L E S O T H O V A L I D A T I O N W O R K S H O P2 5 N O V E M B E R 2 0 1 4

C A I L I N M O R R I S O N

RECAP – THE INTERNATIONAL CONTEXT: THE WTO, PATENTS, TRIPS FLEXIBILITIES

& ACCESS TO MEDICINES

WTO – WORLD TRADE ORGANISATION

• The WTO is the only multilateral international body that creates, regulates, and manages the rules of trade between nations.

• There are 160 Member states.

• A majority of the Member States are developing countries with 34 designated as Least Developed Countries, including Lesotho that joined the WTO when it came into force in 1995

• Central to the WTO are the various negotiated agreements including the TRIPS Agreement

WORLD TRADE ORGANIZATION AGREEMENT ON TRADE-RELATED ASPECTS OF INTELLECTUAL

PROPERTY RIGHTS (TRIPS)

• TRIPS came in to force 1. Jan 1995

• Most comprehensive international agreement on intellectual property rights

• Sets forth minimum standards for Intellectual Property Rights protection(IPRs) that must be met by all WTO Members

• This includes copyright protection on music, books etc. as well as patents on medical products and processes.

THE SITUATION PRE-TRIPS

Developed Countries:

• Pharmaceutical products became patentable in West Germany in 1967; France in 1967; Italy in 1979; and Spain in 1992.

• One of the arguments made by these countries for the delay in granting patents on pharmaceutical products was in order to build capacity in the pharmaceutical sector to compete in the global market place.

THE SITUATION PRE-TRIPS

Developing Countries:

• Until early 1990s, approx. 50 developing countries either excluded medicines from patentability or provided shorter periods of protection or operated conditions which restricted patent holders’ rights.

This includes the:• India Patents Act, 1970 (Based on German model) • Brazil, No Pharmaceutical Patents

WHAT IS A PATENT?

• A Patent is an exclusive right granted for the protection of an invention.

• Patents are monopoly rights granted by the Government to protect inventions.

PATENTS

• Titles granted by the State as a reward to innovation

• Protects inventionsex: a molecule, a manufacturing process, a

therapeutic indication, a formulation, a combination, etc.

• that are New, Inventive, and Capable of Industrial Application on the date of the patent application

Many patents protect a single drug. It is not one drug – one patent

PATENT TERM

• Patents are granted a 20 year term (Duration) in accordance with TRIPS Art. 33

• The justification for the 20 year term is said to be to allow the patentee time to recoup their expenditure, for without a monopolistic patent they would not invest in the research needed to produce new inventions.

PATENTS – WHAT DO THEY DO?

• Give a temporary monopoly to their owner as long as annual fees paid

• Only a negative right: the exclusive right to prevent others from making, using, selling, importing the object of a patent

Up to patent owners to sue infringers (except when infringement is criminalized)

THE PURPOSE OF THE PATENT SYSTEM

• Is to encourage technological innovation by rewarding intellectual creativity through providing patent protection on the invention – granting a patent

• It is asserted that patents are given as a reward – a recognition of the inventor’s contribution and that society benefits as the information disclosed in patents is published

TRIPS – KEY PROVISIONS

Key provisions:• Art 7 – Objectives of TRIPS• Art 8 – Principles• Art. 6 - Principle of Exhaustion (parallel importing

permissible)• Art. 27 – Patentability Criteria and Exclusions from

Patentability• Art 28 - Exclusive patent rights• Art. 33 – minimum 20 year term• Art 31 – Compulsory Licensing

TRIPS – GENERAL OBJECTIVES

• Art 7… objectives: The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations

TRIPS – GENERAL PRINCIPLES

Art. 8• (1). Members may, in formulating or amending

their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of this Agreement.

TRIPS – PATENT CRITERIA

Threshold Test:

Art 27.1 Patents are available in all fields of technology provided that they are: new, involve inventive step and are capable of industrial application.

This is more commonly referred to as the 3 step test

EXCLUSIONS FROM PATENTABILITY

• Exclusions: Art 27.2 - Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect human, animal or plant life or health or to avoid serious prejudice to the environment;• Art. 27.3  Members may also exclude from

patentability:• (a) diagnostic, therapeutic and surgical

methods for the treatment of humans or animals; (b)    plants and animals other than micro-organisms

ART 31 – EXCEPTIONS TO RIGHTS CONFERRED - COMPULSORY LICENCE

• An authorisation given by the national patent office, or a Court, to any interested person to legally overide a patent, i.e. to manufacture, sell, import or export a patented product, or to use a patented process for these purpose without the authorization of the patent owner

• TRIPS Art. 31 (b)requires prior negotiation with the right holder to try to obtain a voluntary licence on reasonable commercial terms and conditions and that such efforts have not been successful within a reasonable period of time.

• Adequate remuneration must be paid to right holder (TRIPS Art. 31(h)

• The scope and duration of such use shall be limited to the purpose for which it was authorized (TRIPS Art. 31(c)

ART 31 – EXCEPTIONS TO RIGHTS CONFERRED - GOVERNMENT USE

• An authorisation by the Government to legally overide a patent, i.e. to manufacture, sell, import or export a patented product, or to use a patented process for these purpose without the authorization of the patent owner

• The Governement may waive the requirement of prior negotiation in the case of a national emergency or other circumstances of extreme urgency or in cases of public non- commercial use.

