PATENTS (COMPULSORY LICENSING) BILL

Order for Second Reading read.

5.49 p.m.

The Minister for Law and National Development (Mr E. W. Barker): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The law in force at present in Singapore relating to patents is contained in the Registration of United Kingdom Patents Ordinance (Cap. 181) which provides for the registration in Singapore of patents granted in the United Kingdom. Such registration confers privileges and rights relating to the invention similar in all respects to those conferred by the issue of the patent in the United Kingdom. There are, however, no provisions in our Ordinance to require patentees to work their inventions in Singapore. There are also no provisions empowering the Registrar of Patents in Singapore to grant compulsory licences for the making, using, exercising and vending of patented inventions in Singapore. The result is that owners of patents registered in Singapore have in most cases not bothered to work their inventions in Singapore. This is particularly evident in the field of patented medicines and drugs.

The demand for patented medicines in Singapore, therefore, can only be met by importation which has caused a substantial loss in foreign exchange. An analysis of major patented pharmaceutical products purchased by private consumers shows that there would be a saving in foreign exchange of about $2 million per year if local manufacturers are permitted to manufacture patented drugs. Important drugs, which if manufactured in Singapore can be made available at lower costs, are being imported and sold to local consumers at higher prices. In order to make available such drugs to the public at reasonable prices and in order to develop our pharmaceutical industry, a system of compulsory licensing is urgently required.

A compulsory licence is an authorisation given by a competent authority to a person other than the owner of the patent to make, sell, use and exercise the patented product even though the beneficiary of the compulsory licence has no authorisation from the owner of the patent. Although the laws of many countries provide for compulsory licences, in actual fact, the number of cases in which these provisions have been invoked are relatively few. This is no indication that the system of compulsory licences has not attained the main objective for which it was created. This objective is to cause the working of the patented invention in the country. If the owner of a patent does not work his invention or hesitates to grant contractual licences on reasonable terms, the mere fact that the law empowers the granting of compulsory licences for the manufacture of his invention will usually induce him to grant licences by contract on reasonable terms.

Mr Speaker, Sir, this Bill in clauses 3 and 5 empowers the Registrar of Patents to grant compulsory licences in respect of the making, using, exercising and vending of patented inventions concerned with food or medicine or a surgical or curative device and also on certain grounds - in respect of classes of inventions listed in the Schedule to the Bill. Clause 5 however provides that the Registrar shall not grant a licence in respect of a patented food, medicine or surgical or curative device if the patentee satisfies him that he has already established or is about to establish an industry in Singapore for the making of such food, medicine or surgical or curative device.

The Registrar is empowered in clause 7 to revoke a patent under certain circumstances two years after he has granted a licence to manufacture in Singapore the invention to which the patent relates. These provisions are necessary to encourage the commercial working of recent inventions in Singapore and will benefit our industrialisation programme. The Minister will have power to add to the list in the said Schedule as and when required.

In clause 10, the Registrar is empowered, where the patentee and the licensee are unable to agree on the amount of the royalty or compensation, to determine the amount of royalty or compensation payable to the patentee under a compulsory licence but such royalty or compensation shall not exceed ten per cent of the net ex-factory sale price in bulk of the patented article.

The Bill also provides that the rights conferred by a patent shall not be deemed to be infringed by the making, importation or obtaining by or on behalf of the Government of any patented medicine or drug for distribution or use in any dispensary, hospital or other medical institution maintained by or on behalf of the Government or otherwise specified by the Minister by notification in the Gazette. The patentee shall be notified by the Government as soon as practicable of such making or user and in default of any agreement between the patentee and the Government, the Registrar may determine the amount of royalty or compensation payable to the patentee, but such royalty or compensation shall not exceed five per cent of the net ex-factory sale price in bulk of the patented article.

An appeal lies against any decision of the Registrar to an Appeal Tribunal to be presided over by a Judge of the High Court.

Mr Speaker, Sir, I must emphasise that it is not the purpose of this Bill to deprive any person of his rights under a patent. Its main aim is to secure that inventions whose exploitation would be of economic benefit to Singapore are commercially worked locally.

Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. -[Mr Barker].

Bill considered in Committee; reported without amendment; read a Third time and passed.