of a compulsory licence to use patented material

without prior authorization of the patent holder is that the licence must be primarily for the

18

TRIPS Articles 7 and 8, preamble; see also the Declaration, ¶ 4-5.

19 See India – Patents (US) WT/DS50/AB/R ¶. 46-48 (discussing DSU Articles 3.2 and 19.2).

20 Correa, Trade Related Aspects of Intellectual Property Rights: A Commentary on the TRIPS Agreement,

(Oxford University Press) 329.

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supply of the Member granting the licence.21

A major revision was provided in the 2001

Doha Ministerial Conference, which made it possible for countries unable to manufacture

pharmaceuticals to import cheaper generic copies, which explicitly alters Article 31(f) to

permit a waiver of this requirement only when the requirements of the Decision are met.22

Another state issuing compulsory license to export which was previously in breach of (f) is

now possible after 2001, and it is assisting Maru in reasonable fear of GHC‟s inability to

produce sufficient medicine in time.

At issue in this case are two provisions, Articles 31(b) and (f). In light of the

objectives and purposes of the treaty23

and subsequent agreements entered into by the

parties24

, Maru was permitted to waive the prior authorization requirement because the public

health crisis in Maru constituted “public health emergency” and Maru was not bound by the

domestic supply requirement because that provision was amended by the Decision.

The closest case for such a situation is the granting to a company in a foreign country

of a compulsory license for importing generic drugs is the "Brazilian model" in which the

government used all means available to provide ARV drugs for all its citizens with

HIV/AIDS. The basis of this model includes negotiating with the pharmaceutical

corporations over patent rights and importation of copied drugs from the Far East.25

For

Brazil‟s case, copying ARV drugs under compulsory licensing and importing ARV drugs

manufactured in highly competitive third world developing countries such as Thailand, India,

and China, has in turn resulted in lowered prices and increased availability of the drugs to

21

TRIPS Article 31(f)/ 22

The Decision, ¶ 2.

23 Declaration ¶ 5(a); VCLT Article 31.3; TRIPS Articles 7-8; see also India – Patents (US), AB Report, ¶ 55.

24 Declaration, ¶. 3-5; VCLT Article 31.3(a) (calling for consideration of any “subsequent agreement between

the parties regarding the interpretation of the treaty or the application of its provisions”); see also James Thuo

Gathii, The Legal Status of the Doha Declaration at 300 (finding that the Declaration has status of a

“subsequent agreement between the parties” under the VCLT). 25

Flaer, Benjamin, Bastos, Younis, “Health Care Policy and the HIV/AIDS Epidemic in the Developing World,

More Questions than Answers”, 2010 36 Journal of Health Care Finance (Aspen), No. 4 JHTHCF 75.

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affected populations.26

Besides the model it advocates, Brazil sponsored a resolution that

placed access to ARV medications as a fundamental human right in the context of previous

UN declarations of "health care for all."27

There are human rights implications in intellectual

property protection and following the Doha Declaration on the TRIPS Agreement and Public

Health that developing countries such as Maru “would take steps to protect and advance their

essential interests.”28

In Brazil, although use of ARV/HAART resulted in moderately

decreased rates of transmission, it significantly lowered both morbidity and mortality of

HIV/AIDS.29

The Brazil‟s model has been proven successful as it has led to great reduction in

prices on patented ARV medications from the international pharmaceutical companies in the

face of patent-breaking in the market economies of the developing world. It is submitted that

Maru is setting a good example in the region for another successful model of providing cheap

access to life-saving medicine.

3. The scope and duration of the use of Miracle Cure produced by Fizer did not violate

TRIPS

The compulsory license issued to Fizer‟s facility in Porta as a result of the national

health emergency is limited in terms of scope and duration in compliance with Article 31(c).

It has been understood by Maru that the scope of use of all technology involved in the

production of Miracle Cure is only limited to this single occasion of “killer flu” period which

26

Ibid.

27 Celentano, Beyrer, Public Health Aspects of HIV/AIDS in Low and Middle Income Countries: Epidemiology,

Prevention and Care, Chapters 8, 9, and 29 (Springer, 2008). 28

Abbott, “Legal Options for Implementing Paragraph 6 of the Ministerial Declaration on the TRIPS

Agreement and Public Health”, Summary of Oral Presentation at Quaker United Nations Office(QUNO)-

Norway Ministry of Foreign Affairs Meeting at Utstein Monastery, Norway, 2002. 29

Kaiser Family Foundation, "The Role of Part D for People with HIV/AIDS: Coverage and Cost of

Antiretrovirals Under Medicare Drug Plans", Medicare Drug Benefit, Report #7548, 2006; See also Calmy, A,

Hirschel, B, Cooper, DA, Carr, A, "A New Era of Antiretroviral Drug Toxicity," Antiviral Therapy, 14(2): 165-

179 (2009).

