(2004; 110 pages)
IV.2.1 Developing Local Technical Expertise on the Use of TRIPS Flexibilities
Regional cooperation in developing local expertise in intellectual property and development matters and in the use of flexibilities, in particular, has an important role to play. Such an approach is promising as it would benefit from pooling of financial, human and other resources that currently exist in each country. For example, the experience of South Africa in dealing with the case against the Government of South Africa by pharmaceutical companies, the pressure from the United States Government and the recent decision by its competition commission against two pharmaceutical companies on competition grounds could benefit many other countries in the region if it was widely shared. Access to information through sharing of expertise and best practices can empower countries to take a more determined position on public health and access to medicines issues.
There are two possible models of regional cooperation that could be considered as a vehicle for developing local expertise in intellectual property matters generally, health-related research and innovation and, in particular, the use of TRIPS flexibilities. The first approach is where intellectual property issues are dealt with as a component of the broad regional economic integration and related processes. This approach has most commonly been adopted among the RECs in Latin America and the Caribbean region.70 The best example of this approach where members of a REC have attempted to work together on incorporating TRIPS flexibilities is the Andean Community (See Box 4).
70 For example, the Andean Community has adopted various decisions dealing with intellectual property.
Under this scenario, the REC or other regional body would establish within its secretariat, a division to help the Member countries address matters of intellectual property and, in particular, assist them in training and research and act as a forum for discussion and exchange of information on the best practices on the use of TRIPS flexibilities. The mechanism would also help the Member countries draw on each others expertise and experience in the use of the flexibilities. RECs like COMESA have already been carrying out studies and responding to Member States’ requests for assistance on the use of TRIPS flexibilities and on negotiations in the WTO. While there may be a number of such activities ongoing in various RECs there is need to develop a more institutionalized approach.
Decision 486 on Industrial Intellectual Property which covers patents, industrial designs and trademarks provides the legal basis in the Community for dealing with compulsory licences, parallel imports, research exception, patentability and data protection.
A. Compulsory licensing
The Decision is closely modelled on article 31 of the TRIPS Agreement. The relevant provisions include: article 65 (cases of “public interest, emergency or national security”); article 66 (practices that “adversely affect free competition”); article 67 (cases of dependent patents); and, article 68 (conditions for granting compulsory licences). Unlike previous Andean Community law, Decision 486 does not establish a local working obligation. It only provides that a patent may not be subject to a compulsory licence if the protected product is imported “in a manner sufficient to meet the needs of the market.” Situations relating to practices that adversely affect free competition are dealt with by allowing the competent national office, after having obtained the consent of the national antitrust authority, to grant compulsory licences where practices are determined to be detrimental to the exercise of free competition. This is especially so in cases where such practices constitute an abuse by the patent holder of a dominant position in the market.
B. Parallel imports and exhaustion of rights
The Decision incorporates the principle of international exhaustion of rights. It is, however, interesting to note that the principle of international exhaustion of rights, as provided for in the Decision, is narrower than under the previous regime which existed before the implementation of the TRIPS Agreement. Under the earlier regime, the rule was that the patent owner could not prevent the importation of a patented product “put into the market in any country, with the consent of the owner of the patent, a licensee or any other person authorized therefore”) meant that the consent of the patent owner was not a condition for the application of the international exhaustion of rights, thereby allowing the parallel importation from a compulsory licensee abroad. Decision 486, on the other hand, adopts “the express consent theory” as the basis of the international exhaustion principle.
The application of the “express consent theory” may go too far and make illegal the parallel importation from even a voluntary licensee if the latter was not authorized by the patent holder, under the licence agreement, to export in general or to particular countries. Decision 486 therefore only presumes the patent holder’s consent where the parallel exporter is “economically associated” to the former. Such a literal interpretation of the relevant article, article 54, would seem to exclude the legality of parallel imports from independent compulsory licensees.
C. Research and the early working exceptions
Decision 486 contemplates exceptions where the patent holder may not exercise the rights conferred. This include cases where the relevant acts were: carried out in a private circle and for non-commercial purposes; carried out exclusively to experiment with the subject matter of the patented invention; and carried out exclusively for the purposes of teaching or scientific or academic research. Hence, while Decision 486 includes an explicit research exception, it does not include an explicit “early working exception”. It is uncertain the extent to which the experimentation exception could be judicially interpreted to allow the initiation of procedures for the approval of generic drugs before the expiry of the patent.
D. Test data protection
In relation to the protection of test data, the Decision includes, under the rubric of “intellectual property- linked trade practices”, some important provisions. Article 261 of the Decision provides that information provided to any authority or disclosed pursuant to legal requirements by the person in lawful possession of it shall not be considered public property if that person supplies the information for the purpose of obtaining licences, permits, authorizations, registrations, or any other legal purposes. With regard to the information provided as a condition for approving chemical products, the Decision literally incorporates article 39(2) and 39(3) of the TRIPS Agreement.
