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Compulsory Licensing of
patented invention
Pankaj Kumar
IPR Ambassador, Facilitator and the Trainer
IPR Coordinator, IIS deemed to be University
ipr.pkumar@gmail.com
Definition of patent
WIPO defines patent as
• an exclusive right
• granted for an invention,
• which is a product or a process
• that provides, in general, a new way of doing
something, or offers a new technical solution
to a problem.
• A patentee shall have exclusive rights over his
invention for a period of 20 years, and he can
exclude others from making any use of his
patented product.
Patent and WTO
TRIPS Agreement, part of WTO agreements,
aims –
• to facilitate innovation as well as
• trade in knowledge and creativity
• by providing global minimum standards
• for protection and enforcement of IPR,
including patents.
What could the patent owner do?
1. Work it himself?
2. Sell it?
3. Licence it?
• Voluntary licence
– ideal because non-conflictual
– Know-how ideally with patented invention
(technology transfer scenario)
– Negotiating power
• BUT, what if things do not work that way?
“Use without authorization”
• The approach of the TRIPS Agreement:
– Too difficult to agree on all the various existing systems
or that there should be only one or two categories:
• Public non-commercial use (“Government use”)
• Compulsory licences (or non-voluntary licences): existing
systems of CL for public interest, licences of right, CL for non-
working or insufficient working, for anti-competitive practices)
• Dependent licenses (for dependent inventions)
• So, better focus on the conditions of use without the patentee’s
authorization (because certain situations require different
conditions, certain grounds have to be mentioned, e.g.
Emergency, anti-trust, etc.).
Article 31 of TRIPS
In a nutshell:
• TRIPS does not:
– establish an exhaustive list
– limit grounds for CL in general
– limit grounds to emergency situations in particular
• TRIPS does:
– indicate possible grounds for CL (Art.31)
– set conditions for grant of CL - see Art. 31
→ Flexibility for domestic implementation & use
Compulsory licences under
Article 31 of TRIP
• Conditions for the grant of a compulsory licence
– Individual merits
– Unsuccessful efforts to obtain a voluntary license
on reasonable commercial terms and conditions
within a reasonable period of time.
• except in cases of national emergency or other
circumstances of extreme urgency or public
non-commercial use
– Scope and duration to be limited to the purpose
for which it was authorised.
– Non-exclusive
Compulsory licences under
Article 31
– Non-assignable, except with that part of the
enterprise or goodwill
– Predominantly for the supply of the domestic
market (A.31(f))
– To be liable to termination if and when the certain
circumstances cease to exist and are unlikely to
recur.
– Adequate remuneration to the right owner
– Judicial review of the decision relating to the grant
and remuneration
Compulsory License: Meaning
• use of the patented invention may be authorized to a
3rd party either by
• the competent court OR by a Patent Office
(depending on the law of the country)
• without the consent of the patent owner
• through a regime
• called …. compulsory licensing
• CL have been imposed on pharmaceutical manufacturers
by some countries on the asserted grounds of public
health and safety, but they could potentially apply to any
patented invention.
Definition - Compulsory Licensing
“*f+or patents, when the authorities license
companies or individuals other than the patent
owner to use the rights of the patent – to make,
use, sell or import a product under patent (i.e., a
patented product or a product made by a
patented process)
– without the permission of the patent owner.
Allowed under the WTO’s TRIPS (intellectual
property) Agreement provided certain
procedures and conditions are fulfilled”- WTO
Compulsory license: Why… the problem?
• concerns regarding fair access to medicines and vaccines
• Intervention mechanism- ‘reasonable requirement’…CL has now
become the hope for financially challenged patients.
• Government balances the rights of the patentee with its
obligations to ensure proper and reasonable working of patents.
Fair access to medicines and vaccines
• March 11, 2020 - WHO declared Covid-19 a global pandemic
• Since the virus first emerged at the end of 2019, pharma co. have been
ramping up efforts to develop new medicines and vaccines to address the
pandemic
• concerns regarding fair access to medicines and vaccines
• Limitation to Patent Rights (CL) -There are certain situations where the
exclusive rights of a patentee can be used without his/her authorization.
• CL provides a specific mechanism to bypass a patent owner’s legal
monopoly… a way to introduce low-cost generic medicines to the market.
• In case of a pandemic, state intervention through CL has been regarded as
necessary and essential.
Compulsory License:
Paris Convention & TRIPS Agreement
• As provided under the TRIPS Agreement (Article 31), a number of
conditions and circumstances must be respected before granting a
compulsory license to a third party.
• … prevents the abuses which might result from the exclusive rights
conferred by a patent.
• The agreement allows CL 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.
• The term “compulsory licensing” does not appear in the TRIPS Agreement.
Instead, the phrase “other use without authorization of the right holder”
appears in the title of Article 31.
• Compulsory licensing is only part of this since “other use” includes use by
governments for their own purposes.
• This regime may also be applied in case of non-use of the patented
invention within a prescribed period (generally 4 years from the filing date of
application for patent, or 3 years from the issue of patent).
Continue…. WTO declaration on TRIPS & public health
Continue…. WTO declaration on TRIPS & public health
A patent waiver on COVID
vaccines is right and fair
US representative at the WTO, announced US support for
a waiver on intellectual property for COVID vaccines on 5
May21
Safeguards /Indian Patent Act
1. General principles applicable to working of patented inventions: Sec 83
2. ‘reasonable requirements of the public’ – s84(1)(a) not defined
3. Working information: Sec 146 (2)
4. Patentability Criteria: Sec 3(d)
5. Strong Opposition Mechanism (2)
6. CHAPTER XVIII WORKING OF PATENTS, COMPULSORY
LICENCES AND REVOCATION
7. Automatic Compulsory licensing for generics
8. Parallel imports
Section 83. General principles applicable to working of patented inventions.-
• (a) that patents are granted to encourage inventions and to secure that the
inventions are worked in India on a commercial scale and to the fullest
extent that is reasonably practicable without undue delay;
• (b) that they are not granted merely to enable patentees to enjoy a
monopoly for the importation of the patented article;
• (c) that the protection and enforcement of patent rights contribute to the
promotion of technological innovation and to the transfer and
dissemination of technology, to the mutual advantage of producers and
users of technological knowledge and in a manner conducive to social and
economic welfare, and to a balance of rights and obligations;
Continue… Section 83. General principles applicable to working of
patented inventions.-
• (d) that patents granted do not impede protection of public health
and nutrition and should act as instrument to promote public
interest specially in sectors of vital importance for socio-economic
and technological development of India;
• (e) that patents granted do not in any way prohibit Central
Government in taking measures to protect public health;
• (f) that the patent right is not abused by the patentee or person
deriving title or interest on patent from the patentee, and the
patentee or a person deriving title or interest on patent from the
patentee does not resort to practices which unreasonably restrain
trade or adversely affect the international transfer of technology;
and
• (g) that patents are granted to make the benefit of the patented
invention available at reasonably affordable prices to the public.
