Master Thesis
International and European Law: International Trade and Investment Law (LLM)
THE TRIPS AGREEMENT AND ACCESS TO ESSENTIAL MEDECINES
Question:
Is Article 31 bis of the Agreement on the Trade-Related Aspects of Intellectual Property Rights (TRIPS) a flexibility that is too burdensome and is further inhibited in the jurisdiction
Abstract
The recent adoption of Article 31 bis of the Agreement on the Trade Related Aspects of Intellectual Property Rights (TRIPS) on January 23, 2017, sealed what Paragraph 6 of the Doha Declaration promised to Least Developing Countries (LDCs). Namely, allowing countries with no or little pharmaceutical industry to import a compulsory licensed drug. Since its creation, the mechanism was negotiated with difficulty between developed and developing countries. In practice, the paragraph 6 system has been used once in 13 years of existence. Indeed, Canada in 2004 passed a legislation retaking the elements of the interim waiver. Despite the humanitarian spirit of this law, the Canadian Company who exported the drug declared the overall procedure too burdensome. For this reason, developing countries, civil societies, and academics consider Article 31 bis ineffective in practice. Yet, its adoption into the TRIPS Agreement (the first in the history of the WTO) shows that the mechanism is still a current affair of debate. Moreover, commentators and experts estimate that the Canadian experiment highlights a difference between Article 31 bis and its domestic implementation into the jurisdiction of the WTO member states.
This paper discusses the question: “Is Article 31 bis of the Agreement on the Trade-Related Aspects of Intellectual Property Rights (TRIPS) a flexibility that is too burdensome and is further inhibited in the jurisdiction of Member States from the World Trade Organization?” It argues that Article 31 bis is unworkable in practice and calls for its renegotiation. The compromise found in negotiating the paragraph 6 system between developed and developing countries created a mechanism with heavy anti-trade diversionary measures that undermine its use. Nonetheless, the general implementation of Article 31 bis into the legislation of exporting countries do not add more or fewer restrictions. The Canadian and Indian legislation are exceptions in that regard. Rather, pieces of evidence point that the mechanism is the problem. The Indian legislation (considered to be the most flexible implementation of paragraph 6) failed to trigger it. Lastly, a proposal to use the system to an economy of scale remuneration does not encourage sufficient market initiatives for exporters.
Table of Contents
Introduction ... 4
Part I – Historical overview of The TRIPS Agreement and access to essential medicines: patents ... 6
1. The TRIPs Agreement ... 6
2. Compulsory license ... 8
3. Events before Doha ... 9
Part II- The Doha Declaration on the TRIPS Agreement, the Waiver and the Amendment ... 11
1. The Doha Declaration ... 11
2. New mechanism: the Waiver and Amendment ... 12
Part III- the Waiver /Amendment in practice ... 17
1. Limits of the Waiver ... 17
2. Canada and Rwanda ... 19
3. India and Nepal ... 24
4. The implementation comparison ... 27
Part IV –The current status of the Amendment ... 31
1. World Trade member states’ view ... 31
2. Suggestion for Improvement ... 32
Conclusion ... 35 Bibliography ... 37 Annex 1 ... 43 Annex 2 ... 44 Annex 3 ... 47 Annex 4 ... 49
Introduction
The human immune deficiency virus (HIV) caused a major epidemic outbreak that impacted the globe. In 2015, the HIV affected 36.7 million people (including 1.8 million Children).1 Borders between States become meaningless in the face of such outbreak. In particular, for Least Developing Countries (LDCs) which already suffer from other diseases like Malaria and Tuberculosis. The questions of access to medicines became a key policy issue for developing countries. Indeed, new medicines are protected by patent, Intellectual Property Right (IPRs). By contrast, developed countries are seeking to promote public health but enforce also IPRs within a world legal framework.
The Report of the United Nations Secretary-General's High-Level Panel recalls that States have a duty to respect, protect and fulfill the right to health in international law.2
For example, Article 12 of the International Covenant on Economic, Social and Cultural Rights 1976 (ICESCR) emphasizes that States have recognized the right of everyone to the enjoyment of the highest attainable standard of physical and mental health. Meanwhile, international economic treaties confer rights to private property. The Trade-Related Aspects on Intellectual Property Rights (TRIPS) in that regard, is on the unsteady ground between protecting Intellectual Property and the right to access to essential medicines. Consequently, the World Trade Organization (WTO) has to balance public and private rights.
Yet, the seriousness of the HIV crisis brought the awareness for the WTO, that the TRIPS Agreement had insufficient flexibilities for LDCs. Within this context, the Doha Declaration reaffirmed the principles and objectives of Article 7 and 8 of the TRIPS Agreement, and let States decide on their level of health policy. In the same vein, the Doha Declaration reaffirmed that each member state has the right to grant a compulsory license under Article 31 of the TRIPS Agreement and the freedom to determine the grounds upon which such licenses could be enacted.
Before and at the Doha Conference (2001), strong apprehensions were particularly raised by LDCs and developing countries in regard to Article 31 (f). Indeed, provisions (f) only allow a compulsory license to be produced for the domestic market and prohibit its exports. Paragraph 6 of the Doha Declaration launches the adoption of a new mechanism that recognizes the limits of Article 31 (f). It subsequently brought paragraph 6 of the Doha
1 GLOBAL HIV AND AIDS STATISTICS: <https://www.avert.org/global-hiv-and-aids-statistics> (consulted April 12, 2017
2 Secretary-General, United Nations “Report of the United Nations Secretary-General's High-Level Panel on Access to Medicines Report: promoting innovation and access to health technologies.” (September 14, 2016) p.7
Declaration into an interim waiver in 2003 and Amendment in 2005, which is now called Article 31 bis. However, despite the full ratification of the mechanism on January 23, 2017, its underuse in 13 years of existence raises questions of its usefulness in practice.
This thesis asks the following question: “Is Article 31 bis of the Agreement on the Trade-Related Aspects of Intellectual Property Rights (TRIPS) a flexibility that is too burdensome and is further inhibited in the jurisdiction of Member States from the World Trade Organization?
The paper argues that the practice of Article 31 bis proves that the system is too burdensome but is not particularly complicated in its domestic implementation. Rather, it is the mechanism itself that goes against market profitability for individual exporters. A renegotiation of this flexibility is needed to facilitate trade and access to essential medicines among nations.
The negotiation history of this mechanism between developed and developing countries explains partly why it is underused. Different competing interests have resulted in slowing down market initiative for potential exporters. These barriers are difficult to reconcile, even with a proposition to set in place an economy of scale solution or simplify the notification process. Moreover, the Canadian-Rwandese experiment might at first glance prove that the national standards of Canada had further inhibited the domestic implementation of Article 31 bis. Nonetheless, this law is an exception since the Indian implementation of paragraph 6 emphasized that the mechanism itself is burdensome. Section 92 of the Indian Patent Act had simplified the implementation of paragraph 6 compared to other jurisdictions of WTO member states. The Indian-Nepalese case study, further illustrates the difficulty for an exporter in obtaining a notification from an importing member state. Consequently, it is crucial that WTO member states renegotiate Article 31 bis or simplify the system, as it is currently not workable in practice.
