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Department
of Policy and Business Practices
The
Future of TRIPS:
Impact of the Doha Public Health Declaration
 Download
pdf version
Conference
Report
Paris,
ICC International Headquarters
Friday 13 September 2002
Table
of contents
Opening
remarks
Introduction
Presentations
Closing
remarks
Opening remarks
Maria
Livanos Cattaui (Secretary General, ICC) opened the proceedings by highlighting
the serious implications of
the theme of the conference for communities
throughout the world, including business. Public health crises had prompted
debate on whether the current intellectual property system achieved an
appropriate balance between the need to encourage innovation and the public
interest in maximizing access to new technology and products. Mrs. Cattaui
affirmed the importance that ICC attached to achieving a proper balance
between different interests to ensure continuing support for the intellectual
property system She stated that business could contribute to finding solutions
to today's grave developmental and public health challenges by creating
wealth to alleviate poverty and introducing useful innovations. To play
their role fully, however, businesses needed clear rules, certainty and
predictability, as well as incentives to innovate. Mrs. Cattaui concluded
her presentation by urging leaders to find a sustainable solution that
satisfied the immediate needs of accessible healthcare and achieved the
long-term goal of economic development and innovation.
Introduction
Adrian Otten (Director, Intellectual Property Division, World Trade Organization)
introduced the discussion by mentioning that the Doha Declaration on the
TRIPS Agreement and Public Health was adopted in November 2001. The Declaration
was a response to concern expressed by some developing countries and by
some parts of the NGO community about whether the international rules
contained in TRIPS were flexible enough to enable developing countries
to pursue certain public health objectives involving, but not limited
exclusively to, the HIV/AIDS crisis. The Declaration did emphasize that
the TRIPS Agreement does not and should not prevent WTO members from taking
measures to protect public health, and it reaffirms the rights of members
to use to the full the provisions of the TRIPS Agreement. The Declaration
makes it clear that the TRIPS Agreement 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. The Declaration
also contains a number of clarifications of some of the flexibilities
in the TRIPS Agreement in the area of compulsory licensing and exhaustion.
The Declaration recognized the need for balance by emphasizing the scope
in the TRIPS Agreement to take measures to promote access to medicine
while, on the other side, recognizing the importance of intellectual property
protection for the development of new medicines. Further work was called
for in two areas by the Declaration. In response the TRIPS Council extended
the transition term in regard to pharmaceuticals for the forty-nine poorest
countries to 2016 and also deferred the exclusive marketing right provisions
obligation in Article 70.8 of the TRIPS Agreement for those countries
to 2016.
The
other area was paragraph six of the Declaration where the TRIPS Council
was asked to find a solution to the problem of a country without manufacturing
capacity in the pharmaceutical sector not being able to make effective
use of the compulsory licensing provisions under the TRIPS Agreement.
A number of proposals to address and seek solutions to the paragraph six
issue have been offered and discussed. A thematic compilation was prepared
followed by a new informal paper of views previously expressed to be discussed
in a TRIPS Council meeting next week. After that meeting the chairman
of the TRIPS Council will try to find common language for use at a November
TRIPS Council meeting with a view to reporting a recommendation to the
General Council by the end of the year. Intensive consultations will also
take place between September and November. The thrust of the proposals
is to find ways of facilitating exports of generic pharmaceuticals to
countries with insufficient manufacturing capacity. The problem is that
Article 31(f) of the TRIPS Agreement requires countries that use compulsory
licensing do so to predominantly supply their domestic market. This handicaps
countries with small domestic markets and limited domestic manufacturing
capacity in being able to import or find sources for import using compulsory
licensing. Approaches suggested for addressing this issue include amending
or interpreting Article 31(f), interpreting the limited exceptions clause
of Article 30 of the TRIPS Agreement, the use of a waiver, a possible
moratorium on dispute settlement or possible combinations of these approaches.
With regard to substance under discussion are the scope and coverage of
the decision, product coverage, disease coverage, the sort of importing
countries, the extent to which developed or high-income developing countries
should be able to benefit, and the sort of countries that should be able
to supply. Agreement is also needed on conditions or safeguards regarding
diversion of products. Other proposals are directed to enhancing domestic
manufacturing capacity and to viewing a regional economic arrangement
as a domestic market.
