Making Intellectual Property Rules Fair Session on Critical Issues Facing the Poor: What Progress has the world made in fulfilling the basic needs of the poor?

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Making Intellectual Property Rules FairSession
on Critical Issues Facing the PoorWhat Progress
has the world made in fulfilling the basic needs
of the poor?

• James Love
• Consumer Project on Technology
• CUTS Partnership Conclave Governance and its
  Relationship with Poverty Reduction
• 13 March 2003
• New Dehli, India

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Who obtains patent protection?PCT Patent
Filings, 2002
 
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Tim Hubbards demand curve problem
Cost
People treated
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Changes in Prices for Fluconazole in Thailand,
following the introduction of competition in 1998
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Global brainstorming on intellectual property

• Open Source/GPL models for software development
• Peer to peer technologies and social organization
  models
• UK Commission on Intellectual Property Rights
• TACD IP agenda
• Royal Society brainstorming on IPR
• OECD IPR studies
• US National Academies of Science
• US Federal Trade Commission / Department of
  Justice hearings on competition and intellectual
  property.
• MSF Working groups on IPR/DND

• IETF working group on IPR
• UNDP Human Development Report 2001
• Blur/Banff discussions on music
• Rockefeller Bellagio meetings / collective
  management of intellectual property rights
• World Business Council for Sustainable
  Development Project on Intellectual Property
  Rights
• Aventis Radical IPR scenarios
• Ransom / Matching Funds model
• WIPO access to genetic resources / traditional
  knowledge and folklore
• WHO/Harare proposal

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For TRIPS to be fair to the poor, rights to
patent owners must be subject to limitations and
exceptions
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Under the Present TRIPS Accord there is limited
but important flexibility

• WTO member countries may
• Set their own standards for novelty and utility
• exclude some inventions under Article 27
• offer limited royalty free exceptions to patent
  rights under Article 30
• Issue compulsory licenses to patents under
  Article 31
• Allow for domestic or international exhaustion of
  rights after sale of product (1st sale doctrine),
  under Article 6, thereby permitting parallel
  trade

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In 2001 in Doha, the WTO promised its patent
rules could and should protect public health
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Paragraph 4 of the Doha Declaration on TRIPS and
Public Health

• 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.

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Paragraph 5 of the Doha Declaration on TRIPS

• (b) Each Member has the right to grant
  compulsory licences and the freedom to determine
  the grounds upon which such licences are granted.
• (c) Each Member has the right to determine what
  constitutes a national emergency or other
  circumstances of extreme urgency, it being
  understood that public health crises, including
  those relating to HIV/AIDS, tuberculosis, malaria
  and other epidemics, can represent a national
  emergency or other circumstances of extreme
  urgency.

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Doha Declaration, Paragraph 6

• We recognize that WTO Members with insufficient
  or no manufacturing capacities in the
  pharmaceutical sector could face difficulties in
  making effective use of compulsory licensing
  under the TRIPS Agreement. We instruct the
  Council for TRIPS to find an expeditious solution
  to this problem and to report to the General
  Council before the end of 2002.

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US, Japan, EU used paragraph 6 negotiations to
renegotiate and undermine Doha Declaration on
TRIPS

• In order to get consensus on paragraph 6
• US Government seeks to limit scope of diseases
• EU proposed list of diseases including AIDS and
  diseases with little commercial market, such as
  yellow fever
• Japan asks for exclusion of vaccines and other
  technologies
• Japan others seek to limit to emergencies only
• EU/US/Japan/Canada demand tight restrictions on
  eligible countries, excluding nearly every
  country with any level of economic development
• EU insists on extraordinary complex and costly
  procedures

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NGOs say bad deal on paragraph 6 is worst than no
deal

• LDCs have ignore patents on medicines until
  2016, and be source of exports of cheap generic
  drugs
• Every country can permit exports under Article
  31.k of the TRIPS
• Possibly under refusal to deal grounds
• Exports can be permitted under Article 30, if
  allowed by panel
• Canadian early working case
• European Parliament Amendment 196

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The US and EU are hostile to efforts to expand
access to medicines

• AIDS Generic manufacturers cannot achieve
  economies of sale without access to middle income
  country markets
• Diabetes More than 100 persons in developing
  countries now have diabetes
• Asthma Common among children in developing
  countries. Lack of access to best drugs (such as
  singulair) lead to unnecessary suffering and
  death
• Cancer 80 million persons in developing
  countries lack access to treatment for cancer.

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Glivec Story

• Very effective drug
• Treats rare forms of leukemia
• Developed with significant US government RD
  support
• Norvartis charges in as much as 50,000 annual
  for treatment of chronic condition
• National health care systems are bankrupted by
  cost of such drugs

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Demonstrations in Korea over pricing of Glivec
lead to arrests
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Korea government is pressured to reject
compulsory license

• The Korean Government reached agreement with the
  United States in 1999 to price new, innovative
  drugs at the average ex-factory price of A-7
  countries
• United States, United Kingdom, Germany, France,
  Italy, Switzerland, and Japan.
• Europe has also been involved in pressure in
  Korea over drug prices

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US now seeking higher prices on medicines in many
trade negotiations
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Developing countries need good rules for
compulsory licenses

• Administrative proceedings should be cheap and
  fast
• Compensation should be predictable and affordable
• UNDP royalty guidelines
• Grounds should be straightforward

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Access Gap Theory

• If one can establish that there exists a
  significant gap between those who need medicine
  and those who actually have the medicine, and
• Price is a barrier to access
• It is illegal to refuse to license the patent on
  a non-exclusive basis at a reasonable royalty

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Advantages of Access Gap Theory

• Empirical burden is straightforward
• Based upon public health data
• Policy is straightforward,
• Mechanism to give effect to access to medicine
  for all provisions of Doha Declaration
• Exports permitted under Article 31.k of TRIPS

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For more information

• Consumer Project on Technology
• http//www.cptech.org
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