PATENTS (AMENDMENT) BILL

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PATENTS (AMENDMENT) BILL: Order for Second Reading read.

The Senior Minister of State for Law (Assoc. Prof. Ho Peng Kee): Mdm Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Overview of the Bill

Madam, this Bill amends the Patents Act to strengthen our patent regime. The changes will encourage innovation and research activities in Singapore. In particular, they will support the growth of the pharmaceutical and biomedical industries. As the Minister has said earlier, many of the amendments are a result of consultations with patent professionals stretching over two years. Several of the amendments are also an outcome of the USSFTA.

Key features of the amendments

Let me highlight the key amendments in the Bill.

Patent term extension

Clause 9 provides for an extension of the patent term to compensate for delays. These delays may occur either in the process of obtaining a patent grant or, in the case of a pharmaceutical product, in the process of obtaining marketing approval. Getting a patent grant can be a lengthy process. Patent offices have to conduct rigorous examinations on the invention, to determine if it is patentable. A delay in the grant of a patent can affect a company's ability to enforce its rights in any event of infringement. Applicants should not be prejudiced for delays arising from the patent office's processes. For this reason, should there by an undue delay on the part of the patent offices, we will compensate the patent owner by extending the term of protection correspondingly.

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Section 36A(1)(c) further recognises that a patent term for a pharmaceutical product can be curtailed if there were unreasonable delays in the granting of marketing approval by the relevant authority. While the pharmaceutical product may have been granted a patent, the owner can only market the product in Singapore after the Health Sciences Authority (HSA) has granted approval for the sale of the product in Singapore.

Madam, the drug discovery process is a high-risk and costly venture for pharmaceutical companies. I am told that in the United States, it takes US$400 million to bring a drug to market. Pharmaceutical companies depend very heavily on patent protection to recoup the investment and R&D costs involved in developing new drugs. Unreasonable curtailment of the protection period will have significant impact on the company's business viability, as it will have a shorter period of market exclusivity.

Just as we should not prejudice an applicant for undue delays in the granting of a patent, we should likewise not prejudice applicants if there were unreasonable delays in the marketing approval process caused by HSA. We want to assure the pharmaceutical industry that the patent period available to them in Singapore would not be unfairly shortened. Already, countries such as Australia, Japan and the United States provide for patent term extensions arising from delays in marketing approvals.

Let me say that these amendments do not imply that IPOS or HSA have been tardy in their processes. Rather, countries with advanced patent systems have chosen to set out the expected standards in the laws. We too want to reflect the standards in our law, and thereby reassure patent owners that in

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the event of an unreasonable delay, they will not be disadvantaged in Singapore.

Parallel importation of pharmaceutical products

We have proposed two other refinements to the patent system in clause 20 of the Bill, to take into account the unique nature of the pharmaceutical industry.

The first is set out in the new section 66(2A). Under this new section, a patent owner will have a right to bring an action to stop a parallel importer from importing the patent owner's patented pharmaceutical product, if the product has not previously been sold or distributed in Singapore. However, once the owner brings in the patented product, the right to bring action ceases, and he will be subject to the same competitive pressures from parallel imports. This is a delicate balance we have sought to preserve between the interests of the patent owner and the interests of users of pharmaceutical products. Essentially, the patent owner has a "first mover advantage" in the Singapore market, but once he is in, will have to compete with the parallel importers.

Madam, in drafting this amendment, we have given special consideration to ensure that no Singaporean would be denied adequate medical care as a result of this new right. Under new section 66(2)(i), a patented pharmaceutical product which is needed for the treatment of a specific patient in Singapore may, with HSA's approval, be imported specifically for use by that patient, even if the patent owner has not brought the pharmaceutical product into Singapore.

"Bolar" provision

The second refinement is the introduction of what is commonly known as a "Bolar" provision. The new sub-

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section 66(2h) allows a generic drug producer to carry out activities covered by a patent without the consent of the patent owner, provided the activities are carried out to support an application to HSA for marketing approval for a pharmaceutical product. This will facilitate the manufacture, sale and distribution of generic versions of patented drugs immediately after the patents for those drugs which have expired, something that would benefit consumers.

The "Bolar" provision is not a new concept. In balancing the interests of right holders and the needs of users, the "Bolar" provision serves as a useful counterbalance to the Patent Term Extension. It originated from the United States, and has been incorporated into the patent legislation in countries such as Canada and Australia. With the introduction of this provision into our patent legislation, Singapore consumers too will be able to gain access to generic versions of a drug, as soon as the patent expires.