Presentation
Background on Compulsory Licenses
Europe
David Perkins (Partner, Clifford Chance) noted that the United Kingdom
did have a compulsory licensing provision for foodstuffs and medicines
in an old act but that was eliminated when the United Kingdom acceded
to the European Patent Convention. Since the TRIPS Agreement came into
force he was unaware of any reported decisions in any member states of
the European Union where Article 31 of the TRIPS Agreement has been involved.
There is no such thing as a European patent, just national patents and
what is obtained from the European Patent Office is a bundle of national
rights dealt with by the national law of each member state. As to the
TRIPS Agreement, the European Union and the member states had joint competence
to enter into and sign the Agreement. As to implementation of the TRIPS
Agreement, and the compulsory licensing provisions in Article 31, some
states (dualists) need implementing legislation while for other states
(monists) the Agreement is self-executing. The Community Patent Convention,
which is not yet in force, has a number of provisions related to compulsory
licensing which have been incorporated into most national laws of European
Union member states. While the Paris Convention has a compulsory licensing
provision, that provision has been overtaken by the TRIPS Agreement for
European Union member states. There are three basic types of compulsory
licenses, a license in the public interest, a license for failure to work
and a lice
nse to permit the working of a dependent patent. A fourth type
is a government license. While there has not been a final decision in
Germany in the past 50 years awarding a compulsory license there is a
case where a license was granted for public interest (to treat a medical
condition). The license was revoked on appeal, as other treatments were
available for the condition. The appeals court indicated that the balancing
of interest between a patentee and the public must be subject to the principle
of reasonableness. In regard to compulsory licenses for failure to work,
in the European Community working in one member state is considered to
satisfy the demand in another member state. The third type of compulsory
license permits working of a dependent patent with the compulsory licensing
of the dominant patent. TRIPS Agreement Article 31 requires that the later
dependent patent must represent an important technical advance of considerable
economic significance before a compulsory license will be granted.
North
America
M.
Andrea Ryan (Vice President, Wyeth Research) noted that compulsory licensing
is defined in a WHO and WTO joint report as taking place when a government
allows a third party to produce a patented product or use a patented process
without the consent of the patent owner. The TRIPS Agreement does not
use the term and only speaks of "…use without authorization
of the right holder." As to the three countries in North America,
the United States does not have a compulsory license system, Mexico has
a fairly well developed system and Canada recently moved to a system with
only limited use of compulsory licenses. Mexico has a traditional system
based on a failure to work concept as the basis for the grant of a compulsory
license. Mexico provides that importation from the United States or Canada
will count for working in Mexico. As for Canada, before 1996 there were
many compulsory licenses granted, particularly in the pharmaceutical area.
This liberal grant of such licenses for pharmaceuticals ended with a change
in Canadian law in 1996. A compulsory license may still be sought in Canada
after three years from grant of the patent by applying to the commissioner
of patents and alleging that there has been an abuse of the exclusive
rights of the patent. Abuse of the exclusive rights is defined as whether
the demand for the product is being adequately met on reasonable terms,
or trade or industry is unfairly prejudiced by the lack of a license,
or a variety of other acts. Since 1996, members of the generic industry
in Canada have applied for compulsory licenses and there are cases wending
their way through the courts. In the United States in 1948, a law was
enacted providing that no license is needed by the government or its contractors
to practice a patented invention, but the government must given reasonable
compensation to the patentee. The system in the United States is a compensation
system, not a licensing system.
An
IP practitioner noted the extensive use of compulsory licenses for failure
to work in Spain before Spain joined the European Union and that the compensation
that was given to the patentee in most cases was very small. Those that
obtained the licenses to supply the domestic market also exported the
product. Compulsory licenses may be fair and just provided that they are
adequately legally framed and that should be a consideration if a compulsory
licensing system is again going to be used.
In
response to a question regarding the relationship of Article 8 and Article
31 of the TRIPS Agreement, Adrian Otten noted that Article 8 makes it
clear that members are free to take measures to protect public health,
provided that the measures are consistent with the provisions of the TRIPS
Agreement. What the Doha Declaration makes clear is that there are measures
that are consistent with the TRIPS Agreement that can be taken for this
purpose.
