CONQUEST BY PATENT : THE PARIS CONVENTION REVISITED

Author(s): Rajeev Dhavan, Lindsay Harris and Gopal Jain

Source: Journal of the Indian Law Institute , April-June 1990, Vol. 32, No. 2 (April-
June 1990), pp. 131-178
Published by: Indian Law Institute

Stable URL: https://www.jstor.org/stable/43953176

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 JOURNAL OF THE INDIAN LAW INSTITUTE

Volume 32 APRIL- JUNE Number 2

CONQUEST BY PATENT : THE PARIS CONVENTION REVISITED

Rajeev Dhavan *, Lindsay Harris ** and Gopal Jain***

I Introduction

THE HISTORY of the West in the East has largely been the history of
repeated attempts to capture world markets as areas of exclusive domain.
In its expansion, the West has used many techniques. Sometimes it has
simply arbitrarily divided the world into exclusive zones of trade, influence
and empire. Bloody wars have been fought to retain these zones of
influence. Sometimes special agreements have been forged between power-
ful and, often, unsuspecting weaker nations. But, increasing industrialis-
ation and greater competition amongst nations has led to the creation of
many ingenious techniques to divide the world into exclusive industrial
and import monopolies. This paper will discuss the historical evolution
of one particular technique - the use of international patent law under the
Paris Convention for the Protection of Industrial Property of 1883.
The Paris Convention was engineered in the later half of the nineteenth
century by the industrialised nations for the ostensible purpose of protec-
ting industrial property on international level. Its true object, however,
was to secure import monopolies for the producer nations of the West in
order to satisfy the needs of an expanding capitalism. Although the con-
vention's stated goal was equal protection of industrial property in the
markets of member nations, its unstated premise was unequal production
of such property among the countries of the world. This condition - the
unequal division of the world into producer and non-producer nations -
was necessary to the achievement of the Union's true objective, viz ., the
capture of foreign import monopolies for the citizens of imperial producer
nations.

Accordingly, the convention allows a foreigner to obtain a patent mono-

poly with absolutely no concomitant obligation to produce the patented
article or even to ensure its supply in the patent-granting country. This
practice - obtaining patents in order to capture import markets rather than
to manufacture locally - has the effect of retarding the industrial develop-
ment of the importing country, since the foreign monopoly grant effectively

*M.A. (Cantab.), B.A. LL.B. (Alld.), Ph.D. (London), Advocate and Bar-at-Law.
Honorary Professor, Indian Law Institute, New Delhi.
**B.A. (Stanford), J.S.D. (Stanford).
***B.A. (Del.), presently student, Lincoln's College, Oxford.

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132 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. ^2 s 2

blocks domestic producers. It also has the effect of restricting

among imports, thereby worsening the terms of trade for th
country. By keeping market nations in perpetual servitud
monopolies, the system has the ultimate effect of preventing t
mation of dependent economies into productive ones.
The problem of foreigners obtaining patents in order to cap
monopolies rather than to exploit inventions locally has been - and
the focal point of struggle under the convention. Indeed, as
eighteenth century, many countries had enacted compulsory
quirements in response to this problem.1 Even Great Britain,
a period of decline at the turn of the century, introduced a b
for sanctions to deal with the problem of non-working of pa
ments made by members of parliament during discussion of t
foreshadowed today's debate:

Nothing can be more absurd or outrageous than that a

patentee can come here and get a patent and use it, not
purpose of encouraging the industries of this country
prevent our people doing what they otherwise would do. T
our laws to be used to give preference to foreigners is to m
ridiculous.2

The struggle over import monopolies in the Paris Convention

been confined to article 5 of the convention, which governs the e
of patents.3 Indeed, it has been remarked that the history o
the history of the Paris Convention.4
The import monopoly principle - the central feature of the con
is embodied in article 5(1), which prohibits countries from revoki
on the ground that the patented articles are being imported
locally manufactured. Other provisions of article 5 furth
ability of member nations to ensure that patents are worked local
The other principle features of the convention include arti
provides for industrial property "in the broadest sense" ; articles

1. The French Law of 1791 provided for compulsory working of paten

See , WIPO, "Licences of Right", PR/S/1, 8 (1976).
2. Id. at 9 (quoting Sir Robert Reid).
3. For an analysis of the convention as a struggle between social and priv
namely, see, U. Anderfelt, International Patent Legislation and Developing
(1971). See also, C. Akerman, V Obligation d' exploiter la license Obligat
de Srevet d' invention 150-53 (1936) (arguing that heightened awareness
oppsed to private interests has had a significant influence on the conven
4. See, Akerman, supra note 3 at 57 ("One could say that the history
in a certain sense, the history of the Union itself") (translated from Fr
S.P. Ladas, The International Protection of Industrial Property 327 (1930

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 1990] CONQUEST BY PATENT 1 33

principle of national treatment, which proh

tic law between foreign and national patent
which allows patentees who have filed in o
rity period in which to file similar applicat
which prohibits the denial of a patent on th
patented article is subject to restriction
finally, article 5 quater , which provides fo
by a patented process.
Examination of the debates that preced
have animated its subsequent revision re
been deeply troubled by the import mon
Paris Union. Indeed, what is striking upo
has changed ; though over one hundred y
creation, the terms of the debates then and
Although today there exists a more sop
theories of economic development, the d
countries have always worried about t
convention and its tendency to favour t
nations.

Although the main issue - the problem of foreign import monopolies -

is deceptively simple, two factors have contributed to its obfuscation. First
is the appropriation by big business of the language of individual rights,
so that the regulation of the patentee is consistantly framed as an issue of
individual rights versus state power. Naturally, the West has championed
the rights of the "individual" in this contest. Never mind the fact that,
even one hundred years ago, the patentee was most likely not a lone inventor
with a kite and a key, but a large corporate enterprise. The use of such
rhetoric by big business formed part of a larger process in the late nineteenth
century by which corporations managed to define themselves as "indi-
viduals" under the law. This process - the systematic appropriation by
big business of the language of individual rights, with all its attendant
imagery of the lone inventor entitled to just compensation for his creative
efforts - is the mechanism by which corporate greed has been veiled and
legitimated.

Further, the individual versus state dichotomy has also functioned to

obscure the more salient tension which exists on the international level
between developed and developing countries.
A second factor contributing to the obfuscation of the issues is the utter
obscurity of the language of the Paris Convention itself. It is a highly
deceptive piece of legislation, slyly taking with its right hand what it appears
to give with its left. For example, article 5 is often characterised as a piece
of permissive legislation, granting member states authority to regulate paten-
tees. In fact, it is just the opposite. Though the language of article 5(2)
would suggest otherwise, the provision as a whole represents an emascula-
tion rather than an empowerment of member states. Other provisions of

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134 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 32 : 2

the text are rife with ambiguities, susceptible of widely ranging inte
tions. Developing countries are thus correct to remain skeptical o
document, despite assurances to the contrary by those who woul
persuade.
This paper traces the historical evolution of the Paris Convention and
its subsequent revisions, focussing primarily on the debates surrounding
article 5. At the outset, five general trends may be observed: First, as
stressed above, countries have, since the Union's inception, been concerned
with the problem of foreign import monopolies. This concern has mani-
fested itself in struggles over article 5. Second, shifting patterns of solici-
tude for "patentee's rights" by countries depending on tbeir particular
economic situation indicate a pragmatic rather than a principled approach,
that is, a country's solicitude for "individual rights" often corresponds with
its economic interests. This is unexceptional except for the fact that the
rhetoric obfuscates the contradiction between staunch defense of mono-
poly principles abroad, and well-developed anti-trust principles at home.
Third, on the whole, the convention has evolved towards greater protection
for the patentee and less regulatory authority for the member states, despite
a contrary trend in the domestic legislation of many countries.5 Fourth,
developing country membership is of comparatively recent origin, which
means that developing countries as such had little part in determining the
principles on which the convention is based.6 Finally, the convention
has been characterised by a marked absence of attempts to properly
examine where the public interest lies; or how the gifts of technology can
be developed outside the market principle; or how the market principle
itself should be modified.

n Development of international system

(1) Vienna Exhibition of 1873

By the end of the eighteenth century, patent laws had become a common
feature in the domestic legislation of many - though not all - industrialised
countries. Two notable exceptions were the Netherlands and Switzerland,
who had no patent systems from 1869-1912, and from 1850-1907 res-
pectively. These exceptions are often ignored by proponents of the patent
system, who argue that patent protection is necessary to industrialization -
as evinced by the historical experience of leading industrial nations.
Never mind the fact no relationship has been demonstrated between the
presence of patent laws and the rate of economic development of a country,
the argument is a historical when used to persuade today's developing

5. See, The International Patent as an Instrument of Policy for National Development

UNCTAD, 1D/B/C6/AC.2/3 at 28 (1927).
6. See, UNCTAD : The Role of the Patent system in the Transfer of Technology to
Developing Countries 35 (New York) United Nations, 1975.

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1990] CONQUEST BY PATENT 135

countries to adopt such a system.7 F

evolved in response to the specific ec
existed in the advanced capitalist coun
designed to serve other interests and oth
different needs of today's developing
such arguments continue to be urged
the blithe claim that "if it worked for u
With the advent of international tra
lain that exclusive national patent legi
could imitate with impunity their pr
markets. Claiming that inventors sh
national borders, several countries be
minimum rules to ensure patent p
real objective, of course, was to secure
and the patent, with the exclusive
mechanism by which this would be ac
The catalyst for the first internationa
protection was the Vienna Exhibition
to exhibit their products, fearing th
opportunity for foreign imitators to
products. In response to this concern
to host the first international conferen
the nature of the problem, at least from

We live no longer in the day of ind

confined to and removed from forei
communication prevents or delays t
live at a time of liberal customs po
newly united once isolated seats of i
and the mutual exchange of goods s
a generation ago one could not have
conditions the patent granted for an
comes in fact a restriction unprofita
invention without limitation or inc
adjoining country common propert
country must work with auxiliary ma
fore dearer in price, will suffer an
same material is produced in the ot
restriction but with a damaging co
nuance of hitherto antagonistic view
conduce to the preservation of general
patent protection were maintained

7. Anderfelt, supra note 3 at 65. See also, Sc

Patents 34, 102 (1971) (arguing that these la
either the Netherlands or Switzerland).

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136 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 32 : 2

thereby skilled operatives from another, then the danger of distur-

bance of the international industrial balance might readily be met
by the common action of all civilized states, disposed to the maintenance
of patent protection .8

A few phrases of this passage merit translation. First , 4 'the preservation

of general harmony" can be taken to mean "the satisfaction of imperia
desires". Second , the concern with "disturbance of the industrial
imbalance" is most ironic in light of the fact that what was actually sought
was not a balance but an imbalance : an international system unequally
divided between producer and non-producer nations, in which the former
could dominate the markets of the latter. Finally , to whom did the phrase
"civilised states" refer? Did it mean that only imperial states were invited
to participate in the formation of an international system and that these
would speak on behalf of their empires ? (Indeed, Tunisia was an original
signatory to the Paris Convention in 1883 due to adherence on her behalf
by France). Or, did it mean that only states "disposed to the maintenance
of patent protection" were "civilised"? Or, perhaps these amounted to
one and the same? Was, then, the capture of "primitive" markets by
"civilised" nations to be one more instance of the white man's burden?
At the Vienna Conference of 1873, much of the debate centred on the
various justifications for the patent institution. Two competing rationales
were invoked - one stressing the natural property rights of the individual
in his invention, and the other stressing the interests of society.9 The
former theory had its roots in the eighteenth century concept of the natural
right to private property, which was thought to be an aspect of natural
justice. Proponents of this theory held that "[t]he patentee receives
nothing from the law that he did not have before. The only effect of the
patent is to restrain others from encroaching upon the private property
rights of the patentee - property which is his by the highest possible title
of natural right."10 Although today the form in which this argument is
expressed is less convincing, the philosophy of individual property rights
has had an important hand in shaping the contours of the convention.
In contrast, the latter theory stressed the interests of society in stimulating
invention and economic development as the primary justification for the
patent system, the premise being that without the monopoly grant indi-
viduals would have less incentive to invest, and, presumably, their business
patrons to invest.

