Utilizing TRIPS Flexibilities for Public Health Protection Through South-South Regional Frameworks: II. INTELLECTUAL PROPERTY AND ACCESS TO ESSENTIAL MEDICINES IN DEVELOPING COUNTRIES: II.1. An Overview of Public Health-related TRIPS Flexibilities: II.1.1 Compulsory Licensing

Utilizing TRIPS Flexibilities for Public Health Protection Through South-South Regional Frameworks
(2004; 110 pages)

Table of Contents

THE SOUTH CENTRE
PREFACE
ABBREVIATIONS
EXECUTIVE SUMMARY
I. INTRODUCTION
	I.1 The Rationale for and Scope of the Study
	I.2 The Study Process and Methodology
	I.3 Parts of the Study
II. INTELLECTUAL PROPERTY AND ACCESS TO ESSENTIAL MEDICINES IN DEVELOPING COUNTRIES
	II.1. An Overview of Public Health-related TRIPS Flexibilities
		II.1.1 Compulsory Licensing
		II.1.2 Parallel Imports and Exhaustion of Rights
		II.1.3 Limitation on the Grant of New Use Pharmaceutical Patents
		II.1.4 Research and the Early Working Exceptions
		II.1.5 Limiting the Extent of Test Data Protection
		II.1.6 Control of Anti-Competitive Practices and Abuse of Intellectual Property Rights
III. CONSTRAINTS ON NATIONAL EFFORTS TO IMPLEMENT TRIPS FLEXIBILITIES FOR PUBLIC HEALTH PURPOSES
	III.1 Lack of Technical Expertise to Incorporate and Implement TRIPS Flexibilities in National Law and Policy
	III.2 Insufficient Domestic Research and Manufacturing Capacities in the Pharmaceutical Sector
	III.3 Insufficient Technical and Infrastructural Capacities for Medicines Regulation
	III.4 Difficulties in Establishing Efficient Pharmaceutical Management and Procurement Systems
	III.5 Bilateral and other TRIPS-plus Pressures
	III.6 Difficulties in Tackling Anti-Competitive Practices and Abuse of Intellectual Property Rights
IV. OVERCOMING CONSTRAINTS IN THE USE OF TRIPS FLEXIBILITIES THROUGH SOUTH-SOUTH REGIONAL FRAMEWORKS
	IV.1 Relevant Regional Frameworks
	IV.2 Regional Approaches to Use of TRIPS flexibilities for Public Health
		IV.2.1 Developing Local Technical Expertise on the Use of TRIPS Flexibilities
		IV.2.2 Addressing the Problem of Insufficient Research and Manufacturing Capacities in the Pharmaceutical Sector
		IV.2.3 Developing Technical and Infrastructural Capabilities for Medicines Regulation
		IV.2.4 Establishing Efficient Pharmaceutical Management and Procurement Systems
		IV.2.5 Resisting Bilateral and other TRIPS-plus Pressures
		IV.2.6 Regional Competition Enforcement Mechanisms
V. CONCLUSIONS AND RECOMMENDATIONS
	V.1 Summary of Recommendations
BIBLIOGRAPHY
BACK COVER

II.1.1 Compulsory Licensing

A compulsory licence is a licence granted by an administrative or judicial body to a third party to exploit an invention without the authorization of the patent holder. This type of licence is commonly referred to as a non-voluntary licence connoting the lack of consent by the patent holder. The TRIPS rules on compulsory licensing are contained in article 31. The concept of compulsory licensing itself, however, has a long history. One of the earliest legal instruments to incorporate the concept was the United Kingdom (UK) Statute of Monopolies of 1623.¹¹ At the international level, compulsory licences are recognized and provided for in the Paris Convention of 1883.¹² Indeed, by 1994, when TRIPS was adopted, compulsory licensing provisions had become a typical feature of patent laws around the world.¹³

¹¹ Correa (1999a), p. 1.

¹² See article 5A(2) of the Paris Convention which provides that,

"Each country of the Union shall have the right to take legislative measures providing for the grant of compulsory licences to prevent abuses which might result from the exercise of the exclusive rights conferred by the patent, for example failure to work:"

¹³ Correa (1999a), p.2.

Article 31 of TRIPS lists detailed conditions which must be complied with when a WTO Member chooses to use compulsory licensing. These include the need to grant licences on a case-by-case basis, evidence of unsuccessful prior request for a voluntary license, non-exclusivity of the licence and the requirement for compensation. There are also conditions governing the termination of licences and restrictions on export and on assignment of licences to third parties. Notwithstanding these conditions, the Agreement still leaves considerable room for flexibility in legislating on compulsory licences.

Compulsory licensing as a policy mechanism can be used to address a number of situations including, among others:

• The high prices of medicines.
• Anti-competitive practices by pharmaceutical companies.
• Failure by pharmaceutical patent holders sufficiently to supply the market with needed medicines.
• Emergency public health situations.
• The need for establishing a pharmaceutical industrial base.