In assessing the potential impact that treating intellectual property (IP) as an investment asset can have on the IP policy space available to states, it is essential to draw a distinction between the rules governing the expropriation of investment assets and the rules relating to the fair and equitable treatment (FET) of investments. This distinction is necessary because, in some investment agreements, measures relating to IP are excluded from the scope of the rules on expropriation, whereas there is usually no such exclusion of IP from the scope of the FET standard. Moreover, the FET standard can be described as a standard whose content and scope is ambiguous, thus making it a potentially useful tool in the hands of an investor seeking to challenge an IP measure adopted by a state. This chapter therefore seeks to examine the potential impact that the FET standard can have on the IP policy space available to states. Using the two recent decisions of investment tribunals in the cases of Philip Morris v Uruguay and Eli Lilly v Canada as case studies, the chapter will critically examine the extent to which a claim based on a denial of FET can narrow down the policy space available to states to design their national IP laws in a way that suits their level of development and societal needs.
Bayer Corporation & Anr v Union of India & Ors, Special Leave to Appeal (C) No(s) 30145/2014
Emmanuel Kolawole Oke
In November 2014, the scope of the regulatory review exemption contained in section 107A(a) of the Indian Patents Act was considered by the Delhi High Court in the case of Bayer Corporation v Union of India. In this case, which is a sequel to the compulsory licence that was earlier granted to Natco in respect of Bayer's patented drug in 2012, Natco sought to export 1 kilogramme of the patented active pharmaceutical ingredient to a company in China. Bayer contended that this was in breach of the terms of the compulsory licence and equally outside the scope of section 107A(a). Natco however argued for a broader interpretation of section 107A(a) in a manner that will permit the exportation of patented active pharmaceutical ingredients to producers of generic drugs solely for the purposes of generating information required for obtaining regulatory approval. In accepting Natco's broader interpretation of section 107A(a), the Delhi High Court incorporated a model of human rights into its decision by being mindful of the implications that a restrictive interpretation of section 107A(a) could have on the production of cheaper generic drugs and access to medicines. This decision reinforces India's crucial position as the ‘pharmacy of the developing world’.