PDF Resource Book on TRIPS and Development

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When a member implements TRIPS norms into their national legislation, it certainly needs to strike the balance between compliance with TRIPS and advancing the public interest and national developmental goals. On the one hand, each WTO member had to introduce pharmaceutical patents to protect product and process patents without discriminating between domestic and multinational pharmaceutical industries, thus reforming pharmaceutical regulations that protected local generic producers.

On the other hand, however, each member also had to identify policy options to ensure access to affordable medicines and so save the local generic industry. There is an assumption that the introduction of product patent protection for pharmaceuticals will lead to substantially higher prices, which will have negative effects on both public health and generic-based pharmaceutical industries in developing countries.

Predictions of higher prices are made on the basis of a comparison of drug prices between countries that do and do not offer pharmaceutical patent protection. However, these comparisons may involve mistaken assumptions, as it is not clear whether the comparisons consider other demand and supply side factors—notably differences in purchasing power, market structure, distribution margins, tariffs, taxes and exchange rate fluctuations—that may also drive prices.

The implication is that patent protection for pharmaceuticals will actually benefit developing countries by stimulating innovation and transfer of technology. Very little is known about the extent to which the prices of pharmaceutical products may increase as a result of the introduction of pharmaceutical patenting. One interview participant even claimed that because India and China have implemented pharmaceutical patents, there will be a sharp increase in pharmaceutical prices in Bangladesh because the local pharmaceutical industry is dependent on India and China for raw materials.

The basic criteria of patentability, protection and duration of patents set forth in TRIPS are regarded as notable achievements by developed countries in elevating and harmonising the minimum standards of patent protection, which was not within the scope of the Paris Convention. Therefore, while complying with the TRIPS Agreement, patent law and pharmaceutical regulation in Bangladesh should provide equal protection for domestic and foreign pharmaceutical patent applicants and inventors.

The combined result of these provisions is that both product and process patents should be available for pharmaceutical technologies. As a product patent was not available for pharmaceutical invention and was largely excluded by most developing countries prior to TRIPS, this provision is considered a major achievement for the developed countries. Pursuant to Article Accordingly, any discrimination concerning patent applications made by nationals and foreigners is contradictory to the requirement of non-discrimination as to the place of the invention. In addition, existing pharmaceutical regulations must remove product restrictions on the multinational pharmaceutical industry.

The provision in the last sentence of Article Reichman, consider that the right to supply imports according to this provision Article If this is the case, the provision would not override the local production obligation of the patentee. However, developing countries like India applied for a grant of compulsory patent licensing on the grounds that a non-working patent was recognised by the Paris Convention, which considers that it is applicable for the TRIPS Agreement as well.

However, after the introduction of TRIPS-compliant patent law, the Government of Bangladesh may need to allow not only the granting of patents on pharmaceuticals but also certain monopoly rights to patentees, including the right to sell, import and distribute as per the TRIPS Agreement and the principle of non- discrimination.


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However, nothing in the TRIPS Agreement prevents a country from assigning the examination of patent applications in the pharmaceutical sector to the Ministry of Health or DDA, provided that assignment does not constitute a de facto discrimination as to the field of technology. However, the TRIPS Agreement states in Article 33 that the term of patent protection shall not end before the expiration of a period of 20 years, counted from the filing date. The patent law of Bangladesh provides for only 16 years of protection; this will need to be extended to 20 years.

These are regarded as falling within the definition of existing subject matters under Article The calculation of the period of 20 years is clear and specific. In simple terms, Article 33 defines the earliest date on which the term of protection of a patent may end. While a long period of protection may be justifiable in the case of major inventions, for minor improvements the optimal period of protection should be shorter and commensurate with the lower investment in skill, time and resources made by the patentee.

This is quite different from the situation regarding pre-existing international IP conventions. However, the limitations to patent rights are implied in the provisions on compulsory licensing, which are mentioned generally in Article 8 and particularly in Article 31 of TRIPS. Accordingly, the requirements set forth in Article 31 aim at different types of compulsory licenses. The applicability scope of this article is broader than that of the rule provided in Article 5 A 4 of the Paris Convention, which is only applicable to the type of compulsory licenses for non-working or insufficiently working patents.

First, it waives the obligation in 31 f that CL shall be predominantly for supply to the domestic market,. Second, it waives the obligation in 31 h for the importing country to pay remuneration to the right holder and. Third, it waives the obligation in 31 f to the extent that re-export of the imported pharmaceuticals is allowed among members of a regional trade agreement, if at least half of these members are LDCs.

