Professional Documents
Culture Documents
Trips and Pharmaceutical Patent
Trips and Pharmaceutical Patent
8th Semester
SESSION- 2015-20
Page No.
A. Introduction 3
B. Trips – Overview 4
C. Trips – Background 5
D. Trips – Requirements 6
E. Trips - Obligations 9
J. Trips – Problems 15
K. Conclusion 16
L. Bibliography 17
Patents provide the patent owner with the legal means to prevent others from making, using,
or selling the new invention for a limited period of time, subject to a number of exceptions. A
patent only gives an inventor the right to prevent others from using the patented invention. It
says nothing about whether the product is safe for consumers and whether it can be supplied.
Patented pharmaceuticals still have to go through rigorous testing and approval before they can
be put on the market.
The World Trade Organization (WTO) is the international organization dealing with the rules
of trade between nations. As of February 2005, 148 countries are Members of the WTO. In
becoming Members of the WTO, countries undertake to adhere to the 18 specific agreements
annexed to the Agreement establishing the WTO. They cannot choose to be party to some
agreements but not others (with the exception of a few "plurilateral" agreements that are not
obligatory). Of these agreements, the Trade-Related Aspects of Intellectual Property Rights
(TRIPS) is expected to have the greatest impact on the pharmaceutical sector and access to
medicines. The TRIPS Agreement has been in force since 1995 and is to date the most
comprehensive multilateral agreement on intellectual property. The TRIPS Agreement
introduced global minimum standards for protecting and enforcing nearly all forms of
intellectual property rights (IPR), including those for patents.
The international conventions prior to TRIPS did not specify minimum standards for patents.
At the time that negotiations began, over 40 countries in the world did not grant patent
protection for pharmaceutical products. The TRIPS Agreement now requires all WTO
members, with few exceptions, to adapt their laws to the minimum standards of IPR protection.
In addition, the TRIPS Agreement also introduced detailed obligations for the enforcement of
intellectual property rights. However, TRIPS also contains provisions that allow a degree of
flexibility and sufficient room for countries to accommodate their own patent and intellectual
property systems and developmental needs. This means countries have a certain amount of
freedom in modifying their regulations and, various options exist for them in formulating their
national legislation to ensure a proper balance between the goal of providing incentives for
future inventions of new drugs and the goal of affordable access to existing medicines
The 1994, the World Trade Organization (WTO) Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS) established minimum universal standards in all areas of
intellectual property. It is intended to implement these standards globally through a WTO
enforcement mechanism.
In 2001, the developing countries, concerned that developed countries were insisting on an
overly narrow reading of TRIPS, initiated a round of talks that resulted in the Doha
declaration. The Doha declaration is a WTO statement that clarifies the scope of TRIPS,
stating for example that TRIPS can and should be interpreted in light of the goal "to promote
access to medicines for all." Specifically, TRIPS requires World Trade Organization (WTO)
members to provide copyright rights, covering authors and other copyright holders, as well as
holders of related rights, namely performers, sound recording producers and broadcasting
organisations; geographical indications; industrial designs; integrated circuit layout-
designs; patents; new plant varieties; trademarks; trade names & undisclosed information.
TRIPS also specifies enforcement procedures, remedies, and dispute resolution procedures.
The protection and enforcement of all intellectual property rights shall meet the objectives to
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.
TRIPS was negotiated during the Uruguay Round of General Agreements on Tariffs and
Trade (GATT) in 1984-1994. Its inclusion was the culmination of a program of intense
lobbying by the United States (U.S.), supported by the European Union (EU), Japan and other
developed nations. The campaigns of unilateral economic encouragement under
the Generalized System of Preferences and Coercion under Section 301 of the Trade Act
played an important role in defeating competing policy positions that were favoured by
developing countries like Brazil, but also including Thailand, India and Caribbean Basin states.
In turn, the United States strategy of linking trade policy to intellectual property standards can
be traced back to the entrepreneurship of senior management at Pfizer in the early 1980s, who
mobilized corporations in the United States (U.S.) and made maximizing intellectual property
privileges the number one priority of trade policy in the United States.