8. (Emphasis added). Kronstein and Till, "A Re-evaluation of the International Patent
Convention", 12 Law and Contemporary Problems 768 (1947). The United States seems
to have spearheaded the movement for an international conference.
9. For the view that the history of the patent doctrine is essentially the story of the
interplay between the interests of society and those of the individual, see, Anderfelt, supra
note 3 at 35.
10. B.G. Fox, Monopolies and Patents : A Study of the History and Future of the Patent
Monopoly 203 (1947).

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1990] CONQUEST BY PATENT 137

The former vision was manifested at the convention in a resolution

passed in recognition of the patentee's natural right to protection.11 The
latter vision was manifested in a resolution favouring compulsory licensing
of patents when in the public interest. This resolution attempted to strike
a balance between the rights of the inventor and the need to protect society
from the consequences of use, abuse, and non-use. But concern was
diverted only to non-use as an adverse consequence. Questions of adverse
use or abuse remain obscured today. However, ultimately the Paris Con-
vention rejected even the small concession of compulsory licensing and its
use was not to be introduced again until the Hague Revision Conference
of 1925.

A connected proposal to curb patent non-use was the sanction of

revocation for non-working. Again, the dialogue was framed as an issue
of individual (patentee) interests versus those of society. Concluding that
revocation of the patent for non-working would be too burdensome on the
patentee, the Vienna Conference recommended that non-working of the
patent in one country should not lead to revocation as long as the patent
was being worked in another membei country and the citizens of the country
at issue could obtain licenses.12

(2) The Paris Exhibition of 1878

The Vienna Conference had resulted in a committee that recommended
to the French government that further discussion*» take place. In res-
ponse, the French government convened a Congress to discuss international
patent matters at the Paris Exhibition of 1878.
Once again, the conflict between the social utility theory of patents and
the individual rights theory, in the limited sense in which we have described
them earlier, occupied center stage. The discussions at this conference
largely bore the imprint of the French patent doctrine, which was allegedly
based on the natural property theory of patents.13 Despite opposition
from several countries, the convention explicitly adopted the natural pro-
perty theory of patents as its stated rationale for the institution of patents.14
Indeed, the influence of this theory remains dominant in the convention
today.
In apparent contradiction to this stated rationale, however, the Con-
gress also passed a resolution permitting revocation of patent grants in cases

11. See, E.T. Penrose, The Economics of the International Patent System 50-51 (1951).
12. See, Anderfelt, supra note 3 at 67.
13. French patent law, having been strongly influenced by the natural law philosophy
of the eighteenth century, was based on the notion that the inventor has a natural and
absolute property right in his invention. Certain features of the French patent law, how-
ever, contradicted its self-proclaimed rationale. For example, under the law the patentee
was required to exploit his patent. Such a requirement clearly limits the property rights
of the inventor in order to promote the interests of society. See, Neumeyer, "Compulsory
Licensing of Patents under some Non- American Systems", Study No. 19 (1959).
14. See, Penrose, supra notę 11 at 50-51.

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1 38 JOURNAL OP TttE INDIAN LA W INSTITUTE [Vol. 32 : 1

where the patents were not being exploited locally. This resolution
ted at least a limited vision of patents that valued social utility abov
vidual property rights. It can be seen as a concession to decency an
attempt to provide a defence against the most obvious charges of ex
tion. Related to the issue of local working of patents was that of i
tation of patented articles. The two issues have to be seen together
a deferred compulsory licence, and, in the extreme case, revocatio
been conceded, the serious business of protecting monopolies w
compromisingly stated, admitting no exceptions whatsoever. In a
highly controversial resolution, the Paris Conference of 1878 state
countries should not be allowed to prohibit the importation of pat
articles. This resolution was directed against the national patent le
tion of many countries, which at that time prohibited the importa
patented articles. This resolution was especially targeted at France,
legislation prohibited importation on the grounds that "the exclusiv
that is granted to a patentee can only be legitimately recognized on
tion that he effectively works his invention and that it is thus made to
the country in which he has obtained his patent."15
In response to such laws, the Paris Congress of 1878 drafted wha
to become article 5(1) of the convention of 1883. Despite strong op
tion from participants who felt that inventors should be required t
their inventions in the patent-granting country, the resolution was pass
The resolution, stating that the importation of patented products w
to be prohibited, has undergone only slight revisions since its
drafting.

(3) The Paris Conference of 1880

The text of what was to become the Paris Union of 1883 was drafted at
the Paris Conference of 1880.17 Discussion at this conference once again
centered on the issue of compulsory working clauses and compulsory licen-
sing. Arguments against compulsory working clauses have traditionally
rested on two grounds: first, that such requirements are too burdensome
on the patentee and constitute an interference with his property rights.
The second argument, based on "invisible hand" notions, asserts that the
market, rather than the state, should determine whether local production

15. Id. at 75 (quoting a French report). Again ,this statement reveals the inconsistency
of the French Patent Act, which purported to be based on notions of absolute property
rights, but in fact sought to promote industrial development.
16. See, Anderfelt, supra note 3 at 67-68.
17. The following nineteen countries were present at the Paris Conference of 1880 :
Argentina, Austria - Hungary, Belgium, Brazil, France, Great Britain, Guatemala, Italy,
Luxemburg, the Netherlands, Portugal, Russia, El Salvador, Sweden, Norway - Switzerland,
Turkey, United States, Uruguay and Venezuela. See, Actes de la Conference de Paris
1890, 6-7.

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1990] CONQUEST BY PATENT 139

should be undertaken.18 What was overloo

asserted - was that patents prevented rather t
the invisible hand (by stifling competition
recognised at home, the tremendous doubl
monopolies abroad were aggressively assert
right, while at home their troublesome effect
U.S., to such legislation as the Sherman Anti-T
Several delegates argued in favour of compul
The Swiss delegate feared that in the absenc
patentees would use local patents merely to
than to create local industry. Some exhibit
wards the proposal to abolish compulsory w
the Italian delegate found the idea appealing
abroad, he opposed the proposal on the grou
would be greatly out weighed by the disadv
patents in Italy with no intention of local u
to abolish compulsory working did not succe
become article 5 of the convention was ado
provided :

[T]he patentee shall remain under the obligation to exploit his patent
in accordance with the laws of the country into which he intro-
duces the patented articles.

This clause was limited by article 5(1), which prohibited member states
from revoking patents on the grounds that the patentee was importing the
patented product. The precise relation between the two provisions, how-
ever, remained unresolved.

Ill The Paris Conference of 1883

(1) Membership

In 1883, nineteen delegations convened in Paris to sign the document

that had been drafted at the 1880 conference.20 The text was signed by
fourteen states, the original members being Belgium, Brazil, Ecuador,
France, Great Britain, Guatemala, Italy, the Netherlands, Portugal,
El Salvador, Serbia, Spain, Switzerland, and Tunisia.21 The United States,
Germany, and Japan joined shortly thereafter.

18. For a discussion of arguments against compulsory working clauses, see, Anderfelt,
supra note 3 at 69.
19. See, Actes , supra note 17.
20. Argentina, Belgium, Brazil, France, Great Britain, Guatemala, Italy, Luxem Durg,
the Netherlands, Portugal, Rumania, Russia, El Salvador, Serbia, Spain, Swedan, see
Actes, de la Conference de Paris 1883 , 6-7.
21. Anderfelt, supra note 3 at 70.

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140 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 32 : 2

A few interesting features regarding the membership of

been noted, especially in response to claims by proponent
that developing countries have been members and have thu
shaping the convention since the beginning. Tunisia be
through adherence on her behalf by France; Serbia had no
law until 1918; and Ecuador, El Salvador, and Guatemala s
from the Union, in 1886, 1887 and 1895 respectively. By 1
additional countries had joined the Union. By 1934, th
risen to nine; and by 1958, to fifteen. By 1967, with the c
pendence of many African countries, 42 developing coun
the Union. Today, total membership of the Union stan
is the only developing country, as that term is used today,
the Union since its inception.22
Due to a dearth of materials on the subject, it is difficu
motivation behind the recent accessions to the Union of m
countries.23 One author has explained the recent increase
country membership in the Union as the coincidence of
accession to independence of a large number of states, com
creased campaigning by the Paris Union in the 1960's
members.24 Indeed, it has been pointed out that the p
distinguishing Union from non-Union countries is their f
colonies. For example, Latin American countries comp
regional block of non-members, and most of these count
independent since the formation of the Union. In contras
countries, which comprise the largest block of Union mem
very recently been dependent on developed countries.
To explain the disparity in underdeveloped country mem
Union, it has been observed that "economic cooperation a
status and affinity of legal traditions with the former mothe
been more important factors than for instance the country's
tion in the economic and technical fields."25 In addition,
count the strong effect of bullying by the developed countri
stipulating accession to the Paris Convention as a conditi
and other assistance, and under threat of retaliatory measure

22. Supra note 6 at 34-35.

23. See, Anderfelt, supra note 3 at 121 ("The basic difficulty in inter
cance of acts of adherence and ratification by developing countries is t
about the underlying motives. Besides the official records of the re
summarising the positions of countries on various questions, little
written on the subject concerning either individual countries or the d
as a group").
24. See, id. at 122.
25. Id. at 124.

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1990] CONQUEST BY PATENT 141

(2) The various texts of the Paris U

The convention, which contains a

been revised six times: at Brussels
Hague in 1925; at London in 1934
in 1967. These revisions have not a
the convention was originally based
The Paris Convention has been de
embodied in the successive texts established at the revision conferences.
However, the series of Conventions called Acts (of the same Convention)
has constituted and maintained one and the same union. .."26

Thus, members of the Union are not all signatories to the same text.
For example, as of 1975, one quarter of the developing countries had not
ratified the Stockholm Act. More than half had signed the Lisbon Act
of 1958, while eome were only signatory to the London Act of 1934. Brazil
has not ratified any conventions since that of the Hague in 1925.27 A report
by UNCTAD (1977) describes the confusing heterogeneity of the con-
vention thus:

In total, accounting for both the relations between signatories of

the same Acts as well as among signatories of distinct Acts, the
developing country members are in no fewer than ten different
types of arrangements regarding the substantive provisions of the
Convention, with other member states.28

(3) Substantive provisions of the Paris Convention

Articles 1 to 5 contain the substantive provisions of the convention.

These provisions purport to establish certain minimum international stan-
dards to be incorporated into the legislation of member states. On the
whole, these provisions safeguard the rights of patentees and limit the regu-
latory authority of member states. The main effect is to protect patentee
rights and enable the creation of monopolies, subject to breaking the mono-
poly only under limited circumstances, and, in the extreme case, revoking it
altogether.

(a) Monopolies in the broadest sense ( article 1)

Article 1 appropriately introduces us to two important negative features

of the convention: first , a total lack of concern with any kind of public
interest objectives, and, second an irritating ambiguity which makes the
text susceptible to a troubling range of interpretations.

26. G.H.C. Bodenhausen, Ģuide to the Application of the Paris Convention for the
Protection of Industrial Property 18 (1968).
27. Supra note 5 at 5.
28. Ibid. Note, however, that under article 23, new members may not accede to earlier
Acts.

