[Ip-health] WIPO SCP23 - 1 December 2015 - Statement of Knowledge Ecology International on Patents and Health

Thiru Balasubramaniam thiru at keionline.org
Tue Dec 1 14:07:42 PST 2015


*1 December 2015*

*World Intellectual Property Organization (WIPO) Standing Committee on the
Law of Patents (SCP 23)*

*KEI Statement on Patents and Health*

Thank you Madame Chair

After five years of secret negotiations, the final text of the
Trans-Pacific Partnership (TPP) was released in early November 2015. In the
context of patents and health, bilateral and plurilateral agreements such
as the TPP, continue to be a cause of great concern. The TRIPS+ measures of
the TPP are designed to make drugs, vaccines, diagnostic tests and other
medical technologies more expensive, often by broadening and extending the
monopoly protections conferred by intellectual property rights.

The harmful impacts will affect all countries, and predictably, the higher
prices will limit access to known efficacious treatments for diseases.

The TPP provisions include:

Article 18.37(2), which changes the WTO standard for patents, by mandating
that patents are granted for new uses or methods of using known products.

Article 18.48(2), which requires an effective extension of the patent term
beyond the 20 years required by the WTO.

Article 18.50, which creates a WTO/TRIPS+ obligation of at least five years
of market exclusivity on the test data used used to register products,
effectively ensuring monopolies when there are no patents on the product,

Article 18.52, which is designed to extend non-patent exclusivity to eight
years, for biologics.

Article 18.74, is the TPP’s aggressive standard on damages, which is
TRIPS+, and mandates that judicial authorities have the authority to
consider “any measure of damages that the rights holder submits” including
“suggested retail price.”

The provision in the TPP concerning damages from infringement is
particularly concerning if it is interpreted by the Investor State Dispute
Settlement (ISDS) to limit the effective implementation of liability rules
that are based upon statutory limitations on the remedies for infringement.

For example, the United States Biologic Price Competition and Innovation
Act (BPCIA) has provisions, designed to induce transparency of patents on
biologic drugs, that limit the damage for infringement to a reasonable
royalty, in some cases. Recently a member of the U.S. Congress
(Representative Eshoo) asked the United States to explain how the current
U.S. law is consistent with the TPP provisions on damages.

And, recently, Senator Bernie Sanders proposed legislation in the US Senate
to expand access to hepatitis C virus (HCV) treatments for veterans, by
limiting the compensation to patent holders when prices for products are
excessive and if the outlays on the products would exceed the budgetary
resources available for veterans.

The TPP appears to limit the ability of the U.S. Congress to take measures
that are legal under the WTO rules, but apparently in conflict with the
TPP. This directly concerns two important issues in the United States, the
current law seeking to induce transparency of patents on biologic drugs,
which is designed to reduce the risks facing investors in biosimilar
products, and a proposed change in the U.S. law that is designed to protect
veterans from access constrained by the excessive prices of drugs.

Here we also note these issues are relevant to the joint proposal in
document SCP/16/7 by the African Group and the Development Agenda Group on
a work program on patents and health,

Document 16/7 refers to flexibilities under Article 44 of the TRIPS
including those cases where injunctions are not made available to stop
infringements, and governments or courts allow infringements to take place,
subject to some limited and reasonable compensation to the patent holder.
The United States is currently the place where Article 44 flexibilities are
used most frequently to overcome patent monopolies - including since 2006 -
several cases involving medical devices and diagnostic tests.

In developing modules on state practice, we have urged the WIPO secretariat
to examine how certain countries, such as the United States, implement
limitations and exceptions to remedies associated with the exclusive rights
of patents, with a focus on the flexibilities found in Articles 44.1 and
44.2 of the TRIPS Agreement, including cases where non-voluntary
authorizations to use patents replace injunctions to enforce exclusive

We urge the WIPO SCP to commission a framework study by leading independent
experts to examine the implications of international trade agreements on
access to medicines including norms on the evergreening of patents,
mandatory patent extension, sui generis exclusivity, damages and the
investor state dispute system (ISDS).

The study should examine the impact of patent monopolies on the prices of,
inter alia, hepatitis C medicines and cancer medicines.

The study should also examine limitations and exceptions to remedies for
infringement contained in Part III of the TRIPS Agreement, the very area
that is facing new challenges from norm on remedies for infringement
included in the TPP.

Finally, we note there is one provision in the TPP that we were grateful to
see, and would like to highlight here:

In Article 18.41, Other Use Without Authorisation of the Right Holder, the
TPP provides that “The Parties understand that nothing in this Chapter
limits a Party’s rights and obligations under Article 31 of the TRIPS
Agreement, any waiver or any amendment to that Article that the Parties
accept.” What this provision does is protect the use compulsory licensing,
under Part II of the TRIPS, as a limitation on the right, rather than the
remedies to infringement of those rights.

The positive assurances that the TRIPS flexibilities found in Part II of
the TRIPS, for compulsory licensing of rights, will be protected in the
TPP, makes the assault on the TRIPS Part III flexibilities regarding the
enforcement of rights even more surprising. One wonders, what were the TPP
negotiators trying to accomplish?

The United States trade negotiators claim that our concerns over the TPP on
the issue of damages are wrong, from a legal point of view, and that
governments can, by statute limit the damages for infringement, to a
different standard than the one put forth in the TPP. It would be good to
clear this up before any government decides whether or not to be bound by
the TPP, and perhaps the United States, Australia, Canada, Japan, or any of
the other TPP member countries could shed light on this important question.

Thank you Madame Chair

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