After the Uruguay round, the GATT became the basis for the establishment of the World Trade
Organization (WTO). Because ratification of Trade-Related Aspects of Intellectual Property
Rights (TRIPS) is a compulsory requirement of World Trade Organization membership, any
country seeking to obtain hard access to the numerous international markets opened by the
World Trade Organization (WTO) must enact the strict intellectual property laws mandated by
TRIPS. For this reason, the Trade-Related Aspects of Intellectual Property Rights (TRIPS) is
the most important multilateral instrument for the globalization of intellectual property laws.
States like Russia and China that were very unlikely to join the Berne Convention have found
the prospect of WTO membership a powerful enticement.
The Trade-Related Aspects of Intellectual Property Rights (TRIPS) requires member states to
provide strong protection for intellectual property rights. For example, under TRIPS:
1. Copyright terms must extend at least 50 years, unless based on the life of the author.
(Art. 12 and 14).
2. Copyright must be granted automatically, and not based upon any "formality," such
as registrations, as specified in the Berne Convention. (Art. 9).
3. Computer programs must be regarded as "literary works" under copyright law and
receive the same terms of protection.
4. National exceptions to copyright (such as " fair use " in the United States) are
constrained by the Berne three-step test.
5. Patents must be granted for "inventions" in all "fields of technology" provided they
meet all other patentability requirements (although exceptions for certain public
interests are allowed (Art. 27.2 and 27.3), and must be enforceable for at least 20
years (Art. 33).
8. Legitimate interests of third parties have to be taken into account by patent rights
(Art. 30).
The most visible conflict has been over AIDS drugs in Africa. Despite the role that patents have
played in maintaining higher drug costs for public health programs across Africa, this
controversy has not led to a revision of TRIPS. Instead, an interpretive statement, the Doha
Declaration, was issued in November 2001, which indicated that TRIPS should not prevent
states from dealing with public health crises. After Doha, the United States and to a lesser
extent other developed nations began working to minimize the effect of the declaration. A 2003
agreement loosened the domestic market requirement, and allows developing countries to
export to other countries where there is a national health problem as long as drugs exported are
not part of a commercial or industrial policy. Drugs exported under such a regime may be
packaged or colored differently in order to prevent them from prejudicing markets in the
developed world. In 2003, the Bush administration also changed its position, concluding that
generic treatments might in fact be a component of an effective strategy to combat HIV. Bush
created the PEPFAR program, which received $15 billion from 2003–2007, and was
reauthorized in 2008 for $48 billion over the next five years. Despite wavering on the issue of
[compulsory licensing], PEPFAR began to distribute generic drugs in 2004-2005.
Another controversy has been over the Trade-Related Aspects of Intellectual Property Rights
(TRIPS) Article 27 requirements for patentability "in all fields of technology", and whether
or not this necessitates the granting of software and business method patents. According to
Article 10 of the TRIPS Agreement the appropriate instrument to protect software protection
is copyright. The importance of this instrument has recently been confirmed by the U.S.
Supreme Court (Oracle America, Inc. v. Google, Inc.).
• The invention and creativity in them should provide social and technological benefits. The
intellectual property protection encourages inventors and creators because they can expect
to earn some future benefits from their creativity. This encourages new inventions, such as
new drugs, whose development costs can sometimes be extremely high, so private rights
also bring social benefits.
• The way intellectual property is protected can also serve social goals. For example, patented
inventions have to be disclosed, allowing others to study the invention even while its patent
is being protected. This helps technological progress and technology dissemination and
transfer. After a period, the protection expires, which means that the invention becomes
available for others to use. All of this avoids “re-inventing the wheel”.
The obligation for member countries under the Trade-Related Aspects of Intellectual Property
Rights (TRIPS) Agreement are given below:-
Patenting: - The World Trade Organization (WTO) members have to provide patent
protection for any invention, whether a product (such as a medicine) or a process (such as a
method of producing the chemical ingredients for a medicine), while allowing certain
exceptions. Patent protection has to last at least 20 years from the date the patent application
was filed.
Three criteria: - To qualify for a patent, an invention has to be new (“novelty”), it must be an
“inventive step” (i.e. it must not be obvious) and it must have “industrial applicability” (it
must be useful).
