WHO/EDM Technical

Briefing Seminar
27 September – 1 October 2004

TRIPS Agreement and Public Health

 Structure of presentation
1. WHO and IPRs & access to medicines
2. What are patents?
3. TRIPS Agreement and the Doha Declaration
4. "TRIPS flexibilities" - what are they and how
are they used?
5. The Paragraph 6 problem and the WTO
August 30 Decision
6. Challenges

2
WHO perspectives on IPRs and
access to medicines
 Access to essential medicines is a human right
 Essential medicines are not simply another
commodity
 Patent system is an incentive mechanism
for research and development of new drugs
 Patents should be managed so as to protect
interests of patent holder, as well as, safeguard
public health principles
 WHO supports measures which improve access
to medicines, including the use of TRIPS
safeguards. 3
WHO Mandate
Since 1999, WHA Resolutions have given
broad mandate to WHO to:
 analyse, monitor and report on implications of
globalization, IPRs/TRIPS, trade agreements
for public health;
 Strengthen pharmaceutical policies and
practices; and
 Assist in the implementation of TRIPS
flexibilities and public health safeguards.
4
What are Patents?
 Proprietary title
 Territoriality of patents – diversity and
flexibility in national patent laws  no
international patent
 Patentability criteria and exceptions
 Patent duration
 Patents granted by national Patent Offices
 Annual renewal, payment of fees to maintain
patent
5
Patents: The rationale
 INFORMATION - dissemination of information and
technical knowledge
 INVESTMENT – increased investment in R&D

 INNOVATION

In exchange for --
• MONOPOLY – a time-limited 'monopoly' and the ability
to determine price
 MARKET – a negative right to prevent others from
using, making, selling, marketing the product for a
specified period

Global debate – is the patent system delivering? 6

Pharmaceutical patents
 Patent protection is intended for protection of
inventions, and not for medicines per se
 However, types of patents granted for pharmaceuticals are
increasing. Often, there is more than one patent for each
single medicine.
 So, not only are patents applied for in respect of:
• specific molecules (product patents);
• manufacturing methods (process patents); or
• medical indications (e.g., effect of the molecule)
BUT also for:
• combinations of known products; e.g., a fixed dose combination
• new salts of known substances
• new uses for known products
• variants of known manufacturing processes

What is and should be the criteria for patentability? 7

 Pre-TRIPS
 Intellectual property rights – a public policy tool
 Development of different approaches for
different needs: technology transfer vs.
protection of technological base; enhancing
competition and access vs. protection of
investment
 Patent issues treated differently in each country
 Eligibility requirements, patentability criteria
 Scope of protection – process and/or product patents
 Exceptions and exemptions
 Checks and balances vs. abuse of IPRs 8
Patents and the TRIPS Agreement
 Minimum standards for patent protection
 Framework for national implementation but NOT a
uniform international law or uniform legal
requirements
 Patents to protect inventions, in all fields of
technology
 Patentability criteria: novelty, inventive step,
industrial application (TRIPS Art.27)
 Patents for products and processes
 Patent term – minimum of 20 years
 Patents and the promotion of public interest?
9
TRIPS Agreement and Doha Declaration

 WTO Ministerial Conference, Nov.2001

 Patent and prices debate
 Clarification of TRIPS provisions
 Para 4: TRIPS "can and should be
interpreted and implemented in a manner
supportive of WTO Members' right to protect
public health and in particular, to promote
access to medicines for all"

10
TRIPS and developing countries
Developing countries, when designing and
implementing patent legislation, should follow this
principle: Strict standards of patentability and narrow
scope of allowed claims
This means:
• Limiting scope of patentable subject-matter
• Standards – strict requirements for patentability and breadth
of patent commensurate with inventive contribution and
disclosure made
• Facilitating competition – restricting ability of patentees to
prohibit others from building on or designing around
patented inventions
• Extensive safeguards to ensure patent rights are not
exploited inappropriately
Recommendation of UK CIPR Report (2001)
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TRIPS Agreement and Doha Declaration

TRIPS-consistent policy options for affordable

medicines: use of public health safeguards
affirmed in Doha Declaration
 Government use

 Compulsory licences

 Parallel importation

 Exceptions to patent rights (e.g., Bolar

exception)
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Using the TRIPS flexibilities
• Straightforward, transparent and fast
procedures
• Legislation that fully exploits the flexibility in
TRIPS; e.g., for determining grounds for
compulsory licensing and non-commercial
use by government
• Clear, easy to apply, and transparent
guidelines for setting royalty rates
• Appeal procedures that do not suspend
execution of licence
13
Public non-commercial (government) use

Article 31 TRIPS
• "Public non-commercial use"
• Government right (govt. agency, dept. or
contractor) to use patent in the public interest
• Fast-track approach to compulsory licences
• Compensation to patent holder
• State practice: US and UK legislation