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started at the end of 2009 and will cease once the killer flu died down in the foreseeable

future. The compulsory license issued to Fizer was meant to produce sufficient Miracle Cure

for export to Maru, and once the “killer flu” was under control in Maru, Fizer would no

longer be entitled to produce it for further distribution and use in Porta or any other country.

Fizer‟s understanding of the license was obviously flawed and not in agreement with what

was put down in the license. The Director of Intellectual Property Department did not

authorize any continued production of Miracle Cure. Even if Fizer‟s plan of drug production

is unlimited in scope and duration, Maru is not to be legally responsible for that. For further

dispute, this is to be another matter to be referred for arbitration between the two relevant

parties.

Article 31(f) stipulated that the “competent authorities shall have the authority to

refuse termination of authorization if and when the conditions which led to such authorization

are likely to recur” and in Article 31(g), “authorization for such use shall be liable, subject to

adequate protection of the legitimate interests of the persons so authorized, to be terminated if

and when the circumstances which led to it cease to exist and are unlikely to recur.”

At present, the “killer flu” situation may have temporarily stabilized but is far from

being stamped out. The situation leading to the issuance of the compulsory license is thus

likely to recur, and therefore the license was not unduly unlimited and is permissible under

Article 31(f) and (g).

4. The legal validity of the compulsory license was subjected to and confirmed by an

independent judicial review of decision of the Maru domestic court

After a protest to the Director of Intellectual Property Department, an infringement

action was brought by GHC-Maru against the Government of Maru for infringing its patent

rights, which was adjudicated by an independent justice system in the democratic system

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within Maru. The fact that the presiding judge went to the same law school with the

Chairman of Fizer and that they probably could have known each other in person beforehand

(the Claimant fails to provide evidence as such) hardly suggests any forms of injustice or

prejudice, either directly or indirectly, as the Applicant fails raise any proof confirming any

conflict of interest therein. Fairness was definitely not affected in the transparent judicial

review process of the legal validity of the compulsory license.

5. Adequate remuneration had been paid to GHC/GHC-Maru

Article 31 paragraph (h) stipulates that “the right holder shall be paid adequate

remuneration”. It has been submitted that the amount cannot be construed on a „profits lost‟

basis, otherwise high royalty payments would mean there is no price reduction and hence no

expansion of drug availability.

The Respondent contacted the Claimant to pay compensation of $20 per vaccine, the

cost of production in Hori, an economic giant presumably having higher production costs,

which seems a more than reasonable commercial terms, fully complying with paragraph (b)

of Article 31.

Considerable room is left for interpretation at the national level of what remuneration

is deemed to be “adequate”. It must be determined in each individual case, taking into

account the circumstances of the licensee and of the market where it operates, as well as the

purpose of the license. It is clear that countries have considerable discretion in setting

compensation. Article 1 of the TRIPS lays down that countries "shall be free to determine

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the appropriate method of implementing the provisions of this Agreement within their own

legal system and practice."30

B. Release of test results and know-how protected is essential and practical

Test results, know-how and clinical trial results are protected separately from the

patented drug under TRIPS Article 39 (3), which stipulates that “members, when requiring,

as a condition of approving the marketing of pharmaceutical or of agricultural chemical

products which utilize new chemical entities, the submission of undisclosed test or other data,

the origination of which involves a considerable effort, shall protect such data against unfair

commercial use. In addition, members shall protect such data against disclosure, except

where necessary to protect the public, or unless steps are taken to ensure that the data are

protected against unfair commercial use.”

GHC-Maru, in its bid to raise prices in hope of huge profits at critical times of health

crisis, has acted inequitably in public interest. The State of Maru, as a responsible

government, placed public interest as prime priority. Managing for GHC-Maru to hand over

all technologies involved including test results and know-how are indispensable for boosting

production volume by Fizer to promote public health. It is impractical, if not possible, to

keep up with the demand of Miracle Cure without these crucial information holding the key

of administration of this particular drug, for instance noting the important side effects.