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142 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 32 : 2

It establishes the purpose of the convention, which is to

Union for the protection of industrial property. The only co
is for the patent holder. None for the manufacturer; none
sumer; none for the nation, nor for the world system as a
absence of any preambular statement of purpose - for examp
tion of economic development, or of the general public inter
in the national patent legislation of many countries, suggests th
ness of concern that animated the convention.
Second , article 1(3) introduces the first of many major am
king in the text of the convention. It provides :

Industrial property shall be understood in the broadest s

shall apply not only to industry and commerce proper, bu
to agricultural and extractive industries and to all manuf
natural products, for example, wines, grains, tobacco lea
cattle, minerals, mineral waters, beer, flowers, and flour.

The question which arises with regard to this section is w

cludes member countries from excluding whole fields from
practice common in many countries today. The languag
property... in the broadest sense" - suggests that it does.
The official interpretation, however, contradicts this, c
member states may exclude certain categories from protecti

There is... no obligation for the member states to grant p

wine, cattle, or fruit... the purpose of the provision is merely
excluding from the protection of industrial property ac
products which would otherwise run the risk of not being as
to those of industry proper.29

But one must not be beguiled by such comforting int

Rather, one must be wary of any document which can be
mean the opposite of what it seems to say. Indeterminącie
create arenas of struggle in which meanings will be political
and thus weaker nations are correct to remain skeptical of
manipulable document.

(b) Principle of national treatment (article 2)

Article 2 establishes the principle of national treatment, whi

member states from discriminating between foreign and nat
Thus, each member state must grant the same protection
other member states as it grants to its own nationais. Art
provides that non-member states are also entitled to protect

29. Bodenhausen, supra note 26 at 25.

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 1990] CONQUEST BY PATENT 143

domiciled or have commercial or industri

state.

Note the disparite impact of formal equality on countries at vastly

different stages of economic development. For producer nations, the
provision means the ability to obtain patent protection abroad ; for non-
producer nations, the provision will largely mean having to grant protection
to foreigners at home. Since few nationals from non-producer countries
will seek patents abroad, the provision is a one-way stieet, conferring bur-
dens without benefit on non-producer nations.

(c) Right to priority {article 4)

Article 4 establishes the right of priority. This right allows an applicant

who has filed an application for a patent grant in one member country a
twelve month period in which to file similar applications in other countries ;
these latter application will then be treated as if they had been filed at the
time of the first application. The effect of this is that an intervening filing
or exploitation of the invention by a third party will not invalidate the
application filed on the basis of the priority right.
This right has been broadly construed under the Paris Convention.
For example, patentees are able to claim multiple priorities on the basis of
related inventions. A person who has filed several applications relating to
different aspects of one invention, may join them together and file a single
application in one member state. To claim a right of priority, he must file
the application within twelve months of the initial application. Finally,
if the single application contains some new feature not included in the
previous applications, the new feature gives rise to a new right to claim prio-
rity in filing later applications.30 One can easily imagine how such a system
might be subject to abuse by greedy patent filers, who can claim priority
as a means of blocking foreign competition.

(d) Independence of patents {article 4 bis)

Article 4 bis, introduced at the Brussels Revision Conference of 1897-

1900, establishes the principle of independence of patents : that is, patents
obtained for the same invention in different countries are independent of
one another.31 The independence of patents principle follows from the
fact that member countries are free to establish their own criteria for
patentability. Article 4 bis was inserted to make clear that denial or
forfeiture of a patent in one member country will have no bearing on the
validity of a patent in respect of the same invention in another member
country.

30. For a discussion of the right to priority, see, S. Ladas, Patents , Trademarks , and
Related Rights 492-93.
31. See, Anderfelt, supra note 3 at 75.

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144 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 32 : 2

(e) Monopolism : problems of non-use {article 5)

Article 5 which sets limits on the authority of member s;at es

patent abuse, is the most controversial article. Article 5A
that "the importation by the patentee into the country wher
has been granted of objects manufactured in any of the cou
Union shall not entail forfeiture of the patent." As stressed
provision has been harshly criticised since it was first draft
Nonetheless, it remains today in its original form - a fact wh
reflects the degree of power dissenting countries have wielde
Union.

Article 5(2) as it emerged in 1883 provided that "the pa

remain under the obligation to exploit his patent in accorda
laws of the country into which he introduces the patented ar
ever, in subsequent conventions this article has been revised
vision establishing limits on governmental intervention. Th
has been towards greater protection for the patentee, and les
authority for the state.

(4) Procedural provisions

Any country may join the Union on a unilateral declaration

Article 16 stipulates that new members can adhere only to th
Article 18 provides for the holding of periodic revision confer
purpose of amending the convention. Article 26 prohibits me
denouncing membership in the Union for a period of at leas
As for voting procedures, the coņvention is governed by an u
requiring unanimity in order to amend.33 Finally, article 13
an International Bureau of the Union for the Protection of In
perty (BIRPI) to function as Secretariat of the Union. In 196
major organisational changes taken at the Stockholm Conven
became known as WIPO (World Intellectual Property Organi

IV The evolution of article 5 : Paris Union Revision Conferences

(1) Brussels Revision Conference 1897-190034

Non-forfeiture

At the Brussels Conference, Belgium, backed by the United States,

32. Id. at 106.

33. Id. at 70.
34. The following countries were new members at the time of the Brussels Conference :
Denmark, the Dominican Republic, Norway, Sweden, and the United States. The
following non-member countries also participated in the convention : Austria, Hungary,
Chile, Recuador, Germany, Japan, Luxemburg, Morcco, and Turkey. Japan became
member at the convention. See, Actes de la Conference de Bruxelles 1897-1900, 20, 129,
363-66*

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1990] CONQUEST BY PATENT 145

proposed a total ban on revocation for n

the patent was being worked in one mem
lation of many countries provided for
patents). Note the imperial implicati
for granted the legitimacy of asymmet
of the world into producer and mark
allow a patentee from an imperial produ
market nation, with no intention of w
others to do so. Such a scheme would h
transformation of market nations into
perpetual servitude to import monopol
tion, which had been made by Belgium
viously in 1880, was again rejected by a ma
No agreement was reached, and the co
understanding that it would reconvene
later in 1900, a major limitation on the
states was enacted: a clause was adopted
revoking patent grant for non-working un
years from the date of the patent appli
not to be allowed if the patentee could
referred to non-working of the patent
patent means local manufacture of the
a patented process, local application of
or sale of the patented product, produced
factured abroad by a patented process,
patent).
A question left unresolved was what circumstances would be allowed
to constitute adequate "justification" for non-working. Some suggested
that unsuccessful efforts by the patentee to license should constitute justi-
fication, but no consensus on this could be reached.36 The solution adopted
was to allow each country to determine the issue for itself. On the whole,
however, "justification" has been interpreted to encompass legal, econo-
mic, or technical obstacles to exploitation. Obviously, the acceptance of
"economic reasons" as a legitimate justification for non-working provides
a major loophole for the patentee and it is not surprising that this clause,
which remains today in a modified form, has been highly criticised for pro-
viding such toothless scrutiny of the patent holder.
The above provisions were codified in Final Protocol 3 bis, which reads :

The patentee in each country shall not forfeit his patent for non-
working until after a minimum period of three years from the filing
of the application in the country in question and in case he cannot
justify his inaction.

35. Id. at 95, 304-05.

36. Id. at 74.

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146 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 32 : 2

Final Protocol 3 bis was incorporated into the convent

5(2) at the Washington Conference in 191 1 .
Prior to 3 bis, the principal limit on the power of the sta
abuse was contained in article 5(1), which prohibits membe
revoking patents on the grounds that patentees are importi
manufacturing locally the patented product. Otherwise
remained obligated to exploit his patent in accordance with
the patent-granting country. The addition of article 3 bis
protection for the patentee vis a vis the power of the state to r
tation, guaranteeing a virtual three-year monopoly for the
no concomitant obligation to exploit the patent locally.
some questions unanswered: could sanctions other than
employed before the expiration of the three-year period?
scholars have answered this question in the negative, reaso
feiture was the only sanction mentioned in the debates.37
Two other changes were made at this conference that fur
thened the position of the patentee.
First , the period of the right to priority was extended from
months. Second , the principle of independence of patents w
in article 4 bis.38 As stated above, the independence of pat
a corollary to the independence of national patent legislati
countries. Article 4 bis was inserted to make clear that the fate
respect of the same invention in different countries would not
Finally , the politics of this convention require comment.
Austria, who were not yet members of the Union, made clea
to join the convention unless article 3 bis were adopted
states, their demands had considerable influence on the disc
convention and the final decision to limit the power of mem
revoke patents.39
In addition, a celebrated study of international cartels h
the role of transnational corporations in persuading gover
the Paris Convention. It argues that large industries were
patent pools, and then use their power to force smaller indu
subordinates or dissolve. At the Brussels Convention, for examp
shows how Germany and the United States pressured Sw
granting patent protection to her chemical industries, despi
Switzerland's national legislation excluded chemicals from pa
Under threat of retaliation, Switzerland felt obliged to joi
cartel.40 Such pressure techniques, needless to say, persist t

37. Ibid. See also, Akerman, supra note 3 at 110.

38. See, Anderfelt, id. at 75.
39. For Germany's demands, see, Actes , supra note 34 at 321. Se
supra note 3 at 74-75.
40. See, Kronstein and Till, supra note 8 at 776-80.

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 1990] CONQUEST BY PATENT 147

account for the reason why so many

Western demands and joined the Pa
adversity to their interests.

(2) Revision Conference of Washingto

(/) Safeguarding imperial interests ( arti

A highly significant provision was ado

further safeguarded imperial interest
vided the right of countries to accede
behalf of their colonies and protectorate
provision in the literature - indeed, o
provision to a footnote enumerating
ference.42 But clearly the provision is
to imperial countries the captive mar
By allowing countries to force their
provision facilitated the spread of impor
The ultimate effect of import mono
perpetual state of dependency, since t
tively to block the rise of local manufac
Article 16 bis was incorporated into
has undergone only minor modificatio
to Washington. The Revision Confere
the language of the provision to its pr
camouflage the imperialism which ha
pressed. The provision now reads:

(a) Any country may declare in its

accession, or may inform the D
notification any time thereafter,
applicable to all or part of those t
declaration or notification, for the e
is responsible. 42a
(b) Any country which has made
such a notification may, at any
General that this Convention shal
or part of such territories.

This provision thus allows nationals

claim application of the convention
such member states have acceded to the Union.

41. At the time of the Washington Conference, there were 22 member states. The
new members were : Austria, Cuba, Germany, Hungary, and Mexico. See, Actes de la
Conference de Washington 25.
42. See, Anderfeit, supra note 3 at 77.
42a. (Emphasis added to highlight euphemism).

