PHARMACEUTICAL INDUSTRY IN EUROPE
6. TRIPs and pharmaceuticals
6.5 TRIPS PHARMACEUTICAL IP AGENDA
6.5.1 TRIPs Patents – an Enhanced International Patent Regime The most significant achievement for the advanced pharmaceutical industry
concerning the TRIPs agreement is the granting of patent protection for pharmaceutical products and processes. One should bear in mind that, prior to TRIPs, more than 50 countries did not grant patent protection to pharmaceutical products and processes at all but granted patentability only to pharmaceutical processes.71 The following elements are particularly important to the TRIPs ʻpatent-regimeʼ.
Patentable subject matter
According to Art. 27.1, patents shall be available for any invention, whether products or processes, in all fields of technology (that is including the pharmaceutical sector), provided that they are new, involve an inventive process and are capable of industrial application.72 No less important, the TRIPs agreement explicitly applies the principle of non-discrimination when stating that ʻpatents shall be available and patent-rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally producedʼ(Art. 27.1).
The TRIPs agreement also lays down the circumstance under which members can choose to exclude inventions from patent protection. First, members can deny patentability of inventions in order to protect ordre public, morality (including human, animal and plant life or health in general) and the environment, provided that the exclusion was not adopted strictly because their domestic laws prohibit the commercial exploitation of these inventions (Art. 27.2). Secondly, according to Art. 27.3a, members may exclude from patentability diagnostics, therapeutic and surgical methods for the treatment of humans or animals. Finally, Art. 27.3b allows members to prohibit the patenting of plants and animals, excluding micro-organisms, and essentially biological processes for the production of plants and animals, excluding non-biological and microbiological processes.73 However, members are required to protect the IPRs of plant breeders either by patents or by any other effective sui generis system based on plant breedersʼ rights (PBRs). The provisions laid down in Art. 27.3 should have been subject to revision by the Council for TRIPs as of 1999. To date (2000), no decision has been made. This may not come as a surprise given that Art. 27.3b is closely linked to the wider issue of gene patenting, also known as ʻpatenting lifeʼ.
As discussed in Chapters 7 and 8, the interpretation of Art. 27.3b became a
source of conflict between developed and developing countries during the 1999 ministerial meeting.
Exclusive rights and exemptions deriving from TRIPs patents
Exclusive patent rights for products and processes are described in Art 28.
Generally speaking, the patentee has the exclusive right to prevent others from making, using, offering for sale, selling or importing (excluding parallel imports) the patented product or process without his consent.
Subject to their transitional arrangements (1996: developed countries, 2000: developing countries, 2005: LDCs) WTO members are also obliged to provide full protection to existing patents, that is patents granted to products and processes prior to the TRIPs agreement (Art. 70.2).74
WTO members can adopt limited exceptions to the rights conferred by a patent, provided that such exceptions ʻdo not unreasonably conflict with a normal exploitation of a patent, and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third partiesʼ (Art. 30).
In its current state, Art. 30 is too general and vague, paving the way for ʻinterpretational battlesʼ between advocates of stronger patent protection, such as the advanced pharmaceutical industry in Europe, and advocates of weaker patent protection. Two interpretational approaches should be cited. According to Blakeney, exemptions to exclusive patent rights include the following: (1) compulsory licensing in the public interest; (2) manufacture or use of the patented product for the sole purpose of scientific research and experimentation, and; (3) cases where third parties had, in good faith, manufactured or used the patented product prior to the patent application (simultaneous inventions for example).75 A similar view is expressed by UNCTAD, which emphasized the use of patented products and processes for scientific and experimental purposes.76 Pro-industry views, on the other hand, tend to minimize the extent to which Art.
30 may be used. Such is the approach of the International Chamber of Commerce arguing that ʻit is impossible to foresee if and to what extent member countries may, in fact, abuse this provision (Art. 31)ʼ.77 As elaborated upon in Chapter 8, the interpretation of Art. 30 played a crucial role in the dispute between the EU and Canada regarding commercial experimentation in patented pharmaceutical products (so-called ʻBolarʼ exemptions).
Increased term of patent protection
Art. 33 established that the patent term of protection shall be no less than a period of 20 years from the filing date. Following this Article, both the term itself and its starting point are a major achievement for patent owners. Pre- TRIPs legislation in many countries, mostly developing but also developed, provided shorter patent term of protection. This varied between 5 to 15 years
for the group of developing countries and between 16 to 20 years for the group of developed countries.78
There were also discrepancies concerning the starting point of the patent term. In some countries, such as Argentina, Portugal, Spain and the US, the patent term began from the date it was granted, while in other countries, such as the UK, Germany and France the patent term was calculated from the date of filing.79 For example, the US allowed for a patent term of 17 years from the date of the grant.80 Hence, setting a minimum period of 20 years is a considerable increase in the global term of protection provided to patents. Moreover, by harmonizing the term of protection according to the filing date, the TRIPs agreement prevents third parties from using the information embodied in the patent filing applications without the applicantʼs consent.81
Compulsory licensing – putting binding conditionality on the mandatory use of patents
The TRIPs agreement also addresses the issue of compulsory licensing of patents, that is the use of a patent by the government, or third parties authorized by the government, without the patenteeʼs consent (Art. 31).
