3. The International Patents Regime under the TRIPS Agreement 14
3.3. The Flexibilities: 20
3.3.2. Limited exceptions 22
Article 30 of the TRIPS Agreement provides for “limited exceptions to the exclusive rights conferred by a patent”, allowing additional public health related flexibilities, which formally diminish the strong rights awarded by patents. However, the limited exceptions to patents rights, which include research and experimentation, prior use, early working and the export of medicines to non-producing countries, are provided only if they “do not unreasonably conflict with a normal
80 See E. Asif, “Exclusion of Diagnostic, Therapeutic and Surgical Methods from Patentability” (2013) Journal of Intellectual Property Rights, Vol 18, 242 – 250.
81 C. Park, A. Prabhala & J. Berger, (note above) 40. The full document is available online at:
http://www.undp.org/content/undp/en/home/librarypage/hiv-aids/using-law-to-accelerate-treatment-access-in- south-africa.html, accessed in December 2014.
82 See Section 3(c), 3(d) and 3(e) of the Indian Patents Act, 1970 (as amended up to Patents (Amendment) Act, 2005).
exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner”.
Notably, those mentioned exceptions were already in use in national laws prior to the implementation of the TRIPS Agreement. For this reason, during negotiations both developing and developed countries agreed for the insertion of a general provision that could comprise such concessions in a sole principle.83
Article 30 of the TRIPS Agreement has been at the centre of an international discussion regarding the appropriate meaning of the word “limited”. In particular, there have been views put forward suggesting an extended interpretation of Article 30, so as to allow countries with producing capacities to export drugs to non-producing countries, without the use of compulsory licensing.
The argument has been clarified by the EC-Canada WTO Dispute Settlement Panel,84 which explained that limited exceptions must satisfy three cumulative conditions in order to be justified:
(i) the exception must be “limited”; (ii) it “must not unreasonably conflict with a normal exploitation of the patent”; (iii) finally, it must “not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interest of third parties”.85
The WTO Panel, highlighting the limited nature of these exceptions, strictly interpreted the provision of Article 30 of the TRIPS Agreement. Particularly, the Panel stressed that the word
“exception” already suggests a limited allowance and the term “limited” further restricts such a concession. Then, it emphasizes the significant similarity between Article 30 and Article 13 of the TRIPS Agreement (“Limitation and exceptions”) and that the latter finds its origin in the wording of Article 9.2 of the Berne Convention, which provides an exception to copyright for fair use.
83 See UN Conference on Trade & Development-International Centre for Trade & Sustainable Development, The TRIPS Agreement and Developing Countries (2005) 95 UNCTAD Geneva.
84 The complaint from the EC was against Canada and two specific aspects of its legislation, namely the “stockpiling exception” and the “regulatory review”. Whereas the former provision allowed third parties to manufacture a patented pharmaceutical product, without the patent owner permission, within six months of the expiration of the patent validity so as to supply the product onto the market as soon as the patent had expired; the latter exception allowed unauthorized third parties “to make, contract, use or sell the patented invention solely for uses reasonably related to the development and submission of information required under any law of Canada, a province or a country other than Canada that regulates the manufacture, construction, use or sale of any product” (Canada Patent Act, Section 55.2(1)).
85 See WTO Panel Report, Canada – Patent Protection of Pharmaceutical Products (Canada – Patent Protection), WT/DS114/R, adopted 17 March 2000, para. 7.20. See also F. Ortino, E. Petersmann, “The WTO Dispute Settlement System, 1995-2003” (2004) Kluwer Law International, 424 – 432.
Finally, the Panel took the view that the “stockpiling exception” carried out by Canada (through which Canada authorized third parties to manufacture and store patented drugs, without the authorisation of the patent-holder, with the aim of putting the drug into the market upon expiration of the patent) was not a “limited exception” within the meaning of Article 30 of the TRIPS Agreement. The decision of the Panel brought doubts regarding the excessively restrictive interpretation of Article 30 and as to the implications that the decision would have regarding compulsory licensing. In particular, the concerns relate to whether a compulsory licence for manufacturing and supplying a generic medicine to another WTO Member is justifiable under Article 30 of the TRIPS Agreement, without conflicting “with a normal exploitation of the patent”.86 However, the Doha Declaration (issued soon after the WTO Panel decision), highlighting the important role of compulsory licensing in expanding access to medicines, played a central role in surpassing the concerns and criticisms resulting from the Panel decision.
Another aspect of Article 30 of the TRIPS Agreement that should be considered as a significant mechanism to improve access to medicine, is the “early working” exception, also called
“regulatory exception” or “Bolar” provision.It was introduced by the United States with the aim of testing inventions regarding pharmaceutical products, before the expiration of patents, in order to study and then commercialize the generic versions of the same drugs immediately after the patents expire. Such a type of exception to the patent’s rights before the expiration of the right has found great support from the developing world. It is generally used in order to permit generic producers to use the patented medicine with the aim of obtaining marketing approval by drug regulatory authority, regardless to the patentee authorisation. This method lets the generic manufactures to enter into the market right after the expiration of the patent.
The “regulatory exception” was also discussed by the EC-Canada WTO Dispute Settlement Panel, which ruled that the use by Canada of this exception was “limited” and therefore it complies with the provision of Article 30 of the TRIPS Agreement. In fact, the patented drugs were produced, without authorisation, only with the aim to obtain regulatory approval and they were restricted solely to a small number of items.
86 See D. Matthews (note above) 21-22.