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Analysis Of The Concept Of Patent Linkage
Intellectual property law has never been uncontroversial, and patent law in particular has been the subject of heated debate. Patent Linkage is generally understood as the establishment of a relationship between the market approval process of generic drugs and the patent status of the originator product.  It outlines the requirement of not allowing the grant of marketing approval to any generic drug manufacturer prior to the expiration of the patent term or determination by the competent authority that the patent will not be infringed or is invalid unless by consent of the patent owner. The obligation is placed on the applicants applying for marketing approval to prove that the drug is not protected by a patent. An obligation is also placed on the national regulatory authorities to prevent the registration and marketing of a generic pharmaceutical in case the drug for which approval is sought is patented.
In countries where patent linkage is recognised, the regulatory authority is, in effect, turned into a patent enforcement agency, as patent linkage prevents that authority from granting regulatory authorisation to a generic medicine where there is believed to be a relevant patent in existence. 
This project deals with the concept of patent linkage and the position with respect to this concept in US and India.
POSITION IN US
In the United States, Patent Linkage is statutorily recognised by the Drug Price Competition and Patent Term Restoration Act, a major amendment of the Federal Food, Drug and Cosmetic Act, enacted in 1984. This legislation is commonly known as the Hatch Waxman Act.
Linkage in US is applied though the publication of “Approved Drug Products with Therapeutic Equivalence Evaluations", commonly known as the Orange Book. This publication identifies the drug products which have been approved on the basis of safety and effectiveness by the Food and Drug Administration (FDA). Orange Book lists the approved drugs, the discontinued drug and provides patent and exclusivity Information. Applicants of the pioneer drug are required to file with the FDA the number and expiration date of any patent the subject matter of which is the drug for the market approval of which the application is made or a method of producing that drug.
The FDA cannot approve a second application in case there is a patent listed in the Orange Book for the pioneer drug on which the second application relies on. Therefore, when a second applicant submits an ANDA (Abbreviated New Drug Application (application for a typical generic drug) [filed under Section 355 of the US Code Title 21, Chapter 9, sub chapter 5] or a section 505(b)(2) application, it must include appropriate certifications that they have permission to use all of the patents listed in the Orange Book with respect to the drug which serves as the basis for their petition (US Code Title 21, Chapter 9, Subchapter 5, Section 355 (b)(2)(A)  and Section 355 (j)(2)(A)(vii)  provide that the applicants have four certification options).
Generic drug manufacturer must certify when filing Abbreviated New Drug Application (ANDA) [in case the application is filed without the required investigations being conducted in order to show that the drug is safe and effective, the application must contain a certification claiming either of the four grounds]:
1) That the drug has not been patented;
2) That the patent has already expired;
3) The date on which the patent will expire, and that the generic drug will not go on the market until the expiry of the patent; or
4) That the patent is not infringed or is invalid. 
These are referred to as paragraphs I, II, III and IV certifications.
Paragraph I, II, III applications are relatively easier to administer while paragraph IV application is a little complicated to administer. Under a paragraph IV application, the applicant must notify the patentee of its filing and must also describe reasons as to why the patent will not be infringed or is unenforceable or invalid.
The patentee/innovator has got a period of 45 days after the receipt of notice to file an infringement suit. Under the US law, the submission to FDA of paragraph IV certification in an ANDA creates infringement for purposes of federal court jurisdiction.
If a lawsuit is filed within the period of 45 days and the patent information had been submitted before the date on which the ANDA or section 505 (b)(2) was filed before the FDA, the FDA approval is stayed for a period of 30 months at the end of which the FDA issues tentative approval. Most ANDA applicants await resolution of the litigation before going to market to avoid liability for damages.
There are several benefits of patent information being made easily available through the orange book. Firstly, it allows generic drug manufacturers to review patent information so as to determine when the patent expires since they will be allowed to use the patented invention freely once the patent has expired. Secondly, the manufacturers can get to know the subject matter of patent and hence they can more quickly address issue of whether patent is infringed by their use of a specific drug product.
In a nutshell, the process for applying maybe summarized as under:
Generic manufacturer has to apply for marketing approval of the patented drug along with any of the four certifications.
In the cases of paragraph I and II applications, the FDA may grant the approval immediately while in case of paragraph III application, the FDA may grant the approval on the expiry of the patent term.