In
response to several questions Andrea Ryan noted that in the United States
the government does not have to notify the patentee that it is using the
protected invention, and that in some mergers the competition authorities
may require licensing as a condition for approving the merger.
Large Economy Perspectives
Europe
Jean
Charles Van Eeckhaute (Administrator, Directorate-General for Trade, European
Commission) noted that the Doha Declaration represents an important milestone
in the history of the TRIPS Agreement and that it arose in the context
of the debate on the interrelationship between intellectual property and
public health and access to medicines. It also has meaning with regard
to other IP topics that will be dealt with in the WTO such as geographical
indications, biodiversity, the transfer of technology, and others, some
of which are of particular interest to developing countries. For the EC,
intellectual property is paramount for creating a regulatory environment
that is favorable for research and development and is essential to create
wealth. To fulfill these objectives globally applicable core rules on
intellectual property are needed, which is why the EC was and is one of
the main supporters of the TRIPS Agreement. Concerns expressed by developing
countries about the implementation of TRIPS need response and solutions
need to be found that don't affect the overall balance and the existing
level of protection of the TRIPS Agreement. The Doha Declaration shows
that in most cases solutions can be found in the TRIPS Agreement itself.
Nevertheless, the EU is prepared to consider a limited amendment of the
TRIPS Agreement in the context of paragraph 6 of the Doha Declaration
as long as the core principles and the overall balance are not affected.
The EC proposes a new paragraph to Article 31 carving out a clearly circumscribed
exception to the restriction imposed by Article 31(f) which would allow
WTO member states to grant compulsory licenses for export. As to scope
in terms of diseases covered, the Doha Declaration sets the scope coupled
with a rule of reasonableness in terms of diseases to be covered. In regard
to product scope, paragraph 6 refers to pharmaceutical sector and the
EC is ready to be flexible on this within the limits of reasonableness.
As to importing countries, the solution is designed for developing countries,
but not those with sufficient manufacturing capacity. In regard to the
scope of countries of production, there is no EC position yet. Manufacturing
capacity should
be determined from objective criteria to be defined by
the TRIPS Council. Both developing and developed countries will have to
take preventive measures against diversion of medical products produced
under the solution and destine for a developing country. Needed also is
a procedure that would give a right holder the possibility to offer the
product at a strongly reduced price after being notified of an intent
to grant a compulsory license.
United
States
Claude
Burcky (Deputy Assistant US Trade Representative for Intellectual Property,
Office of USTR) noted that the United States had worked with the developing
countries in Doha to achieve a political statement with respect to the
TRIPS Agreement and public health that also provides clarification regarding
what flexibility there is in TRIPS to engage in practices such as compulsory
licensing and parallel imports. The United States also was the first WTO
country to propose providing an additional ten-year transition period
for least developed countries to implement the patent and other provisions
related to pharmaceuticals in the TRIPS Agreement. The TRIPS Council approved
that ten-year transition recently. The Doha Declaration does not amend
the TRIPS Agreement, and the ministers reaffirmed their commitment to
the existing balance in the TRIPS Agreement and the importance of intellectual
property to the development of new medicines. The TRIPS Agreement is but
one small element in addressing problems such as HIV/AIDS. Factors such
as health infrastructure and financing weigh heavier in regard to these
problems but are not factors TRIPS addresses. Paragraph six of the Doha
Declaration recognizes that certain WTO members that don't have pharmaceutical
production capacity could face difficulty in making use of compulsory
licensing to address their health problems. The United States has offered
two papers outlining a framework of a solution. As to the scope of diseases
covered, one should look to the existing language in paragraph one of
the Doha Declaration focusing on health crises. With respect to the scope
of products, paragraph six of the Declaration refers to the pharmaceutical
sector. Expansion of the scope to include test kits could be explored.
