WTO: 2010 NEWS ITEMS

WTO members debated on 2 March 2010 the question of whether a 2003 decision designed to improve access to medicines is working. Although opinions expressed in the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Council varied, members agreed that they should look at real-life experiences in order to assess the system.

The TRIPS Council also discussed issues related to patents and biodiversity, including a new paper from Bolivia. It considered various aspects of technical cooperation. And it heard about the latest steps in improving the way information on intellectual property is shared among members.

NOTE:
THIS NEWS ITEM IS DESIGNED TO HELP THE PUBLIC UNDERSTAND DEVELOPMENTS IN THE WTO. WHILE EVERY EFFORT HAS BEEN MADE TO ENSURE THE CONTENTS ARE ACCURATE, IT DOES NOT PREJUDICE MEMBER GOVERNMENTS’ POSITIONS. THE OFFICIAL RECORD IS IN THE MEETING’S MINUTES 

  

SEE ALSO:

> More on geographical indications
> More on TRIPS and biodiversity
> TRIPS news

In brief

TRIPS and biodiversity

New in this meeting was a Bolivian paper IP/C/W/545 describing approach the country’s constitution takes and calling for a total ban on patenting all life forms, protecting the rights of indigenous communities, their traditional knowledge and “food sovereignty” against monopoly power of major corporations.

Most statements reflected members’ unchanged positions in this issue.
  

Technical cooperation

Among the issues discussed were least-developed countries’ priority needs (explained in a new web page: http://www.wto.org/english/tratop_e/trips_e/ldc_e.htm). Bangladesh has joined Uganda and Sierra Leone in submitting its priorities.

The information provided to members included the EU’s latest paper on its technical cooperation activities. The EU highlighted a €16m project with China (€5m coming from China itself), and €1.2m project in Bangladesh with a contribution from the World Intellectual Property Organization.
  

Information and transparency

The Secretariat reported on progress in improving the information available online. This is partly in response to a letter from the General Council chairperson to all councils and committees on ways to make notifications and other information flows more up-to-date and more complete in the areas they handle.

In October 2009, the Secretariat presented a background note IP/C/W/543 summarizing the relevant procedures and their use, with suggestions on how to make the notification system more transparent and easier to use.

In this meeting the Secretariat reported that a new set of pages serving as a toolkit for notifying countries’ intellectual property laws, regulations and other information will soon be published on the WTO website. The Secretariat is also working with the World Intellectual Property Organization (WIPO) on accessing WIPO’s improved electronic database of laws.
  

‘Non-violation’ disputes

“Non-violation” is shorthand for the arcane question of whether there can be legal grounds for complaint under TRIPS even when the TRIPS Agreement has not been violated. Members disagree on whether these complaints have a place in TRIPS but have agreed to refrain from launching disputes on them, the restraint officially known as a “moratorium”. More recently the moratoriums have been extended from one Ministerial Conference to the next.

In December 2009, the Geneva Ministerial Conference agreed to extend the moratorium further until the next meeting, which they decided to hold in 2011.

  

In depth: TRIPS and health

1. ‘Paragraph 6’

The debate is about a 2003 “waiver” (a waiver allows countries to bypass a WTO rule under certain circumstances), and an almost identical amendment to WTO intellectual property rules, agreed in 2005 and now waiting for the required number of WTO members to accept it. (More here)

Since the last TRIPS Council meeting in October, Nicaragua and Pakistan have accepted the permanent amendment of the TRIPS Agreement.

The deadline for governments to accept the amendment was extended for two more years until 31 December 2011 by the WTO General Council on 17 December 2009. In practice, how members use the system would be the same, since the waiver and amendment are almost identical. The waiver will remain in force until the amendment takes effect. But a full amendment would make the legal situation more permanent.
  

The rule change removes a requirement that generics produced under compulsory licence should be mainly for the domestic market, which would limit their export to countries that cannot make the medicines. It is sometimes called the “Paragraph 6system after the provision in the 2001 Doha Declaration on TRIPS and Public Health that led to its creation.

