Second Reading Speech on Patents (Amendment) Bill 2008 by Senior Minister Assoc Prof Ho Peng Kee

25 AUG 2008

25 Aug 2008 Posted in Parliamentary speeches and responses

Mr Speaker, Sir, I beg to move that the Bill now be read a second time.

  1. The Bill amends the Patents Act to give effect to the Protocol adopted by the World Trade Organisation to amend Article 31 of the Trade-Related Aspects of Intellectual Property Rights or TRIPS Agreement to facilitate greater access to patented pharmaceutical products in public health emergencies. The Bill also amends the Patents Act to align it with the Competition Act.

Amendments Related to the TRIPS Protocol

  1. Article 31 of the TRIPS Agreement covers compulsory licensing or the use of patents by third parties without the authorisation of the right holders. Under it, WTO member countries can issue compulsory licences for the domestic production of patented pharmaceutical products predominantly to supply their own domestic market to address public health emergencies. When this happens, the volume available for export will be affected. WTO members countries with insufficient or no domestic pharmaceutical manufacturing capacity cannot make effective use of Article 31 and the amount they can import from those member countries with manufacturing capacity will be limited.
  1. Hence, in August 2003, the WTO General Council decided to ‘waive’ the export limitation in Article 31 to allow member countries to manufacture patented pharmaceutical products under compulsory licence for export to countries in need under certain conditions. The Protocol is to formally incorporate this ‘waiver’ into the TRIPS Agreement.
  1. The system put in place by the TRIPS Protocol can increase Singapore’s access to medicines in situations of national emergency. For us to import medicines under the system, we need to amend our Patents Act to give effect to our obligations under the TRIPS Protocol.
  1. Section 56 of the Patents Act currently allows the Government or any party it authorises to use a patented invention without infringing the patent under limited circumstances, such as for or during a national emergency or other circumstances of extreme urgency. Clause 4 of the Bill amends Section 56 to add that this includes the import of patented pharmaceutical products, if the relevant notification has been given to the TRIPS Council.
  1. Further, we need to put in place safeguards to ensure that the rights to import patented pharmaceutical products manufactured under compulsory licence are not abused for commercial profit, and that patent holders are remunerated accordingly for the use of their patents. Thus, Clause 5 of the Bill amends Section 60 to prohibit the re-export of patented pharmaceutical products imported into Singapore under the TRIPS system. Clause 7 amends Section 66 to prohibit patented pharmaceutical products produced under compulsory licence for another country from being diverted into Singapore through parallel import. Finally, Clause 6 of the Bill amends Section 62 to clarify that patent holders will not be remunerated if they have already received or will receive remuneration for the use of their patents in the exporting country, as provided for under the TRIPS Protocol.

Amendments to Align the Patents Act with the Competition Act

  1. Sir, the Bill also seeks to align the Patents Act with the Competition Act.
  1. The Patents Act, which was enacted in 1995, currently bans certain types of agreements involving patented inventions that were believed in the past to be inherently anti-competitive. Specifically, Section 51 bans agreements that require or tie the licensee to procure something else in addition to the patented product from the patent holder, thus allowing a patent holder to unfairly extend his monopoly rights to an unrelated product. Section 52 bans agreements that require a patent licensee to continue to pay patent royalties after expiry of the patent, thereby effectively extending the life of the patent.
  1. In reality, these agreements may not always be anti-competitive. For example, “tying” arrangements may not be anti-competitive if there are alternative products on the market that serve the same purpose as the patented product. Also, agreements that require a patent licensee to pay royalties after the expiry of the patent may not amount to an abuse of monopoly rights by the patent owner since licensees may, for commercial reasons, prefer to distribute the royalties payable over a longer time period.
  1. Thus, with the enactment of the Competition Act in 2005, such agreements are more appropriately dealt with under competition law. As there could be agreements that have been entered into on the basis of the law as set out in Sections 51 and 52, Clause 3 of the Bill inserts a new Section 50A in the Patents Act to restrict the application of Sections 51 and 52 to those agreements made before the commencement of the new Section 50A. Agreements made after that will thus come entirely under the purview of the Competition Act. This will give businesses greater flexibility in structuring new commercial agreements and put Singapore on par with jurisdictions such as the UK and US, where such agreements are regulated by competition law.

Conclusion

  1. To sum up, this Bill would bring our patents regime into alignment with our obligations under the TRIPS Protocol and enable Singapore to import patented pharmaceutical products made under compulsory licence, to cope with public health emergencies. The Bill will also align our patents regime with our competition regime. Consultations by IPOS indicate that the proposed changes are welcomed and supported by stakeholders in Singapore.
  1. Sir, I beg to move.

Last updated on 26 Nov 2012