As to which members should benefit from the solution, more work needs
to be done on defining the criteria of production capacity to be used
to determine such members. All least developed countries would be eligible
importers and all developed countries should be excluded. A legitimate
question exists whether advanced developing countries would be eligible
importers. As to the countries being able to issue compulsory licenses
for export, this should be limited to developing and least developed countries,
which will facilitate export opportunities for such countries. Any solution
should be based on Article 31 of the TRIPS Agreement. The United States
supports a waiver approach with the WTO drafting a waiver to excuse countries
from the export restrictions in Article 31(f) in response to a need expressed
by a country not able to itself issue a compulsory license to a domestic
producer. Waivers are familiar to WTO members, approved in advance, can
be granted for multiple years, can be granted quickly, and filing requests
for waivers has not been resource intensive or burdensome. The United
States supports efforts to ensure that there are safeguards built into
the solution to prevent abuse to guard agains
t product diversion, and
that there be full transparency in the solution to promote competition
among suppliers, both patent holders and the generic competition.
In
response to a comment from a member of the German chemical industry that
compensation was not mentioned during the last part of the program, Claude
Burcky mentioned that an Article 31 solution will maintain the safeguard
provision in that Article that adequate compensation must be provided
to the right holder.
In
response to a question from a representative of a U.S. pharmaceutical
association about when the EC would have a position on countries of export,
Jean Charles Van Eeckhaute commented that the position is being developed.
In
response to a comment from a representative of a developing country mission
to the United Nations that including test kits in the scope of products
may pose little problem, Jean Charles Van Eeckhaute suggested that it
was better to have clear and not open-ended definitions when it was necessary
to resolve a situation through legal means.
Industry Perspectives
Europe
David
Rosenberg (Manager, Industry Affairs, Corporate Intellectual Property,
GlaxoSmithKline) noted that his interests were patents and health and
there was no conflict between the two. Recent disenchantment with globalization,
the WTO and TRIPS itself has arisen from a worldwide health crisis involving
AIDS, and TB and malaria. The vast majority of persons affected are in
developing countries without access to appropriate medicines. It is alleged
that patents cause high prices for medicines, that generics would charge
low prices and that with low prices more persons would get medicines.
While that is the argument, it is simply wrong. The US, EU and the North
wanted a new trade round but were unwilling to give increasing market
access to developing countries, particularly in the areas of steel, agriculture
and textiles, so they gave on TRIPS as it applies to pharmaceuticals.
They also agreed that TRIPS did not limit the grounds for compulsory licenses,
but they failed to note that it was always intended that compulsory licensing
would be used in limited, extreme circumstances and not as a matter of
policy. In regard to the problem posed by paragraph six of the Doha Declaration,
industry favors maintaining the Article 31(f) conditions but to permit
a waiver. As to the scope of the products affected and the countries that
can import, as these are broadened, IP protection is reduced. Industry
believes that only the poorest countries should be able to import and
for HIV, TB, malaria and other epidemics. Some want broad product reach
and that all developing and least developed countries should be able to
import. This will not work because patents are not presently a barrier
to access and generics will not supply greater quantities of medicines
at greatly reduced prices, and even if they did, the medicines will still
be unaffordable for most of those in need. A true solution involves all
sectors of the global society, including the pha
rmaceutical industry,
both generic and R&D working together in a new kind of partnership
on the problems of access and poverty with the North providing more funding
to deal with the existing crisis.
An
unidentified attendee commented that the question is not whether we should
have patents or not, as everyone agrees that patents are essential for
research and development. The question is how patents are used or misused.
As to compulsory licenses they could also be given to research-based companies
and that's why some believe eligible suppliers should also be drawn from
developed countries. Regarding technology transfer, it is a difficult
problem given the debt of the developing countries and the fact that over
95% of the research is done at headquarters level of pharmaceutical companies
in developed countries.
In
response to a comment from Danny Huntington (FICPI) suggesting that the
public in general in the developed countries rather than the companies
producing the product or doing the research should fund the research,
David Rosenberg agreed and indicated that the developed country governments
should put up more funding for this purpose.
An
unidentified attendee mentioned a Canadian study that showed the effect
on health care in Tanganyika through carefully directing an additional
expenditure of eighty cents a day. Any increase in funding should be matched
by undertakings to deploy such funding in a sensible and useful fashion.