The research conducted in this paper was based on legislations (international agreements and national laws); two case studies (i.e Canada-Rwanda and India-Nepal), official documents issued by WTO as well as the United Nations (UN) and other specialized agencies of the UN system (notably, WIPO and WHO); academic commentaries and material produced by civil society involved in health issues. The methodology used in this paper is internal and descriptive. It analyses and describes Article 31 bis of the TRIPS Agreement and its domestic implementation. Finally, the two case studies (i.e Canada-Rwanda India-Nepal) show the predictive character of Article 31 bis in practice.
Part I presents a historical overview of The TRIPS Agreement and access to essential medicines. A historical briefing is necessary in order to understand partly why Article 31 bis is particularly burdensome. Part II cites the provisions of the Doha Declaration, the Waiver/Amendment and explains the negotiation context. Part III discusses the criticism of the Waiver /Amendment in using case studies of Canada and India, and assesses a comparison analysis of its domestic implantation. Finally, Part IV outlines what were the recent discussions and suggestions at the WTO for its improvement.
Part I – Historical overview of The TRIPS Agreement and access to essential medicines: patents
1. The TRIPs Agreement
The term “patent” is a document enacted by a state authority, which confers legal rights for a new invention or its process.3 Patentees have a privileged access to the market, where monopolies are created and competition prohibited. The pharmaceutical sector uses patents as an essential right to generate income after years of research and development. Most pharmaceutical inventions come from WTO member states that are economically developed. It is, therefore, no surprise that developed countries are seeking to protect their interests. Before the TRIPS Agreement, IPRs were not regulated at the international level as a trade matter.4 Most developed countries had legislations allowing the grant of patents for both pharmaceutical products and processes. By contrast, developing countries did not permit the granting of patents on pharmaceutical products.5 For instance, Chapter II 3 (b) of the Indian Patent Act 1970 did not allow the patentability of pharmaceutical goods.6 Most developed countries conferred patent protection for 15-17 years, whereas in developing countries for 5 years.7
3 WIPO Intellectual Property Handbook: Policy, Law and Use, “Fields of Intellectual Property Protection”,
Chapter 2 p. 17 [Online] URL Address: <http://www.wipo.int/export/sites/www/about-ip/en/iprm/pdf/ch2.pdf> (consulted June 4, 2017)
4 Cottier, T., “The World Property Organization (WIPO)” [Online] URL Address:
<http://opil.ouplaw.com/view/10.1093/law:epil/9780199231690/law-9780199231690-e576?rskey=fR4Mcu&result=1&prd=OPIL> (consulted June 1, 2017)
5 United Nations Development Programme (UNDP), “Good Pratice Guide: Improving Access to Treatment by Utilizing Public Health Flexibilities in the WTO TRIPS Agreement”, (2009), p. 5
6 Indian Patent Act 1970
7 World Health Organization, “Globalization, TRIPS, and Access to Pharmaceuticals”, Policy Perspectives on
Medicines No. 3 (March 2001), [Online] URL
Address :<http://www.searo.who.int/entity/intellectual_property/globalization-trips-and-access-to-pharmaceuticals-perspectives-on-medicines-No3-who-2001.pdf?ua=1> (consulted May 29, 2017)
The TRIPS Agreement was created to protect the IPRs of industries from developed nations.8 In that sense, the TRIPS Agreement brought substantive IPRs to developing countries through international law.
A large number of countries, particularly in Africa, did not even have modern intellectual property legislations and/or adequate infrastructure to administer IPRs. According to Mathews, only about 10% of developing countries sent intellectual property experts to the negotiations of the TRIPS.9 At the Uruguay Round, only a few developing countries were conscious of the full extent to which the provisions of the draft agreement on IPRs would limit their freedom to adopt health policies responding to their needs.10 At the same time, developing countries were under pressure to make concessions in the intellectual property area in exchange for aid or advantages in respect of other commodities. On April 15, 1984, parallel to the establishment of the WTO countries signed, in Marrakech, a bundle of trade treaties including the TRIPS Agreement. Consequently, since the TRIPS creation, a conflict of interest between developed and developing countries embedded the future negotiations on the access to essential medicines.
By signing the TRIPS Agreement, WTO member states engaged in introducing in their national legislation, a minimum standard of protection set by the Agreement. The Agreement gives an extended deadline for developing countries and LDCs to implement the minimum standards.11 Member states also engaged in strengthening the enforcement of IPRs before their national courts.12
The TRIPS Agreement grants negative rights where patentees may preclude; any unauthorized third party, not having the owner’s consent from the acts to make, using, offering for sale, selling or importing their patent/or its process.13 Many provisions in the TRIPS Agreement bars access to essential medicines. These are the following.14 Firstly, Article 27.1 of the TRIPS Agreement states “patents shall be available for any inventions
8 Miguel, P. Z., "Trade in Generics v. World-Scale Market Segmentation: Market-Driven Solutions to the ‘Paragraph 6’Issue." Journal of World Trade 48, no. 1 (2014), p. 82
9 Matthews, D., “Intellectual Property, Human Rights and Development – the Role of NGOs and Social Movements“, Edward Elgar Publishing 2011, p. 1
10 Frankel, S. and Gervais, D. J., “Advanced Introduction to International Intellectual property”, Edward Elgar
Publishing (2016), Chapter 2 p. 31
11 Article 66.1 of the TRIPS Agreement. The current transitional period for LDCs for pharmaceutical products
is now January 1, 2033 – countries that ceased to be LDCs will have a transitional period until 2021.
12 Frankel, S. and Gervais D. J., ( n 10), p. 29 13 Article 28 of the TRIPS Agreement
14 Mercurio, B., “TRIPs and access to essential medicines” in ed Van Calster G., and Prévost D., Research handbook on environment, health and the WTO. Edward Elgar Publishing (2013), Chapter 8 p. 235.
[…] provided they are new, involve an inventive step and are capable of industrial application”. It further specifies that patent shall be available and their recognition enjoyable without discrimination. Secondly, Article 33 confers patent protection for a minimum duration of 20 years from the date of filing the patent application. After this period, its exploitation falls into the public domain. Finally, under Article 39, WTO member states are obliged to protect undisclosed test data of the patent that has a commercial value for its invention or process.
To counterbalance these restrictions, WTO member states and LDCs recur to various mechanisms, allowed under the TRIPS Agreement. Namely, these are patent protection standards, transitional arrangements, exhaustion of intellectual property rights, exceptions to owner rights and compulsory licenses. Before the Doha Declaration, LDCs and developing countries were unsure on the extent that these flexibilities could be used in light of the objectives and principles of Article 7 and 8 of the TRIPS Agreement. In particular, Article 31 (f) of the TRIPS Agreement.