‘reasonable requirements of the public’
Under the Indian Patent Act, the reasonable requirements of the public
are deemed not to have been satisfied where:
• The patentee refuses to grant a license(s) on ‘reasonable terms’; and
– a trade or industry is prejudiced; or
– demand for the patented article has not been met to an adequate
extent; or
– a market for exportation of the patented article manufactured in
India is not being supplied or developed; or
– the establishment or development of commercial activities in
India is prejudiced.
• The patentee imposes a condition on the patented invention;
• Non-working of the patented invention in the territory of India;
• Working of the patented invention in India on a commercial scale is
prevented by the importation from abroad.
Compliance: Working information
Section 146 (2) of the Indian Patent Act requires every patentee and licensee to
provide information on the extent to which the patented invention has been worked
on a commercial scale in India.
Patentees and licensees required to submit Form 27 every calendar year, within 3
months of the end of each year with relevant information includes the following:
• Whether the invention has been worked;
• If not worked, the reasons for non-working, and steps being taken to work
• If worked, quantum and value of the patented product;
• If manufactured in India, whether imported from other countries, giving details of
the countries concerned;
• Licenses and sub-licenses granted during the year;
• Whether the public requirement has been met, at a reasonable price either partly,
adequately or to the fullest extent.
• Failure to supply such information creates a presumption of non-working and may
contribute in grant of a CL.
• It is also a punishable offence and invites a fine which may extent up to 10 L.
• Knowingly furnishing false information is an offence punishable with
imprisonment up to 6 months, a fine or both.
Patentability Criteria: Section 3(d)
(Novartis Dispute)
Section 3(d) excludes:
The mere discovery of a new form of a known substance which does not
result in the enhancement of the known efficacy of that substance….is
not patentable.
What exactly does “efficacy” mean?
Factual Dispute (whether salt is 30% more bio-available?)
Novartis challenge that section 3(d) violative of TRIPS
Art 27 of TRIPS:
Patents shall be granted to all inventions, that are new, non obvious and
have industrial applicability
Non obviousness standards are left to the discretion of member states
Grounds for Compulsory license: TRIPS v India
Article 31 of TRIPS Agreement mention –
• National emergencies,
• Other circumstances of extreme urgency and
• Anti-competitive practices
Grounds that have been proposed or asserted to support the imposition of a CL in
India have included:
• circumstances of national emergency or extreme urgency;
• vital public health needs;
• strong societal interest has arisen in access to the invention;
• abuse of economic power by the patent owner, in such a manner as to violate
antitrust laws; and
• in circumstances where multiple patents held by different owners cover a
particular technology. For example, combination therapies – such as triple
antiretroviral drugs – may be subject to more than one patent. In such cases, if
one patent owner refuses to license, then the technology may not be
marketed
CHAPTER XVIII WORKING OF PATENTS,
COMPULSORY LICENCES AND REVOCATION
• WORKING OF PATENTS
• COMPULSORY LICENCE
• REVOCATION
Compulsory licenses:
Grounds in India (S.84)
section 92(1): Suo moto by the
Central Government/CG
pursuant to a notification issued by the Central
Government if there is Circumstances either a
• "national emergency" or
• "extreme urgency" or
• in cases of "public non-commercial use"
Doha Declaration & the Indian Patent Act
section 92-A
• In order to give effect to the paragraph 6 of Doha Declaration
which recognizes WTO members with insufficient or no
manufacturing capacities in the pharmaceutical sector could
face difficulties in making effective use of compulsory license
under the TRIPS Agreement, the Indian Patent Act was
amended to insert a new provision, section 92-A
• section 92-A on compulsory licensing for manufacturing and
exportation of patented pharmaceutical products into any
country that does not have sufficient manufacturing capability
to address public health problems.
• Exportation is allowed mainly to those countries where a
compulsory license has been granted where such countries
have notified or otherwise allowed the importation of
patented pharmaceutical products from India.
Compulsory licensing provisions in the Patents Act 1970
use by the Government:
Section 100
• Under Section 100 of the Indian Patent Act,
compulsory license can be issued by the
Government on a patented drug for use by the
Government.
• The Bombay High Court in the case
of Garware Wall Ropes Ltd. Vs. A.I. Chopra and
Konkan Railway Corp. allowed third party
agencies to use a patented invention on
behalf of the Government.
public use: section 102
• Under section 102 of the Indian Patent Act,
Government can obtain a pending or already
granted patent for public use.
• In return the Government must pay the
patentee royalties as mutually agreed upon
between the parties.
Procedure for granting a compulsory license:
section 87
• Any party interested in obtaining the CL may file a request online or
on paper via Form 17, along with fees prescribed with the Indian
Patent Office.
• It is required that the Form 17 state nature of the applicant’s
interest along with facts and particulars on which the application is
based.
• Under section 87 of the Indian Patent Act, upon filing the
application for grant of CL, the Controller at the Indian Patent Office
shall analyze the prima facie case made by the applicant against the
patentee.
IPO analyze the prima facie case made by the
applicant against the patentee
Under section 87 of the Indian Patent Act, upon filing the application for grant of CL, the
Controller takes into consideration:
• The nature of the invention;
• The applicant’s ability to work the invention;
• Whether the applicant made any efforts to reasonably obtain a license from the patentee;
• If such efforts have not been successful within a reasonable time period.
• A notice will be issued to the applicant if the Controller is unsatisfied with the request and
will provide a statement rejecting the CL.
• The applicant may request a hearing with the Controller, within a month from the date of
notice of rejection.
• At the conclusion of the hearing, the Controller will decide the matter.
• If the matter is decided in favor of the applicant, necessary terms and conditions shall be
decided for granting of the CL. The royalties to be paid to the patentee will be decided by
the Controller. The patentee’s investment in the invention, workability of the patentee’s
invention by the applicant, the selling price of the patented article, and terms of the license
will be considered.
• However, the procedure mentioned in Section 87 shall not apply after considering the
application when the Controller determines that a national emergency or a circumstance of
extreme urgency exists.
Opposition to the grant of CL: Form 14
• The patentee or any other person desiring to oppose
the application for the grant of a compulsory license
may, within the prescribed time (i.e. 2 months from
the date of publishing the application in the Official
Journal of the Indian Patent Office), file a notice of
opposition via Form 14, along with prescribed fee.
• Upon notice being served, the Controller will notify
the applicant and give both, the applicant and the
opponent, an opportunity to be heard before
deciding the case.
