The member states of the Common Market for Eastern and Southern Africa (COMESA) have clearly committed themselves to giving due priority to the protection of public health and promoting access to medicines for all.

According to the COMESA Treaty, member states have agreed to undertake concerted measures to co-operate in protecting public health and promoting access to medicine for all through the control of pandemics or epidemics, communicable and vector borne diseases that might endanger the health and welfare of the citizens of the common market[1]; the adoption of mechanisms for joint action in combating the outbreak of epidemics such as aids, cholera, malaria, hepatitis and yellow fever[2]; and the facilitation of movement of pharmaceutical products within the common market and the control of their quality.[3] Members of COMESA have undertaken also to harmonize drug registration procedures,[4] and afford each other mutual recognition of drugs registered in the common market, including cooperating, within the framework of cooperation in industrial development, in the local production of pharmaceutical products[5].

The Fourth Session of the WTO Ministerial Conference meeting in the Qatari City of Doha adopted, on 14 November 2001, the Declaration on the TRIPs Agreement and Public Health. The declaration highlighted the right[6] of WTO members to protect public health and promote access to medicine for all. However, the Ministerial Conference recognised, under paragraph 6 of the declaration, that WTO members with insufficient or no manufacturing capacity faced difficulties in effectively using their right to issue compulsory licences, and in this regard instructed the TRIPs Council to find a solution and report to the General Council by December 2002. After a year’s work, the TRIPs Council was able to produce only a draft Decision on which all WTO members agreed except the United States. Efforts are still continuing to obtain full consensus on the draft Decision. In view of this, it is appropriate for member states to consider ways of implementing the Declaration on the TRIPs Agreement and Public Health, while taking into account the discussion in the TRIPs Council on a solution for members with insufficient or no manufacturing capacity.

COMESA commissioned this study to assist member states in the preparation of patent laws and adoption of other necessary measures in implementing their rights and obligations under the TRIPs Agreement as clarified by the Declaration on the TRIPs Agreement and Public Health, and in pursuance of their obligations in the COMESA Treaty. For member states that would already have adopted the principal legislation, the study could be used in preparing the detailed patent rules governing the operation of the principal legislation. Additionally, the study could be used in the actual exercise on a continuous basis of the rights of member states in protecting public health and promoting access to medicines for all.

The study therefore aims to elaborate the question of protecting public health and in this regard contains suggestions for a regional framework on protecting public health. According to the terms of reference, the study has the following specific objectives:

· Review the ongoing discussion in the TRIPS Council on protecting public health and ensuring access to medicine for all;

· Analyse the case for and a legal framework for building domestic manufacturing capacity in the pharmaceutical sector within the COMESA regional market;

· Provide recommendations for a legal framework for the supply of pharmaceutical products within the COMESA regional market.

· Examine the existing legal framework in COMESA member states for protecting public health and ensuring access to medicines for all. This will entail a study of selected member states in order to compile relevant legislation and to describe the measures taken on the basis of the legislation, if any.

· Contain a case study, in light of the discussion in the TRIPs Council on paragraph 6 of the Declaration on the TRIPs Agreement and Public Health, on the declaration of a period of emergency in Zimbabwe.

· Make recommendations on a legal framework on the limited exception for production and exportation of medicine using patented technology before the expiry of the patent term

· Make recommendations on how to take forward the work in the TRIPs Council relating to the amendment to Article 31 of the TRIPs Agreement as part of the solution to the problem the ministers identified in paragraph 6 of the Declaration on the TRIPs Agreement and Public Health;

· Make recommendations on the question of general exceptions in the TRIPs Agreement designed to ensure a balance between the protection of the interests of society and the private rights of patent holders.

Methodology

The study involved missions to Zimbabwe, Malawi, Namibia, Kenya, Zambia and Swaziland, and deskwork. Although a mission was not undertaken to Uganda, an assessment of the situation on access to medicines and the patent law was done based on available relevant legislation.

Missions

The missions to selected member states aimed to closely analyse the legal framework for protecting public health, not only in terms of the legislation in place, but also in terms of how the legislation had been translated into institutions and measures on the ground. While many developing countries may have laws under which their administrations can act appropriately in exercising their rights to protect public health, the laws remain un-utilised. In particular, it was important to study why the right to issue compulsory licences would appear not to have been the preferred or readily available option in protecting public health; and to examine alternative measures if any that have been resorted to. The case study on the Zimbabwe declaration of a period of emergency considered the legal framework for the law, and the institutional mechanisms put in place for its operation.

The interviews covered both the public and the private sector. In the public sector, we interviewed, where possible, the following departments: justice, health (including the drug regulatory authorities and the procurement sections), commerce, industry, and in the private sector, the manufacturers, pharmacists and wholesalers.

Deskwork and preparation of the study

The deskwork was a period for analysing the results of the missions to selected member states and writing the study. It was also a period for writing an elaboration of the question of protecting public health, with recommendations for appropriate measures and ways forward.

CHAPTER 2: THE TRIPs AGREEMENT AND THE PROTECTION OF PUBLIC HEALTH AND THE PROMOTION OF ACCESS TO MEDICINE FOR ALL

The monopolistic nature of patents

The TRIPs Agreement provides a good listing of the main types of intellectual property rights. In its Part II, the Agreement lists: copyrights, rights of performers and producers of phonograms as well as broadcasting organisations (known as rights related to copyrights), trademarks, geographical indications, industrial designs, patents, layout designs, and undisclosed information.

Of these various types of intellectual property rights (IPRs), patents, on the one hand, and information and communication technologies[7], on the other, have been attracting international attention and scrutiny particularly since the mid 1990s when the World Trade Organisation was formally formed, and certain sections of developmentalists and activists begun focusing their efforts on it on the basis that it could adversely affect the development prospects of developing countries.

The TRIPs Agreement in its Article 28 sets out the rights that a patent gives:

“1. A patent shall confer on its owner the following exclusive rights:

(a) where the subject matter of the patent is a product, to prevent third parties not having the owner’s consent from the acts of: making, using, offering for sale, selling, or importing for these purposes that product (subject to the rules in the country on exhaustion of intellectual property rights);

(b) where the subject matter of the patent is a process, to prevent third parties not having the owner’s consent from the act of using the process, and from the acts of: using, offering for sale, selling, or importing for these purposes at least the product obtained directly by that process.

2. Patent owners shall also have the right to assign, or transfer by succession, the patent and to conclude licensing contracts.”

According to that provision, a patent owner enjoys a monopoly over the production and selling of the product, and using the process. Though the patent rights are written in terms of the patent owner being able to take steps to prevent others from doing the listed things, the TRIPs Agreement imposes obligations in members to protect these rights through the police and judicial systems of the country.

The monopolistic nature of these exclusive rights may mean that patents can limit access to medicine, seeds, and technology, thus adversely affecting, the protection of public health, food security, and availability of development technology. Trademarks, to the extent that brand names are associated with high prices for medicine, have also affected public health.

The very concept of protecting intellectual property rights is primarily to ensure the welfare and advancement of society. It should be instructive that the first recorded patent law, namely the Statute of Monopolies of 1624, in England, was enacted to promote competition and abolish monopolies that had been granted “upon misinformation and untrue pretences of public good”, but contained an exception for genuine mechanical inventions. Since then, the idea of patents has attained extensive monopolistic proportions to the prejudice of competition, perhaps the same idea as the camel inch-by-inch chasing the Arab from his tent.

Policy issues and areas for exceptions

The fundamental basis that patents should be available primarily for the good of the public and not primarily to profit the owner is emerging quite prominently in the context of the WIPO programme to develop an international patent system – the WIPO Patent Agenda. This discussion has to some extent[8] been summarised in a document the WIPO Secretariat prepared for the 37^th series of meetings of the WIPO Assemblies that took place from 23 September to 1 October 2002.[9] At page 31, the document lists the following as policy issues:

· “There are certain concerns about the actual grant of a patent on certain subject matter (such as the grant of patents on inventions considered contrary to morality, to ordre public, or to the protection of the environment and human well-being, and concerns about the granting of patent rights on genetic material construed as a form of assertion of ownership over the components of life – as opposed to concerns about the actual use of such technologies, whether or not patents).

· “Some concerns relate more to the policy implications of granting patents to certain inventions or class of technology (such as patents on core enabling technologies or research tools, and the concern that this may restrain the development of biotechnology; and concerns that patents on software of business method patents may constrain the growth of electronic commerce).

· “Other policy concerns arise over the patterns of ownership of patents or the way patent rights are exercised (such as the ownership of patent clusters creating an effective monopoly in the market place, the misuse of patent rights for anti-competitive or other detrimental impact, and the impact of patents on pricing and accessibility of key technologies).

· “Finally, some concerns arise from the uncertain public-private interface that the patent system embodies. The patent system, as a policy mechanism specifically intended to use the grant of private rights in order to promote the broader public interest, must entail a dynamic synthesis of public and private rights. … the need to establish the right balance of public and private interests is at the core of many patent policy issues, and especially in mapping out the interface between the patent system and other areas of public policy.”

Against such policy concerns, proponents of stronger and harmonised patent systems at the international level have indicated that governments always retain the right to regulate at the national level the patent system in order to ensure the good of society, and rather than lowering the standards they have instead recommended the acquisition and use of better policy skills in exercising the rights of government to ensure the benefit of society, the drawing of a clear distinction between patenting as a process and the subsequent regulation of the exploitation of the patent, and better examination in the patent offices to ensure patents are granted on the basis of established criteria.

The Declaration on the TRIPs Agreement and Public Health

The Fourth Session of the Ministerial Conference of the WTO felt it owed the international community some concrete results on issues of public health as raised in the build up to the conference. The ministers were clear that they had to produce results. This in part accounted for the priority given to reaching some solution on these issues. The main issue in this regard concerned the relation between the TRIPs Agreement and the right of WTO members to take measures to protect public health as well as the broad question of the perceived restrictiveness or stiff conditions or overly high standards imposed by the TRIPs Agreement. The Ministerial Conference had before it a draft declaration with clauses requiring a flexible interpretation and application of the TRIPS Agreement to address public health crises. In response, the ministers stated in paragraph 17 of the Declaration they adopted as follows:

“17. We stress the importance we attach to implementation and interpretation of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) in a manner supportive of public health, by promoting both access to existing medicines and research and development into new medicines and, in this connection, are adopting a separate Declaration.”

The Ministers left no doubts at all about the importance of implementing and interpreting the TRIPs Agreement in a manner that supported public health. They indicated how such implementation and interpretation would support public health, namely, through promoting access to medicine and promoting research and development into new medicines. For developing and least developed countries this means promoting domestic capacity for research and development into new medicines.

The separate Declaration on the TRIPs Agreement and Public Health then went further than paragraph 17 of the Ministerial Declaration to address certain specific problems relating to measures protecting public health and to the TRIPs Agreement as a whole. It recognised and affirmed in paragraph 4 the right of members to take measures to protect public health and that while the TRIPS Agreement is relevant in the exercise of this right it should always be supportive of these measures in the way it is interpreted and implemented and through the full use of all the flexibility it contains. For as paragraph 4 stated,

“4. We agree that the TRIPS Agreement does not and should not prevent Members from taking measures to protect public health. Accordingly, while reiterating our commitment to the TRIPS Agreement, we affirm that the Agreement can and should be interpreted and implemented in a manner supportive of WTO Members' right to protect public health and, in particular, to promote access to medicines for all.

In this connection, we reaffirm the right of WTO Members to use, to the full, the provisions in the TRIPS Agreement, which provide flexibility for this purpose.”

Any solutions or processes under the TRIPs Agreement should not prejudice this right of members that has been recognised in the declaration, rather the right should be applied or operationalised in the most suitable manner to achieve the objectives of protecting public health and enabling members to effectively use the provisions on compulsory licences. What the declaration initiated and must be continued is the process of putting positive interpretations to provisions of the TRIPS Agreement and implementing the provisions in a manner that does not prejudice certain rights of members. There must be a balance between the rights of the holder of intellectual property rights and the rights of society as properly set out in Articles 7 and 8, 30 and 31[10], and elsewhere in the Agreement.

The separate Declaration on the TRIPs Agreement and Public Health went on to highlight some flexibility in the TRIPs Agreement, dealing with the particular issues that had been raised in the TRIPs Council in the build up to the Ministerial Conference. These issues had included, the need to interpret the TRIPS Agreement in a manner that reflects and promotes its objectives and principles as stated in Articles 7 and 8, the right of countries to determine their own grounds on which to grant or issue compulsory licences without being restricted by Article 31, the right of countries to determine for themselves what constitutes emergencies or other circumstances of extreme urgency in order to utilise the flexibility in Article 31 and possibly Article 73, and the freedom of countries to adopt the doctrine of international or regional exhaustion of intellectual property rights in order to be able to allow importation of medicine from alternative or affordable sources.

To address these issues, paragraph 5 of the Declaration on the TRIPs Agreement and Public Health stated as follows:

“5. Accordingly and in the light of paragraph 4 above, while maintaining our commitments in the TRIPS Agreement, we recognize that these flexibilities include:

(a) In applying the customary rules of interpretation of public international law, each provision of the TRIPS Agreement shall be read in the light of the object and purpose of the Agreement as expressed, in particular, in its objectives and principles.

(b) Each Member has the right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted.

(c) Each Member has the right to determine what constitutes a national emergency or other circumstances of extreme urgency, it being understood that public health crises, including those relating to HIV/AIDS, tuberculosis, malaria and other epidemics, can represent a national emergency or other circumstances of extreme urgency.

(d) The effect of the provisions in the TRIPS Agreement that are relevant to the exhaustion of intellectual property rights is to leave each Member free to establish its own regime for such exhaustion without challenge, subject to the MFN and national treatment provisions of Articles 3 and 4.”

These four clauses do not introduce any new rights or obligations in the TRIPs Agreement. They state the existing position on these issues, indeed as specifically reflected or envisaged in the TRIPs Agreement. Yet these clauses were worth having, even if merely for clarification.

Interpretation of the TRIPS Agreement

Regarding the flexibility in the TRIPs Agreement, paragraph 5(a) of the Declaration states that “in applying the customary rules of interpretation of public international law, each provision of the TRIPs Agreement shall be read in the light of the object and purpose of the Agreement as expressed, in particular, in its objectives and principles”. This instruction relates to the process of interpretation, and to institutions that would be doing the interpretation, both of which include the following.

(a) As is well known, the WTO dispute settlement system as established and elaborated under the Dispute Settlement Understanding has been a forum for interpretation of provisions of the WTO Agreement including the TRIPs Agreement. Panels and the Appellate Body have heard disputes and reached conclusions on the basis usually of extensive interpretation and application of the provisions, in elaborately reasoned and high-strung judgments. They have made findings and recommendations to members, which have been adopted by the Dispute Settlement Body with the result that members have been compelled to comply.

(b) In proceedings in other WTO bodies, such as the General Council and the TRIPs Council, members through their delegations often state positions reflecting their understanding or interpretation of the provisions of the TRIPs Agreement. In the General Council, decisions are adopted on the basis of positions taken by delegations and such decisions will in some cases be authoritative interpretations of the provisions of the WTO Agreement including the TRIPs Agreement. The TRIPs Council may make recommendations to the General Council on interpretations to adopt. Apart from authoritative interpretations, positions taken by members on the whole tend to reflect interpretations that may be put on provisions and this tends to spill out into public perceptions on the meaning of specific rules.

(c) Parallel to these WTO processes in Geneva, government officials in the capitals are on a continuous basis engaged in a process of complying with WTO obligations or implementing them in the laws, measures, and policies adopted. By the way they comply with the obligations or implement them governments put certain meaning or interpretation to specific rules. Implementation will reflect their appreciation of the flexibility in the TRIPs Agreement or their definition of the scope of this flexibility. In these capital-based processes of compliance and implementation, several actors are involved on the basis of quite specific interests. (i) For governments, the interests of society or the public will need to be protected and this may entail certain public policy measures in specific sectors such as the protection of public health and nutrition. (ii) For industry and specifically the pharmaceutical lobbies, the protection and enforcement of their private intellectual property rights, their patent rights for instance, will be paramount; and usually they will argue that protection and enforcement of their rights is in the best interests of society as that will promote innovation and result in better products to meet the needs of society. (iii) For activists in various areas, they may lobby government and industry in line with their specific missions such as the promotion of access to medicine, ensuring food security, and protecting genetic resources. (iv) For foreign governments taking an interest in laws, measures and policies proposed by other members, they will seek to act in the best interests of their dominant constituencies on issues involved and regarding the TRIPS Agreement the dominant constituency is not infrequently the pharmaceutical lobby rather than patients. (v) In some cases, domestic courts may be called upon to adjudicate on disputes involving private rights of persons, that arise from the TRIPs Agreement, that is, the intellectual property rights that members are required to protect. The positions of the various actors influence the ultimate positions adopted in the country, and in many cases this depends on the power and influence exercised by or over government officials, and on the legitimacy of positions and the interests of the country as perceived. In this way, the capital-based processes also involve interpretation and implementation of the agreements.

Grounds for Compulsory Licences

According to Article 28(1) of the TRIPs Agreement, a patent on a product confers on its owner the rights “to prevent third parties not having the owner’s consent from the acts of: making, using, offering for sale, selling, or importing that product for these purposes”; and a patent on a process confers on its owner the rights “to prevent third parties not having the owner’s consent from the act of using the process, and from the acts of: using, offering for sale, selling, or importing for these purposes at least the product obtained directly by that process”.

These rights that a patent confers on its owner, can be subject to compulsory licences. A compulsory licence issued to a licensee would mean that the licensee has the rights to undertake the acts that Article 28(1) of the TRIPs Agreement lists as exclusive rights a patent confers on its owner. The compulsory licences, subject to any specific conditions that however should be appropriate and not undermine the licence, would confer on the licensee the rights to make, use, offer for sale, sell, or import the patented product; or the right to use the process and similarly do acts relating to products directly obtained using the process.

Paragraph 5(b) of the Declaration on the TRIPs Agreement and Public Health states that “each Member has the right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted”.

This is an appropriate provision in the sense that members themselves are in the best position to determine, given the circumstances they find themselves in at a given time, whether and how to protect the interests of society. It is appropriate for members to determine the grounds so that they can readily respond to circumstances as and when government intervention may be necessary to protect important public policy.

The TRIPs Agreement does provide some framework to guide the determination of some of the grounds, always bearing in mind that members may find additional grounds and that it is important for this flexibility to remain unhindered, so that intellectual property regimes at the international and domestic levels may always develop and adapt as may be necessary.

In general, compulsory licences should be available where they would assist in the attainment of the objectives as set out in Article 7 and as reflected in the principles in Article 8 of the TRIPs Agreement.

On this basis, the grounds for compulsory licences, closely following the language of Articles 7 and 8, would include

the promotion of technological innovation,
transfer and dissemination of technology,
protecting the right of society to benefit from advances in science and technology,
the protection of the social economic welfare of society including public health and nutrition,
the promotion of the public interest in sectors of vital importance for social economic and technological development,
to prevent the abuse of intellectual property rights, and
to prevent practices that unreasonably restrain trade or adversely affect the international transfer of technology.

However, these do look like objectives to be attained rather than specific grounds as such. An important consideration in this regard is that when rendered as grounds rather than objectives, they can provide a clear legal basis for action or measures, in this case, for compulsory licences. And to take into account the broad language used, a judicial body, such as the High Court, could be given the jurisdiction to determine applications for compulsory licences that are made on these grounds.

Compulsory licences should be available additionally on any grounds so far developed through court decisions and administrative practice in various jurisdictions. These other grounds include,

Ensuring that the reasonable requirements of the public are met or satisfied;
Refusal to deal;
Failure to exploit or exploit on reasonable terms;
Failure to work or manufacture domestically;
Failure to obtain a licence with reasonable terms;
Remedy anti-competitive practices, unfair competition;
Inter-dependence of patents;
National emergencies; and
Protect the public interest – health, nutrition, and environment.

These grounds should not be challenged as such, because the declaration clearly states that “each Member has the right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted”. What may still be challenged is whether the procedural requirements under Article 31 of the TRIPs Agreement have been complied with.