Disclosure: - Details of the invention have to be described in the application and therefore have
to be made public. Member governments have to require the patent applicant to disclose details
of the invention and they may also require the applicant to reveal the best method for carrying
it out.
Exceptions
Governments can refuse to grant patents for three reasons that may relate to public health:-
c. Transition periods- The TRIPS Agreement provides for transition periods, permitting
developing countries additional time to bring national legislation and practices into
conformity with TRIPS provisions. There are three main transition periods. First was
the 1995–2000 transition period, at the end of which countries were required to
implement the TRIPS Agreement. The 2000–2005 transition period allowed certain
countries to delay providing product patent protection in the areas of technology that
had not been so protected at the time of the TRIPS Agreement coming into operation
in that country. These countries were allowed a further 5 years to put in place a product
patent regime for technologies and products, which they had not thus far provided,
patent protection, such as pharmaceuticals and agro-chemicals.
During the transition period, these countries are required to accept patent applications
from 1995 onwards and to keep such applications pending, in a patent "mailbox" until
the mailbox is opened in 2005 when the applications will be assessed. The third
transition period allows least-developed countries (LDCs) until 2006 to implement their
obligations under the TRIPS Agreement in view of their economic, financial and
administrative constraints.
On the post-Uruguay Round world trade scenario, after the accords in agriculture and textiles
and clothing, the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)
is the issue affecting developing countries like India. The TRIPS covers seven types of
intellectual property rights; trademarks, trade secrets, geographical indications, industrial
designs, copyright, integrated circuits, and patents. Patents has been the contentious issue for
several reasons.
India is committed to amend its patent laws by the year 2005 (for technologies previously
unprotected in its market). The objective is to change the patent system which, in turn, is
supposed to facilitate research and development activities within the country. According to the
United Nations definition, a patent is a legally enforceable right, granted by a country’s
government to an inventor. A patent excludes other persons from manufacturing, using or
selling a patented product or from utilising a patented method or process. As of today, India
has a process patent regime regarding pharmaceutical products. Therefore, the 1970 Indian
Patents Act has to be changed in order to bring it in line with the international laws on the
patenting of pharmaceutical (and agrochemical) products. Being a developing nation, India has
a grace period of five years to change its patent laws under the agreement on TRIPS. In other
words, the 1970 Indian Patents Act will have to be suitably amended by 31st December 1999.
At the same time, developing countries like India are given a grace period of ten years for
technologies previously unprotected in its market. During this interim period of ten years, all
patent applications will be put in a black box.
However, pharmaceutical corporations can apply for an Exclusive Marketing Right (EMR) for
their products for only five years, even before the country in question has fully phased in the
new patent protection system. The proviso is that the product must have been registered for a
patent and has received marketing rights in any of the WTO member countries. Thus, it is a
backdoor method for granting monopoly rights. Transnational corporations (TNCs) control 90
% of all registered patents in the world. In fact, given such monopoly power over patents and
the EMR clause, India, or for that matter any developing country, does not have any transition
period. This is true in the case of protected technology, and if one interprets that from the
patent/product-originating country angle. This is the haziest part of the TRIPS Agreement, with
respect to the pharmaceutical and also the agrochemicals sectors.
The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) does not
provide for the retrospective patenting in India of drugs that are already on the market or
covered by existing patent applications elsewhere. Taking into account the transitional period,
there will be less impact on prices of new patented drugs on the Indian market during the 1990s
and only a minimal effect until 2005. Thereafter, it will build up gradually from a pool of new
drugs. Global progress, in research and development, is replenishing this pool at a steady but
moderate pace, as older drug patents expire.
Here, one has to consider the moderate pace of pharmaceutical innovation and of obstacles to
market penetration of new drugs in India. Such consideration leads to the conclusion that, in
value term, not more than 15% of the Indian market will be covered by patents sometime
after 2005. The remaining 85% of the market will continue to be exposed to the impact of
generic competition. Patented products will themselves ultimately contribute to that generic
pool when their patents expire.