Claude
Burcky commented that while he could accept many of the points made by
David Rosenberg, what David Rosenberg argued is not the public perception
of the matter. The challenge is not up to the negotiators to stand up
and do the right thing. The challenge is up to industry to educate the
public about the reality of the matter. Industry has ceded ground to the
NGOs on this debate. It is up to industry to demonstrate and make the
average person more aware of what the reality of the situation is if industry
expects the negotiators to achieve a deal with a proper balance.
United States
Ronald
E. Myrick (Chief Intellectual Property Counsel, General Electric Company)
noted that the TRIPS Agreement contains a number of industry's principal
intellectual property objectives and some of the objectives are being
called into question in the Doha Declaration on public health and the
export compulsory licensing exercise. In the press to address the real
and very serious HIV/AIDS crisis, there may have been agreement as to
the interpretation of the TRIPS Agreement that may serve as a precedent
which could be applied to other industries and other public policy situations.
Among the objectives are: an end to discrimination among technological
sectors (TRIPS Article 27.1); a limitation on the use of compulsory licensing
without authorization of patent holder (TRIPS Article 31); a limitation
on the exceptions to the patent right that national patent systems may
incorporate (TRIPS Article 30); and a recognition that WTO members may
adopt measures necessary to protect public health (TRIPS Article 8) provided
these measures comply with TRIPS. Industry's concern is that while today
th
e Declaration and the export compulsory licensing exercise are aimed
at pharmaceutical patents, this could be the first step of a broader challenge
to the overall value of intellectual property protection for economic
development. The relief requested today in regard to exclusive rights
to pharmaceuticals because of lack of domestic capacity could evolve to
future requests for relief from copyright protection for educational software,
or medical texts, or patent protection for medical devices. The act of
the ministers discriminating against one sector raises a question about
commitment to the non-discriminating treatment of all sectors. Also troubling
is the emphasis in the Declaration on the freedom to issue compulsory
licenses without the recitation of the limitations on such licenses found
in the TRIPS Agreement. Another problem is posed by the suggested use
of Article 30, which lists permitted exceptions to patents based on exceptions
found in the laws of some countries at the time TRIPS was concluded, for
an export compulsory licensing solution. The export compulsory licensing
exercise is still underway and US and EU negotiators still have the ability
to contain the potential damage to the protection of intellectual property
while ensuring solutions to the AIDS crisis.
Japan
Yoshihide
Nakamura (President, Sony Chemicals Corporation) cited a WHO report indicating
that by December 2001 there were tens of millions of HIV-infected persons
and AIDS patients and tens of millions of AIDS deaths. This issue was
considered within the TRIPS negotiations. The later debate over providing
developing and least developed countries access to medicines led to the
Doha Declaration. Recent TRIPS Council discussions are seeking means by
which countries with insufficient medicine manufacturing capabilities
may make effective use of the TRIPS compulsory licensing provisions. The
use of compulsory licensing may diminish the ability of the patent system
to motivate inventors to pursue a better future for humankind. This effect
may not be limited to the medicine field and it may become difficult to
pay inventors in other fields the reasonable compensation necessary for
motivation. Further problems regarding compensation of inventors arise
from the digital-age ability to make inventions available without payment,
or to permit extensive further use of an invention with only a first use
payment. These problems damage the motivation of persons engaged in development
and creation and are a threat to the realization of a better future for
humankind. The TRIPS Agreement should be regarded as a gift of wisdom.
In seeking a solution to the public health problem, we should by all means
avoid the stopping of technological development and ensure that the inventor
is constantly motivated and properly dignified.
Developing Country Government Perspectives
Betty Berendson (Minister Counsellor, Permanent Mission of Peru to the
United Nations Office, Specialized Agencies and to the WTO, Geneva) utilized
her presentation to review the advantages and disadvantages of the legal
mechanisms recently proposed to the TRIPS Council. Drawing heavily from
documents tabled by various countries and country groups t
o the TRIPS
Council, Ms. Berendson emphasized the benefits of an article 30 solution
over other suggestions - including an article 31 based solution, a moratorium
on dispute settlement, and a waiver - as the best option for resolving
the paragraph 6 issue of the Doha Declaration on Public Health. An authoritative
interpretation would be beneficial for members because it would present
clear boundaries that would be confined solely to patent rights. Furthermore,
it would not require a lengthy modification of the existing TRIPS text.