In order not to make meaningless this freedom to determine the grounds for compulsory licences, it needs to be agreed in the WTO to clearly limit the scope of such challenges in accordance with the intention in the declaration and the specific rules in Article 31; or better still, it will be helpful if a meaningful moratorium is agreed to enable members to boldly take all necessary measures for dealing with the international health crisis.

Additionally, and in the context of an expeditious solution, it needs to be clearly stated that the existence in the country or region of malaria, tuberculosis, HIV aids and any related or opportunistic diseases, as well as the occurrence of any epidemics related to diseases such as Ebola, cholera, meningitis, typhoid, constitute a national emergency or other circumstances of extreme urgency; and that members recognise the present international health crisis constituted by these diseases as grounds for compulsory licences or public non-commercial use.

It deserves emphasis that it is not only patent laws that will be applicable in addressing public health crises and other circumstances of extreme urgency. Other laws that will be applicable may include, competition laws (to deal with anti-competitive practices or the abuse of intellectual property rights), public health statutes (under which the Minister or other competent officer may issue appropriate orders or enact statutory instruments for measures to control or prevent epidemics), national emergency statutes (under which countries may declare emergencies and provide for measures to deal with such situations), constitutions and provisions on human rights as well as facilities for public interest litigation (under which government and private sector organisations may promote and protect certain social economic rights of the public, such as access to, medicine, doctors and treatment facilities), and the sovereign right of governments to use any intellectual property rights in the interests of the public for non-commercial purposes.

Such statutes should also be clearly recognised as legitimate instruments that are supportive of or additional to measures relating to compulsory licences.

National emergencies and other circumstances of extreme urgency

Paragraph 5(c) of the declaration states that “each Member has the right to determine what constitutes a national emergency or other circumstances of extreme urgency, it being understood that public health crises, including those relating to HIV/AIDS, tuberculosis, malaria and other epidemics, can represent a national emergency or other circumstances of extreme urgency”.

The Africa Group, Barbados, Bolivia, Brazil, Dominican Republic, Ecuador, Honduras, India, Indonesia, Jamaica, Pakistan, Paraguay, Philippines, Peru, Sri Lanka, Thailand and Venezuela, in their submission to the Special Session of the TRIPs Council on Access to Medicine[11], held on 20 June 2001 at the request of the Africa Group at the April meeting of the TRIPS Council, elaborated how access to medicine and the protection of public health in the context of epidemics caused by HIV/AIDS and related opportunistic diseases, malaria, tuberculosis, among others, had become an important concern worldwide and specifically in the United Nations system.[12]

What the WTO as an organisation could now do on its part, having recognised the international concern and the global scale of the crisis, and having adopted the declaration on public health stating in paragraph 5(c) that it is “understood that public health crises, including those relating to hivaids, tuberculosis, malaria and other epidemics, can represent a national emergency or other circumstances of extreme urgency”, is adopt a decision, as already suggested in the context of grounds for compulsory licences, further recognising an international public health crisis and on this basis expressly permitting compulsory licences to be issued by any Member that so wishes for the production and supply of medicines and medical technology to any members in need. A list of such members that are in need of support, could be compiled and continually updated by the WTO on the basis of communications to the TRIPs Council from the World Health Organisation and UNAIDS, and from the members facing public health crises and taking measures to deal with the crises; it being understood that the WTO list is for purposes of information sharing among the members and relevant organisations.

In 2002, Zimbabwe declared a period of emergency on HIV/AIDS for the purpose of enabling the State or a person authorised by the Minister to make or use any patented drug, including any antiretroviral drug, used in the treatment of persons suffering from HIV/AIDS or HIV/AIDS-related conditions, and to import generic drugs in the treatment of persons suffering from HIV/AIDS or HIV/AIDS-related conditions. This emergency declaration was renewed in 2003 and extended until 2008.[13]

Exhaustion of intellectual property rights

Paragraph 5(d) of the declaration states that “the effect of the provisions in the TRIPS Agreement that are relevant to the exhaustion of intellectual property rights is to leave each Member free to establish its own regime for such exhaustion without challenge, subject to the MFN and national treatment provisions of Articles 3 and 4”.

Exhaustion of intellectual property rights is the concept that generally intellectual property rights will not be enforced on transactions subsequent to the exercise of these rights during the first transaction. That is, at the first sale or disposal, the intellectual property rights are exercised and thereby exhausted.

(a) Once a patented product or process has been put on the market with the consent of the patent holder (for instance through sale or granting another person a licence to produce), the rights under the patent (such as to prevent others from importing, selling or producing the product) have been exercised. Voluntary licences and sale contracts may contain conditions that regulate the sale or export of products. In such cases, the conditions may be recognised and enforced on the basis of freedom of contract, but this may be subject to over-riding public policy considerations such as the prevention of, restraint of trade, abuse of intellectual property rights, and anti-competitive practices.

(b) In other cases where consent may not directly apply, for instance where compulsory licences are granted, the concept of exhaustion should similarly apply on the basis that the patent holder has obtained reward or payment for the invention and having been thus remunerated the rights (to prevent the import, sell, production, or export of the product) have been exhausted. In this regard, it may be pointed out that paragraph (f) of Article 31 of the TRIPS Agreement, already envisages the possible exportation to other countries of some of the products produced under a compulsory licence, provided that on the whole the production is “predominantly for the domestic market”.

(c) This means that, with respect to compulsory licences meeting the criteria under Article 31, the right of the patent holder to prevent the exportation of these products is qualified or limited to the extent that some of the production may be exported; say up to 49.9 per cent of the production. The exhaustion concept applies in relation to the specific products put on the market.

In the context of the need for producers under compulsory licences in small domestic markets (of developing and least developed country members) to have a wider market for their products in order to properly utilise production capacity, and in order to increase the proportion of domestic production that may be exported (beyond the “predominantly for the domestic market” restriction in Article 31(f)), it would be necessary and appropriate for the doctrine of exhaustion of rights to apply as members may choose. To limit production under compulsory licences to the domestic market amounts to limiting the choice given to members in applying the doctrine of exhaustion of rights. It deserves emphasis that the rationale for exhaustion of rights derives from the market and contract principles that (i) if the product is put on the market with the consent of the patent holder, there can be no objection to further disposal of the product, subject to any relevant and operative contractual terms, (ii) once sold, products become the property of the buyer who may accordingly dispose of them as fit, and (iii) once remunerated for the patented product or process the patent holder has exercised the rights accorded under the patent – the rights to prevent the unauthorised others from producing, exporting, importing, selling or offering for sale, or from using the patented process. Similarly, in the event of a compulsory licence, once the patent holder is adequately compensated in accordance with the TRIPS Agreement, that is once remunerated or rewarded, the rights in the patent – to prevent others from producing, exporting, importing, and selling – should be exhausted.

The concept of exhaustion can be applied on a national, regional, or international basis. Applied on a national basis, it means that once the patented product or process has been put on the market in the country, the patent holder cannot regulate or exercise rights over further transactions on the product or process in the country, but the patent holder may prevent the importation from abroad of the patented product or process into that country. Applied on a regional basis, it means once the patented product or process has been put on the market in any country in the region, the patent holder cannot exercise patent rights over any further transactions in the region, that is, the product or process may be further sold or imported into any other country in the region without additional consent from the patent holder, that is parallel imports are permitted within the region. Regional application of the concept can be on the basis of a customs union or a free trade area; products normally move freely within such areas without facing formal trade barriers mainly customs duties and other restrictive regulations of commerce. And applied on an international basis, it means that once a patent product or process has been put on the market in any country, it may be sold or imported into any other country without a requirement for further consent from the patent holder.

(a) The European Court of Justice has applied the concept of exhaustion of intellectual property rights on a regional basis (the European internal market) and has adopted the doctrine of consent as the justification for permitting parallel imports taking place within the internal market. On this basis of this justification, the doctrine of regional exhaustion of rights within the EU has not been extended to products produced under compulsory licences; the reasoning being that the patent owner’s consent is lacking in cases of production under compulsory licences.

(b) However, the actual or legal basis within the acquis of the European Union, for permitting parallel imports seems to be the freedom of movement of goods within the customs union as understood in terms of the definitions of Article XXIV of GATT 1994 (customs unions are single customs territories where the parties eliminate barriers to their trade and adopt substantially the same external trade regime against third countries). In the words of the courts, the rationale for permitting parallel imports is to ensure the “operational viability of the internal market”, by eliminating barriers to movement of goods, preventing the partition of the internal market and in this regard ensuring competitive conditions, and promoting the approximation of the laws of the member states where the relevant instruments have been adopted. It is this that may ultimately explain the fervour with which parallel imports have been permitted within the internal market. Even in respect of products put on foreign markets and imported into the internal market, the courts have been prepared to look into the foreign contracts to establish whether there was consent for the products to be imported into the internal market, and would consider such imports consented to where there is contractual consent for importation from abroad into the internal market.

(c) On the basis of the doctrine of consent, therefore, the European Court of Justice has taken the view that products produced under compulsory licences may not be considered put on the internal market with the consent of the holder of the intellectual property rights. In such cases, the intellectual property holder would not have been in control of the process of the introduction of the products onto the internal market, and would not have had the legal means to prevent the introduction of the products.

(d) This view may not be appropriate for other countries or regions that may have additional but equally important considerations or public policy objectives to fully take into account, further to ensuring freedom of contract and the sanctity of private rights. In any case, exhaustion of intellectual property rights need not be based only on consent (express or implied); it can be based on reward or compensation, and on other public policy considerations such as the creation and preservation of customs unions or free trade areas in order to increase freedom of trade and efficiency within the region, or considerations for protecting public health particularly through ensuring access to medicines.

Differences in economic and other circumstances in countries may provide locational advantages for production, along the same lines as transnational corporations locate in developing countries on considerations such as, low cost labour or inputs, or proximity to sources of inputs for their products, in order to produce competitively for the global market. Regarding pharmaceutical products, there can be differences in prices depending on where the products are produced. Production in such locations may be under licence from the patent holder or from competitors. Bulk purchases from the patent holder may be obtained at discounted prices, and the buyer in such cases may be in a position to charge lower retail prices than the retail prices from the patent holder. Generic versions of patented products may be produced much more affordably than the brand name versions.

The significance of the provision in the declaration that members retain the right to determine how they will apply the concept of exhaustion of intellectual property rights, is in availing members with a wide selection of sources for importation of medicines and medical technology, depending on the rules they adopt. International exhaustion of intellectual property rights gives a Member the widest scope for sources of supplies, in that they can source supplies from any country, from the most affordable source available globally. Regional exhaustion allows a Member to source from the most affordable source within the region, for instance, with the customs union or free trade area. National exhaustion means that users in the country may only look at sources within the country, and comply with the rights of the patent holder if they obtain the products from outside the country.

In Africa, the Southern African Development Community, the Common Market for Eastern and Southern Africa, the Intergovernmental Authority of Development, the Economic Community of Central African States, the Economic Community of West African States, the Arab Sahel Economic Community, and the Arab Maghreb Union have been formed as regional economic communities respectively in Southern, Eastern, Central, Western and Northern Africa, thus covering the entire continent, as building blocks for the continental economic community to be formed progressively over a maximum period of 34 years counted from 12 May 1994.[14] Some regional economic communities have made more progress than others towards becoming full free trade areas or customs unions. In Africa therefore, Member States may consider adopting the concept of exhaustion of intellectual property rights on a regional basis.

In the context of an expeditious solution under paragraph 6, this is an instance where groups of members may take measures themselves on the basis also of the flexibility in the TRIPS Agreement, to address public health crises. Such measures will be effective in the context of (a) predictability and certainty in part assisted by the Declaration and an expeditious solution the TRIPS Council will recommend; (b) availability of domestic manufacturing capacity in the pharmaceutical sector within the region, through location of production within the region; and (c) importation of pharmaceutical products into the region from third country sources. The recognition of the importance of regional or international exhaustion of intellectual property rights is an important element in an expeditious solution under paragraph 6, when viewed as it should against a background of consistent bilateral and regional pressure, in some cases successful, on African countries to give up some of their flexibility under the TRIPS Agreement.

CHAPTER 3: EXPLAINING THE INEFFECTIVE USE OF COMPULSORY LICENCES – THE PROBLEM IDENTIFIED IN PARAGRAPH 6

Paragraph 6 of the Declaration on the TRIPs Agreement and Public Health states as follows:

“6. We recognize that WTO Members with insufficient or no manufacturing capacities in the pharmaceutical sector could face difficulties in making effective use of compulsory licensing under the TRIPS Agreement. We instruct the Council for TRIPS to find an expeditious solution to this problem and to report to the General Council before the end of 2002.”

The “difficulties in making effective use of compulsory licensing under the TRIPs Agreement” have meant that developing countries have hardly issued compulsory licences. According to the UNDP Report 2001, not a single compulsory licence has been issued south of the Equator, yet developed countries have readily resorted to them.[15]

It is important to clearly identify and explain the difficulties developing countries have faced and on that basis to develop solutions that directly address those difficulties. Without addressing the difficulties the purported solutions may not be adequate to assist developing countries make effective use of compulsory licensing under the TRIPs Agreement and in accordance with appropriate domestic laws. This will entail government officials understanding what the shortcomings have been and taking initiatives to rectify them.

Developing countries have for a long time clearly felt the need for technology transfer to their countries to assist their economic development. They have addressed their need for technology transfer through seeking solutions in the framework of international instruments and at the domestic level.

Regarding international instruments, this felt need got a robust articulation in the calls for a new international economic order, that became prominent in the United Nations in the 1970s, especially in 1974 with the adoption of the United Nations Charter on the Rights and Duties of States. As the UN resolutions did not have binding force and remained largely unheeded, developing countries continued to address their need for technology transfer mainly through seeking binding international instruments. In the negotiations on the Code of Conduct for Transnational Corporations, developing countries wanted to develop binding obligations that would require inter alia technology transfer. The negotiations produced only a draft code that has not been adopted due to opposition from developed countries over the binding obligations. Developed countries have tended to think that technology transfer should be left to voluntary decisions taken at the corporate level. This background will be relevant to the WTO Working Group on Trade and Technology Transfer.

At the domestic level, the approach in the 1960s and early 1970s was to expropriate foreign companies in the public interest. This was done within a broad framework of political programmes for economic independence, in which technology transfer was an important component.

Both these approaches – international instruments and domestic measures – did not specifically target patents as major sources of technology transfer; rather, the focus was on the physical assets of foreign companies or the introduction of skills in domestic economies through re-location, training, and local participation in shareholding and management. The specific framework for technology transfer was corporate ownership and governance, rather than focusing on patent procedures for disclosure of inventions and compulsory licensing.

Though intellectual property laws had been around for a century or so in developed countries, or for about 40 years in some developing countries, patent procedures and patent-related solutions were largely out of the picture. Patent laws were on the whole obscure and relatively insignificant in domestic policymaking. Until the entry onto the scene of the WTO and its TRIPs Agreement in 1995, there was not much publicised international attention on the implications of patents on major public policy goals like public health and food security. It needs to be noted that up to now, patent offices tend to be located in Justice Ministries and headed by a registrar who performs several other functions, serviced only by legal skills, rather than being a fully fledged government department. Patent offices still do not feature prominently in the policy-making processes of government. Besides, there is usually no organic link between patent offices and health departments or the government departments responsible for declaration of emergencies. This means that relevant government departments may be unaware of patented medicine or products in the country on which compulsory licences could be issued.

Patent laws are not widely taught in Africa. The result has been that lawyers and government policy makers, as well as the judiciary and indeed the Justice Ministries, have tended to be short on the required skills for utilising patent laws to address public policy goals. Also, the institutional framework for operating the laws has been lacking or minimal, leading to patent laws on the statute books without much relevance to the actual problems afflicting society.

However, some developing countries have been able to invoke their patent laws and to use the flexibility to protect important public policy goals, like health and food security, by exclusions from or limitations on patentability of pharmaceutical products and processes as well as food substances. In this respect, mention may be made of India and Brazil that partly through such exclusions have been able to develop a good degree of domestic manufacturing capacity in the pharmaceutical sector. If these could have been models, one problem that the TRIPs Agreement poses is that they are not available as policy options because the Agreement requires patentability in all fields of technology and specifically includes the pharmaceutical and agricultural chemical products.

Developing countries have, especially with the increased prominence of economic liberalism since the 1980s, been put under the strong impression that attraction of foreign direct investment will be the panacea to the problem of economic development. To this end, developing countries have been urged to adopt and enforce robustly pro-investment policies in terms of according favourable treatment to foreign companies. Such treatment has had a large component of strong protection for intellectual property rights, including patents. Such strong protection has tended to be inconsistent, in developing countries, with the exercise of the right to compulsory licensing, though this has not been the case in developed countries.

This discouragement of compulsory licensing in developing countries has been reinforced by pressure from developed countries, taking various forms. In bilateral and regional arrangements developed countries have tended to insist on developing countries undertaking obligations that restrict the use of compulsory licensing. In donor programmes conditions have been imposed on developing countries that give foreign companies strong protection from some governmental measures considered restrictive or harmful to foreign companies. Pharmaceutical companies have seized on such obligations and conditions to also add pressure on government departments to discourage measures that would protect public health. Examples include heavily lobbying parliamentarians and government departments against adopting laws or measures that the companies consider would undermine their rights, and in the case of South Africa starting an action in the law courts against the government. It would seem noteworthy that decades of economic liberalism to protect foreign investment against intrusive governmental measures have not focused on protecting public health in terms of building domestic manufacturing capacity in the African region.

Regarding the lack of a domestic private sector with the requisite skills and resources as well as the absence of appropriate legal incentives in the TRIPs Agreement to promote domestic manufacturing capacity, the Africa Group proposal to the TRIPs Council[16] in its paragraphs 3 and 4 explains the paragraph 6 problem as follows:

“3. This problem, as recognised by Members, has various elements that include the following and in this regard these various elements indicate the elements of the expeditious solution to be adopted under paragraph 6:

(a) The country may not have domestic technical know-how or skills and may lack the necessary equipment to undertake the production of certain needed medicines.

(b) Where such capacity could be introduced through technology transfer or locating within the country, considerations of returns on investment or profits for the investor or the producer may work against countries with small domestic markets. In conditions of poverty, the purchasing power of countries facing public health crises or in urgent need of medicine and medical technology may be so low that investors will not consider the country to provide a sufficient market to sustain desired or profitable levels of production.

(c) Where the possibility of exporting to other countries would have been considered, in order to have a wider market beyond the country of production, Article 31(f) of the TRIPS Agreement restricts this by the requirement that production under a compulsory licence be “authorised predominantly for the supply of the domestic market of the Member authorising such (production)”; thus making it contrary to the Article 31(f) of the TRIPS Agreement for production under a compulsory licence to be done predominantly for export to other countries. Yet the country itself may not have any domestic need or further domestic need for the pharmaceutical product in question.

(d) Where a country not facing a public health crisis but with capacity to produce and export pharmaceutical products, would have assisted Members that issue compulsory licences by exporting the products to them, paragraph (f) of Article 31 still restricts this through the apparent requirement that it is Members facing the public health crisis that can issue such licences, this apparent requirement arising from the condition that production under a licence should be predominantly for the supply of the domestic market of the Member that issues the licence.

(e) These limitations show how paragraph (f) of Article 31 may be far out of line with the needs of Members in the face of the international and national health crises upon us. The paragraph needs to be deleted, or a clear exception introduced, or an authoritative interpretation adopted, bearing in mind the short time frame within which an expeditious solution should be adopted.

(f) Compulsory licensing as an area for consideration and action falls both within and beyond the TRIPS Agreement, or said differently, it is only partly covered by the TRIPS Agreement. As the declaration points out, for instance, Members have the right to determine the grounds on which to issue compulsory licences, and such grounds are not set out in the TRIPS Agreement. This flexibility will need to be protected against attempts to restrictively define the scope of the freedom of Members to determine grounds for compulsory licences. If restrictively interpreted this too would render ineffective the freedom to determine grounds for compulsory licences. In this regard, there should be no basis in the TRIPS Agreement for prohibiting the issuing of compulsory licences on grounds of addressing public health needs abroad, and any remnant restrictions should be brought in line with the Declaration on the TRIPS Agreement and Public Health.