The developed countries such as the U. Any member developed, developing or LDC may be an exporter. There is no list of eligible diseases as the August 30 Decision refers to pharmaceuticals needed to address health problems, as recognised in the Doha declaration, para. First, if there is no patent on the particular pharmaceutical in either the exporting or importing country, supply can be met by regular import without reference to the August 30 Decision.

Second, in the case of having a patent in the importing country but not in the exporting country, the importer can issue a regular CL for import under Article 31 as the purpose would be to supply the domestic market.


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  7. Therefore, a pharmaceutical company in Bangladesh could also supply generic medicine to other developing countries, if any developing country was willing to issue a CL for import to receive medicines from Bangladesh. Third, the parties must use the Decision when there is a patent in the exporting country but not in the importing country. However, it is only the exporter that should issue a CL. On the other hand, if a particular product is patented in both countries, both of them have to issue CLs and proceed as per the August 30 Decision.

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    But Ghana later chose to import the products from generic manufacturers in India, where there was no patent, and hence it was not necessary to use the Decision. The third situation took place in September when one Indian pharmaceutical company filed an application as a potential supplier to the Indian patent office, requesting to manufacture and export to Nepal several anti-cancer pharmaceuticals patented in India, including erlotinib. As an LDC, Nepal was automatically entitled to use the system approved under Aug 30 decision, but Nepal never informed the WTO regarding its intention to import the given patented medicines—a prerequisite for using the decision.

    The compulsory licence was granted two weeks later. The packaging bore an export tracking number issued by the Canadian government. Details of the product and its distinguishing characteristics, as well as details of the shipment, were posted on the website. Economic and technological collaboration between the public and private sectors could create favourable conditions for political alliance as well as a hospitable environment for balancing local pharmaceutical innovation and access to medicines.

    Under that convention, each country could establish its own IP regime in a way that would favour its national policy. Brazilian industrial property legislation granted patent protection for pharmaceutical processes and products until Patents that are developed with the help of public funding need to be worked in the US.

    TRIPS, Access to Medicines and Local Production in South Africa

    For example, on 25 April Brazil decided to issue a compulsory license for the HIV drug Storcrin the brand name for Efavirenz , after failure to secure a considerable discount from the patent owner. In terms of novelty flexibility, the Brazilian National Institute for Industrial Property INPI is criticised by health activists, local generic producers and lawyers for adopting an overly broad definitionof novelty. This results in many patent applications that are not new molecular entities NMEs , but rather are simply revised versions of some existing patented NMEs.

    It was not until , when taking part in negotiations with the U. Then, under Article 25 of the amended patent law, the Chinese government formally approved the granting of patent protection for pharmaceutical products. However, China also attempted to strike a balance between the interest of patent holders and public health, ratifying further amendment to the patent law in to adopt some public health-related measures, as approved by the Doha Declaration, and to encourage Chinese generic producers.

    The Chinese government supports and encourages research on local traditional knowledge and genetic resources. It therefore tried to preserve the interests of local producers and users by introducing strict requirements. Article 26 of the Patent Law adopted disclosure requirements, which require that the applicant disclose and explain the direct and original source of the genetic resource.


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    8. If the applicant is not able to disclose the original source, the applicant must provide the reasons why. This vagueness may create uncertainties and some companies may avoid the provision by using weak excuses. Recognising the importance of CL in the context of public health challenges in China and the available flexibilities in the TRIPS Agreement, China revised its CL provisions during the third amendment to the patent law in According to Article 48 of the Patent Law, the SIPO may, upon the request of an entity or individual qualified for exploitation, grant a compulsory license to exploit a patent for an invention or utility model, when the patentee has not or has not sufficiently exploited it, without any justified reason, within three years of the granting of the patent right or four years of the filing for the patent.

      A compulsory license can also be granted to avoid or eliminate adverse effects on the competition in cases in which it has been legally determined that the enforcement of the patent right by the patentee constitutes a monopolistic act. Prior to , the circumstances under which a person could apply for a compulsory license were 1 they had been unable to obtain a license after a reasonable period of negotiation based on fair and reasonable terms, if the implementation of an invention or utility model that constitutes a significant progress had to rely on the implementation of a patent previously granted; 2 in situations where public health is concerned; and 3 in a state of emergency.

      With respect to public health, the field is thus significantly widened. The State Food and Drug Administration SFDA shall review the drug application in accordance with the provisions, and after the expiry date of the patent, check and issue the drug approval number, Import Drug License or a Pharmaceutical Product License if the application conforms to the provisions. By shortening the application time spent on clinical trial, the provision relating to Bolar exemptions can be seen as encouraging the production of generics to reduce the price of patented medicines and improve accessibility to medicines.