2. Compulsory license
Article 31 is considered to be the compulsory license provision of the TRIPs Agreement. It allows a state (or third party authorized by the nation) to have laws allowing “other use of the subject matter of a patent without the authorization of the right holder, subject to respecting conditions and procedures aimed at protecting interests of the right holder.”15 Article 31 does not define “compulsory license”, as this is left for domestic legislation of the member states.16 A compulsory license is produced in order to prevent that the patent holder has exclusivity of rights.17
The relaxed provisions of Article 31 allow a member state in any circumstances to decide when a compulsory license could be enacted.18 This was confirmed at the Doha Declaration that ‘each Member has the right to grant compulsory licenses and the freedom to determine the grounds upon which licenses are granted.’19
15 For the purpose of Article 31, ‘other use’ refers to use othere than that allowed under Article 30 16 Malbon, J., Lawson C. and Davison M., “The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights: A commentary”, Edward Elgar Publishing (2014), Part II p.496
17 Committee on Development and Intellectual Property (CDIP), “Patent Related Flexibilities in the Multilateral Legal Framework and their Legislative Implementation at the National and Regional Levels,”
CDIP/5/4 (March 1, 2010), p.15
18 Op cit., p. 497
19 “ Doha Declaration on the TRIPS Agreement and Public Health”, WT/MIN (01)/Dec/2 (November 14, 2001)
However, Article 31(f) establishes that any such use ‘shall be authorized predominantly for the supply of the domestic market of the Member [States] authorizing such use’. This means that those members are not allowed to issue a compulsory license for a pharmaceutical product for the purpose of exporting such product to another member state. This provision was the subject of criticism for countries that do not have the capacity to manufacture pharmaceutical products in their territory since they relied on imports to get access to essential medicines.
Article 7 and 8 respectively, highlights that IPRs measures should be implemented “in a manner conducive to social and economic welfare” and “adopted to protect health and nutrition.” However, these two Articles did not overcome the obstacle that Article 31 (f) had.
3. Events before Doha
Since the entry into force of the TRIPS Agreement, the impact of the HIV epidemics had continued to grow. The African continent was particularly affected. In 2000, it was estimated that the HIV outbreak in Sub-Saharan Africa affected 25.3 million people.20
In 1997, the South African Government introduced Section 15C in the South African Medicines and Related Substances Control Act (MRSCA) to explicitly authorize parallel imports of patented pharmaceuticals. The US pharmaceutical industry challenged the new legislation before the High Court of South Africa on grounds of unconstitutionality.21 Also, upon pressure by the Pharmaceutical Research and Manufacturers of America (PhRMA) the United States Trade Representatives (USTR) placed South Africa on the Special 301 “watch list” both in 1998 and 1999. The actions of the US government and its pharmaceutical lobby were condemned in the media and among activists. The scandal was such that the plaintiffs in the MRCSA case suspended their lawsuit against the South African Government and the USTR took South Africa off the 301 List.
Similarly, Brazil had passed legislation authorizing compulsory licensing to fight the AIDS epidemic, whenever a patent was not ‘worked in Brazil’.22 Consequently, the US also initiated dispute settlement procedures at the WTO against Brazil.23 The US position was that
20 “The Global HIV and AIDS Epidemic 2001”
<https://www.cdc.gov/mmwr/preview/mmwrhtml/mm5021a3.htm#fig1> (consulted May 20, 2017)
21 Fisher W. and Rigamonti, C., “The South Africa AIDS Controversy - A Case Study in Patent Law and Policy “, Harvard Law School, The Law and Business of Patents 10, (2005) p.3
22 SICE, “Intellctual Property Rights National Legislation_Brazil; Industrial Property Law N.9279”, (May 14, 1996) [Online] URL Address <http://www.sice.oas.org/int_prop/nat_leg/Brazil/ENG/L9279eI.asp>
23“Brazil- Measures affecting Patent Protection”, Request for Consultations by the United States, WT/DS199/1,
the new legislation breached the principle of non - discrimination set forth in Articles 27 and 28 of the TRIPS Agreement. However, the growing criticism on the part of the international community pushed the US to withdraw its complaint before the WTO in July 2001.24
These events raised awareness on the question of the extent to which developing countries are able to use the flexibilities offered by the TRIPS Agreement to face public health crises. On April 2001, developing countries proposed that the TRIPS Council held a special session to discuss the impact of patents, access to medicines and clarify the existing flexibilities in TRIPS Agreement. At the special session, a group of developing countries submitted a paper outlining what would become the negotiating position of developing countries at the Doha Conference.25 It stressed, “Members may wish to bring further proposals for modifications of the Agreement, with a view to increase its flexibility.”26
The text highlights the importance that a compulsory license could do to promote health standards and points that developed countries contain legislations that restrict its use. More specifically, they claimed that based on Article 5A (II) of the Paris Convention and Article 31, governments may issue compulsory licenses as a way of ensuring that medicines will be available at a more affordable price. The TRIPS Agreement should, therefore, provide the broadest flexibility for the use of a compulsory license.
The different perspectives in balancing public health and the safeguard of IPRs inevitably lead to difficult negotiations that Article 31 bis inherited.27 At the Special discussion on Intellectual Property and access to medicines, held in June 2001, Tanzania on behalf of LDCs, raised the point that LDCs should be allowed to invoke compulsory licensing in favor of a firm located in another country. These countries should be allowed to import medicines without being accused of infringing the agreement.28 In that regard, the delegation of Tanzania asked that LDCs needed to be assisted in enacting the appropriate legislation and that Article 31 (f) should be interpreted more liberally. In contrast, developed countries were more stringent with paragraph (f). The United States emphasized that what was relevant was whether the compulsory license infringed patent protection in the licensee’s country.29 If a
24 “Brazil – Measures Affecting Patent Protection”, Notification of Mutually Agreed Solution,
WT/DS1199/4,G/L/454, IP/D/23/Add.1 (July 19, 2001)
25
WTO, “Paper submitted by a group of developing countries to the TRIPS Council for the special discussion on intellectual property and access to essential medicines” , Council for TRIPS, IP/C/W/296, (June 19, 2001) 26 Ibid.,
27 Malbon, J., Lawson C. and Davison M., (n 16), p. 514
28 WTO, “Minutes of the Council for TRIPS Special Discussions on Intellectual Property and Access to Medicines”, Council for TRIPS, IP/C/M/31, (July 10, 2001) pp.28-30
patent protection exists in the licensee’s country and the compulsory licensee decides to export the pharmaceutical product, a problem is created. In this instance, the US delegation suggested limiting eligibility for compulsory licenses to those parties that did not infringe patent protections in their own country.
In brief, the pre-TRIPS and pre-Doha Declaration history in regard to patents, explains the different views of developed and developing countries to enact a compulsory license. Their contrasting views were the first milestones that would complicate the creation of Article 31 bis.
