IN this 45th instalment, we canvass the implications and the possibility of invoking Trade Related Aspects of Intellectual Property Rights (Trips) flexibilities in the acquisition of appropriate technology for critical needs by developing countries.
As at the time of negotiation, subsequent conclusion and adoption of the Trips Agreement by the World Trade Organisation (WTO), the paradoxical scenario then prevailing was of 90%+ technology-rich but natural resources-poor developed countries (North) versus 90% natural resources-rich but technology-poor developing countries (South).
In tandem thereto and underpinning the disparities in socio-economic development between the two camps and among nations were dissonances in legislative development, markedly so among developing and least developed countries (LDCs).
Whereas the developed North had for centuries built their technological capacities and prowess -- their potency buttressed by progressively appropriate, effective and adequate legislative innovation -- the developing South dismally lagged behind in both respects such that by the advent of the Trips Agreement, they either had insufficient or no technological capacity at all.
In recognition of this dichotomy, negotiating parties thus reached a compromise in the form of Article 31 that permits member states of the WTO to provide in their laws for compulsory licensing in exceptional circumstances of dire need as would have been individually determined by themselves. This would be subject to appropriate application being made to the Trips Council, prior notice being given to the patent holder, and upon certain laid-down standards, terms and conditions being met -- so-called Trips flexibilities.
Implications of Trips flexibilities
Foremost, the implications of Trips flexibilities have to be construed in the context of Article 7 thereof, being the promotion of technological innovation and the transfer and dissemination of technology in a manner that is equitable and mutually beneficial to both the patent holder and licencee in a manner conducive to the socio-economic aspirations and welfare of the affected country. This is the very essence of the condition vesting the prerogative to determine what constitutes the existence of exceptional circumstances to the concerned WTO member state.
Nature and scope of flexibilities
By their very nature, therefore, Article 31 of Trips flexibilities are waivers of Trips obligations for certain deserving circumstances subject to meeting certain standard minimum conditions, for a specific special purpose and for a limited time period. By Trips obligations in this context is meant temporary deprivation (or is it robbery?) of the patentee's rights to exclusively commercially exploit their invention and enjoy the derivative fruits thereof.
There are sphincters placed on the subject matter of the patented invention. In this context and by implication, compulsory licences are made available with respect to all forms of patentable subject matter (inventions) in all fields of human endeavour and activity. That is to say, compulsory licences may be applied for by anyone in any field of invention without exception, so long as there exist exceptional circumstances justifying waiver of Trips obligations and the granting of compulsory licence.
Practicality of invocation
Sadly, despite the pervasive availability of Trips flexibility provisions, most developing countries and almost all LCDs have not yet seized on the available opportunities to exploit these in addressing their perennial cross-sectoral socio-economic needs and aspirations. This is mainly because of lack of knowledge of the existence of these flexibilities and the underlying mobilisation processes involved in mobilisation.
Even when they are aware, there remains dire lack of understanding of their implications and scope of availability, crippling incapacity to meet the attendant financial obligations, appalling lack of political will to integrate appropriate national policies into the IP systems -- much to the detriment of socio-economic development, thus prejudicing business and the public at large sine die.
To date, the Doha Declaration on the Trips Agreement and Public Health has been a major breakthrough and milestone achievement with respect to Trips flexibilties and the availability of medicines.
For the first time in the history of Trips flexibilities, developing countries resolutely took an unusually proactive approach and acted responsibly in lobbying the Trips Council to grant waiver of the Trips obligations with respect to the grant of compulsory licences towards the acquisition of critical medicines or their manufacturing processes for the treatment of pandemic diseases perennially bedeviling their citizenry in the spirit of the Millennium Development Goals.
In particular, the waiver of paragraphs (f) and (h), namely that the licence grant shall be mainly for the supply of the domestic market of the affected WTO member states, and the obligation to pay adequate compensation to the patent holder commensurate to the prevailing domestic market equivalent, was sweet music to the ears of many a developing country and LDCs.
By these waivers not only are eligible member states permitted to manufacture generic medicines for export to fellow eligible importing countries, but are also entitled to pay nominal licensing fees dovetailed to their financial capacity, astride receiving guaranteed technical support from the patent holders.
Key flexibilities adopted
The decisions of the Trips Council as adopted on June 27 2002 and August 30 2003 effectively amended the Trips Agreement in advance of due review dates, by providing for the following flexibilities:
Countries are at liberty to grant compulsory licences to pharmaceuticals upon grounds solely determined by themselves;
Countries have unfettered rights to determine what constitutes national emergency and other situations of extreme urgency situations, while acknowledging in this regard the pandemics of HIV and Aids, tuberculosis, malaria and other epidemics;
The determination of exhaustion of IPRs in terms of the relevant provisions of Trips to be the sole prerogative of member countries;
Compulsory licensing, where possible, to include the importation or production of diagnostic kits and active ingredients;
Member countries may extend compulsory licensing to include manufacturing for export to an "eligible importing member" of which the council of Trips has been duly notified;
Compulsory licence for exportation shall extend to the supply of only sufficient and clearly identified products, accompanied by sufficient documentation thereto;
Ensuring reasonable compensation to the patent holder, and the application of these provisions lasting until the review and amendment of the Trips Agreement, but subject to permissible further extensions beyond the agreed period of application.
Notwithstanding the likelihood of disgruntlement from certain quarters of patent holders, of importance is the victory to make essential medicines cheaply accessible by a wider spectrum of the afflicted yet vulnerable populace in eligible developing and LDC countries.
Possibility of wholesome invocation
In spite of the apparent vagueness and vexatious nature of the Trips flexibilities provisions, it is universally acknowledged that almost all developing countries and LDCs experience circumstances which qualify to be declared national emergency situations or circumstances of extreme urgency warranting the acquisition of appropriate technology through Trips flexibility compulsory licences.
We urge the state, civil society and business alike adopt the Doha Declaration approach guided by sectoral needs, MDGs, and existing technological capacities and ability to similarly lobby the Trips Council.
Pasipanodya is an IP consultant. He writes in his own capacity.