Ms. Berendson continued by questioning the legal predictability offered
by the waiver solution. Turning to the specific elements of a paragraph
6 solution, Ms. Berendson felt that no limitations should be placed on
either product coverage or the scope of disease, in order to effectively
protect and promote public health objectives. She proposed that no category
of member countries be excluded as beneficiary-importing members or as
eligible supplying members, though election would be voluntary. The member
itself should have the right to assess its own manufacturing capacity
as opposed to across-the-board criteria that may not adequately assess
actual manufacturing capacity. Conditions for the solution should be broad
and not reduce the flexibilities presently afforded by the TRIPS agreement
and the Doha Declaration. A transparent mechanism could allow members
to review the solution's impact and help encourage competition in price
and quality of product supplied. Remuneration to the right holder should
be commensurate with the patient's ability to afford the product. Ms.
Berendson concluded her presentation by stating that the best solution
was one that was expeditious, legally predictable, and non-burdensome.
Amr
Ramadan (Counsellor, Permanent Mission of the Arab Republic of Egypt to
the United Nations Office, Specialized Agencies and to the WTO, Geneva)
described the evolution of the current policy debate concerning access
to medicines that had begun much earlier in developing countries. Mr.
Ramadan began his presentation by referencing the TRIPS agreement as an
important development tool that could harmonize the socio-economic goals
of developing countries and the economic goals of producers. Mr. Ramadan
encapsulated the goals of developing countries in this debate as: firstly,
to reach a common understanding among WTO members on the flexibilities
provided by TRIPS with regard to pharmaceuticals; and secondly, to clarify
its pharmaceutical-related provisions. Mr. Ramadan reflected on the proposed
solutions and points of discussion brought to the attention of the TRIPS
Council by the various countries and country groups. New elements thrown
onto the table during the discussions of the TRIPS Council had led to
a divergence of views and subsequent complications, thereby preventing
the TRIPS Council from reaching an expeditious solution. Mr. Ramadan underscored
the need for an effective, non-burdensome, legally predictable and permanent
solution that would benefit those countries facing serious health crises,
and that - by avoiding trade diversion and ensuring transparency - would
not cause damage to the patent right holder. Mr. Ramadan reflected on
developing country concerns with some practices of the research-based
pharmaceutical industry. He recommended that pharmaceutical manufacturers
should practice differential pricing, and urged them to take voluntary
initiatives outside the TRIPS framework. Pharmaceutical companies should
refrain from patenting practices
that were restrictive and behavior that
sought to extend exclusive rights. Mr. Ramadan noted that pharmaceutical
companies could pay more attention to developing country needs in the
areas of health and of technology transfer.
Industry
representatives opened the discussion by questioning how pharmaceutical
innovation could continue without the support of an incentive system which
they submitted would be undermined if a broad solution was adapted. Participants
underscored the benefits of the present system offered by the TRIPS agreement
and pressed the discussants on alternative incentive solutions. The panelists
responded that the present system, in which compulsory licensing already
existed, would not be jeapordized under the proposed article 30 solution,
emphasizing that proper remuneration would still be made to the patent
right holder, and that adequate safeguards would be in place. However,
participants highlighted the larger repercussions that an article 30 solution
would have on intellectual property rights generally and questioned how
proper remuneration would be achieved under this solution. The panelists
noted that the threat of compulsory licensing had led to a dramatic drop
in prices which companies could practice voluntarily.
Developing Country Private Sector Perspectives
Peter Dirk Siemsen (Senior Partner, Dannemann, Siemsen, Bigler & Ipanema
Moreira, Brazil) opened the session by highlighting the current tendency
to overemphasize patents and compulsory licensing as an end, rather than
a means to an end, in the context of public health crises. In an historical
overview of the correlation between patent protection, industrial growth
and R&D in Brazil, Mr. Siemsen pointed out that growth and foreign
investment in the pharmaceutical sector had been influenced less by patents
than by general government policy. The Brazilian government, however,
continued to use patents as an issue in international discussions although
these had no real effect on Brazil's economy. According to Mr. Siemsen,
the outlook toward intellectual property had become more positive since
the 1990's and investment in government-sponsored research had increased.