The Decision therefore only grants protection against “unfair commercial use” of confidential data. This means that a third party could be prevented from using the results of the test undertaken by another company as background for an independent submission for marketing approval, if the data had been acquired through dishonest commercial practices. However, the Decision does permit a national competent authority to rely on data in its possession to assess a second and further application, relating to the same drug, since this would not amount to “unfair commercial use”.
The mechanism can be institutionalized through the establishment in the region of a high-level Permanent Advisory Council on Trade-Related Innovation Policies (ACTRIPS) or a functionally equivalent mechanism.71 The ACTRIPS or its equivalent would become the focal point within the structure of the REC or other regional body for policy-making about the integration into domestic law of TRIPS flexibilities and adapting these flexibilities to evolving international legal standards in the context of a broader innovation policy. The ACTRIPS would not duplicate the activities of national or regional intellectual property offices and would ideally play a supervisory and policy-making role that requires inputs from intellectual property offices but that locates such inputs within a broader policy-making process for the countries of the region.
71 The original proposal for the ACTRIPS mechanism was first advanced in Reichman, Watal and Okediji (2000). See also Reichman (2003) and Musungu and Dutfield (2003). Note that the ACTRIPS would be about innovation policies and not just intellectual property which is only one part of innovation issues.
This mechanism, apart from coordinating such issues as training, information exchange and other related activities, would also be important in coordinating regional positions on TRIPS flexibilities and other matters of common concern and enabling consensus building on these issues for future intellectual property negotiations. Such a regional structure could also play an oversight and supervisory role for regional intellectual property organizations such as the African Intellectual Property Organization (OAPI) and the African Regional Intellectual Property Organization (ARIPO). Establishing ACTRIPS at the regional level will therefore, if appropriately implemented, empower developing countries to maximize the benefits of intellectual property while reducing the social and economic costs of existing international legal obligations.
This would also help these countries position themselves to contribute to the future development of suitable international legal norms affecting the use of the flexibilities for public health purposes, national innovation systems and policies. Furthermore, the regional mechanism could serve to institutionalize a broad-based coalition from the member countries focusing on both existing and new issues, monitor developments in different fora, including WIPO and the WTO, and serve as a vehicle for rapidly responding to TRIPS-plus pressures in an ongoing and systematic fashion. Finally, the ACTRIPS would make it possible for governments to continue to receive technical assistance from varied sources and process inputs from such assistance in a more systematic fashion ensuring continuity and that such assistance does not undermine the use of TRIPS flexibilities for public health purposes.
As the case of the Andean Community shows, however, this type of mechanism should not be used as a vehicle for harmonizing intellectual property standards generally or with respect to the use of flexibilities. Attempts at complete harmonization in the approach to the use of TRIPS flexibilities may be problematic since different countries in the region could have different needs. Consequently, this mechanism is likely to work better where expertise is developed through training, research, exchange of information and sharing of best practices in the use of flexibilities at the regional level, but each country is allowed the space to frame the actual flexibilities and their use to suit its specific needs. This coordinated but non-harmonizing approach is also less likely to encounter political and institutional resistance from the individual countries.
The second model of regional cooperation on intellectual property matters is where regional intellectual property organizations are established as independent organizations with no linkage to regional economic and development organizations. This scenario obtains mostly in Africa in the form of OAPI and ARIPO (See Box 5). While this model could help to develop expertise in such matters as patent examination and related issues, it is unlikely to offer a viable forum for developing local expertise on the use of TRIPS flexibilities for public health and related purposes. The main reason for this is the tendency of these types of organizations towards harmonization as opposed to coordination. OAPI which constitutes a single regional patent system, for example, harmonized the rules on compulsory licensing by requiring that no compulsory licence can be issued before the expiry of three years from the date the patent was issued or four years from the date of application.72 The Agreement (commonly called the Bangui Agreement) also provides that compulsory licences do not extend to acts of importation73 which defeats the whole purpose, for example, of paragraph six negotiations. This goes beyond the requirements of TRIPS and therefore has the effect of limiting the powers of the Member States to use compulsory licensing.
72 Weissman (2003).
73 Vandoren and Van Eeckhaute (2003), p. 791.
Another problem with this model of independent intellectual property or patent organizations is that they tend to operate outside the broad policy framework on research, technology development and innovation that should inform intellectual property policy formulation. There is very little policy supervision by economic development bodies in the region with the result that very little expertise on the use of TRIPS flexibilities for public health purposes has so far been developed in these organizations. Finally, the mandates of these organizations are mostly limited to matters of patent grants and examination or registration and do not include issues relating to the exercise of patent rights. This will limit the extent to which the organizations can help Member States in the use of TRIPS flexibilities for public health purposes.
