MIPLC Studies Patents and Public Health Andrew Law Legalising the Policy Thoughts in the Doha TRIPS Declaration of 14 November 2001 3 Nomos https://doi.org/10.5771/9783845212654 , am 29.07.2020, 21:02:10 Open Access - - https://www.nomos-elibrary.de/agb https://doi.org/10.5771/9783845212654 , am 29.07.2020, 21:02:10 Open Access - - https://www.nomos-elibrary.de/agb MIPLC Studies Edited by Prof. Dr. Christoph Ann Technische Universität München Prof. Robert Brauneis The George Washington University Law School Prof. Dr. Thomas M.J. Möllers University of Augsburg Prof. Dr. Dres. h.c. Joseph Straus Max Planck Institute for Intellectual Property, Competition and Tax Law Volume 3 https://doi.org/10.5771/9783845212654 , am 29.07.2020, 21:02:10 Open Access - - https://www.nomos-elibrary.de/agb Andrew Law Patents and Public Health Legalising the Policy Thoughts in the Doha TRIPS Declaration of 14 November 2001 Nomos https://doi.org/10.5771/9783845212654 , am 29.07.2020, 21:02:10 Open Access - - https://www.nomos-elibrary.de/agb 1. Auflage 2009 © Nomos Verlagsgesellschaft, Baden-Baden 2008. Printed in Germany. Alle Rechte, auch die des Nachdrucks von Auszügen, der fotomechanischen Wiedergabe und der Übersetzung, vorbehalten. Gedruckt auf alterungsbeständigem Papier. This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically those of translation, reprinting, re-use of illustrations, broadcasting, reproduction by photocopying machine or similar means, and storage in data banks. Under § 54 of the German Copyright Law where copies are made for other than private use a fee is payable to »Verwertungsgesellschaft Wort«, Munich. Die Deutsche Nationalbibliothek verzeichnet diese Publikation in der Deutschen Nationalbibliografie; detaillierte bibliografische Daten sind im Internet über http://www.d-nb.de abrufbar. Die Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available in the Internet at http://www.d-nb.de. Zugl.: München, Univ., Diss., 2008 ISBN 978-3-8329-4078-2 https://doi.org/10.5771/9783845212654 , am 29.07.2020, 21:02:10 Open Access - - https://www.nomos-elibrary.de/agb For Silke and Noah https://doi.org/10.5771/9783845212654 , am 29.07.2020, 21:02:10 Open Access - - https://www.nomos-elibrary.de/agb https://doi.org/10.5771/9783845212654 , am 29.07.2020, 21:02:10 Open Access - - https://www.nomos-elibrary.de/agb 7 Acknowledgements It is almost impossible to complete a dissertation like this without meaningful con- tributions coming from countless selfless persons. In my case I have a number of persons without whom I would not have been able to complete this long journey. I would thus like to thank those academics and officials that have responded to my countless pleas for information and comments. In this respect I would like to thank Prof. Thomas Cottier, Prof. Frederick Abbott, Roger Kampf (WTO IP Counsellor) and Ingo Meitinger (Swiss Federal Institute of Intellectual Property). Furthermore, I would like to thank Anne-Laure Nguyen for sacrificing her precious free time to read and comment on the legal aspects of the dissertation. I would also like to ex- press my fondest thanks to my mother, Jean Law, for the countless hours she spent grooming this dissertation for elusive language errors. Prof. Dr. Horst Bester, my father-in-law, was also grateful enough to give me the benefit of his academic wis- dom, for which I am ever so thankful. The behind-the-scenes support I received from Prof. Dr. Wolfgang Fritzemeyer proved priceless for enabling me to undertake this venture into the WTO wilderness. For this I am truly grateful. Also, I am most thankful for the unique opportunity Baker & McKenzie – in particular it’s International Trade Practice Group – provided me with in enabling me to put theory into practice. Being able to file my academic premises on real-world matters is a chance few in position have the honour of ex- periencing; I am truly thankful for having had this good fortune. I would also like to convey my sincerest thanks to my supervising professor, Prof. Dr. Dres.h.c. Joseph