TWN Info Service on UN Sustainable Development (Jun17/05)
13 June 2017
Third World Network

South nations raise stakes on IP-Public Interest imbalance
Published in SUNS #8478 dated 9 June 2017

Geneva, 8 Jun (D. Ravi Kanth) - Major developing countries - India, South Africa, China, Brazil, and Fiji - raised the stakes on the growing "imbalance between intellectual property and the public interest" at the World Trade Organization.

For the first time, the five countries called for an information-exchange session on "compulsory licenses" and other flexibilities in the WTO's Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement.

In an extraordinary proposal on "Intellectual Property and the Public Interest" circulated on 6 June, the five countries urged members to share their experience on the difficulties encountered by them for availing and implementing compulsory licenses (CLs).

The use of CL by governments - which allow generic companies to produce patented product or process without the consent of the patent owner for addressing grave public health crises - is often met with fierce opposition by major developed countries, particularly the United States.

Big pharmaceutical companies in the US and in Europe continue to treat CLs as weapons of mass destruction and in many cases, resorted to extreme forms of pressure tactics, including coercion, according to several reported cases in various countries.

Despite clear provisions for the use of CLs which are allowed under Article 31 of the TRIPS agreement subject to certain conditions, the US and its partners have left no stone unturned whenever any government of a developing country sought to use CLs for meeting grave public health crises.

The Doha Declaration on the TRIPS Agreement and Public Health says "each Member has the right to grant compulsory licenses and the freedom to determine the grounds upon which such licenses are granted".

But due to onerous conditions in the Doha mechanism, only two countries had sought the flexibility.

Against the backdrop of sustained attempts to foist "TRIPS plus" standards in the free trade agreements as well as bringing controversial issues such as "innovation" through the back door by developed countries, the five developing countries sought to highlight the issues on which the TRIPS agreement was negotiated and how the flexibilities must be used.

The TRIPS agreement, according to the five countries, "attempts to strike an appropriate balance between the interests of right holders and users."

It is a minimum standards agreement that is designed for addressing "the promotion of technological innovation" and "transfer and dissemination of technology to the mutual advantage of users and producers of technological knowledge in a manner conducive to social and economic welfare."

Further, it seeks a "balance of rights and obligations" and has enabled members to use various flexibilities accorded in the agreement.

"Key TRIPS flexibilities include transition periods for LDCs (extended by the WTO until 01 January 2033), differing IP exhaustion regimes, refining the criteria for grant of a patent (patentability criteria), pre-grant and post-grant opposition procedures, as well as exceptions and limitations to patent rights once granted, including the regulatory review exception ("Bolar" exception) to facilitate market entry of generics, compulsory licences and government use," the five countries maintained.

However, many countries have been unable to use the flexibilities accorded in the TRIPS agreement because of pressure and coercion by the US and other developed countries.

The UN Secretary-General's High Level Panel Report on Access to Medicines last year graphically catalogued instances where "capacity constraints or political pressure from states and corporations" have prevented countries from using TRIPS flexibilities.

"Political and economic pressure placed on governments to forego the use of TRIPS flexibilities violates the integrity and legitimacy of the system of legal duties and rights created by the TRIPS Agreement, as reaffirmed by the Doha Declaration," the five countries argued.

The sponsors said, "in the Myriad Genetics (2013) case, the US Supreme Court had ruled unanimously that naturally occurring genes cannot be patented, even if they are isolated."

"In 2003, the US Federal Trade Commission had proposed tightening the non-obviousness standard, in order to limit the grant of unwarranted patents."

(Over ten days ago, "the US Supreme Court put sharp new limits on where patent infringement lawsuits can be filed, undercutting patent owners' ability to channel cases to favourable courts," according to a Bloomberg news report.)

Further, "a slew of regional trade agreements containing "TRIPS plus" standards of IP protection and enforcement have the potential to significantly affect the policy space available for effective and full use of the TRIPS flexibilities," the sponsors of the proposal maintained.

The proposal also listed the common "TRIPS plus" provisions in free trade agreements (FTA) that affect the pharmaceutical sector: the definition of patentability criteria; patent term extensions; test data protection; the linkage of regulatory approval with patents and enforcement of IPRs, including border measures.

"Such provisions can delay market entry of generics and increase prices of medicines."

Worse still, even "investor-State disputes under regional or bilateral investment protection agreements are also emerging as significant threats to the use of TRIPS flexibilities in the public interest," the five countries maintained.

Also, big pharmaceutical companies have resorted to "monopoly rights in test data, without sufficient use of balancing exceptions and limitations to protect the public interest."

These companies have exacerbated crises of access around the world, where many patients were unable to afford medicines, and force governments with finite health budgets to ration care.

The time has come for pursuing "a development-oriented approach towards formulating IP laws and policies rather than pursue an iconoclastic approach of IP for development," the five countries argued.

It is against this background, that the five countries said there is "a need for discussion in the TRIPS Council on the relationship between IP and the public interest and to broaden the understanding of how the IP system can be more responsive to public interest considerations."

"While this issue is very pertinent for developing countries, it has also been a topic of significant policy debate even in developed countries," the sponsors argued.

The five countries want a meeting during the upcoming TRIPS Council session on 13 June "to share their experiences on the use of compulsory licenses for accessing health and other technologies."

The five countries want WTO members to share their national experiences and examples of using compulsory licenses.

They posed four questions on CL so as to enhance the understanding on various grounds available for issue of compulsory licenses and problems faced by members while using them.

The four questions are:

* What grounds are available in their national laws to issue compulsory licenses?

* What are the difficulties faced by WTO Members in using compulsory licenses, including constraints, such as insufficient or no manufacturing capacities?

* How the measure of compulsory licence was used by governments to obtain price reduction from patent holders?

* What was the result of using compulsory licenses in terms of price and access to affordable products and technologies?

In short, the proposal paves the way for bringing CLs to the centre-stage at the WTO which was never attempted in the past. By raising the issues concerning CLs, the five countries will popularize the use of CLs in developing and poorest countries