TRIPs AMENDMENT APPROVED BY WTO

The IPKat is once again indebted to the Patent Office’s website, from which the Kat learnt of an amendment to the TRIPs Agreement agreed on by WTO Members on 6 December, with the aim of providing access to essential medicines. The amendment, designed to implement paragraph 6 of the Doha Declaration, introduces a new Art.31bis to the TRIPs Agreement (N.B. the document states that it is a draft, but the final version is unchanged).

The new article reads:

1. The obligations of an exporting Member under Article 31(f) shall not apply with respect to the
grant by it of a compulsory licence to the extent necessary for the purposes of production of a pharmaceutical product(s) and its export to an eligible importing Member(s) in accordance with the terms set out in paragraph 2 of the Annex to this Agreement.

2. Where a compulsory licence is granted by an exporting Member under the system set out
in this Article and the Annex to this Agreement, adequate remuneration pursuant to Article 31(h) shall be paid in that Member taking into account the economic value to the importing Member of the use that has been authorized in the exporting Member. Where a compulsory licence is granted for the same products in the eligible importing Member, the obligation of that Member under Article 31(h) shall not apply in respect of those products for which remuneration in accordance with the first sentence of this paragraph is paid in the exporting Member.

3. With a view to harnessing economies of scale for the purposes of enhancing purchasing power for, and facilitating the local production of, pharmaceutical products: where a developing or least‑developed country WTO Member is a party to a regional trade agreement within the meaning of Article XXIV of the GATT 1994 and the Decision of 28 November 1979 on Differential and More Favourable Treatment Reciprocity and Fuller Participation of Developing Countries (L/4903), at least half of the current membership of which is made up of countries presently on the United Nations list of least‑developed countries, the obligation of that Member under Article 31(f) shall not apply to the extent necessary to enable a pharmaceutical product produced or imported under a compulsory licence in that Member to be exported to the markets of those other developing or least‑developed country parties to the regional trade agreement that share the health problem in question. It is understood that this will not prejudice the territorial nature of the patent rights in question.

4. Members shall not challenge any measures taken in conformity with the provisions
of this Article and the Annex to this Agreement under subparagraphs 1(b) and 1(c) of Article XXIII of GATT 1994.

5. This Article and the Annex to this Agreement are without prejudice to the rights, obligations and flexibilities that Members have under the provisions of this Agreement other than paragraphs (f) and (h) of Article 31, including those reaffirmed by the Declaration on the TRIPS Agreement and Public Health (WT/MIN(01)/DEC/2), and to their interpretation. They are also
without prejudice to the extent to which pharmaceutical products produced under a compulsory licence can be exported under the provisions of Article 31(f).

An annex provides definitions of “pharmaceutical products”, “eligible importing member” (least developed countries or other members, faced with a national emergency, who have notified the TRIPs Council of an intention to use the system) and “exporting member” (countries which will use the system to manufacture and export drugs to meet the needs of eligible importing members) and sets up a system by which eligible importing members must notify the TRIPs Council about the pharmaceutical needed and that a compulsory licence will be granted if the drug is patent-protected in the exporting country’s territory. Meanwhile, the exporting country must impose a very limited compulsory license and notify the TRIPs Council of the existence and terms of the licence. Eligible importing countries must take reasonable measures to prevent pharmaceuticals produced under the compulsory licence scheme from leaking out of their territories and being resold in other countries while all members must employ effective legal means to prevent the importation into, and sale in, their territories of products produced under the system and diverted to their markets. The system is to be reviewed annually.

The IPKat counsels that this isn’t just a developing country issue. Any country could be caught up in a health emergency, as the spectre of the potential flu pandemic may yet teach us.

As for the amendement, now that the WTO General Council has agreed it, WTO Members have until 1 December 2007 to accept it.