Speaker: Adrian Otten
The purpose of this note is to describe those provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) that relate to the standards of patent protection to be accorded to inventions in the area of pharmaceuticals. To set this discussion in context, it is useful to recall three basic features of the TRIPS Agreement:
- that, together with some 25 other legal texts, it is an integral part of the Agreement Establishing the World Trade Organization (and therefore subject to the WTO dispute settlement system);
- that it covers not only patents but all the other main areas of intellectual property rights; and
- that it lays down not only the minimum substantive standards of protection that should be provided for in each of these areas of intellectual property, but also the procedures and remedies that should be available so that rights holders can enforce their rights effectively.
What pharmaceutical inventions must be patentable under the TRIPS Agreement?
The main rule relating to patentability is that patents shall be available for any invention, whether a product or process, in all fields of technology without discrimination, where those inventions meet the standard substantive criteria for patentability - namely, novelty, inventive step and industrial applicability. In addition, Members are required to make grant of a patent dependent on adequate disclosure of the invention and may require information on the best mode for carrying it out. Disclosure is a key part of the social contract that the grant of a patent constitutes since it makes publicly available important technical information which may be of use to others in advancing technology in the area, even during the patent term, and ensures that, after the expiry of the patent term, the invention truly falls into the public domain because others have the necessary information to carry it out.
Three types of exception to the above rule on patentable subject-matter are allowed. These may be of interest from a public health perspective:
- inventions the prevention of whose commercial exploitation is necessary to protect “ordre public” or morality, including to protect animal or plant life or health;
- diagnostic, therapeutic and surgical methods for the treatment of humans or animals; and
- certain plant and animal inventions.
What are the rights conferred by a patent under the TRIPS Agreement?
The minimum rights that must be conferred by a patent under the TRIPS Agreement follow closely those that were to be found in most patents laws, namely the right for the patent owner to prevent unauthorized persons from using the patented process and making, using, offering for sale, or importing the patented product or a product obtained directly by the patented process.
Term of protection
Under the TRIPS Agreement, the term of protection must be at least 20 years from the date of filing the patent application. It should be noted that, although the issue of patent term extension to compensate for regulatory delays in the marketing of new pharmaceutical products was raised in the negotiations, the TRIPS Agreement does not contain an obligation to introduce such a system.
Limitations/exceptions to these rights
Under the TRIPS Agreement, patent rights are not absolute but can be subject to limitations or exceptions. These can be put into three categories:
- the Agreement allows limited exceptions to be made by Members 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 interest of third parties. Thus, for example, many countries allow third parties to use a patented invention for research purposes where the aim is to understand more fully the invention as a basis for advancing science and technology;
- the Agreement also allows Members to authorize use by third parties (compulsory licences) or for public non-commercial purposes (government use) without the authorization of the patent owner. Unlike what was sought by some countries in the negotiations, the grounds on which this can be done are not limited by the Agreement, but the Agreement contains a number of conditions that have to be met in order to safeguard the legitimate interests of the patent owner. There is not space to discuss all of these here, but two of the main such conditions are that, as a general rule, an effort must first have been made to obtain a voluntary licence on reasonable commercial terms and conditions and that the remuneration paid to the right holder shall be adequate in the circumstances of each case, taking into account the economic value of the licence;
- the Agreement recognizes the right of Members to take measures, consistent with its provisions, against anti-competitive practices and provides more flexible conditions for the grant of compulsory licences where a practice has been determined after due process of law to be anti-competitive. For example, each of the conditions specifically referred to above for the grant of compulsory licences may be relaxed in these circumstances. The Agreement also provides for consultation and cooperation between Members in taking action against anti-competitive practices.
The TRIPS Agreement lays down some rather complicated transition provisions which give countries periods of time in order to adapt their legislation and practices to their TRIPS obligations, which periods differ according to the type of obligation in question and the stage of development of the country concerned. Here we will limit the discussion to those transition provisions which relate to the application of the obligations on substantive standards for the protection of pharmaceutical inventions. For these purposes, the obligations should be divided into two categories:
(i) the obligations relating to the introduction of product patent protection for pharmaceutical products in those developing and least developed countries which do not yet grant it. Since most developing and least developed country Members of the WTO already provide for product patent protection for pharmaceuticals, a relatively small number of countries are concerned;
(ii) obligations regarding process patents for this group of countries and all patent protection obligations for other developing and least developed countries.
With respect to the second category above, the basic rule is that developing and least developed countries have until 1 January 2000 and 1 January 2006, respectively, to meet the obligations in question. At that time, the rules of the TRIPS Agreement will apply not only to new patent applications but also to patents still under protection in their territories.
With respect to the first category of situations referred to above, the developing countries in question have until 1 January 2005 to apply product patent protection to pharmaceutical products and the least developed countries until 1 January 2006. Notwithstanding proposals to the contrary, the TRIPS Agreement does not require the bringing under protection of pharmaceutical inventions that were in the “pipeline” in these countries at the time of entry into force of the WTO. However, with effect from the entry into force of the WTO (1 January 1995), these countries have been under an obligation to provide a system whereby applications for patents for pharmaceutical product inventions can be filed (often referred to as a “mailbox” system). These applications do not have to be examined until after 1 January 2005 (or 1 January 2006 in the case of least developed countries). If found to be patentable by reference to their filing (or priority) date, a patent would have to be granted for the remainder of the patent term counted from the date of filing. In the event that a pharmaceutical product that is the subject of a “mailbox” application obtains marketing approval prior to the decision on the grant of a patent, an exclusive marketing right of up to five years will have to be granted provided that certain conditions are met.
It will be noted that most developing and least developed countries already grant patent protection for pharmaceutical products. In these countries, the TRIPS Agreement will therefore not lead to fundamental changes in this regard, although a certain amount of adjustment in legislation, for example in respect of patent term and compulsory licensing, may be necessary. With respect to the fairly limited number of countries that did not provide patent protection for pharmaceutical products at the time of entry into force of the WTO Agreement, some, including Brazil and Argentina, have decided to bring such protection into effect more quickly than is required under the TRIPS Agreement.
It will also be noted that the TRIPS Agreement pays considerable attention to the need to find an appropriate balance between the interests of rights holders and users and that this was an important theme in the negotiations. This is not only reflected in the basic underlying balance related to disclosure and providing an incentive for R&D, but also in the limitations and exceptions to rights that are permitted and in the transition provisions.
It should also be appreciated that the protection of pharmaceutical inventions is one aspect of a much wider agreement, covering not only the protection of intellectual property in general in a coherent and non-discriminatory way but also further liberalization and strengthening of the multilateral trading system as a whole. While it is true that some countries put particular emphasis on TRIPS matters in the Uruguay Round negotiations, it is also true that other countries attached great importance to other areas, for example textiles and agriculture. It is our belief, and a belief shared by all WTO Members, that a strong and vibrant multilateral trading system is essential for creating conditions for economic growth and development worldwide. This in turn provides for the generation of the resources required to tackle health problems.