[Ip-health] IP-Watch: TRIPS Council Members: Defining IP Rights And The Public Interest

Thiru Balasubramaniam thiru at keionline.org
Thu Jun 15 08:01:10 PDT 2017


TRIPS Council Members: Defining IP Rights And The Public Interest


“Political and economic pressure placed on governments to forgo the use of
TRIPS flexibilities violates the integrity and legitimacy of the system of
legal duties and rights created by the TRIPS agreement and as reaffirmed by
the Doha Declaration,” India told a World Trade Organization committee this
week, referring to the WTO Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS).

Intellectual property rights are often seen as a promoter of innovation
through the lens of most developed countries, and as a potential barrier
for developing countries, struggling to address public interest needs, in
particular meeting their public health obligations. This week the
intellectual property committee of the World Trade Organization discussed a
new topic brought on by some developing countries, underlining the
difficulties met by some in seeking to use the flexibilities provided by
the WTO IP rules, in particular compulsory licences.

The WTO Council for Trade-Related Aspects of Intellectual Property Rights
(TRIPS) was held on 13 June, finishing in one day. The council elected a
new chair for the year: Irene Young, permanent representative of Hong Kong.

TRIPS Council meetings are held in closed-door sessions despite the
apparent absence of sensitive issues on the agenda.

IP and Public Interest, Access to Medicines Jeopardised

A newcomer this week was an item [pdf] on IP and the public interest, with
a focus on compulsory licences. Compulsory licences, in the health area,
are steps taken by a government after negotiations with a pharmaceutical
company to lower prices of a particular medicine have failed, in order to
have the medicine manufactured by a generic company.

IP and the public interest was put forward by Brazil, China, Fiji, India,
and South Africa.

India, according to its statement, gave the example of antiretroviral
medicines to treat HIV/AIDS which “were priced beyond the reach of most
people who needed them in developing countries,” in the 1980s and 1990s.

Flexibilities included in the TRIPS Agreement, such as compulsory licences,
were used by countries like Brazil, Thailand, South Africa and others to
bring prices down, India said, further noting that the TRIPS Agreement
implicitly says that WTO members have the freedom to determine the grounds
upon which compulsory licences are granted.

So far India has issued only one compulsory licence, the Indian delegate
said, for Bayer’s drug sorefenib tosylate (Nexavar) used for the treatment
of kidney and liver cancer, which allowed the price of the medicine to drop
from US$4,370 for a month’s treatment, to US$135 a month.

According to his statement, the Indian delegate presented several cases of
use of compulsory licences in developed WTO members. Referencing a 2009
article on “Compulsory licensing of patented pharmaceutical inventions:
evaluating the options,” the delegate said the United States threatened
Bayer with a compulsory licence on ciprofloxacin in 2001, “which the US
intended to stockpile as a defence against anthrax,” leading Bayer to
“drastically” lower its price.

The Indian delegate remarked on the difficulty for developing countries to
make use of compulsory licences, for reasons including capacity
constraints, and political and economic pressures from states and
corporations, echoing the recent findings of the United Nations Secretary
General’s High-Level Panel on Access to Medicines.

“Political and economic pressure placed on governments to forgo the use of
TRIPS flexibilities violates the integrity and legitimacy of the system of
legal duties and rights created by the TRIPS agreement and as reaffirmed by
the Doha Declaration,” he said.

Brazil, in its statement, said IP addresses the public interest by
providing incentives for innovation. However, governments “have the
responsibility of safeguarding the public against a potential negative
impact, notably on competition.”

A flexible policy space is necessary for each member state to develop and
adapt the set of IP regulations which are the most fitting to its reality,
Brazil said, adding that exceptions and limitations to IP rights give the
necessary flexibility to increase societal welfare without prejudicing the
legitimate interests of patent owners.

“The judicious use of compulsory licenses assists countries to uphold the
delicate balance of the TRIPS Agreement,” the delegate said, adding that
Brazil issued its first and only compulsory licence for the antiretroviral
efavirenz to treat HIV/AIDS, after negotiations with the patent owner

Despite the fact that Brazil “strictly” followed the international legal
framework, “the Brazilian Government faced legal disputes in national
courts,” initiated by the patent owner, which were unsuccessful. Brazil
could reduce the price of Efavirenz from US$1.59 to US$0.45 per tablet.

