Q4 Compulsory licensing Flashcards
What states in Paragraph (f) under article 31?
in general under article 31 of TRIPS government can copy patent without authorization of the right holder if there are a need in the public health sector. paragraph (f) was amendment to allow not only to copy to help your own people but supply your own domestic market predominantly. to allow the suppliers not only to supply your own domestic market but also to export to other countries in particular Africa.
What are the conditions required to grant compulsory licenses?
The Declaration on the TRIPS Agreement and Public Health (WT/MIN(01)/DEC/2) and, in particular, the instruction of the Ministerial Conference to the Council for TRIPS contained in paragraph 6 of the Declaration to find an expeditious solution to the problem of the difficulties that WTO Members with:
1) insufficient
2) or no manufacturing capacities
in the pharmaceutical sector could face in making effective use of compulsory licensing under the TRIPS Agreement;
What kind of abuses is possible under TRIPS?
One of the abuses possible is compulsory licenses: the TRIPS agreement authorizes the government to some members to, in health or security purpose, copy the product.
One of those “abuses” is compulsory licensing when countries were in need.
Art 31 on “compulsory licensing” saw further flexibility introduced in subparagraph “f”: any such use shall be authorized PREDOMINANTLY for the supply of the domestic market of the Member authorizing such use.
So here govt’s (Think Brazil and India) were allowed to supply to their domestic market but this paragraph was modified (predominantly) in order to allow to also help other countries
What is the main purposes of the WTO Agreement ?
The main purposes of the WTO Agreement is sustainable development, as well as the goal to benefit economic development of developing and least-developing countries through international trade
What is stated in the article XVIII GATT?
Article XVIII GATT 1994 contains special provisions which give developing countries special rights, particularly to those contracting parties the economies of which can only support low standards of living and are in the early stages of development, in addition to some other special rights given to treat those countries more favourably than other WTO Members, which are the so-called “Special and Differential Treatment Provisions”. These special provisions include, for example, taking protective measures affecting imports; flexibility in the tariff structure to be able to grant tariff protection; longer time periods for implementing the agreements and commitments; or, measures to increase trading opportunities; support to help developing countries build the capacity to carry WTO work, handle disputes and implement technical standards, as well as provisions related to least-developed country Members. In other words, Article XVIII gives developing countries the right to protect their markets from imports in order to promote the establishment or maintenance of a particular industry, as well as the right to protect their markets from imports in cases of balance-of-payments difficulties.
What was Doha Declaration?
In 2001, the Doha Declaration on the TRIPS Agreement and public health found a solution to the problem of the difficulties that WTO Members with insufficient or no manufacturing capacities in the pharmaceutical sector could face in making effective use of compulsory licensing under the Agreement.
What was the outcome of the Declaration
The outcome was a Declaration affirming that the TRIPS Agreement can and should be interpreted and implemented in a manner supportive of WTO Members’ rights to protect public health and, in particular, to promote access to medicines for all. Two provisions were introduced related with least-developed countries and countries that do not have production capacity, which directly involved changes to the rules for the TRIPS Agreement. what this declaration changed was the provision under Article 31(f), which stated that compulsory licenses must be granted mainly to supply the domestic market. However, with the new Declaration, it was decided that this should be changed so that countries unable to manufacture the pharmaceuticals could obtain cheaper copies elsewhere if necessary. For this purpose, the Decision considered that “eligible importing Member” meant any least-developed country Member, and any other Member that has made a notification to the Council for TRIPS of its intention to use the system as an importer.
What was adapted in TRIPS agreement in 2005 by WTO Members?
TRIPS Agreement was amended in 2005 by WTO Members to adapt the rules of global trading system to the public health needs of people in poor countries.
What was the most remarkable point of the amendment to TRIPS ?
the fact that generic medicines could be exported at reasonable prices to satisfy the needs of countries with no pharmaceutical production capacity, or those with limited capacity, which would help the most vulnerable countries to access the drugs that meet their needs, as well as helping to deal with diseases and epidemics. The amendment empowers importing developing countries and least-developed countries facing public health problems and lacking the capacity to produce drugs generically to seek such medicines from third country producers under “compulsory licensing” arrangements. . By this provision, Members recognize the desirability of promoting the transfer of technology and capacity building in the pharmaceutical sector in order to overcome the problem faced by Members with insufficient or no manufacturing capacities in the pharmaceutical sector.
