TRIPs Article 30 allows for limited exceptions to the rights conferred to the patent holder. These exceptions however can be challenged and subsequently reviewed by the WTO. In the context of pharmaceuticals, the most common exception to the exclusive rights of the patent holder is often referred to as the ‘Bolar provision’. A Bolar provision12 allows interested (generic) manufacturers to start producing test-batches of a product before the patent expires, in order to collect the necessary data for submission to the registration authorities; this will reduce the delay for generic products to enter the market after the patent has expired, and thereby enhance competition. The text of the TRIPs Agreement does not specifically address this issue. However, in a recent WTO dispute, a WTO Panel13 ruled that a provision in Canadian law, which permits the use of patented products by generic producers for the purposes of seeking regulatory approval from the authorities for the marketing of their generic version soon after the patent expires, is allowed under TRIPs. However, the Panel also decided that manufacturing and stockpiling of patented medicines by generic producers during the six months prior to the expiry of the patent term (which was also permitted under Canadian law) is not allowed.
12 The name refers to a court case in the US, “Roche Products Inc. vs. Bolar Pharmaceutical Co. which dealt with this type of exception.
13 The WTO Panel in “Canada - Patent Protection for Pharmaceutical Products”.
With this decision, the Panel effectively has decided that a ‘Bolar type’ provision is ‘TRIPs compliant’, provided certain conditions are met14. Moreover, there is no requirement to provide for a patent term extension of the original product, as a compensation, in order to legitimize a Bolar exception (as is done in the US).
14 Bolar provisions, like other exceptions to patent rights, must still comply with the requirements of Article 27.1. That is, they may not discriminate according to the place of invention, the field of technology or whether products are imported or locally produced.
Another useful exemption is an experimentation clause, which allows companies, universities and other research institutions to experiment with patented inventions. Such experimentation may lead to new innovations, to improvement of existing inventions or to the realization that the granting of a patent was not justified and that it should be revoked.