The system allows generic medicines made under “compulsory licences” to be exported to countries that cannot produce the medicines themselves. So far, it has only been used once for exports from Canada to Rwanda, and this has led to questions about whether the system is working effectively.

Delegations generally agree that it would be useful to look at real experiences, and the new chairperson, Martin Glass of Hong Kong, China, who took over at the end of the meeting, will contact members on how to proceed, including the proposal to hold a workshop on the issue before the TRIPS Council’s formal annual review of the system in October.
  

So is it working? A number of developing countries repeated their belief that the system might not be an effective solution because of its limited use so far. They repeated their call for a workshop to look at real-life experiences in using the system or in trying to use the system.

A number of developed countries continued to counter that the single case does not prove anything because the system is only one of a range of options for allowing the sick in poorer countries access to more affordable medicines.

These include foundation funds and other means of buying medicines more cheaply, and patent holders lowering prices in some markets because of the threat of compulsory licensing (whether for export or to supply domestic markets).

Several pointed out that the only factual evidence brought to the TRIPS Council so far — by Canada — suggests the length of time needed for Canada to export to Rwanda was not caused by the system but by other factors.
  

The Canadian account was first outlined in an informal consultation on 12 February. Canada asked for it to be put on the record of this formal TRIPS Council meeting. (Chairperson Karen Tan’s oral report on the consultation is below)

Canada says that after the company, Apotex, received fast-track approval for its generic (TriAvir, a fixed dose combination tablet of lamivudine, 150mg + nevirapine, 200mg + zidovudine, 300mg) in June 2006, Apotex took over a year to find an interested importing country. In July 2007 Apotex had found a customer and contacted the patent holders to negotiate a voluntary licence (this step is normally required for any compulsory licence, not only those under the Paragraph 6 system). In September 2007, Apotex asked for a compulsory licence; approval took two weeks, Canada says. Rwanda’s public tender then took until May 2008, when Apotex started production, making the first delivery in September 2008, Canada says. (Details below)

Although the new chairperson will consult members on how to proceed, some developed countries pointed out that the informal consultation on 12 February was already held in response to a call from developing country critics who wanted an opportunity for members to share their experience in using or trying to use the system. Only Canada actually did so, they said.
  

2. Generics detained in transit in the EU

This issue involves generics in transit through the EU and alleged violations of either trademarks or patents in the transit country. See fact sheet here and here.

India and Brazil continued to complain about EU members’ customs authorities detaining genuine (ie, not counterfeit) generic medicines in transit through EU ports and destined for developing countries.

India accused the EU of paying lip service to reforming the Customs Regulation 1383/2003, which governs the detentions, and failing to provide information. India and Brazil did not cite new cases in this meeting but complained that the threat of detentions remains. As in previous meetings, they raised the issue under “other business”.

The EU said that it had provided information in lengthy bilateral meetings, and that its customs officers have to be able to check shipments because of the large amount of counterfeit drugs.

Background: the original complaint. This was first raised by India and Brazil in meetings of the General Council in February 2009 (see minutes)and the TRIPS Council in March 2009 and then again in the July and October meetings in the same year (see minutes).

Cases cited previously include at Rotterdam (Losartan, an anti-hypertension medicine), Frankfurt in May 2009 (Amoxicillin, a antibiotic) and in Paris in October 2009 (Clopidogrel, a blood thinner).

India and Brazil, supported by a number of developing countries said that they were dissatisfied with assurances given by the EU originally, after the numerous seizures by Dutch authorities during 2008. Later seizures had occurred after the end of the EU’s MEDIFAKE campaign based on its Customs Regulation 1383/2003, they said. The two said that by permitting the seizures, the regulation violated GATT (on goods in transit), TRIPS, and the Doha Declaration on TRIPS and Public Health as it created barriers to the legitimate trade in generic medicines. They said the regulation also contravened international humanitarian law which recognized the right to health.