      Thus, the Patent Law did not provide the specific legal basis for parallel importation. However, Article 69 1 of the Patent Law clarified the issue by stating that it would not constitute patent infringement after the product first entered the international market with the authorisation or consent of the patent owner.

      Nevertheless, China provided data exclusivity which may hamper the production of generic pharmaceuticals for the local market. During its WTO accession process in , China approved a six- year period of data exclusivity protection for pharmaceutical drugs containing a new chemical entity NCE under its Provisions for Drug Registration. There should be more detailed requirements for experimental data, otherwise the protection scope of data exclusivity is difficult to understand.

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      Further, the six-year exclusivity is too general: there should be a differential protection period for different kind of drugs, as is the case in Japan. In this regard, the Indian approach for refusing to provide test data protection and dealing with other TRIPS flexibilities could be more viable for the LDCs, considering the embryonic stage of their industries in comparison to China and their weak financial and technical capacities. The change came with the passage of the Patents Act, , eliminating product patents for pharmaceuticals and only allowing process patents, which gave protection for a maximum period of seven years.

      By applying modified production processes, they successfully avoided conflict with the original patent or having infringement claims made against them. This required India to implement patent protection for pharmaceutical products and processes. After a three-stage amendment process in , and , India finally entered into a TRIPS- compliant patent regime on 1 January , taking advantage of the entire transition period. LDCs could do likewise, following the Indian model and adopting more extensive pre- grant grounds for objection and a process for post-grant opposition.

      Novartis AG challenged the law on the grounds that the provision provided absolute power to the controller of the patent and denied the rights existing under Article 27 of the TRIPS Agreement that obliged WTO member states to provide patent protection to all fields of technology without discrimination. A government, or its authorised agent, can use a patent without the authorisation of the patent holder.

      The Patent Act, provides for three types of government use. Bayer Corporation , clarified the issue of the working of the patent in the territory of India. This is due to the weakness in the compulsory license regime under the Patents Act, The result was that a product could not be imported where it was produced under a compulsory license.

      Resource book on TRIPS and development: an authoritative and practical guide to the TRIPS agreement

      This was resolved by a amendment to enable India to import pharmaceuticals even if the drugs were produced under a compulsory license. However, if any prior use is approved, then the company is required to pay the patent holder a reasonable royalty. The ceiling prices of controlled drugs should normally not be based on cost of production, but on benchmarks that can be readily monitored.

      It has begun documenting traditional knowledge to prevent the misappropriation of that knowledge by MNCs. One study suggested that:. TRIPS gives member states the freedom to choose the nature and extent of protection they want to offer. The South African Medicines Control Council MCC licensed entities until in at least one of the categories of manufacturer, importer and exporter of medicines. Further amendments to patent law were made in and The South African companies referred to India as an example of a country where access remains an issue despite the availability of generic versions of AIDS drugs.

      The enactment of the MRSCA, with its provisions for parallel importation, attracted serious criticism from supporters of patent protection for the pharmaceutical industry as they considered it among the options for issuing compulsory licensing , whereas it received strong support from public health groups.

      We [are] not intending to break any treaties. Being on the watch list meant it was possible for South Africa to have unilateral trade sanctions imposed on it by the US. However, the US did not bring a WTO case against South Africa due to a huge public health campaign both inside the US and beyond; the possible negative publicity was too great.

      It was also representative of the broader international struggle over the meaning of TRIPS, especially over the scope of and exceptions to internationally recognised IPRs. Although the issue of parallel imports was discussed by the TRIPS negotiators, they failed to reach a consensus on the subject. This is precisely because developing countries favoured international exhaustion, whereas the US advocated national exhaustion and the EU tried to preserve the principle of EU-wide exhaustion.

      In the context of South Africa, the pharmaceutical companies feared that the Minister for Health could use the amended MRSCA to bypass these provisions to their detriment and to the benefit of South African manufacturers of generic drugs. This almost certainly indicates that none have ever been granted. The Patent Office has no filter to ensure that patents are granted only when they are deserved. The statute merely requires the registrar to conduct a formal tick-box approach to an application.

      Due to a lack of pre-grant opposition and effective post-grant procedures, the South African opposition procedure may not be helpful for local generic producers. Copyright The Rental Right. Copyright Term of Protection. Copyright Limitations and Exceptions. Copyright Related Rights.

      INNOVATION AND IP

      Geographical Indications. Industrial Designs. Patents Subject Matter and Patentability Requirements. Patents Nondiscrimination. Patents Ordre Public and Morality. Patents Therapeutic Surgical and Diagnostic Methods. Dispute Settlement. International and Technological Cooperation and Transfer of Technology.

      Transitional Provisions. Review and Amendment. Security Exceptions.