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Implementation of the WTO General Council Decision on Paragraph 6 of the DOHA Declaration on the Trips Agreement and Public Health - Health Economics and Drugs Series No. 016
(2004; 49 pages) View the PDF document
Table of Contents
View the documentAcknowledgements
View the documentIntroduction
View the documentCircumstances in which the Decision may be used
View the documentCompulsory licence in the importing country
View the documentCompulsory licence in the exporting country
View the documentAnti-diversion measures
View the documentSuspension of the system
View the documentConclusions
View the documentAnnex 1: WTO Decision of 30 August 2003 (WT/L/540)
View the documentAnnex 2: Summary of context and steps required to use the system
 

Annex 2: Summary of context and steps required to use the system

Assessment of Manufacturing Capacities in the Pharmaceutical Sector

Least-developed country Members are deemed to have insufficient or no manufacturing capacities in the pharmaceutical sector.

For other eligible importing Members insufficient or no manufacturing capacities for the product(s) in question may be established in either of the following ways:

(i) the Member in question has established that it has no manufacturing capacity in the pharmaceutical sector;

OR

(ii) where the Member has some manufacturing capacity in this sector, it has examined this capacity and found that, excluding any capacity owned or controlled by the patent owner, it is currently insufficient for the purposes of meeting its needs. When it is established that such capacity has become sufficient to meet the Member's needs, the system shall no longer apply.


Annex 2:
Summary of context and steps required to use the system

Issues to be considered

• There is no need to follow the Decision procedures if there is an agreement by the patent owner or his voluntary licensee to supply the required pharmaceutical product(s) at prices agreeable to the importing country. The need to use the Decision arise if the patent owner refuses to supply on mutually agreed conditions.

• If an agreement with the patent owner is not reached, the prospective importing country should determine which patents are relevant in the importing and exporting country and their legal status. This may not be a simple task since, as previously mentioned, several patents usually protect, directly or indirectly, a product. Moreover, patents expire after the specified period of duration and for lack of payment of maintenance fees. Before taking action, the existence of enforceable patents should be confirmed. An option that governments may follow when Article 31 (b) is not applicable (e.g. in cases of emergency), is to grant a compulsory licence covering all patents (whether identified or not) relating to a product (including processes and, if relevant, indications) that would be infringed in case of importation.1

1 See, e.g. the notice of authorization for the exploitation of patented inventions issued by the Government of Malaysia on 29 October 2003 relating to didanosine, zidovudine and lamivudine, and the compulsory licence granted by the Government of Mozambique (No. 01/MIC/04) in May 2004.


• The possibility of using the Decision will depend on certain aspects of the national patent laws in the importing and exporting countries. The law in the importing country must provide for compulsory licences under which imports can be made to address public health needs, and the law in the exporting country must allow for exports in cases (not covered by Article 31 (k) of the TRIPS Agreement) where export markets are predominantly supplied. The national law in the importing country should also permit the implementation of the waiver of Article 31 (h) regarding compensation to the patent owner when products are being imported pursuant to the Decision.

• A dissatisfied patent owner may use the legal mechanisms available under the laws of the importing and/or exporting country to challenge the compulsory licence, the compensation to be paid (in the exporting country) or other aspects of the transactions made under the Decision.

Context

Access to needed product refused

Refusal of the patent owner to supply drugs at a price acceptable to importing country

Patent status in the importing and exporting country

Identification and analysis of relevant patents and of their validity

Compulsory licence (CL) to import allowed by national law in importing country

Law in the importing country allows for the granting of CL to import in order to satisfy public health needs; in cases of emergency, for public interest, to remedy anti-competitive practices, for non-commercial government use or on other grounds

Implementation of waiver on compensation (Article 31 (h) of the TRIPS Agreement)

Law in the importing country has been adapted to use the waiver relating to the compensation to the patent owner

CL for export allowed by national law in exporting country

Exporting country’s law has been amended, as necessary, to implement waiver of Article 31 (f) of the TRIPS Agreement

Steps in the importing Member country

The steps for the importing country to use the Decision are summarized in the following table. As previously mentioned, differences exist in some aspects of the procedures depending on whether the importing country is a LDC or a developing country not falling within this category. The steps indicated below are not necessarily sequential (for instance, the notification of the importing country can be made before or after the granting of a compulsory licence).