Because of the AIDS crisis, the Brazilian government had decided to create
a local generic industry. In spite of this, and tough requirements for
marketing authorizations, Mr. Siemsen noted that Brazil was currently
an attractive market for foreign generic companies. Brazilian patent law
allowed compulsory licensing in cases of national emergency or overwhelming
public interest. Only two compulsory licences had been granted since 1945.
Due to an unfortunate coincidence in timing, a US WTO complaint against
Brazil had been linked by politicians to a local discussion over the definition
of national emergency and the public interest in the context of compulsory
licensing, thus leading to an emotional controversy that was one of the
factors leading up to the Doha Declaration. In closing, Mr. Siemsen emphasized
that public health circumstances differed from country to country and
that the role of compulsory licensing had to be analyzed in the global
context of each country. He also encouraged the use of voluntary options
before resorting to compulsory licensing.
V.L.
Kandan (Senior Vice President, Asian Patent Attorneys Association, Malaysia)
echoed Mr. Siemsen's remarks that the issue of compulsory licensing was
being overplayed. Dato Kandan stated that the view that TRIPS could soon
be replaced by a TRIPS II was not shared in Malaysia. He noted that multi-national
corporations, local companies that manufacture generic products, and non-governmental
organizations representing the consumer interest, influenced policy discussions
over patents in Malaysia. The Third World Network, for example, which
was active both locally and internationally, had put forward proposals
on issues of double compensation, flexible use of safeguards and exceptions,
and parallel imports. These proposals were intended to strengthen public
health considerations in Malaysian patent laws. In combination, the three
constituent parts of the private sector in Malaysia effectively provided
a voice for both private and public interest goals, such as health. The
Malaysian patent system provisions on compulsory licensing already appeared
to have achieved an adequate balance between the interest of the patent
holder and the needs of the public. Amendments to compulsory licensing
and parallel import provisions of the Patents Act in 1983 had taken into
account public health considerations at the instigation of NGOs before
the Doha Declaration. Dato Kandan concluded that the added flexibilities
addressed in the Doha Declaration would therefore seem to have little
practical impact on Malaysia.
Participants
from the pharmaceutical industry shared information on voluntary initiatives
being undertaken in Africa by the pharmaceutical sector. Deeply discounted
drugs were being provided in Africa, public-private partnerships were
underway and the pharmaceutical industry was one of the biggest philanthropists
in the continent. One participant pointed out that an international exhaustion
regime for patents was not compatible with a situation where drugs were
deeply discounted
Small Economy Perspectives
Felix
Addor (Chief Legal Officer, Deputy Director General, Swiss Federal Institute
of Intellectual Property, Switzerland) used Switzerland as an example
to demonstrate how strong intellectual property laws helped contribute
to the economic growth of a small country whose only raw material was
knowledge. Switzerland's successful positioning as the largest pharmaceutical-trading
partner with the EU and as the "worldwide first exporter of pharmaceutical
products" had evolved because of its rigorous protection of knowledge.
He emphasized the importance of patent law as proof of a country's technological
strength, and patents as a key indicator of economic growth. Mr. Addor
urged both members and Ministers to continue to commit to the TRIPS agreement
as reduced IP protection would lead to less private sector research and
therefore fewer drugs. He pointed to flexibilities within the text of
the TRIPS agreement, which enabled WTO members to address their public
health problems. Turning to the issue of paragraph 6, Mr. Addor elaborated
on the elements of the solution under debate including its scope, coverage,
and conditions, as well as appropriate safeguards to protect against product
diversion. The scope of disea
ses should cover all those which cause public
health problems but especially HIV/AIDS, tuberculosis and malaria. Product
coverage should include patented pharmaceutical products such as medicines
that are used to treat public health crises, but diagnostic kits and medical
equipment needed further consideration. Finally, while all least developed
countries would qualify as beneficiary recipient countries, developing
countries would qualify only if they proved the absence of sufficient
production capacity. Turning to the conditions for the solution, Mr. Addor
stated the need for transparency and involvement of the right holder,
which would allow the latter to propose a voluntary solution. He stressed
that proper safeguards must be enacted to prevent product diversion especially
if a solution not based on article 31(f) was adopted. Mr. Addor reviewed
the possible legal mechanisms presently under consideration and stressed
that the solution should seek to preserve the present incentive system,
while promoting the transfer of technology and foreign investment and
serving the interests of those really in need.