(g) There is a requirement for compensation to the patent holder on granting or issuing a compulsory licence, and developing and least developed Members are usually short on resources for such purposes. The requirement under Article 31 is that the remuneration should be adequate[17]. Members have the right to restrict any remedies relating to compulsory licensing to this right to adequate remuneration, notwithstanding what the other provisions of the TRIPS Agreement say about the rights of patent holders.[18] This important flexibility will need to be clearly highlighted along the same lines as the declaration does for other areas, in order hopefully to put it within ready use by Members that need it. It will also be important for international mechanisms to be put in place for assisting in funding the compensation required on compulsory licences.

4. Care should be exercised not to use the existence of other categories of problems as an argument against finding an expeditious solution as envisaged under the declaration.[19] The solution envisaged under the declaration relates to the spirit and flesh of the declaration, that is, for the TRIPS Agreement to be supportive of measures to protect public health including access to medicine and to be supportive through the manner it is interpreted, implemented and applied both in the short and long term. In this effort, the entire declaration and the TRIPS Agreement should be looked at and a solution devised on the basis of all relevant provisions and all available flexibility. But above all, the expeditious solution under paragraph 6 should relate to the lack of or insufficiency of local manufacturing capacity in the pharmaceutical sector, rather than inadequacy of infrastructure or even poverty.”

The proposal of the Africa Group highlights the concrete problems that the TRIPs Agreement additionally contributes towards the lack or insufficiency of domestic manufacturing capacity in the pharmaceutical sector.

The solutions to this problem will therefore have to be found in international instruments, such as the TRIPs Agreement, as well in domestic measures that authorities must dare to take if they are to fulfil their functions as government and protect important public policy relating inter alia to public health and access to medicine for all.

CHAPTER 4: THE DISCUSSION IN THE TRIPS COUNCIL ON PARAGRAPH 6 OF THE DECLARATION

Since 14 November 2001, when the WTO Ministerial Conference instructed the TRIPs Council to find an expeditious solution to the problem that countries with insufficient or no manufacturing capacity in the pharmaceutical sector may not be in a position to make effective use of the right to issue compulsory licences, the Council held four formal meetings: on 5-7 March 2002, on 25-27 June 2002, on 17-19 September 2002, and on 25-27 November 2002.There were also many informal meetings and other consultations. At the March meeting, delegations presented exploratory statements and papers, on options for the solution; and at the June meeting, they on the whole come forward with concrete or more focused proposals, drawing on their positions at the March meeting. The meeting of September and November focused on consultations to narrow the differences into draft text for a solution to recommend to the General Council.

The Problem identified in paragraph 6

The discussion on the problem focused on Articles 30 and 31 of the TRIPs Agreement. It was envisaged that the solution would be found by interpreting these provisions to address the constraints that members face, and or by amending Article 31 to remove those constraints.

Accordingly, delegations identified and discussed the following constraints:

One constraint was that it was unclear whether a member with manufacturing capacity could produce and export medicine to a third country facing public health needs.
It was argued that Article 30 could be interpreted to permit this.
Another constraint was that, where a country with manufacturing capacity issued a compulsory licence and commenced production of medicine, paragraph (f) of Article 31 prohibited such production if done predominantly for export, it required that such production should be predominantly for the domestic market of the member issuing the compulsory licence.
In this regard, it was argued that paragraph (f) could be deleted in order to remove this constraint, or amended to state that the restriction did not apply to measures to address public health needs in a third country, or to interpret the expression “domestic market” to include free trade areas and customs unions. Such an interpretation would provide production under a compulsory licence with a wider market and could thus make such production attractive for investors.

However, right from the start, the Africa Group stated its view that the solution had to be based on achieving the objectives and operationalising the principles of the TRIPs Agreement as contained in Articles 7 and 8 respectively of the TRIPs Agreement, that the solution had to take into account all the flexibility in the TRIPs Agreement as well as the entire Declaration on the TRIPs Agreement and Public Health, and that the solution had to be comprehensive. Therefore the Africa Group would find an expeditious solution that included but was not limited to Articles 30 and 31.

Solutions

It was broadly agreed that countries with insufficient or no manufacturing capacity needed the undoubted right to resort to importing medicine from third countries with manufacturing capacity. In turn, third countries with manufacturing capacity needed to be permitted to produce medicine for purposes of exportation to countries that needed it to address public health concerns.

This solution would require Article 30 of the TRIPs Agreement to be interpreted as allowing this. However, several delegations expressed reservations about a mere interpretation stating that the Article allowed this.[20]

Even if granted, an exception to permit exportation of medicine to countries with insufficient or no manufacturing capacity would be a short-term solution. The Co-ordinator of the Africa Group, speaking at the March 2002 TRIPs Council meeting on behalf of Africa and other developing countries[21], took the position that the solution had to be sustainable and of a long term nature; it had to include the building of domestic manufacturing capacity as that was in fact the real solution to the problem of insufficiency or lack of domestic manufacturing capacity. The Africa Group stated that the solution had to be broad and comprehensive, and it had to draw on all the flexibility in the TRIPs Agreement as highlighted in the Declaration on the TRIPs Agreement and Public Health. Further, the solution had to be integral to the Declaration and part of the broad framework for the building of a sound technological base in developing countries.

Such domestic manufacturing capacity would entail local investors starting production within the country, and other producers to locate production facilities in the country. This would be business decisions, and as usual would need the encouraging or supporting infrastructure. It was important therefore for the solution found by the TRIPs Council, to fully take into account the need for a framework that encouraged and supported the location and operation of production facilities within countries with insufficient or no domestic manufacturing capacity. Elements of the solution in this regard, would address the problem of small markets, by providing access to the larger regional market. It would also be necessary to understand in broad terms the reference to “pharmaceuticals sector” in the declaration, so as to include not just medicines but medical technology as well.

Certain developed countries continually suggested that the solution required would be useful only after 1 January 2005, when the transition period for countries like India expired; because during a transition period, the Member is not required to enforce the product patents covered by the transition period. Article 64.5 of the TRIPs Agreement provided that developing countries that did not provide for patent protection in the pharmaceutical products in 1995, would be allowed a transition period that would expire on 1 January 2005, before beginning to have patent protection in this sector. The argument was that developing countries with insufficient or no manufacturing capacity in the pharmaceutical sector could import affordable medicine from the other developing countries that still use the transition period and produce generic medicine. The problem would arise when the transition period expired at the beginning of 2005.[22]

The main problem with this argument was that African countries had clearly taken the position that they did not wish to perpetually depend only on imports of medicine, and wished to have domestic manufacturing capacity and to immediately begin work towards this.

Proposals at the June 2002 Meeting

At the June meeting, delegations made some concrete proposals as follows:

Amendment of Article 31 by introducing an exception to paragraph (f), accompanied by safeguards to prevent re-exports (European Communities);
Adoption of a waiver to Article 31(f) (Canada supported by the US);
Moratorium (the US supported by Canada);
Permit the big developing countries with manufacturing capacity to export to developing countries with insufficient or no manufacturing capacity on the basis of compulsory licences issued on both countries (EC and US);
Interpretation of Article 30 to permit government authorisation for exports subject to certain safeguards (Brazil on behalf of Bolivia, Brazil, Cuba, China[23], Dominican Republic, Ecuador, India, Indonesia, Pakistan, Peru, Sri Lanka, Thailand, and Venezuela);
Build domestic manufacturing capacity and explore other options as elements of the solution including an interpretative note on Article 30 to include exceptions for technology transfer to countries with insufficient or no manufacturing capacity (United Arab Emirates);
Amend Article 31 to remove the restrictions, interpret Article 31(f) to permit exports of up to 49.9 per cent of production under compulsory licences, interpret Article 31(f) to permit production under compulsory licences for the regional market (Africa Group);
Members should agree on an exception under Article 30 for exportation (Africa Group);
Establish a voluntary information sharing and notification mechanism, grant moratorium to cover the extent of the public health problems, provide patent holders with a right to prevent re-exports (Africa Group);

These were not new ideas; they had been largely explored in the March meeting. What was new was the focus on urging the TRIPs Council to adopt certain specific solutions. The Africa Group provided the longest and most comprehensive proposal in terms of the elements covered and the suggestions on accommodating the concerns and issues raised by other members. The accommodation was done in terms of putting an African perspective to the proposals and concerns of other delegations. For instance, regarding the moratorium, the Africa Group proposed that it could be considered if it were to be available for the duration of the health problems and covered all measures to address public health problems. Regarding the transition periods and the relevance of the solution, the Africa Group proposed that the transition periods could be extended beyond 1 January 2005. Regarding safeguards, the Africa Group proposed that patent holders could have the right to prevent re-exports, a right they more or less already had under the TRIPs Agreement as it currently is. Regarding amendment of Article 31, the Africa Group proposed an undertaking that all members would accept the amendment within a period of 1 year and that in the interim period, an Article 30 solution should already be in force as well as interpretations relating to Article 31.

Further, the proposal contained a draft decision (in the annex). This was designed to take the process forward, by focusing the debate and drawing attention to the need for results rather than merely statements and papers that did not proactively seek dialogue across the various positions held by delegations. The proposal provided an elaborate explanation of the proposals made, and in the draft decision demonstrated what the proposals could look like as text for a decision of the General Council.

In the build up to the June TRIPs Council meetings, the Africa Group proposal came in for some degree of criticism, with predictions that it would definitely “backfire”. The fears were that:

Mention of the moratorium would encourage the US to focus solely on the moratorium and to go on to attach and elaborate restrictive conditions for this solution. This did not happen. In the course of the meeting, the US took a strong stand against the safeguards proposed by the EC, and supported the Africa Group statement that the EC had not made out a case for the overly stringent conditions it was proposing and that any safeguards should not exceed the remedies already provided for in the TRIPs Agreement;
The idea of a draft decision was premature; and in revealing the bottom line, it was strategically wrong. African delegates consistently answered that they wanted to drive the process forward and crystallise the debate around possible text and elements for an actual decision. Negotiations over text or language for instruments, including decisions, are usually protracted and delegations usually are reluctant to agree to words that have not been expressly cleared by their capitals. This can delay or even derail the process of coming up with an instrument. But worse still, is that from experience, last minute pressure on developing countries has usually resulted in instruments that are skewed against them as they have not been able on the whole to maintain their stances until the end. The draft decision was meant to allow time for developing and agreeing upon language that protected and reflected the positions of African countries. In summing up the discussion on paragraph 6, the Chairman of the TRIPs Council stated and the Council agreed that the secretariat should prepare a factual thematic note setting out areas of commonality and disagreement and elements of a possible solution, and that he would call an informal session before the September meeting to hold consultations on a possible solution. This clearly shows that the Africa Group achieved what it set out to do;
The Africa Group proposal raised too many options and would not help the discussion. As it turned out, the approach of the Africa Group proposal helped the TRIPs Council to see that there was common ground on various issues and possibilities of agreement on certain proposals. In the course of the meeting, some hitherto quite hostile delegations, were taking favourable positions on the Africa Group proposals, noticeably Canada which stated that it had no problem with various options despite its preference for a waiver. The approach of the Africa Group also helped to diffuse the debate on the conceptual problems of Article 30, which the EC already pointed out in informal consultations the day before the TRIPs Council meeting and threatened to raise during the formal meeting.

Brazil and a group of developing countries tabled a paper[24] at the June 2002 meeting, which proposed as a solution to the problem, an ‘authoritative’ interpretation of Article 30 of the TRIPs Agreement so as to recognise the right of WTO Members to authorize third parties to make, sell and export patented public health-related products without the consent of the patent holder.

Article 30 of the TRIPs Agreement provides as follows:

“Members may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties.”

Although the Africa Group had at the beginning of the negotiations contemplated such an authoritative interpretation as a possible solution, the Group’s view was that the authoritative interpretation of Article 30 as envisaged in the Brazilian proposal presented unworkable and conceptually difficult ideas. While the Group was committed to finding an expeditious and comprehensive solution, and was not excluding any workable possibility, its position was that ‘expeditious’ did not mean any quick-fix solution.

As the co-ordinator of the Africa Group explained to the June 2002 meeting of the TRIPs Council:

“In fact, it needs to be clearly acknowledged that the effective solution to insufficiency or lack of domestic manufacturing capacity is to build such domestic manufacturing capacity. The TRIPS Council could not possibly be expected to find merely temporary solutions to a problem that is of a long term nature; a problem that may in fact – unless a solution is found – remain as permanent and that may last for as long as the TRIPS Agreement is in force, namely, the problem of lack of domestic manufacturing capacity to make effective use of compulsory licences. The solution that the TRIPS Council comes up with must have a bearing on the need for effective solutions to problems, and we would understand that the solutions need to be actual solutions rather than merely postponing or even dodging the issues to be addressed. The solution must further fully take into account the need to always specifically address the special needs – including development needs – of developing and least developed country Members. In this connection, we would consider the instruction to this Council to find an expeditious solution, to refer to time within which to find the solution, that is, to find the solution immediately and report this to the General Council before the end of this year, and we are pleased that the EC have taken this view as well. We do not think a solution aimed at only enabling Members to perpetually import the needed pharmaceutical products is the aim of this exercise, and it would not be a desirable objective of this exercise. But we have indicated in our submission that such importation could be one of the several elements of the solution.”

Brazil’s main argument for preferring an authoritative interpretation of Article 30, to the exclusion of other possible options particularly the option of amending Article 31(f) to permit production under compulsory licences for regional markets, was that the authoritative interpretation would avoid burdensome procedures.[25] But as far as African countries were concerned, in their jurisdictions there existed no appreciable difference in the procedures for adopting into domestic law either an amendment of Article 31(f), or an authoritative interpretation of Article 30. Before they can ratify or accept any such interpretation, these countries’ Parliaments would have to first approve it; delegations cannot simply take a decision to ratify or accept it at the WTO secretariat in Geneva. They would then have to amend their laws to take into account the changes, since their laws would not currently provide for this. This would again involve their Parliaments.

But probably the most conceptually problematic aspect of the proposal was that it envisaged Article 31 type procedures. The proposal stated[26] that the importing country would have the freedom to decide whether or not to issue a compulsory license to the importer and that therefore the ‘predominantly for the supply of the domestic market’ requirement in Article 31(f)[27] would not amount to an obstacle. Also foreseen was the possibility of members putting into place safeguards.[28] Use of the term ‘authorize’ in the proposal was potentially problematic since this term is used in Article 31 in the context of compulsory licences. Its use in the proposal by Brazil could be interpreted as envisaging the issuance of compulsory licences under the Article 30 interpretation. It appears though that the concept of compulsory licenses cannot be imported into Article 30 because of the footnote in Article 31 that makes it clear that 'other use' under Article 31 (compulsory licences) refers to use other than that foreseen in Article 30. Assuming some kind of administrative procedure was foreseen as the ‘authorization’, it remained unclear from the proposal what its form,content, or scope would be, or whether or not this had to be agreed to by Members at the multilateral level, or whether Members were free to do as they pleased.

The argument was made in the proposal that an exception under Article 30 would not unreasonably conflict with the normal exploitation of the patent and would not unreasonably prejudice the patent owner's interests, without due regard being paid to the fact that this was subject to interpretation in view of the fact that these rightsare separate and individual and cannot simply be lumped together.[29] The argument was also made that since the act of exporting was not enumerated among the exclusive rights conferred by the patent in Article 28 of the TRIPs Agreement, if undertaken, it would not unreasonably prejudice the legitimate interest of the patent owner.[30] Besides the fact thatthis argument did not appear logical, (simply because this isnot enumerated does not mean it does not unreasonably prejudice the rights of the right holder), it raised a non-issue. The fact that one cannot make, sell or use the patented product without the authority of the right holder means that practically, one simply cannot get their hands on it without the authority of the right holder, unless a compulsory license was issued. This could be the reason the TRIPs Agreement is silent on the issue. Of course, if the right-holder has authorised the making, using or selling of a product, whether one can actually import it depends on the regime on exhaustion of intellectual property rights in the importing country.

Despite the fact that developing countries at Doha and before emphasised that any solution should contribute towards the fulfilment of the objective of transfer of technology that the developing countries considered critical to improving manufacturing capacity and to ensuring sustainable access to affordable medicines, the proposal by Brazil did not deal with this issue. The authoritative interpretation of Article 30 of the TRIPs Agreement preferred by Brazil would create an exception to allow only exports and would do nothing to address the issue of transfer of technology to boost domestic manufacturing capacity. Neither did the proposal address the situation where no patents exist in the country in need of medicine, or cases where lack of economies of scale make domestic production for a particular product impractical or too costly. In addition, reference was made to "third parties"[31]in the proposal as being those who could be authorized to make, sell and export patented medicine, and then also to "local producers", with no explanation as to what the distinction between the two was. While “third parties” could include producers outside the country or even non-citizens, “local producers” could mean nothing else but producers located in a country. This distinction raised issues that needed extensive discussion on eligibility to produce and export to the country in need, which the proposal did not go into.

The other issue that the proposal did not address was the established practice in the WTO dispute settlement system to require members to comply with all their obligations, notwithstanding that they might have certain rights that would otherwise excuse any compliance with certain obligations. Such rights could even include transition periods. The Appellate Body of the WTO has insisted on a principle of an alleged cumulative nature of WTO obligations, that all obligations must be complied with unless compliance with one obligation is prohibited by a provision. This approach made an Article 30 interpretation in terms “authorisation to make, sell and export” unlikely to address the obstacles posed in other provisions of the TRIPs Agreement particularly in Article 31(f), such as the constraints on domestic markets and the requirement of case-by-case authorisation in compliance with all the conditions on compulsory licences.

A country that imports products under a compulsory licence would be required to import predominantly for its domestic market, which raises concerns of lack of economies of scale in relation to the country. And in the absence of a compulsory licence, the patent holder would have the right to prevent the importation, the sell, the offering for sell, and the use of the product in the country, in accordance with the rights under Article 28(1) of the TRIPs Agreement. Those rights cannot just be interpreted away, there would need to be a more coherent approach within the structure of the TRIPs Agreement as a whole.

The Africa Group was concerned that in agreeing to interpret Article 30, developing countries could end up undermining any future proposal they could wish to come up with regarding general exceptions under the TRIPs Agreement, by setting a precedent of interpreting an existing exception, albeit a limited one, in a manner that hedges it around with conditions or “safeguards” as they were called. The Africa Group stated at the March 2002 meeting of the TRIPs Council on behalf of the bloc of developing countries, that the TRIPs Agreement is imbalanced against developing countries and that therefore a solution to the paragraph 6 problem needs to additionally be put in the broad context of introducing general exceptions to provisions of the TRIPs Agreement along the lines of the general exceptions in the other WTO Agreements, namely, Article 20 of the General Agreement on Tariffs and Trade 1994 and Article 14 of the General Agreement on Trade in Services. Such general exceptions would have to be introduced through the addition of provisions to the TRIPs Agreement, through amendment.

General exceptions in trade agreements are normally self-executing, in that they in themselves provide the required basis for invoking them without need for any further procedures and interpretative conditions or additional safeguards from the WTO. On the part of the members, in invoking the general exceptions, they are only required to be within the framework of the language and any challenge to the measures adopted is against members as such and not against individuals within the members. Article 30 as an exception has provided a basis for laws or measures that members adopt enabling individuals to do certain acts without the need for any further procedures, and certainly without the need for case-by-case authorisation in specific instances; the laws or measures have been standing authorisation to the individuals, who can plead the law in defence of their acts against any challenges that could otherwise be mounted on the basis of the rights of patent holders.

Article 30 is a self-executing exception; it is itself the authority for doing what it allows. No further or additional authority needs to be granted from the WTO, other than a domestic law adopted on the basis of Article 30, to a researcher in a laboratory or to a teacher in an institution intending to use a patent or a patented product in research or teaching; or to a doctor that needs to apply certain therapeutic methods or products; or to a producer than wants to undertake pre-marketing testing in order to obtain marketing approval pending the expiry of the patent term. And certainly, no authorisation is needed from the WTO before resort can be made to Article 30; this is a matter for the members themselves to address through adopting a law that provides for the required exceptions, only provided that the exceptions fall within the scope of Article 30.