In case of paragraph IV application, the applicant must notify the patentee of the application after which the patentee may file a suit of infringement within forty five days of receiving the notice. If a suit of infringement is filed, then an automatic thirty month stay of approval is placed on the drug. Now if the patent expires before the period of thirty months gets over or the period of thirty month expires or if the court determines that the patent is invalid before the expiry of thirty months, then the FDA may grant approval immediately but if the court determines that a valid patent has been infringed, then the FDA does not approve the drug until the patent expires.
Thus, under the U.S. patent linkage system, the onus is placed on the generic drug manufacturer to provide information as to whether an existing patent will be applicable to the drug for which the marketing approval is being sought. If the manufacturer decides to challenge the patent, then a notice needs to be given to the patentee in order to enable him to defend the validity of the patent in the court. After the patent litigation has been resolved, the marketing approval can be granted by the FDA to the generic drug manufacturer if the patent is declared invalid, while in cases where the generic drug infringes the patent and the patent is found to be valid, the FDA may have to wait till the expiry of the patent before granting approval.
POSITION IN INDIA
In India, the issue of patent linkage was first raised in the case of Bristol Myers Squibb (BMS) v. Hetero Drugs Ltd.  wherein BMS sued Hetero and appealed that Hetero should be stopped from making, using or selling a generic drug ‘Dasatinib’, which infringed BMS’s patent for a leukaemia drug, ‘Sprycel’ which it had been selling since 2006. In January, 2009, an ex-parte injunction was given by the Delhi High Court in favour of BMS. In its injunction the court said, “It is expected that the DCGI while performing statutory functions will not allow any party to infringe any laws and if the drug for which approval has been sought by Hetero drugs is in breach of the patent of BMS, the approval ought not to be granted to Hetero."  Then came the case of Bayer corporation which led to a lot of debate related to the issue of patent linkage and which was also the first detailed decision related to patent linkage given in India. The decisions of the Single Judge and the Division Bench of the Delhi High Court have been analysed below:
Bayer Corporation and Anr. v Cipla, UOI  (Single Judge Decision)
An application was made by Cipla for a marketing licence for its drug “Soranib" before the DCI. The writ petition was filed by Bayer to seek directions from the court to, inter alia, restrain grant of licence to Cipla.
It was alleged by Bayer’s counsel that Cipla’s drug was an infringement of its patent and being an infringing copy of an existing patented product, Cipla’s drug could be deemed as a “spurious" drug as defined in section 17 (b)  of the DCA.
Bayer also argued that Section 2 of the DCA read jointly with Section 48 of the Patents Act provided the concept of ‘Patent Linkage". In other words, Bayer contended that, by virtue of Section 2 of the DCA, the DCGI needed to ensure that his decision to grant marketing approval should not be in derogation of any other law which was in force at the time; that DCGI had no reason to grant marketing approval to Cipla when it would be contrary to section 48 of the Patents Act (which dealt with infringement of patents); that only when Bayer’s patent for the disputed drug expired can DCI grant such an approval. Bayer’s argument in short was that the said provisions of DCA and the Patents Act, when read together had an inbuilt provision of “Patent Linkage".
Cipla argued that Bayer’s claim of “patent linkage" based on an interpretation of the respective provisions of DCA and Patents Act was misleading because: (i) the mere grant of a drug regulatory or a marketing approval by DCGI itself could not amount to a patent infringement; and (ii) assessment of a patent infringement was beyond the statutory powers of the DCI which was not institutionally capable of dealing with complex issues of patent validity and infringement (only a court of law was competent to assess whether there was an infringement under the Patents Act), and, the DCGI could not assume a patent infringement simply because the patentee claimed so. If the contentions of Bayer were accepted, Cipla argued, the powers of the High Courts would be vested with the DCGI who would examine the merits of a patent while granting a drug approval, a situation that was unsupported by, and beyond the contemplation of the DCA.
Cipla further pointed out that Bayer’s claims were based on the notion that the patent was a valid one and had been infringed and that if such arguments were accepted it would be inconsistent with the spirit of the Bolar provision the main objective of which was ensuring availability of cheap or low cost drugs to the public by speeding up the entry of the generic drugs in the market.