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148 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 32 : 2

(ii) Revisiting the monopoly provision

At Washington, article 5, once again, provided the mai
controversy. Several countries expressed strong objections t
tions on the sanction of revocation that had been adopte
these countries, the Bureau proposed the device of compulso
as an alternative remedy for the problem of non-workin
proposal, however, compulsory licensing would be strictly lim
in which consumers or producers had complained that either
license for a product was unavailable.43
Many countries objected to the Bureau's proposal on the g
compulsory licensing had proven to be an ineffective way t
exploitation. They objected to the idea that eompulsory lice
replace compulsory working, claiming that such a change con
their national laws.44
The case of Great Britain is especially interesting. In 1880, when it
enjoyed industrial predominance, it had co-sponsored a bill proposing
complete abolition of the sanction of revocation. In contrast, by the turn
of the century, Great Britain was experiencing a period of decline relative to
other industrialised countries, and there was great concern over the problem
of foreign patent holders who were not exploiting their patents in Great
Britain. In the light of this problem, it amended its Patent Act in 1907 to
include a compulsory working provision 45
The Bureau's argument in favor of compulsory licensing was that it
constituted a compromise between the rights of the patentee and the interests
of society : it was less onerous on the patentee than compulsory working
requirements, and at the same time would serve society's interest in promoting
the growth of local industry and the availability of desired products.46
Germany put forth a proposal providing for the sanction of compulsory
licensing to be used after a three-year period in cases of non-working.
Compulsory licensing was to be used rather than revocation. Austria,
France, Great Britain, the Netherlands, and Spain all rejected Germany's
proposal. France based her rejection on the failure of compulsory licensing
in the experiences of other countries, including Great Britain, Sweden and
Mexico. It insisted that compulsory working requirements were the only
way to ensure local exploitation of patents.47
43. Id. at 75.
44. Id. at 75-76.
45. For a discussion of the problem of non-working of patents by members of Parliament
at debates on the British Patent of 1907, see, WIPO, supra note 1 at 8-9. For an inter-
pretation of why Britain favoured abolition of revocation in 1880 but not in 1907, see,
Anderfelt, supra note 3 at 101.
46. See, Anderfelt, id. at 76.
47. For France's position, see, Actes , supra note 34 at 282 (". . . France was not in
principle opposed to the idea of tempering the system of compulsory working, but detailed
studies had not shown - any way to achieve this goal, the experiences of Great Britain,
Sweden, and Mexico with compulsory Licensing has shown this system to be bad and
inadmissible), (translated from French).

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 1990] CONQUEST BY PATENT 149

The German proposal was finally reject

were adopted at the Washington Conferen
as it left the Washington Conference read

Nevertheless, the patentee shall rema

exploit his patent in accordance with th
which he introduces the patented article, b
the patent may not be forfeited for non-w
of the Union until after a period of three y
application in that country and only in cas
his inaction.48

The text gave rise to one question of inter

to other causes of revocation besides non
revoked before the expiration of three y
working ? The original Bureau proposal
non-working", which suggested that arti
of revocation. Objecting to this omission
Bureau accepted, the insertion of the ph
suggests that the restriction on revocati
working.49

(3) Revision Conference of the Hague 1925

(/) Compulsory licensing not forfeiture

The most important revision adopted at the Hague was the substitution
of the sanction of compulsory licensing for that of forfeiture.50 Article
5(3) was added, which provided, "Measures to prevent abuses shall not
entail forfeiture unless the grant of compulsory licenses is insufficient to
prevent such abuses."51 The addition of this clause meant the further
attenuation of the sanction of revocation. The principle sanction provided
for by the Union was now to be the much milder sanction of compulsory
licensing, with revocation demoted to a sanction of last resort only.

(//) Abuse of monopoly replaces " non-working "

A second important change was the introduction of the concept of abuse

of monopoly, which appeared in the revised article 5(2) :

48. See, Anderfelt, supra note 3 at 107.

49. See, Actes , supra note 34 at 106, 228. Anderfelt adduces further support for this
interpretation from the language of the clauses by which revocation is not allowed in cases
in which the patentee justifies 4 'his inaction". See, Anderfelt, supra note 3 at 76.
50. Jayagovind refers to the Hague Conference as a "landmark" in the evolution of
international patent legislation, presumably because of the introduction of compulsory
licensing. See, Jayagovind, 4 The International Patent System and Developing Countries",
20 Indian Journal of International Law , 47, 52 (1980),
51. See, Anderfelt, supra note 3 at 107,

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150 JOURNAL OF THE INDIAN LA W INSTITUTE [Vol. 32 : 2

Nevertheless, contracting countries shall have the right to t

necessary legislative measures to prevent the abuses which might
from the exclusive rights conferred by the patent , for example ,
to work .

The previous text, it will be recalled, had provided :

Nevertheless, the patentee shall remain under the obligation to e

his patent in accordance with the laws of the country into w
introduces the patented article but with the restriction that the
may not be forfeited for non-working in one of the countrie
Union until after a period of three years of the date of fil
application in that country.

The insertion of the concept of abuse of monopoly (i.e., "abu

might result from the exclusive rights conferred by the paten
rise to wildly conflicting interpretations. At the one extreme is th
optimistic view that the addition of the "abuse of monopoly" c
a progressive provision adopted by a Union whose evolving con
recognised the need to regulate patents in the public interest
extent that this line of reasoning can be understood, it goes so
follows : Prior to 1925, article 5 mentioned only the obligation
its sanctions. The convention was completely silent as to other
their possible sanctions. Because the convention did not explici
authority to states to legislate sanctions for abuses other than non
member states had no authority to regulate such abuses. The in
of the abuse of monopoly concept is then seen as increasing th
member states, by delegating to them the authority to sanctio
non-working, but other abuses besides.
The more plausible interpretation reaches the exact opposite
It asserts that the change in article 5(2) had the effect of furth
the state's ability to regulate patentees. The reasoning is as fol

Although prior to 1925, the Convention text had only deal

non-working, this did not mean that other actions by a patentee
harmful by society could not have been subject to sanctions by v
of national law. The only plausible explanation for the fact t
Convention text treated only sanctions against non-working it t
did not regulate other abuses, leaving the Union countries
legislate on the matter. From what has been suggested above
reference to the Brussels Conference, on the non-applicability o
three year grace period to sanctions for causes other than non-wo
and moreover, taking into consideration the British proposal
the Washington Conference to expressly make non-working the

52. Id, at 82.

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1990] CONQUEST BY PATENT 1 51

case in which the period was applicable, t

to be that the concept of " abuse of monopo
further curtailment of society's right to co
monopoly power that a patent gives its holde

Issues of "correct" interpretation aside, t

give rise to such completely contradictory vie
when the text's authoritative interpretive
forces. Where language fails to settle basic
does - then politics will settle the issue of
interpretation will be that which best suits t
Article 5(2) of the Hague text gave rise to o
as well : What was meant by "abuse", and
constitute abuse ? It has been said that failure to work was not liable to
sanctions in and of itself, but must independently be deemed to constitute
"an abuse".54 Examples of other activities thought to be included within
the notion of "abuse" included insufficient working ; refusal by patentees
to grant licences on reasonable terms; failure to supply the market with
sufficient quantities; and demanding unreasonable prices.55 Yet the issue
of "abuse" remains obscure to this day.
The third revision of article 5 changed the starting date of the three-
year immunity period from that of the patent application to that of the
patent grant. The relevant provision, article 5(4) was revised to read :

In any case, the patent may not be subjected to such measures before
the expiration of at least three years from the date of the grant, or if
the patentee proves the existence of legitimate excuses.

Finally, how is the phrase "legitimate excuses" to be interpreted ? Could

lack of capital constitute a legitimate excuse ? One interpretation held
that excuses could be "based on the existence of legal, economic, or technical
obstacles to exploitation, or more intensive exploitation, of the patent
in the country."56 Such an elastic standard - permitting of excuses on
"economic" grounds - suggests; that mere profitability or convenience could
be enough to justify importation rather than local production.

(iii) Discussions at the Hague

The proposal by the Bureau that countries abolish compulsory working

requirements in favour of compulsory licensing once again met with fierce
opposition. Many less economically powerful countries voiced their concern

53. (Emphasis added). Ibid.

54. Ibid .
55. Bodenhausen, supra note 26 at 71.
56. Id. at 73.

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152 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 32 : 2

that the abolition of working requirements would favour the

trialised countries by allowing them to capture export m
example, the United States was strongly in favour of abolishin
requirements.57 Spain objected, stating that such an arrange
favour the more industrialised countries by granting them patent
This, in turn, would impede the growth of industry in the le
countries. Supporting Spain in her argument were Poland
Yugoslavia.58
The Bureau's proposal for complete abolition of the sanction of revocation
was also opposed. According to one writer, Poland's refusal to abolish
the sanction of revocation for non-working was based on the fact that its
industry was far less developed than that of the Western countries, and it
feared that Polish industry would be stifled by import monopolies.59 Another
argument agreed to by all three countries was the proven ineffectiveness of
compulsory licensing, which was generally attributed to the difficulty of
finding local licensees.60 But note, of course, that patentees could them-
selves have invested, which would have obviated the problem of non-working.
The Bureau and the industrialised countries that opposed working
requirements put forth several arguments. The first was an argument from
efficiency; that the inventor is best able to assess where conditions will favour
efficient production of the good.61 The second argument was that working
requirements would lead to the establishment of foreign industry to which
local manufacturers would be hostile.62 It has been suggested that while
this argument may have made more sense in the context of the economic
nationalism of that period, it seems ironic today when attracting foreign
capital is precisely what is desired by developing countries.63
Due to the fierce objection to the abolition of revocation, a compromise
solution was adopted. In the compromise proposal put forward by the
United States and Great Britain, the sanction of revocation was kept, but
could only be used in the event that "the grant of compulsory licenses is
insufficient to prevent... abuses."64 This became the text for article 5(3).

(4) Revision Conference of London 1934

The changes taken at the London Conference further diminished the

57. Anderfelt, supra note 3 at 107.

58. See, Actes de la Conference de la Haye 1925 at 423.
59. See, Anderfelt, supra note 3 at 79.
60. See, Actes , supra 58 at 433.
61 ē Id. at 235. For treatment of the question of whether a patentees choice of where
to produce can be interpreted as a test of what is most advantageous to society, see, Ander-
felt, supra note 3 at 125-52 (answering in the negative).
62. The Bureau argued : 4 'The obligation for the foreign patentee to manufacture in
the country may lead to the establishment of a foreign industry towards which the local
manufacturers would not be favourable". Actes , supra note 58 at 235 (translated from
French).
63. See, Anderfelt, supra note 3 at 79.
64. Id. at 80.

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 1990] CONQUEST BY PATENT 153

power of Union members to regulate pa

the time period during which sanctions w
5(4) was changed from "the patent may n
before the expiration of three years from
cation for a compulsory license may not
three years from the date of the grant of t
further lengthened the grace period : "No
vocation may be instituted before the exp
the grant of the first compulsory licence
to further attenuiate the sanction of revoca
be invoked until the expiration of at leas
patent grant. Thus, the patentee was ensure
from the sanction of compulsory licensin
year period of immunity from revocation.
Once again, the Bureau proposed an am
the sanction of revocation. The draft am
sures may foresee the compulsory licence
but not the revocation of the patent gra
patentee should not be deemed in abuse o
"willing to satisfy all the needs of the lo
of consumer product needs.67 Such a pol
to countries whose primary goal was loc
ability of products.
The Bureau further asserted that where
licenses but unable to find licensees, he s
non-working. Indeed, one of the major ch
sing as a sanction was that local licensees we
the sanction ineffective for achieving local p
Yet, from the Bureau's pro-patentee poin
difficulty that should exonerate the patente
working. The Bureau stated that: "As neit
local industry dares to undertake exploita
reproach the foreign patentee for abuse of m
ness of his efforts to accord licenses con
inaction."68

Four countries - Poland, Czechoslavak

fiercely opposed the abolition of revocat

65. Id. at 107-08.

66. Actes , supra note 58 at 261 (translated from French).
67. Id. at 174 ("... a satisfaire a tout les besides du merche indigene").
68. Actes , supra note 58, at 175. ("Lorsque ni le brevete étranger ni l' industrial indigene
n'csent entreprendre l'exploitation dams le pays. ... on na'saurait reprocter an brevete
in abus de son droit excluasif, puisque Pinefficacite de son offre d'accorder des licenses
aux industries du pays constitute precisement la justification de son inaction").

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 154 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 32 : 2

sanction was necessary to prevent abuses harmful to local industry.