Termination of compulsory license
A patentee or any
other person
possessing title
or interest in the
patent may apply
to the Controller
using Form 21
together with any
evidence
requesting to
terminate the CL
granted under
Sec 84
Appeal/Review
An appeal of the Controller’s decision to grant or deny
a compulsory license can be made to the Appellate
Board. The appeal can be held under:
• Sections 84 (1)-(5) Compulsory License;
• Section 85 Revocation for non-working of invention;
• Section 91 Licensing of related patents;
• Section 92 Special provisions for Compulsory License
on notifications by Central Government; or
• Section 94 Termination of Compulsory License.
Compulsory License:
Cases in India
• Out of very few applications for grant of
Compulsory License so far (4), only in 1st case
the license was granted
1st Compulsory licenses
•Natco Pharma Ltd v Bayer
•Bayer patented drug nexavar is to treat advanced stage of
kidney and liver cancer
•Nexavar is a trade name and the chemical name is Sorafenib
Tosylate
•The drug is not a life saving but life extending and has to be
taken by the patient lifetime
•Cost of therapy is INR 2,80,428/- per month
•Natco Pharma offered to sell it around for INR 9,000/-
•Bayer's admission that only 2% of kidney and liver cancer patients
were able to access the drug and that the drug was imported and
not manufactured within India
India Controller of Patents grants
compulsory license on Bayer drug, Nexavar,
in favor of NATCO
– Three grounds applied
• Lack of accessibility
• Lack of reasonable affordability
• Failure of local working
– Bayer had supplied very limited quantities to the
Indian market
• Bayer argued that Cipla already adequately supplying
market, so that compulsory license unnecessary
• Bayer introduced limited evidence of program designed
to provide accessible-affordable product
Compulsory license on Nexavar
granted
– Prices far in excess of those affordable to the
public, including with government assistance
– Had sought to supply requirements only through
importation, and had not demonstrated sufficient
obstacle to local production
– Bayer alleges Cipla production infringes patent,
cannot rely on activities it claims are illegal as
defense
• Affirmed by Intellectual Property Appellate
Board on March 4, 2013
CL and Indian judicial system
1. CG – ‘public requirements’ failed; CL granted
by the Patent Office on March 9, 2012
2. IPAB - "It is only because of public interest,
we are not interfering in this appeal on this
ground".
3. HC - no reason to interfere with the findings
of the authorities under the Act.
4. SC - upheld the decision of Controller and
upheld the grounds for which Compulsory
license was issued.
The human rights angle
• Each of the decisions by the Indian courts
referred to above pay particular attention to
the interests of India's large poor population
and need for access to medicines
• A number of the cases are argued on the Right
to Health
• Specific reference to Human Rights
instruments is not a prerequisite to a human
rights decision
Remark
• patent protection is granted not as ABSOLUTE
protection, nor it can denied altogether as
directly affects innovation funding and
unfettered use of this provision may result in
global pharmaceutical companies being
hesitant to introduce new medicines in other
countries.
• Hence the companies have to fix the cost of
their patented module according to the
economic status of the country if they want to
protect their product from compulsory
licensing.
The grant of CLs is whether violative of Art 14 of the
Constitution which prohibits the State from denying any person
equality before the law or the equal protection of laws within
the territory of India?
It is useful to briefly outline certain well settled legal propositions to
aid the discussion:
• The mere fact that a particular word or phrase is not defined does
not render an Act unconstitutional as it can be judicially interpreted on
a case-by-case basis.
• If the legislative policy is clear, a discretionary power that is to be
exercised with regard to the particular circumstances of the case is not
discriminatory.
• It would be competent for the authority that exercises discretion to
lay down guidelines in conformity with legislation to ensure fairness
and exclude arbitrariness.
power of the Controller is not
absolute and unguided
• The terms and conditions of the CLs granted under Sec 84, 91
and 92 are to be determined by the Controller in accordance
with the provisions of Sec 90.
• Clauses (iv) to (ix) of Sec 90 describe the relevant
circumstances and factors for the various conditions and
limitations that may be imposed by the Controller.
• These include conditions that the CL is non-exclusive, non
assignable, for the remaining term of the patent unless a
shorter term is desirable in the public interest and
predominantly for supply to the Indian market but exports
could be permitted if needed to develop or supply the export
market.
Compulsory License:
2nd case in India: BDR Pharmaceuticals v Bristol-Myers Squibb
• Dasatinib (Sprycel®), an anti-cancer drug
• March 4, 2013 the Controller rejected BDR Pharmaceuticals’ (BDR)
application for a CL
• Controller ruled in the favor of patentee
• AP has not made efforts to obtain a license from the patentee as
evident by the applicant's conduct by not taking any action on the
queries by the patentee.
• the Controller found that BDR had made no credible attempt to
procure a license from the patent holder and the applicant had not
acquired the ability to work the invention to public advantage.
• Thus, the compulsory license denied.
Compulsory License:
3rd case in India: Lee Pharma v AstraZeneca
• Drug Saxagliptin®-treatment of Type-II Diabetes Mellitus
• June 29, 2015, Lee Pharma filed an application for CL
• CG rejected application as no prima facie case had been made out
on any of the three grounds under section 84 (1) of the Indian
Patent Act
• AP failed to demonstrate reasonable requirements of the public
• The patented invention was not available to the public at a
reasonably affordable price: It was held that all related drugs were
in the same price range and that Saxagliptin® being sold at
unaffordable price was not justified.
• The patented invention had not been worked in the territory of
India: Lee Pharma also failed to show the exact quantitative
requirements of Saxagliptin® in India. Therefore, it could not be
concluded whether manufacturing of the drug in India was
necessary or not.
erlotinib (brand name Tarceva)
• Roche patented erlotinib (brand name Tarceva) in India and
some other countries, which is used in the treatment of lung
cancer. It is a high-cost drug with each tablet costing Rs 4,800.
This means that a lung cancer patient could pay close to Rs
1.5 lakh a month for treatment.
• Subsequently, an application for a compulsory licence (first
application) has been filed in India, by Natco Pharma of
Hyderabad for the erlotinib. The application is for the export
of 30,000 tablets to Nepal and Natco has offered Roche a 5%
royalty.
Compulsory License:
Shift in government policy on grant of CL
• Recently it was in the air that the Indian Government
offering private assurance to US Trade Representative
that it will not invoke compulsory licenses anymore
(save for public noncommercial use).
• The news started to be covered in legal and
mainstream media with indication that there is a shift
in government policy on grant of compulsory license.