Besides, an authoritative interpretation of Article 30 in the terms proposed in the Brazilian proposal implied that the provision did not in its current form permit the production for export of medicine. If the provision already permitted production for export, there would be no need for seeking the authoritative interpretation in the terms proposed. But if, according to the proposal, the interpretation could have the effect of now permitting what was not permitted by the language of Article 30, that would constitute an amendment of the Article through an interpretation, which the WTO Agreement prohibits, for it says[32]:

“The Ministerial Conference and the General Council shall have the exclusive authority to adopt interpretations of this Agreement and of the Multilateral Trade Agreements. … This paragraph shall not be used in a manner that would undermine the amendment provisions in Article X”.

The delegation of the United States, subsequently supported by Canada, suggested a moratorium on disputes relating to measures to protect public health. A similar proposal had been made in the consultations preceding the Doha Ministerial Conference, and declined by African countries. The pre-Doha proposal was for a 5-year moratorium to apply for Developing Sub-Saharan African countries.[33] The African countries declined it on the basis that it was divisive as between Sub-Saharan Africa and the rest of the developing countries, in favouring one group of countries over another; and it did not address the actual problems African countries faced, such as pressure to forego their transition periods under bilateral and plurilateral dealings with especially the European Union and the United States. In order to engage in the debate on this proposal, the Africa Group subsequently took the position that a moratorium could be considered as one of the elements of the solution, if it objectively related to the solution in terms of scope and duration. It would objectively relate to the solution if it stated that it covered all members and that it would be available for as long as the problem persisted, for it is in this way that it could operate as part of the solution. It would be part of the solution in allowing the amendments and or interpretations to grow and mature.

Other Proposals

The Africa Group made proposals on, transition periods, exclusive marketing rights, fragmentation of the regime provided by the TRIPs Agreement, and a moratorium. But these just fell by the wayside and were hardly referred to in the serious consideration of the paragraph 6 solution.

CHAPTER 5: EMERGING COMMON GROUND FOR A SOLUTION UNDER PARAGRAPH 6

Following the June 2002 meeting of the TRIPs Council, the useful compilation[34] done by the Secretariat clearly showed that the various positions of the delegations on the various issues could converge into common views encompassing most of the concerns of the delegations, and that on the basis of such convergence an instrument could be prepared.

Safeguards

The position of the Africa Group on the issue of safeguards – giving patent holders the right to seek remedies against infringing re-exports – aimed to strike a balance between the existing rights of members under the TRIPs Agreement as clarified by the Declaration on Public Health, and the concerns of patent holders. They would have a remedy and developing and least developed countries would not be required to undertake burdensome measures that would in effect nullify any solution found. Besides, the TRIPs Agreement already had obligations undertaken by all members to enforce intellectual property rights.

General Considerations for safeguards

In their proposals and statements, delegations suggested the following general considerations:

Any safeguards should be necessary to avoid abuse and trade diversion, and reasonable given the complexity of problems and situations that may arise, and proportional to the risk of re-exportation from that Member (EC)
Any safeguards should not be costly, complicated, burdensome, inconsistent with the resources and development needs of developing countries (Africa Group)
They should not negate or undermine the solution found (Africa Group)
And they must be in accordance with the TRIPs Agreement (Africa Group) (Hungary)
Any safeguards that would in any way limit the flexibility and clarification established by the Declaration on the TRIPs Agreement and Public Health, were unacceptable (group of developing countries)

Safeguards against diversion

Taking these considerations into account, it was suggested that the provision on safeguards could be in the following terms:

Members shall provide or permit in their domestic laws, the right of right holders to seek remedies against infringing re-exports out of the domestic market. Products under compulsory licences may be labelled for consumption in specific markets (Africa Group). The responsibility of seeking the remedy against re-exports should be on the patent holder under the existing provisions of the TRIPs Agreement (group of developing countries). No new obligations should be imposed on members (US).

In respect of safeguards, several important considerations were raised:

· Article 31(f) already envisages the exportation of a proportion of the production under a compulsory licence. Therefore, a Member that issues a compulsory licence has the right to permit or envisage the exportation of some of the production or the importation by other members of some of the production.

· It is clearly a limitation of these flexibilities to impose conditions such as: the Member issuing the compulsory licence should import and consume all the production, and the exporting Member should ensure that all the production is exported to that member.

· This should be unacceptable on the basis of public policy and as contrary to the current principles and rules of the TRIPs Agreement as interpreted by the Declaration.

· Further, the Declaration on the TRIPs Agreement and Public Health clarifies that every member reserves the right to issue compulsory licences and the freedom to determine the grounds for compulsory licences. Therefore, a member should be able to issue a compulsory licence to address public health needs in third countries or a group of third countries, provided the other conditions in Article 31 as interpreted and clarified by the Declaration are applied.

· Any need for safeguards should be proved, as any safeguards must be reasonable and proportional. In the absence of any proof, or where the risk of re-exports into the members concerned is only minimal, there is no basis for imposing any conditions and limitations in the form of safeguards. According to the EC Commission, the possibility of re-exports out of poor countries is still only theoretical.

· Re-exports into countries not providing patent protection for the product, or into countries where the TRIPs Agreement’s obligations on pharmaceutical patents do not yet apply (such as least developed countries until 1 January 2016 or some developing countries until 1 January 2005) would not be covered by, and would in no way infringe, the rights patent holders can claim under their patents.

Transparency

The practical position suggested by the Africa Group was for voluntary information sharing. This again aimed to strike a balance between the current rights of members under Article 31 as clarified by the Declaration, and any concerns that the pharmaceutical industry could have. These rights of members, which should not be undermined under any circumstances, include, the right to issue compulsory licences and the freedom to determine the grounds, the right to issue compulsory licences in emergencies and other circumstances of extreme urgency without the requirement to first seek a voluntary licence from the patent holder. The Africa Group recognised the role of the private sector, and its responsibilities. This approach aimed to accommodate any concerns that some developed countries and the pharmaceutical industry might have had.

The Africa Group declined the suggestion that the intention of a Member where no patent exists to request another to issue a license, should be notified to the WTO (EC). The ground was that there was no basis for a Member under no obligation to protect the patent (because there is no patent in the country) to be required to notify the WTO.

Further, it could not be a very constructive exercise to engage in what could only be unjustified speculation given the situation on the ground, and given the existing provisions of the TRIPs Agreement on enforcement:

Article 31 already requires notification to the patent holder, and the TRIPs Agreement already requires members to implement its enforcement provisions. Additional obligations would therefore be unnecessary. However, in cases of emergencies or other circumstances of extreme urgency, the requirement to first seek a voluntary licence does not apply. These rights should not be prejudiced, especially after being so clearly emphasised in the Declaration.
Imposition of burdensome conditions on members taking measures to protect public health is not interpreting and implementing the TRIPs Agreement in a manner that is supportive of the members’ right to protect public health, and is therefore contrary to the letter and the spirit of the Declaration on the TRIPs Agreement and Public Health.

Product Coverage

There seemed to be general agreement to construe in a broad manner the expression “pharmaceutical sector” as used in relation to “manufacturing capacity” in the Declaration. This was considered important in order to ensure that the effort of the TRIPs Council to find a solution was properly applied and a durable solution found, one that addressed the problem in a holistic manner.

A possible definition of “Pharmaceutical products” was suggested by various delegations namely, that “pharmaceutical products” should refer to:

Medicines, related technical process and equipment (Africa Group), including active pharmaceutical substances and diagnostic kits (group of developing countries), as well as other health-related products (UAE and the group of developing countries), that are needed to address public health problems particularly those resulting from hivaids, tuberculosis, malaria and other epidemics (EU); and any products needed to address national emergencies or other circumstances of extreme urgency (Colombia).

General Eligibility

It was suggested that eligibility could be determined along the following lines:

Any members that need support to address public health concerns may benefit from exports permitted under the Decision, except those that notify the TRIPs Council that they do not wish to be eligible under the decision (Africa Group), particularly developing countries (Africa Group), (EC), (UAE), (group of developing countries), but especially those afflicted by public health problems (US).

There were one or two suggestions to the effect that high income countries according to World Bank classification, should not use the paragraph 6 solution (Switzerland), (US), and that imports should only be permitted for developing countries (EC).

Importing countries where the product is not patented

It was suggested that further details, if any, on eligibility to import under the solution, could be in the following terms:

Members may take measures where the products are on or off patent, and where the provisions of the TRIPs Agreement requiring pharmaceutical patents are not in force (Africa Group), under the expeditious solution to be found (Group of developing countries), including where the pharmaceutical is not patented in the territory of the importing Member that requests another to manufacture and export the pharmaceutical (US)

Assessment of Insufficient Manufacturing Capacity

In order that the solution found did not leave out populations and people that needed support, that needed life saving medicine, it was suggested that the question of assessing insufficiency of manufacturing capacity could be resolved as follows:

Manufacturing capacity should be assessed in relation to specific medicines (Norway, Africa Group, Group of developing countries). Each Member shall have the right to determine whether it has insufficient or no manufacturing capacity in the pharmaceutical sector (group of developing countries). In this regard, the manufacturing capacity of the patent holder shall not amount to sufficient manufacturing capacity for purpose of the solution (EC), (US). All least developed countries should be considered to have no or insufficient manufacturing capacity (US), (Switzerland).

Eligible Supplying Members

Since it was considered important that the solution should not be restrictive and should avail the widest possible alternatives to supplies of pharmaceutical products and medical technology [including the immediate equipment that would be part and parcel of certain life saving treatments] in a way that was not restricted through the exclusion of any possible or available sources, it was suggested that the provision in this respect could be in the following terms:

Sources of supplies of pharmaceutical products should include developing and developed countries, in order not to restrict sources of supplies and competitive offers (Africa Group), (group of developing countries), (Norway)

Applicability of Article 30/31 conditions

(a) In Exporting Countries

The suggestions were to:

Amend Article 31(f) to create an exception for public health laws, measures and regulations (Africa Group), (EC), (US); and
Create an exception under Article 30 to apply in all members, to permit production and exportation of pharmaceutical products to address public health needs in other members (Africa Group), (group of developing countries)

As the Africa Group explained, the amendment would take some time to become operational. Yet the amendment was the direct and clear way of removing the restriction in paragraph (f) of Article 31, which practically all delegations had identified as an issue to squarely address. It would be very important, therefore, that in the meantime and for as long as it takes any Member to accept the amendment, the interpretation under Article 30 would already operate as a short term and immediate solution permitting the exportation to countries that need support to address public health problems. Further, the Article 30 interpretation would be a short term solution while members with insufficient or no manufacturing capacity, build their own domestic manufacturing capacity for the products needed to ensure a sustainable capacity to protect public health.

(b) In Importing Countries

As indicated in the TRIPs Agreement and clarified in the Declaration:

Sources of imports include, parallel imports on the basis of international or regional exhaustion of rights; compulsory licences issued in the exporting country where some of the production is exported; compulsory licences issued in the importing country, which are worked by importation from any legitimate sources abroad (Africa Group) or importation under a compulsory licence complying with Article 31 (US), (EU); and
Where there is no patent in the importing country, patent rules do not apply (EU)

In addition, an Article 30 interpretation to permit production and exportation to third countries must conversely include or entail the freedom of the importing country to import the pharmaceutical products unrestricted by additional procedures. It needs to be noted, that the notification and information sharing arrangement that the Africa Group has proposed, would be a means of initiating the production in the exporting Member through the request of the importing Member. Such importing Member would consider and make such a request in the exercise of its “right to protect public health particularly though ensuring access to medicines”, as clearly stated in the Declaration.

(c) Remuneration to Right Holder

The remuneration had to be on the basis of Article 31. As delegations suggested,

Article 31(h) on adequate compensation would apply (EC) subject to the right to limit remedies and any safeguards to the right to adequate compensation under Article 44(2) of the TRIPs Agreement (Africa Group). There shouldn’t be double compensation and the compensation should be determined on the basis of the country of consumption taking into account the ability of patients to afford the product (group of developing countries); but the responsibility to compensate should fall upon the exporting country, since it has more resources (US). And any compensation if any and if at all in the importing country would have to take into account the compensation paid in the exporting country (US).

These would be the basic guidelines on compensation. Colombia suggested that the TRIPs Council should adopt compensation guidelines. The Swiss delegation suggested that the judicial authorities in the importing country should determine the compensation, which the exporting country would then take into account.

Legal Mechanisms

It was suggested that the legal mechanisms could include the Article 31(f) amendment, together with the Article 30 interpretation, as follows:

Amend Article 31(f) to create exception for laws, measures and regulations including compulsory licences to protect public health (Africa Group), (EU), (UAE); but this should be coupled with an undertaking by all members that they will complete the necessary internal procedures in one year for the amendment to enter force, and that the amendment will be binding on all members (Africa Group)
Pending the entry into force of the Article 31(f) amendment and in respect of members that have not accepted the amendment, there should be a comprehensive moratorium on dispute settlement (EU)
And an exception could be created under Article 30 to permit the production for export of products to address public health needs in a third country (Africa Group), as a limited and reasonable exception to address public health concerns (Africa Group)
Exports to third countries could be permitted where production is done under a compulsory licence issued to address public health needs in a third country in the context of free trade areas and customs unions (Africa Group)
Exports to third countries could be permitted as measures taken in compliance with UN responsibilities given the national and global/international health crises that the UN and WHO have recognised (Africa Group).
In this regard, it was noted that:

· Article 73 (b)(iii) and (c) may be read as permitting measures to protect national security notwithstanding any provision of the TRIPs Agreement, and

· The Declaration on the TRIPs Agreement and Public Health recognises that every Member has the right and freedom to determine what constitutes national emergencies or other circumstances of extreme urgency, and contains an understanding that hivaids, tuberculosis, malaria and other epidemics may constitute national emergencies or other circumstances of extreme urgency.

Building manufacturing capacity

It was suggested that there should be a recognition that:

The Paragraph 6 solution should include measures encouraging and creating conditions for technology transfer to members with insufficient manufacturing capacity (Africa Group), (UAE), (group of developing countries), (US), (Peru);
Measures in this regard would additionally include specific measures adopted by developed countries (Africa Group) as well as the broader implementation of the technology transfer objectives of the TRIPs Agreement (Africa Group), (group of developing countries); and
Technology transfer should be part of the medium to long-term solution under paragraph 6 (Peru) (Africa Group).

It may be noted that that, location of production facilities in certain countries is based on advantages offered by the location in combination with the specific advantages the company may possess. Such advantages would include the size of the markets to be supplied, the low cost of production, availability of relevant skills in the production and marketing chain of processes, availability of partnerships, reduced trade barriers for instance in the context of a free trade area or a customs union; as well as the marketing networks and patents of the major companies.

The Africa Group proposals relating to the meaning of “domestic market”, and indeed the amendment to remove the restriction in Article 31(f), were based on this view and aimed to encourage the building of domestic manufacturing capacity as the sustainable solution to protecting public health particularly through ensuring access to medicines.

Domestic market in Article 31(f) should be defined to include regional markets and in certain circumstances Least developed countries (Africa Group)
Account should be taken on ARIPO and OAPI (Senegal). This could be done on the basis that a patent and a compulsory licence in OAPI has force within all the member states of OAPI, and may be recognised by all the member states of ARIPO subject to arrangements that those members may agree upon.
Economies of scale would be an important consideration in designing and implementing a paragraph 6 solution (group of developing countries)

CHAPTER 6: THE 16 DECEMBER 2002 DRAFT DECISION IMPLEMENTING PARAGRAPH 6

After many informal consultations among members regarding the possible elements of the solution, the Chairman of the WTO Council for Trade-related Aspects of Intellectual Property Rights (TRIPs) Ambassador Eduardo Pérez Motta (Mexico), on the 16th of December presented to Members a draft waiver for adoption as a Decision capturing the elements that Members had negotiated. The elements of the Decision include a moratorium on disputes regarding any measure taken in conformity with the provisions of the waiver. This waiver would remain in force until all Members have accepted an amendment to the TRIPs Agreement.

The Decision covers those public health problems referred to in paragraph 1 of the Doha Declaration on TRIPs and health (i.e. HIV/AIDS, tuberculosis, malaria and other epidemics). All least-developed countries would automatically be eligible as importers of medicine under the mechanism established by the waiver, while all other Members would be eligible following a once-off notification to the WTO. A compulsory licence issued by the country wishing to export medicine to a country with insufficient or no manufacturing capacity would be subject to certain conditions, including limiting the amount produced to that needed by the importing Member, clearly identifying the products produced under the licence and posting relevant information on a website. Notifications would also need to be submitted by importing countries. Safeguards are expected to be put in place by the importing country to prevent flow-back of drugs to developed country markets.

But Members have failed to adopt this Decision[35], thereby failing within the prescribed timeframe, to find the required solution to the problem identified in paragraph 6 of the Declaration on the TRIPS Agreement and Public Health. While the text of the draft waiver was acceptable to all members, the US did not agree with the scope of disease coverage as phrased in the draft.

Regional markets

The draft Decision in its paragraph 6 provides that the obligation to supply predominantly for the domestic market, is to be waived for regional trade agreements covered by Article 24 of GATT and the Enabling Clause if half their membership is made up of least developed countries. The African regional economic communities and the African Union qualify for this waiver. Indeed, African delegations had to fight very hard for this clause and in doing this they got the support of especially the European Communities.

The result is that production undertaken in an African country can be for purposes of supplying not only the market of the one country where production is located, but also for purposes of supplying the entire regional market that the country is party to. Or, as the Decision says, the purpose of the waiver is to “enable a pharmaceutical product produced or imported under a compulsory licence in that Member to be exported to the markets of those other developing or least-developed country parties to the regional trade agreement that share the health problem in question”.

In addition, there would be a requirement for a notification to the TRIPs Council before the country can be eligible to import or export under the system provided under the Decision. According to footnotes 2, 4 and 8 of the Decision, such notifications could be made jointly by the regional market, that is, through the Secretariat of the regional market.

Territoriality and regional markets

Nevertheless, the last sentence of paragraph 6(a) of the draft Decision Implementing Paragraph 6 of the Declaration states that “it is understood that this will not prejudice the territorial nature of the patent rights in question”. Developed countries insisted on adding this sentence in the hope that the effect would be to require that every country within the regional market should issue a compulsory licence in order to be able to import medicine that would otherwise move freely within the regional market. Their argument was that patents are territorial in nature and therefore no country can adopt measures or even laws that can result in mutual recognition of compulsory licences or the giving effect to a compulsory licence abroad.

The effect of that last sentence of paragraph 6(a) of the draft Decision cannot take away what the first part of the paragraph clearly states, namely the right to export to other members of the regional trade arrangement the medicine that is produced or imported into a country that is party to the regional trade agreement. On the part of the importing country, the crux of the matter is whether it recognises the compulsory licences in the other countries party to the regional trade agreement and whether within the regional trade agreement medicine can move freely, for instance on the basis of exhaustion of intellectual property rights as a result of the compulsory licence, or as a matter of public policy adopted by the member states of the regional trade agreement as a measure to protect public health and promote access to medicine in line with Articles 7 and 8 of the TRIPs Agreement. It is up to countries to take measures in this regard.

The rights and privileges of a patent begin and end with the country that grants it. Each patent is considered as having a separate existence in each sovereign state in which it is granted. This appears to follow from Article 4bis of the Paris Convention for the Protection of Industrial Property and Article 5.2 of the Berne Convention for the Protection of Literary and Artistic Works. On its part, Article 4bis of the Paris Convention states in the first paragraph that, patents applied for in the various countries of the Union by nationals of countries of the Union shall be independent of patents obtained for the same invention in other countries, whether members of the Union or not. This provision is to be understood in an “unrestricted sense”, in particular, in the sense that patents applied for are independent, both as regards the grounds for nullity and forfeiture, and as regards their normal duration.[36] Article 4bis of the Paris Convention therefore simply affirms the independence of patents as applied for in the various countries, rather than set down any ‘principle of territoriality’. It does not even use the word ‘territory.’ On the other hand however, the Berne Convention, in its Article 5.2, uses wording that could be interpreted as making reference to territoriality in intellectual property protection. It states that “the extent of protection, as well as the means of redress afforded to the author to protect his rights, shall be governed exclusively by the laws of the country where protection is claimed.” Indeed, it has been said that Article 5.2 of the Berne Convention is based on a “territorialist” approach.[37] The only basis of the so-called ‘principle of territoriality’, it would appear, is these provisions in these two Conventions on intellectual property protection.