Poland proposed a compromise solution, in which non-working would not
be deemed an abuse where the conditions of the local market did not
justify local production. It, however, wished to reserve to the country
rather than the patentee the decision as to whether local productio
was justified by local demand, in such cases where it determined that loc
production was justified by local demand, Poland wanted to reserve the
right to block importation of patented products.70
Czechoslavakia objected to the Bureau's proposal to abolish revocation
completely, claiming that such a change would favour foreign patentees at
the expense of her own national interest. Asserting that the Hague
amendments had already worked to its disadvantage the delegation
insisted on examining very carefully new proposals, in order to better
safeguard her own national interest. The delegation stated:

One must not lose sight of the fact that this improvement entails a
weakening of the economic position of nationals to the advautage of
foreigners. Given the proportion that exists between the manufac-
turing and trade of all countries such as Czechoslavakia, on the one
hand, and foreign competition, on the other hand, it is to be feared
that the advantages will far from compensate for the disadvantages
to the national economy, if the Bureau proposal was adopted.71

Finally, the members reached a compromise under which the sanction

of revocation was maintained, but further diluted by prohibiting its us
until at least two years after the grant of a compulsory license.72 This
ensured that revocation could not take place until after the actual grant o
a compulsory license. In contrast, the previous text had been ambiguous
as to whether an actual giant of a compulsoiy license was required before
revocation could be invoked, or whether projected insufficiency was enough.
In sum, despite strong opposition from several countries, the changes
made by the London Conference once again seemed to strengthen the posi-
tion of the patentee vis-a-vis national governments, by further limiting the
state's ability to invoke the sanction of revocation.

(5) The Revision Conference of Lisbon 1958

At the Lisbon Conference, several changes were once again made in the
text of article 5. In addition, two new articles were inserted: articles 4

69. Id. at 262-63.

70. See, Anderfelt, supra note 3 at 85-86.
71. Actes , supra note 58 at 245 (translated from French).
72. Eighteen were in favour of the proposal, seven were opposed (Brazil, Syria-Lebanon,
France, Italy, Japan, Morocco, Tunisia) and five abstained (Belgium, Cuba, Danzig, Mexico,
Poland). See, id. at 379.

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 1990] CONQUEST BY PATENT 155

quater and 5 quater. In particular, article 5

cess patents, has been a source of great ques
countries.

(0 Article 5 revisions : dangerous ambiguities

The revised language of article 5 is highly

ranging interpretations. Because of the ma
one must be conscious of its political impli
tative" interpretations that seek to portray
will seem reasonable to even the most recalcitrant of audiences. The follo-
wing will seek not to determine the "correct" interpretation - if, indeed,
there is such a thing - but rather, to point out the potentially harsh inter-
pretations inherent in the ambiguous provisions.
First , the text of article 5(A)(2) was changed to read that each country
shall have the right to "take legislative measures providing for the grant of
compulsory licenses to prevent the abuses which might result from the exclu-
sive rights conferred by the patent, for example, failure to work." The
previous text had read that states "shall have the right to take the neces-
sary legislative measures" to prevent abuses.73
This textual change has given rise to an important question of interpre-
tation : Can countries take legislative measures other than compulsory licen-
sing? Although several commentators have answered this in the affir-
mative,74 a restrictive interpretation of this clause is equally possible -
indeed, even probably, given the tendency of the convention to curtail the
ability of member states to regulate in the public interest. Under such a
restrictive interpretation, compulsory licensing would be the only legislative
measure (besides eventual revocation) that could be taken by member
states to crub abuses.
Second , article 5(^4)(3) was changed from "[t]hese measures will only
provide for the revocation of the patent if the granting of compulsory
licenses shall not suffice to prevent these abuses," to "[forfeiture of the patent
shall not be prescribed except in cases where the grant of compulsory licenses
would not have been sufficient to prevent such abuses." A great fuss has
been made in some of the literature over this change, to the effect that this
represented a victory to member states who desired greater regulatory
authority.75 The argument put forward for this interpretation is that the
new language - "would not have been sufficient" - suggests that actual
compulsory licensing need not precede foreiture, but that projected insuffi-
ciency would suffice. The most that can be said of this interpretation is
that it represents a heroic effort on the part of some commentators to find

73. (Emphasis added to highlight addition). See, Anderfelt, supra note 3 at 107.
74. See, Jayagovind, supra note 50 at 53.
75. See, Anderfelt, supra note 3 at 90. See also, Jayagovind, ibid.

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 156 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 32 : 2

at least one revision in the Paris Convention that could be p

concession to the less powerful nations. Indeed, the immediat
clause shows how contrived such an interpretation is:

No proceeding for the forfeiture or revocation of a patent

instituted before the expiration of two years from the gran
first compulsory license.

Clearly, revocation could take place only after compulsory

had actually been tried for a period of two years. The resort
tortions as the above shows how truly difficult is the exerc
revisions that facilitated rather than militated against less de
tries.

Third , several changes were made in article 5^4(4).

The first sentence of the old text had provided:

In any case an application for the grant of a compulsory license may

not be granted before the expiration of three years from the date of
the patent.

The new text stipulated:

An application for a compulsory license may not be made on the

ground of failure to work or insufficient working before the expiration
of a period of four years from the filing of the patent application or
three years from the date of the grant of the patent whichever period
expires last.16

Two changes in this sentence should be noted. First , the insertion of

the phrase "on the ground of failure to work" has given rise to the question
of whether the provision applies to compulsory licenses granted for reasons
other than failure to work: that is if the compulsory license is being granted
for abuse other than failure to work, must the waiting period be observed?
Several commentators have answered in the negative, urging a liberal cons-
truction under which the restrictions of article 5,4(4) have no application
if the compulsory license is being granted for an abuse other than non-
working.77 This interpretation is by no means a necessary one, however.
A further question raised by the insertion of the clause ("on the ground of
failure to work") is whether compulsory licenses can be granted at all for
purposes other than non-working. Although article 5A(2) suggests that
they can, the insertion of this language makes an alternative interpretation
possible, as well- that compulsory licenses can only be granted for failure
to work, and not for other purposes.

76. (Emphasis added to highlight changes). Id. at 102.

77. Id. at 89.

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1990] CONQUEST BY PATENT 157

Second , the new period during which co

invoked was instituted to take into accoun
systems among member states. Some cou
nation system", which provides for the gr
nation of the substance of the patent
because of the time it takes to examine t
is often granted more than one year afte
sory license cannot be applied for until t
grant of the patent. (Since 5A(4) allows th
ever period expires last, three years from
years from the date of application).
In contrast, where there is no such exa
more likely to be granted within one yea
claim the benefit of immunity from com
four years from the filing of the applicatio
The final change in article 5^1(4) was the
that any compulsory license must be non
These requirements have come under fir
they reduce the value of the compulsory
concomitantly, to the country itself.

(//) Debates at Lisbon - article 5 again

As at every conference, the Bureau, su

once again proposed to abolish revocation
Several countries - including Brazil, Iraq
objected to the proposal. The reason: exp
licensing to be an ineffective remedy, oft
local manufacturers to exploit the patents
that "such a measure would risk to delay
countries," and Italy felt likewise that abo
the industrial development of the coun
developing countries, as well as the U.K., t
In response to the proposal to once aga
Turkey reminded the conference that eve
lengthening of this period. It pointed
would further strengthen the position of
by granting them an even longer mon
light of this, Turkey proposed reducing the
is protected from sanctions. It insisted
the period would benefit only the more devel

78. See, Actes de la Conference de Lisbon 1958.

79. Id. at 512 (translated from French).
80. See, WIPO, supra note 1 at 16.

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158 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 32 : 2

The industrialized states, without being subjected to any

difficulties, have benefitted from the potential of monop
their patents create. Will the less industrialized states nev
the right to benefit from these advantages?81

Turkey felt that the proposal would further enlarge the g

developed and developing countries, and insisted that if the pe
reduced, it would seek to legislate domestically to achieve a re

(///) Article 4 quater : Further limits on regulation in public intere

Another assault on the authority of the state to regulate in

interest is embodied in article 4 quater adopted at the Lisbon
It provides :

The grant of a patent shall not be refused and a patent shall not be
invalidated on the ground that the sale of the patented product or
of a product obtained by means of a patented process is subject to
restrictions or limitations resulting from the domestic law.

In keeping with tradition, article 4 quater is an ambiguous provision.

Two questions arise. First , although the provision refers only to cases
where sale of a product is limited by domestic law, might it also apply where
the manufacture of such product, or the application of a patented process,
is subject to similar restrictions? The Director of BIRPI has provided an
unsurprising answer, stating that "it would seem reasonable to adopt for
these latter cases the same solution as for the cases referred to in the pro-
vision."83 This illustrates the process by which gaps and ambiguities may
be harnessed to serve certain interests.

A second , more important question of interpretation, involves the scope

of the phrase "restrictions or limitations". The language of the provision
mentions only cases where the sale of a product is subject to restrictions
or limitations resulting from the domestic law. The question thus arises
as to whether the provision applies where there is a total prohibition of sale
under the domestic law. The Director of BIRPI has again confirmed the
expansive potential of this provision, answering in the affirmative. "The
question whether a total prohibition of such sale also comes under the pro-
vision is left open, but should, in view of the purposes of the provision, be
answered affirmatively. In all cases, refusal or invalidation of a patent
must remain possible if the invention concerned is contrary to public order
or morality. This may not, however, be accepted merely because the
exploitation of the invention is prohibited or restricted by law or regulation,
but only when it is contrary to the basic legal or social concepts of the country
concerned."84

81. See, Actes , supra note 78 at 40 (translated from French).

82. See, Anderfelt, supra note 3 at 108.
83. See, Bobenhausen, supra note 26 at 65.
84. Id . at 66.

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 1990] CONQUEST BY PATENT 159

(iv) Article 5 quater : product monopolies ou

Article 5 quater , which governs the im

under a patented process, was also introd
It has pawned both criticism and conf
recommended in studies by both UNC
article 5 quater provides:

When a product is imported into a cou

there exists a patent protecting a proces
product, the patentee shall have all the
imported product, that are accorded to h
country of importation, on the basis o
respect to products manufactured in that

In order to begin to understand this mo

sion, it is first necessary to understand th
patent.
Generally, a process patent is a patent that protects a process of manu-
facture rather than the product itself. There are two types of process
patents: pure process patents, and product-by-process patents. Under the
pure process patent, the scope of the protection is limited to the process of
manufacture and does not extend to the product created by such process.
Under a pure process patent, use by a third party of the patented process
would constitute infringement, although, strangely, use or sale of the product
so produced would not.
In contrast, a second type of patent- the product-by-process patent -
is provided for in the legislation of some countries. This type of patent is
more extensive in scope than is the pure process patent. Under the pro-
duct-by-process patent, the patent extends its protection to the products
obtained by such process which means that not only the use of the process
by a third party, but also, and independently, the sale and use of its products
will constitute infringement.
Note the different implications for the existence of import monopolies
of each type of patent. Under a pure process patent, a patentee cannot
obtain an import monopoly. Thus, the patentee cannot block an infringing
import, since sale or use does not, under the process patent, constitute
infringement.
In contrast, the holder of a product-by-process patent can obtain an
import monopoly with respect to products made by the patented process.
Thus, such a patentee could block an infringing import, since, under the
product-by-process patent, sale or use is actionable.
The developed countries prefer the product-by-process patent because

85. See, UNCTAD, supra note 5 and WIPO, Article 5 Quater of the Paris Convention «
PR/8/3 (1976).

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160 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 32 : 2

of its power to confer import monopoly on the patentee. In c

holder of a pure process patent risks being undercut in the
infringing imports which he is powerless to block. For this
developed countries have been seeking the extinction of the
patent (indeed, the most recent statement presented by develo
at the GATT multilateral negotiations in 1988 proposed its ab
At Lisbon, one of various desperate attempts was made to g
cess patent to yield a product monopoly. According to th
BIRPI in his commentary on article 5 quater :