• News "private assurance“: press statement published
by NDTV website where both BDR Pharma and Lee
Pharma blamed lack of government support for cheap
generics and pressure from Big Pharma for not
pursuing Compulsory License application anymore
Clarification of Govt
DIPP/DPIIT: "There have been recent media reports that the Government of
India has privately assured that it will not issue any more compulsory
license. It is hereby clarified that such reports are factually incorrect. In
this regard, it may be noted that India has a well established TRIPS
compliant legislative, administrative and judicial framework to
safeguard IPRs. Under the Doha Declaration on the TRIPS Agreement
Public Health, each member has the right to grant compulsory licenses
and the freedom to determine the grounds upon which such licenses
are granted.
Even as the Government of India is conscious of the need to spur innovation
and protect individual rights, it retains the sovereign right to utilize the
flexibilities provided in the international IPR regime. It may be noted that
till date, there has been only one case of compulsory license in India and
that too after a well-thought out and laid down process, which was
subsequently upheld right up to the highest Court of the land.“
Finance Minister Arun Jaitley said India will retain the right to issue so-called
compulsory licenses to its drug firms, under "emergency" conditions.
Some uses without authorization
under Article 31
• Examples in area of pharmaceuticals:
• Public non-commercial use
– Ecuador (2010 for ritonavir)
– Brazil (2007 for efavirenz)
– Thailand (2006-2008 for seven HIV/AIDS/heart disease and cancer
drugs)
• Public interest
– India (2012 for sorafenib)
– Declaration of public interest rejected in Colombia (2009 for
lopinavir/ritonavir), instead: application of price control measures
• Anti-competitive practices:
– Italy (2005-2007 for refusal to licence)
Impacts of CL in Pharma
• Price reductions
• Imports of lower priced drugs, etc.
• BUT, is it a sustainable long term solution ? Different
views
– complex technologies
– lack of co-operation with patent right holder
– Case of India = exceptional case because size of market, long-time
experience
Why a Doha Declaration on TRIPS-
public health?
• Separate Ministerial Declaration in WT/MIN(01)/DEC/2).
• Why?
– Fears of some quarters and governments of using
certain flexibilities.
• The Doha declaration reaffirms or clarifies, inter alia:
– Balance of interests for the society (access to medicines
(price) and R&D
– Art.7 and 8
– The flexibilities, e.g. on
• Right to chose exhaustion régimes
• Issues of national emergency, extreme urgency
• Transition period for LDCs for pharmaceuticals (2016
The “Paragraph 6 System”
• Recognizes that Members with insufficient or no
manufacturing capacities in the pharmaceutical sector
could face difficulties in making effective use of
compulsory licensing under TRIPS
• Instructs the TRIPS Council to find an expeditious
solution and report to the General Council before the
end of 2002
⇒ reference to “Paragraph 6 System”
Article 31(f) issue
• Members can issue compulsory licences for
importation / domestic production
• Availability of supply from generic producers in third
countries ?
– Art. 31(f) requires production under compulsory licenses
"predominantly for the supply of the domestic market of the
Member“ ⇒ need to address legal problem resulting from
Art.31(f) conditions in exporting Member
• Solution: three waivers (derogations), adopted in light
of Chair’ statements
The 1st waiver (WTO)
• Basic rule under Article 31(f): production under
compulsory licence predominantly for supply of
domestic market
• Paragraph 6 System waives requirement for exporting
Members in cases of production/export of a
pharmaceutical product to eligible importing Members
• Subject to conditions on transparency and safeguards
The 2nd waiver
• Basic rule under Article 31(h): remuneration to be paid
where compulsory licence is granted
• Under Paragraph 6 System:
– Exporting Member: adequate remuneration is to be paid
taking into account the economic value of the authorization
in the importing Member
– Importing Member: Article 31 h) is waived; no remuneration
payable if paid in exporting Member for the same products
(n.b.: unless treaties are directly applicable, this requires a
change in legislation/regulation)
The 3rd waiver
• Concerns: Regional trade agreements
• Objective: economies of scale, enhance purchasing
power, help local production
• Derogation from Art. 31(f) if:
– RTA falls within WTO rules
– At least half of the RTA members are LDCs
– Members concerned share the health problem in question
⇒ Note: derogation does not affect any patent status
in importing countries - principle of territoriality
• Promotion of regional patent systems
• Developed countries, in conjunction with IGOs, to
provide technical cooperation
The “Paragraph 6 System”
• General Council Decision of 30 August 2003:
– contains three waivers (derogations)
– in effect since 30 August 2003, terminates when amendment
replaces it for each Member
• GC Decision of 6 December 2005 / Protocol Amending TRIPS
proposes insertion of:
– new Article 31bis consisting of 3 waiver provisions of August 2003
Decision
– Annex setting out terms for using Paragraph 6 system
– Appendix to Annex dealing with assessment of manufacturing
capacities (former annex to August 2003 Decision)
⇒ “technical exercise”, no changes in substance to Paragraph 6
System
TRIPS-Public Health in sum
• Heavily negotiated
• Doha Declaration
– Confirmation of importance of R&D and innovation but
also flexibilities
– Transition period for least developed countries (LDCs)
– Paragraph 6
• Article 31; Article 31(f)
• Paragraph 6 system is meant to address a health
problem in the importing Member and a legal
problem in the exporting Member. Not purported to
resolve all public health problems
Public Health Problem in WTO Member requiring
pharmaceutical product
Product not patented Product patented
Compulsory licence
in compliance with
Art 31 TRIPS
Agreement with
originator
Pharmaceutical product can be
manufactured domestically
Pharmaceutical product cannot be
manufactured domestically
Product not patented
in exporting Member
Product patented in
exporting Member
Need to use para. 6 System if exported
amount is predominant share of production
When to Use the Para.6 System
Supply by non-WTO
Member
TRIPS-Public Health - Some References
• Doha Declaration on TRIPS and Public Health
(WT/MIN(01)/DEC/2)
• Decision on the implementation of paragraph 6 of the Doha
Declaration on TRIPS and Public Health (WT/L/540 and Corr.1)
• Decision on an amendment to the TRIPS Agreement (Protocol)
(WT/L/641)
• Annual Review of the Functioning of the System 2010 (IP/C/57
and Corr.1)
• Members’ laws implementing the Para.6 System:
http://www.wto.org/english/tratop_e/trips_e/par6laws_e.htm
• How to accept the Protocol Amending TRIPS:
http://www.wto.org/english/tratop_e/trips_e/accept_e.htm
• Decision on extension of transition period for LDCs with
respect to pharmaceutical products (IP/C/25)
• Decision on general extension of transition period for LDCs
(IP/C/40) - June 2013, being discussed /negotiated at the time
of Durban’s workshop
Compulsory licences:
Some remarks
• CL may help resolve but is not the panacea.