In sum, territoriality as applied to patents is no more and no less recognition that the granting of patents is dependant on each national law, and that a patent is only effective in the country of grant.[38] The holder of a patent enjoys patent protection only to the extent allowed by the laws of the country in which the patent is registered, and is not entitled to enforce his rights in a country where he has not applied for a patent. In addition, if the patent holder enjoys a certain standard of protection in one country, this does not entitle him to that same standard in any other country if that standard is not recognised therein. What the standard of protection should be in any country is a matter of national law. Even if a patent is granted in many countries, it must be enforced in each individual jurisdiction.[39]

The territoriality principle suggests that a compulsory licence issued in one country, or the effects of such a compulsory licence, would not be recognised in another country unless there exists some agreement or understanding between those two countries for such recognition. Nothing prevents any two countries, or a region, agreeing to recognise in their territories, and give effect, to a compulsory licence issued in the other territory (ies).

There is recognition of the fact that the unmitigated territorial nature of intellectual property protection, including patents, poses obvious limitations and difficulties, both procedurally and substantively. Since patent protection within a country (territory) can only be granted to an inventor who has applied for it in that country, inventors would have no choice but to submit patent applications in all countries where protection was desired. The practical, monetary effect of patent territoriality cannot be overestimated as the unnecessary redundancies can drive up costs of obtaining and enforcing worldwide patent protection.[40] In addition, such applications would have to be filed simultaneously since failure to do so could preclude patent protection in all but one country, with the first application destroying the “novelty” of the invention in subsequent applications.[41]

There exist a number of efforts by countries to circumvent the limiting effect of the territoriality of patents. As indicated, the earliest of these was the adoption in 1884 of the Paris Convention. In a limited[42] way, the Paris Convention harmonizes patent protection. It incorporates the principle of “national treatment” which requires that nationals of other member states be accorded the same advantages as accorded to the nationals of a member state. Also incorporated in the Paris Convention is the “right of priority” which entitles a patent application of one member country to a period of twelve months after the initial patent application to apply for protection in all of the other member countries. Within this one-year period however, the applicant can rely on the early date of filing to avoid intervening prior art that would prevent the grant of a patent.[43] The Paris Convention was followed by the adoption in 1970 of the Patent Cooperation Treaty, which provides for the filing of one patent application that can have effect in many countries. An international application in one of several designated national patent offices has the effect of a national application in all of the countries that the applicant designates.

The European Patent Convention ("EPC") creates a bundle of European patent rights with effect in Europe and the individual states designated by the applicant. This allows an applicant to file a single patent application at the European Patent Office, which, if accepted, yields a series of national patents in all designated countries participating in the Convention.[44] Efforts were made to supplement the EPC with the Community Patent Convention, whose purpose was to avoid the division of the European patent into patent rights governed essentially by national laws. Although this goal has not been realized, it was envisaged that a supranational unitary Community patent with a uniform subsequent life, scope of protection and enforceability in the courts would eventually be created.[45]

Thus, although the attempts to improve the patent application and management process reflected in the Conventions does not do away with the territorial nature of patents, [which as argued here is no more and no less recognition that the rights and privileges of a patent begin and end in the country of grant, and that countries are free to agree to give them mutual recognition and effect in their respective territories], they are a clear reflection of the fact that territoriality can be circumvented by the application of law and that this concept is nothing more than a legal construct. The evolution of patent protection as reflected in the various Conventions is based on the understanding that territoriality is not an absolute concept and that it can be significantly altered according to states’ agreement.

Some courts in Europe have in their judgments made it clear that territoriality is not absolute by recognizing cross-border patent enforceability, based on the reasoning that while in earlier days jurisdiction was seen as the sovereign authority of the state and its demarcations as a matter of international law, “nowadays” international law only sets marginal limits to the organization of international jurisdiction by the national state, with every state free to organize this law according to its own views. Thus, while the courts of the Netherlands and the United Kingdom may disagree about how to interpret provisions of the Brussels Convention[46] under which a judgment rendered in one member state is automatically recognized and enforceable in all the other member states, with some limited exceptions, they readily acknowledge that the Brussels Convention introduced a new international legal order, which in many respects eliminates national legal boundaries. The courts of both countries hold that the Brussels Convention confers judicial authority to national courts to decide issues of foreign patent infringement. This is also a significant deviation from the traditional notion that a patent is territorial in scope.[47]

In sum, territoriality does not prevent the operation of the concept of regional markets as suggested by the developing countries, and as captured in paragraph 6 of the draft Decision. Even imagining that it did as the developed countries argued in the negotiation of the decision, territoriality would only be an issue to the extent that another country refuses to recognize a compulsory license issued in another country. If a country chooses to accept the compulsory licence in its territory, the so-called “principle of territoriality”, cannot prevent that. And if a country is required to recognise and give effect to a compulsory licence by an agreement that it is party to, then it does not have the power, or the right, to ignore or override that.

CHAPTER 7: OFFERS FOR MORATORIA

In the discussion in the TRIPs Council after Doha, before the draft Decision of 16 December 2003, the US proposed a moratorium as the expeditious solution under paragraph 6.[48] Although a moratorium may be appropriate in protecting and providing support for laws, measures, and policies adopted to promote public health, for it to be meaningful it would have to address the shortcomings that were found in a similar pre-Doha proposal, for instance by applying the moratorium across the board to all members in respect of laws, measures and policies adopted to address the international public health crisis.

Regarding the duration, such a moratorium would be meaningful or of some practical use if related to the duration of the health crises, for instance the duration of the HIV/AIDS crisis and the prevalence of malaria and other diseases in Africa. It would therefore have to be envisaged that the moratorium would operate for as long as it would take the international community to effectively combat the diseases, and such a determination could be entrusted to the World Health Organisation, mandating it to certify that given diseases in relation to which the moratorium was in force have been successfully contained particularly in developing and least developed countries.

The suggestion of a moratorium as the solution came again when the TRIPs Council failed to find a solution after the deadline of December 2002 passed. At the TRIPs Council meeting of 20 December 2002, the US did not join the consensus on the draft Decision Implementing Paragraph 6 of the Declaration on the TRIPs Agreement and Pubic Health. In this regard, the Africa Group, through its co-ordinator, stated that the outstanding work of the TRIPs Council was to find a solution in accordance with the ministerial instructions contained in paragraph 6 of the Declaration.

The Africa Group clearly stated that the outstanding work was in no way to be restricted to the scope of diseases and that in any case, that was a matter on which the members through their Ministers had clearly pronounced themselves in paragraphs 1, 4 and 5(c) of the Declaration. The effect of those paragraphs was to highlight the right of each Member to determine from time to time what diseases constitute a national emergency or other circumstances of extreme urgency, as a fundamental means of protecting public health and in particular promoting access to medicines for all. The Declaration was adopted as part of the WTO set of rules and as such was meant to provide a permanent instrument members could use as part of their rights and obligations under the TRIPs Agreement. The Declaration therefore is a definitive instrument that all members should implement and comply with in good faith. Indeed, the Declaration received international acclaim and support as a triumph for society.

For clarity, the Africa Group re-iterated the views it had consistently stated. The solution to the problem identified in paragraph 6 of the Declaration must be of a long term nature; it must be binding and legally stable; it must be multilateral in the sense of being adopted within the WTO framework by all members; it must be a solution to lack or insufficiency of manufacturing capacity in the pharmaceuticals sector; it must in no way undermine the current flexibility in the TRIPs Agreement as highlighted in the Declaration; it must build upon and positively support resort to the Declaration and the TRIPs Agreement; it must not be cumbersome to use and must not negate the right of members to protect public health and promote access to medicines for all; and

Though the draft Decision Implementation Paragraph 6 was unsatisfactory, the Africa Group stated its intention to accept it if all members also accepted it. The Group clearly stated that any re-opening of any part of the draft Decision, including the scope of diseases, would lead the Group to also re-open areas it was not satisfied with.

The Africa Group stated that any modification of the draft Decision was unacceptable, including the modification of the language on scope of diseases. On that basis, the Africa Group did not accept any suggestions for restriction of the scope of diseases or the inclusion of a footnote relating to the scope of diseases.

The fresh offers from the US and the EU on moratoria

Since the 20 December 2002 meeting of the TRIPs Council, some members, through letters addressed to Ministers, communicated some willingness, in certain cases, to refrain from challenging measures taken to protect public health. The letters from the US and the EU were subsequently tabled before the TRIPs Council as communications. The view of the Africa Group on those communications was as follows.

The communications did not amount to a multilateral solution within the framework of the WTO Agreement, and on this account did not constitute the solution to be found in accordance with the ministerial instructions in paragraph 6 of the Declaration. And given that they merely re-stated positions already advanced or explored, they did not constitute new ground for consideration in the search for a multilateral solution on the basis of the ministerial instructions.

The communications did not amount to domestic laws, regulations, or measures in the framework of the WTO Agreement. The communications would not have a binding directive effect in the context of governmental functions of those members. Their effect therefore could not be considered to be fundamental or even a palliative to the problem in paragraph 6. The Group urged the US and the EU and all delegations to earnestly find a solution within the WTO framework, and not fall back upon unilateral measures as alternatives or even aides.

The communications did not constitute any departure from the positions that the Africa Group and other delegations had difficulties with and objected to. In particular, the communications still maintained the narrowing of the current flexibility in the TRIPs Agreement as highlighted in the Declaration. In this regard, they amounted to a re-statement of positions already advanced and that the Africa Group had objected to.

The EU proposal for a positive list of diseases and the involvement of the WHO in determining health crises, was inconsistent with and did not support the right of members to themselves determine what constituted national emergencies or other circumstances of extreme urgency and upon such determination to proceed to take expeditious measures to save lives and to promote access to medicines for all. The practical relevance of some diseases listed was also doubtful. Further, the Group did not wish to see the members’ right to determine what constituted national emergencies or other circumstances of extreme urgency in any way restricted by, or subjected to consultations with, or advise from, the WHO.

Members must not be put in a position where their determination of national emergencies or other circumstances of extreme urgency could be contested by the WHO or any other organisation. Besides, there would be no WTO competence or dispute settlement mechanism for timely resolving any such dispute. And if there were, any recommendations that would contradict the determination by a Member of a national emergency or other circumstances of extreme urgency, would be contrary to the clear right already highlighted in the Declaration on the TRIPs Agreement and Public Health.

Members have long recognised that protecting public health and particularly promoting access to medicines for all, is a matter that cannot and should not be subject to a closed list of diseases. In the Declaration, therefore, contingency provisions were included. Paragraph 1 included reference to “other epidemics”; and paragraph 5(c) highlighted the right to determine what constitutes national emergencies or other circumstances of extreme urgency. Paragraph 5(c) made reference to “including” and “other epidemics”, as follows: “…it being understood that public health crises, including those relating to HIV/AIDS, tuberculosis, malaria and other epidemics, can represent a national emergency or other circumstances of extreme urgency”.

African countries should be trusted to determine diseases that constitute a national emergency or other circumstances of extreme urgency within the meaning of the Declaration, and on the basis of that determination to proceed to invoke the solution found to paragraph 6, and the TRIPs Agreement as clarified by the Declaration. It should also be noted that the draft Decision envisages reporting and reviews in the TRIPs Council.

Earlier, the Group had suggested, in informal consultations, the possibility of agreeing upon a negative list of pharmaceutical products that could be excluded from the solution to paragraph 6 (for instance, viagra and treatment for baldness) – but some members objected to the idea.

CHAPTER 8: DOMESTIC MANUFACTURING CAPACITY IN THE PHARMACEUTICAL SECTOR – THE CASE FOR A LEGAL FRAMEWORK

Why every country or group of countries should have domestic manufacturing capacity should be more of a given than a case to make.

Without domestic manufacturing capacity a country will face difficulties in making effective use of compulsory licensing – WTO Trade Ministers (then 144 of them) agreed upon this in paragraph 6 of their Declaration on the TRIPs Agreement and Public Health. The difficulties arise from the lack of persons or companies with the requisite skills and facilities within the country, to issue the compulsory licences to. Compulsory licences will normally be issued to and operated by a government department or an entity that the government authorises according to applicable procedures for the issue or grant of the licences. Where no government department has the manufacturing capacity, the government department is unlikely itself to be in a position to work the compulsory licence by manufacturing or producing the patent product or by using the patented process. And, where there is no manufacturing capacity in the private sector, there are unlikely to be no applicants for the compulsory licences, no potential manufacturers or producers coming forward to seek the issue or grant of compulsory licences on the products or processes, or where they apply it might be inappropriate to issue the licence taking into account the feasibility of operating the licence by manufacturing or production. In circumstances like that, it will be the patent holder itself that will have the manufacturing capacity, but even then the facilities might be located outside the country. The patent holder will not be a reliable option if it has been responsible for the circumstances that make the issue or grant of the compulsory licences necessary, especially when it has failed to grant voluntary licences on reasonable terms. The importance of having the manufacturing capacity therefore goes to the core of the ability of a country to use its right to determine the grounds for compulsory licences and to issue or grant the licences.

There is a possibility of working a compulsory licences through importation of products; that is, the compulsory licence can be issued as permission (or as a licence) to import the product, which would otherwise be one of the exclusive rights of the patent holder in accordance with Article 28(1) of the TRIPs Agreement. But as the Africa Group argued in its proposal to the TRIPs Council, any importation of products while welcome as a possibility or an additional alternative must be considered a short term solution in comparison with the predictability and security that having domestic manufacturing capacity gives a country.

There can be several instances when a country could need to issue compulsory licences; these would also be the grounds for compulsory licences, as pointed out earlier in this study[49], but subject to how far the domestic legislation goes in setting them out. Each of these instances is a reason for having domestic manufacturing capacity in order to be able to issue or grant compulsory licences to address those specific concerns.

Other reasons of a systemic nature do similarly indicate the importance of having domestic manufacturing capacity. It may be a matter of national security for a country to be in a position to protect important public policy objectives, and this may well include objectives such as ensuring the sufficient supply on reasonable terms of product and process technology to meet its essential needs in the areas of public health and food security. It needs to be recalled here that diseases and food shortages kill more people in Africa now than some regional conflicts; with demographic, economic, social and political consequences.

Domestic manufacturing capacity is likely to be tailored along the needs of the domestic population and in line with local circumstances. To rely on the manufacturing capacity of foreign countries that have no close similarity with one’s country or region, may have the risk of irrelevance to the local needs and circumstances. In the area of public health, tropical diseases or tropical variants of diseases that are major concerns in Africa may not be a research and development priority in developed countries. Rather, research and development is planned and undertaken with calculations of returns on investment, thus skewing it in favour of affluent sections of society in developed countries. Localised diseases and variants in Africa would not be high on the agenda of research and development in developed countries; yet most of the research is done there.

In this regard, most markets of African countries would not have the requisite effective demand that could support the long-term or even a one-off supply of certain needed products in the pharmaceutical sector. The low purchasing power in Africa is in part a result of rampant poverty as well as the absence of adequate medical infrastructure that would enable good access to all sectors of the country. Therefore, it would be important to put into effect such regulatory frameworks and other measures that promote the production and supply of low-priced medicine including generic medicine that targets the income levels of especially rural and urban-poor populations. The regulatory framework and other measures would in this context and among other things aim to support the domestic manufacturing industry.

The question of economies of scale attracted a degree of focus in the Africa Group proposal. To make the location and expansion of production facilities in African countries viable, the Group proposed that the requirement in Article 31(f) of the TRIPs Agreement to supply predominantly for the domestic market of the member that issues the compulsory licence, should be changed (through amendment of that provision) to mean that the supply can be made to the entire regional market (free trade area, customs union, and the interim arrangement) in the case of African countries. In practical terms, this proposal reflects the view that the creation of domestic manufacturing capacity should be appropriately pursued at the regional level but this in turn means that there must be a common regional policy on promoting access to medicine or at minimum there must be satisfactory harmonisation or co-ordination of policies particularly on the operation of compulsory licences, and the sourcing and supply mechanisms.

The pharmaceutical industry is a major economic player in developed countries as well as the advanced developing Members that have fairly large generic medicine industries. The industry in this sense is an element of foreign direct investment. It creates jobs, assists in a better tax base, and contributes towards a healthy workforce. As good citizens, pharmaceutical industries may even engage in charity work. However, these are only possibilities and will depend on the actual policies followed in the event of locating production facilities within the country. Those policies will also be subject to the efficiency of the regulatory framework in the country. The framework will additionally have to have clear objectives that do not compromise but that ensure the protection of public health and the promotion of access to medicine for all.

CHAPTER 9: THE PRIVATE SECTOR

The international community but particularly developing countries have welcomed the Doha Ministerial Declaration on the TRIPs Agreement and Public Health as a triumph for society and for good sense, because the declaration clarifies, in paragraph 4, that governments may take measures to protect public health. The importance of this clarification should be seen in the context of loss of or threat to human life on an unprecedented scale in recent memory posed by hivaids-related diseases and other killer diseases like malaria and tuberculosis just to mention two among numerous ailments envisaged in paragraphs 1 and 5(c) of the declaration. It will now be up to people and their governments both in developed and developing countries, as well as international organisations, collectively as an international effort, to use the declaration to deal with all disease-related epidemics that need to be addressed, and this will be helped by experiences and information that are shared and publicised.

Industry should work closely with governments to find sustainable solutions to health crises, but without seeking to undermine the rights of society as clarified in the declaration. In this regard, industry might wish to look at ways of establishing a presence in countries or regions with health crises, transferring medical technology, and generally being part of the expeditious solution under paragraph 6 of the Declaration.

To give effect to the declaration, government officials will need to expedite the adoption of laws and measures; and industry will need to be forthcoming in seeking compulsory licences from governments, in taking up licences that are issued by governments, in targeting production to meet the needs of countries that declare emergencies, and in providing alternative or more affordable sources of medicine under laws and measures for parallel imports. Manuals and information books to guide government officials and industry alike, and to readily put all players in contact whenever and once necessary, should be helpful if quickly made available. Initiatives by industry, and international and private sector and charity organisations to provide such manuals or information as reference material for all actors, would be important and helpful.

Industry should be urged to support laws and measures adopted to protect public health, through individual initiatives particularly programmes that ensure access to sufficient supplies of pharmaceutical products at levels that ordinary poor people can comfortably afford; and in the event that compulsory licences are issued, to support such measures to taking up the licences as may be appropriate.

CHAPTER 10: CURRENT LAWS, REGULATIONS, AND MEASURES IN SELECTED COMESA MEMBER STATES FOR PROTECTING PUBLIC HEALTH AND PROMOTING ACCESS TO MEDICINE FOR ALL

Kenya

The relevant laws for protecting public health and promoting access to medicine

The Industrial Property Act provides for the limitation, in certain cases, of the rights of the patent holder[50] and provides for the exhaustion of intellectual property rights in stating that the rights under the patent shall not extend to acts in respect of articles which have been put on the market in Kenya or in any other country or imported into Kenya if the articles are imported from a country where they were legitimately put on the market.[51] The Act allows the issuance of compulsory licenses[52] and waives the preconditions for the grant of a compulsory license in the case of a national emergency or other circumstances of extreme urgency, provided the owner of the patent shall be so notified as soon as reasonably practicable.[53] Any compulsory license granted must be limited in scope and duration, must be for the purpose for which it was authorized, and should be limited predominantly for the supply of the domestic market.[54] The Act also provides for the exploitation of patented inventions by the government or by third persons authorized by the government for the importation, manufacture or supply of the patented inventions where the public interest, in particular, national security, nutrition, health, environmental conservation, or the development of other vital sector of the national economy so requires, including in cases of national emergency or other extreme urgency.[55]

The enactment of the Industrial Property Act in August 2001 was a product of many factors, that included civil society and business lobby efforts, the obligation to incorporate the WTO TRIPS Agreement into national laws and the need to provide legal certainty in terms of the rights of the government to address issues of public health.

The Pharmacy and Poisons Act provides for the establishment of the Pharmacy and Poisons Board, which has a number of departments dealing with Drug Information, Inspection, Registration, National Drug Quality Control Laboratory, Finance and Administration.