Part II- The Doha Declaration on the TRIPS Agreement, the Waiver and the Amendment
1. The Doha Declaration
At the WTO Fourth Ministerial Conference held in Doha, in November 2001, the Trade Ministers of the WTO unanimously supported ‘the Doha Declaration’.30 The Doha Ministerial Conference recognized the gravity of the public health problems afflicting many developing and LDCs (with particular emphasis on but not exclusively those resulting from HIV/AIDS, tuberculosis and malaria outbreak).31 It stressed that the TRIPS Agreement should be part of the wider national and international action to address these problems. It recognized that intellectual property is important for the development of new medicines and the concerns related to the effects of intellectual property on the prices of medicines.32 Paragraph 4 of the Doha Declaration specifically states that the Agreement “can and should be interpreted and implemented in a manner supportive of WTO’s member’s rights to protect public health, and, in particular, to promote access to medicines for all.”33
The Declaration provided a number of significant clarifications as to the scope of the flexibilities provided by the TRIPS Agreement in accordance with the customary rules of interpretation of public international law. Each provision of the TRIPS Agreement shall be read in the light of the object and purpose of the Agreement.34 In that regard, Articles 7 and 8 of the TRIPS Agreement should empower States to use flexibilities to decrease the price of
30 The Doha Declaration, (n 19) 31 Ibid., para [1]
32 The Doha Ministerial Declaration, para [17] 33 The Doha Declaration, (n 19)., para [4] 34 Ibid., para [5 (a)]
essential medicines.35 Likewise, the Doha Declaration reaffirmed that each member state has the right to grant compulsory licenses, the freedom to determine the grounds upon which such licenses are granted36 and what could constitute a national emergency.37
Paragraph 6 of the Doha Declaration emphasized the concern voiced by several LDCs and developing countries with insufficient or no manufacturing capacities in the pharmaceutical sector.
“We recognize that WTO members with insufficient or no manufacturing capacities in the pharmaceutical sector could face difficulties in making effective [the] use of compulsory licensing under the TRIPS Agreement. We instruct the Council for TRIPS to find an expeditious solution to this problem and to report to the General Council before the end of 2002”
Indeed, LDCs and some developing countries faced difficulties in making effective use of compulsory licensing as provided under Article 31 (f) of the TRIPS Agreement.38 During the negotiations leading to the adoption of the Doha Declaration, several developed countries had proposed to limit its scope to just addressing specific diseases or applying it to specific pharmaceutical products. But this approach had been rejected by developing countries. In short, the Doha declaration brought clarification on the patent- access to medicines issue within the TRIPS Agreement.
2. New mechanism: the Waiver and Amendment
The expeditious solution of paragraph 6 was solved with the Perrez Motta text (name after the former Chairman of the TRIPS Council). Member States had different views and understanding of the legal effect of the declaration.39 The delegation of the United States originally opposed to any solution involving an amendment to the Agreement. The first proposal was blocked by the United States in December 2002. By contrast, developing countries and initially the European Union (EU) propose to amend Article 31 or alternatively interpret Article 30 of the TRIPS Agreement in a strict manner. Albeit member states had
35 Frankel, S. and Gervais D. J., (n 10), p. 39 36 Doha Declaration., para [5 (b)]
37 Ibid, para [5 (c)]
38 “Minutes of the Council for TRIPS Special discussion on intellectual property and access to medicines”,
Council for TRIPS, (n 28), p. 29
contrasting views, it was recognized that Article 31 (f) was a problematic paragraph to the social and economic realities of the developing world. Nations with sufficient export-knowledge were sufficiently convinced to waive and replace Article 31 (f) with a new mechanism.
An interim waiver solution was promoted on August 30, 2003 by the Decision of the General Council of the WTO.40 The Waiver sought to balance interests from potential importers located in Africa, Asia and America and exporters of generics like India, Brazil and countries interested in using the system.41 The Decision waived the obligations established under Article 31(f) for countries exporting pharmaceuticals to eligible countries, and Article 31 (h) of the Agreement (adequate remuneration) for eligible importing countries that in turn must adopt appropriate measures to prevent trade diversion.
In echoing this solution, certain developed countries however, feared that the new mechanism could be misused and that generic drugs exported to eligible importing countries under this mechanism may illegitimately re-export them to third countries. For this reason, the mechanism imposes a number of anti-diversionary measures. The Decision adopted emphasized that the mechanism should be read “in the light of a statement by the General Council Chairman”, which means that compulsory licensed drugs should be used in good faith to protect public health and not be sold to pursue an industrial or commercial interest by re-entering non-exempted markets. Furthermore, the waiver attached a short list of guidelines (selected best practice from procurers) to minimize product anti-diversion measures and consequently market segmentation.42
In addition, the United States delegation wanted to add a pre-defined list of drugs and limited the use of this mechanism to epidemics solely mentioned in the Doha Declaration (i.e HIV, Malaria and Tuberculosis). Nevertheless, it was agreed that the waiver mechanism would apply to “any patented product, or product manufactured through a patented process, of the pharmaceutical sector needed to address the public health problems as recognized in paragraph 1 of the Declaration on the TRIPS Agreement and Public Health”.43
40 WTO “Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and public health”,
General Council, WT/L/540, (September 1, 2003)
41 Miguel, P. Z., (n 8), pp. 86-87
42 WTO“Minutes of Meeting”, World Trade Organization General Council, WT/GC/M/82, (August 25th, 26th
and 30th 2003), para [43]
43“Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and public health”, (n
Originally, all WTO member states were allowed to import, but 23 countries44 declared that they would not use the system as importers. Other 11 higher-income countries45 and territories announced voluntarily that they would only use the system as importers in situations of national emergency or other circumstances of similar gravity.46 In adopting the paragraph 6 systems, WTO member states agreed that the Decision, including the waivers granted in it, would terminate for each member state on the date on which an amendment to the TRIPS Agreement replacing its provisions would take effect for the member states. Matthews stressed that following the adoption of the Waiver; opinions differed in the developing country camp on how to proceed on both the time and the substantive content that the permanent amendment would take.47 Médecin Sans Frontières (MSF) pointed out since the start the weaknesses of the waiver mechanism and advised developing countries to reject any deal transforming the mechanism into a permanent feature of the Agreement.48 In their view, developing countries should rather allow further time to test the waiver and if required propose changes before signing up on a permanent solution. Nevertheless, two years later on December 6, 2005, WTO member states reached an agreement to make permanent the temporary waiver of Article 31 (f) and (h) of the Agreement.49
The Protocol transforming the Waiver into a permanent modification of the TRIPS Agreement was opened for acceptance by member states until December 1, 2007, or “or such later date as may be decided by the Ministerial Conference”.50 In fact, it would take 13 years before the Amendment entered into force. This happened on January 23, 2017, the date by which two-thirds of WTO member states had ratified the Protocol. Thus, this satisfied the requirement of Article X (3) of the Agreement establishing the WTO.51
44 Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy,
Luxembourg, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom and the US. After they joined the EU, ten more countries are part of the list (Czech Republic, Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovak Republic and Slovenia).
45 Hong Kong China, Israel, Korea, Kuwait, Macao China, Mexico, Qatar, Singapore, Chinese Taipei, Turkey
and United Arab Emirates.