A. African Organization for Intellectual Property (OAPI)
OAPI came into being on 13 September 1962 when 12 French-speaking African countries decided, by the Libreville Agreement, to set up a common structure, which was to act as national office for industrial property for each of them. The organization was called African and Malagasy Office for Industrial Property (OAMPI). Until 1962, patents were issued by the French National Institute for Industrial Property, which served as national office for states regrouped within the French Union. The basic idea behind the Libreville Agreement was: the adoption of uniform legislation; the creation of a common authority on matters of patents; and the centralization of procedures. With the signing of a new agreement in 1977, the Bangui Agreement, OAMPI became OAPI. The Bangui Agreement was adopted for various reasons including the withdrawal of the Mala-gasy Republic from the Libreville Agreement, the need to cover all rights items, the need better to involve patent rights in development and the desire for wider integration. Today, OAPI has 16 Member States, namely; Benin, Burkina Faso, Cameroon, The Central African Republic, Chad, Congo, Cote d'Ivoire, Equatorial Guinea, Gabon, Guinea, Guinea Bissau, Mali, Mauritania, Niger, Senegal, and Togo.
The issuing of patents in OAPI Member States is regulated by the Bangui Agreement, which has the status of national patent law for all Members. OAPI receives all patent applications and registers regional patents which have a binding effect in all 16 Member States. Once the patents have been issued by OAPI, they are then regulated at the national level by each respective State. Questions relating to existing patents (e.g. infringement, voluntary or compulsory licences) are settled before the civil courts of each Member State based on the provisions of the Agreement. The Bangui Agreement is therefore the effective law for these countries both in terms of procedural matters and substantive patent law including with respect to the use of TRIPS flexibilities. The Bangui Agreement was revised in 1999 in an attempt to bring it in line with the requirements of the TRIPS Agreement. The revised Bangui Agreement entered into force on 28 February 2002.
B. African Regional Intellectual Property Organization (ARIPO)
ARIPO’s formal history goes back to the Lusaka Agreement, which was adopted by a Diplomatic Conference held in Lusaka, Zambia on 9 December 1976 establishing the Industrial Property Organization for English-speaking Africa (ESARIPO). Until 1 June 1981, when ESARIPO established its own secretariat, the United Nations Economic Commission for Africa (UNECA) and WIPO, the two main players behind the establishment of ESARIPO, acted as its joint secretariat. In December 1985, the Lusaka Agreement was amended in order to open up the membership of the Organization to all African states members of UNECA or OAU and changed its name to ARIPO apparently in order to reflect its new panAfrican outlook. There are currently 15 states which are party to the Lusaka Agreement. These are: Botswana, the Gambia, Ghana, Kenya, Lesotho, Malawi, Mozambique, Sierra Leone, Somalia, Sudan, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.
ARIPO was established to pool together the resources of its member countries in industrial property matters in order to avoid duplication of financial and human resources. Thus the preamble to the Lusaka Agreement states that Member States are “aware of the advantage to be derived by them from the effective and continuous exchange of information and harmonization and co-ordination of their laws and activities in industrial property matters”. An additional consideration at the time of establishing ARIPO was that the majority of the countries concerned had dependent industrial property legislations which did not provide for original grant or registration in the countries concerned but could only extend to their territories the effects of industrial property rights obtained in a foreign country.
The main objectives of the organization as set out in article 3 of the Lusaka Agreement include: (a) to promote the harmonization and development of the industrial property laws, and matters related thereto, appropriate to the needs of its members and of the region as a whole; (b) to foster the establishment of a close relationship between its members in matters relating to industrial property; (g) to promote and evolve a common view and approach of its members on industrial property matters; and (h) to assist its members, as appropriate, in the acquisition and development of technology relating to industrial property matters. Cooperation activities in the area of patents are governed by the Harare Protocol, which was adopted by the Administrative Council of ARIPO in December 1982, in Harare, Zimbabwe.
The Protocol empowers the ARIPO Office to receive and process patent and industrial design applications on behalf of states party to the Protocol. The Protocol which entered into force in 1984 currently has 14 Members, namely, Botswana, The Gambia, Ghana, Kenya, Lesotho, Malawi, Mozambique, Sierra Leone, Sudan, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe. Unlike OAPI, which creates substantive patent standards for its members, the Harare Protocol only governs receipt, examination and provisional grant of patents. Each member therefore retains sovereignty over legislating on substantive patent standards. In addition, ARIPO patent grants do not apply automatically in the Member States and the States retain the right to reject an ARIPO issued patent.
RECs and other similar regional bodies should establish regional ACTRIPS or functionally equivalent mechanisms as a central feature of an institutionalized approach to regional research and innovation including essential health research and, in particular, as a focal point for training, research, information exchange and political coordination in the use of TRIPS flexibilities for public health promotion and protection. As far as possible, however, developing countries should avoid a harmonization approach or using regional patent or industrial property organizations with no broad economic and development mandates as a basis for regional cooperation on the use of TRIPS flexibilities in general and for public health in particular.