Exclusive Rights and Public Access – Flexibilities
in International Agreements and
Development Objectives
The Public Health Example
21 September 2007
Short Courses on Key Economic Issues
Geneva, Switzerland
Christoph Spennemann, Legal Expert, IP
Division on Investment, Technology and
EnterpriseDevelopment, UNCTAD
UNCTAD/CD-TFT
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Overview of Presentation
• The interface between exclusive rights
(IPRs) and public health/production of
generic pharmaceuticals
• The TRIPS flexibilities for public access and
local production
• Conclusions
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The interface between IPRs and
public health/local production (1)
• Patents provide incentives for new drugs
development
• Patents contribute to increased drugs prices
• Local pharmaceutical production as one
means to help ensure sustainable drugs
supply & broad public access
• 2016 window of opportunity for LDCs
• No need to grant or enforce pharmaceutical
patents (WTO waiver)
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The interface between IPRs and
public health/local production (2)
• Pharmaceutical substances needed for
local production in DCs are often
patented by foreign companies
• Under TRIPS governments are provided
tools (« flexibilities ») to promote
access by local producers to patented
substances
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Transition periods for leastdeveloped countries (LDCs)
• Until 1 July 2013 for all TRIPS obligations
• Until 1 January 2016 for patents & trade secrets protection of
pharmaceuticals
• LDC-based producers may use patented substances for
production
• LDC-based traders may import & sell patented substances
• Importance of domestic implementation of transition periods
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Licensing agreements
• Local producer pays for right to manufacture,
distribute and use patented substances
• Foreign patent holder takes advantage of
lower production costs and new markets
• Examples: GSK agreements with Aspen
(South Africa) and Cosmos (Kenya)
• Need for government or civil society involvement
• TRIPS provides framework for control of abusive
terms to safeguard licensee’s interests
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Exceptions to granted patent rights
(1)
The patented substance may be used
• for marketing approval of generic products
• Approved by WTO jurisprudence
• for research & new drugs development
• Used in developed country legislation
• Main purpose must be research/promotion of
technological progress
• Ultimate commercial consequences accepted by
developed country jurisprudence (Germany)
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Exceptions to granted patent rights
(2)
• Swiss draft patent law: innovative
concept of experimental use exception
• Covers both scientific and commercial
activities
• Provided research leads to new knowledge
about patented product
• Protection limited to existing know-how,
but does not block follow-on innovation
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Parallel imports
• Permitted under TRIPS
• Many local producers need to import substances
(active pharmaceutical ingredients/APIs) that are
under domestic patent
• Often available at lower cost abroad (China, India)
• Domestic patent holder cannot invoke patent against
imports if domestic law authorizes parallel imports
• No counterfeits, but produced by domestic right
holder for sale on foreign market
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Compulsory licensing (1)
• Authorization by the government of a third
party to use an invention without the consent
of the right holder
• Powerful negotiating tool for government
• To influence prices (Brazilian & Thai experience)
• To involve generic producers at reasonable
licensing terms (South African & Thai experience)
• 2006/2007:Thai Government issues 3 CLs
• 2007: Brazilian Government issues 1 CL
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Compulsory licensing (2)
• Governments free to determine grounds for
CLs
• Problems of countries lacking domestic
manufacturing capacities
• WTO decision to
• Facilitate exports of drugs produced under CL to
needy Members
• Waive compensation requirement in importing
country
• Facilitate regional cooperation of LDC-dominated
trade agreements to attract foreign investment
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Limiting the scope of future patents
• Exclusions from patentability
• Natural substances (new uses)
• Methods of medical treatment (new uses)
• Strict patentability requirements
• To avoid patenting of new uses of known
substances
• To avoid patenting of minor changes of existing
drugs (« ever-greening »)
• Trivial patents restricted by 2007 US Supreme
Court decision
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Protection of Pharmaceutical Test
Data
• Data submitted to drug regulatory authorities
(DRAs) for marketing approval purposes
• TRIPS authorizes different approaches:
• Data exclusivity  DRA may not rely on original
data for examination of subsequent submissions
(USA; EU countries)
• Unfair competition approach  no exclusivity 
reliance by DRA on original data  speeds up
market entry of generic competitors
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Overview: TRIPS flexibilities for
local pharmaceutical production
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LDC transition periods
Licensing agreements
Patent exceptions
Parallel imports
Compulsory licensing
Limited scope of future patents
Non-exclusive rights in test data
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Importance of flexibilities
for investment by generic producers
• Flexibilities help preserve the public
domain
• Flexibilities help generic producers
access materials and enter the market
• Generic producers make investment in
DCs dependent on implementation of
flexibilities
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Conclusions
• TRIPS provides important tools/flexibilities to
promote access to pharmaceutical substances
& local production
• TRIPS flexibilities useless if not implemented
in domestic legislation
• TRIPS flexibilities attract foreign generic firms
• Regional cooperation creates bigger markets
& economies of scale for pharmaceutical
production
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Contact
Christoph Spennemann
Legal Expert
Policy Implementation Section/Intellectual Property
Division on Investment, Technology and Enterprise
Development (DITE)
UNCTAD
E-mail: [email protected]
Tel: ++41 (0) 22 917 59 99
Fax: ++41 (0) 22 917 01 94
http://www.unctad.org/tot-ip
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