Publications
European IP Bulletin, Issue 28, January - Hot Topics
Hot Topics
1. World Trade Organisation Members Agree to Amend the Trips Agreement on Patents and Public Health
On 6 December 2005, WTO members approved changes to the Trade Related Aspects of Intellectual Property (TRIPS) Agreement.
The amendment of the TRIPS Agreement with regard to pharmaceutical patents and public health concludes the process which began with the Doha Declaration on TRIPS and Public health of 2001(The Doha Declaration). On 30 August 2003, the General Council agreed to implement paragraph 6 of the Doha Declaration. This paragraph provided for WTO members to obtain affordable generic pharmaceutical products through a ‘waiver’ on pharmaceutical patents with regard to public health. The waiver made it possible for WTO members to set aside some of the provisions of Article 31(f) of the TRIPS Agreement. The poorer WTO members are, under the waiver, allowed to import affordable generic versions of the patented drugs. Compulsory licenses can be acquired to manufacture the patented drugs and these can be exported to those countries that cannot afford the patented drugs. However, this waiver was not previously enshrined in the TRIPS Agreement. Therefore, General Council decision of 2005 makes this ‘waiver’ permanent through an amendment of the TRIPS Agreement. The amendment will come into force once two thirds of the members have ratified the change. The decision of the General Council was affirmed by the Ministerial Declaration on 18 December 2005 in Hong Kong.
The amendment has been drafted so as o reflect as closely as possible the ‘waiver’ language. There are three main parts. The first is the introduction of five paragraphs under Article 31 bis, an additional article. The TRIPS Agreement had made it impossible for countries without the capacity to produce the pharmaceutical products under the compulsory licence to make use of the said provision. This was because Article 31(f) of the TRIPS Agreement only allowed the domestic use of medicines produced under the compulsory licence. New Article 31 bis allows the export of pharmaceutical products made under compulsory licence to countries that lack production capacity. This in effect allows the poorer WTO members to obtain affordable drugs that are essential to public health. One notable feature is that in principle at least the patent holder has to be adequately remunerated.
The second amendment comes in the form of a new annex to the TRIPS Agreement. This annex contains seven new paragraphs that set out terms for using the new system. The amendment also seeks to ensure that the generic drugs manufactured under the compulsory licence are not diverted to the wrong markets.
The third amendment is an “appendix” to the new annex, which deals with the assessment of the lack of manufacturing capacity within the importing member country. The least developed countries are presumed to have no manufacturing capacity while the other WTO member states have to demonstrate that there is no capacity, or insufficient capacity by provision of evidence. The deadline set by the WTO Members is 1 December 2007. In the meantime, the ‘waiver’ remains in force.
Several countries such as Canada, Norway and India have already changed their laws while others, such as the EU and Norway, are in the process of amending their laws to incorporate the changes. Some developed countries have announced that they will not be using the new system to import, while others have stated that they will only use the system to import in cases of emergency. These include Hong Kong China, Israel, Korea, Kuwait, Macao China, Mexico, Qatar, Singapore, Taipei, Turkey and United Arab Emirates.
Since 2003, several countries such as Brazil, India and South Africa have made use of the waiver to export and import drugs that are essential to public health. Other countries and least developed countries can comfortably make use of the waiver to obtain affordable drugs without the risk of violating the terms of the TRIPS Agreement and having trade sanctions imposed on them. Members emphasised that the system should be used in good faith and in the interest of public health matters, and not for commercial purposes.
The amendment covers patented products or products made using patented pharmaceutical processes that include active ingredients and diagnostic kits. It is meant to address the public health problems that were recognised by the Doha Declaration on TRIPS and Public Health such as the treatment of HIV/AIDS, malaria, tuberculosis and other epidemics especially within the developing countries. The system aims to ensure that the patent owners are not unduly exploited and at the same time, the drugs can be obtained at an affordable price by the least developed countries.
This is the first time in the history of WTO that a core Agreement has been amended in this way. It opens up the way for future negotiations and amendments to the TRIPS Agreement especially where there are contentious issues that need to be addressed in light of the interests of the WTO members. The changes will only be significant if the WTO members ratify the amendment and change their laws accordingly.
2. UK Chancellor Announces Intellectual Property Review
On 2 December 2005, the Chancellor of the Exchequer, Gordon Brown, announced the launch of a new independent review into the United Kingdom’s intellectual property framework, to be headed by Andrew Gowers, former editor of the Financial Times.
The Gowers Review will run for 12 months. Part of its aim is to ensure that the intellectual property system in the UK is configured in a way that enables the UK to compete optimally in the knowledge-based economy, particularly in the manufacturing, science-based sectors and the creative industries. To this end, the Review will examine whether the system strikes the optimal balance between the interests of IPR holders and the needs of consumers. Although the Treasury expects that Gowers will find that the balance struck in the UK is broadly correct, it has identified a number of potential areas for concern:
- the administration of the system for granting intellectual property rights;
- the ability of businesses to overcome the complexities of the patent and copyright systems;
- whether the realities of the digital environment are sufficiently acknowledged in the IP system; and
- whether the “fair use” exceptions are adequate.
The Review has also taken over the previous Government’s commitment to investigate the sufficiency of the current term of copyright protection on sound recordings and performers’ rights.
Mr Gowers will report to the Chancellor, the Secretary of State for Trade and Industry and the Secretary of State for Culture, Media and Sport. He is expected to seek the views of stakeholders in the IP system as he carries out his investigation. The Chancellor’s announcement coincides with the publication of the Cox Review of Creativity in Business, in which Sir George Cox, the Chairman of the Design Council, made a number of suggestions as to how the competitiveness of the UK’s creative industries can be enhanced.
It appears that any recommendations for change that come out of the Gowers Review are likely to focus on very precise areas of the law, rather than suggesting a rethink of the entire structure of the intellectual property system. Any changes that the Review does recommend will, of necessity, be constrained by the UK’s European and international commitments in the intellectual property field. Although it has not been stated expressly, from the remit of the Review announced by the Treasury, it seems that Andrew Gowers’ focus will be on patent and copyright law and not on trade mark law.Click here to return to the Summary page, or on any of the headings below to see the full case notes for that topic.