The Kenya Industrial Property Institute established by the Industrial Property Act, 1992 is responsible for the registration and administration of Patents and Trademarks and related intellectual property issues, including the administration of the principal legislation as well as development of implementation regulations and guidelines.

The Standards Act, established the Kenya Bureau of Standards (KBS), which has quality laboratory facilities and is responsible for the routine testing of pharmaceutical devices such as disposable syringes.

General Assessment

The National Drug Policy of 1994, the Declaration of the State of Disaster vis-a-vis HIV/Aids of 1999, and the Industrial Property Act of 2001, collectively provide Kenya with an appropriate policy and legal framework for the local manufacture of essential medicines. But this notwithstanding, Kenya has not prioritised the manufacture and acquisition of ARV combinations most suitable for its circumstances. As a result there are 42 registered combinations, which can be imported or manufactured. This has been criticized by some stakeholders as a demonstration of the lack of government commitment to perform the necessary clinical tests. They argue that it shows government is taking a trade approach and not a public health approach.

Kenya declared a State of National Disaster vis-a-vis HIV/AIDS in 1999 in response to an active lobby by civil society. There is general agreement among stakeholders, both public and private, that there were no urgent follow-up actions by Government to put in place a comprehensive programme of action to address the disaster. In addition, there was no noticeable response from the International Community. Kenya has a vibrant pharmaceutical industry (about 36 companies), which has made it self-sufficient in the production of essential drugs as well as supplying about 50% of the COMESA regional market requirements. The industry is more than prepared to start production of anti-retrovirals if granted the necessary support by government. The National Drug Quality Control Laboratory has state of the art equipment but suffers from inadequate staffing. Staff is seconded from the Ministry of Health and there is high turnover due to poor remuneration packages. As a result, inspections and market surveillance are not undertaken on a regular basis. It was indicated that the Government is doing its best to address these shortcomings.

Despite the existence of an elaborate, appropriate and WTO compatible policy and legal framework for the granting of compulsory licenses for the manufacture of anti-retrovirals, no such license has been issued to date. The government argues that this could be partly due to the fact that no pharmaceutical company had applied for the grant of a compulsory license maybe for fear of legal challenge and/or retribution by the big pharmaceutical companies. On their part, the pharmaceutical companies argue that the problem lies with the Government, as it has not taken appropriate urgent measures to promote local production. Specifically they argue that: Government has not yet developed regulations and procedures for the application of compulsory licenses; in a declared state of national disaster, government should not wait for the private sector to apply but should use the provisions for governmental use to forge partnerships with them in the manufacture of anti-retrovirals; given the objective of affordable access and the fact that anti-retroviral prices have been drastically reduced making local ARV production unprofitable, government should consider subsidizing or going into joint production with the private sector, and reducing the prices without increasing the market is not commercially viable, underlining the need for government subsidies, direct purchase and or partnership with private sector. It is further argued that Government is pre-occupied with the trade and not public health approach, and needs to exempt pharmaceutical raw materials/inputs from import duties and VAT in order to ensure that locally produced pharmaceutical products can compete with imported products whose duty is zero.

It was learnt that Kenya has been under intense pressure from big pharmaceutical companies, which have tried to persuade Kenya, through various "incentives" such as donations and the manipulation of the Global Fund, to drop from its legislation the provision for the issuance of compulsory licenses. Whilst the Kenyan Government has rightfully resisted these pressures, there appears to have been no corresponding action on its part to import cheaper drugs for its people, and continues to rely on donations which often come with conditionalities.[56] As a result, only a small population of HIV/Aids sufferers are on treatment.[57]

It is clear that Kenya has the legislation and institutions under which she can act appropriately in exercising her right to protect public health. However, these laws remain under-utilized because of, among other reasons, the lack of budgetary provision for parallel imports or supporting local production through partnership with the private sector; the lack of urgency on the part of relevant government institutions responsible for regulating the granting of compulsory licenses and appropriate guidelines and procedures for the issuance of compulsory licenses; pressure from big pharmaceutical companies through the targeting of doctors and aimed at discouraging the prescribing and dispensing of generics; manipulation of aid and preferential market access arrangements by developing countries and aggressive marketing gimmicks by big pharmaceutical companies alleging negative side-effects from the use of generics thereby causing fear and uncertainty to the governments and general public.

Malawi[58]

The relevant laws for protecting public health and promoting access to medicine

Pharmacy, Medicines and Poisons Act CAP:35:01

Except in accordance with a license granted in terms of the Act, no person shall in the course of business carried on by him sell, supply, or export any medicinal product; or procure for sale, supply or exportation of any medicinal product, or manufacture or assembly any medicinal product for sale, supply or export.[59] These restrictions shall however not apply to anything done by a medical practitioner or dentist in relation to a medicinal product specially prepared, or specially imported by him or to his order, for administration, sale or supply to his particular patient. Unless in the case of a medical practitioner, hospital, nurse, midwife, clinical officer or veterinary surgeon, no person shall sell by retail, offer or expose for sale by retail, or supply any medicinal product on a pharmacy list unless the person is lawfully conducting a retail pharmacy business; the product is sold or supplied on premises which are a registered pharmacy; the person is a pharmacist and the product is in a container or package made elsewhere than at the place of sale and is not opened since made up for sale in it.[60]

Matters to be considered before a license can be issued in the case of an application for a product license, include safety, efficacy and quality, and in the case of an application for a manufacturer’s of wholesaler’s license, the operations proposed to be carried out, the premises in which those operations are to be carried out, the equipment which is or will be available on those premises, and the qualifications of the person under whose supervision the operations will be carried out.[61]

The Act establishes the Pharmacy, Medicines and Poisons Board whose functions are to assist in the promotion and improvement of the health of the population of Malawi, exercise discipline and control over the professional conduct of all persons registered under the Act and practicing in Malawi, and advise the Minster of Health on any matter falling within the scope of the Act.[62] The Board is also the sole registering authority of all persons required to be registered under the Act.[63]

Patents Act CAP 49:02

Under the Act a compulsory license shall be issued to any person interested who can show that he has been unable to obtain a license under a patent on reasonable terms after the expiry of a period of three years subsequent to the date which the patent was sealed, or four years subsequent to the date on which the application was lodged, whichever period last expires, on the ground that the reasonable requirements of the public with respect to the invention have not been or will not be satisfied.[64] The reasonable requirements of the public shall be deemed not satisfied if the patent is not being worked in Malawi on a commercial scale for no satisfactory reason; if working is being prevented or hindered by the importation of the patented article by the patentee or persons claiming under him; demand of the patented article is not being met in Malawi to an adequate extent or on reasonable terms; trade or industry of Malawi is being prejudiced or the trade or industry is being prejudice by unfair conditions attached by the patentee.[65] The terms and conditions of the license are that there should be secured to the patentee maximum royalty compatible with successful working and a guarantee of a minimum yearly sum by way of royalty.

Notwithstanding anything in the Act, any Government department or any person authorised in writing by the Minster of Justice may make, use or exercise any invention disclosed in any specification lodged at the Patent office for the service of the Government,[66] and for a purpose which appears to the Minister expedient or necessary. These powers in relation to an invention exercisable by a Government department or a person authorised by the Minister shall also be exercisable during any period of emergency, defined as any period beginning on such date as may be declared by the Minister of Justice by statutory instrument to be the commencement and ending on such date as may be so declared to be the termination of the period of emergency.[67] The authority of the Minister may be given before or after the patent is granted and either before or after the acts in respect of which the authority is given are done, and may be given to any person.

A compulsory license may be granted where a patent is in force in respect of a substance capable of being used as food or medicine, or in the production of food or medicine, or a process for producing such a substance.[68]

General Assessment

As an LDC, Malawi is under no obligation to provide patent protection for products or processes until 1 January 2016. In fact, some officials in the Ministry of Health were not aware that Malawi has a Patents Act, and had wondered how drugs had come to be patented in Malawi.[69] The Pharmacy and Poisons Board explained that in its handling of drug registrations, it pretended that the Patents Act does not exist, and would consider recommending its review if it appeared at any point that it was hindering availability of medicines and if strong objections were lodged. Although there is awareness of the Doha Declaration and the flexibility it provides, the general belief is that patents do not hinder availability of drugs in Malawi. It is believed that the Doha Declaration led to the slashing of prices by drug companies in Malawi to an estimated K2500 [US$30] from K10 000 per month, [US$100].

Drug donations were being received from some international drug companies.[70] Although these were welcomed, there is awareness that donations are not the panacea to the problem. It was explained that some drugs that were supposed to be used as a combination were being donated singly, lessening their effectiveness in the treatment of patients.[71] Malawi’s application to the Global Fund had been approved and it would be receiving US$193 million over five years. Only part of that money would be used to procure AIDS drugs to treat approximately 25 000 patients out of a possible 300 000 on a first-come first-served basis. It is reported that the HIV/AIDS epidemic in Malawi is one of the most severe in sub-Saharan Africa,[72] with an estimated 850 000 adults and children living with HIV/AIDS in 2001, with an adult prevalence of 15%. According to the World Bank, AIDS is the major cause of death among people aged 15 to 49 in Malawi. Life expectancy is estimated to have dropped from 52 to 42 years as a result of AIDS. As part of its national response to AIDS, Malawi has undertaken to develop and sustain a dynamic, broad-based institutional framework for the planning, delivery and evaluation of HIV/AIDS programmes through the cabinet Committee on HIV/AIDS.

It was indicated that there were some drug companies in Malawi that manufacture one or two minor drugs and formulations but none that manufacture anti-retrovirals.[73] The view among some officials in the Ministry of Health was that although regional manufacture would be desirable, indications were that manufacture would be more expensive than importation in the first ten years.

Although the general belief in Malawi is that patents are not a problem, it is doubtful that this belief is correct taking into account the monopolistic nature of patent rights and the fact that nothing has as yet been done in Malawi to analyze and even test whether patents are indeed not a problem.

Namibia[74]

The relevant laws for protecting public health and promoting access to medicine

The Patents, Designs, Trade Marks and Copyright Act of 1952[75]

The study established that the Ministry of Justice, working together with the Ministry of Commerce and Industry, has produced a Draft Bill to provide for the registration and protection of patents, utility model certificates, industrial designs and trade marks and replace the 1952 Act. The Bill, which provides for the exploitation of a patent by “government or other persons thereby authorised”[76] and “non-voluntary licenses”,[77] is expected to passed into law soon.

In the Bill, exploitation of a patent by the Government or a person authorised is allowed in the public interest, in particular, national security, nutrition, health or the development of other vital sectors of the national economy[78] or where the court has determined that the manner of exploitation by the owner of the patent of his licensee is anticompetitive. The exploitation of the patent is subject to the payment to the owner of “an adequate remuneration” taking into account the economic value of the Minister’s authorisation. The Minister is supposed to take his decision after hearing the patent owner “and any interested person if they wish to be heard.”[79] In all other instance except those of national emergency or other circumstance of extreme urgency, public non-commercial use and anti-competitive practices, the person seeking the license must show that he has not been able to obtain a contractual license on reasonable terms and conditions.

On the request of any person who proves that he is able to work a patented invention in Namibia made to the registrar after the expiration of at least three years, the Registrar may grant a non-voluntary license if the patented invention is not worked sufficiently in Namibia.[80] The beneficiary of the non-voluntary license shall have the right to exploit “other than to import” the patented invention in Namibia, subject to the payment of “equitable remuneration.”

Medicines and Related Substances Control Act No. 101 of 1965

The Act establishes the Medicines Control Council and the Medicines Control Appeal Board tasked with controlling the registration of drugs in Namibia, and prohibits the selling of drugs unless they are registered. Every application for the registration of medicine shall be submitted to the registrar, and applicants must be registered pharmacists or the manufacturers of the medicine of a body corporate registered with the Namibian Pharmacy Board. Safety and efficacy results from clinical trials and experiments must be clearly spelt out, including the active ingredients and the recommended dosages.[81] The Council may however authorise the sell, during a specified period to any specified person or institution a specified quantity of any particular medicine, which is not registered.

The Council shall as soon as is reasonably practicable after any medicine has been registered, inform medical practitioners, dentists, pharmacists and the person who applied for the registration of such medicine of the name and number under which the medicine is registered, the therapeutic efficacy and the effect of such medicine and the purpose for which, the circumstances under which and the manner in which such medicine should be used.[82]

Hospitals and health Facilities Act No. 36, 1994

This Act, whose aim is to regulate the conduct of health facilities, empowers the Minister of Health to establish state health facilities and related services in order to promote efficient health services. The Minister is also empowered to enter into an agreement with any Government or person for the supply of health services and may permit any person to make use of such health facilities and services subject to such terms and conditions as the Minister may determine.[83]

The Act provides in addition that every person in Namibia shall have access to a state hospital or state health facility and shall be entitled to receive treatment or other medical care and benefit from the health services established under the Act.[84] In addition, any person suffering from a disease or ailment for which treatment as an in-patient is essential shall on the recommendation of a practitioner be entitled to be admitted to a state hospital for the purposes of receiving treatment.[85] The superintendent of a state hospital can authorise the transfer to any hospital of a state patient[86] or a patient receiving free treatment to receive treatment at that hospital free of charge or as a state patient.

The Minister of Health may subsidize or financially assist a private hospital or private health facility established therein, and make payments to a private hospital or private health facility therein, in respect of fees for the treatment of and health services rendered to any state patient by that hospital or private health facility.

Others

The Nursing Professions Act 1993 provides for the establishment of a professional board for the nursing and midwifery professions whose responsibilities, among others, are to control all matters affecting education and training of, and the manner of exercise of the practices pursued by nurses and midwives, to encourage and promote efficiency and assist in the promotion of the health standards of Namibians.[87] Similar functions are performed by the medical and dental professions boards established under the Medical and Dental Professions Act, 1993 and the pharmacy profession board established in terms of the Pharmacy Profession Act, 1993, as well as the allied health services professions board also set up under an Act of 1993. The Namibian Nursing Association Act, 1993 set up an association whose purpose is to provide and develop an efficient and adequate nursing service through research, nursing education and management and the promotion of primary health care. The Council for Health and Social Services Professions set up under an Act of 1993 is tasked with assisting the Minster in the promotion of the health and welfare of Namibians

General Assessment

Namibia’s Pharmaceutical Services division in the Ministry of Health said its primary concern in the registration of drugs was the safety of the drugs to be put on the market with emphasis placed on ensuring the quality and efficacy of the registered drugs. In its view, these requirements do not hinder availability. Since it became a requirement in 2003 that all drugs on the Namibian market registered in South Africa, and which had by virtue of that fact been considered duly registered in Namibia, should be registered with the relevant authorities in Namibia, the office of the registrar had received 2262 applications relating to patented and generic drugs. A new Medicines Control Act, aimed at domesticating the control of medicines, was currently at the Bill stage and is expected to be passed into law soon.

Although admission to a hospital is not totally free as every patient admitted to a state hospital has to pay a once-off subsidized N$16.00 user fee at a local hospital and N$30.00[88] for a referral, the Hospitals and health Facilities Act is an innovative piece of legislation that could greatly assist the availability of medicine for all. The study was unable to establish the achievements in practice under the act, but was able to ascertain that eighty-five percent of the Namibia population relies on state hospitals. With an adult HIV prevalence of around 24 percent[89] Namibia is among the five countries most affected. UNAIDS reported that in 2002 the Government of Namibia was spending about US$25 million a year on HIV/AIDS prevention, care and services.

Namibia’s proposal to the Global Fund had been approved and it would benefit in the amount of US$100 million over five years. There were plans to also tap into the US$15 billion fund set up by the United States Government. Namibia is on the verge of launching an AIDS programme aimed at making anti-retrovirals more readily available to people, which would see the introduction through a tender system of anti-retrovirals into five of the seven state hospitals. The possibility of joint purchasing with Botswana and South Africa was being explored in order to reduce the cost of drugs. Donations of the drug nevirapine were currently being received from some international drug manufacturing companies.[90] Although availability and affordability of drugs still poses a challenge in Namibia, the feeling remains that patents do not hinder the availability of medicines in Namibia making it unnecessary to issue any compulsory licenses at the moment. However, one drug wholesaler[91] noted that the availability of cheaper generic drugs could continue to be hindered in Namibia by the prevalent practice of most doctors of prescribing only patented drugs.

As in the case of Malawi, it is difficult to accept that patents are not a problem in Namibia since patents by nature confer monopolistic rights, and Namibia has not as yet tested whether or not patents are a problem in the country. Currently working on a new Patents Act, Namibia is in a unique position to capture in its legislation the flexibilities that WTO Members have confirmed the TRIPs Agreement provides.

Swaziland

The relevant laws for protecting public health and promoting access to medicine

Swaziland inherited from its colonial past The Patent Utility Models and Industrial Designs Act 1936. Although the Act provided for patent registration in Swaziland, the actual filing of patents was done in the UK and RSA. A new Patents, Utility Models and Industrial Designs Act was given the Assent of His Majesty, the King, in September 1997 but is not yet operational because the implementation regulations and guidelines are not yet in place. Further, the government is currently working with WIPO to update the Act in order to make it TRIPS compliant.

The Act excludes from patent protection methods for the treatment of the human or animal body by surgery or therapy, as well as diagnostic methods practiced on the human or animal body,[92] and provides that where the public interest, in particular, national security, nutrition, health or the development of other vital sectors of the national economy so requires, the Minister may decide, without the agreement of the owner of the patent, that a government agency or a third person designated by the Minister may exploit the invention, subject to the payment of an equitable remuneration to the said owner thereof.[93]

Also inherited from the colonial past is the Pharmacy Act of 1929, which provides for the control and monitoring of pharmacy practices as well as the regulation of pharmaceutical products. Whilst stipulating the requirements for the handling, prescribing and sale of pharmaceutical drugs, the act does not provide for the clinical testing of the same nor does it establish a body such as the Pharmacy and Poison Board to perform this function. The registration of drugs is done through the Director of Medical Services. Two draft bills, the Medicines and Related Substances Control Bill and the Pharmacy Bill, are currently being finalized to replace the current Pharmacy Act. These two bills have provisions for the establishment of regulatory bodies as well as the construction of infrastructure such as a National Quality Control Laboratory.

General Assessment

The current regulatory framework appears rather weak. There is no central body that regulates the local manufacture and importation of drugs. Whilst the registration of manufacturers and pharmaceutical traders is done by the Ministry of Commerce, the Ministry of Finance issues import permits with very little consultation between the two Ministries. As a result, in some cases drugs are being imported without prior scrutiny and prescription drugs are being sold over the counter. It is reported that counterfeit drugs have found their way onto the market. The study established that a private company is currently importing unregistered generic anti-retroviral drugs. Procurement of pharmaceutical drugs is done through the floatation of international tenders administered by the Ministry of Finance. However, import duties are charged on raw material imports, which increases the cost of drug manufacture. Imported drugs are exempted from duty payment.

The Ministry of Health does, however, carry out random inspections of imported pharmaceutical drugs, including standards and quality inspections of manufacturing companies. With the help of manufactures, products undergo quality control at the factory laboratory and are then sent to an independent laboratory in South Africa. This arrangement means that locally manufactured pharmaceutical drugs are subjected to stricter scrutiny whilst imported drugs do not.

There is one recently established local company Mchepa Chemical Industry currently manufacturing a small range of essential drugs. It expressed its readiness to manufacture anti-retrovirals if given the appropriate support by government. The view of industry is that government has to demonstrate practical commitment by engaging local manufacturers in placing bulk orders or giving market guarantees. They also call for the strengthening of the regulatory framework to ensure that locally manufactured drugs do not face unfair competition from imported, often unregistered and counterfeit products.

An HIV/AIDS Prevalence Survey conducted recently revealed that 40% of pregnant women tested positive. With a population of less than one million, these statistics call for the adoption of an urgent public health approach if high mortality rates are to be avoided in the near future. In the 2003 financial year, government allocated E15 million for the purchase of anti-retrovirals. However, this money has not yet been utilized because the regulatory and administrative aspects regarding the procurement process have not been finalized. For instance, government is still to prioritise the ARV combinations, agree on the tender system to be used and how the drugs will be handled, stored and dispensed. An additional amount of US$52 million has been sourced from the Global Fund. At the time of the study visit, a delegation was in Geneva, Switzerland, to finalize access procedures.