Straus, for his magnanimity and perseverance in reviewing my dissertation and for the comprehensive and constructive comments and suggestions he made in this respect. He has my utmost thanks for the sacrifice he has made for my benefit. I also would like to thank fellow Profs. Lehmann and Schricker for in- vesting their precious time and experience in reviewing my efforts to attain the doc- toral grade. My further thanks go to the Max Plank Institute for Intellectual Property, Competition and Tax Law in Munich for providing me with the opportunity to use their wonderful facilities – it is a veritable Garden of Eden to all with an inquisitive mind for intellectual property. Finally, I would like to thank my wife for her endless patience and loving encour- agement. I am truly blessed to have had her accompany me on this long path. She has my eternal thanks ... Hanover, September 2008 Andrew Law https://doi.org/10.5771/9783845212654 , am 29.07.2020, 21:02:10 Open Access - - https://www.nomos-elibrary.de/agb https://doi.org/10.5771/9783845212654 , am 29.07.2020, 21:02:10 Open Access - - https://www.nomos-elibrary.de/agb 9 Table of Contents Chapter 1 Introduction 17 Chapter 2 Patents and society 19 Chapter 3 The legalising policy thoughts in the Public Health Declaration 26 Chapter 4 The circumstances leading up to the Public Health Declaration 29 A. Introduction 29 B. The events preceding the Public Health Declaration 30 I. The GATT system and the Uruguay Round 30 II. The implementation of the TRIPS Agreement 34 Chapter 5 An analysis of the TRIPS Agreement 42 A. Nature and scope of the TRIPS Agreement 42 B. The object and purpose of the TRIPS Agreement 47 I. An analysis of the preamble 48 II. An analysis of Article 7 TRIPS 51 III. An analysis of Article 8.1 TRIPS 53 IV. An analysis of Article 8.2 TRIPS Agreement 56 V. The influence of the international customary rule of interpretation on the object and purpose provisions 58 VI. The role of ‘flexibility’ in the object and purposes of the TRIPS Agreement 60 1. The flexibilities found in the object and purposes provisions 61 2. The role of the object and purpose provisions in flexibilities found in other TRIPS provision 62 3. The relevance given to the role of flexibility in the object and purpose provisions by the Member States 63 VII. The role of health in the object and purpose of the TRIPS Agreement 65 VIII. Other influences on the object and purpose of the TRIPS Agreement 68 C. The material provisions of the TRIPS Agreement 69 I. The subject matter of patents 69 1. Article 27.1 of the TRIPS Agreement 70 2. Article 27.2 of the TRIPS Agreement 71 a) Commercial exploitation 72 b) Necessity 75 c) Discrimination and differentiation 81 d) Implementation restrictions relating to the Article 27.2 exclusion 83 3. Conclusion 84 https://doi.org/10.5771/9783845212654 , am 29.07.2020, 21:02:10 Open Access - - https://www.nomos-elibrary.de/agb 10 II. Rights conferred to the patent holder 85 III. The withdrawal and limitation of rights conferred 86 1. Revocation 87 2. Limited exceptions 90 3. Compulsory licenses 101 a) General 101 aa) The compulsory license system 101 bb) Grounds for compulsory licenses 102 cc) Discrimination 105 dd) Causality approach 106 ee) The relationship between Article 31 of the TRIPS Agreement and Article 5A(4) of the Paris Convention 107 ff) Commercial use of compulsory licenses 108 b) Article 31(a) 108 c) Article 31(b), first sentence 110 d) Article 31(b), second sentence 112 aa) Extreme urgencies and national emergencies 113 bb) Public non-commercial use 117 e) Article 31(c) 121 aa) Scope 121 bb) Duration 123 f) Article 31(d) 124 g) Article 31(e) 126 h) Article 31(f) 127 i) Article 31(g) 131 j) Article 31(h) 134 k) Article 31(i and j) 141 l) Article 31(k) 144 m) Conclusion 144 IV. Disclosure 145 V. Exhaustion 149 D. Conclusion 154 Chapter 6 The Public Health Declaration 156 A. The scope of the Public Health Declaration 156 I. Clarification of the relationship between the TRIPS Agreement and public health 157 II. Countries without domestic