Steps to use Decision

LDCs

Other Members

Notification of intention to use the system

Not required

Notification with or without limitations

Establishing lack of or insufficient manufacturing capacity

Not required

Required

Notification of product’s name and quantities, intention to grant or granting of CL and lack of or insufficient manufacturing capacity

Notification of lack of or insufficient manufacturing capacity not required

Required

Preliminary procedures to obtain a CL if relevant patents are in force in the importing country

Unless the prior request of a voluntary licence does not apply, an entity in the importing country must seek a voluntary licence from the patent owner

Unless the prior request of a voluntary licence does not apply, an entity in the importing country must seek a voluntary licence from the patent owner

Application for and processing of CL request

Compliance with national laws

Compliance with national laws

Granting of CL in importing country, before or after the notification

CL may be for unlimited quantity, as long the patent is in force, and without compensation

CL may be for unlimited quantity, as long the patent is in force, and without compensation

Review of CL

The granting of a CL may be challenged by the patent owner and subject to review by a higher authority. Depending on national law, the review need not suspend the execution of the licence

The granting of a CL may be challenged by the patent owner and subject to review by a higher authority. Depending on national law, the review need not suspend the execution of the licence

Registration of products with health authority in the importing country

Proof of bioequivalence and bioavailability, if required by national law

If, in the importing country, data exclusivity is granted with regard to data submitted for the registration of medicines, the data holder’s authorization would be required, unless the use of such data is included2 in the CL3

Proof of bioequivalence and bioavailability, if required by national law

If, in the importing country, data exclusivity is granted with regard to data submitted for the registration of medicines, the data holder’s authorization would be required, unless the use of such data is included in the CL

Anti-diversion measures in the importing country

Adoption of reasonable measures within their means, proportionate to their administrative capacities and to the risk of trade diversion to prevent re-exportation of the products that have actually been imported into their territories under the system

Adoption of reasonable measures within their means, proportionate to their administrative capacities and to the risk of trade diversion to prevent re-exportation of the products that have actually been imported into their territories under the system

 

2 There are precedents of this kind in the USA. See Correa, C (1999), Intellectual property rights and the use of compulsory licenses: options for developing countries, Trade-Related Agenda, Development and Equity, Working Paper No. 5, Geneva, South Centre, 1999, p.16.

3 Provisions allowing the use of data in cases of the granting of a compulsory licence may need to be incorporated into national laws, in order to prevent legal challenges that could otherwise block the exploitation of the licence.


Steps in the exporting Member country

In addition to a possible legislative change, a number of actions need to be taken by the prospective supplier and exporting country in order to apply the Decision.

Steps to use Decision

Actions required

Preliminary procedures to obtain a CL

Unless the prior request of a voluntary licence does not apply, an entity in the exporting country must seek a voluntary licence from the patent owner

Application for a CL

• Only for a limited amount
• Entirety of production for export

Granting of CL including determination of compensation to patent owner

Compliance with national laws

Review of CL

The granting of a CL may be challenged by the patent owner and subject to review by a higher authority. The review need not suspend the execution of the licence

Notification by exporting country

Information about the conditions attached to the CL, including the name and address of the licensee, the product(s) for which the licence has been granted, the quantity(ies) for which it has been granted, the country(ies) to which the product(s) is (are) to be supplied, the duration of the licence and the address of the web site where the supplier will post information about shipment

Production and product differentiation

Develop the chemistry and formulate the drug (when produced by the licensee for the first time), and investigate the shape, colouring, labelling and packaging of the patent-holder's product in the importing country in order to differentiate the product for export

Notification by the supplier before shipment

Information about quantities and distinguishing features of products

 

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