(/) This article was introduced into the Convention at th

Conference of Lisbon in 1958. Before that Conference th
vention left complete freedom to member States to defi
national legislation the acts of third parties by which a pate
be infringed. At the Conference of Lisbon it was pr
change this situation drastically by stipulating that a patent
for a process of manufacture , would be infringed by the imp
sale or use of products obtained by such process in another co

This proposal was not accepted and the adopted article has c
narrower scope.
He goes on to explain the meaning of article 5 quater as adopted:

(ii) The legislation of several countries stipulates that, if a patent is

granted only for a process, such patent extends its effects to pro-
ducts obtained, or directly obtained, by such process, which means
that not only the application of the process, but also, and indepen-
dently, the sale and use of its products, will constitute patent
infringement. The provision under consideration prescribes that,
when a country has adopted this system, all rights granted by its
legislation, on the basis of the process patent with respect to pro-
ducts manufactured according to the patented process in the country
itself, must also apply in the case of importation of such products
if they are manufactured according to the said process in another
country, even if that process is not patented in the said other
country.86

According to the above interpretation, article 5 quater only applies to

countries that have adopted the product-by-process patent in which case
the country must extend equal protection to imports and locally manufac-
tured products. In countries which do not provide for such patents, the
provision is said to have no application.
But developing countries remain skeptical, fearing that article 5 quater
represents another attempt to transform the process patent into a product

86. Supra note 26 at 85,

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 1990] CONQUEST BY PATENT 161

monopoly. In light of the original propo

good grounds for such suspicion. The ho
serves only to reinforce such suspicions.
Due to such uncertainty over the scope of
source of great concern to developing co
implications in the fields of pharmaceuti
primary areas in which process patents a
WIPO have called for its deletion. WIPO's
rights granted under article 5 quater we
the fact that in many countries that gran
rights are not sufficiently well defined.
forum will interpret article 5 quater i
existence of process patents in the dome
study concludes:

Although the specific provisions made

behalf will be given its (sic) due weight,
law, the courts may allow such right
Convention, although such rights are abs

The WIPO study also points out that th

cially interpreted - is redundant: that is,
cable to countries which do not provide
and in countries which do provide product
of article 5 quater will apply regardless o
convention.88

If the official interpretation renders the

the more cause for suspicion as to the re
quater . The only conclusion is that since t
patent by means of direct legislation fai
achieved through the indirect process of
provision adopted.

V Paris Union since 1960

(1) Brazilian Resolution of 1961

In 1961, Brazil, the only developing country that has been a member of
the Paris Union since its inception, introduced a controversial draft resolu-
tion in the Second Committee of the General Assembly.89 The resolution
raised several questions concerning the effect of the international patent

87. WIPO, supra note 85 at 5-6.

88. See, id. at 6.
89. See, "The Role of Patents in the Transfer of Technology to Under-developed
Countries", Doc.A/C.2/L.565 (1961).

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162 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 32 : 2

system on the economics of developing countries. In part

criticised the ability of foreigners, under the present system
patents with no concomitant obligation to work them in
granting country. She also criticised the tendency of the syst
to limit developing countries' access to technical knowledge.
The resolution called upon the Secretary-General to produ
that would include:

(à) a survey of national patent legislations;

(b) a study of the effects of royalties paid to foreigners on balance of
payments of developing countries;
(c) a study of the need to revise patent legislation in light of goals of
economic development; and
(d) a recommendation regarding the possibility of convening an inter-
national conference to discuss revision of the international system.90

Perceiving the Brazilian Resolution to be an attack on the Paris Union,

developed countries responded with strong opposition. Especially threa-
tening to the hegemony of the Paris Union was Brazil's suggestion that an
international conference be held to consider revision of the current system.
For example, one delegate, Holland, objected to the idea of an international
conference in a somewhat defensive tone, stating:

An international conference would duplicate the existing perfectly

effective procedure for the revision of the international patent
system.... Throughout its some eighty years of existence, the Inter-
national Bureau of the Union has taken into account the interests
of the developing countries....91

The opponents of the resolution successfully managed to tag on an amend-

ment that seriously diluted the text as it had been introduced. The amend-
ment, which provoked acute controversy, stipulated that any international
conference to re-examine the international patent system would have to
"utilize the existing machinery of the International Union for the Pro-
tection of Industrial Property".92 This amendment was narrowly passed
by a vote of twenty-one to twenty, with twenty-five abstentions.93 The
purpose of this amendment was both to ensure the role of the Paris Union
in future discussions, as well as to make clear that challenges to its position
would not be brooked. Along these lines, opponents of the resolution
also managed to secure the deletion of introductory paragraphs that had been
highly critical of the existing international system. Finally, the opponents

90. See, Jayagovind, supra note 50 at 57.

91. See, General Assembly, Official Records, sixteenth session, second committee.
779th meeting.
92. See, Doc.A/C.2/L.627.
93. Doc, A/5056 at 77,

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 1990] CONQUEST BY PATENT 163

of the resolution managed to insert

carry out Brazil's requested study in co
This final act of co-operation seeme
would be as mild as the amended re
Brazilian Resolution succeeded in transf
the entire structure of the Paris Un
implicitly - to endorse it.
As called for by the passage of the
General in 1964 produced a report e
Transfer of Technology to Develop
great disappointment to developing c
recommendation concerning the con
to discuss possible revision of the sys
The Secretary-General somewhat dis
on this question have been expressed
the Secretary-General's inquiry", wh
rability of convening such a conferen
the questionnaire circulated to gove
preparing the study.96 Especially ga
final paragraph of the summary of
problems could best be solved at the
The report stated :
In fact, as pointed out in the repo
nection with the transfer of techn
much beyond the operation of nation
of international patent relations, s
contemplated in the resolution c
issues. More could be done throu
priate legislative and administrativ
with action to curb restrictive bus
licensing agreements, and the prov
assistance to developing countries
report.97

Although it is true that the problems arising in connection with the

transfer of technology are complex, the report essentially uses such com-
plexity as an excuse to evade the question of revision of the international
system. Certainly, it is illogical to suggest that because an international
conference could not deal with every issue, it should not deal with any.
But this is in keeping with the overall technique of the report, which is to
highlight problematic factors external to the patent system in order to
deflect blame from the system itself. The fact that the report exclusively

94. Anderfeit, supra note 3 at 198-99.

95. Doc.E/3681/Rev. 1(1964).
96. Anderfelt, supra note 3 at 183.
97. See, supra note 6 at 1>

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 164 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 32 : 2

recommends solutions on the national level shows the extent to which it

succeeded in shifting responsibility from the international system to indi-
vidual countries. Naturally, such a report seemed to the developing coun-
tries to be a defense of the status quo written on behalf of the developed
countries.98

(2) Stockholm Convention of 1967

Although the developed countries had successfully managed to defuse
the potential for radical change embodied in the Brazilian Resolution, the
very fact of it remained troublesome. For the resolution seemed to represent
the beginning of a new era of intensified criticism of the international patent
system by a growing number of developing countries. Insecure over its
position in the international order, the Paris Union would now feel compelled
to respond.
.Indeed, it is generally recognised that the Brazilian Resolution was a
major catalyst for increased activity on the part of BIRPI to recruit
developing countries into the Union." As the Director of BIRPI stated,
"whatever the merits of this resolution, and whatever it may lead to, it had
at least the effect of causing action in the Paris Union".100 Fearing further
threats to its hegemony, the Union's sudden efforts towards developing
countries is attributable to its perception of the need for greater universality
in order to pre-empt attacks challenging its place in the field of internati-
onal patent protection.
In light of these concerns, the Paris Union underwent major organi-
sational changes at the Stockholm Convention of 1967. The principal
motivation for these changes, put bluntly, was "the desire to effectively stop
outside organizations from upsetting the international patent system.101
Towaids this end, BIRPI desired recognition by the United Nations as the
exclusively competent "agency" on international patent matters. BIRPI's
director stated :

In order that their exclusive competence be recognized in the indus-

trial property and copyright fields, each Union must become an
"agency", i.e. a generally recognized juridical and international
body possessing organs fully representative of the States and a
secretariat; such transformation must be effected by means of an
inter-governmental agreement.102

Thus desirous of greater universality in order to secure a dominant posi-

tion in the field of intellectual property, the convention establishing the
World Intellectual Property Organisation was adopted at Stockholm in

98. See, Jayagovind, supra note 46 at 57.

99. See, Anderfelt, supra note 3 at 198.
100. Doc. I.A.P.I.P. Annual Report , 1963 : II at 17.
101. Anderfelt, supra note 3 at 260.
102. Ibid .

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1990 J CONQUEST BY PATENT 165

1967 at the revision conference for the Paris Union. The establishment of
WIPO represented a merging of forces by the Paris Union and. the Berne
Union for the protection of literary and artistic works. The stated
purposes of WIPO are two-fold : to promote the protection of intellectual
property throughout the world, and to facilitate cooperation among the
various unions for the promotion of intellectual property. Under the
reorganisation, WIPO replaced BIRPI in its function as secretariat.103
The WIPO convention provides for no substantive treaty obligations on
member states, and it is open to states that are not members of any of the
Unions which WIPO administers. However, the role of such non-union
states is severely limited by the fact that they have no voting rights, and are
consequently relegated to a merely advisory role. The original proposal
for reorganisation had made no such distinction among members; in an
all too familiar way, however, the power of non-union members to adopt
resolutions was deleted from the final text.104 The organisation thus created
was one in which only states already members of the individual unions
had decision-making power; those states outside the unions represented were
offered little more than a forum for discussion. As one author has
concluded :

Despite all intentions behind the creation of WIPO, it must be finally

concluded that, for practical purposes, a State not belonging to one of
the Unions will have little power to influence the international patent
system. The only way to attain any influence will be to join the Paris
Union and accept the present system with the built in brakes on
changes.105

(3) UNCTAD Ill-main lines for revision of Paris Union

Although various United Nations bodies were to take up the issue of

revision of the international system over the course of the next few years,
no major initiative was taken until 1972, at the third session of the United
Nations Conference on Trade and Development (UNCTAD III) at Santiago.106
In a unanimous vote, the conference adopted resolution 39(111), which
called the Secretary-General to up-date the 1964 United Nations study. The
resolution requested the Secretary-General "to devote special consideration
in this study to the role of the international patent system in (technology)
transfer, with a view to providing a better understanding of this role in the
context of a future revision of the system."107 Following this recommen-
dation, in 1977, the UNCTAD Secretariat published a major report on the
Paris Convention, which explicated the major revisions required from the

103. See, supra note 6 at 15.

104. See, Anderfelt, supra note 3 at 262.
105. Id. at 264.
106. See, Jayagovind, supra note 46 at 57.
107. Supra note 6 at 35 (quoting text of resolution),

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 166 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 32 : 2

point of view of developing countries.