productions facilities 159 III. The postponed implementation of certain TRIPS-obligations 160 B. The legal status of the Public Health Declaration 161 C. The effect of the Public Health Declaration on the TRIPS Agreement 163 I. The scope and purpose 163 1. The customary rules of interpretation 164 2. The Public Health Declaration and Articles 7 and 8 of the TRIPS Agreement 165 https://doi.org/10.5771/9783845212654 , am 29.07.2020, 21:02:10 Open Access - - https://www.nomos-elibrary.de/agb 11 3. The Public Health Declaration and the right to health 167 4. Conclusion 169 II. The material obligations 169 1. Exhaustion 169 2. Compulsory licenses 170 a) The flexibilities in paragraph 5 of the Public Health Declaration 171 b) Paragraph 5(b) of the Public Health Declaration 172 c) Paragraph 5(c) of the Public Health Declaration 174 d) Subsequent developments 177 e) Conclusion 178 III. The extension of the transitional period for LDCs 178 1. Paragraph 7 of the Public Health Declaration 178 2. The TRIPS Council decision extending the transition period 182 3. The General Council waiver of Article 70.9 183 IV. Member States without domestic pharmaceutical production facilities 185 Chapter 7 The solution to the paragraph 6 dilemma 186 A. The identification of the paragraph 6 issues 186 I. The scope of paragraph 6 186 II. Manufacturing capacity 187 III. Insufficient or no capacities 188 IV. Pharmaceutical sector 188 V. Effective use of the compulsory license system 189 VI. Potential paragraph 6 solutions 189 B. The 30 August 2003 decision 190 I. The legal effect of the Decision and the Chairman’s Statement 191 1. The waivers in the Decision 191 2. The Decision’s moratorium 192 3. The Chairman’s Statement 193 II. The scope of the Decision 197 III. The legal implications of the Decision 198 1. The pharmaceutical product 198 2. Eligible countries 201 a) The exporting Member State 201 b) The importing Member State 204 c) Conclusion 210 3. Safeguards 210 a) Safeguards inherent to the system 211 b) General safeguards 214 4. Transfer of technology 216 IV. Procedure for the adoption of a final solution 217 C. Article 31bis of the TRIPS Agreement 218 https://doi.org/10.5771/9783845212654 , am 29.07.2020, 21:02:10 Open Access - - https://www.nomos-elibrary.de/agb 12 Chapter 8 The realisation opportunities afforded by the Public Health Declaration 223 A. Norway 223 B. Canada 228 C. The Netherlands 234 D. India 236 C. EC 238 F. Related measures taken to reflect the Public Health Declaration 242 I. International and multilateral policies and measures 242 II. Bilateral policies and measures 242 III. National policies and measures 245 G. Conclusion 247 Chapter 9 Definitive consequences of the Public Health Declaration 248 Bibliography 251 Cited treaties, legislation and similar legal documents 262 Cited cases 268 Annex I: Public Health Declaration 272 Annex II: 30 August 2003 Decision 275 Annex III: The Article 31 bis Amendment 282 Annex IV: Examples of royalty rates in compulsory licensing & related cases 291 https://doi.org/10.5771/9783845212654 , am 29.07.2020, 21:02:10 Open Access - - https://www.nomos-elibrary.de/agb 13 List of Abbreviations ACP African, Caribbean and Pacific Group AER American Economic Review AGOA African Growth and Opportunity Act AJIL American Journal of International Law AJPH American Journal of Public Health Art Article BGH German Federal Supreme Court BPatG German Federal Patent Court BSE Bovine spongiform encephalopathy BVerfG German Federal Constitutional Court CAFTA US/Central American and Dominican Republic Free Trade Agreement CEO Chief Executive Officer Chi. J. Intl. L. Chicago Journal of International Law CIPO Canadian Intellectual Property Office CIPR UK Commission on Intellectual Property Rights CPTech Consumer Project on Technology CSGTSD Centre for Study of Global Trade System and Development CUP Cambridge University Press DG Director General DSB Dispute Settlement Body DSU Understanding on Rules and Procedures Governing the Settlement of Disputes EC European Communities ECJ European Court of Justice ed(s) Editor(s) edn Edition EFTA European Free Trade Association EGBGB Einführungsgesetz zum Bürgerlichen Gesetzbuch EJAIB Eubios Journal of Asian and International Bioethics EJIL European Journal of International Law ELDB European Legal Developments Bulletin EMEA European Medicines Agency EPC European Patent Convention EPO European Patent Office EU European Union https://doi.org/10.5771/9783845212654 , am 29.07.2020, 21:02:10 Open Access - - https://www.nomos-elibrary.de/agb 14 FDA US Food and Drug Administration FDI Foreign direct investment Food Drug L.J. Food and Drug Law Journal FTA Free trade agreement FTAA Free Trade Agreement of the Americas FTC Federal Trade Commission GATS General Agreement on Trade in Services GATT General Agreement on Tariffs and Trade GSP Generalised System of Preferences GRUR Gewerblicher Rechtschutz und Urheberrecht GRURInt Gewerblicher Rechtschutz und Urheberrecht, Internationaler Teil ICCPR International Convent on Civil and Political Rights ICESCR International Covenant on Economic, Social and Cultural Rights ICJ International Court of Justice IFDA International Foundation for Development Alternatives IGE Eidgenössisches Institut für Geistiges Eigentum IIC International Review of Industrial Property and Copyright Law IIE International Institute for Economics IntCl International Patent Classification Int. J. Health Serv. International Journal of Health Services IntTLR International Trade Law and Regulation IPC Intellectual Property Committee IPGRI International Plant Genetic Resources Institute IPR Intellectual property right ITO International Trade Organisation IYHR Israel Yearbook on Human Rights JIEL Journal of International Economic Law J.Intell.Prop.L Journal of Intellectual Property Law JIPLP Journal of Intellectual Property Law and Practice JPHP Journal of Public Health Policy JPO Japan Patent Office JPTOS Journal of the Patent and Trademark Office Society JWIP Journal of World Intellectual Property LDC Least-developed country LMU Ludwig-Maximilians-Universität (Munich) https://doi.org/10.5771/9783845212654 , am 29.07.2020, 21:02:10 Open Access - - https://www.nomos-elibrary.de/agb 15 MFN Most-favoured nation Mich.J.Int’l.L Michigan Journal of International Law Mich.L.Rev. Michigan Law Review MLU Martin-Luther-Universität Halle-Wittenberg MPI Max Planck Institute MSF Médecins sans Frontières NAFTA North American Free Trade Agreement NIH US National Institutes of Health NGO Non-governmental organisation NZZ Neue Züricher Zeitung OAPI Organisation Africaine de la Propriété Intellectuelle OHCHR Office of the High Commissioner for Human Rights OJEPO Official Journal of the European Patent Office OUP Oxford University Press p Page(s) Para Paragraph PCIJ Permanent Court of International Justice PhRMA Pharmaceutical Research and Manufacturers Association PMA Pharmaceutical Manufacturers Association QUNO Quaker United Nations Office SACU Southern African Customs Union SCID Studies in Comparative International Development sec Section(s) SPS Sanitary and Phytosanitary Measures TBT Agreement on Technical Barriers to Trade TIFA Trade and investment framework agreement TPD Transvaal Provisional Division of the South African High Court TPRM Trade Policy Review Mechanism TRALAC Trade Law Centre for Southern Africa TRIMS Trade-Related Investment Measures TRIPS Agreement on Trade-Related Aspects of Intellectual Property Rights UNCHR United Nations Commission on Human Rights UNCTAD United Nations Conference on Trade and Development UNDP United Nations Development Programme UNGA United Nations General Assembly https://doi.org/10.5771/9783845212654 , am 29.07.2020, 21:02:10 Open Access - - https://www.nomos-elibrary.de/agb 16 UNHDI United Nations Human Development Index UNICEF United Nations International Children’s Emergency Fund UNTS United Nations Treaty Series US United States of America USC Unites States Code USTR US Trade Representative WBER World Bank Economic Review WHA World Health Assembly WHO World Health Organization WIPO World Intellectual Property Organization WSJ Wall Street Journal WTO World Trade Organisation WVK Wiener Vertragsrechtkonvention ZaöRV Zeitschrift für ausländisches öffentliches Recht und Völkerrecht ZEuS Zeitschrift für Europarechtliche Studien https://doi.org/10.5771/9783845212654 , am 29.07.2020, 21:02:10 Open Access - - https://www.nomos-elibrary.de/agb 17 Chapter 1 Introduction One of the three pillars of the World Trade Organisation (‘WTO’) is the Agreement on trade-related aspects of intellectual property rights. 