Two elements in the TRIPs agreement make the issue of compulsory licensing in pharmaceuticals particularly beneficial to the advanced pharmaceutical industry. First, the granting of compulsory licences must not discriminate between different fields of technology. That is a result of Art. 27.1 – non- discrimination – and Art 31.i, stating that ʻthe authorisation of such use shall be considered on individual meritsʼ. Prior to TRIPs, several member countries, such as India and Canada, explicitly allowed the use of compulsory licensing in patented pharmaceuticals products.82 Second, under TRIPs, compulsory licensing cannot be easily granted on the basis of insufficient working of the patented invention. Originally, the non-working of a patent (patents that are not utilized for production purposes in the granting country) was a primary justification for the granting of compulsory licences, as indeed mentioned in Art.
5A(2) of the Paris Convention.83 By omitting any reference to the non-working issue in Art. 31, and by implying that sufficient working can also be based on the importation of patented products (Art. 27.1), TRIPs greatly reduced the validity of compulsory licences on such grounds.84
Members can use compulsory licences only if they were unable to obtain voluntary authorization from the right-holder ʻon reasonable commercial terms and conditions and within a reasonable period of timeʼ (Art. 31b). Once authorization for compulsory licensing is granted, member countries are required to pay adequate remuneration to the patentee according to the circumstances of each case, taking into account the economic value of the licence (Art. 31h).
The TRIPs agreement also put conditionality on the compulsory licensing of dependent patents – cases in which the granting of a compulsory licence on a
given patent infringes the rights of another patent. Dependent patents are mostly improvements to inventions that have already received patent protection. Here, the licence may be granted only if the dependent patent involves ʻan important technical advance of considerable economic significance in relation to the invention claimed in the first patentʼ (Art. 31li). The patentee of the original invention shall also be entitled to remuneration in the form of a cross-license (Art. 31lii).85
Finally, compulsory licence may be used in cases of national emergencies, such as health hazards. Art. 8.1 allows members to adopt measures necessary ʻto protect public health and nutrition, and to promote the public interest in sectors of vital importanceʼ.86 Until 2000, the interpretation of this provision was highly disputable. Referring to Art. 8.1, the WHO argues that ʻif a new pharmaceutical product introduced to the market were to constitute an important innovation or play an essential role in health policy, such as a vaccine against Aids or malaria, it should be possible to grant an ex officio (compulsory) licenseʼ.87 The advanced pharmaceutical industry, on the other hand, strongly objected to this line of interpretation and argued that the use of compulsory licence should be subject to strict criteria concerning the nature of the disease and the scope of the crisis in any given country.88 However, the recent WTO Ministerial declaration on TRIPs and Public Health (held in Doha, November 2001) reasserted the mandate of WTO members to use compulsory licences under conditions of national emergency. As noted in article 5c of the declaration:
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.89 The events and circumstances leading to the adoption of the Doha declaration on TRIPs and Public Health are discussed in greater detail in Chapter 9.
Special provisions relating to pharmaceutical and agrochemical patents Developing and least-developed countries that did not grant patent protection to pharmaceutical and agrochemical products prior to the agreement are required to take specific patent ʻprotection building measuresʼ during their transition periods (2000 and 2004 respectively).90 In essence, the TRIPsʼ goal is to reduce any further delays in the patentability of these products, given that there is a considerable time-gap between a patent application and a patent grant in the pharmaceutical and agrochemical fields (more than 10 years).91
First, subject to the conditions laid down in Art. 70.8, developing and least- developed countries must provide adequate facilities for pharmaceutical and agrochemical patent applications (so called ʻmailbox applicationsʼ).92 Second, such applications must be judged according to the patent criteria of the TRIPs
agreement (Art. 70.8b). Third, once their implementation period has expired, WTO members must protect any approved patent for the remainder of its term, commencing from its filing date (Art. 70.8c). Finally, in the unlikely event that a product is approved for market use before a decision to grant it patentability is made, developing countries and LDCs are obliged to grant it exclusive marketing rights (EMRs).93 Market exclusivity will be granted for a period of up to five years, or until the patent is rejected or expires, whichever period is the shorter (Art 70.9). EMRs shall be granted only when the following conditions exist: the product concerned is a genuine invention, a patent application was filed, and another member granted patentability to that product and approved it for market use.94
However, in cases were there are no patent applications pending, the TRIPs agreement does not require that market exclusivity should also be granted to pharmaceutical products that enjoyed patent protection in the source countries.95 This kind of retroactive protection (usually referred to as ʻpipeline protectionʼ) was highly desired by the advanced pharmaceutical industry.96 For instance, the IFPMA argued that the lack of pipeline protection in Art. 70.9 ʻdelayed substantially any practical benefits from this provisionʼ.97
The TRIPs agreement, therefore, secures a considerable increase in the global protection of patents. Most importantly, patents shall be granted, on a non- discriminatory basis, to all fields of technology, including pharmaceuticals, regardless of the issue of ʻnon-workingʼ. The extensive patent rights guaranteed by TRIPs enable patentees to have much greater control, or even a monopoly, on the use of their inventions, both by themselves and by others. Patents also enjoy a longer term of protection: a minimum period of 20 years from the date of filing.
The exclusion from patentability can be based on issues concerning public order and morality, the environment, health emergencies and life-patenting. It cannot be based on economic calculations concerning the commercial exploitation of a patent. Patent rights may be violated mainly for non-commercial purposes, such as academic research, yet without prejudice to the interests of the patentee.
Compulsory licences, though authorized, are subject to restrictive and binding conditions including the principle of non-discrimination, avoiding the granting of a licence on the basis of non-working, and compensating the patentee in exchange for that licence. Finally, developing countries and LDCs are also required to establish adequate facilities (mailbox procedures) for pharmaceutical and agrochemical patent applications during their transition periods.
6.5.2 TRIPs Trademarks – Securing a Global System of Brand