What is the compulsory license ?
is when a government allows someone else to produce the patented product or process without the consent of the patent owner mainly for the domestic market, not for export. This type of action is allowed as part of the agreement’s overall attempt to strike a balance between promoting access to existing drugs and promoting research and development into new drugs. However, this exceptional use without authorization can only be done under a number of conditions aimed at protecting the legitimate interests of the patent holder.
what are overlaps between public health, IP and trade
The goal to increase access to medicines will be achieved only if the policy spheres of public health, intellectual property (IP) and trade are viewed together rather than in isolation
These three policy areas interact and influence each other
IP protection is recognized as crucial to the development
of new medicines
Trade is essential to access medical products
IP protection can have an impact on prices and access
IP protection alone is not a sufficiently strong incentive to attract investments in R&D for neglected diseases and other areas which generate a low return on investment (e.g. antibiotics)
Finding solutions to the challenge involves a wide range of policies, stakeholders, incentives and market intervention both at the national and international levels
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National laws usually also authorize the grant of “compulsory licences” to third parties or for government use, without the authorization of the right holder. Under the TRIPS Agreement, WTO Members are free to determine the grounds for the grant of compulsory licences or government-use authorizations. Such grounds can include public interest in general and are not limited to public health emergencies or to the spread of infectious diseases. Compulsory licences and government- use authorizations have been used to import cheaper generic medicines or to produce them locally by a number of countries, mainly for HIV treatments, but also for other drugs
Examples of using compulsory licences:
Government use of patents: the Thai example:
Thailand has authorized government use of patents on several pharmaceutical products used to treat HIV/AIDS, heart attack, stroke and cancer. In 2005, more than half a million Thai citizens were HIV positive. Although the Thai government had made a commitment to provide free ARV treatment to all who needed it, the costs rose significantly when better and more expensive treatments became available. In November 2006, the Thai Ministry of Public Health issued a decree that it would use the patent rights relating to efavirenz and it authorized the state-owned Government Pharmaceutical Organization (GPO) to import or produce efavirenz under which the patent holder was entitled to receive a royalty of 0.5 per cent of GPO’s total sales value. Following the declaration of government use for the ARV treatment lopinavir/ritonavir in 2008, the number of patients in Thailand using lopinavir/ritonavir reportedly increased from 39 to 6,246. In February 2007, the patent holder announced a global price reduction on efavirenz, benefiting HIV/AIDS patients around the world.
Public non-commercial use: the example of Ecuador
Ecuador’s IP authority granted a compulsory licence to a pharmaceutical distributor with operations in Ecuador. The compulsory licence, granted in April 2010, covers a patent relating to the active ingredient ritonavir, which is a retroviral protease inhibiting compound used for the treatment of HIV/AIDS. The licence covered all the patent rights, including importation and was limited to use in Ecuador. The licence was reportedly intended for public non-commercial use (Article 31b of the TRIPS Agreement). The Ecuadorian authorities informed the patent owner before they granted the compulsory licence. The licence is valid until the date on which the patent expires in 2014. The licensee is required to pay the patent owner adequate remuneration calculated according to the Tiered Royalty Method, which was based on a royalty of five per cent of the price of the patent owner’s product in the United States, adjusted for the difference in gross domestic product per capita, yielding a royalty rate of 0.42 per cent of the United States price. The procedure for the grant of the compulsory licence took six months to complete.
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The TRIPS Agreement aims at balancing the interest of providing incentives for research and development of new drugs, while making them as widely accessible as possible. In that sense, the Doha Declaration on TRIPS and Public Health clarified some of the flexibilities provided under the Agreement:
Members are free to determine the grounds upon which compulsory licences are granted
Members are free to establish their own regime of exhaustion for IPRs
The Declaration also lead to the adoption of the “paragraph 6 system” which provides an additional pathway for countries with limited capacity in the pharmaceutical sector in order to import cheaper generics made in other countries under compulsory licences.
- The Doha Declaration on the TRIPS Agreement and Public Health clarified that each
Member is free to determine the grounds upon which compulsory licenses are granted. - The paragraph 6 system recognized the problem of countries with insufficient capacity in the pharmaceutical sector in making use of compulsory licensing when they need to import generics from third countries where the medicines needed are protected by patents.
- The TRIPS Agreement limits the amount that countries can export under a compulsory licence.
- If a compulsory license has to be granted in both the importing and exporting country for the same products, remuneration need only to be paid in the exporting country.
What is the «Paragraph 6 System» about?
It provides an additional pathway for countries with limited resources to import cheaper generics made under compulsory licensing if they are unable to manufacture the medicines themselves.
Under the TRIPS Agreement, Members can issue compulsory licenses for importation and for domestic production. However, a potential problem may arise when the sources of supply from generic producers are in third countries where the medicine is patent-protected. The TRIPS Agreement (Article 31(f)) limits the amount that such third countries can export under a compulsory license. Thus, a problem could arise if the product is patent protected in the third country from where the medicines needed will be imported and a compulsory license has to be granted in that country. In order to solve this problem, the General Council adopted a Decision on 30 August 2003, which waives under certain circumstances:
1) the obligation on exporting Members to ensure that compulsory licenses are only granted for the purpose of predominantly supplying its domestic market (Article 31(f)) - subject to certain transparency requirements; and,
2)the obligation on importing Members to pay adequate remuneration to the right holder subject to a compulsory license in order to avoid double remuneration (Article 31(h)). (If a compulsory license has to be granted in both the importing and exporting country for the same products, remuneration need only to be paid in the exporting country based on the value of the license in the importing country);
3)a further derogation enables export and re-export of products manufactured under a compulsory license more easily amongst parties to a regional trade agreement at least half of whom are LDCs.
