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FLEXIBILITIES IN WTO’S TRIPS AGREEMENT FOR ACCESS TO

MEDICINESby

Sangeeta Shashikant THIRD WORLD NETWORK

at

ASIAN REGIONAL WORKSHOP ON FREE TRADE AGREEMENT

26-28 August Kuala Lumpur, Malaysia

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What is TRIPS?

Agreement on Trade-Related Aspects of Intellectual Property Rights

sets minimum standards for: Copyright and Related Rights, Trademarks, Geographical

Indications, Protection of Undisclosed Information, Industrial Designs

Patent – is a monopoly given by a country to a person/entity for an novel innovative invention as a reward/privilege for a fixed period of time.

TRIPS set minimum standards for patents such as duration (20 years), rights given to patent holders, when the right can be taken away and on what grounds etc.

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Key Provisions

Art.1: “Members MAY BUT SHALL NOT be obliged to, implement in their law more extensive protection than is required by this Agreement……

Members SHALL BE FREE to determine the appropriate method of implementing the provisions of this Agreement within their own legal system and practice…..

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Objectives (Art. 7)

“The protection and enforcement of IPRs should contribute to the promotion of technological innovation and to the transfer and dissemination of technology knowledge and in a manner conducive to social and economic welfare, and to balance of rights and obligations”

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Principles (Art 8)

“Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of this agreement

Appropriate measures, provided that they are consistent with the provisions of this Agreement, may be needed to prevent the abuse of IPRS by the right holders”

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TRIPS FLEXIBILITIES

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TRIPS FLEXIBILITIES TRIPS-consistent policy options for affordable

medicines Patentability Criteria

Exceptions to patent rights (e.g., Bolar exception)

Parallel Importation

Compulsory License

Government Use

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Criteria for Patentability What can be patented?

Inventive step; novel (new); capable of industrial application

Under TRIPS – obligation to patent products and processes

Ample Flexibility in defining/scope…. national governments should be guided by development priorities; need to encourage more R & D and innovation and public interest considerations

AVOID bad or trivial patents

AVOID grant of patents on NEW USES of existing substances…..it will prolong monopoly/evergreening

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PARALLEL IMPORT

Article 6 TRIPS

Chapter 4, pg 37 of the Manual on Good Practices

It is the import and resale in a country of a patented product that has been legitimately put on the market of the exporting country.

No need consent of patent holder

Doha Declaration on TRIPS and Public Health affirms the right to choose Exhaustion of rights: national, regional or international regimes

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COMPULSORY LICENCE (CL)Article 31 TRIPS (Reaffirmed in Doha Declaration on Public

Health) Chapter 7, pg 69 of the Manual on Good Practices Govt grant of licence to 3rd party to use patent without consent of

patent holder Right to determine grounds for compulsory licence (reaffirmed in

the Doha Declaration on Public Health)

- negotiations to obtain a license on reasonable terms and conditions from the patent holder failed

- public interest, national emergencies,

- to remedy anti competitive practices (Article 40) NOT just for emergencies and NOT limited to certain diseases

(reaffirmed in Doha Declaration on Public Health)

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Conditions for grant of CL Prior negotiations to obtain license under reasonable

terms from the patent holder failed

Except when CL issued in cases of - national emergency - situation of extreme urgency including public health

crises- Remedy anti-competitive practices

Payment of “adequate remuneration”

CL has to be “predominantly for the supply of the domestic market”

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GOVERNMENT USE Article 31 TRIPS

Chapter 5, pg 45 of the Manual on Good Practices

"Public non-commercial use”

Government right (govt. agency, dept. or contractor) to use patent in the public interest

Fast-track approach to compulsory licences

No need prior negotiation with patent holder

Payment of “Adequate Remuneration” to patent holder

State practice: US and UK legislation

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EXCEPTIONS TO PATENT RIGHTS

Article 30 TRIPS Chapter 6, pg 55 of the Manual on Good Practices

Limited exceptions to exclusive rights

Allows a third party to make specified and limited use of patent No need consent of the patent holder…..automatically applicable

if provided for in legislation

e.g. Research, Experimental, Production for export

e.g. "Bolar" exception: use of patent prior to expiry for approval for generic product

NO specific conditions to use Article 30

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USE OF FLEXIBILITIES

IN

UNITED STATES

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Compulsory Licenses in US

Many compulsory licenses have been issued by the US for a wide range of patented inventions.

