Transcript Flexibilities In WTOs TRIPS Agreement For Access To

FLEXIBILITIES IN WTO’S TRIPS
AGREEMENT FOR ACCESS TO
MEDICINES
by
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 socioeconomic 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 CarterWallace 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 generic
producing countries e.g. in India…..these countries can only produce
under a compulsory license “predominantly for the supply of the
domestic market” [Art. 31 (f) TRIPS Agreement]
 What does this mean? – 100 % production.
51% must be for supply to domestic
market. 49% can be exported
(nonpredominant portion)
Problem is 49% may NOT be sufficient to meet all the needs of
countries 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
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now going back on the promises.
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
C ou n rt y
Indonesia
Grou n ds
Emergency
Malaysia
Government
use
Mozambique Emergency
South Africa Competition
Swaz iland
Emergency
Zambia
Emergency
Li ce n se e
Exports
One
Manufacturer
One
Importer
One
Manufacturer
Small number In Africa
Manufacturers
Open
One
Manufacturer
No
Royalty
.5%
4% offer
2%
5%
No
remuneration
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
versus
DATA 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...
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