They accused developed countries of deliberately confusing medicine quality with intellectual property protection as part of an orchestrated campaign to impose “TRIPS plus” enforcement norms on other members. They said the actions rendered hollow the EU’s proclaimed commitment to better access to medicines for developing countries.

They described the EU’s response to efforts to resolve the issue bilaterally as insufficient, and called on the EU to urgently review the regulation and bring it into conformity with its WTO obligations under GATT and TRIPS.
  

Background: the reply. The EU said its commitment to access to medicines was well illustrated and that this policy had not changed. While not hindering trade in generic medicines, it was important to stop dangerous fake medicines and for that purpose detention by customs to allow verification of the product by the right holder was legitimate and necessary, the EU said.

The discussion concerned a few cases of temporary detention of medicines (not seizure), and all the consignments had ultimately been returned to their importers, the EU stressed. It said it had reacted effectively to India's and Brazil's concerns, as patent right holders had publicly committed themselves not to seize generic medicines for patent infringements, and no new cases had occurred.

The medicines detained in Frankfurt were going to Denmark and were therefore not a case of transit, the EU said. It added that the regular review of Regulation 1383/2003 was open and could address any concerns that India and Brazil might have.
  

Observers

Members continued to disagree on whether the Secretariat of the Convention on Biological Diversity should be an observer in the council, even if invited ad hoc meeting by meeting. A suggestion was also made for the African Regional Industrial Property Organization (ARIPO) and Organisation Africaine de la Propriété Intellectuelle (OAPI) to be accepted as ad hoc observers on the basis of their earlier requests. The chairperson agreed to hold consultations. But without consensus, the situation is unchanged. For the new suggestion some members said they need time to consider it.
  

Chairperson: Ambassador Karen Tan of Singapore, temporarily, handing over at the end of the meeting to Mr Martin Glass of Hong Kong, China.

Next meetings

These dates could still be changed:

  • Tuesday-Wednesday 8—9 June 2010
  • Tuesday-Wednesday 26—27 October 2010

 

The 12 February consultation on TRIPS and public health
  

What the chairperson reported

Ambassador Tan reminded delegations that paragraph 8 of the Decision on the Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health provides that the Council for TRIPS shall review annually the functioning of the system set out in the Decision with a view to ensuring its effective operation and shall annually report on its operation to the General Council. The TRIPS Council held its sixth review of the Paragraph 6 System at its meeting in October. The seventh review is scheduled to take place in October this year.

In the context of its review last October, the Council asked her to hold a round of informal consultations on the operation of the System before today’s formal meeting. The purpose, she said, was to provide a platform to share experiences and to look at concerns in an informal setting, without prejudging the outcome. In response to this request, she held an informal meeting on 12 February.

Overall, the chairperson said she found the informal meeting to be very constructive. She felt that members were interested in sharing experiences on the use of the System and ready to engage in practical and fact-based discussions in order to have a full understanding of the operation of the system.

As regards the specific points made by delegations, some of them were concerned that the system had been used only once by Rwanda and Canada, which raised the question of whether the system had met its objective of providing an expeditious solution to problems faced by countries with insufficient or no manufacturing capacities in the pharmaceutical sector, she said. The meeting also heard that the fact that the system had only been used once did not imply that it was inadequate, since there were also other ways to get medicines to patients, she said. Some delegations argued that the number of licences issued under the system was not the proper measure of its success, and that the use of the system by Rwanda and Canada had demonstrated that the system could work effectively; the system could only play a supportive role in the wider effort to improve access to essential medicines, and its mere existence might have had a positive impact on drug prices, Ambassador Tan said.

The chairperson reported that concerns were also expressed about a period of some three years that it had taken to deliver the medicines to Rwanda in this particular case. She said Canada shared experience on its use of the system, giving a detailed account of the timeline of the shipments under the system, attributing the bulk of the time consumed not to the specific requirements of the Paragraph 6 system, but to factors such as identifying a recipient country for the available medicine, and the government procurement process in the recipient country which required a competitive tendering process.