• Need for R&D of new molecules and need for affordable medicines
• Negotiating power and importance of dialogue
– national task forces
– At regional and international levels
• Importance of Doha Declaration
• Use of flexibilities in a manner which does not end up being
counter-productive or inefficient
• Application of Paragraph 6 System so far
– Rwanda – Canada
• Paragraph 6 System and acceptances: not many acceptances from countries of
the African Continent
– At the time of Durban WIPO-DTI seminar: (in chronological order), following participating
countries: Mauritius, Zambia, Uganda, Rwanda, Togo
• Different views on the Paragraph 6 System:
– Very complex and bureaucratic
– Flexibilities used, plus voluntary actions by companies

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Compulsory Licensing of patented inventions for public health

  • 1. Compulsory Licensing of patented invention Pankaj Kumar IPR Ambassador, Facilitator and the Trainer IPR Coordinator, IIS deemed to be University ipr.pkumar@gmail.com
  • 2. Definition of patent WIPO defines patent as • an exclusive right • granted for an invention, • which is a product or a process • that provides, in general, a new way of doing something, or offers a new technical solution to a problem. • A patentee shall have exclusive rights over his invention for a period of 20 years, and he can exclude others from making any use of his patented product.
  • 3. Patent and WTO TRIPS Agreement, part of WTO agreements, aims – • to facilitate innovation as well as • trade in knowledge and creativity • by providing global minimum standards • for protection and enforcement of IPR, including patents.
  • 4. What could the patent owner do? 1. Work it himself? 2. Sell it? 3. Licence it? • Voluntary licence – ideal because non-conflictual – Know-how ideally with patented invention (technology transfer scenario) – Negotiating power • BUT, what if things do not work that way?
  • 5. “Use without authorization” • The approach of the TRIPS Agreement: – Too difficult to agree on all the various existing systems or that there should be only one or two categories: • Public non-commercial use (“Government use”) • Compulsory licences (or non-voluntary licences): existing systems of CL for public interest, licences of right, CL for non- working or insufficient working, for anti-competitive practices) • Dependent licenses (for dependent inventions) • So, better focus on the conditions of use without the patentee’s authorization (because certain situations require different conditions, certain grounds have to be mentioned, e.g. Emergency, anti-trust, etc.).
  • 6. Article 31 of TRIPS In a nutshell: • TRIPS does not: – establish an exhaustive list – limit grounds for CL in general – limit grounds to emergency situations in particular • TRIPS does: – indicate possible grounds for CL (Art.31) – set conditions for grant of CL - see Art. 31 → Flexibility for domestic implementation & use
  • 7. Compulsory licences under Article 31 of TRIP • Conditions for the grant of a compulsory licence – Individual merits – Unsuccessful efforts to obtain a voluntary license on reasonable commercial terms and conditions within a reasonable period of time. • except in cases of national emergency or other circumstances of extreme urgency or public non-commercial use – Scope and duration to be limited to the purpose for which it was authorised. – Non-exclusive
  • 8. Compulsory licences under Article 31 – Non-assignable, except with that part of the enterprise or goodwill – Predominantly for the supply of the domestic market (A.31(f)) – To be liable to termination if and when the certain circumstances cease to exist and are unlikely to recur. – Adequate remuneration to the right owner – Judicial review of the decision relating to the grant and remuneration
  • 9. Compulsory License: Meaning • use of the patented invention may be authorized to a 3rd party either by • the competent court OR by a Patent Office (depending on the law of the country) • without the consent of the patent owner • through a regime • called …. compulsory licensing • CL have been imposed on pharmaceutical manufacturers by some countries on the asserted grounds of public health and safety, but they could potentially apply to any patented invention.
  • 10. Definition - Compulsory Licensing “*f+or patents, when the authorities license companies or individuals other than the patent owner to use the rights of the patent – to make, use, sell or import a product under patent (i.e., a patented product or a product made by a patented process) – without the permission of the patent owner. Allowed under the WTO’s TRIPS (intellectual property) Agreement provided certain procedures and conditions are fulfilled”- WTO
  • 11. Compulsory license: Why… the problem? • concerns regarding fair access to medicines and vaccines • Intervention mechanism- ‘reasonable requirement’…CL has now become the hope for financially challenged patients. • Government balances the rights of the patentee with its obligations to ensure proper and reasonable working of patents.
  • 12. Fair access to medicines and vaccines • March 11, 2020 - WHO declared Covid-19 a global pandemic • Since the virus first emerged at the end of 2019, pharma co. have been ramping up efforts to develop new medicines and vaccines to address the pandemic • concerns regarding fair access to medicines and vaccines • Limitation to Patent Rights (CL) -There are certain situations where the exclusive rights of a patentee can be used without his/her authorization. • CL provides a specific mechanism to bypass a patent owner’s legal monopoly… a way to introduce low-cost generic medicines to the market. • In case of a pandemic, state intervention through CL has been regarded as necessary and essential.
  • 13. Compulsory License: Paris Convention & TRIPS Agreement • As provided under the TRIPS Agreement (Article 31), a number of conditions and circumstances must be respected before granting a compulsory license to a third party. • … prevents the abuses which might result from the exclusive rights conferred by a patent. • The agreement allows CL 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. • The term “compulsory licensing” does not appear in the TRIPS Agreement. Instead, the phrase “other use without authorization of the right holder” appears in the title of Article 31. • Compulsory licensing is only part of this since “other use” includes use by governments for their own purposes. • This regime may also be applied in case of non-use of the patented invention within a prescribed period (generally 4 years from the filing date of application for patent, or 3 years from the issue of patent).
  • 14.
  • 15. Continue…. WTO declaration on TRIPS & public health
  • 16. Continue…. WTO declaration on TRIPS & public health
  • 17. A patent waiver on COVID vaccines is right and fair US representative at the WTO, announced US support for a waiver on intellectual property for COVID vaccines on 5 May21
  • 18. Safeguards /Indian Patent Act 1. General principles applicable to working of patented inventions: Sec 83 2. ‘reasonable requirements of the public’ – s84(1)(a) not defined 3. Working information: Sec 146 (2) 4. Patentability Criteria: Sec 3(d) 5. Strong Opposition Mechanism (2) 6. CHAPTER XVIII WORKING OF PATENTS, COMPULSORY LICENCES AND REVOCATION 7. Automatic Compulsory licensing for generics 8. Parallel imports
  • 19. Section 83. General principles applicable to working of patented inventions.- • (a) that patents are granted to encourage inventions and to secure that the inventions are worked in India on a commercial scale and to the fullest extent that is reasonably practicable without undue delay; • (b) that they are not granted merely to enable patentees to enjoy a monopoly for the importation of the patented article; • (c) that the protection and enforcement of patent rights contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations;
  • 20. Continue… Section 83. General principles applicable to working of patented inventions.- • (d) that patents granted do not impede protection of public health and nutrition and should act as instrument to promote public interest specially in sectors of vital importance for socio-economic and technological development of India; • (e) that patents granted do not in any way prohibit Central Government in taking measures to protect public health; • (f) that the patent right is not abused by the patentee or person deriving title or interest on patent from the patentee, and the patentee or a person deriving title or interest on patent from the patentee does not resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology; and • (g) that patents are granted to make the benefit of the patented invention available at reasonably affordable prices to the public.
