WORLD TRADE WT/DS50/6
16October 1997
ORGANIZATION(97-4569)
Original: English
INDIA -PATENT PROTECTION FOR PHARMACEUTICAL
AND AGRICULTURAL CHEMICAL PRODUCTS
Notification ofanAppeal byIndia under
paragraph 4ofArticle 16oftheUnderstanding onRules
andProcedures Governing theSettlement ofDisputes (DSU)
Thefollowing notification, dated 15October 1997, sentbyIndia totheDispute Settlement
Body (DSB), iscirculated toMembers. Thisnotification alsoconstitutes theNotice ofAppeal, filed
onthesame daywiththeAppellate Body, pursuant totheWorking Procedures forAppellate Review .
_________________________
1. Pursuant toArticle 16oftheUnderstanding onRules andProcedures Governing theSettlement
ofDisputes (DSU) andRule20oftheWorking Procedures forAppellate Review, Indiahereby notifies
itsdecision toappeal totheAppellate Body from certain findings andconclusions ofthePanel on
India -Patent Protection forPharmaceutical andAgricultural Chemical Products (WT/DS50/R).
2. India requests theAppellate Body toreview thefollowing issues oflawcovered inthePanel
report andlegalinterpretations developed bythePanel.
(A) Article 70.8oftheTRIPS Agreement.
(i) Whether Article 70.8(a) oftheTRIPS Agreement creates theobligation "toeliminate any
reasonable doubts regarding whether mailbox applications andeventual patents based onthem
could berejected orinvalidated".
Subparagraph(a)ofArticle70.8oftheTRIPSAgreementobligesthedevelopingcountryMember
concerned to:
"...provide asfrom thedateofentry intoforce oftheWTO Agreement ameans bywhich
applications forpatents for[pharmaceutical andagricultural chemical products] canbefiled."
Thisprovision establishes merely aprocedural obligation tocreate ameans offiling, commonly
referred toasa"mailbox". Therights tobeaccorded onthebasisofmailbox applications aresetout
insubparagraphs (b)and(c)ofArticle 70.8, which apply onlyafteratransitional period oftenyears.
ThePanel concluded initsreport that:
"...Article70.8requirestheMembersinquestiontoestablishameansthatnotonlyappropriately
allows fortheentitlement tofilemailbox applications andtheallocation offiling andpriority
datestothem, butalsoprovides asound legalbasistopreserve novelty andpriority asofthoseWT/DS50/6
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dates, soastoeliminate anyreasonable doubts regarding whether mailbox applications and
eventual patents based onthemcould berejected orinvalidated..." (paragraph 7.31, emphasis
added)
Theruling thatsubparagraph (a)ofArticle 70.8requires theestablishment oflegalcertainty
astothefuture treatment ofmailbox applications effectively incorporates intothisprovision obligations
arising onlyafteraten-year transitional period under subparagraphs (b)and(c)ofthatArticle. India,
therefore, considers thatthePanel erred ininterpreting Article 70.8(a) oftheTRIPS Agreement.
(ii) Whether developing country Members intended togiveuptheirrighttodetermine thevalidity,
under theirdomestic law,ofanymailbox established pursuant toArticle 70.8oftheTRIPS Agreement.
There isnodispute thatIndiahasestablished amailbox under itscurrent administrative practice
under which itcontinues toreceive applications. Despite finding thatIndia'sreliance onthis
administrative practice was"notunconstitutional", thePanel found that"there would remain doubt
during thetransitional period regarding theeligibility ofthese products [covered bythemailbox
applications] forfuture patent protection". (paragraphs 7.37and7.38)
Onaproper interpretation oftheordinary meaning, context andobject andpurpose of
Article 70.8andonthebasisofthenegotiating history thereof, Indiaconsiders thatadeveloping country
Member hasfulfilled itsobligations under Article 70.8ifitestablishes amailbox based onitsown
determination ofthevalidity ofthemailbox under itsdomestic law.
Subsidiarily, among otherissues, Indiawishes theAppellate Body toexamine whether thePanel
didnotreversetheburdenofproofinviolationofestablishedprinciplesbyrequiringIndiatodemonstrate
thatitsmailbox could notbesubjected toapossible legalchallenge inthefuture.
(B) Whether Article 70.9oftheTRIPS Agreement requires theestablishment ofasystem forthe
grant ofexclusive marketing rights.
Article 70.9oftheTRIPS Agreement obliges India togrant exclusive marketing rights to
pharmaceutical oragricultural chemical products thatmeetthefollowing conditions:
(a) Amailbox application hasbeen filed inIndia inrespect ofapharmaceutical or
agricultural chemical product;
(b) Apatent application hasbeenfiledinrespect ofthatproduct inanother Member after
1January 1995;
(c) Theother Member hasgranted thepatent;
(d) Theother Member hasapproved themarketing oftheproduct; and
(e) India hasapproved themarketing oftheproduct.
ThePanel found thatIndiahadnotdenied thegrantofexclusive marketing rights toanyproduct
meeting theabove conditions. ThePanel nevertheless concluded thatIndia didnotcomply withits
obligations under Article 70.9oftheTRIPS Agreement because ithadfailed toestablish under its
domestic law"asystem" forthegrant ofexclusive marketing rights asoftheentry intoforce ofthe
WTO Agreement (paragraph 8.1). However, Article 70.9oftheTRIPS Agreement doesnotrequire
theestablishment ofasystem forthegrant ofexclusive marketing rights. While there aremany
provisions intheTRIPS Agreement thatexplicitly require Members tocreate theauthority forthegrantWT/DS50/6
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ofcertain rights intheirdomestic law,Article 70.9wasdrafted asatransitional provision merely
requiring thegrant ofexclusive marketing rights tospecific products aftertheoccurrence ofspecified
events. India therefore considers thatthePanel erred ininterpreting Article 70.9oftheTRIPS
Agreement.
(C) Whether aPanel isauthorized tomake findings andrecommendations onamatter onwhich
thecomplaining party hadnotrequested findings andrecommendations.
TheUnited States requested thePanel tofindthatIndia hadfailed toimplement theobligation
inArticle 70.8oftheTRIPS Agreement toestablish a"mailbox system". TheUnited States further
requested thePanel tofind:
"Inthealternative, ifthePanel findsthatIndia hashadavalidmailbox system inplace, India
hasfailedtocomplywithitstransparencyobligationsunderArticle63oftheTRIPSAgreement."
(paragraph 3.1(c), emphasis added).
ThePanel concluded thatIndia'scurrent mailbox system didnotconform totherequirements
ofArticle 70.8butnevertheless ruledontheUnited States 'Article 63claim. Under Articles 3,7and11
oftheDSU, panels aretomake findings andrecommendations onlyonmatters submitted tothem by
theparties tothedispute. India therefore considers thatthePanel exceeded itsauthority under the
DSU byruling ontheUnited States 'subsidiary claim afteraccepting itsprincipal claim.
Inparagraph 6.44ofitsinterim report, thePanel hadjustified itsinitiative bydeclaring that
theUnited States 'subsidiary request was"better understood asanadditional request". India objected
tothischaracterization oftheUnited States 'request. Inparagraph 6.11ofitsfinalreport, thePanel
justified itsdecision by"theneedtoavoid alegalvacuum intheevent that,uponappeal, theAppellate
Body were toreverse thePanel'sfindings onArticle 70.8." Given thepossibility ofanappeal, the
United States could haverequested thePanel topresent findings onArticle 63irrespective ofthePanel's
conclusions onArticle 70.8. However, thepossibility ofanappeal didnotauthorize thePanel topresent
suchfindings onitsowninitiative.