As regards the topics that might warrant more discussion, she said some delegations suggested that the focus could be on the experience from the use of the system by Rwanda and Canada to consider whether the system is working effectively. Some delegations said that the performance of the system could be appraised more generally to assess whether there were any procedural problems regarding its operation, she recalled.

Some members said that, bearing in mind that the system was demand-driven, it would be helpful to know whether there were some concrete obstacles why potential importers did not procure under it. Among other issues mentioned that might merit further discussion were safety and efficacy of medicines procured under the system, government procurement, and the dissemination of information with a view to building capacity in developing countries to use the system, she said.

Members also discussed the appropriate ways to address these issues, agreeing that annual reviews were a good platform for sharing experiences and evaluating the operation of the system, she reported. However, she went on, some delegations wished to complement this work by organizing a dedicated workshop open to all stakeholders. Some other delegations said that the review process was a member-driven exercise, but believed that its usefulness could be enhanced, for example by more factual input, she said

Finally, she reported that there were calls for the Chair to consult with interested delegations on how to best address the issues raised in the discussion. A number of delegations expressed their willingness to participate in any consultations that the chair might decide to hold on the matter, she concluded.
  

Experience: Canada

Canada listed key dates in implementing the WTO system and Canada’s Access to Medicines Regime in order to explain why it took some time for the shipments of Apotex’s TriAvir (a fixed dose combination tablet of lamivudine, 150mg + nevirapine, 200mg + zidovudine, 300mg) to reach Rwanda.

The Access to Medicines Regime was designed to be demand-driven but in this case it was driven by the supplying company, Canada said. Any delays were not caused by the WTO system but, nor was much time taken up by Canada’s Access to Medicines Regime, it said. The total time needed to supply the medicines included a period when the Canadian company first had to search for a customer, and later Rwanda’s procurement procedure, which had to be respected, Canada added.

These are the dates that Canada gave:

AUGUST 2003 — The WTO waiver (“Paragraph 6 solution”) is agreed

SEPTEMBER 2003 — Canada announces its intention to implement the system

MAY 2004 — Canadian Parliament amends the law, setting up the legal framework to allow compulsory licensing for export

MAY 2005 — Canada’s new law and implementing regulations take effect

DECEMBER 2005 — Canadian health authorities government are asked by Apotex Inc to approve a generic medicine. The product then undergoes a fast-track approval procedure to ensure quality and efficacy

JUNE 2006 — The review is completed (it normally takes about 12 months, Canada said). Apotex starts a year-long search for a customer

JULY 2007 — Apotex identifies Rwanda as its customer, and writes to three patent holders to seek a voluntary licence (required under the TRIPS Agreement before a compulsory licence can be issued). (Rwanda notifies the WTO that it intends to import)

SEPTEMBER 2007 — Apotex applies for a compulsory licence to export to Rwanda. The Canadian government approves this in two weeks.

OCTOBER 2007 — Canada notifies the WTO that it has issued a compulsory licence. Rwanda opens a public tender to supply the medicines.

MAY 2008 — Apotex announces it has won the public tender under Rwanda’s rules, starts production.

SEPTEMBER 2008 — The first half is delivered

SEPTEMBER 2009 — The second half is delivered

 Jargon buster 

• CBD: Convention on Biological Diversity.

• geographical indications (GIs): Place names (or words associated with a place) used to identify products (for example, “Champagne”, “Tequila” or “Roquefort”) which have a particular quality, reputation or other characteristic because they come from that place.

• modalities: The way or method of doing something — in the Doha Development Agenda negotiations these are blueprints for the final deal, eg, how to cut tariffs, and reduce agricultural subsidies and support, along with flexibilities to deal with various sensitivities. Once the modalities have been agreed, countries can apply the formulas to tariffs on thousands of products and to various support programmes.

• special sessions: meetings of WTO councils and committees focusing only on the Doha Development Agenda negotiations.

• TRIPS: Trade-related aspects of intellectual property rights.

> More jargon: glossary

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