  • 21. ‘reasonable requirements of the public’ Under the Indian Patent Act, the reasonable requirements of the public are deemed not to have been satisfied where: • The patentee refuses to grant a license(s) on ‘reasonable terms’; and – a trade or industry is prejudiced; or – demand for the patented article has not been met to an adequate extent; or – a market for exportation of the patented article manufactured in India is not being supplied or developed; or – the establishment or development of commercial activities in India is prejudiced. • The patentee imposes a condition on the patented invention; • Non-working of the patented invention in the territory of India; • Working of the patented invention in India on a commercial scale is prevented by the importation from abroad.
  • 22. Compliance: Working information Section 146 (2) of the Indian Patent Act requires every patentee and licensee to provide information on the extent to which the patented invention has been worked on a commercial scale in India. Patentees and licensees required to submit Form 27 every calendar year, within 3 months of the end of each year with relevant information includes the following: • Whether the invention has been worked; • If not worked, the reasons for non-working, and steps being taken to work • If worked, quantum and value of the patented product; • If manufactured in India, whether imported from other countries, giving details of the countries concerned; • Licenses and sub-licenses granted during the year; • Whether the public requirement has been met, at a reasonable price either partly, adequately or to the fullest extent. • Failure to supply such information creates a presumption of non-working and may contribute in grant of a CL. • It is also a punishable offence and invites a fine which may extent up to 10 L. • Knowingly furnishing false information is an offence punishable with imprisonment up to 6 months, a fine or both.
  • 23. Patentability Criteria: Section 3(d) (Novartis Dispute) Section 3(d) excludes: The mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance….is not patentable. What exactly does “efficacy” mean? Factual Dispute (whether salt is 30% more bio-available?) Novartis challenge that section 3(d) violative of TRIPS Art 27 of TRIPS: Patents shall be granted to all inventions, that are new, non obvious and have industrial applicability Non obviousness standards are left to the discretion of member states
  • 24. Grounds for Compulsory license: TRIPS v India Article 31 of TRIPS Agreement mention – • National emergencies, • Other circumstances of extreme urgency and • Anti-competitive practices Grounds that have been proposed or asserted to support the imposition of a CL in India have included: • circumstances of national emergency or extreme urgency; • vital public health needs; • strong societal interest has arisen in access to the invention; • abuse of economic power by the patent owner, in such a manner as to violate antitrust laws; and • in circumstances where multiple patents held by different owners cover a particular technology. For example, combination therapies – such as triple antiretroviral drugs – may be subject to more than one patent. In such cases, if one patent owner refuses to license, then the technology may not be marketed
  • 25. CHAPTER XVIII WORKING OF PATENTS, COMPULSORY LICENCES AND REVOCATION • WORKING OF PATENTS • COMPULSORY LICENCE • REVOCATION
  • 26.
  • 28. section 92(1): Suo moto by the Central Government/CG pursuant to a notification issued by the Central Government if there is Circumstances either a • "national emergency" or • "extreme urgency" or • in cases of "public non-commercial use"
  • 29. Doha Declaration & the Indian Patent Act section 92-A • In order to give effect to the paragraph 6 of Doha Declaration which recognizes WTO members with insufficient or no manufacturing capacities in the pharmaceutical sector could face difficulties in making effective use of compulsory license under the TRIPS Agreement, the Indian Patent Act was amended to insert a new provision, section 92-A • section 92-A on compulsory licensing for manufacturing and exportation of patented pharmaceutical products into any country that does not have sufficient manufacturing capability to address public health problems. • Exportation is allowed mainly to those countries where a compulsory license has been granted where such countries have notified or otherwise allowed the importation of patented pharmaceutical products from India.
  • 30. Compulsory licensing provisions in the Patents Act 1970
  • 31. use by the Government: Section 100 • Under Section 100 of the Indian Patent Act, compulsory license can be issued by the Government on a patented drug for use by the Government. • The Bombay High Court in the case of Garware Wall Ropes Ltd. Vs. A.I. Chopra and Konkan Railway Corp. allowed third party agencies to use a patented invention on behalf of the Government.
  • 32. public use: section 102 • Under section 102 of the Indian Patent Act, Government can obtain a pending or already granted patent for public use. • In return the Government must pay the patentee royalties as mutually agreed upon between the parties.
  • 33. Procedure for granting a compulsory license: section 87 • Any party interested in obtaining the CL may file a request online or on paper via Form 17, along with fees prescribed with the Indian Patent Office. • It is required that the Form 17 state nature of the applicant’s interest along with facts and particulars on which the application is based. • Under section 87 of the Indian Patent Act, upon filing the application for grant of CL, the Controller at the Indian Patent Office shall analyze the prima facie case made by the applicant against the patentee.
  • 34.
  • 35. IPO analyze the prima facie case made by the applicant against the patentee Under section 87 of the Indian Patent Act, upon filing the application for grant of CL, the Controller takes into consideration: • The nature of the invention; • The applicant’s ability to work the invention; • Whether the applicant made any efforts to reasonably obtain a license from the patentee; • If such efforts have not been successful within a reasonable time period. • A notice will be issued to the applicant if the Controller is unsatisfied with the request and will provide a statement rejecting the CL. • The applicant may request a hearing with the Controller, within a month from the date of notice of rejection. • At the conclusion of the hearing, the Controller will decide the matter. • If the matter is decided in favor of the applicant, necessary terms and conditions shall be decided for granting of the CL. The royalties to be paid to the patentee will be decided by the Controller. The patentee’s investment in the invention, workability of the patentee’s invention by the applicant, the selling price of the patented article, and terms of the license will be considered. • However, the procedure mentioned in Section 87 shall not apply after considering the application when the Controller determines that a national emergency or a circumstance of extreme urgency exists.
  • 36. Opposition to the grant of CL: Form 14 • The patentee or any other person desiring to oppose the application for the grant of a compulsory license may, within the prescribed time (i.e. 2 months from the date of publishing the application in the Official Journal of the Indian Patent Office), file a notice of opposition via Form 14, along with prescribed fee. • Upon notice being served, the Controller will notify the applicant and give both, the applicant and the opponent, an opportunity to be heard before deciding the case.
