(2000; 140 pages) [French] [Spanish]
When the Uruguay Round of trade negotiations was launched, more than fifty countries (including some developed countries) did not confer patent protection on pharmaceuticals22. While some regarded this absence of protection as necessary to promote access to drugs at competitive prices23, others criticized it as jeopardizing innovation and unfairly depriving inventors of the benefits generated by their contributions.
22 See, e.g., UNCTAD, 1996.
23 The specific implications of the patent system and, particularly, of the introduction of product patents in developing countries in the pharmaceutical field has been extensively discussed. See, e.g., Nogues, 1990; Redwood, 1994; Rozek, 1993; Subramanian, 1995; UNCTAD, 1996.
The TRIPs Agreement obliges all WTO Members to recognize patents in all fields of technology (Article 27.1)24. When fully in force, this obligation will have eliminated the varying patent policy approaches that previously existed.
24 According to article 27.1, “patents shall be available for any inventions, whether products or processes, in all fields of technology”. See e.g. Straus, 1996.
Literally interpreted, Article 27.1 does not permit the exclusion from patentability of medicines in general or, arguably, of specific groups thereof. Under this interpretation, WTO Members could not exclude from patentability even the “essential medicines” listed by the World Health Organization (WHO)25.
25 Currently Decision 344 of the Andean Group provides for such exception. Venezuela has submitted a proposal to review the TRIPs Agreement in a possible future WTO Round in order to specifically allow for that exclusion (see document WT/GC/W/282, 6 August, 1999). However, it has been noted that most of the drugs in the WHO list of Essential Medicines are off-patent, and that the list does not include high priced drugs. Given the methodology applied for establishing that list, the non-patentability of such drugs may not be a significant issue for developing countries. See MSF, HAI and CPT, 1999.
There are two exceptions in the TRIPs Agreement under which pharmaceuticals might conceivably be excluded from patentability, but neither appear sufficient to justify such an exclusion, except in limited circumstances.
The first is ordre public, one of the recognized grounds for exceptions from patentability under TRIPs Article 27.2. There is no universally accepted notion of ordre public26, leaving member countries some flexibility to define which situations are covered, depending upon their own social and cultural values. Article 27.2 itself indicates that the concept is not limited to “security” reasons; it also relates to the protection of “human, animal or plant life or health” and may be applied to inventions that may lead to “serious prejudice to the environment”.
26 For instance, under the Guidelines for Examination of the European Patent Office “ordre public” is linked to security reasons, such as riot or public disorder, and inventions that may lead to criminal or other generally offensive behaviour (Part C, chapter IV, 3.1). Traditionally, “ordre public” in United States law referred to an invention that was “frivolous or injurious to the well-being, good policy, or sound morals of a society.” Lowell v. Lewis, 15 (a. 1018 No. 8568) (C.D. Mass. 1817), quoted in Chisum and Jacobs, 1992, p. 2.5. In the United States, “the trend is to restrict this subjective public policy approach to utility” (Idem).
Article 27.2 indicates that non-patentability on grounds of ordre public is permissible if necessary to prevent commercial exploitation. In other words, it may not be possible to declare the non-patentability of a certain subject matter while permitting at the same time its distribution or sale27.
27 See, e.g., Correa and Yusuf, 1998, p, 193. For a different opinion, see, e.g., Leskien and Flitner, 1997.
However, the situation might be different if developing countries all over the world (or their regional organizations) collectively decided to prohibit or suspend the patentability of certain pharmaceutical products on grounds of ordre public. Such a decision could produce a new “state practice” that WTO panels would have to take into account. If the grounds of such a decision were sufficiently compelling to warrant at least a temporary expansion of the ordre public exception beyond its traditional moorings, it could also conceivably warrant an exception to the “non commercial exploitation” rule contained in Article 27.2, if such products were distributed on a not-for-profit basis. These matters are inherently speculative and to some extent contingent upon the still-to-be-determined meaning of the safeguard provisions set out in the TRIPs Agreement (See Articles 7 and 8).
A second exception which might authorize exclusion of pharmaceuticals from patentability is Article 8.1 of the TRIPs Agreement, which explicitly recognizes the right of WTO Members to adopt policies in accordance with public health concerns. However, the adopted policies are subject to a test of “necessity” and of consistency with other obligations under the TRIPs Agreement.
The “consistency” requirement may permit patentability exclusions in cases of distinct public health emergencies as defined by the national government, and as distinct from ordinary or everyday health and nutrition measures. Emergency cases could trigger the application of a different test of “inconsistency” (as provided for under Article 8.1) or qualify as a situation not “conducive to social and economic welfare” (as provided for under Article 7). In such a case, a suspension or exclusion from patentability might be linked to and justified by a specific emergency. Once the emergency subsides, the TRIPs requirement of patentability could be restored.
A key consideration is clearly the purpose for which any subject matter exclusion were to be adopted. If, for example, the same objective could be obtained by imposing permissible compulsory licenses under Article 31, an exclusion of patentability could be seen as merely an attempt to circumvent the pre-conditions of Article 31. If, instead, local situations posed such unusual problems as to merit a public interest exception, these problems might also justify overriding or limiting other articles, such as Article 31, in favour of some non-permanent exclusion of subject matter, if that exclusion was necessary to solving the problem.
An issue that may merit further exploration is whether an exception to patentability may be justified under the general GATT exception to trade disciplines, when the exception is necessary to protect public health (Article XX(b))28. This article recognizes the importance of sovereign nations being able to promote domestic health interests, even if contrary to their general obligations under the WTO agreements29. However, to date, Article XX(b) has been interpreted and applied rather narrowly in GATT/WTO case law30, and it is doubtful whether GATT Article XX(b) would apply in the TRIPs context. In the view of a panel, the TRIPs Agreement has a relatively self-contained, sui generis status within the WTO, even though “it is an integral part of the WTO system, which itself builds upon the experience of over nearly half a century” 31 under the GATT.
28 “Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures:...
(b)necessary to protect human, animal or plant life or health;...”
29 See, e.g., Jackson, 1999, p. 233.
30 See, e.g., Petersman, 1998; Trebilcock and House, 1999, p. 135-165.
31 See the Panel Report on USA vs. India - Patent Protection for Agricultural and Chemical Products, WT/DS50/R, adopted on 16 January 1998, para 7.19.
In sum, under the current TRIPs Agreement, a straightforward exclusion from patentability of pharmaceuticals - even the category of essential medicines - does not seem to be a viable option. The admissibility of exceptions based on ordre public will depend on the interpretation of both Article 27.2 and Articles 7 and 8, but does not seem a promising basis for exclusion from patentability32. Exclusions to meet specific public health emergencies, especially if limited in time, might be justifiable if they are a necessary part of an overall strategy for addressing the emergency.
32 It should also be noted that in many cases it may be difficult or impossible to anticipate ordre public considerations at the time of examination of an application, since such considerations may arise after the patent is granted (or the product is commercialized). In these cases, the granting of a compulsory license would be a logical option. See Section X.