The time scale of the introduction of pharmaceutical patents in India under TRIPS makes it
certain that, if Indian drug prices rise during the remainder of the 1990s, it will not be for
patenting reasons. The earliest start of premium pricing for patented drugs will be in the early
years of the next decade. No significant effect can be anticipated until after 2005, because the
weight of patented drugs on the Indian market will be too small for economic impact. More
important than the time scale of patent protection will be fundamental checks and balances
which will slow down on the impact of premium pricing on Indian drug expenditure.
Of these the second is the most immediate, whereas the first and the third are the most
durable safeguards against a price explosion.
As expected, the proposed changes in the intellectual property regime are welcomed by the
global business and their subsidiaries operating in India. Big transnational corporations (TNCs)
like Hoechst, Novartis, etc., have already set up 100% Indian subsidiaries. However, most of
them are interested in playing a waiting game regarding their involvement in the Indian
pharmaceuticals market.
They are likely to introduce their new patented drugs once the system of product patent
becomes fully operational. Even in that case, most of the new drugs will either be imported as
formulations or be formulated in India, by using imported bulk drugs. In short, India is unlikely
to be a site for Research and Development (R&D) and production of bulk drugs.
Many people are of the opinion that the negotiation of the Trade-Related Aspects of Intellectual
Property (TRIPS) Agreement as one that was forced by the developed countries against
objections from many developing countries. The aim was to universalise the standards of
Intellectual Property Rights (IPRs) protection that developed countries had already
incorporated within their legal systems. Thus, the Trade-Related Aspects of Intellectual
Property (TRIPS) Agreement now requires all the World Trade Organization (WTO) members
to adapt their laws to the minimum standards of Intellectual Property Rights (IPRs) protection.
During the 1980s, the gradual erosion of the developed countries' supremacy in manufacturing
and technology, due to the rise of the Asian countries as competitors, was a cause for concern.
The industrial lobbies convinced developed-country governments on the need to link trade with
IPRs, in order to prevent imitation and to increase returns on research and development.
Monopoly rights granted by IPRs were regarded as crucial to prevent the developing countries
from further undergoing the 'catching-up' process towards industrialisation based on imitating
and copying technologies, as the developed countries themselves had done. In other words,
IPR protection was a tool to guarantee the comparative advantage that had so far ensured the
developed countries' technological supremacy.
Prior to the negotiation of the TRIPS Agreement, over 50 countries (including developed
countries) did not confer patent protection on pharmaceuticals. Many developing countries
regarded the absence of protection as necessary to promote access to drugs at competitive
prices.
Judging from the prolonged negotiations on the issue during the World Social Summit, it can
be expected that the proposal of the Like-Minded Group to exclude patentability of essential
drugs will generate heated debate. It is a legitimate concern that the Trade-Related Aspects of
Intellectual Property (TRIPS) Agreement does not adequately take into account public health
needs. The agreement has instead been described as a 'charter of rights for patent holders'.
There are no specific obligations towards the governments granting the patent rights. The
interests of the consumers and patients have also been ignored. In order to protect the public
interest of providing access to and availability of medicines and healthcare, developing
countries will have to consider a wide range of factors. However, a key factor must be the
implications of the TRIPS Agreement and its patent protection for drugs and pharmaceuticals.
In this regard, developing countries must be allowed to exercise the options already provided
for in the TRIPS and other international agreements, free from pressure. National legislation
putting into effect the compulsory licencing, parallel importing and other options in a manner
most conducive for the individual health, economic and development needs of a country should
be considered of primary importance.
At the World Trade Organization (WTO), developing countries will have to fight for their
concerns to be effectively and promptly addressed. With respect to the TRIPS Agreement,
developing countries have submitted proposals for changes to the agreement, in order to ensure
that IPR protection does not undermine their economic and developmental prospects. In this
regard, the proposal of the Like-Minded Group should be supported and adopted as necessary
first step to ensuring access to essential medicines and their affordability.
Given such a hazy scenario, it is difficult to predict the future of the Indian pharmaceutical
industry under the new regime of intellectual property rights and its relationship with
international trade. The drug policy of the government has to be a pro-active one – to take
advantage of the TRIPS regime. Compatibility between the above-mentioned two options
serves as a base for rational and need-based drug policy.
3. The 30 August 2003 decision on importing and exporting under compulsory licence:
http://www.wto.org/english/news_e/pres03_e/pr350_e.htm