46“Compulsory licensing of pharmaceuticals and TRIPS” [Online] URL address:
<https://www.wto.org/english/tratop_e/trips_e/public_health_faq_e.htm> (consulted June 3, 2017)
47 Matthews D., (n 9), Chapter 2 page 41
48 Médecin Sans Frontières, press release, “Breakdown in WTO Negotiations Provides Opportunity to Fix Flaw in Agreement on Access to Medicines”, (December 20, 2002) [Online] URL address:
<http://www.cptech.org/ip/wto/p6/msf-collapse-statement.html> (consulted July 7, 2017)
49 WTO,“Amendment of the TRIPS agreement”, WT/L/641, (December 8, 2005) p. 3 50Ibid., p. 2
51 WTO IP rules amended to ease poor countries’ access to affordable medicines:
The mechanism established under the Waiver, and Amendment now called Article 31 bis can be summarized as follows. The Amendment retakes the essential elements of the Waiver. Namely, waiving Article 31 (f), (h) and imposes anti-trade diversionary measures. The entry into force of the Amendment is subject to certain conditions.
Product differentiations would apply to active ingredients produced and supplied under the System and in general special packaging and /or special coloring or shaping. It further expressed that these trade anti-diversionary measures should not have a significant impact on the price of pharmaceuticals goods. In addition, importing countries should include information on how they established that they had insufficient or no manufacturing capacities in their local manufacturing sector. This is in order to clarify their industrial incapacity and guarantee that under this mechanism the patent holder would receive financial compensation only by the exporting member and not by the importing member.52 Finally, the Amendment states that Article 31 bis and the Annex are without prejudice to the rights, obligations and flexibilities that members have under the provisions of the TRIPS Agreement other than paragraph (f) and (h) of Article 31. This includes those reaffirmed by the Doha Declaration and their interpretation.53
For essential terms, a ‘pharmaceutical product’ is defined as “any patented product, or product manufactured through a patented process, of the pharmaceutical sector needed to address the public health problems as recognized in paragraph 1 of the Declaration on the TRIPS Agreement and Public Health”54. An ‘eligible importing member’ is defined as “any least- developed country Member and any other Member that has made a notification to the Council for TRIPS of its intention to use the new system as an importer.”55 An exporting member is defined as “a Member using the system to produce pharmaceutical products for, and export them to, an eligible importing Member”.56
The Annex of the Amendment further prescribes the elements of the notification procedure be used by eligible importing members and exporting members in the framework of the mechanism.57 Eligible importing members shall notify the names and expected quantities of the products needed. Furthermore, and unless they are LDCs members, they shall confirm to the WTO that they have established that they have insufficient or no manufacturing capacities
52 “Amendment of the TRIPS agreement”, (n 49), p. 3 53 Ibid., p.3
54 Ibid., p.4 55 Ibid
56 Ibid., p.3., para 1 (c) 57 Ibid., p.3., para 1 (b)
in the pharmaceutical product for the products in question. Also, eligible importing members shall ensure “the availability of effective legal means to prevent the importation into, and [to] sale [it], their territories of products produced under the system diverted to their markets inconsistently with its provisions”.58
Exporting members are required to export only the necessary amount of medicines to meet the needs of the eligible importing members. The entirety of this production shall be exported to member(s), which had notified its needs to the Council for TRIPS. They have to be clearly identifiable through special packaging and/or coloring or shaping.59
Despite the willingness and eagerness of WTO member states to promote access to essential medicines, the mechanism was used only once in 13 years of existence. Several reasons could explain why. One as stated above, the context and interests of each party lead to a series of difficult negotiations between developed and developing countries. As a result, not every WTO Members were satisfied with it. Just before the Waiver was transformed into an Amendment, African Countries, Brazil and India proposed a mechanism that would be less burdensome.60 However, the US opposed any modification of the text and rejected the European Union’s middle ground paper proposal. Furthermore, not every WTO member viewed the mechanism as the sole solution. The European Parliament declared on July 12, 2007 that the mechanism is just part of the solution to the problem of access to medicines and public health and that other measures were necessary to improve health care and infrastructure.61 However, it would be too straightforward to think that its domestic implementation is another reason. The Canadian legislation added more requirements in the system in comparisons to other WTO members. Yet, it remains the sole Member that used the system completely and should not be seen as a good precedent. India who did not add substantive requirements failed to trigger it. Consequently, the mechanism is the issue not its domestic implementation. The case studies below illustrate the inherent flaws of Article 31 bis.
In essence, from its historical conception, Article 31 bis was the fruit of a political compromise between the respective interests of developed and developing countries.
58“Amendment of the TRIPS agreement”, (n 49), p.5, para 4 59 Ibid., pp.4-5, para 2 (a)-(c)
60 Miguel, P. Z., (n 8), p. 88
61 European Parliament, “European Parliament Resolution on the TRIPS Agreement and access to medicines”,
PV 11/07/2007-18, (July 7, 2007), para [K.7], [Online] URL address:
<http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P6-TA-2007-0353+0+DOC+XML+V0//EN>
Developed countries feared that the mechanism might be misused and imposed a number of complex anti-diversionary and notification requirements. Conversely, developing countries (especially LDCs) feared commercial sanctions like Thailand in 2008 and accused the mechanism to be overregulated.
But Article 31 bis is now in full legal effect as two-thirds of WTO member states ratified the amendment. Currently, 89 Members accepted the text of the Amendment (see Annex 1 and 2). There is still work ahead as some LDCs still need to accept the notification system (Afghanistan, Angola, Democratic Republic of Congo, Gambia, Gambia- Bissau, Guinea, Haiti, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Niger, Somalia, Chad, and Yemen). Also, the mechanism could be used only to the extent to which both the exporting country and the eligible importing country had adopted implementing legislations at domestic level. Besides in 2016, 18 WTO member states had passed domestic legislation to this effect (see Annex 3). Its implantation varies from a two-end spectrum. The Canadian legislation contains 200 Articles that compulsory licensee would need to go through.62 By contrast, the Indian’s legislation contains 3 paragraphs. One can deduce that the implementation of Article 31 bis into the national legislation of WTO member states, primarily depends on their policy to adopt strong or soft IPRs.63
More importantly, most LDCs have not yet implemented the Amendment into their national legislation. Certainly, one of the reasons is that the implementation of the TRIPS Agreement for LDCs has been pushed to 2033. Consequently, LDCs do not need to recur to Article 31 bis. Other flexibilities such as parallel importing are also available to promote access to essential medicines at a reasonable cost.
Part III- the Waiver /Amendment in practice 1. Limits of the Waiver
Many commentators argued that the system is particularly burdensome and call for its revisit. Ranjan, states although that paragraph 2 (a) (ii) of the Annex provides guidance to know whether LDCs have no or insufficient pharmaceutical capability. This is not the case for a developing country.64 In this instance, proving limited industrial capacity is procedurally
62 Miguel, P. Z., (n 8), p. 91 63 Ibid.,
64 Ranjan, P. "Understanding the Conflicts between the TRIPS Agreement and the Human Right to Health." The Journal of World Investment & Trade 9, no. 6 (2008), p. 569
time-consuming.65 Other hurdles consist of the conditions that an exporting country has to comply such as to determine before the export country the necessary amount that the importing country needs, and the special packaging, labeling, colorings or shaping of the products under Paragraph 2 (b) (ii).66 As a consequence, the price of manufacturing these generics increases, even if Paragraph 2 (b) (ii) prohibits it. Another limitation is the market size of the importing country, where pharmaceutical manufacturers are economically disadvantaged to produce medicines that have special distinctions.