Cipla denied that there was any “Patent Linkage" regime in India and that what Bayer wanted was to have the Court legislate it through interpretation of the two statutes, which, according to Cipla, was impermissible. According to Cipla, while the TRIPS agreement mandated a Bolar provision to encourage research and development, which had actually been done by virtue of Section 107A (a) of the Patents Act, the question of “Patent Linkage" concept was really a TRIPS plus policy, which was unsupported by Indian legislative policy.
The DCGI raised the argument that the Patents Act was a self-contained code of all issues pertaining to patents, their grants and enforcement.
DCGI further submitted that the definition of “spurious drug" had been introduced in the DCA because of the problems of adulterated drugs and production of spurious and sub-quality drugs which posed a serious threat to the community’s health and that DCGI did not have the legislative mandate to refuse marketing approval of a drug based on its patent status and lacked the institutional competence to deal with complex patent issues.
The Indian statutory law did not permit the linking of the patent status of a drug to its marketing approval and that there was no administrative or regulatory system in India permitting patent linkages.
(i) Whether a combined reading of the DCA and the Patents Act resulted in the conclusion that no marketing approval could be granted to applicants for marketing drugs which were patented, by reason of Section 2 of DCA, read with Sections 48 and 156 of the Patents Act?
(ii) Whether drugs or formulations which infringed patents were “spurious drugs" under the DCA?
On the first issue, the Court found that the DCA was a public regulatory measure, which prescribed standards of safety and efficacy which were to be followed in the pharmaceutical industry while on the other hand the Patents Act put in place a regime containing standards for conferring private monopoly rights in favour of inventors. The Patents Act required that, to claim a patent, processes or products should involve steps that were technically advanced as compared to the existing knowledge or having economic significance or both. While the Controller of Patents and other officers were experts in judging patentability of a product, officials under the DCA who were required to only test the safety and efficacy of the product and ensure that it was in conformity with the therapeutic claim which had been put forth, could not claim to have the domain knowledge to examine whether a patent involved an inventive step. Hence, the Court held that to invest a regulatory authority such as the DCI with functions that were exclusive to other enactments would be beyond the competence of the DCA.
Further, it was pointed out by the Court that patent infringement was never assumed at the instance of a patentee, but had to be ascertained before a court of law under the Patents Act and that such an adjudication was unquestionably beyond the jurisdiction of the DCI. On the issue of patent linkage, the Court found no legal regime for a patent linkage as argued by Cipla and held that in the absence of a parliament mandated regime, courts should not seek to lay down policy matters.
The Court also referred to a 400 page preliminary report dated November 28, 2008 by the competent authorities of the European Commission  which was based on a sample of medicines under investigation that faced loss of exclusivity in the period 2000-2007. The report noted post expiry expenditure of fifty billion euros had been incurred on the drugs in the member states and fourteen euros were saved because of the presence of the generic drugs in the market. The report also highlighted the fact that had the generic drugs been introduced in the market without delay, a further three billion euros could have been saved and suggested that to delay competition, big pharmaceutical manufacturers had intervened before regulatory authorities other than patent offices in a large number of cases, just like Bayer was trying to do in the instant case.
The Court observed that such ‘patent linkage’ would have undesirable results such as clothing regulatory authorities with completely new powers in areas they lacked expertise and undermine the “Bolar/ Early working" exceptions under patent laws that encouraged quick access to the post patent markets for generic medicines etc. Accordingly, the Court found that Section 2 of DCA read with provisions of the Patents Act did not establish a ‘patent linkage’ as sought by Bayer.
On the second issue, the Court felt that if Bayer’s contention that drug formulations that infringed patents were spurious drugs was accepted, then every generic drug would be considered a spurious drug since generic drugs were nothing but the deemed substitutes of the originator patented drugs. The Court held that such an interpretation would be contrary to the legislative intent in framing the DCA. The key element of determining whether a drug was spurious or not, the Court held, was deception, in the manner of presentation of the drug concerned, in the sense that they imitated or represented themselves to be something that they were not. The Court characterized the writ as a speculative foray by Bayer in an attempt to “tweak" public policies through court mandated regimes and dismissed the writ petition with costs of INR 675,000 (approximately USD 14,000) payable in equal shares to Cipla and the Union of India, another respondent in the case.