Brazil also mentioned the High-Level Panel and its recommendations. Respect
for IP and the promotion of the public interest are not mutually exclusive,
the delegate said.

US, EU, Switzerland: IP system Flexible Enough

Some 15 delegations took the floor on the issue, according to a source. The
United States warned against the potential negative effects of the
co-sponsors’ view of public interest, as it could discourage members to
establish and maintain robust domestic IP regimes, and jeopardising
innovation, according to the source.

Compulsory licensing diminishes the patent monopoly, thus undermining the
incentive for innovation and investment, the US said, according to the

A developing country source told Intellectual Property Watch that the
European Union said the TRIPS Agreement is providing an adequate balance
between IP owners and the public interest.

Switzerland, according to its statement said public interest is a very
important topic, and the current system of IP protection fully integrates a
balance between private and public interest.

The Swiss delegate also added that patents only grant so-called “negative
rights,” by preventing others to use the patent owner’s invention without
authorisation. He added that a patent does not confer a discretionary power
over pricing, but the IP system is based on the fact that investment in
research and development and the marketing of innovative medical products
are financed through the patent system through exclusive rights’ revenues.

Switzerland also said that the country is currently financing a feasibility
study conducted by the Medicines Patent Pool, which looks into the
challenges and opportunities of potentially expanding the MPP business

According to sources, other items in relation to IP and the public interest
might be submitted at future sessions of the TRIPS Council.

IP for Innovation: Small Enterprises Need to Step Up

Another agenda item requested by some WTO members included one item [pdf]
seeking to exchange views on intellectual property and innovation, in
particular inclusive innovation and micro, small and medium enterprises
(MSMEs) and growth. Agenda items on IP and innovation have become a regular
item at the TRIPS Council.

This week the IP and innovation item was proposed by Australia, Canada, the
European Union, Japan, Singapore, Switzerland, Taiwan, and the United

According to sources, cosponsors gave detailed statements illustrating the
fact that MSMEs are not making use of IP, but when they do, they often have
higher revenue and a better growth potential. According to a source,
cosponsors suggested that this theme be further discussed in the future.

According to the source, India noted that the formal IP system based on
exclusion and proprietary knowledge is not compatible with the diffusion of
knowledge. The evidence does not support the assertion that increasing
patent monopolies drives innovation, India further said, according to the

Non-Violation Complaints: Standstill

Non-violation complaints refer to disputes between members in cases where a
member considers that another member’s actions have led to loss of expected
benefits, despite not violating a WTO agreement.

A current moratorium prevents that form of complaints for IP issues at WTO.
It has been renewed every two years. Most WTO members insist they would
like the moratorium extended indefinitely. The United States and
Switzerland, on the contrary, would like the moratorium lifted permanently.

Several sources told Intellectual Property Watch that the US and the Swiss
positions have not changed. However, the issue will come up again in
December, during the WTO Ministerial Conference, as the TRIPS Council was
tasked to find a solution ready for consideration at this time.

Switzerland, according to its statement, said the TRIPS agreement forms an
integral part of the WTO framework as well as the dispute settlement

The Swiss delegate dispelled concerns voiced by India during previous
sessions of the council, about the risk of reducing member’s regulatory
policy space if non-violation claims on IP were brought in. He said
non-violation complaints are regarded as exceptional remedy, and the
standards and requirements for bringing forward a non-violation complaint
are likely to be very high.

CBD Presentation Still Banned from TRIPS by US

The US has regularly opposed requests by several countries over the last
sessions of the TRIPS Council to have the secretariat of the UN Convention
on Biological Diversity give a presentation on its Nagoya Protocol on
Access to Genetic Resources and the Fair and Equitable Sharing of Benefits
Arising from their Utilization, sources told Intellectual Property Watch.

A suggestion for an informal presentation was also opposed by the US, they
said. According to a source, South Africa suggested that the option of
holding a side event at a future Council meeting might be a solution.

Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International
41 22 791 6727
thiru at keionline.org

More information about the Ip-health mailing list