1 The agreement, known as the TRIPS Agree-ment, requires its Member States to enact a system of intellectual property rights that has no comparison in the international arena. What sets the TRIPS Agreement apart from other international intellectual property rights treaties is its comprehensiveness. Not only does it dictate a minimum level of intellectual property protection from all WTO Member States but it also creates a judicial body to adjudicate and sanction those states abiding by its rules. 2 The combination of a minimum standard of intellectual property protection and a compliance body has made the TRIPS Agreement a formidable tool for the globalisation of intellectual property rights. Parallel to the expansion of global intellectual property standards has been the spread of the HIV/AIDS virus. The toll this and other epidemics have taken has be- come a cause for national and international concern. Those countries worst affected by these epidemics, mostly developing countries, lacked the financial resources to provide meaningful treatment or adequate access to the necessary pharmaceuticals. Rightly or wrongly, the affected countries and non-governmental organisations iden- tified patent protection as a barrier to providing access to the needed medicines. The WTO Member States reacted to the conflict of ‘patent rights vs. patient rights’ with the adoption of the Declaration on the TRIPS Agreement and Public Health (the ‘Public Health Declaration’). 3 By adopting the Public Health Declaration the WTO Member States presupposed three things: Firstly, that the TRIPS Agreement lacked the legal ability to address those policy thoughts contained in the Public Health Dec- laration; secondly, that the contents of the Public Health Declaration would rectify the problem, or at least point the direction to a resolution; and lastly that a solution would rectify the alleged weaknesses in the TRIPS Agreement. These presuppositions arise principally out of the lack of a shared understanding of the scope and application of the TRIPS Agreement. It is only within the context of a legal evaluation of the TRIPS Agreement that the policy thoughts of the Public Health Declaration can be evaluated. Hence, it is the intention and purpose of this 1 Agreement on the Trade-Related Aspects of Intellectual Property Rights Annex 1C to the Agreement Establishing the World Trade Organisation. Cf. Straus , TRIPS, TRIPS-plus oder TRIPS-minus – Zur Zukunft des internationalen Schutzes des Geistigen Eigentums in: Ohly et al (eds) Perspektiven des Geistigen Eigentums und Wettbewerbsrechts (CH Beck Munich 2005) p. 197. 2 The TRIPS Agreement does however provide for the transitional implementation of the agreement in favour of developing and least-developed Member States. 3 Declaration on the TRIPS Agreement and Public Health, 14.11.2001, WT/MIN(01)/DEC/2 (Annex I hereto). https://doi.org/10.5771/9783845212654 , am 29.07.2020, 21:02:10 Open Access - - https://www.nomos-elibrary.de/agb 18 dissertation to conduct a legal appraisal of the scope and application of the TRIPS Agreement and the Public Health Declaration. In doing so this dissertation eluci- dates what measures are legally tenable under the TRIPS Agreement thus enabling an accurate appraisal of the necessity and applicability of the Public Health Declara- tion and, ultimately, the correctness of the criticisms levelled at the TRIPS Agree- ment. In order to bring light into the TRIPS Agreement, this dissertation analyses the TRIPS Agreement from a neutral, pre-Public