Bayer Corporation and Anr. v Union of India and Ors.  (Division Bench)
FACTUAL MATRIX OF THE CASE
On 5th July, 2001, Bayer Corporation had filed a patent application in respect of an invention titled “Carboxyaryl Substituted Diphenyl Ureas" which was granted on 3rd March, 2008 by the Patent Office for a period of twenty years from 12th January, 2000 in accordance with section 53 of the Patents Act.
The DCGI granted licence to Bayer to import "sorafenib tosylate" in terms of rule 122A of the Drugs and Cosmetics Rules 1945.
According to Bayer, it learned in July 2008 that Cipla had announced the introduction of a drug “Soranib" which was a substitute of its patented drug. Subsequently, on 31st July 2008 Bayer wrote to the DCGI requesting that marketing approval be not granted to Cipla for its drug "Soranib" as Bayer had the exclusive right to market the drug. It urged the DCGI to reject the representation of Cipla for grant of marketing approval for spurious adaptation of its patented drug sorafenib tosylate, as the same would contravene DCA.
On 25th September, 2008 Bayer wrote to Cipla asking it to confirm whether it had filed an application before DCGI for grant of marketing approval for a drug covering "sorafenib tosylate" but received no reply.
On 31st October 2008 Bayer filed the above mentioned writ petition praying inter alia for a writ restraining the DCGI from granting licence to Cipla to manufacture and market, to imitate/ substitute its drug “sorafenib tosylate" which is prescribed for the treatment of renal cancer.
An interim ex-parte order was passed by learned Single Judge on 7th November 2008 restraining the DCGI from passing a final order on the application made by Cipla for grant of marketing approval for Soranib which was later vacated on the basis of submissions made by Cipla and DCGI.
(a) Whether the DCGI can grant marketing approvals under the DCA to generic versions of patented drugs?
(b) Whether the grant of such marketing approvals to generic versions of a patented drug is in derogation of the Patents Act?
(c) Whether generic drugs are spurious drugs in terms of the DCA?
(d) Is there a patent linkage in terms of the Patents Act and the DCA?
Bayer claimed that Soranib was an imitation of, or a substitute for its patented drug and that by granting such licence, the DCGI would permit the marketing of a ‘spurious drug’ as defined under Section 17B DCA.
Bayer contended that a collective reading of Section 2 DCA  and Sections 48  of the Patents Act provided for patent linkage in India. Also, the inclusion of the column in Form 44 (to be filled under Rule 122B DCR with the application) requiring the applicant to indicate the ‘patent status’ of the drug was done consciously to bring about patent linkage.
It was also contended that Section 156 of the Patents Act read with Section 48 obliges the DCGI, whose office is part of the central government, to ensure that the patent granted in favour of Bayer is not infringed and DCGI would abet patent infringement by granting marketing approval. Reliance was placed on Hoechst Pharmaceuticals v. CVS Mani  wherein Section 2 DCA and the DCR were interpreted as requiring the DCGI to adhere to the requirements of the Trade and Merchandise Marks Act 1958.
It was contended on behalf of Cipla that that the scheme and purpose of the DCA and the Patents Act are entirely different and that there was no concept of patent linkage in India.
Merely because Form 44 requires the applicant to indicate the patent status does not mean that the DCGI is bound to ensure that no patented drug is granted marketing approval. It was argued that if the patent holder has already been granted approval for the marketing of the patented drug as a new drug  , then the subsequent applicant for marketing approval has to only indicate the bio-availability/bio-equivalence of the drug.
If Bayer's argument of patent linkage were to be accepted then the DCGI will have to presume that the patent granted is valid, and section 13 (4)  clearly mandates that the grant of patent does not lead to a presumption of its validity and the patent can only be validated by the Appellate Board, the High Court or the Supreme Court.
CANCER PATIENT AID ASSOCIATIONS’ CONTENTIONS
If the appellant's attempts to introduce a patent linkage system in India were to succeed it will inevitably have an adverse impact on access of a large number of cancer patients to safe, effective and affordable medicines.
The DCGI is not the appropriate body to enforce a patent and its main function is to ensure safety, quality and efficacy of the drugs available to the public in India.
Generic drugs cannot be held to be spurious drugs otherwise they will invite penal sanction under the DCA merely for infringing the patent.
Patents Act provides for the Bolar Exception  under section 107A and Article 30 of TRIPS (deals with exceptions to patent rights) also recognises such an exception to encourage competition.