14
Public non-commercial (government) use
United Kingdom
Patents Act 1977, Section 55(1)
Notwithstanding anything in this Act, any government department or any person
authorized by a government department may, for the services of the Crown and
in accordance with this section, do any of the following acts in the United
Kingdom in relation to a patented invention without the consent of the proprietor,
that is to say-
(a) where the invention is a product, may-
(i) make, use, import or keep the product, or sell or offer to sell it where to
do so would be incidental or ancillary to making, using, importing or
keeping it; or
(ii) in any event, sell or offer to sell it for foreign defence purposes or for
the production or supply of specified drugs and medicines, or dispose
or offer to dispose of it (otherwise than by selling it) for any purpose
whatever;
(b) where the invention is a process, may use it or do in relation to any product
obtained directly by means of the process anything mentioned in paragraph
(a) above;
(c) without prejudice to the foregoing, where the invention or any product
obtained directly by means of the invention is a specified drug or medicine,15
may sell or offer to sell the drug or medicine; ...
Public, non-commercial (Government) use

United States: 28 USC 1498 (1997)

“(W)henever an invention described in and covered by a patent of the
United States is used or manufactured by or for the United States
without license of the owner thereof or lawful right to use or
manufacture the same, the owner’s remedy shall be by action against
the United States in the United States Court of Federal Claims for the
recovery of his reasonable and entire compensation. Reasonable and
entire compensation shall include the owner’s reasonable costs,
including reasonable fees for expert witnesses and attorneys, in
pursuing the action ...

For the purposes of this section, the use or manufacture of an invention

described in and covered by a patent of the United States by a
contractor, a subcontractor, or any person, firm or corporation for the
Government and with the authorization or consent of the Government,
shall be construed as use or manufacture for the United States”.
16
Parallel import

Article 6 TRIPS
 Import and resale of patented product in
another country, without consent of patent
holder
 Exhaustion of rights: national, regional or
international regimes
 State practice: S. Africa, Malaysia

17
Parallel import
South Africa: Medicines and Related Substances Control Act
No. 101 of 1965 (as amended by the Medicines and Related
Substances Control Amendment Act 1997), Section 15C:

“(T)he minister may prescribe conditions for the supply of more affordable
medicines in certain circumstances so as to protect the health of the public, and
in particular may-
(a) notwithstanding anything to the contrary contained in the Patents Act, 1978
(Act No. 57 of 1978), determine that the rights with regard to any medicine
under a patent granted in the Republic shall not extend to acts in respect of
such medicine which has been put onto the market by the owner of the
medicine, or with his or her consent;
(b) prescribe the conditions on which any medicine which is identical in
composition, meets the same quality standard and is intended to have the
same proprietary name as that of another medicine already registered in the
Republic, but which is imported by a person other than the person who is the
holder of the registration certificate of the medicine already registered and
which originates from any site of manufacture of the original manufacturer as
approved by the council in the prescribed manner, may be imported;
(c) prescribe the registration procedure for, as well as the use of, the medicine
referred to in paragraph (b)”.
18
 Parallel import
Malaysia: Patents Act 1983, as amended by Patents
(Amendment) Act 2000 Section 58A: Acts deemed to be non-
infringement
(1)It shall not be an act of infringement to import, offer
to sale (sic), sell or use-
(a) any patented product; or
(b) any product obtained directly by means of the patented process or
to which the patented process has been applied, which is produced
by, or with the consent, conditional or otherwise, of the owner of the
patent or his licensee.
(2)For the purposes of this section, ‘patent’ includes a patent granted in
any country outside Malaysia in respect of the same or essentially the
same invention as that for which a patent is granted under this Act.”

19
 Parallel import

Argentina: Patent Law No. 24.481 of 1995

Article 36.c provides that the rights conferred
by a patent shall have no effect against “any person
who ... imports or in any way deals in the product
patented or obtained by the patented process once
the said product has been lawfully placed on the
market in any country; placing on the market shall
be considered lawful if it conforms to Section 4 of
Part III of the TRIPS Agreement”.

20
Exceptions to patent rights

Article 30 TRIPS
 Specified and limited use of patent

 "Bolar" exception: use of patent prior to

expiry for approval for generic product
 Others: research, experimental, production
for export
 Automatically applicable if provided for in
legislation – no further conditions
21
 Early working/Bolar provision
United States: 28 USC 1498 (1997)
“(W)henever an invention described in and covered by a patent of the
United States is used or manufactured by or for the United States
without license of the owner thereof or lawful right to use or
manufacture the same, the owner’s remedy shall be by action against
the United States in the United States Court of Federal Claims for the
recovery of his reasonable and entire compensation. Reasonable and
entire compensation shall include the owner’s reasonable costs,
including reasonable fees for expert witnesses and attorneys, in
pursuing the action ...

