Health and Intellectual Property: The WTO and TRIPS Agreement

Many advocates for a global right to health believe that intellectual property rights protections have a negative effect on the realization of the right to health. This debate originates in the World Trade Organization and the related Agreement on Trade-Related Aspects of Intellectual Property Rights.

The World Trade Organization is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business.

The WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), negotiated in the 1986-94 Uruguay Round of international trade talks, introduced intellectual property rules into the multilateral trading system for the first time.

TRIPS covers five broad issues:

• How basic principles of the trading system and other international intellectual property agreements should be applied;
• How to give adequate protection to intellectual property rights;
• How countries should enforce those rights adequately in their own territories;
• How to settle disputes on intellectual property between members of the WTO;
• Special transitional arrangements during the period when the new system is being introduced.

The intellectual property areas covered by the TRIPS Agreement include:

• Copyright and related rights;
• Trademarks, including service marks;
• Geographical indications;
• Industrial designs;
• Patents;
• Layout-designs (topographies) of integrated circuits;
• Undisclosed information, including trade secrets.

The TRIPS agreement says patent protection must be available for inventions for at least 20 years. Patent protection must be available for both products and processes, in almost all fields of technology. Governments can refuse to issue a patent for an invention if its commercial exploitation is prohibited for reasons of public order or morality. They can also exclude diagnostic, therapeutic and surgical methods, plants and animals (other than microorganisms), and biological processes for the production of plants or animals (other than microbiological processes).

The TRIPS agreement describes the minimum rights that a patent owner must enjoy, but it also allows certain exceptions. A patent owner could abuse his rights, for example by failing to supply the product on the market. To deal with that possibility, the agreement says governments can issue “compulsory licenses,” allowing a competitor to produce the product or use the process under license. But this can only be done under certain conditions aimed at safeguarding the legitimate interests of the patent-holder.

An issue that has arisen recently is how to ensure that patent protection for pharmaceutical products does not prevent people in poor countries from having access to medicines — while at the same time maintaining the patent system’s role in providing incentives for research and development into new medicines. Flexibilities such as compulsory licensing are written into the TRIPS Agreement, but some governments were unsure of how these would be interpreted, and how far their right to use them would be respected.

A large part of this was settled when WTO ministers issued a Special Declaration on the TRIPS Agreement and Public Health at the Doha Ministerial Conference in November 2001.

In the TRIPS Declaration, the WTO ministers agreed that the TRIPS Agreement does not and should not prevent members from taking measures to protect public health. They underscored countries’ ability to use the flexibilities that are built into the TRIPS Agreement. And they agreed to extend exemptions on pharmaceutical patent protection for least-developed countries — until 2016. On one remaining question, they assigned further work to the TRIPS Council — to sort out how to provide extra flexibility, so that countries unable to produce pharmaceuticals domestically can import patented drugs made under compulsory licensing. A waiver providing this flexibility was agreed on 30 August 2003.

On December 6, 2005, in an effort to make the waiver permanent, the WTO General Council adopted an Amendment to the TRIPS Agreement (the “Protocol”) and submitted it to the Members for acceptance. Two-thirds of WTO members must ratify the Protocol. The Protocol is open for acceptance by Members until 1 December 2007 or such later date as may be decided by the Ministerial Conference.

Article 31(f) of the TRIPS Agreement says that production under compulsory licensing must be predominantly for the domestic market. The concern was that this could limit the ability of countries that cannot make pharmaceutical products from importing cheaper generics from countries where pharmaceuticals are patented.

As with the 2003 waiver, the permanent amendment will allow any member country to export pharmaceutical products made under a compulsory license for this purpose.

A separate statement by General Council chair Amina Mohamed, Kenya’s ambassador, is designed to provide comfort to those who feared that the decision might be abused and undermine patent protection.

The TRIPS Amendment allows developing countries with no or insufficient pharmaceutical manufacturing capacity to access alternative supplies of medicines in the event of a public health crisis. The Amendment includes safeguards to ensure that export compulsory licensing is used, as originally intended, for public health purposes and not to achieve industrial or commercial goals. WTO Members also commit to prevent the diversion of products away from the intended recipient country, so that poor populations are not deprived of the medicines intended for them. The goal of the amendment is to ensure that only countries truly lacking in pharmaceutical manufacturing capacity will be able to use export compulsory licensing.

In September 2007, according to an article by David Cronin for Intellectual Property Watch, a dispute erupted between two of the European Union’s most powerful institutions over Thailand’s decision to circumvent pharmaceutical patents in order to boost its supply of cheap medicines.

As the article explains, Peter Mandelson, who holds the trade portfolio in the EU’s executive arm, the European Commission, wrote to several Thai ministers after Bangkok decided to overrule patents on three medicines by issuing compulsory licenses. Mandelson expressed concern over reports that Bangkok “may be taking a new approach to access to medicines” by stating that “if drug companies wish to do business in Thailand, they should offer their drugs for no more than 5 percent above” the cost of generic versions of the products in question.

According to Mandelson, “this approach would be detrimental to the patent system and so to innovation and the development of new medicines” and “it risks forcing more drug companies to abandon their patents.”

But members of the European Parliament (MEPs) have taken exception to Mandelson’s letter, which was dated 10 July and made public in late August. Many MEPs believe that Mandelson should not be seeking to exert pressure over developing countries which overrule drug patents in order to address public health needs.
They also feel that Mandelson was insensitive to questions raised by the Parliament over the relationship between global intellectual property rules and access to medicines.

The EU debate follows on the heels of a debate over Thailand’s actions that was held at a March 16, 2007 Capitol Hill briefing in Washington, D.C. In an article written by Martin Vaughan of Intellectual Property Watch, Ron Cass, Chairman of the Federalist Society’s Practice Group on International Law and National Security, said the circumstances of the Thai case do not fall within narrow exceptions in the TRIPS Agreement on when a government may use a patented technology without first negotiating with the patent holder.

Cass also defended the March 14, 2007 announcement by Abbott Laboratories that it has withdrawn requests to register in Thailand seven new medicines, including a new heat-stable version of the AIDS drug lopinavir/ritonavir, marketed by Abbott as Kaletra.

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