Intellectual Quarterly Update (Q4 2005)
Introduction
The relationship between intellectual property (IP) and innovation in the pharmaceutical sector as well as access to essential medicines has been a central issue in the debate on IP and development within and outside of the World Trade Organization (WTO). In this context, there have been, in recent years, a number of high profile events and processes including, the adoption at the Fourth WTO Ministerial Conference in Doha in 2001 the Declaration on the TRIPS Agreement and Public Health (the Doha Declaration). The implications of the rules under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) have been at the centre of the WTO debate. Other important recent decisions include the World Health Assembly (WHA) Resolution on Intellectual Property Rights, Innovation and Public Health. These developments demonstrate, at least at the formal level, the growing international recognition that public health considerations condition the manner in which IP policies are formulated and implemented.
At the WTO, the Doha Declaration defined the relationship between IP protection and public health. The Declaration affirmed that the TRIPS Agreement can and should be interpreted and implemented in a manner that supports WTO Members right to protect health, particularly ensuring access to medicines for all. A key issue at Doha, which the Ministers, however, failed to resolve was how countries which desired to exercise the right to protect public health through the use of compulsory licensing but had insufficient or no manufacturing capacity in the pharmaceutical sector could be assisted. Consequently, under paragraph 6 of the Declaration, the Ministers, recognizing that WTO Members with insufficient or no manufacturing capacities in the pharmaceutical sector could face difficulties in making effective use of compulsory licensing instructed the Council for TRIPS to find an expeditious solution to the problem. Based on this mandate, and due to mounting pressure towards the Fifth WTO Ministerial Conference in Cancun in September 2003, the WTO General Council adopted a decision to implement paragraph 6 (the Decision) on 30 August 2003.
The Decision took the form of two main waivers. The first waiver related to the obligations of Members under article 31(f) and the second to the obligation under article 31(h) of TRIPS. In essence, the Decision waived the provisions of article 31 which require that: (1) where the law of a Member allows for compulsory licensing, including use by the government or third parties authorized by the government such use shall be authorized predominantly for the supply of the domestic market of the Member authorizing such use7; and (2) the right holder shall be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization. In addition, the Chairman of the General Council read out a statement before the adoption of the Decision setting out “several key shared understandings” of Members regarding the Decision.
The Decision has 12 main components, namely: the product and disease coverage; eligibility of Members to import or export; the waiver to article 31(f) and the conditions attached; the terms of the waiver to article 31(h); safeguard measures; special rules for re-export; transfer of technology; annual review; the relationship between the Decision and existing rights, obligations and flexibilities; non-violation and situation complaints; the process for adopting a permanent solution including the relationship between the permanent solution and the Decision; and determination of lack of manufacturing capacity. There is also the Chairman’s Statement whose legal status is important. Correa in a 2004 publication discusses each of these elements in detail.
However, the Decision was adopted as a temporary mechanism.10 In this regard, there was an agreement written into the Decision that the Council for TRIPS would prepare an amendment to replace the waivers for each Member on the date on which the amendment took effect for that Member.11 It within this context that the General Council, acting on behalf of the Ministerial Conference12, adopted an amendment to the TRIPS Agreement as the permanent solution to the paragraph 6problem on 6 December 2005.13 This became the first time that a core WTO Agreement has been amended since the establishment of the organization in 1995. The timing of the amendment, barely a week before the Sixth WTO Ministerial Conference in Hong Kong, reminds one of the timing of the adoption of the Decision on 30 August 2003, just ten days before the Fifth Ministerial Conference in Cancun. In both cases, it was considered that failure to address the public health issue would paint the WTO in bad light and put in danger progress on other issues at the Ministerial.