The study, entitled "The International Patent System :
of the Paris Convention for the Protection of Industrial Prop
most of the criticisms of developing countries against the
study calls for revision of many basic features of the conven
remedies provided for non-working (article 5); treatment of imp
5 and 5 quater ); right of priority (article 4); independence of pat
4 bis); and national treatment (article 2). In addition, the
several procedural criticisms regarding amendment and revisi
and provisions regulating denunciation and withdrawal.
The introduction of the study lays out the context for r
report emphasises that throughout the history of the Union, all
been in the direction of strengthening the position of the pa
than in the direction of promoting the public interest of l
countries. Moreover, it emphasises, the Union took shap
the admission of the majority of the developing countries to the
community, and before the special needs and problems of th
were recognized and acknowledged."109 Finally, it criticises as
antiquated the notion of formal equality which is a cornerstone of the
convention, asserting that such equality between unequals is essentially
spurious.
One of the major criticisms voiced in the UNCTAD study against the
Paris Union is that it allows foreign patentees to obtain patents in deve-
loping countries merely to capture export markets for products manufactured
abroad. Indeed, as much as 90-95 per cent of the patents granted by deve-
loping countries go to foreigners who work the patents abroad.110 The
relevant provisions in this regard are articles 5(A) (l') and 5 quater . Article
5 A (I), it will be recalled, prohibits the patent-granting country from revoking
the patent on the ground that the patentee is importing the product rather
than manufacturing it locally. Article 5 quater extends the import monopoly
principle to process patent products.
The UNCTAD report recommends the deletion of 5 quater , as well as
the revision of article 5C4)(1) in accordance with the principle that "patents
are granted to be effectively used... and no departure to this principle should
be admitted."111 A second criticism voiced in the UNCTAD study concerns
the weakness of sanctions provided for in the convention. The report
stresses the ineffectiveness of compulsory licenses as a sanction, in particular
criticising the provisions of article 5(4)(4), which prohibit applications for
compulsory licenses for a period of several years. Such time lags subs-
tantially reduce the value of compulsory licenses to prospective licensees.112

108. See, UNCATD, supra note 5.

109. Id. at 6.
110. Id., para 78.
111. Id., para 26.
112. Id., para 31.

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1990] CONQUEST BY PATENT 167

Moreover, the provision which allows the p

makes it even more difficult for a third pa
the clause providing that such licenses, if gr
non-transferable makes the enterprise much
licensee - especially if the foreign patente
patented goods. In response to these pr
recommends abolishing the limitations on s
abuse. States should be free to adopt all me
the goal of achieving local exploitation of
automatic lapses, and compulsory licensing.
Third , the UNCTAD study criticises the r
ship it inflicts on patentees from developin
the priority right should not apply against
faith, started the exploitation of an inventi
of preferential treatment for developing co
who, in good faith, apply for a patent during
the foreign applicant.^14
It also criticises the principle of independ
4 bis. The report calls for the amendment o
compulsory exchange of information among
litigation concerning validity of patents.1:15 T
cillin case as an example of the unfortunate
dence of patents principle. In 1970, although
the "fraudulently procured" Ampicillin pat
more than sixty countries. UNCTAD argue
on developing countries on account of this
there been a formal mechanism for the ex
should be noted that a step in this directio
lishment of the Patent Cooperation Trea
national patent applications put into effect
WIPO. The treaty provides for an internati
Search Authority to be conducted upon subm
application specifying the PCT countries in
It also provides for a preliminary examinat
patentability, the criteria for which are very
Finally, the principle of national treatm
challenged by UNCTAD. The report stre
developing countries six times more patents th
tries, and that nationals of developing coun
of the world total of patent grants.117 Thus

113. Id., paras 26-38.

114. Id., para 65.
115. Id., para 72.
116. Id., para 68.
117. Id., para 78.

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i 68 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 32 : 2

the rights of foreign patent holders so far as the developing co

concerned, and can be characterised as a reverse system of pre
the markets of developing countries for foreign patent holders."118
thus recommends that developing countries be permitted to disc
their patent laws between nationals and foreigners.119

(4) GATT multilateral trade negotiations 1988 ; MNCs take the of

(/) Introduction

But developing countries are not the only ones urging revisi
international patent system. Developed countries are currently
their own major initiatives to obtain even greater protection f
patent holders than is presently provided under the Paris Conve
content to simply defend the status quo , the European, Amer
Japanese business communities have put forth a brazen statem
for greatly increased levels of intellectual property protection
contravention to almost every one of UNCTAD's recommendati
The statement, presented in June 1988 at the Uruguay Round
Multilateral Trade Negotiations, describes its objectives thus:

The GATT negotiations on intellectual property should produ

multilateral code, the GATT IPP (Intellectual Property Protec
that eliminates trade distortions caused by infringement and
misappropriation of intellectual property. This result wo
achieved by taking two important steps that should not
barriers to legitimate trade: ( à ) the creation of an effective dete
to international trade in goods where there is an infringeme
intellectual property rights, and (b) the adoption and implem
tation of adequate and effective rules for the protection of intelle
property.121

The statement, presented by the European, Japanese and Unit

business communities represents the culmination of two years o
tion among the three groups to develop an international privat
consensus on GATT provisions on intellectual property (GATT I
three groups involved in the collective effort are: the Intellectua
Committee (IPC), a coalition of thirteen major US corporations; t
of Industrial and Employer's Confederations of Europe (UNICE)
man for the European business community, representing 22 differen
tries; and the Japan Federation of Economic Organisations (KEI

118. Ibid.
119. Id., para 80.
120. Basic Framework of GATT Provisions on Intellectual Property : Statem
of the European , Japanese and United States Business Communities (1988).
121. Id. at 17.

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 1990] CONQUEST BY PATENT 169

a private economic organisation represe

in Japan.122

The three groups, in a document entitled "Basic Framework of GATT

Provisions on Intellectual Property: Statement of Views of the European,
Japanese, and United States Business Communities", call for measures
which go far beyond those of the Paris Convention in protecting private
patentees and further delimiting the power of states to regulate patents in
the public interest. Thus, the GATT proposal presents to today's
developing countries an even greater source of concern than does the Paris
Convention.

(iì) A brief comment on the tone of the GATT IPP

A reader of the Paris Convention, in order to move beyond an under-

standing of the technical to an apprehension of the political, must under-
take an almost heroic task of deconstruction. Not so for the reader of the
GATT IPP, which quite openly takes a hard-line stance towards the demands
of developing countries, making clear that few concessions will be granted:

GATT negotiators must guard against the diminution of intellectual

property protection to a level below the consensus existing among
those nations which engage in most of the trade in goods embodying
intellectual property and whose trade and investment have flourished
because of adequate intellectual property protection.^3
The first paragraph indicates that the document can be taken essentially
as a manifesto for the developed countries:

Inadequate and ineffective protection of intellectual property against

infringements of intellectual property rights has substantially dis-
torted international trade. If adequately and effectively protected,
intellectual property promotes the expansion of international trade,
investment, and transfers of technology, intellectual property is the
foundation of international competitiveness. A regime that ade-
quately protects intellectual property can help improve and expand
the industrial base and standard of living of developing countries
as it has done in industrialized countries.124

Although the report occasionally - as in the above quotation-pretends

to take into consideration the needs of developing countries, the document
as a whole makes surprisingly little effort to conceal the real motivation
underlying its proposals. Indeed, the major problem identified by the
document is loss of profits and export markets by the United States industry
on account of "inadequate protection" of intellectual property. (The

122. See, id. at 4-5.

123. Id. at 24.
124. Id. at 11.

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170 JOURNAL OF THE INDIAN LAW INSTITUTE tVoI. 32 : 2

report refers euphemistically to this situation as "trade distortio

ling a world view in which massive profits for the few constitute th
and slightly less massive profits a "distortion").

Documented losses are compelling evidence of the magnitu

the problem. In response to a recent questionnaire of the
International Trade Commission, 193 U.S. firms estimated
aggregate worldwide losses due to inadequate intellectual prop
protection in 1986 at 23.8 billion, or 2.7 per cent of sales aff
by intellectual property. The ITC further estimated that worl
losses to all of U.S. industry in 1986 from inadequate foreign
tection of intellectual property ranged from 43 billion to
billion.125

The report especially criticises the situation in the pharmaceutical and

chemical industries:

While it takes ten years and 125-160 million dollars to bring a

pharmaceutical product based on a new chemical entity to market,
a chemist could easily duplicate the product and, if not legally cons-
trained, could produce the drug in sufficient quantities to effectively
make it unprofitable for legitimate producers.... Such loss of export
and domestic markets by intellectual propeity-based industries
makes the international protection of intellectualp roperty both a
trade issue and an intellectual property issue.126

(5) Proposed GATT provisions of intellectual property protection

The GATT report sets forth seven radical proposals. Most depart
from the provisions of the Paris Convention in providing even greater pro-
tection for foreign patentees, and in further depriving member states of
authority to regulate use of patents in the public interest. The complaints
of developing countries against the Paris Convention thus apply a fortiori
to the GATT proposal.
First, and of prime importance to developing countries, the GATT
proposal completely eliminates use of the pure process patent, providing
only for the product patent and the product-by-process patent. The relevant
provision reads:

A patent shall provide the right to exclude others from the manu-
factures, use or sale of the patented invention, and in the case of a
patented process, the ability to exclude others from the use or sale of
the direct product thereof, during the patent term.127

125. Id. at 13.

126. Ibid .
127. Id. at 32.

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 1990] CONQUEST BY PATENT 171

In its explanation for the provision, the re

Chemical substances can almost always be m

and it is rarely feasible to patent all such rou
resides in a new valuable chemical subst
therefore simply an invitation to imitators to
substance by another route, usually a rela
exercise for a competent chemist. . . . Full pro
should be afforded for all new substances,
pharmaceuticals, and agrochemicals, witho

Second , the proposal requires that patents be

nation as to subject matter".120 This suggests t
be able to exclude whole fields from patentabil
countries today.
The proposed GATT IPP provision confl
developing countries, which exclude from p
activities. Among the most common excl
which are commonly accorded a process r
medicines; nutritive and chemico-pharmace
plants and animals, and, finally, items consider
interest.130 It should be noted, also, that t
calls for the patentability of biotechnological
Third , the GATT proposal provides that
shall be twenty years from filing.132 This
to developing countries, which tend to gran
Indeed, even under the Paris Convention, th
uniform patent term on member countries, an
for itself issues of patent duration. On the who
economies which provide the longest paten
twenty years. While data on developing cou
patent duration, there is a clear trend towards
as compared to developed countries, (e.g., f
years).133 One analyst has commented on the
mining patent duration :

The evidence relating to developing countries

128. Id. at 35.

129. Id. at 32.
130. Supra note 6 at 52.
131. GATT, supra note 121 at 35.
132. Id . at 32.
133. Argentina, Chile, China, Iran, and Venezuela have patent durations of 1-5 years;
the duration is 6-10 years in Spain, Turkey, Argentina, Chile, China, Columbia, Egypt,
India, Iran, Peru, and Venezuela. Note that some countries provide for both durations,
depending on the nature of the patent and the subject matter. See, supra note 6 at 54.

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172 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 32 : 2

certain countries recognize the possibility that patent dura

vary according to diverse circumstances. In some countries, the
of the patent grant depends upon the sector to which the paten
In other cases, the duration depends on the type of patent
others, it may depend upon clear evidence that the patent
worked .... The only conclusion that can be drawn, therefor
a developing country could determine the period of durat
patent grant in accordance with its own specific requirem
policy considerations.134

Clearly, the same patent duration is not appropriate for a

at all stages of development. The GATT IPP proposal would
impose on developing countries a standard convenient fo
countries only. Further, the requirement of a twenty year pa
especially troubling in light of other GATT proposals, discus
that deprive states of the ability to ensure working of patents
The fourth and highly troubling proposal deals with working o
The proposal would totally deprive states of the ability to ensure
are worked locally. Its passage would thus represent the tota
the import monopoly principle. The proposal states that "[a]
not be revoked for non-working".135 It will be recalled that at alm
revision conference of the Paris Union, the abolition of the
revocation for non-working has been proposed and fiercely re
developed countries. Currently, under the Paris Convention,
of revocation for non- working is available, although in a serio
form.