Additionally, GHC set up its manufacturing and research base in the state of Maru

and promised to do everything for the people of Maru for this valuable business opportunity

in the region. Clinical trials of the new Miracle Cure were principally conducted on older

30

See also Love, “Compulsory Licensing: Models For State Practice In Developing Countries, Access to

Medicine and Compliance with the WTO TRIPS Accord: Prepared for the United Nations Development

Programme”, Consumer Project on Technology, 2001.

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adults and babies of the half a million Maru people and on adults for US$20. It is equitable,

therefore, for GHC to pass over the technical know-how to save lives of Maru people or at

least, temporarily control the further spread of the “killer flu” within Maru and to

neighbouring countries.

II. ARTICLE 28 TRIPS DOES NOT REQUIRE MEMBERS TO RECOGNIZE

ANY INFRINGMENT BEYOND THE LITERAL TERMS OF A PATENT

A proper interpretation of Article 28 TRIPS, taking account of the text, context,

objects and purposes31

, demonstrates that there is no obligation for members to extend

protection of patents to non-literal infringement (“NLI”). Accordingly, Maru‟s refusal to

recognize non-literal infringement of patents by “Sure Cure” does not violate its international

obligations under TRIPS.

A. Textual analysis unambiguously excludes the obligation to recognize NLI

Extensive jurisprudence of the WTO recognizes the need to first determine the

ordinary meaning of the text, prior to other methods.32

Article 28 TRIPS stipulates only for

rights in relations to the “subject-matter” of “product” and “process”. It does not provide for

rights in relations to the “equivalents of product” or “equivalents of process”. WTO

Appellate Body has recognized that “principles of interpretation neither require nor condone

the imputation into a treaty of words that are not there or the importation into a treaty of

concepts that were not intended”. Accordingly, the ordinary meaning unambiguously

excludes the obligation to recognize NLI. In the absence of ambiguity, the strict literal

interpretation should be adopted.

31

DSU, Article 3.2.

32 Qureshi, Interpreting WTO Agreement: Problems and Perspectives (Cambridge University Press 2006), 8;

Shanker The Vienna Convention on the Law of Treaties, the Dispute Settlement System of the WTO and the

Doha Declaration on the TRIPS Agreement (2002) 36 Journal of World Trade 721, 725.

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In the current case, TRIPS only require Maru to grant exclusive rights for the product

of “Miracle Cure”, and does not oblige Maru to grant exclusive rights over the equivalents of

“Miracle Cure”. Therefore the refusal to recognize that “Sure Cure” infringed “Miracle Cure”

does not violate Maru‟s obligation under TRIPS.33

B. Contextual analysis supports no obligation to recognize NLI

A contextual analysis of the provision reveals that there is no obligation to recognize

NLI. Article 31.1 VCLT requires a treaty to be interpreted in accordance with its context,

purpose, and objects.34

1. Article 1.1 TRIPS supports no obligation to recognize NLI

Article 28 TRIPS should be read together with Article 1.1 TRIPS, which provides that

members shall not be required to implement more extensive protection than required, and that

members shall be free to determine the method of implementing the obligations under

TRIPS.35

Article 28 TRIPS does not mention any obligations regarding non-literal

infringements of patents. Thus, any interpretation requiring the recognition of non-literal

infringements will be protection more extensive than required by TRIPS, violating Article 1.1.

Moreover, the current issue is regarding “method of implementation”, which is an

area determined by each member. TRIPS only provides the general framework for patent

standards.36

In relations to Article 28, it mandates the protection of products and process, and

33

Moot Problem ¶17.

34 Gardiner, Treaty Interpretation (Oxford University Press 2008), 141; Petersmann, “Ten Years of the WTO

Dispute Settlement System: Past Present and Future” 3 Journal of International Law & Policy 1:1, 1:11.

35 Correa, Trade Related Aspects of Intellectual Property Rights: A Commentary on the TRIPS Agreement (OUP

2007).

36 Cameron and Gray, Principles of International Law in the WTO Dispute Settlement Body, 50 International

and Comparative Law Quarterly 248, 260; Petersmann, supra n34, 1:11.

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the rights to make, use, offer to sale, sale, and import.37

The issue of non-literal infringement

relates to the judicial process for the determination of patent infringement. Different

processes, based on the different legal system, are allowed. For Maru, similar to the position

in the United Kingdom, there is a legal tradition to follow a strict literal interpretation, which

is different from the legal traditions in Continental Europe or United States.