• However, the patent holder should be notified as soon as possible and must be paid adequate remuneration

ART. 6 PRINCIPLES OF EXHAUSTION

• TRIPS does not address the issue of the exhaustion of intellectual property rights. • Exhaustion of IPRs is the principle that once the

owner of an IPR has placed the product covered by that right into the marketplace the right to control how the product is resold with the internal market is lost.• Countries have a wide scope on which type of

exhaustion to apply. There are 3 Principles of Exhaustion that member states can adopt: National, Regional, and International

ART. 6 PRINCIPLES OF EXHAUSTION

• National Exhaustion: means that upon sale of the product only domestic rights are exhausted. Simply put, you can only shop around for the best priced patented drug in the country.

• Regional Exhaustion: the first consensual sale of the IP protected product exhausts any IPRs over the product domestically and in the region. Allows you to shop around the region for the best priced patented pharmaceutical product

ART. 6 PRINCIPLES OF EXHAUSTION

• International Exhaustion: exhausts the IPR rights once the patented product is sold anywhere in the world

• Public Health advocates argue that countries should adopt the principle of international exhaustion as it allows for the “shopping around”( parallel importation) of the best priced patented pharmaceutical products.

THE USE OF COMPULSORY LICENCES ON PUBLIC HEALTH GROUNDS

Prior to the Doha Declaration on TRIPS and Public Health in 2001, the issuing of compulsory licences to respond to public health epidemics was disputed at the WTO for a number of years.• Many developed countries argued that Art. 31 could

not be used as a mechanism for responding to public health epidemics such as HIV/AIDS.

• In other words, compulsory licensing - did not apply to patented drugs.

• Developing and least-developed countries responded that there is nothing in TRIPS that excludes the use of the Agreement to respond to public health epidemics.

SO WHY IS THE DOHA DECLARATION ON TRIPS AND PUBLIC HEALTH SO IMPORTANT?

It was unanimously agree by ALL WTO Members that health, should be and is given priority over commercial concerns.

“We agree that the TRIPS Agreement does not and should not prevent Members from taking measures to protect public health. Accordingly, while reiterating our

commitment to the TRIPS Agreement, we affirm that the Agreement can and should be interpreted and

implemented in a manner supportive of WTO Members' right to protect public health and, in

particular, to promote access to medicines for all. In this connection, we reaffirm the right of WTO Members to

use, to the full, the provisions in the TRIPS Agreement, which provide flexibility for this purpose.”

- WTO Ministerial Declaration on the TRIPS Agreement and Public HealthNovember 2001

DOHA DECLARATION

• Recognize gravity of public health problems afflicting developing countries• It was affirmed by all WTO Members that:

• TRIPS “does not and should not prevent Members from taking measures to protect public health”

• TRIPS “can and should be interpreted and implemented in a manner supportive of WTO Members’ right to protect public health and, in particular, to promote access to medicines for all”

THE DOHA DECLARATION – REAFFIRMED THE FLEXIBILITIES IN THE TRIPS AGREEMENT

• The right of countries to issue a compulsory license at their discretion, not only in cases of emergency.

• The right of countries to determine for themselves what constitutes a national emergency or extreme case of urgency, in which case the procedure for issuing a compulsory license becomes easier and faster.

LESOTHO AS AN LDC

• Recognising the importance of trade and development for all member states, a number of the WTO Agreements have specific provisions for taking into account the interests of LDCs.

• The special and differential treatment provisions (S&Ds) are set out in a number of the WTO Agreements provide LDCs flexibility in the implementation of certain rules and commitments including longer implementation periods

LDCS – SPECIAL AND DIFFERENTIAL PROVISION IN TRIPS

• TRIPS Agreement contains two key special and differential provisions specifically for LDC member states.

• First, the Preamble notes that Members recognize the special needs of the least-developed country Members in respect of maximum flexibility in the domestic implementation of laws and regulations in order them to create a sound and viable technological base

LDCS – SPECIAL AND DIFFERENTIAL PROVISION IN TRIPS

• TRIPS Article 66 recognizing the special needs and requirements of least developed countries affords a longer period for implementation of the agreement in order to develop a sound and viable technology base.

• Initially, least developed countries had until 2006, with the possibility of a longer transition period to implement the TRIPS Agreement.

TRIPS IMPLEMENTATION AND PHARMACEUTICAL PRODUCTS

• In 2002, the deadline for implementation under Article 66 for LDC’s TRIPS obligation for pharmaceutical products was extended until 2016.

• This extension period took into account the instructions of Paragraph 7 of the Doha Declaration on TRIPS and Public Health that held LDCs would not be obliged to implement or apply Sections 5 and 7 of Part II of the TRIPS Agreement with respect to pharmaceutical products

LDCS -TRANSITION PERIOD EXTENDED FOR PHARMACEUTICAL PRODUCTS

• In 2005 the transition period was extended to 2013

• Then on 11 June 2013, the TRIPS Council adopted a Decision (IP/C/64) that further extended the transition period until at least 1 July 2021 not only to pharmaceutical products, but it gives LDCs the freedom to choose whether or not to protect trademarks, patents, copyright, industrial designs, geographical indications or any other form of intellectual property covered by the agreement.

SO FINALLY - WHAT DOES THIS MEAN FOR LESOTHO?

• The extension period removes LDCs (Lesotho) obligations with regards to pharmaceutical patents and any other form of intellectual property covered by the agreement until at least 1st July 2021

In other words:• Lesotho should not be granting patents on

medicines until at least 2021 and should use this period to develop a sound and viable technology base to be able to respond to the health needs of its people.

C A I L I N M O R R I S O N

THANK YOU FOR YOUR TIME AND ATTENTION