Uganda[94]

The relevant laws for protecting public health and promoting access to medicine for all

The National Drug Policy and Authority Statute, 1993

This Act establishes the Ugandan National Drug Policy and a National Drug Authority to ensure the availability, at all times, of essential, efficacious and cost effective drugs to the entire population of Uganda, as a means of providing satisfactory health care and safe-guarding the appropriate use of drugs.[95] The National Drug Policy is also to enable the making of a continuous review of the needs knowledge and resources of essential drugs; the promotion of rational use of drugs both in the public and private sector; the improvement of Government regulations and control of manufacture, production, importation, exportation, marketing and use of drugs; the provision of systematic public information, professional training and re-training of health workers; the improvement of the registration of drugs and licensing of pharmaceutical premises; the intensification of research in all types of drugs including traditional medicine and compliance with the international regulations on drugs including the relevant conventions.[96]

The Drug Authority is charged with the implementation of the National Drug Policy and shall deal with the development and regulation of the pharmacies and drugs in Uganda; estimate drug needs to ensure that the needs are met as economically as possible; control the importation, exportation and sale of pharmaceuticals; control the quality of drugs; promote and control local production of essential drugs; encourage research and development of herbal medicines; promote national drug use through appropriate national training and establish and revise professional guidelines and disseminate information to health professionals and the public.[97]

A National List of Essential Drugs shall be compiled, and no person shall import or sell any drug unless it appears on the list, but may do so after the authorisation of the Drug Authority to meet emergency or extraordinary circumstances.[98] A Drug Commission shall ensure the regular assessment and estimation of the national drug needs both in the public and private sectors, and the estimates shall be expressed both in unit quantity and financial cost.[99] For the purposes of providing accurate estimates of drug needs, the Commission shall promote and encourage investigation, including studies of current morbidity patterns, drug utilization and available diagnostic and therapeutic resources.[100] The Drug Authority may prohibit the sale or retail of a drug if in its opinion the use of the drug may endanger the health of the user or there may be other undesirable effects in the use of the drug.[101] No person shall carry on a business of supplying restricted drugs by wholesale unless he is authorised to carry on that business by a license granted by the Drug Authority,[102] and no person shall manufacture any drug or preparation which is not included on the national list unless with the approval of the Authority. The National Drug Authority shall encourage research by persons carrying on research and development in herbal and other medicines and where appropriate take such medicines into production as a component of the drug supply.

The Public Health Act [Chapter 269]

This Act regulates the preservation of public health in Uganda, under the Minister of health who may declare that any disease shall be a notifiable disease. The Minister may declare any part of Uganda an infected area and may make rules prohibiting any person from living in any building or using any building for any purpose if any such use is liable to cause the spread of any infectious disease,[103] and can order the compulsory medical examination of persons suffering from an infectious disease.

Uganda AIDS Commission Statute, 1992

A Ugandan AIDS Commission is established under the Act for the prevention and control of the AIDS epidemic. Its functions are to oversee, plan and coordinate AIDS prevention and control activities throughout Uganda, in particular to formulate policy and establish programme priorities for the control of the AIDS epidemic and management of its consequences throughout the country; ensure proper planning and coordination of all AIDS control policies and programmes; identify obstacles to the implementation of AIDS control policies and programmes and ensure the implementation and attainment of programme activities targets; mobilize, expedite and monitor resources for the AIDS control programme activities and disseminate information on the AIDS epidemic and its consequences in Uganda and on the programme activities for its control. In the performance of its functions, the Commission is responsible to the President.

The Patents Statute, 1991

Where the Minister responsible for the supervision of the patents registry is of the opinion that it is in the vital public interest, [defined as including matters of paramount importance pertaining to national security, public health, public order and morality and national economy][104] he may in consultation with the Registrar direct that a patented invention be exploited by a Government agent or other person designated by the Minister. But the owner of a patent affected by any direction of the Minister may appeal to the High Court against both such direction and the amount of remuneration awarded to him, although any such appeal shall not suspend the effect of the direction of the Minister.

After the expiry of at least three years from the grant of a patent, any person may, in proceedings instituted by him against the owner of a patent or in proceedings instituted against him by the owner request the court to grant him a compulsory license on the grounds, among others, that the patented invention has not been worked in Uganda or that the existing degree of working of the patented invention in Uganda does not meet on reasonable terms the demand for the patented product on the domestic market.

Others

The Food and Drugs Act provides that no person shall add any substance to, or abstract any constituent from, a drug so as to affect injuriously the quality, constitution or potency of the drug, with the intent that the drug shall be sold in Uganda.[105] The Allied Health Professionals Statute, 1996 provides for the regulation, supervision and control of the allied health professionals[106] and for the establishment of a Council to register and license the allied health professionals. Since no visit was conducted to Uganda, the achievements of these laws in practice could not be ascertained.

Zambia

The relevant laws for protecting public health and promoting access to medicine for all

The control of the manufacture and distribution of medicinal products in Zambia is governed by a number of statutory instruments under the overall responsibility of the Ministry of Health, viz: the Pharmacy and Poisons Act, the Dangerous Drugs Act, the Medicinal and Allied Professions Act, the Therapeutic Substances Act, the Food and Drugs Act and Patents Act.

The Patents Act,[107] which is administered by the Patent Office which falls under the Ministry of Commerce and Industry, empowers the Registrar of Patents to refuse the grant of a patent for "food, medicine and plant varieties" in cases "where the ingredients are known."[108] The formulation of this provision has created legal uncertainty as to whether all types of food, medicine and plant varieties are exempted from patent protection. The Patent Office appears unsure whether or not the Act provides protection for medicine.[109] The Act provides for the issuance of compulsory licenses in situations where there is insufficient working, an emergency or situation of extreme urgency, a threat to human life and health and urgent need for state use. The Act is silent on the issue of parallel imports and/or exhaustion of rights.

The licensing of locally produced and imported medicines as well as the licensing of manufacturers, wholesalers, importers and retail pharmacies is done by the Pharmacy and Poisons Board (PPB). The supply/procurement of medicine is done through the floatation of international tenders through the Tender Board. The study revealed that these tenders are always invariably won by foreign suppliers and that most local bidders fail at the pre-qualification stage.

General Assessment

The PPB is under-staffed (only one pharmacist and two technicians) and ill-equipped to perform its functions effectively. For instance, the PPB does not have a Quality Control Laboratory and has to rely on equipment used by the Food and Drugs Board. As a result, there is a backlog of drug registrations going back to 1996. The current registration procedures for the importation of drugs reflect the incapacity of the PPB and highlight the danger of a weak regulatory framework. In other words drugs are being imported without being subjected to scrutiny by PPB. Any importer can compile a dossier for the medicine he wants to import, pay a registration fee, submit this to the PPB and import the following day. However, registration of anti-retrovirals and anti-malaria drugs takes a bit longer. To date Zambia has not yet issued a compulsory license and only about 10 000 Zambians receive ARV treatment at public institutions.

Two companies[110] visited indicated their readiness to manufacture generic versions of anti-retrovirals. In fact they were at various stages of testing their products and applying for the registration of their ARV combinations. Zambia's Drug Policy document commits the government towards giving maximum support to the local manufacture of pharmaceutical products and to ensure that these can compete with imported medicines. At the moment all imported medicines come in duty-free. As a result government has waived all duties on imported inputs in the manufacture of medicines. Government is working on a package of additional measures to encourage local manufacture. But despite the fact that government has made budgetary provisions of K10 billion and K15 billion in 2002 and 2003, respectively, for the supply of anti-retrovirals, it had not as yet approached any local manufacturer for the supply or production of these drugs. There appears to exist a certain mistrust between the PPB and manufacturers, arising mostly from the fact that the PPB holds the perception that local manufacturers and suppliers are taking advantage of the fact that the PPB is understaffed and ill-equipped to fulfil its mandate. It is alleged that some sub-standard drugs have been manufactured in, or imported into, Zambia. On their part the local manufacturers argue that government is not committed to local manufacture as it has not approached them to work in partnership in the production of essential drugs. Further, they argue that the tender system used for procurement of medicines discriminates against local manufacturers. These local manufactures are using below 20% of their manufacturing capacity.

Zimbabwe[111]

The relevant laws for protecting public health and promoting access to medicine for all

The Public Health Act [Chapter 15:09] and the Drugs and Allied Substances Control [General] Regulations of 1991

The Public Health Act provides the general institutional arrangements for the delivery of health services in Zimbabwe, including the notification of diseases, sanitation and housing, water and food supplies and infant nutrition. The Ministry of Health is tasked with preventing and guarding against the introduction of disease from outside; promoting the public health, and the prevention, limitation or suppression of infectious and contagious diseases within Zimbabwe; to advise and assist local authorities in regard to matters affecting public health; to promote or carry out researches and investigations in connection with the prevention or treatment of human disease and to prepare and publish reports and statistics or other information relative to the public health.

The Drugs and Allied Substances Control Regulations regulate the application for the registration of drugs, their importation and sale in Zimbabwe. Any manufacturer of drugs or any other person who in the eyes of the Medicines Control Council of Zimbabwe is acceptable, may apply for the registration of a drug for the purposes of selling it or distributing it in Zimbabwe. Every application shall be accompanied by, among other requirements, a sample of the drug or such samples of the drug or raw materials that the Council may request for analysis, copies of all records and batch data relating to a particular batch, which shall include raw material analytical reports, master sheets relating to manufacture and packaging, in-process records, final product analytical records and authorization for release and any other relevant records.[112]

No person shall import into Zimbabwe or export from Zimbabwe any listed drug except with the written permission of the Council and subject to such conditions as the Council may impose[113] and no person shall acquire or possess a listed drug unless he is a pharmaceutical chemist, an authorised manufacturer, a person for whom the drug has been prescribed or a person authorised in writing by the Council.[114] In addition, no person shall manufacture, store or prescribe a listed drug unless he has authority to do so.[115] No person shall sell a pharmacy drug in Zimbabwe unless he is authorised to do so by the Council.

The Health Professions Act [Chapter 27:19]

A Health Professions Authority is set up under this Act whose functions are to formulate, develop and implement measures and policies designed to coordinate and integrate the functioning and operations of members of the health professions and ensure the provision and promote the enhancement of efficient professional services by members of the health professions. The Authority is also tasked with liaising and collaborating with all relevant councils on matters of practice and control, discipline, education and minimum standards required at any premises or at which members of any health profession practise their profession, and to implement Government policy on any matter relating to the health professions.

Councils have been set up under the Act, whose functions in their relative fields are to assist in the promotion of the health of the population of Zimbabwe; regulate, control and supervise all matters affecting the training of persons and to monitor, enforce and improve the standards of such training in Zimbabwe and to define and enforce ethical practice and discipline among registered persons. The Councils are the following: Medical and Dental; Allied Health Practitioners; Natural Therapists; Nurses; Pharmacists; Medical Laboratory and Clinical Scientists; Environmental Health Practitioners, and Medical Rehabilitation.

The Patents Act [Chapter 26:03]

The Patents Act provides for the granting of a compulsory license in the case of abuse or insufficient use of patent rights[116] to any person interested who can show that he has been unable to obtain a license on reasonable terms after the expiration of a period of three years subsequent to the date on which the patent was sealed or four years subsequent to the date on which the application in respect of the patent was lodged on the ground that the reasonable requirements of the public have not been satisfied.[117] Where a patent is in force in respect of a substance capable of being used as food or medicine or in the production of food or medicine; or a process for producing food or medicine; or any invention capable of being used as or as part of a surgical or curative device, a licence shall be granted upon application.[118] In settling the terms of a license under this section efforts shall be made to ensure that food, medicine and surgical and curative devices shall be available to the public at the lowest prices consistent with the patentees deriving a reasonable advantage from their patent rights.[119] Any license granted shall entitle the licensee to make, use, exercise and vend the invention as food or medicine or for the purposes of the production of food or medicine or as part of a surgical or curative device but for no other purpose.[120]

The Patents Act allows any department of the State or any person authorised by the Minister of Justice to make, use or exercise any invention disclosed in any specification lodged at the Patent Office for the service of the State. The authority of the Minister in respect of an invention may be given either before or after the patent is granted and either before or after the acts in respect of which the authority is given are done. The Minister is however under an obligation to notify the patentee as soon as practicable after the use is begun, and to furnish such information as to the extent of the use as he may from time to time require.[121]

During a period of emergency, [defined as any period beginning on such date as may be declared by the Minister of Justice by statutory instrument to be the commencement and ending on such date as may be so declared to be the termination of the period of emergency[122]], a person authorised by the Minister to use the invention for the service of the State may make, use, exercise and vend the invention for any purpose which appears to the Minister necessary or expedient for, among other things, the maintenance of supplies and services essential to the life of the community; or for securing sufficiency of supplies and services essential to the well-being of the community; or generally for ensuring that the whole resources of the community are available for use, and are used, in a manner best calculated to serve the interests of the community.[123]

The emergency legislation

In 2002, the Minister of Justice, Legal and Parliamentary Affairs, in terms of section 34 of the Patents Act [which allows use of patented inventions for the service of the state[124]], read with section 35 [which relates to special provisions as to State use during an emergency[125]] issued a notice declaring a period of emergency on HIV/AIDS for the purpose of enabling the State or a person authorised in writing by the Minister to make or use any patented drug, including any antiretroviral drug, used in the treatment of persons suffering from HIV/AIDS or HIV/AIDS-related conditions, and/or to import generic drugs in the treatment of persons suffering from HIV/AIDS or HIV/AIDS-related conditions. The understanding among the relevant authorities is, however, that similar regulations can be issued for other diseases and that AIDS just happened to be the problem at hand needing a solution. With a prevalence rate of 35% at the end of 2001, up from at estimated 25% two years earlier, Zimbabwe is among the countries hardest hit in sub-Saharan Africa.[126] Life expectancy is predicted to decline to 35 years by 2010 compared with 66 years in 1997. The Government has adopted a national strategic framework on HIV/AIDS, created a National AIDS Council by an Act of Parliament and introduced an AIDS levy to generate resources to support HIV/AIDS interventions.

The declaration, initially made for a period of six months, was extended in January 2003 to December 2008.[127] The period of the declaration had originally been put at six months only because the relevant authorities in the Ministry of Health and the Medicines Control Authority of Zimbabwe, [MCAZ] believed that the declaration could be challenged by the pharmaceutical companies. This did not happen. Tests done on pregnant mothers had also shown a downward trend of infections from 35% in 2000, 29.5% in 2001 with prospects for a further reduction in 2002, which raised expectations that six months could be sufficient to enable medicines to be made available to arrest the infection trend. But it became clear that that the period of six months was too short to make any appreciable difference, and since the feared challenge from pharmaceutical companies did not materialise, the declaration was then extended for a further period of 5 years to 2008. The issuance of the declaration was also a response to pressure from some sections of the public and private sector, born out of a realization that such a declaration would be useful and would assist in cutting down bureaucracy.

While the declaration makes provision for a person authorised in writing by the Minister to “make or use any patented drug”, including any antiretroviral drug, it makes provision for any such person to only import generic drug used in the treatment of persons suffering from HIV/AIDS or HIV/AIDS-related conditions. This raised the question why no provision was made for the importation of patented drugs. Two reasons were given in explanation. The first was that it was a deliberate policy of the Ministry of Health to promote the importation of generics, which are considered invariably cheaper than the patented equivalents. The second reason was that the drafters assumed that the importation of the patented versions could be taken care of under the principle of exhaustion.[128] In any case the patented versions were available on the market and could be imported with few restrictions by those who could afford to buy them.

The emergency declaration does not waive the requirements under the Drugs and Allied Substances Control [General] Regulations for manufacture, sale and distribution of drugs in Zimbabwe and the emphasis on the quality of the drug and its effectiveness, which according to some wholesalers and pharmacists, has resulted in the registration process remaining slow. The Ministry of Health made it clear that even though it believes that affordable access is important, this should not be at the expense of drug effectiveness and safety. It was noted that some multinational companies believed that since Zimbabwe was poor, it should not insist on the provision of some of the required data and information.

Basis under the Declaration on the TRIPs Agreement and Public Health

The Zimbabwe emergency declaration has a clear basis in the Declaration on the TRIPS Agreement and Public Health adopted at the Fourth Session of the Ministerial Conference in Doha in 2001. The Ministers left no doubt at all about the importance of implementing and interpreting the TRIPs Agreement in a manner that supported public health. In the main Doha Declaration the Ministers stated in paragraph 17 as follows:

In this connection, we reaffirm the right of WTO Members to use, to the full, the provisions in the TRIPS Agreement, which provide flexibility for this purpose.”

The separate Declaration on the TRIPs Agreement and Public Health went on to highlight some flexibility in the TRIPs Agreement by stating in paragraph 5 as follows:

“5. Accordingly and in the light of paragraph 4 above, while maintaining our commitments in the TRIPS Agreement, we recognize that these flexibilities include:

(b) Each Member has the right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted.

The international community wanted and demanded these clarifications from the Ministerial Conference, against a background of consistent and in some instances successful pressure by industry lobbies and some developed country governments on governments of developing and least developed countries, not to use some of the flexibility in the TRIPs Agreement. Although the idea of the Zimbabwean emergency declaration had been mooted even before the adoption of the Declaration on the TRIPs Agreement and Public Health in Doha in 2001, the Doha Declaration provided a clear basis for its issuance, especially with its clear reference to HIV/AIDS as one of the diseases of concern to Members of the WTO.

Assessment of Performance

Two Zimbabwean registered companies have so far made applications for compulsory licences pursuant to the declaration. VARICHEM Pharmaceuticals [Pvt] Ltd[129] was in April 2003 granted a compulsory license to manufacture combivir, whose patent is held by GlaxoSmithKline, and was set to begin operations shortly thereafter. Another company applied for and was granted a compulsory license to import.

One Pharmacy[130] in Harare, which imports and sells anti-retroviral drugs was of the view that even though the declaration had made it easier to import generics which the MCAZ had frowned upon before, the registration requirements were still too stringent. Since some of the drugs were well known and had been successfully used elsewhere, the pharmacy believed it made sense to allow the distribution of the drug in Zimbabwe even without some of the required information, especially considering that if a person was given authority by the MCAZ to import medicines for personal use[131], he was not required to provide the information that the pharmacist was required to provide before he could be granted authority to sell the drug. Some of the companies in India from where the pharmacy sourced the drugs sometimes did not bother to provide all the required paper work since they considered Zimbabwe an insignificant market.

While the MCAZ acknowledged that non-provision of sufficient information contributed to some of the delays experienced in processing applications, it emphasised that its policy is that applications made for the registration for sale of anti-retroviral drugs would be processed with speed and should not wait in the processing queue. Although the Minister of Justice was willing to discuss any reasonable requests for the relaxation of registration requirements, both his Ministry and the Ministry of Health were very clear on the need to insist on information that would guarantee the importation of safe drugs. Individual imports were not subject to the strict requirements for the reason that they were for personal use and that any damage that they could cause was limited only to the individual importing the drug for personal use, who in any case has to have a valid prescription to be able to source and import the medicine.

It is the view of the whole health service industry – pharmaceutical wholesalers, pharmacists and health officials – that the re-training of doctors is necessary to enable them to fully understand the disease and how it should be treated. It was noted that some doctors prescribed one drug instead of the required combination or put patients on the drugs only for a limited period instead of a lifetime prescription leading to ineffective treatment in some cases, and drug resistance in others. The disease was complex, requiring treatment for life, through a sometimes-complicated process. In this connection, the Ministry of Health has developed treatment guidelines, whose launching has however been delayed for fear that this may raise expectations that since the treatment guidelines were out the drugs would now also become available, when in fact they were not.