The administration of the DCA and the DCR is under the control of the Ministry of Health and Family Welfare whereas that of the Patents Act is under the Department of Industry Promotion, under the Ministry of Industry and Commerce and the scheme, aims and objectives of both the acts are completely different.
In relation to the first issue, the court held that the contention that the DCGI is bound by the injunction in Section 48 prohibits any third party from even “offering for sale" the patented product without the consent of the patent holder, is based on a misreading of Section 156 of the Patents Act which states that the central government is also bound by such patent. The court further held that Section 156 only imposes a negative obligation on the part of the government not to infringe the patent but does not place a positive duty on it to protect and enforce the patent. Hence marketing approval can be granted by the DCGI even in respect of patented drugs.
The court held that section 48 gives a negative right which is enforceable at the instance of the patent holder and also subject to other provisions which permit challenge to the validity of the patent to be raised as a defence in a suit for infringement of the patent. The court further held that in granting marketing approval to a patented drug, the DCGI by no means itself infringes any patent or abets the infringement of any patent by the applicant in whose favour the marketing approval is being granted and that such an argument was based on a misconstruction of the scheme of the DCA. The court highlighted that the object of the DCA was to regulate the import, manufacture, distribution and sale of drugs and cosmetics and it was by no means required to enforce a patent granted under the Patents Act and deny marketing approval to a generic version of a patented drug manufactured by a non-patentee. Hence, the grant of marketing approvals to generic drug manufacturers cannot be said to be in derogation of the Patents Act.
The court also upheld the contention of Cipla that when an application is made for grant of marketing approval for generic version of a patented drug, in respect of which marketing approval has already been granted to the patent holder, the applicant has only to satisfy the DCGI that its drug is bio-available and bio-equivalent to the patented drug. The court held that keeping in mind the overall scheme of the DCA, it cannot be said that patent linkage is established only because one column of Form 44 asks the applicant to indicate the patent status of the drug and that a form in an appendix to a rule cannot be interpreted in a manner which is contrary to the overall scheme of the act.
The court also observed that a patent is valid for 20 years and if patent linkage is recognized, then every time a marketing approval is sought by a generic manufacturer of a patented drug, the DCGI will have to perforce reject such application as long as 20 years have not elapsed from the date of grant of the patent. The court held that this will be contrary to the provisions of the DCA as well as the provisions of the Patents Act and that the Court could not possibly read into the statute a provision that plainly did not exist.
The court further held that if Bayer's argument of patent linkage was accepted, it would mean that instead of the validity of the patent being tested, if at all, either in revocation proceedings or by way of a counter-claim in infringement proceedings instituted by the patent holder, the DCGI will presume the validity of the patent and will then either outright refuse the marketing approval sought for a patented drug by the applicant (a generic manufacturer) or put the application ‘on hold’ till the applicant gets the question of the validity of the patent settled in proceedings before a competent authority. The court observed that this argument is premised on a procedure that is not at all envisaged under the DCA and clearly is beyond the scope of the powers of the DCGI which is plainly not equipped to deal with issues concerning the validity of a patent.
The court also took into account the fact that accepting Bayer's contention would mean that the patentee would be able to block off all generic manufacturers who might have been able to make the drug available in the market at affordable prices. If the patentee does not apply for even a marketing approval, then the drug would be virtually unavailable in India till such time the patentee decides it should be available. The court held that although the Patents Act recognises the monopoly of the patent holder for a period of three years, after which a compulsory licence may be granted, the question of preventing the DCGI to grant marketing approval for the generic version of the drug during that period is not envisaged by the provisions of the DCA. The court concluded its decision on the issue by saying that whether patent linkage should be introduced is an issue that requires a policy decision to be taken by the government and it is not for the court to determine if the government should bring in a system of patent linkage.
On the last issue, the court held that generic drugs  cannot be regarded as spurious drugs as this would mean subjecting manufacturers of generic versions of patented drugs to criminal prosecution under the DCA although the Patents Act does not provide for such a consequence. Also, the question of the drugs being spurious cannot arise merely at the stage of seeking marketing approval even before such drugs are manufactured or marketed. The court observed that since Cipla had said that it will use its own brand name and label, no question of manufacturing a drug under a name which belongs to another drug and hence the drug cannot be held to be spurious as defined under section 17B  of DCA.