  • 37. Termination of compulsory license A patentee or any other person possessing title or interest in the patent may apply to the Controller using Form 21 together with any evidence requesting to terminate the CL granted under Sec 84
  • 38. Appeal/Review An appeal of the Controller’s decision to grant or deny a compulsory license can be made to the Appellate Board. The appeal can be held under: • Sections 84 (1)-(5) Compulsory License; • Section 85 Revocation for non-working of invention; • Section 91 Licensing of related patents; • Section 92 Special provisions for Compulsory License on notifications by Central Government; or • Section 94 Termination of Compulsory License.
  • 39. Compulsory License: Cases in India • Out of very few applications for grant of Compulsory License so far (4), only in 1st case the license was granted
  • 40. 1st Compulsory licenses •Natco Pharma Ltd v Bayer •Bayer patented drug nexavar is to treat advanced stage of kidney and liver cancer •Nexavar is a trade name and the chemical name is Sorafenib Tosylate •The drug is not a life saving but life extending and has to be taken by the patient lifetime •Cost of therapy is INR 2,80,428/- per month •Natco Pharma offered to sell it around for INR 9,000/- •Bayer's admission that only 2% of kidney and liver cancer patients were able to access the drug and that the drug was imported and not manufactured within India
  • 41. India Controller of Patents grants compulsory license on Bayer drug, Nexavar, in favor of NATCO – Three grounds applied • Lack of accessibility • Lack of reasonable affordability • Failure of local working – Bayer had supplied very limited quantities to the Indian market • Bayer argued that Cipla already adequately supplying market, so that compulsory license unnecessary • Bayer introduced limited evidence of program designed to provide accessible-affordable product
  • 42. Compulsory license on Nexavar granted – Prices far in excess of those affordable to the public, including with government assistance – Had sought to supply requirements only through importation, and had not demonstrated sufficient obstacle to local production – Bayer alleges Cipla production infringes patent, cannot rely on activities it claims are illegal as defense • Affirmed by Intellectual Property Appellate Board on March 4, 2013
  • 43. CL and Indian judicial system 1. CG – ‘public requirements’ failed; CL granted by the Patent Office on March 9, 2012 2. IPAB - "It is only because of public interest, we are not interfering in this appeal on this ground". 3. HC - no reason to interfere with the findings of the authorities under the Act. 4. SC - upheld the decision of Controller and upheld the grounds for which Compulsory license was issued.
  • 44. The human rights angle • Each of the decisions by the Indian courts referred to above pay particular attention to the interests of India's large poor population and need for access to medicines • A number of the cases are argued on the Right to Health • Specific reference to Human Rights instruments is not a prerequisite to a human rights decision
  • 45. Remark • patent protection is granted not as ABSOLUTE protection, nor it can denied altogether as directly affects innovation funding and unfettered use of this provision may result in global pharmaceutical companies being hesitant to introduce new medicines in other countries. • Hence the companies have to fix the cost of their patented module according to the economic status of the country if they want to protect their product from compulsory licensing.
  • 46. The grant of CLs is whether violative of Art 14 of the Constitution which prohibits the State from denying any person equality before the law or the equal protection of laws within the territory of India? It is useful to briefly outline certain well settled legal propositions to aid the discussion: • The mere fact that a particular word or phrase is not defined does not render an Act unconstitutional as it can be judicially interpreted on a case-by-case basis. • If the legislative policy is clear, a discretionary power that is to be exercised with regard to the particular circumstances of the case is not discriminatory. • It would be competent for the authority that exercises discretion to lay down guidelines in conformity with legislation to ensure fairness and exclude arbitrariness.
  • 47. power of the Controller is not absolute and unguided • The terms and conditions of the CLs granted under Sec 84, 91 and 92 are to be determined by the Controller in accordance with the provisions of Sec 90. • Clauses (iv) to (ix) of Sec 90 describe the relevant circumstances and factors for the various conditions and limitations that may be imposed by the Controller. • These include conditions that the CL is non-exclusive, non assignable, for the remaining term of the patent unless a shorter term is desirable in the public interest and predominantly for supply to the Indian market but exports could be permitted if needed to develop or supply the export market.
  • 48. Compulsory License: 2nd case in India: BDR Pharmaceuticals v Bristol-Myers Squibb • Dasatinib (Sprycel®), an anti-cancer drug • March 4, 2013 the Controller rejected BDR Pharmaceuticals’ (BDR) application for a CL • Controller ruled in the favor of patentee • AP has not made efforts to obtain a license from the patentee as evident by the applicant's conduct by not taking any action on the queries by the patentee. • the Controller found that BDR had made no credible attempt to procure a license from the patent holder and the applicant had not acquired the ability to work the invention to public advantage. • Thus, the compulsory license denied.
  • 49. Compulsory License: 3rd case in India: Lee Pharma v AstraZeneca • Drug Saxagliptin®-treatment of Type-II Diabetes Mellitus • June 29, 2015, Lee Pharma filed an application for CL • CG rejected application as no prima facie case had been made out on any of the three grounds under section 84 (1) of the Indian Patent Act • AP failed to demonstrate reasonable requirements of the public • The patented invention was not available to the public at a reasonably affordable price: It was held that all related drugs were in the same price range and that Saxagliptin® being sold at unaffordable price was not justified. • The patented invention had not been worked in the territory of India: Lee Pharma also failed to show the exact quantitative requirements of Saxagliptin® in India. Therefore, it could not be concluded whether manufacturing of the drug in India was necessary or not.
  • 50. erlotinib (brand name Tarceva) • Roche patented erlotinib (brand name Tarceva) in India and some other countries, which is used in the treatment of lung cancer. It is a high-cost drug with each tablet costing Rs 4,800. This means that a lung cancer patient could pay close to Rs 1.5 lakh a month for treatment. • Subsequently, an application for a compulsory licence (first application) has been filed in India, by Natco Pharma of Hyderabad for the erlotinib. The application is for the export of 30,000 tablets to Nepal and Natco has offered Roche a 5% royalty.
  • 51. Compulsory License: Shift in government policy on grant of CL • Recently it was in the air that the Indian Government offering private assurance to US Trade Representative that it will not invoke compulsory licenses anymore (save for public noncommercial use). • The news started to be covered in legal and mainstream media with indication that there is a shift in government policy on grant of compulsory license. • News "private assurance“: press statement published by NDTV website where both BDR Pharma and Lee Pharma blamed lack of government support for cheap generics and pressure from Big Pharma for not pursuing Compulsory License application anymore
  • 52. Clarification of Govt DIPP/DPIIT: "There have been recent media reports that the Government of India has privately assured that it will not issue any more compulsory license. It is hereby clarified that such reports are factually incorrect. In this regard, it may be noted that India has a well established TRIPS compliant legislative, administrative and judicial framework to safeguard IPRs. Under the Doha Declaration on the TRIPS Agreement Public Health, each member has the right to grant compulsory licenses and the freedom to determine the grounds upon which such licenses are granted. Even as the Government of India is conscious of the need to spur innovation and protect individual rights, it retains the sovereign right to utilize the flexibilities provided in the international IPR regime. It may be noted that till date, there has been only one case of compulsory license in India and that too after a well-thought out and laid down process, which was subsequently upheld right up to the highest Court of the land.“ Finance Minister Arun Jaitley said India will retain the right to issue so-called compulsory licenses to its drug firms, under "emergency" conditions.
