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TRIPS Agreement and Compulsory Licensing

The WTO members had negotiated an agreement on Trade Related aspects of IPR and named it as the TRIPS agreement. It makes mandatory for all member states to enact legislation to protect intellectual property.

The WTO members had negotiated an agreement on Trade Related aspects of IPR and named it as the TRIPS agreement.  It makes mandatory for all member states to enact legislation to protect intellectual property of the corporate of state members in respective states.  The TRIPS agreement provides a balance between long term benefits to the society and industry through knowledge creation and placing the same in public domain short term benefit to IP creator through market exclusivity.  TRIPS agreement also provides an effective mechanism for the resolution of IP related disputes among state members in a systemic manner.

The most contentious aspect of the TRIPS agreement is the protection of pharmaceutical products. Article 27 relates to patentable subject matter and patents rights are enjoyable without discrimination to the place of invention, field of technology and also whether products are produced locally or are imported.  Patent owners opine that Article 27 of TRIPS agreement forbids the state to give rights to generic players to make patented drug and offer the same to poor at reasonable rate. UN commission on Human Rights and other states have declared that access to medication is a fundamental element for achieving human right. Yet an estimated one third of world’s population lacks regular access even to products included in WHO’s model list of essential medicines.  To address the state health emergencies TRIPS agreement through Doha declaration provides a provision to WTO state members to use the provision of compulsory licensing to balance the long term incentives to innovators against the immediate public health needs of the society.  The Doha Declaration emphasizes that the TRIPS Agreement should not be interpreted as preventing WTO state members from taking necessary actions relative to intellectual property in the event of a public health emergency; one of the extraordinary measures authorized to give governments more flexibility to address a public health crisis is compulsory licensing.

The compulsory licensing provisions of the Doha declaration in respect of public health provide solution to save lives and protect public health.  Doha Declaration states:

“We agree that the TRIPS Agreement does not and should not prevent members from taking measures to protect public health. Accordingly, while reiterating our commitment to the TRIPS Agreement, we affirm that the Agreement can and should be interpreted and implemented in a manner supportive of WTO members’ right to protect public health and, in particular, to promote access to medicines for all. Each member state has the right to grant compulsory licenses and the freedom to determine the grounds upon which such licenses are granted.  Paris convention give each member the right to determine what constitutes a national emergency or other circumstances of extreme urgency, it being understood that public health crises, including those relating to HIV/AIDS, tuberculosis, malaria and other epidemics, can represent a national emergency or other circumstances of extreme urgency.”

Article 31 of the TRIPS agreement also provides a provision which states ““Non-Voluntary” license to domestic producers “without authorization of the right holder” under “national emergency” or “extreme urgency” so long as due process requirements are met. However, paragraph of Article 31 restricts the rights for domestic use only. This aspect addresses the issue for the member states who have technical expertise to practice and manufacture the patented drugs. Despite the provision for compulsory licensing under Article 31 of TRIPS agreement member states who don’t have technical expertise can’t address public health emergency related issues. Doha declaration signed in 2001 recommended the deletion of paragraph and accordingly enables the state members to export to state members who don’t have manufacturing facilities.

Specifically, the interpretation of ‘national emergency’ should adhere to both the text of the declaration, as well as the Doha declaration and Article 5 of the Paris convention give to right to member state to safeguard the public health and declare the state of health national emergency and also state the provision of compulsory licensing in such cases is not forfeit of patent rights of the innovators.  This was negotiated in the shadow of the rampant HIV/AIDS crisis in South Africa.  At that time, year 2002, national HIV prevalence in South Africa was 11.4 per cent and it was truly a national emergency.

In accordance with TRIPS agreement India has enacted legislation providing a provision for compulsory licensing under sections 84 and 92 of Indian patent law. Under section 83 it is desirable that the patent granted in India has to be practiced and the applicant has to submit form 27 to the Indian patent office containing details about the use of granted patent technology in Indian domain. If the protected technology is not being used up to three years after the grant of patent then the interested party can ask for voluntary license under section 84. In case the patekmnt applicant refuses to give voluntary license then the interested party under section 84 can approach patent office for compulsory license.

In case of nil or little access or very high unaffordable price of patent protected essential medicines. The state under section 92 of Indian patent law provides a provision for expanded access under lower price and accordingly can put such patents under compulsory licensing and any generic player can approach patent office for grant of compulsory license under section 92.

To date, India has issued one compulsory license to Indian generic player Natco Pharma Ltd, for Bayer’s Nexavar, an advanced stage kidney and liver cancer drug. The question is whether this is an appropriate use of flexibilities provided by the provision for compulsory licensing. As regards Nexavar case, recent data indicate that there are about 100,000 patients in India suffering from different forms of renal cell and hepatic cell carcinoma and 30000 patients are added to the patient pool every year.  Over 24000 patients die in India every year on account of these diseases. Considering the 1.2 billion population of India, the incidence of these conditions is 0.0083 per cent of the population.

Can this be a base for national emergency which makes the basis for compulsory license legitimate? Certainly the large number dying owing to not availability of the medicine due to high cost and insufficient qty can be the reason based on which national state can consider emergency stage in respect of health.


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