2. Article 4bis of Paris Convention supports no obligation to recognize NLI

Article 2.1 TRIPS incorporates the Paris Convention38

into Part II, III, and IV of

TRIPS. Under Article 4bis of Paris Convention, the principle of independence stipulates that

patents in various countries are independent of each other.39

The grant or refusal of a patent

in one country does not oblige another country to do the same. Similarly, the recognition of a

patent infringement in one country does not oblige another country to also recognize

infringement.40

In the current case, the main crux of the Claimant‟s argument is that due to the

recognition of infringement in Hori, Maru is also obliged to also recognize an infringement.

However, this argument is against the doctrine of independence enshrined in the Paris

Convention, which maintains and recognizes the difference in domestic law on these issues.

TRIPS adopts the doctrine of independence in relations to patents, and with the determination

of patent infringement, TRIPS does not create any new obligations.

3. The principle of restrictive interpretation supports no obligation to recognize NLI

37

Carvalho, The TRIPS Regime of Patent Rights (Kluwer Law 2005), 165.

38 Paris Convention for the Protection of Industrial Property, 828 UNTS 305, hereinafter “Paris Convention”.

39 Carvalho, supra n37, 74

40 Frankel, WTO Application of ‘the Customary Rules of Interpretation of Public International Law’ to

Intellectual Property (2005) 46 Virginia Journal of International Law 365, 402.

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WTO jurisprudence has recognized the principle of in dubio mitius as a relevant tool

of interpretation.41

This doctrine has been applied by WTO Appellate Body (“AB”)42

and is

sanctioned by Article 31.3(c) VCLT, which provides that interpretation may be based on

“any relevant rules of international law applicable in the relations between the parties”. The

principle provides that when a term is ambiguous, the contracting states are assumed to have

undertaken the term that is the least onerous or imposes the fewest restrictions.43

The

application of such rule in the WTO context is supported by AB in EC – Beef Hormones.44

In

the current case, if the textual meaning is ambiguous, the interpretation preferred, based on in

dubio mitius, would be one that required states to only afford protection against literal

infringements of patents, and not the more onerous non-literal infringements of patents. This

principle is based on the assumption that sovereign states intended to concede the least

amount of sovereignty.45

In the current case, even if the provision is found to be ambiguous, the interpretation

that should be adopted is one that imposes the least onerous obligations. Accordingly, the

provision only requires states to protect literal infringements of patents.

C. Purposive analysis suggest no obligation to recognize NLI

Article 31.1 VCLT provides interpretation of a treaty “in the light of its object and

purpose”. The purpose of TRIPS is to promote trade, as stipulated in the preamble, and to

41

Cameron, supra n36, 258-260.

42 EC – Beef Hormones (AB Report), WT/DS321/AB/R.

43 Gardiner, Treaty Interpretation (OUP 2008), 60-62, 349-350.

44 Larouer, “In the Name of Sovereignty? The Battle over In Dubio Mitius inside and outside the Court”

<http://scholarship.law.cornell.edu/lps clacp/22>.

45 Cameron , supra n41, 258-260.

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promote technological innovation and transfer, as stipulate in Article 7.46

A proper

interpretation requires accounting of both objectives, which suggests that TRIPS requires the

recognition of and protection against NLI.47

The context of the provision suggests that there is no obligation for members to

recognize non-literal infringements; however, members do have the right to include

appropriate IPR measures in addition to the TRIPS measures.

1. The trade objectives of TRIPS do not support the obligation to recognize NLI

The preamble states the goal of TRIPS is to reduce distortions and impediments to

international trade, and also ensure that IPRs do not become barriers to legitimate trade.48

The trade objectives support that TRIPS intervene in the national patent regime in

order “to reduce distortions and impediments to international trade”. Thus, in cases where

there is a distortion in trade, TRIPS should not intervene in the domestic patent regime.

Furthermore, the use of the word “reduce”, instead of “eliminate”, means that TRIPS did not

intend to intervene in every trade distortion, but only intervene in cases of severe trade

distortion. Due to its limited application, the existence of equivalents do not severely disrupt

a market, or distort trade49

; and therefore, do not warrant any interference by TRIPS, such as

obliging members to recognize NLI.

2. The IPR objectives do not support the obligation to recognize NLI

46

Yu, The Objectives and Principles of the Trips Agreement, 46 HLR 979, 1000.

47 Correa, supra Error! Bookmark not defined., 1.

48 TRIPS, First Paragraph of Preamble; Correa,and Yusuf, Intellectual Property and International Trade: The

TRIPS Agreement (Kluwer 2008)

49 Weston, A Comparative Analysis of the Doctrine of Equivalents: Can European Approaches solve an

American Dilemma 39 IDEA 35, 35.