  • 53. Some uses without authorization under Article 31 • Examples in area of pharmaceuticals: • Public non-commercial use – Ecuador (2010 for ritonavir) – Brazil (2007 for efavirenz) – Thailand (2006-2008 for seven HIV/AIDS/heart disease and cancer drugs) • Public interest – India (2012 for sorafenib) – Declaration of public interest rejected in Colombia (2009 for lopinavir/ritonavir), instead: application of price control measures • Anti-competitive practices: – Italy (2005-2007 for refusal to licence)
  • 54. Impacts of CL in Pharma • Price reductions • Imports of lower priced drugs, etc. • BUT, is it a sustainable long term solution ? Different views – complex technologies – lack of co-operation with patent right holder – Case of India = exceptional case because size of market, long-time experience
  • 55. Why a Doha Declaration on TRIPS- public health? • Separate Ministerial Declaration in WT/MIN(01)/DEC/2). • Why? – Fears of some quarters and governments of using certain flexibilities. • The Doha declaration reaffirms or clarifies, inter alia: – Balance of interests for the society (access to medicines (price) and R&D – Art.7 and 8 – The flexibilities, e.g. on • Right to chose exhaustion régimes • Issues of national emergency, extreme urgency • Transition period for LDCs for pharmaceuticals (2016
  • 56. The “Paragraph 6 System” • Recognizes that Members with insufficient or no manufacturing capacities in the pharmaceutical sector could face difficulties in making effective use of compulsory licensing under TRIPS • Instructs the TRIPS Council to find an expeditious solution and report to the General Council before the end of 2002 ⇒ reference to “Paragraph 6 System”
  • 57. Article 31(f) issue • Members can issue compulsory licences for importation / domestic production • Availability of supply from generic producers in third countries ? – Art. 31(f) requires production under compulsory licenses "predominantly for the supply of the domestic market of the Member“ ⇒ need to address legal problem resulting from Art.31(f) conditions in exporting Member • Solution: three waivers (derogations), adopted in light of Chair’ statements
  • 58. The 1st waiver (WTO) • Basic rule under Article 31(f): production under compulsory licence predominantly for supply of domestic market • Paragraph 6 System waives requirement for exporting Members in cases of production/export of a pharmaceutical product to eligible importing Members • Subject to conditions on transparency and safeguards
  • 59. The 2nd waiver • Basic rule under Article 31(h): remuneration to be paid where compulsory licence is granted • Under Paragraph 6 System: – Exporting Member: adequate remuneration is to be paid taking into account the economic value of the authorization in the importing Member – Importing Member: Article 31 h) is waived; no remuneration payable if paid in exporting Member for the same products (n.b.: unless treaties are directly applicable, this requires a change in legislation/regulation)
  • 60. The 3rd waiver • Concerns: Regional trade agreements • Objective: economies of scale, enhance purchasing power, help local production • Derogation from Art. 31(f) if: – RTA falls within WTO rules – At least half of the RTA members are LDCs – Members concerned share the health problem in question ⇒ Note: derogation does not affect any patent status in importing countries - principle of territoriality • Promotion of regional patent systems • Developed countries, in conjunction with IGOs, to provide technical cooperation
  • 61. The “Paragraph 6 System” • General Council Decision of 30 August 2003: – contains three waivers (derogations) – in effect since 30 August 2003, terminates when amendment replaces it for each Member • GC Decision of 6 December 2005 / Protocol Amending TRIPS proposes insertion of: – new Article 31bis consisting of 3 waiver provisions of August 2003 Decision – Annex setting out terms for using Paragraph 6 system – Appendix to Annex dealing with assessment of manufacturing capacities (former annex to August 2003 Decision) ⇒ “technical exercise”, no changes in substance to Paragraph 6 System
  • 62. TRIPS-Public Health in sum • Heavily negotiated • Doha Declaration – Confirmation of importance of R&D and innovation but also flexibilities – Transition period for least developed countries (LDCs) – Paragraph 6 • Article 31; Article 31(f) • Paragraph 6 system is meant to address a health problem in the importing Member and a legal problem in the exporting Member. Not purported to resolve all public health problems
  • 63. Public Health Problem in WTO Member requiring pharmaceutical product Product not patented Product patented Compulsory licence in compliance with Art 31 TRIPS Agreement with originator Pharmaceutical product can be manufactured domestically Pharmaceutical product cannot be manufactured domestically Product not patented in exporting Member Product patented in exporting Member Need to use para. 6 System if exported amount is predominant share of production When to Use the Para.6 System Supply by non-WTO Member
  • 64. TRIPS-Public Health - Some References • Doha Declaration on TRIPS and Public Health (WT/MIN(01)/DEC/2) • Decision on the implementation of paragraph 6 of the Doha Declaration on TRIPS and Public Health (WT/L/540 and Corr.1) • Decision on an amendment to the TRIPS Agreement (Protocol) (WT/L/641) • Annual Review of the Functioning of the System 2010 (IP/C/57 and Corr.1) • Members’ laws implementing the Para.6 System: http://www.wto.org/english/tratop_e/trips_e/par6laws_e.htm • How to accept the Protocol Amending TRIPS: http://www.wto.org/english/tratop_e/trips_e/accept_e.htm • Decision on extension of transition period for LDCs with respect to pharmaceutical products (IP/C/25) • Decision on general extension of transition period for LDCs (IP/C/40) - June 2013, being discussed /negotiated at the time of Durban’s workshop
  • 65. Compulsory licences: Some remarks • CL may help resolve but is not the panacea. • Need for R&D of new molecules and need for affordable medicines • Negotiating power and importance of dialogue – national task forces – At regional and international levels • Importance of Doha Declaration • Use of flexibilities in a manner which does not end up being counter-productive or inefficient • Application of Paragraph 6 System so far – Rwanda – Canada • Paragraph 6 System and acceptances: not many acceptances from countries of the African Continent – At the time of Durban WIPO-DTI seminar: (in chronological order), following participating countries: Mauritius, Zambia, Uganda, Rwanda, Togo • Different views on the Paragraph 6 System: – Very complex and bureaucratic – Flexibilities used, plus voluntary actions by companies