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Review of Art 39.3 TRIPS – interpretation and controversy

Sanya SmithThird World Network

25 August 2006Bangkok

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What are intellectual property rights? (IPRs)

Historically: a reward for inventivenessA limited monopoly given by the

government as an exception to usual preference for competition

Examples of IPRs Patents for inventions Copyright for books, music, films etc Trade marks for brand names

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World Trade Organization (WTO)

GATT (1947-1994) Trade in goods

WTO (1995- ) goods trade, services trade and intellectual

property rights 150 countries are Members

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Comparative advantage

Industrialised countries have higher wages so cannot produce manufactured or agricultural products as cheaply as developing countries Pfizer CEO: ‘By the early 1970’s, it became clear that

tougher global competition lay ahead for US business’ Industrialised countries/their companies still own

most of the intellectual property. Eg 98% of patents granted in Malaysia are to foreigners Pfizer CEO: ‘Intellectual property rights are extremely

important to the competitiveness of the US and other post-industrial economies’

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How did TRIPS come about?

According to former Pfizer CEO, Mr Pratt: ‘The industry became more active in the policy arena and by the

next decade [1980s] our efforts began to bear fruit.’ ‘Having been successful in getting “TRIPS” on the GATT

agenda, government asked the US private sector to provide specific proposals for an agreement’

‘In conjunction with more than a dozen companies from all the relevant sectors of US business, Pfizer and IBM co-founded the Intellectual Property Committee. . . The USTR was impressed.’

USTR asked the IPC to join forces with the main European and Japanese business groups

‘Working together, we were able to draft intellectual property standards . . . Our combined strength enabled us to establish a global private sector-government network which lay the groundwork for what became “TRIPS”.’

The Economist, 27/5/1995, Asian edition, page 26

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Registration of medicines

For registration in many countries, need to show that the medicine Is effective against the disease (efficacy) Has minimal side effects (safety) Is manufactured cleanly etc (quality)

Safety and efficacy may need evidence from clinical trials etc

First applicant has to provide evidence of efficacy, safety and quality. Does a subsequent generic who wants the same

medicine to be registered have to provide the same evidence?

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WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)

TRIPS Article 39.3:“Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use.”

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Principles of interpretation

When interpreting Art 39.3 TRIPS, international law allows consideration of the rest of TRIPS Art 7: Objectives: ‘The protection and enforcement of intellectual

property rights should 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.’

Art 8.1: Principles: ‘Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of this Agreement.’

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TRIPS Article 39.3: main elements

Only relates to pharmaceutical and agricultural chemical products

Type of data that is protected: Undisclosed data

Ie not published Objective standard: government decides whether data is public, not

the applicant And that required considerable effort to generate

Up to countries to define Countries could require applicant to prove that it took considerable

effort And is about new chemical entities (NCE). NCE is up to countries

to define, could be: Never before registered anywhere in the world Never before patented anywhere in the world (does not have to be for:

• New therapeutic use for existing medicine, or • New dosage form/isomer/delivery method/combination etc)

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TRIPS Article 39.3: main elements continued Use of data that is prohibited:

Unfair Not defined in TRIPS, so countries can define it for

themselves Likely to be dishonest commercial behaviour

And commercial use Government use of the data by the first applicant to

approve a generic medicine is clearly not commercial use. It is the government doing its regulatory functions.

Government is not in commerce, it is the public sector. Conclusion: according to TRIPS, governments

can rely on the first applicant’s data to approve generic versions, UNCTAD, Correa, Watal etc

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TRIPS negotiating history

EU, Japan and US business groups and US Government wanted data exclusivity Countries considered text that explicitly

required data exclusivity, but rejected it

No country has been sued at the WTO for failing to give data exclusivity

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Further information:‘Protection of Data Submitted for the Registration of Pharmaceuticals: Implementing the Standards of the TRIPS Agreement’, Carlos Correa, South Centre, www.southcentre.org/publications/protection/protection.pdf

Thank you

Questions to sanya@myjaring.net