Likewise, the paragraph 6 system does not waive Article 31 (b), which asks the exporting country to seek a voluntary license with the patent holder. It is only after; when the negotiation has failed that an exporting applicant is allowed to produce a compulsory license. Finally, the compensation requirement, which takes into account the importing country’s value of use, is not explicit on the application of royalties.67 Miguel and Ho also point that some domestic regulations added more administrative requirements and thus could further hamper the use of the decisions. [68][69]
Mitchell and Voon, by contrast, acknowledge these obstacles but they can be bypassed.70 Seeking a voluntary license, for instance, need to be achieved only for a reasonable period of time and this can be waived in situations of extreme emergencies. As for the quantities expected, setting a number of pills or doses, active ingredients, and patients can satisfy this requirement.71 In addition, Article 31 bis does not specify the time when the importation should take place. For the particular distinction requirement, it has to be done only if it is feasible and should not have a significant impact on the price as highlighted under Article 2 (b) (ii) of the Waiver. Moreover, the WTO secretariat in 2016 considers that the system is not particularly burdensome if WTO Members implement the system in an effective manner.72
65 Ranjan, P, (n 64)
66 Ibid., p. 569
67 Thapa R., "Waiver Solution in Public Health and Pharmaceutical Domain under TRIPS Agreement." (2011), Journal of Intellectual Property Rights, volume 16 (2011), p. 473
68 Miguel, P. Z, (n 8), p. 91
69 Oh, Cynthia M. "Complicated Compulsory Licenses: The Waiver/Article 31bis' Solution.", in eds. Oh Cynthia M., “Access to Medecines in the Global Economy”, Oxford University Press 2011, Chapter 7 pp. 219-220 70 Mitchell, A. D. and Voon T., “The TRIPS Waiver as a recognition of public health concerns in the WTO”, in
eds Pogge, Thomas, Matthew Rimmer, and Kim Rubenstein, Incentives for global public health: patent law and access to essential medicines, Cambridge University Press, 2010, Chapter 2 p.71
71 Correa, C., "Trade related aspects of intellectual property rights: a commentary on the TRIPS agreement." Oxford University Press Catalogue (2007), Chapter 9 p.330
72 WTO, “Annual review of the decisions on the implementation of paragraph 6 of the Doha declaration on the TRIPS agreement and public health”, Council for TRIPS, IP/C/76, (November 23. 2016), p. 8
In disagreeing with Mitchell and Voon, the mechanism itself is unworkable in practice. The case studies below show that potential applicants have to comply with too many regulations. Furthermore, although countries add more procedural hurdles; the Canadian legislation appears to be an extreme example in comparison to other legislations. The case study of India points the reluctance of importing countries to use the system.
2. Canada and Rwanda
Canada was the second country after Norway to adopt a legislation allowing the use of the WTO mechanism.73 The legislation was adopted on May 14, 2004 (“An Act to amend the Patent Act and the Food and Drugs Act (The Jean Chrétien Pledge to Africa))” (hereinafter the JCPA). Also, in 2005 Canada set to place a mechanism called Canada’s Access to Medicines Regime (CAMR) that triggers the paragraph 6 system.
The stated purpose of the Act is “to give effect to Canada and Jean Chrétien’s pledge to Africa by facilitating access to pharmaceutical products to address public health problems afflicting many developing and least-developed countries, especially those resulting from HIV/AIDS, tuberculosis, malaria and other epidemics”.74
In essence the Act provides that subject to a certain number of conditions, the Commissioner of Patents “shall, on the application of any person and on the payment of the prescribed fee, authorize the person to make, construct and use a patented invention solely for purposes directly related to the manufacture of the pharmaceutical product named in the application and to sell it for export to a country or WTO Member that is listed in any of Schedules 2 to 4 and that is named in the application” (Act, Section 21.04 (1)). The Commissioner of Patents shall grant a license only if the applicant (i) has complied with the formal requirements laid out in Section 21.04; and (ii) the Minister of Health has notified the Commissioner of Patents that the version of the pharmaceutical product that is named in the application meets the requirements of the Food and Drugs Act. These regulations include the requirements relating to the “marking, embossing, labeling and packaging that identify that version of the product as having been manufactured in Canada” and in a manner that distinguishes it from the version of the pharmaceutical product sold in Canada by or with the consent of, the patentee
73 Ng, E., and Jillian C. K., "Finding flaws: The limitations of compulsory licensing for improving access to medicines-An international comparison." Health Law Journal, Volume 16 (2008), p. 148
74 Statutes of Canada 2004, Chapter 23, An Act to amend the Patent Act and the Food and Drugs Act (The Jean Chrétien Pledge to Africa), Section 21.01
or patentees.75 The applicant must also provide to the Commissioner a solemn declaration to the effect that he or she has at least 30 days to obtain from the patentee(s) a license to manufacture and only produce a compulsory license if such efforts have not been successful, and sell the pharmaceutical product to the country “on reasonable terms”.76
At the time of its entry into force and unlike what was provided under the Waiver/Amendment, Schedule 1 provided that the Act was applicable only to specific medicines and in target formulations.77 The Act provides for the possibility to amend Schedule 1 but this only upon the recommendation of both the Minister of Industry and the Minister of Health to the Governor in Council who then will use his/her discretion to decide whether an amendment should be made (Section 21.03 (1)).