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The IPR objectives of TRIPS are provided in Article 7 TRIPS, which aims to strike a

balance between technological innovation and transfer, for the benefit of both producers and

users. 50

In the current case, the recognition of non-literal infringements may be detrimental to

technological transfer, and excessively in favour of patent-owners. The doctrine of

equivalents severally restricts technological transfer. The recognition of NLI would be the

prohibition of incremental improvements to existing inventions, which would excessively

limit technological transfer. The effect of this is especially detrimental in countries with less

sophisticated economy, where technological innovation is done incremental step-by-step

improvement of existing technologies.

Furthermore, recognition of NLI increases uncertainty and costs.51

A non-literary

approach increases the uncertainty, because one has to examine the specific “inventive

concept” of a patent, or to determine whether the product is equivalent. Uncertainty will

encourage excessive litigation, as seen in the United States, which increases the costs.52

The

uncertainty and cost is neither beneficial for producers and users. Accordingly, the

recognition of NLI is inconsistent with the IPR objectives of TRIPS.

D. Supplementary analysis suggest no obligation to recognize NLI

Under Article 32 VCLT, supplementary rules of interpretation may be used when the

treaty, after a contextual analysis, continues to be ambiguous, or is manifestly unreasonable.

Supplementary rules include recourse to preparatory work and concluding circumstances of

the treaty.

50

Yu, supra n16, 1000.

51 Fisher, Fundamental of Patent Law: Interpretation and Scope of Protection (Hart 2007), 119-134.

52 Weston, supra n49, 35.

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1. The circumstances of conclusion suggest no obligation to recognize NLI.

The circumstances of conclusion gives strong support that there was no intention for

TRIPS to require a doctrine of equivalents. During the negotiation of Article 28 (then Article

31), the contentious issue was regarding the recognition of process patents and also the

specific acts protected. Aside from these two issues, there was negligible negotiation on other

issues, reflecting an understanding that the above two issues were the only new obligations

arising from Article 28.

Furthermore, in the negotiations, Switzerland, Japan, United States and the European

Communities were the members most active in seeking a regime most protective patent

rights.53

However, of the four, Japan and certain countries of the European Communities did

not recognize the doctrine of equivalents. Japan only recognizes the doctrine of equivalents

after the conclusion of TRIPS, in 1998 through a court decision54

, while the United Kingdom

and Ireland still rejects the doctrine of equivalents55

. As there was no negotiation for Japan,

Ireland or the UK to adopt the doctrine of equivalents, it seems implausible that there was an

agreement, even among developed countries, for the obligation to recognize NLI.56

53

Gervais, The TRIPS Agreement: Drafting History and Analysis (Thomas Reuters 2008), 12-27.

54 Fisher, supra n51, 279.

55 Fisher, supra n51, 378.

56 Gervais, supra n53, 12-27.

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III. THE ACTION OF MARU PURSUANT TO THE IMPORT SCHEME IS

VALID AND JUSTIFABLE

The action of Maru pursuant to the import scheme is valid and justifiable, because the

obligations under Doha Declaration and Implementing Decision are non-binding, as they do

not following the decision-making process under the WTO Agreement57

. Moreover, even if

the obligations are binding, Maru has complied with such obligations.

1. The Doha Declaration and Implementing Decision is non-binding

2. The Doha Declaration is non-binding, where there are no sanctions for breach

The Doha Declaration is devoid of any legal value, and compliance is voluntary. The

document is named “Declaration”, which suggests it is not a legally binding document. 58

This can be contrasted to other documents passed by the same Ministerial Conference named

“Decisions”.59

Furthermore, the Declaration does not comply with the decision-making

mechanism under the WTO Agreement60

. Under Article IX:2 of the WTO Agreement, the

Decision cannot constitute as an Authoritative Interpretation, as it does not invoke Article

IX:2 in the text as its basis, nor follow the procedures under Article IX:2.61

3. The Implementing Decision is non-binding where there are no sanctions for breach

57

Marrakesh Agreement Establishing the World Trade Organization 4 (1999), 1867 U.N.T.S. 154, 33 I.L.M.

1144 (1994), hereinafter “WTO Agreement”.

58 Hestermeyer, Human Rights and the WTO: The Case of Patents and Access to Medicine (OUP 2007), 279;

Charnovitz, “The Legal Status of the Doha Declaration” (2002) 2 JIEL 207, 208.

