TWN Info Service on Intellectual Property Issues (Feb18/01)
21 February 2018
Third World Network

Developing nations, LDCs demand TRIPS flexibilities implementation
Published in SUNS #8625 dated 20 February 2018

Geneva, 19 Feb (D. Ravi Kanth) - Several developing countries and the least-developed countries (LDCs) have upped the ante on their core demands for implementing the flexibilities and commitments in the World Trade Organization's Trade-Related Aspects of Intellectual Property Rights (TRIPS ) Agreement.

They stress that this is to ensure the supply of generic medicines at affordable prices and for technology-transfer by the industrialized countries to poorest nations, according to proposals circulated on 16 February.

As the United States and the European Union along with their allies intensify their campaign for bringing "innovation" into the TRIPS Agreement through the dubious route of negotiating disciplines for micro, small, and medium enterprises (MSMEs) at the WTO, the developing and poorest countries opposed attempts t o hijack the TRIPS debate from unimplemented commitments to new issues.

Ahead of the WTO's TRIPS Council meeting on 27 February, the three groups circulated separate proposals on their priority issues in the controversial TRIPS Agreement.

The developing countries and the LDCs want a thorough review of the TRIPS flexibilities, including the unimplemented commitment by the industrialized countries for technology-transfer under Article 64.2 of the TRIPS Agreement .

In their proposal circulated on 16 February, a group of developing countries - Bolivia, Brazil, Chile, and South Africa - have called for continuing the discussion on "the WTO members making full use of the flexibilities" as set out in the TRIPS Agreement for promoting access to health technologies, as confirmed by the Doha Declaration, especially as per the paragraph six mechanism as agreed in 2003.

The four countries underscored the need to expand the debate on flexibilities to issues concerning "the complex interplay between intellectual property and public interest", particularly on how members are implementing "the regulatory review exception ("Bolar exception") under their national or regional framework."

The Bolar exception, which is derived from case law in the United States, was upheld by the WTO dispute settlement panel in the Canada-Pharmaceutical Patents dispute.

The panel maintained that Canada was justified to adopt the regulatory exception under Article 30 of the TRIPS Agreement that deals with exceptions to right s conferred as per the TRIPS provisions.

"Compliance with regulatory requirements often entails experimental trials and other related preparatory steps by companies so they may acquire data necessary for regulatory approval," the proponents argued.

According to the proposal from the four developing countries, the regulator y exception must enable "generic medicine producers to make all necessary preparations to enter the market without delay as soon as the patent expires."

In the absence of such an exception, the proponents argued, "generic manufacturers would be blocked from undertaking the trails required for regulatory approvals, taking months, perhaps years, to obtain such approval."

Because of the absence of the regulatory exception, the patent owners have invariably resorted to extending the protection beyond the patent term as determined by national law.

"Not only does this hurt competition, but it also runs counter to the delicate balance of interest reflected in Article 7 of the TRIPS Agreement between the interests of the inventors and those of the public," the four proponents argued.

Given the enveloping global disease burden and growing need for providing life-saving medicines at affordable prices, the developing countries underscored the need for adopting an "integrated approach that ensures the continuous production of new, innovative medicines without endangering access to off-patent medicines."

Against this backdrop, the Bolar exception could act as "a valuable tool fo r stimulating competition in the market and ensuring the protection of public health."

Last year, the proponents from developing countries held a discussion on th e flexibilities in the WTO's TRIPS agreement, particularly the compulsory rights for promoting access to health technologies when necessary under the paragraph six mechanism of the Doha Declaration.

The developing country proponents called for sharing experiences about the general features of the Bolar exception. They posed the following questions to be addressed at the TRIPS Council meeting:

* What is the general characteristic of the "Bolar exception" or equivalent regulatory review exception in WTO member legislation?

* Which measures undertaken by legitimate parties are exempted from the enforcement of patent protection under the exception?

* What were the challenges faced by WTO Members in implementing such exception?

In their proposal on the failure to implement Article 66.2 by the industrialized countries concerning the technology-transfer, the LDC group expressed sharp concern.

The LDC group demanded "the TRIPS Council to enable the effective implementation of TRIPS Article 66.2."

Under Art 66.2 of the TRIPS agreement, the industrialized countries are required to provide incentives to enterprises and institutions in their territories for the purpose of promoting and encouraging technology transfer.

The LDC group wants the TRIPS Council to deliberate on specific incentives offered by industrialized countries to their enterprises for promoting technology-transfer to the poorest countries.

"It called on the TRIPS Council to deliberate on the meaning of "incentives to enterprises and institutions", found in Article 66.2 and agree on possible ways to provide incentives by developed country members to their enterprises and institutions in order to meaningfully implement the letter and spirit of that provision."

In sharp contrast to the unimplemented commitments in the TRIPS Agreement, the industrialized countries led by the US and the EU along with their developing-country allies called for pressing ahead with their campaign for "innovation" and intellectual property rights for the micro, small, and medium enterprises (MSMEs) at the World Trade Organization.

The US with other proponents - the European Union, Japan, Canada, Australia , Singapore, Switzerland, and Chinese Taipei among others - maintained that "businesses using IP rights perform better on average and this is often true in the case of MSMEs."

In a two-page proposal circulated on 16 February, the proponents argued that "businesses owning IP [intellectual property] rights often have a higher revenue per employee than businesses that do not."

IP rights, according to the proponents, "is important for smart and sustainable growth".

Consequently, MSME-driven inclusive innovation has a significant social as well as economic impact on both developed and developing economies given the hug e presence of MSMEs.

The proponents pointed out that several key challenges concerning the integration of "MSMEs into global trade and enhanced economic outcomes" need to be addressed.

WTO members must consider initiatives for strengthening IP strategies for MSMEs, the US and other sponsors of the proposal argued.

Unless the developing and poorest countries stand their ground at the TRIPS Council meeting, they might witness an ugly prospect of the debate being hijacked to framing commitments on an intangible issue like innovation rather than addressing/clarifying TRIPS flexibilities, including the Bolar exception and the implementation of Article 66.2 of the TRIPS Agreement.