Once the authorization is granted, the holder of the authorization must comply with a number of further obligations. Before exporting a product manufactured under an authorization, the holder must establish a website displaying information including “the distinguishing features of the product, and of its label and packaging”78 and maintain the website during the entire period during which the authorization is valid.79 Furthermore, before each shipment of any quantity of a product manufactured under an authorization, the applicant must provide to the patentee(s), the importing WTO member and the entity that purchased the product, a notice specifying “the quantity to be exported, as well as any party that will be handling the product while it is in transit from Canada to the country or WTO member to which it is to be exported”.80 The authorization granted under the Act shall be valid only for a period of two years, to be counted from the day on which the authorization was granted.81 An authorization may be renewed, but subject to stringent conditions and only be used once.82 The Act is intended solely for export and not for domestic use in Canada. Under certain conditions, the Act extends the recourse of the Waiver/Amendment system also to LDCs that are not WTO members.83
In May 2004, MSF publicly committed testing the new system by placing an order for medicines needed for its field projects. MSF was asked to identify which drugs were needed
75 Statutes of Canada 2004, (n 74), Section 21.04(3)(b) 76 Ibid., Section 21.04(3)(c)) 77 Ibid., Section 21.02 78 Ibid., Section 21.06 (1) 79 Ibid., Section 21.06 (2) 80 Ibid., Section 21.07 81 Ibid., Section 21.09 82 Ibid., Section 21.12 83 Ibid., Section 21.03 (b) (ii))
and did so but seven months later no manufacturer had expressed any interest in producing any of those drugs. Finally, in December 2004, a Canadian private-owned pharmaceutical manufacturer (Apotex) agreed to develop a new anti-retroviral drug (Apo-TriAvir) containing a fixed dose combination of antiretroviral medicines (zidovudine, lamivudine and nevirapine) used in the treatment of HIV/AIDS. The pharmaceutical groups GlaxoSmith, Shire Biochem, and Boehring Engelheim held Canadian patents on the separate antiretroviral components, respectively.84 Each of these three components appeared in Schedule 1 of the Act but the new composite drug did not and therefore was not eligible for export. Apotex had to first process a request for amending Schedule 1. This was done in September 2005 to include Apo-TriAvir. By December 2005, Apotex submitted to the competent regulatory authority (Health Canada) a request to manufacture Apo-TriAvir in quantities for export. As prescribed by Section 21.04(3)(b) of the Act, Apotex had also to provide Health Canada with information demonstrating that Apo-TriAvir complied with the provisions of the Food and Drug Regulation Act. Likewise, the product in order to be exported would have to be manufactured in a manner that would distinguish it from the version of the product sold in Canada with the consent of the patentees. Apotex had also to establish a website containing information on the new drug to be exported. In June 2006, Health Canada approved Apo-TriAvir.85 No recipient importing country, however, had been identified at this stage.86
On July 13, 2007, Apotex sent letters to GlaxoSmithKline, Shire Biochem Inc. and Boehring Engelheim to seek voluntary licenses to use their relevant patents to produce and export 15’600’000 tablets of Apo-TriAvir to Rwanda to meet the requirements of Section 21.04 (c)(i) of the Act. However, in September 2007, after negotiations with the patent holders had allegedly failed, Apotex filed an application to the Commissioner of Patents to export Apo-TriAvir. Two weeks later, on September 19, 2007, the Commissioner of Patents issued to Apotex a compulsory license for export authorizing the manufacture of 15’600’000 TriAvir tablets.87
84 Abbott, C., Cottier T., Gurry F., "International Intellectual Property in an Integrated World Economy",
Second Edition, Wolters Kluwer Law and Business, 2007, Chapter 2 page 252. As also stressed by the authors, at the time these drugs were part of the WHO Guidelines for the first-line treatment of HIV; however, at the time they not available in the form of an approved fixed-dose combination (FDC)
85 The Act gives Health Canada 12 months to complete this review process. In this case, the request was
processed in six months.
86 “Canada’s Intervention to TRIPS Council: Experience using the System (Apotex-Rwanda Case)“, [Online]
URL Address: < http://keionline.org/node/1000> (consulted May 29, 2017).
87
Abbott, F. M. “World Trade Organization: Canada First Notice to Manufacture Generic Drug for Export: Introductory Note”. International legal materials, (6), (2007) p.1127
In the meantime, on July 19, 2007, the Government of Rwanda had notified the WTO of its intention to import 15’6000’000 TriAvir tablets under the Waiver decision.88As an LDC, Rwanda qualified as an eligible importing member both under the Waiver system and the Act. The Rwandan legislation, however, prescribed that whenever drugs are imported into the country, a public tender must be issued. In October 2007, Rwanda opened a public tender for the supply of TriAvir. In May 2008, Apotex announced that it had won the tender and began manufacturing the drug. In September 2008, the first shipment of 6,785,000 tablets was exported to Rwanda. The second shipment of 7,628,000 tablets took place in September 2009.89 The public tender launched by Rwanda attracted other competitors across the world such as in India. But there were unsuccessful to pass the Waiver requirements.
Despite, the humanitarian intention of Canada to pass the JCPA, Canada’s access to Medicines Regime receives particular criticism for being too bureaucratic and technical for an applicant.90 The Chief Operating of Apotex reported “…if other critical medicines are to go to Africa in a reasonable timeframe, the Federal Government must change the CAMR. [It] is unworkable as it now stands.”91
Other than that, MSF published a report of the main concerns. It is summarized as follows. Firstly, the Act is unnecessarily onerous and the list of specific medicines is against the spirit of the Doha Declaration. The text of the Waiver (paragraph 1 (a)) gave a very broad definition, while the Canadian law chose to make a list of such products (Schedule 1). Thus, restricting potential life-saving drugs that can be exported.92 Secondly, Schedule 1 did not include fixed-dose combinations, which includes at least two active pharmaceutical ingredients to form a single dosage.93 This method was, in particular, used to fight AIDS epidemic. Thirdly, another problem is with the time and limit of exporting the drugs that
88 Himelfarb J. “The Limitations of Canada’s Access to Medicine Regime: Lessons from Apotex’s export of essential medicines to Rwanda”, Queen Mary Journal of Intellectual Property, [Online] URL address:
<https://qmjip.wordpress.com/2015/03/22/the-limitations-of-canadas-access-to-medicines-regime-lessons-from-apotexs-export-of-essential-medicines-to-rwanda-2/> (consulted May 27, 2017)
89
WTO, News Item, “Canada is first to notify compulsory licence to export generic drug” [Online] URL Address : <https://www.wto.org/english/news_e/news07_e/trips_health_notif_oct07_e.htm> (consulted on May 29, 2017).
90 Médecins Sans Frontières, “Neither Expeditious, Nor a Solution: The WTO August 30th Decision Is
Unworkable. An illutrsation through Canada’s Jean Chretien Pledge to Africa”, report prepared for the XVI
International AIDS Conference, Toronto, August 2006,pp. 1-7, URL Address:
<https://www.msfaccess.org/sites/default/files/MSF_assets/Access/Docs/ACCESS_briefing_NeitherExpeditious NorSolution_WTO_ENG_2006.pdf> (consulted May 27, 2017).
91 Lybecker, K, M. and Fowler, E. "Compulsory licensing in Canada and Thailand: comparing regimes to ensure legitimate use of the WTO rules," The Journal of Law, Medicine & Ethics 37, no. 2 (2009), p.223 92 Médecins Sans Frontières, (n 90), p. 4
discourage a generic pharmaceutical producer to use the JCPA law.94 Under Article 21.09, the authorization granted under subsection 21.04 is valid for a period of two years beginning on the day on which the authorization is granted. The exporter would have to renew the process again even if it is the same pharmaceutical drug. Fourthly, the limitation of time under Article 21.05, which requires the maximum quantity of the product, that has to be exported during the two years, conflict with the waiver decision. Setting a maximum of exportation is contrary to the Waiver that requires notifying the TRIPS Council of the “expected quantities of the products needed” found in paragraph 2 a (ii). Fifthly, the requirement that a potential exporter should engage in prior negotiations with the patent holder(s) for at least 30 days is a source of potential difficulties and delays. It goes beyond the requirements of the Waiver and the notification requirement to the WTO. Seventhly, it may discourage eligible importing countries to use the system (fear of political pressure and or commercial sanctions). Finally, MSF accused that the JCPA law safeguards patent protection for private parties.95
At the October 2010 session of the Council for TRIPS, Canada stated that the challenges and delays in Apotex’s export of medicines to Rwanda should be viewed as separate issues from CAMR. 96 It declared that CAMR was an efficient, effective and timely system. However, aware of the flaw of Schedule 1, Canada amended it twice.97 The first amendment added a name fixed-dose combination consisting of three anti-retroviral agents in the treatment of HIV/AIDS. The second amendment added a name of treatment for Type A and Type B of Influenza. The amended of Schedule 1 ensured that CAMR remains current with the evolving public health needs of developing countries and LDCs.