For the purposes of this section, the use or manufacture of an invention

described in and covered by a patent of the United States by a
contractor, a subcontractor, or any person, firm or corporation for the
Government and with the authorization or consent of the Government,
shall be construed as use or manufacture for the United States”.
22
Early working/Bolar provision
Canada: Patents Act, Article 55.2(2)
“It is not an infringement of a patent for any person
who makes, constructs, uses or sells a patented
invention in accordance with subsection (1) to
make, construct or use the invention, during the
applicable period provided for by the regulations,
for the manufacture and storage of articles
intended for sale after the date on which the term
of the patent expires.”

23
Compulsory licence

Article 31 TRIPS
 Govt grant of licence to 3rd party to use patent
without consent of patent holder
 Right to determine grounds for compulsory
licence
 NOT just for emergencies
 Conditions for grant: prior negotiations,
compensation to patent holder, appeals
process
24
Compulsory licence – refusal to deal
China: Patent Law of the People’s Republic of China (1992),
Chapter VI, Compulsory Licence for Exploitation of the Patent

Article 48: “Where any entity which is qualified to exploit the

invention or utility model has made requests for authorization from
the patentee of an invention or utility model to exploit its or his
patent on reasonable terms and such efforts have not been
successful within a reasonable period of time, the Patent
Administration Department under the State Council may, upon the
request of that entity, grant a compulsory licence to exploit the
patent for invention or utility model.”

25
Compulsory licence – refusal to deal

Germany: Patent Law (Text of December 16, 1980,

as last amended by the Laws of July 16 and
August 6, 1996)
Section 24-(1):
“A non-exclusive authorization to commercially exploit
an invention shall be granted by the Patent Court in
individual cases in accordance with the following
provisions (compulsory licence) if
1. the applicant for a licence has unsuccessfully
endeavoured during a reasonable period of time to
obtain from the patentee consent to exploit the
invention under reasonable conditions usual in trade
...”
26
Compulsory licence – public health and
nutrition
France: Law No. 92-597 of July 1, 1992 on the Intellectual
Property Code (Legislative Part) (as last amended by Law No.
97-1106 of December 18, 1996)
Chapter III, Section 1, Article L. 613-16:

“Where the interests of public health demand, patents granted for

medicines or for processes for obtaining medicines or for processes
for manufacturing such products may be subject to ex officio
licences in accordance with Article L. 613-17 in the event of such
medicines being made available to the public in insufficient quantity
or quality or at abnormally high prices, by order of the Minister
responsible for industrial property, at the request of the Minister
responsible for health.”

27
Compulsory licence – public interest

Denmark: The Consolidated Patents Act

Publication of the Patents Act, cf Consolidated Act No. 824 of 3
September 1996 as amended by Act 972 of 17 December 1997
Section 47: “When required by important public interests, any person
who wishes to exploit an invention commercially for which another
person holds a patent may obtain a compulsory licence to do so.”

Austria: Patent Law (Federal Law of 1970, as last amended by the

Law of May 23, 1984, amending the Patent Law and the Law
Introducing Patent Treaties)
Section 36(3): “If a licence for a patented invention is required in the
public interest, any persons may apply for such a licence for the
purposes of his business.”
28
Using TRIPS flexibilities
Mozambique: Compulsory licence No. 01/MIC/04
Notice by Ministry of Industry and Commerce, dated 29
March 2004

 Compulsory licence to Pharco Mocambique Lda for the

local manufacture of the 'triple compound' of lamivudine,
stavudine and nevirapine.
 Triple compound is not marketed in Mozambique by
international patent owners
 National interest to keep prices as low as possible
 Royalty due to patent owners shall not exceed 2% of the
total turnover of the mentioned products.

29
 Using TRIPS flexibilities
Article 70 No. 1(b), Industrial Property Code of Mozambique
(Decree No. 18/99 of May 4):

1. The invention may be exploited under authorisation given by the

responsible Minister, without the consent of the proprietor of the
patent, including use of the patent by the Government or by third
parties, in the following instances:

(a) When a potential user has endeavoured to obtain the consent

of the patent under reasonable commercial conditions and
negotiations have been unsuccessful …

(b) Use of the patent in a case of emergency or in any other

circumstances of extreme urgency, either of an economic or a
social nature, or for the development of other sectors that are vital
to the national economy, when the circumstances so require.
30
Using TRIPS flexibilities

Malaysia: Government use authorisation

Notice of authorisation for exploitation of patented
invention in Malaysia, by Ministry of Domestic Trade and
Consumer Affairs, dated 29 October 2003

 Importation of didanosine, zidovudine and

lamivudine+zidovudine combination from India
 Only for supply to government (public) hospitals
 Ceiling price shall not be exceeded
 Compensation to be determined

31
Using TRIPS flexibilities
Section 84 of Patents Act of 1983, amended as at
15 May 2002:
(1) Notwithstanding anything containing in this Act-
(a) Where there is national emergency or where the public
interest, in particular, national security, nutrition, health or the
development of other vital sectors of the national economy as
determined by the Government, so requires; or
(b) Where a judicial or relevant authority has determined that
the manner of exploitation by the owner of the patent or his
licensee is anti-competitive,
The Minister may decide that, even without the agreement of
the owner of the patent, a Government agency, or a third
person designated by the Minister may exploit a patented
invention.