There are very broad grounds to grant compulsory licenses in the US.

Any employee of the United States government can authorize a compulsory license for a patented product to anyone without even holding a hearing.

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Compulsory Licenses in US

Meprobamate (1974): The United States Army wanted supplies of a tranquilizer, meprobamate. Carter-Wallace, the American patent holder, sold it for $34.25 for 500 capsules, while a Danish supplier sold the same amount for $1.55. The United States issued a compulsory license, bought it from Denmark and paid Carter-Wallace a modest royalty.

The anthrax scare (2001). Secretary Thompson to seek a large enough stockpile of ciprofloxacin (Cipro) to treat 10 million people. This quantity was far greater than the supply, and Bayer lacked the capacity to produce such a large quantity in a timely manner. On October 16, a senator asked the government to issue a compulsory licenses to generic manufacturers.

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Compulsory licenses in the US

Apparatus for controlling the orientation of satellites Hughes Aircraft Company (1996). Compulsory license was granted for a royalty of 1%.

Protective eyewear (1997): a compulsory license was issued on a patent for commercial eyeware so that American Optical could provide the US Army with several thousand pairs of ballistic/laser protective spectacles.

Camouflage screens(1998): the US government imposed a compulsory license on Brunswick Corporation patent to expand its industrial base for the production of camouflage screens

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DOHA DECLARATION

ON TRIPS &

PUBLIC HEALTH

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What does Doha Declaration say? Recognizes the “gravity” of public health problems in

developing/least developed countries esp. those resulting from HIV/AIDS, tuberculosis, malaria….

Recognizes concerns of IP and its effects on prices

AGREES that the TRIPS Agreement “DOES NOT and SHOULD NOT prevent Members from taking measures to protect public health”

Affirms “the right of WTO Members to use, to the full, the provisions in the TRIPS Agreement which provide flexibility” which include “the right to grant compulsory licenses and the freedom to determine the grounds upon which such licences are granted”

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What does Doha Declaration Say?

“Each Member has the right to determine what constitutes a national emergency or other circumstances of extreme urgency, it being understood that public health crises, including those relating to HIV/AIDS, tuberculosis, malaria and other epidemics, can represent a national emergency or other circumstances of extreme urgency”

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Paragraph 6 Doha Declaration

Recognized problem:

Post 2005…..TRIPS Agreement is fully implemented by major genericproducing countries e.g. in India…..these countries can only produce under a compulsory license “predominantly for the supply of thedomestic market” [Art. 31 (f) TRIPS Agreement]

What does this mean? – 100 % production. 51% must be for supply to domestic

market. 49% can be exported (non- predominant portion)

Problem is 49% may NOT be sufficient to meet all the needs ofcountries importing because they lack manufacturing capacity

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To resolve problem: The Doha Decl directed TRIPS council “to find an

expeditious solution to this problem and to report to the General Council before the end of 2002.

Decision reached on 30 August 2003- waiver of Article 31(f) for countries producing under a compulsory license- entire production can be exported- BUT many procedures have to be followed by exporting and importing countries- many of the view that procedures are cumbersome

and may be a disincentive to use the decision

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Debate: Permanent Solution Para 11 - TRIPS Council to initiate work to amend the TRIPS Ag. by June

2004….deadline missed

African Group submitted proposal in Dec. 2004

Proposal sought simple solution amendment of TRIPS agreement…..waive Art. 31(f) i.e. the waiver of “predominantly for the supply of the domestic market” without notification and other procedures

Africa Group proposal received overwhelming support from other developing countries but it is opposed by some of the major developed countries with large pharmaceutical industries

Developed countries want the entire August Decision and the Chairman’s statement to be part of the amendment and accuse the Africa Group of reopening the entire debate

Africa Group says: developing countries were pressured to accept the deal. Many promises were made by developed countries that their concerns will be taken into account during the discussion on the permanent amendment but now going back on the promises.