Compulsory licences and Government use

Next, let me turn to clause 13, which seeks to amend the conditions of a grant and use of compulsory licences under section 55 of the Patents Act. Currently, we have in place several grounds which a party can rely on, to apply to the courts for a compulsory licence. To give patent owners greater control over their rights, we have narrowed the grounds for granting a compulsory licence to one specific situation, which is to remedy an anti-competitive practice.

In addition, we are proposing to restrict Government's use of patented inventions, without prior consent, to situations involving national emergency, extreme urgency or public non-commercial use. Clause 14 amends section 56 to give effect to this, with consequential

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amendments being made to clauses 11, 12, 15 to 19.

Exclusive licensee's right to initiate patent infringement proceedings

Madam, clause 22 amends section 74 to allow an exclusive licensee to bring an infringement action in his own name without involving the patent owner. This is a similar provision as the Minister has explained for the Trade Marks (Amendment) Bill.

Improving the patent administration process

Mdm Deputy Speaker, we are also amending our search and examination and patent grant processes to make it more efficient and cost-effective.

A key feature of this modified procedure is a two-track system. It reflects the growing diversity and needs of businesses in Singapore and our commitment to ensure a nimble patents system to meet these needs. We recognise that some companies are anxious to obtain their patents quickly, while others prefer more time to think through their business strategies before they commit funds to obtain patent protection. The two-track system will introduce a default "fast track", which allows the patent applicant an accelerated application process so that he can obtain his patent as quickly as possible. Alternatively, the patent applicant can choose the second "slow track", where he will have more time to work out his marketing plans and decide on his patent strategy. Overall, this new system will provide greater flexibility and lead to potential cost savings for the applicants.

This and other amendments that modify the procedural requirements and improve the quality of our patents have been worked out over the past two years in consultation with patent professionals,

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and will lead to a more business-friendly regime.

Conclusion

Madam, to conclude, these amendments will provide a system of protection comparable to those in the most advanced countries in the area of IP. Overall, the amendments have been designed to give patent owners greater certainty and incentive to innovate. Consumers will also benefit, as new products are introduced in the market.

Madam, I beg to move.

Question proposed.

Assoc. Prof. Chin Tet Yung: Mdm Deputy Speaker, patents are of course an important source of protecting intellectual property rights. While in the past this has been restricted to new inventions, such as devices, machines and the like, protection has now been extended, particularly in the United States, to software. And the line between copyright law and patent law is blurring.

But in Singapore, we have only, a few years ago, started our own patent office and legislated our first patent law. Now I understand that we have to extend or improve it because of the pharmaceutical industry and also because of FTA obligations.

I fully support these amendments but would just like to know why is it necessary to finetune the patent system at this time when the patent system is really at its infancy, and we are hardly able to train the appropriate counsel and other practitioners in patent filing and processing. What steps are taken to ensure that we make it simpler for our professionals in the patenting field to work given all these new amendments?

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Assoc. Prof. Ho Peng Kee: Madam, I thank Prof. Chin for supporting the Bill. Indeed, Prof. Chin is correct. Patent is an important component of the IP regime that encourages research and innovation in Singapore. And this is borne out by the number of patents that has been filed which, in fact, has quadrupled from about 1,008 in 1994 to more than 8,000 last year. This is largely also because of the strong patent regime and other IP regimes that we have introduced in Singapore.

Actually, it has been about 8-9 years since the patent regime was introduced because the Patents Act was enacted in 1995. There have not been major amendments to the Act. Therefore, this is, in a sense, the first major slew of changes basically to improve its workings.

I want to assure Prof. Chin - as we have said before, and the Minister has explained the process - that there have been much consultations and, in particular, in terms of the process, for example, the introduction of the dual-track system is something that will inject much flexibility which patent owners, and even the players in the industry, will welcome.

IPOS has been very active in terms of reaching out to the industry and working with them, eg, the IP Academy has been running a lot of seminars. I am sure in this same vein, they will reach out to the industry, all the players, including the lawyers who practise patent law and the patent agents who have to do the technical specifications, to ensure that these changes will add value to the system, so that there will be more inventions that will be registered both here in Singapore as well as by Singapore entities elsewhere. I am confident that these amendments will be a big plus which the industry players have all worked together, and IPOS will continue to lead in ensuring that the amendments will be understood and properly applied.

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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. - [Assoc. Prof. Ho Peng Kee].

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