32
Using TRIPS flexibilities
Zimbabwe: Declaration of Period of Emergency
(HIV/AIDS) Notice 2002
Declaration of period of emergency to enable the State
or person authorised by the Minister:
(a) to make or use any patented drug, including any
antiretroviral drugs, used in the treatment of
persons suffering from HIV/AIDS or HIV/AIDS
related conditions;
(b) to import any generic drug used in the treatment of
persons suffering from HIV/AIDS or HIV/AIDS
related conditions
33
Using TRIPS flexibilities
Section 35 Patents Act (Zimbabwe)
35.(1) During any period of emergency, the powers exercisable
in relation to an invention by a department of the State or a
person authorized by the Minister under section thirty-four
shall include the power to make, use, exercise and vend the
invention for any purpose which appears to the Minister
necessary or expedient –
…
(b) for the maintenance of supplies and services essential to
life of the community; or
(c) for securing a sufficiency of supplies and services
essential to the well-being of the community, or …

34
Factors hindering the use of compulsory
licences
• Administrative and legal infrastructure
• Lack of adequate infrastructure in developing
countries
• Capacity and expertise – more technical assistance?
• Threat of multilateral or bilateral sanctions
• Compulsory licensing has to be "predominantly for
the domestic market"
• Need for manufacturing know-how and sufficiently
large market
• No co-operation from patent owner
• Economies of scale
UK Commission on Intellectual Property Rights (2001)
35
Paragraph 6 problem

A basic public health principle:

" …people of a country which does not have the

capacity for domestic production of a needed product
should be no less protected by compulsory licensing
provisions (or indeed other TRIPS safeguards), nor
should they face any greater procedural hurdles,
compared to people who happen to live in countries
capable of producing the product …"

Statement by WHO representative at TRIPS Council

(17 September, 2002)
36
Elements of a solution to Paragraph 6:
A public health perspective
• Full and broad coverage in terms of health problems
and range of medicines
• Simple and speedy legal procedures in importing and
exporting countries
• Equality of opportunities for countries in need of
medicines
• Facilitation of multiplicity of suppliers of required
medicines, from developed and developing countries
• Sustainability of quality supply at affordable prices
• Transparency and predictability of applicable rules in
both developed and developing countries
• Stable international legal framework 37
 August Decision: Elements
• August Decision
• Legal status
• Chairman's Statement
• Waiver of obligations – general waiver of limitation on
exports, waiver in Paragraph 6 (export within RTAs),
waiver of compensation in importing countries
• Para 9: other flexibilities in TRIPS not affected;
including other options for export and import
• Waiver to terminate on date on which amendment to
TRIPS takes effect
• Practical effect: export and import of medicines
produced under compulsory licence, subject to
conditions 38
 August Decision: Elements and
conditions for use
• Eligibility of countries
• Purpose of use
• Scope: "any patented product or product
manufactured through a patented process of the
pharmaceutical sector needed to address the
public health problems …"
• Procedural requirements for importing country
• Procedural requirements for exporting country
• Anti-diversion measures

39
Issues for consideration
• Limited application of Decision
• Does not preclude use of other avenues to facilitate
export and import of generic medicines (e.g., Article 30)
• Export quantity constitutes non-predominant part
• Export under compulsory licence to remedy anti-competitive
practices
• Exporting country not under compulsory licence
• Voluntary licence agreement
• Determining status of relevant patent(s) in importing
and exporting countries
• Difficulty in obtaining patent data
• 2016 extension for LDCs
• Status of implementation of August Decision
• Importing countries
• Exporting countries 40
 Issues for consideration
• Required changes to national patent laws
• Compulsory licence for imports
• Waiver of limitation on exports
• Waiver of compensation requirement in importing
country
• Legal challenges at national level
• Grounds for grant of compulsory licence
• Compensation rate
• External factors
• Bilateral and/or regional trade obligations
• Data exclusivity
41
New barriers to compulsory licensing?

• Inadequate or no changes to national laws

• Security of waiver? Extension of deadline for
amendment to TRIPS Agreement
• Data exclusivity
• What are TRIPS requirements under Article 39.3?
• Data exclusivity and TRIPS-plus provisions
• Bilateral and regional trade agreements
• implications for public health and access to
medicines

42