59 Charnovitz, supra n58, 210.

60 Hestermeyer, supra n58, 276; WTO Agreement, Articles IX:1, IX:2, 1X:3, and X.

61 Hestermeyer, supra n58, 280.

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The legal standing of the Implementing Decision is questionable, as it does not

comply with the decision-making mechanism under the WTO Agreement. The Decision does

not explicitly mention that it is a wavier constituted under Article IX:3, and it does not follow

the procedures established under Article IX:3. Furthermore, the Decision does not provide for

a definitive termination date, which is necessary for waivers, as it is an interim solution.

Accordingly, if the Decision is of no legal standing, any action in violation of it is valid and

unjustifiable. In such a scenario, Maru‟s action under the import scheme remains valid, as

Maru‟s action has not directly breach Article 31(f) or Article 31(h), and does not need to rely

on the purported waiver established by the Decision.

B. Even if the Declaration and Decision are binding, Maru is in compliance

1. Maru is an eligible importing country under the Decision

The Decision on Implementation stipulates that only an “eligible importing member”

may benefit from an import scheme of pharmaceutical products produced under a

compulsory licence.62

Under the Annex of the Decision, an “eligible importing member”

shall be either (i) least-developed countries, (ii) countries with no manufacturing capacity in

the pharmaceutical sector, or (iii) countries with some manufacturing capacity, but excluding

the capacity owned or controlled by the patent-owner, has insufficient capacity to meet its

needs.63

Maru is a small country with a population of half a million. It does not possess a very

highly-developed economy, and is reliant on tourism, tourist-related services, and retail

services. Its economy and population is comparable to Solomon Island or the Maldives,

62

Hestermeyer, supra n58, 264.

63 Vandoren, P and Van Eeckhaute J, “The WTO Decision on Paragraph 6 of the Doha Declaration on te TRIPS

Agreement and Public Health – Making It Work” 2006 6 Journal World Intellectual Property 779, 780.

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which are recognized by WTO as least-developed countries.64

Accordingly, Maru is a least-

developed country, and it is an eligible importing country, which does not need to make a

notification under Article 1(b).

2. Maru has complied with the trade diversion safeguards

The Decision requires members to adopt safeguards against trade diversion.65

Article

4 of the Decision specifically requires members to “take reasonable measures... to prevent re-

exportation of the products that have actually been imported into their territories under the

system”. The wording used in the provision clearly implies that there is no obligation

regarding products that have not been imported into their territories.

In the current case, with regards to the products initially produced, which were

imported into Maru for the use for the “killer flu” epidemic emergency that existed then,

there is no evidence to suggest that there were systematic re-exportation or diversion. With

regards to the products subsequently produced, which were distributed in Porta and nearby

countries, there is no obligation for Maru to prevent the diversion of such products. The

products were never imported into Maru, but were produced in Porta, and directly exported

into other countries. The obligation to prevent trade diversion, if existent, lies with Porta and

the nearby countries.

64

Hestermeyer, supra n58, 265.

65 Gopakumar, “The WTO Deal on Cheap Drugs: A Critique”, 7 Journal of World Intellectual Property 99, 107.

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IV. REMEDIES

The Respondent is the following opinion on remedies.

A. No recommendation to be granted

In sum, there should not be any remedies available to the Claimant due to the lack of

wrongdoing by the Respondent.

Regarding the first issue, the Claimant submits that compulsory is validly granted.

Regarding the second issue, the Claimant submits that TRIPS does not require the

recognition of NLI. However, even if recognition is obligatory, it submits that it had no

power to determine the domestic laws regarding NLI, which are determined by the legislature

and the judiciary.

Regarding the third issue, the Claimant submits that the Doha Declaration and the

Implementing Decision is not binding. However, even if the obligations are binding, it

submits that it is in compliance with the obligations under the two agreements.

B. No compensation to be awarded

Furthermore, even if the Respondent is held to be in breach of any articles of TRIPS,

no compensation should be given to Claimant. Compensation and suspension of concessions

or other obligations are only available in the event that the recommendations and rulings by

the Tribunal are not implemented by the Member concerned within a reasonable period of

time66

. WTO Dispute Settlement Understanding (“DSU”)67

guarantees that members have a

reasonable time to bring its non-conforming into compliance. In the current case, such

opportunity has not yet been granted, and thus, no compensation should be awarded.

66

TRIPS Article 22(1).

67 Dispute Settlement Understanding, WTO Doc. LT/UR/A-2/DS/U/1.

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V. CONCLUSION AND PRAYER FOR RELIEF

On the basis of the foregoing facts and points of law, Maru respectfully requests this

Honourable Court to adjudge and declare that all declarations sought by the Respondents be

granted.