This part is extracted from the article Compulsory Licensing for Patented Medicines: A Comparative Legal Analysis of India, Brazil and Thailand written by Van Anh Le and Mark Hyland. The article was published in the Manchester Journal of International Economic Law in 2020, vol.17, issue 3. The authors have agreed for this work to be reproduced on this website. Access to the article with full footnotes can be found here. Or you can contact the author at van-anh.le@law.ox.ac.uk for the full paper.
The controversy of patent protection and access to medicine has become a thorny issue of the 21st century following the adoption of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) in 1995.1 This multilateral agreement requires mandatory patent protection for any inventions in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application,2 for a minimum of 20 years.3 This has resulted in a profound change in the pharmaceutical industry because prior to TRIPS, patenting medicine was optional and the protection term also varied from one country to another. An example is Switzerland, which in spite of being a developed country, did not allow patent protection for pharmaceutical products until 1977,4 though its patent system was first adopted in 1888.5 In a similar vein, medicine patents were only made available in Italy in 1978 when the Italian Supreme Court declared the Law on Industrial Inventions of 29 June 1939 unconstitutional since such law had excluded pharmaceutical products from patenting. 6 In Spain, pharmaceutical products have only been patentable since 1992 as a result of the country becoming a member of the (then) European Economic Community (EEC) (also known as the Common Market).7
On the one hand, there is a good deal of truth that patents are of greater importance in the pharmaceutical industry than in other fields such as chemistry or electronics due to its laborious, expensive and inherently risky Research and Development (R&D) process.8 As a result, pharmaceutical companies often charge a high price to offset not only the successfully marketed medicine but also other candidates that did not reach the final stage. The exclusive rights granted by a patent to the right owner to exclude others from commercially exploiting the patented medicine are considered essential to allow him to recoup his past investment. On the other hand, high prices of medicinal products are believed to hamper the public health efforts, in particular when patenting pharmaceuticals has become almost universal in the wake of TRIPS.9
In order to circumvent the negative impact and abuse of patent rights, many countries’ governments have opted for a mechanism known as compulsory licensing. This legal remedy, which is regulated by Article 31 of TRIPS, allows the government or a third party to manufacture patent-protected medicines without the consent of the patent holders. It is a potential tool that many developing countries, since the creation of TRIPS in 1995, have employed to overrule patent monopoly and give their citizens access to life-saving drugs. Between 1 January 1995 and 6 June 2011, Beall and Kuhn recorded 24 episodes of actual occurrences of compulsory licensing in 17 countries.10 Apart from Canada and the US, which are high-income countries, the remaining granting countries are middle-income economies, of which Brazil and Thailand are the most active users.11 All compulsory licences during the said time were initiated by the government (government use licences), no private party was found to be involved.
Nevertheless, there are several myths about compulsory licensing which need to be dispelled. First of all, compulsory licensing has never been an invention of TRIPS. Its early existence can be traced back to the English Statute of Monopolies of 1623 under the form of compulsory working of a patent within the country, and this concept was later adopted in many countries’ national laws. Within the parameters of international law, compulsory licensing was first mentioned in the 1925 Hague revision of the Paris Convention for the Protection of Industrial Property.12 Prior to TRIPS, around one hundred countries recognized such licences and the grounds to issue a compulsory licence in domestic laws were also expanded from failure to work to include other situations, such as dependent patents, public interest, and anti-competitive behaviours. 13 What TRIPS does is streamline the granting process of compulsory licences in all WTO member states by setting up a standard procedure. This will be analysed in more detail in the next section. Nowadays, 156 countries/territories have been identified to provide for the compulsory licensing exception under their respective legal frameworks.14
Secondly, compulsory licensing is not an exclusive tool of the patent system. In fact, it can be granted for any intellectual property (IP)-protected products. It is very interesting to note that while the term ‘compulsory licensing’ does not appear in Article 31 of TRIPS (the patent section), it is nevertheless used in Article 21 (the trademark section) instead. Furthermore, EU countries have issued compulsory licensing more often in the area of copyrights.15 However, compulsory patent licensing in the pharmaceutical industry is the one which has sparked the most morally and politically bitter conflict between developed and developing countries, patent advocates and health activists, particularly with the genesis of TRIPS.
A final clarification is that developed countries are commonly said to issue compulsory licences. However, one caveat to this statement is that they grant such licences as punishments for antitrust behaviours,16 not aim to address public health under the patent law.17
- Image Hansjörg Keller on Unsplash
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Vân Anh
Vân Anh hiện đang là giảng viên (Assistant Professor) môn luật Sở hữu trí tuệ tại đại học Durham, vương quốc Anh. Blog cá nhân: https://www.vananhle.net/.