Hence, the position in India related to patent linkage is that patent linkage is not permitted in India. But an appeal from the decision of the division Bench of the Delhi High Court in the Bayer case has been admitted by the Supreme Court though it has refused to grant Bayer an interim stay. Thus, the position in India related to patent linkage will be finally determined after the decision of the Supreme Court.
COMMENTS AND SUGGESTIONS
In case the generic drug manufacturers are not granted marketing approval in case the drug is patented, the generic drug industry will be forced to focus more on R&D and will seek to invent drugs rather than produce substitutes of the original drugs. Thus, they will also have to focus on getting patents for drugs and thereby getting the exclusive right to market them. Obtaining and maintaining a patent is an expensive task and that is why it is often seen that majority of the patents are held by big pharmaceutical companies who operate from developed countries. In the interest of the public of the developing countries, which primarily consist of consumers with hardly any focus on R&D, generic manufacturing of drugs should be allowed as otherwise majority of the public who are reliant on the cheaper generic drugs will not be able to afford the drugs manufactured by the patent holder. Patent linkage will also deal a killer blow to the generic drug manufacturing industry of India which currently is the largest exporter of generic drugs in the world.  There are some practical and technical difficulties associated with patent linkage some of which have been highlighted below:
The National Patent Office might grant low quality patents. Patent linkage leads to a presumption of validity and prevents any competition from the generic manufacturers and the only way to overcome the monopoly of the patentee is to go through expensive and time consuming litigation.
Linkage forces the national regulatory agencies, who are traditionally concerned with the safety and efficacy issues to assess and enforce patent rights, to perform a function which falls in a different domain altogether.
It changes the nature of the patent right from a private right, the enforcement of which is dependent upon the willingness and diligence of the patentee to a public right, the enforcement of which is to be done by the national regulatory authorities which are financed by the taxpayers.
It effectively amounts to extension of the patent period of the drug as generic drug manufacturers can begin the proceedings to obtain license only after the expiry of the patent period.
If linkage has to be adopted, then it needs to be ensured by the government that linkage will not apply whenever it or the courts issue compulsory licenses or other orders for non-voluntary authorizations for use of patents. Government has got the right to grant compulsory licenses and take other measures [it has been empowered under section 83 (e) of the Patents Act to take any measure in order to protect public health] to mitigate the monopoly of the patentee but these provisions may be nullified by Trade Agreements that put pressure on the developing countries to refrain from exercising such provisions.
Measures like linkage are very important in order to ensure that investing in research and development of new drugs remains lucrative. On the other hand, it harms the generic competition and access to medicines and sometimes the public interest is also jeopardised. Patent linkage brings with it a lot of practical and technical difficulties and makes the monopoly of the large pharmaceutical companies very strong thereby resulting in the prices of drugs becoming unaffordable for a large section of the public. For instance, the drug sole by Bayer to treat renal cancer is priced at Rs 2.85 lakhs for a monthly dosage of 120 tablets whereas the generic drug manufactured by Cipla is priced at a substantially lesser price. Thus, some other lighter measures can be adopted to ensure that the interests of the patentees are adequately protected and the overall public interest (including access to medicines and availability of affordable drugs) is also not harmed. The trade surplus of the European based pharmaceutical industry (primarily research based) was estimated at forty seven thousand million euros in 2007 so in case lighter regulations instead of patent linkage are introduced in order to facilitate the entry of generic drugs into the market and reduction in the prices of drugs, it cannot be said that an irreparable harm will be done to the interests of the pharmaceutical majors. 
Some of the ways in which such a balance can be brought about are as follows:
Instead of linkage, a mandatory notification system can be introduced which only imposes the obligation of a notification being sent to the patentee so that he can be made aware of the application for marketing approval and then has ample opportunity of taking further action.
There can be a monopoly period for the patentee to enjoy his rights although instead of following the US model (where the monopoly period is 30 months) it can be reduced to 24 months (like in Canada) or even shorter periods such as six or twelve months, particularly if the shorter time is sufficient to ensure enforcement of patents by the patent holder.
In certain cases where the public interest demands so, marketing approval should be granted even while a patent challenge is pending in court.
The generic drug manufacturers can be asked to pay a certain sum to the patentee in the form of a royalty.
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