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Debate: Permanent Solution

Currently:

- impasse between developing and developed countries

Consultations are to continue BUT No

consensus in sight

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RECENT EXAMPLES IN DEVELOPING COUNTRIES OF

USE OF TRIPS FLEXIBILITIES

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Some Recent Compulsory Licenses for AIDS drugs

Country Grounds Licensee Exports Royalty Indonesia Emergency One

Manufacturer .5%

Malaysia Government use

One Importer

4% offer

Mozambique Emergency One Manufacturer

2%

South Africa Competition Small number Manufacturers

In Africa 5%

Swaziland Emergency Open No remuneration

Zambia Emergency One Manufacturer

No 2.5%

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TRIPS FLEXIBILITIES FOR

LEAST DEVELOPED

COUNTRIES

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TRIPS Flexibilities for LDCs (1)

For pharmaceuticals and undisclosed information, the period has been further extended in Paragraph 7 Doha Declaration

“We also agree that the least developed country Members WILL NOT BE OBLIGED, with respect to PHARMACEUTICAL PRODUCTS, TO IMPLEMENT OR APPLY Sections 5 (on Patents) and 7 (on

Protection of Undisclosed Information) of Part II of the TRIPS agreement OR TO ENFORCE RIGHTS provided for under these Sections UNTIL 1 JANUARY 2016 WITHOUT PREJUDICE TO SEEK OTHER EXTENSIONS of the transition periods as provided for in Article 66.1 of the TRIPS Agreement.”

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National Experience

CAMBODIA

Art 136: Cambodian Patent Law:

“The pharmaceutical products mentioned in the Article 4 of this Law shall be excluded from patent protection until 1 January 2016 according to the Declaration on TRIPS and Public Health of the Ministerial Conference of the WTO dated November 14, 2001 in Doha of Qatar”

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TRIPS flexibilities for LDCs (2)

Article 66.1:“The Council for TRIPS SHALL, upon duly motivated request by a least developed country Member, accord extensions of this period”

For all the provisions of the TRIPS Agreement, Patents, Copyright, Trademarks etc ….LDCs have the option to make a request for further extensions beyond 2006

Country Experience: Maldives applied for extension to TRIPS Council and has obtained the extension

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PROTECTION OF UNDISCLOSED DATA

versusDATA EXLUSIVITY

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What is it? For a pharmaceutical company to register its drug to get

marketing approval from the drug regulatory authority, it has to demonstrate the efficacy and safety of the drug by showing test data

When generic manufacturers apply to register the generic version of an already registered medicine, they only have to domenstrate that their product is therapeutically equivalent to the original.

To fulfill the efficacy and safety requirements, the DRA relies on the registration file of the original manufacturer

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Does TRIPS require Data Exclusivity?

NO Art. 39 is about ‘Protection of Undisclosed Information’.

Article 39.3 Requires ONLY to "protect … test data against unfair commercial use … [and] disclosure" - Only "undisclosed test or other data“- Only for "products which utilize new chemical entities”- Only for “origination of [the data] involves considerable effort”Governments have flexibility to define

NO MENTION OF GRANT OF EXCLUSIVE RIGHTS over test data to the originator for a fixed period of time. So WTO Members DO NOT have an obligation under the TRIPS Agreement to confer exclusive rights over test data for any fixed period of time

Waiver for LDCs until 2016

Developing countries have a position...see WTO Comm. IP/C/W 296

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CURRENT TREND

TRIPS Flexibilities and Doha Declaration on TRIPS and Public Health are being eroded by TRIPS plus provisions in FTAs in many ways...