A second proposal regarding working provisions states :

Where justified legal, technical or commercial reasons make it...

impractical to carry out the invention locally, importation authorized
by the patentee shall be deemed to satisfy the requirements for
working.136

The proposal thus redefines "working " so as to encompass importation,

a definition that has never been accepted in the past. Generally, working
has been understood to mean local manufacture of the patented product,
or local application of the patented process, and not importation or sale of
the patented article, or of the article made by a patented process.137
The reason for excluding importation from the definition of working
is the belief that a patent grant is only justified where the patentee works

134. Id. at 54-55.

135. GATT, supra note 121 at 32.
136. Ibid .
137. See, Bodenhausen, supra note 26 at 71.

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 1990] CONQUEST BY PATENT 173

the patent in the patent-granting count

merely as a means to allow patentees
from manufacture, or to control imp
of this proposal indicates that it will
importation : indeed, the grounds of
mere profitability may be enough to
manufacture. Similarly, the use of th
the most rigorous of standards.
A fifth proposal troubling to develo
grant of compulsory licences, in the

Compulsory licensing provisions

particular classes of subject matter.1

This provision is aimed at the prac

compulsory licences for certain classe
in the public interest. Under the Par
is said to be permissible : the conventio
places no limits on the use of compulsor
other than that of preventing abuse
states are free to determine their ow
interest is deemed to require such. T
patents concern vital areas of the pub
and public health. In such cases artic
to be inapplicable, and states may legi
IPP, countries would no longer be fr
patents as vital to the public interes
licensing. The proposal further re
non-exclusive, so that the patentee rem
discretion, and that the patentee be f
licenses granted.
Sixth, one of the most significant aspe
for international enforcement mechanisms to maintain standards of intellec-
tual property. The GATT IPP proposal offers a three-tiered structure of
dispute resolution. First , under GATT IPP, signatory countries would
be required to have procedures that could be used by patentees to stop the
importation of infringing goods. The report explains :

This will isolate significantly infringing goods from countries, whose

inadequate laws and enforcement procedures permit infringement
and other misappropriations of intellectual property, by cutting off
their exporters from their main foreign markets.... As a result, non-
signatory countries will likely be encouraged to adopt and implement

138. GATT, supra note 121 at 33.

139. See, Bodenhausen, supra note 26 at 70.

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174 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 32 : 2

adequate, effective, and non-discriminatory intellectual pro

protection in order to become full partners in the intellectual tra
system.^40

This provision would thus enable the intellectual property own

the infringing import at the border of the signatory country.
Thus, the object is to extend the effects of the GATT IPP b
signatories in order to reduce the volume of trade in infringing
Second, intellectual property owners would have access to lo
to prevent the production of infringing goods. Remedies woul
preliminary and final injunctions, as well as monetary awards
to compensate patentees fully and serve as an effective inf
deterrent.141

Third, and most important, where owners are unable to obtai

because of failure of the signatory country to fulfill its obligat
own governments will be able to invoke the dispute resolution m
of the GATT IPP. Such failure to fulfill obligations might take t
(a) failure to conform its domestic laws to the fundamental pr
intellectual property protections required by GATT IPP; or (b)
provide the judicial and/or administrative remedies and procedur
by GATT IPP. The dispute resolution mechanisms of GATT
either be invoked by a government on its own initiative, or through
by an intellectual property owner who believes that a party to
IPP is not in compliance with its provisions.142 Procedure
include the use of Procedures would include the use of panels o
lectual trade and property experts. If the party is found not to b
liance with the GATT IPP, the complaining party could invoke r
action as sanctioned by the GAIT IPP.143 The report does
clear what such sanctions might entail.
Finally, the GATT IPP also proposes reversal of the burden o
in cases involving the importation of a product obtained by m
patented process.^44 Normally, the patentee claiming infringe
bear the burden of proof. In cases involving the importation o
made by means of a patented process, it is often very difficult for
patentee to prove infringement, since it is difficult for him
how a product imported from abroad was made. In respon
difficulty, the GATT IPP reverses the burden of proof in cases
product.-by-process patents imported from abroad.

140. GATT, supra note 121 at 22.

141. Id. at 33.
142. Id. at 23.
143. Id. at 22.
144. Id. at 40.

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 1990] CONQUEST BY PATENT 175

VI Conclasion

It is over a hundred years since the Paris Convention was agreed by

powerful nations in 1883. Those that defend the convention visualise its
history as a linear development, with each change an improvement over
what went before. It is also possible, however, to see the major changes
that were proposed and accepted as clumsy political compromises, each to
be explained in its own milieu. The linear view is part of a nineteenth
century legacy which projects history as progress. The disaggregated view
of events is essentially cynical, but also more hard edged in its emphasis on
the need to examine the more immediate context in which historical changes
occur. The linear view concentrates on the growth of ideas; whilst the
disaggregated view is more concerned with how these ideas were socially
appropriated and used as vehicles for social and economic action. To
combine both would be to learn the seemingly easy lessons of history with
unease. If, in this paper, we have looked at the discourse of ideas, it is
because our cynicism has not been fed with the availability of enough data
to fill out the context in which the discussion occurred.
In one sense, we can see the concept of 'patents' as an ideological
construct. The justification for this construct is the inventive genius of
man; and. of course, the duty owed to the inventor. But, the inventor-
although an important part of the justification- has long since ceased to
occupy centre stage, either as a Subject or object of concern or even as a
justification for the vast apparatus of patent laws and policy built osten-
sibly to protect his creativity. The Paris Convention continues to honour
his memory in a grand but otherwise sad, gesture in article 4 quater
which reads :

The inventor shall have the right to be mentioned as such in

the patent.

With this obituary, the file on the inventor is closed. His work
and labour have been systematically appropriated by powerful interests
in society. They are the real actors in the drama even if the poor inventor
was the sine qua non of the initial justificatory principle. But, there is a
vast difference in providing a just recompense for creative genius; and
finding a less absolute business equity for someone who has either stolen
or appropriated the creator's work or simply footed the bill. And, so
the argument shifts from creativity to business. Unsatisfactory questions
loom large in both areas, for even creativity is never individual but
builds on what went before; and, a great deal of inventive work cannot
really be personalised as exclusive.
The nineteenth century origins of the Paris Convention 1883 are
apparent from its inclusions of just about every thing within the notion
of industrial property. Everything was to be treated as an invention;
and article 1(3) unabashedly includes "wines, grain, tobacco, leaf, fruit,

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176 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 32 : 2

cattle, mineral waters, beer, flowers and flour". And, this

of the shopping list. No nation could cope with such a l
pretend to enforce the law if all these were included in th
patents. Yet, if this part of the convention has been i
because it is redundant. However, it remains an important
repacious principle that even common property which belon
can be appropriated and clothed with a patent right. It is b
at the other end to begin with the assumption that all i
discovery belongs to society, subject to some reward for the
inventor. Very fundamental notions of property are at
discussion. Yet, even those would become trivialised if the
patent rights should extend to the limitless excesses
Convention.

But, if the inventor and the absurd expanse of patentability have both
exited from the scene, what we are left with is hard business demand.
Industrialists and businessmen who have either commissioned or brought
the product of research and development (R & D) claim a price for it far
greater than they paid. It is the complexity of the price demanded that
needs to be de-constructed for more considered attention. It should not
be overlooked that the R&D is subsidised by the state in which its
work is taking place- (through tax incentives and tax deductions) as well
as through the under-payment of scientists and others whose future claims
are not part of patent law but contigent on the generosity of the largeness
of the patent holder. This is assuming that the inventors can be identified
And, even then, they would be the first to acknowledge that their genius is
built on the cumulative endeavours or persons in the past and elsewhere in
the world. In this scenario, the claim for a patent is something like a
lottery. Whoever gets there first gets the prize, not just a part; but all of
it. And, the question is whether the prize (or the price, depending on how
we look at it) should be a worldwide domination of a particular sphere of
economic activity; and for how long?
There is a threat in all this. The argument of ersatz inventors is that if
they are not assured world domination for an extended period of time, they
will quit. They will stop research and development. They will stop
being inventive. Or, they will simply become terribly secret. This is not a
threat ; it is a bluff even if there are times when we tend to agree to take it
seriously. The inventors will continue to invent although society must
think through less commercial ways in which their creativity can be given
support. The profiteers will continue to seek profits having lost only an
initial advantage, with their loss being the gain of the world. And, yet the
argument is never about wholly taking away their advantages; but, how
much and to what extent?

So, let us return to the quest for world domination as a prize of having
got there first. As things stand at present, they are not denied this world
dominaron. They always have the option to register their patent in indi-

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1990] CONQUEST BY PATENT 177

vidual countries, with each country nego

laws. But, this is not acceptable to ou
may get to some other country first. Wh
pre-determine the result? The technique
in the Paris Convention (article 4). This
however incompletely, registered in one
the others. And because the convention
patent in each country, one registration
including, perforce, the first initial one a
as a whole discloses the elements of the p
With the prospect of worldwide domin
to work out the obligations that are owed to
ted such domination. The first question
is owed to the country in question. The
the basis that no obligation was really du
use his patent rights as an import monop
cially work the patent in that country.
treated as a dumping ground for goods, p
on terms wholly dictated by the patent h
untenable, so unmistakably absurd and s
the entire history of the Paris Conventio
been taken up in connecting its absurdity
and grudging. The suggestion that the
after three years to compulsorily license
mined by allowing the patent holder to
pleading justification for his inaction fo
country. And, the terms of the justifica
The injunction that two years after the
the patent should be revoked is de-limited
examination of whether the abuse of non-
compulsory license. In this way, the pate
with a formal concession to the recipient co
analysis force the patent holder to actual
in a country which he had hitherto simpl
The ultimate success of the Paris Conve
creating terribly harsh sounding restricti
sing, revocation and forfeiture, it gave
a very tough line on patent holders. The
more pleasing for the patent holder. With
he was faced with some widely phrased st
key and ambiguous were surely surmo
wide chance of potential licenses on pa
to have made concessions to the public int
course and the need to define internatio
fidelity of multinational corporations an
the Paris Convention rests on the fundam

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178 JOURNAL OF THE INDIAN LAW INSTITUTE [Vol. 32 : 2

convention has given away much less of the patent holder's

appears to have.
One of the real difficulties with all these discussions is that it is assumed
that all the nations who are signatories to any international agreement are,
by and large, equal in their economic prowess and capacity for technology.
But, they are not. The result is that any international convention of this
nature works elliptically to the advantage of the more economically and
technologically powerful nations of the world. The assumption of equality
is unfounded; but, as long as it is made, the sharp division of the world into
relatively powerful and relatively powerless nations eludes a formal descrip-
tion for the record.
But, we need to return to basic questions about the nature of the patent
right. Never has so much been claimed by just one for the work done
by others. There is no reason why our starting point, like that of the Paris
Convention, should be to create a mystical individual property right around
what is the collective creation of society. Having cheated society by isola-
ting a social creation as an individual right, we have conceded too readily
to the patent holder's claim for national and world domination in that
sphere of activity. The price asked, and readily given, is too high as either
a national or global price. The responsibility assumed by the patent holder
is too low, treating weaker nations and societies as market dumps and manu-
facturing sweat shops. The blackmail to withhold future technology and
start a trade war is unconscionable; but, it helps to tell us what the debate
is really about. The weaker nations are surely right to say that they will
not pay the price, accede to the blackmail or give up their right to be treated
as more than a market dump or a sweat shop. Yet the more powerful
nations persist in their quest to divide the world into an ever-expanding
number of finite monopolies. The argument is not one of principle; but of
greed. That it is backed by the force of threats does not add to the argu-
ment. It simply unmasks it.

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