Health Declaration situation. Thereaf- ter, the scope and effect of the Public Health Declaration is extensively addressed. Thereafter this dissertation then examines the international and domestic conse- quences that flowed from the Public Health Declaration. The legal examination of the TRIPS Agreement alone would be incomplete with- out put-ting the exercise into a social and political context. This is done immediately below. Firstly, the relationship between patents and society is addressed and, sec- ondly, the political events preceding the Public Health Declaration is described. https://doi.org/10.5771/9783845212654 , am 29.07.2020, 21:02:10 Open Access - - https://www.nomos-elibrary.de/agb 19 Chapter 2 Patents and society There cannot be any doubt that it is noble for any country to pursue a policy which stimulates and rewards innovative elements in society, especially when these crea- tions lead to advantages which society as a whole can reap. Although this may pro- vide the originally intended purpose for the intellectual property regime, 4 the ensu- ing exclusive rights possess the ability to restrict free trade which can, in certain cir- cumstances, even burden society. This negative effect of intellectual property rights can even lead to situations whereby elements of society are hindered from gaining benefits that would relieve their discomfort, illness and/or harm. The intellectual property regime, in particular the patent system, would thus appear to be paradoxical in nature. This however is not the case. The basic tenet of an open market is that free (unencumbered) trade increases economic growth and raises standards of living. 5 Patents form an exception to this rule in that they intentionally restrict trade yet also have the effect that society gains knowledge and efficiency from the invention, thus bringing with it an enrichment to society. 6 The balance between the interest of the society as a whole and that of the inventor rests on the condition that exclusive rights may only be granted for a limited period and when the inventor creates something that is new, non-obvious, useful and discloses the way in which to recreate the in- vention. 7 This relationship between the patent and the government-granted exclusive rights reflects a type of reciprocal pact in which both parties (the inventor and the government representing society) pay a ‘price’ in exchange for exclusive rights on the one hand and the creation and diffusion of knowledge and efficiency on the other hand. 8 It is upon this bargain that the patent system is based and justified. 9 4 May , EIPR 1 (2003) p. 2. 5 Beier , 11 IIC 5 (1982) p. 548-549. 6 Templeman , 1 JIEL 4 (1998) p. 603, Gervais , 1 JIPLP 4 (2006) p. 252. Maskus makes an analogy between intellectual property rights and exclusive rights to property and notes that both are potentially growth-enhancing. Maskus , Intellectual Property Rights in the Global Economy (IIE Washington DC 2000) p. 145-146. Early commentators on free trade also did not oppose the patent system. Beier also notes that patent rights were, from their beginning, a natural partner of the free market economy. Cf. Beier , 11 IIC 5 (1982) p. 549. 7 As early back as 1848 Mill was able to make the following clear defence of the patent system: ‘Because it leaves nothing to any one’s discretion; because the reward conferred by it de- pends on the invention’s being useful, and the greater reward; and because it is paid by the very persons to whom the service is rendered, the consumers of the commodity’, Quoted in Beier , 94 GRUR 4 (1992) p. 231. 8 CIPR , (2002), p. 32, May , EIPR 1 (2003) p. 2. 9 An attempt to adequately address either the numerous theories justifying patents or the social, political and legal arguments in favour or against the intellectual property regime would how- ever unnecessarily divert the purpose of this dissertation. As such, the societal justification of https://doi.org/10.5771/9783845212654 , am 29.07.2020, 21:02:10 Open Access - - https://www.nomos-elibrary.de/agb