Article 30 of the Agreement allows “exceptions to the exclusive rights” of the patent holder. This is the situation in which a person can use the patent object with no need to ask the authorization of the holder and without being in an illegal situation. Those exceptions are national legal exceptions and therefore need to be set out in the national patent law.
By virtue of Article 30:
“Members may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties.”
It appears from the reading of Article 30 that these exceptions are subject to three following conditions:
• They must be limited. The authors of the Agreement have attempted to avoid an uncontrolled proliferation of the number of exceptions.
• They must be duly justified; and
• They must not unreasonably affect the patentee’s legitimate interests. The aim is to strike a balance between the interests of third parties (which are the grounds for the existence of the exception) and the interests of the patentee.
Apart from these three types of restriction, whose interpretation is within the WTO’s remit, Member States are left a considerable margin of latitude for implementing the Agreement through national legislation. The Article does not spell out the different grounds on which Member States may base their exceptions, nor the precise cases that can be the subject of such exception to the monopoly. A number of exceptions meeting the foregoing three conditions could be envisaged. Articles 7 and 8 of the Agreement, in particular, merit consideration.
Article 7: Objectives
“The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations” (authors’ emphasis).
Article 8: Principles
“1. Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of this Agreement (authors’ emphasis).
2. Appropriate measures, provided that they are consistent with the provisions of this Agreement, may be needed to prevent the abuse of intellectual property rights by right holders or the resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology” (authors’ emphasis).
Both the promotion and the transfer of technology, as well as public health or nutrition could justify derogation of the patentee’s exclusive rights. Scrutiny of the exceptions existing in much national legislation gives an idea of the different possibilities (Correa, 1997):
- parallel importation of the protected product;
- acts carried out on a private basis and for non-commercial purposes;
- scientific research and experiments involving the patented invention;
- preparation of drugs by unit and on medical prescription in pharmacy dispensaries;
- a person being, in good faith, already in possession of the invention covered by the patent;
- tests carried out before the expiry of the patent to establish the bio-equivalence of a generic drug.
This last exception is at present the subject of consultations under the WTO dispute settlement system between the European Union and Canada, as Canadian legislation allows generics manufacturers to carry out experiments and tests required to obtain marketing approval, and also to manufacture and stockpile copies of patented products, before the relevant patents expire.