According to Elliot, the main negative points that the CAMR contain are that the legislation does not represent fully the flexibilities under WTO law and that it adds TRIPS-plus elements in its practice.98 For example, as stated above, the CARM is contrary to the Waiver of paragraph 2 (a) (i) by setting expected quantities for export. Another example is the requirement to engage in prior negotiations with the patent holder(s) for at least 30 days. This is an element that is considered as a TRIPS-plus requirement.99 Indeed, the analysis
94 Médecins Sans Frontières. (n 90), p.6 95 Ibid., p. 8
96 WTO, “Annual review of the decisions on the implementation of paragraph 6 of the Doha declaration on the trips agreement and public health”, Council for TRIPS, IP/C/57, (December 10, 2010) pp. 7-8
97 WTO, “Minutes of Meting – Held in the Centre William Rappard on 7-8 June 2016”, Council for TRIPS,
IP/C/M/82/Add.1, (September 1, 2016) p. 6
98 Elliot R., "Pledges and Pitfalls: Canada’s Legislation on Compulsory Licensing of Pharmaceutical for Export." International Journal of Intellectual Property Management 1, no. 1/2 (2006), p. 109
conducted above illustrates that the CARM introduces more procedural hurdles than other jurisdictions. Consequently, its implementation is the most restrictive and should be considered at the end of a spectrum.
In short, the Canadian case study shows that the Canadian implementation of the Waiver was particularly burdensome for an applicant since it conflicted with the domestic law. Yet, the 2003 decision itself is particularly burdensome. The Indian legislation is relaxed in comparison but the proceedings of the paragraph 6 system ended at it first stages.
3. India and Nepal
Another example that shows the difficulty in applying the paragraph 6 system in practice is found in the Indian-Nepalese case study. Section 92 A of the Indian Patent Act amended in 2005, retakes the elements of Paragraph 6 of the Doha Declarations. Namely that a compulsory license for export, is only allowed if a country other than India have insufficient or no manufacturing capacity to address public health and that such country is by notification or otherwise, allowed the use of the patented pharmaceutical products from India.100 Nonetheless, this requirement has to be respected only if the patented product in India is also patented in the country of import. Moreover, one can infer that “notification or otherwise” includes products that are patented in India but not protected in the country of import.101 The purpose of these words is to relax the strict rule that forces the applicant to come up with a notification.102
Under Section 92 A (2), it is the Controller granting the patent that would specify the terms and conditions. This means, that the remuneration is determined by the Controller and will take into account the nature of the invention, the expenditure incurred by the patentee in making the invention or in developing it and in obtaining protection, keeping it in force and other relevant factors.103 Finally, Section 92 A (3) follows what the Doha Declaration means with pharmaceutical products. Provisions 2 and 3 of Section 92 A apply without prejudice to the extent that pharmaceutical medicines enacted as a compulsory license, can be exported under any other provisions of this act. Provisions 3 adds in particular that “pharmaceutical means any patented product, or product manufactured through a patented process, of the
100 Section 92A (1) of the Indian Patent Act 1970
101 Gopalakrishnan N.S and Anand M., “Compulsory Licence under Indian Patent Law” in ed. Hilty, R. M., and Kung-Chung L., “Compulsory Licensing: Practical Experiences and Ways Forward”, Vol. 22. Springer, 2014., Part 1 p. 32
102 Ibid., 103 Ibid.,
pharmaceutical sector needed to address public health problems and shall be inclusive of ingredients necessary for their manufacture and diagnostic required for their use.” In this instance, the term pharmaceutical product is broader and includes a range of pharmaceutical compounds and active ingredients, which contrast from Schedule 1 of the JCPA.
Before examining the case, it is striking to notice that Section 92A contains only three provisions that allow the use of the paragraph 6 system. This mechanism was implemented simply and relaxed in comparison to the JCPA. As stated above, Article 31 bis is a fragile consensus and unsurprisingly its implementation points the difference of interest between developed and developing countries. But the Indian legislation points that the practice of the mechanism is itself burdensome, not its implementation.
On September 15, 2007, the Indian generic manufacturer Nacto Pharma Limited applied for two compulsory licenses before the Indian General Controller of Patents.104 Nacto was granted a license from Nepal to export Erlotinib and Sunitib.105 These two drugs are used for cancer treatment. Nepal qualified automatically as an eligible importer since it is a Least Developing Country.106 Therefore, it did not need to establish that it had an insufficient manufacturing capacity and to obtain a voluntary license under Section 92A of the Indian Patent Act and Article 31 of the TRIPS Agreement. Nacto applied for the export of 30,000 tablets to Nepal and 15,000 tables of Sunitib and offered the patent holders a royalty of 5%.107 The Delhi Patent Office decided to hear Roche and Pfizer over the application request from Nacto. The latter opposed to such hearing, claiming that the proceeding should take place only between the Patent office and Nacto as Section 92 A does not require it.108 However, on July 22, 2008, the Dehli Patent office dismissed Nacto’s application. The decision states that although Section 92 (A) of the India Patent Act does not request the hearing of the patentee, its arguments shall be helpful in deciding “the terms and conditions” for granting such license
104 The Patent Act, 1970 (Amended by the Patents Act 2005) and The Patent Rules, 2003 (Amended by the
Patents Rules 2006), “In that matter of Patent Appliction No.537/DEL/1996 (Patent No. 196774) and In the
matter of application for compulsory license u/s 92 (a) and Rules 96-97 filed by M/s Nacto Pharma Ltd. and in the matter of Interlocutory petition filed on 27.02.2008 by M/s Nacto Pharma Ltd. Decision rendered in July
22, 2008., p.2, PDF [Online] URL Address: <http://ipindiaservices.gov.in/decision/537-DEL-1996-154/cl%20537del1996.pdf> (consulted July 2, 2017)
105 Mathur, H., “Compulsory licensing under Section 92A: Issues and concerns.” (2008)., Journal of Intellectual Property Rights Vol (September, 13 2008)., p.465
106 Asawat, V., "Access to Affordable Medicines in the Current Patent Regime: An Indian Perspective." (April 13, 2011), p. 7
107 Bascheer, S., “India’s First Doha Case: Nacto, Pfizer and Roche will be heard soon” SPICY (February 24,
2008), [Online] URL address: SPCIY IP <https://spicyip.com/2008/02/indias-first-doha-case-natco-pfizer-and.html> (consulted July 10, 2017)
108 The Patent Act, 1970 (Amended by the Patents Act 2005) and The Patent Rules, 2003 (Amended by the