Rethabile
Mosisili (Counsellor, Permanent Mission of the Kingdom of Lesotho to the
United Nations Office and Other International Organizations, Geneva) emphasized
that the paragraph 6 issue was a real problem, despite certain allegations
that it was theoretical. The Doha Declaration on Public Health had been
a great political achievement and had reaffirmed developing countries'
commitment to TRIPS, contrary to popular belief. Mr. Mosisili stated that
the scope of diseases in the solution should not be limited to HIV/AIDS,
tuberculosis, and malaria, but that these should provide an illustrative
standard for comparison. The solution needed to be transparent to allow
countries to access medicines at the cheapest possible prices. Mr. Mosisili
suggested a national tendering process for procurement by governments
to achieve this. Additionally, his government supported a mechanism for
notifying the TRIPS Council that would not be binding or cumbersome thus
allowing countries to address emergencies rapidly and efficiently. Finally,
the election by members to be an exporting country should be voluntary.
According to Mr. Mosisili, the provision of a multi-year waiver was the
most attractive solution to the paragraph 6 issue provided that legal
certainty was obtained under adapted WTO procedures, and any safeguards
introduced would not frustrate its objectives. Mr. Mosisili proposed that
the "domestic market" should be interpreted to include specific
groups of countries or regions to make countries with small domestic markets
more attractive for producers and to allow them to pool resources. Mr.
Mosisili closed by recognizing that generic drugs also had a price and
that the problem lay not in the intellectual property system, but rather
in the mobilization of resources.
Some
participants disagreed that patent law necessarily fuelled innovation
and made the following points. Historically, countries adopted stronger
patent protection once they had developed strong technology. However,
the ability for a country to choose a level of patent protection that
corresponded to its level of technology had disappeared with TRIPS. TRIPS
had been accepted by developing countries against the transfer of technology
and the opening of agricultural markets. However, technology transfer
was a long-term process, and in
the meantime, large sums of money were
being transferred from developing to developed countries because of TRIPS.
Other participants added that using intellectual property protection to
further international trade interests through TRIPS had contributed to
the problem being addressed today. A participant maintained that the pharmaceutical
industry should not be made responsible for the problems of developing
countries, which was an international responsibility. A waiver of patent
rights in the current context would set a dangerous precedent for the
future without solving the real problems. A panelist agreed that developing
countries had been very disappointed not to have obtained concessions
in agriculture and perceived TRIPS as a one-way street. He submitted that
criticism of TRIPS would continue in different forms as long as these
underlying problems were not addressed.
Closing
Remarks
In his closing remarks, Richard Fawcett (Vice-Chair, ICC Commission on
Intellectual Property; Intellectual Property Consultant, Bird & Bird)
expressed his belief that the discussions had allowed different factions
to better understand each other's views. He emphasized ICC's recognition
of public health crises in the developing world as a serious issue. Because
of its grave impact on human life, the debate over health crises had increased
tremendously in recent years, and helped move it to the political arena.
Governments had acknowledged this issue and were seeking a solution. Industry
must come together with government, find common ground, and propose a
solution with which it could live. Dr. Fawcett said that intellectual
property was important for large and small businesses in all countries
and that ICC supported maintenance of the current TRIPS agreement. He
said that the solution should only involve pharmaceutical products and
should have clear, workable definitions to determine which countries could
manufacture for export and which countries could import the manufactured
product. A legal mechanism was needed to deal with the problems, but it
should not open the TRIPS agreement for re-negotiation. Safeguards relating
to product liability needed to be implemented, and international exhaustion
should be excluded in this context.
The Future of TRIPS:
Impact of the Doha Public Health Declaration
Friday 13 September 2002
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