The Ministry of Health noted that the international response it had anticipated when it requested the Minister of Justice to issue the declaration is present, and sustained donations of anti-retrovirals such as nevirapine and flucanazole have been received from some international drug companies.[132] This has made it possible for the Ministry of Health to provide free of charge the drug nevirapine to expectant mothers to prevent mother to child transmission. Independent Health Care, a drug wholesale company, indicated that the price of the drug ZERIT that it imported started dropping in June 2001 from about Zimbabwe dollars 22 000 per month, [US$400 at the then official exchange rate] to around Zimbabwe dollars 1 800 per month, [US$30] by 2002 for the treatment of one person.[133] This drop was attributed to the pressure that had been brought to bear on the drug companies after their failed attempt to sue the South African Government, the Doha Declaration and the Zimbabwe emergency declaration. While the Government has indeed welcomed these donations, there is suspicion in some quarters that these donations may be part of a wider strategy to corner the local market and shut out any would-be manufacturers of generic drugs, such as VARICHEM, which indicated that although it was aware that the donations could indeed be part of such a strategy, it was not unduly concerned since the donations would cater for the public sector while its manufacture would cater for the private sector. The sad thing was that the ‘market’ was too large and could never be satisfied by donations.

The average monthly treatment for a recommended combination has been put at anything between US$30 and US$50 per month, which remains beyond the reach of a population 80% of which is classified as poor. VARICHEM Pharmaceuticals [Pvt] Ltd, which has agreed to provide to Government 75% of the drug combivir, which it will manufacture under the compulsory licence, at US$15 per month.[134] The Ministry of Health was currently mooting the setting up of clinics dedicated to the treatment of AIDS along the same lines as the existing diabetic or TB clinics, in a bid to improve availability.[135]

Although it is rather early to make any conclusions on the working of the declaration, one thing that appears clear is the desire all round in Zimbabwe to see the declaration continue in place. The declaration is credited with making the pharmaceutical companies more forthcoming on AIDS drugs, as these companies see cooperation with the Government on AIDS as useful in deflecting similar attention from other drugs that they manufacture. Drug wholesalers[136] were convinced that the emergency declaration had helped not only in the sense that pharmaceutical companies have not increased the prices of anti-retrovirals which still average US$30 per month, but also in the sense that the MCAZ has, against the background of the declaration, allowed the importation of some generic drugs that it would not have allowed into the country if the declaration was not in place. The Minister of Justice expressed the hope that more companies will take advantage of the declaration to set up plants and manufacture AIDS drugs. In his view, having Zimbabwean companies carry out the manufacture in Zimbabwe is preferable to importation as being local companies, it is easier for Government to retain some measure of control on what is manufactured and how it is distributed.

It appears important now to put in place a mechanism for the clear identification of population needs, [including who should receive treatment], suppliers and distribution channels.

CHAPTER 11. RECOMMENDATIONS

Common investment regime in the pharmaceutical sector

Investment regimes in the pharmaceutical sector should be harmonised or at least co-ordinated.

The re-location of production or manufacturing facilities or of places of business within the member states falls within the general field of generating local investment and the inflow of foreign direct investment. The investment laws and policies, and any other ad hoc or continuous measures, should fully take on board the matter of protecting public health and promoting access to medicine through including the pharmaceutical sector within the priority or designated key sectors, for countries where this is not yet the case.

The visits to selected COMESA Members confirmed that content of the laws and policies and other measures should be harmonised or at least co-ordinated, for the same reason that harmonisation or co-ordination of regional investment policies is appropriate. In this regard, African regions have sought inter alia to project themselves as single investment zones providing sizeable regional markets with free flow of goods, services and capital as well as a good degree of liberalised movement of persons. African regions have additionally held out the prospects of liberalised and suitable investment regimes, including specifically the rules on, formation or establishment of business entities, taxation, credit, good administration of justice, security of property and person, access to high-skilled and semi-skilled labour, repatriation of profits, and arbitration and other forms of dispute settlement.

The investment aspects of the content of the laws and policies and other measures dealing specifically with the pharmaceutical sector should be harmonised or at least co-ordinated in a streamlined manner, so that maximum transparency and unity of purpose can be achieved. In this regard, the corpus of incentives in the pharmaceutical sector, which are designed to generate local investment and attract the location of facilities within the countries, should be harmonised or at least co-ordinated in the context of projecting the region as a single investment zone.

Common regional policy on public health and access to medicine

Member states should ensure that their health ministries and their drug authorities harmonise or at least co-ordinate their legislation and policies in the framework of a common policy on public health and access to medicine.

The health ministries have the overall responsibility of protecting and promoting the public health of the country and promoting access to medicine for all. They undertake the overall regulation of hospitals and the medical infrastructure. In this regard, the health ministries will normally be empowered to declare emergencies or the existence of other circumstance of extreme urgency related to health, to declare quarantine areas in relation to people or animals, to take measures to eradicate diseases or contain their spread including through prevention and treatment, and so on.

The main functions of Drug Authorities, the study revealed, include inter alia ensuring the safety and the therapeutic value of medicine through testing and approval and policing; and the regulation of the pharmaceutical sector to ensure that only duly licensed pharmacies operate. The specific functions of the drug authorities will therefore normally include, the authorisation of the use of certain drugs and their release to the public, the issue and renewal of licences for pharmacies, the classification of drugs, the prosecution of crimes related to the administration of national drug policies, and so on.

It could be clear from the nature of these functions that their harmonisation or at least their co-ordination would assist in developing a regional policy on public health and access to medicine. The health ministries and the drug authorities need to mutually support one another in the framework of a common regional policy on public health and access to medicine. This would enhance their functions particularly in eradicating or containing diseases, and in ensuring the safety of medicine within the region. Mutual support and recognition would assist the wider and free movement of drugs within the region.

The common policy of public health and access to medicine will provide the framework for the location and operation of regional manufacturing or production facilities in a manner that utilises the economies of scale provided by the regional market and that assists common procurement mechanisms for medicine. The production economies and the common procurement in bulk should result in appropriately lower pricing of the medicine or even availability in public hospitals without charge, as well as properly managed production planning for the facilities.

Institutions and procedures for compulsory licensing

As pointed out already[137], some of the obstacles to making effective use of compulsory licensing have related to the institutions and procedures on compulsory licensing.

There study showed that properly functioning institutions or competent authorities charged with the functions of receiving applications for and issuing compulsory licences, as well as institutions that on their own motion can issue or operate the compulsory licences as circumstances might warrant, are absent.

Further, the procedures for seeking including applying for, and operating, compulsory licences have been either obscured in remote law books and low profile offices, or non-existent. The absence of streamlined procedures for invoking the provisions on compulsory licences if any in the patent or public health laws and other laws has resulted in diffused responsibility and in practice an absence of direction.

A common policy on public health and access to medicine should address these institutional aspects of compulsory licensing. There should be common institutions designated as the competent authorities, having similar functions and powers; the institutions should have a forum within the context of the organs of the regional economic communities to regularly consult on the details and the operation of the common policy on public health and access to medicine. The procedures on compulsory licensing should be substantively similar. This would facilitate the mutual recognition of procedures in other member states. It would mean also that any problems that arise from time to time or that are identified in the operation of the procedures could be addressed at the regional level.

The elements of the procedures that would be covered could include the following: the competent authorities designated, their functions and powers, eligibility to seek compulsory licences, guidelines on seeking voluntary licenses, grounds for applications for compulsory licences, formats and other details on applications for compulsory licences, conditions for issue and operation of compulsory licences, duration of the compulsory licences, grounds for termination of the compulsory licences, guidelines on compensation, and so on.

Exhaustion of patent rights

The TRIPs Agreement leaves it to the WTO members themselves to determine what regime to adopt on exhaustion of intellectual property rights. In this regard, members may choose national, regional, or international exhaustion of the rights.[138] The member states in the region do not have the same approach to exhaustion. It would assist the operation of a common policy, or at least some co-ordination, if the member states adopted the regional or international exhaustion of intellectual property rights, but not the national.

Regional or international exhaustion would mean that products that are legitimately introduced onto the regional market could move freely within the regional market without the holder of the relevant patent having a right to prevent or control this on the basis of the patent. The products would be legitimately introduced onto the regional market if, for instance, sold by the patent holder, produced or manufactured under a voluntary licence granted by the patent holder, or if the patent holder is otherwise properly remunerated for the use of the patented product or process. Such remuneration could be done in the context of compulsory licensing.

Legal framework for the supply of pharmaceutical products within the COMESA regional market

There are several ways pharmaceutical products can be supplied to the member states. These include the following:

· A member state may exercise its prerogative of governmental use, or public non-commercial use, to use a patent to address important public policy needs, including public health and access to medicine. The administration would either import the pharmaceutical products from abroad or produce the products domestically if there is the necessary manufacturing capacity.

· A member state that has domestic manufacturing capacity can issue a compulsory licence for the production and supply of the pharmaceutical products for its own market. The licence can be granted to a government department or an entity in the private sector. Alternatively, and where possible, the production would be done by the patent holder; or under a voluntary licence from the patent holder.

· According to Article 31(f) of the TRIPs Agreement in its current form, a member state may issue a compulsory licence to supply its domestic market and export up to 49 per cent of the production to other member states;

· Countries outside the region may similarly issue compulsory licence to supply their markets and export up to 49 per cent of the production to the member states[139];

· Where a country adopted regional or international exhaustion of intellectual property rights, there is a possibility of supplying that country with products that have been legitimately put on the regional or international market, respectively (that is, the patent holder has sold or disposed of them, or licensed their production, or where the holder has been properly remunerated);

· According to paragraph 6 of the draft Decision, there is an unlimited possibility for a pharmaceutical product produced or imported under a compulsory licence in a member to export to the markets of other developing or least-developed country parties to the regional trade agreement that share the health problem in question;

A legal framework for the supply of pharmaceutical products within the regional market should clarify and strengthen the various options that are available for protecting public health and promoting access to medicine as a concerted effort on the part of the member states, acting jointly within the framework of the free trade area or customs union, or other similar arrangement particularly those under the Enabling Clause.

Equally essential are the elements on addressing the reasons to date for little or no resort to the right to compulsory licensing in most developing countries as well as the suitable elements for a framework for building domestic manufacturing capacity, as discussed elsewhere in this study. These will be integral to a framework for the supply of pharmaceutical products within the regional market.

Additionally, there will be certain practical measures to take that could support the core legal framework. Some of these could include the following:

Member states could adopt a common drug policy within the broad framework of a common policy on public health and access to medicine. The common drug policy would specifically address the aspects that fall within the remit of drug authorities, particularly the safety and therapeutic efficacy of medicine, the licensing of pharmacies, and prosecution of infringement of laws on drugs as enacted in the relevant statutes. Ministries of Health should establish a regular forum as envisaged in the COMESA Treaty through a desk/department in the COMESA Secretariat dedicated to service and coordinate the COMESA Health Ministers Forum.

In this context, national drug authorities need to constitute forums where they regularly meet to consult and exchange experiences, and adopt common or co-ordinated policies within their respective competencies. This may take the form of regional associations. But additionally, the regional framework could provide within the formal organs of the regional market, a mechanism for representatives or experts from national drug authorities to regularly meet and coherently inform the regional integration and development efforts, from the perspective of protecting public health and promoting access to medicine.

On the part of the private sector and as a proper complement to the national drug authorities, pharmacies should be encouraged to form pharmaceutical associations, which could be recognised and brought under the auspices of the regional market. These associations have been very influential in developed countries. It would seem appropriate to have counterparts in developing countries, to address the elements that are of particular concern in developing countries. Located within the private sector, such pharmaceutical associations would assist governments in identifying and possibly addressing the private sector perspectives of protecting public health and promoting access to medicine. Domestic pharmaceutical companies will be as essential element of building domestic manufacturing capacity or promoting sufficient supplies of pharmaceutical products through importation.

An essential possibility within regional arrangements for protecting public health and promoting access to medicine, is the designation of locations or companies that may be national or multi-national parastatals, for the production or procurement of pharmaceutical products for the entire region or for co-operating member states within the region. For this to happen, there will need to be some formal co-operation among regional pharmaceutical companies, brought together under the auspices of the regional market. The constitutive instruments of most African regional economic communities already envisage the possibility of regional multi-national enterprises. This possibility can have some practical application within the context of protecting public health and promoting access to medicine.

However, if there is to be a regional perspective to protecting public health and promoting access to medicine within the framework of regional markets, the secretariats will need to be fully on board to provide the co-ordination desk and facilitate the meetings of the relevant authorities and experts in the framework of the organs of the regional institutions.

Domestic laws providing for production and exportation of medicine as a limited exception to patent rights

While many developing countries may have laws under which their administrations can act appropriately in exercising their rights to protect public health, the laws remain un-utilised. The real use of the Declaration on the TRIPS Agreement and Public Health should include the way the TRIPS Agreement is interpreted in WTO dispute settlement, but perhaps far more urgently the flexibility with which domestic laws and measures on protecting public health are adopted. The interpretation of the TRIPS Agreement in accordance with the declaration will be assisted if developing countries and developed countries now actively adopt laws and measures demonstrating their understanding of the declaration.

In addition to practice mainly in developed countries on Article 30-type exceptions relating to research and teaching, therapeutic methods, and testing for marketing approval, the European Parliament recently adopted amendment 196 of the European Directive on Human Use Medicines. That amendment states that “Manufacture shall be allowed if the medicinal product is intended for export to a third country that has issued a compulsory licence for that product, or where a patent is not in force and if there a request to that effect of the competent public health authorities or that third country”. This amendment received broad international support particularly from generic industries and civil society, and has not attracted opposition from other developed countries.

CHAPTER 12: POSSIBILITIES FOR FURTHER WORK IN THE COUNCIL FOR TRIPs.

Progress in the TRIPS Council will be necessary and one of the conditions precedent to the full implementation of the declaration and the achievement of its goals of supporting governments in adopting laws and measures to protect public health.

There are four main ways of making changes to the WTO Agreements, namely, amendment or modification, adoption of new agreements, adoption of decisions in general, and adoption of specific interpretative decisions. The WTO dispute settlement system seems to be another way of making changes to the agreements, through rather creative interpretations put on provisions by panels and the Appellate Body. These various ways pose certain procedural difficulties or advantages that may affect prospects of achieving the intended changes. The method adopted will determine the nature of the instrument finally adopted: its form, enforceability and status within the legal architecture of the WTO system.

In deciding between the various ways of changing the agreements, some considerations may include,

(a) The amount of negotiations entailed bearing in mind the capacity of the country or the Geneva-based delegation to meet the financial and human resource requirements entailed (long negotiations will stretch the financial resources of the country, technical negotiations will require quite specialised skills, wide ranging negotiations will do both),

(b) The general effectiveness or legal status of the resulting instrument (for instance, decisions may be considered to be political instruments and therefore not to be as authoritative as the legal provisions in the agreements),

(c) The scope of the change (for instance, an interpretation may not introduce new rights or obligations and would therefore be inadequate where new rights or obligations are necessary),

(d) The appropriate period of time within which the required instrument should be operational (for instance, in situations of urgency, long drawn negotiations may be resumed after an interim solution is found and is in place).

Negotiate new agreement

Another alternative is to negotiate an entirely new agreement. This was done in the Uruguay Round to some Tokyo Round codes, resulting in some changes that some members considered to be improvements in the disciplines.

Under the Doha Ministerial Declaration, there is no mandate to renegotiate the entire TRIPS Agreement. The negotiating mandate on the TRIPS Agreement covers the notification and registration system for wines and spirits (spirits were added by the Doha Ministerial Declaration), the extension of the strong protection for wines and spirits to other products, and outstanding implementation issues, which include issues raised under the review of Article 27.3b of the Agreement. In practice though, while negotiations will take place in the special sessions and reviews in the regular sessions, it is not clear whether a meaningful distinction will be maintained between issues for negotiation and those for review; and this blurring of the distinction might mean a de facto renegotiation of the TRIPS Agreement.

Properly speaking, this alternative of renegotiating a new TRIPS Agreement would have to be put on the agenda of the next Ministerial Conference, in order to get the negotiating mandate. Before considering such a mandate, it would be appropriate for developing countries to determine and assess the gains they would wish to make in the negotiations, or the changes they would seek in renegotiating the TRIPS Agreement. Given the possibility of engaging in de facto negotiations, developing and least developed countries need to immediately determine and assess their objectives in any changes to the TRIPS Agreement, and to pursue these objectives in the negotiations and the reviews mandated under the Doha Ministerial Declaration.

In negotiations, developing and least developed countries would be required, in practice and notwithstanding the rules on special and differential treatment, to make concessions. Some such concessions could well include accepting commitments in the areas of investment, competition, transparency in government procurement, and trade facilitation. If this were done, and if developing and least developed countries got the changes they wanted to the TRIPS Agreement, it would still be a loss in amounting to getting only one agreement (the TRIPS Agreement) in exchange for four agreements. Or, developing and least developed countries would have to make concessions in commitments in the goods and services areas.

Decision, Declaration

Decisions or declarations take a relatively shorter process to obtain it. They are politically less sensitive and more acceptable to adverse interests than binding legal instruments.

But their legal status may be uncertain and enforceability may be doubtful, unless it is made clear that they are to have legal force. An instance of this is the Declaration on the TRIPS Agreement and Public Health. It was acceptable to developed countries, but on the basis that it was intended and agreed as a political document. However, its clauses would suggest that it was meant to be useful in the actual interpretation and application of the TRIPS Agreement. And it may qualify for an interpretative decision on the TRIPS Agreement by the Ministerial Conference.

Interpretative Decision of the General Council or Ministerial Conference

The Doha Decision on Implementation Issues and Related Concerns came close to an interpretative decision, except for the part that set out additional items for the work programme.

An interpretative decision does not entail amendment of the agreements. It may be faster to achieve. GATT practice shows that it is one of the traditional ways for improving the agreements. It does not entail actual negotiations and exchange of concessions but it might be watered down in drafting it out.

But the utility or applicability of an interpretative decision may still have to be tested in the dispute settlement system and domestic practice (adoption of laws and measures). Decisions tend over time to contribute to a multiplicity of instruments or regimes. Interpretative decisions are limited to interpreting existing provisions and may not easily create additional obligations

Amendment

Generally, amendments may be proposed by members and require a two-thirds majority to pass. They are then to be accepted by members (under their domestic procedures). When they enter force, they bind only members that accepted them. The WTO may terminate the Membership of those that did not accept the amendments by a three-fourths majority.

Amendments become part of the existing agreements, because they are integrated into existing agreements. The legal effectiveness or equal legal status with the agreement amended cannot be doubted. Amendments may be appropriate way to introduce new rights and obligations into existing agreements, where this is felt necessary. Where they involve negotiations, specific amendments may be completed in short negotiations, which would not be as burdensome to developing and least developed countries as long drawn negotiations.

However, the process of acceptance by members may take a long time. In the history of GATT, the addition of Part IV was adopted and entered force in under two years. The WTO Agreement itself, which amended GATT 1947, entered force within a year of conclusion of the negotiations. So, while the fear that members will not readily ratify amendments might not be supported by GATT experience so far, it is not uncommon for other international instruments, and may be worth considering as an odd to be dealt with.

Amendments do not bind members that do not accept them. In practice, given the practice of taking decisions by consensus in the WTO, amendments would have to be acceptable to all members before they are adopted. While this might indicate that any amendments that are adopted would be readily accepted by members, it must also be seen to clearly indicate that any proposed amendments may be blocked by even a single Member and it has not been uncommon for a single Member to block proposals developing and least developed countries have made in WTO bodies.

Regarding the possibility of quick or fast track negotiations, the problem in the WTO is that any instruments to be adopted, be they decisions of a routine nature taken on the basis of existing agreements such as waiver of obligations, are considered as part of a deal to be done across the board, covering the entire scope of all or most WTO agreements; or where a bundle of issues are being considered, covering the entire bundle. The principle of the single undertaking has now wrongly been given an interpretation and application that now extends to any new decisions and negotiations without prior agreement over whether or not that principle should apply.

Nevertheless, in view of the fact that the problem to be addressed derives from the current provisions of the TRIPs Agreement, it is an amendment that provides a solution of equal or comparable weight and that will be recognised to clearly modify the relevant provisions of the TRIPs Agreement in a manner that provides the required solution.

An appropriate amendment to the TRIPs Agreement to include a specific provision addressing the protection of public health and access to medicine, could be in the form of an Article 31 bis as follows:

Article 31 bis

Protection of public health

1. In furtherance of the Declaration on the TRIPs Agreement and Public Health, paragraphs (f) and (h) of Article 31 shall not apply to laws, regulations, administrative procedures, and other measures to protect public health and, in particular, to promote access to medicines for all.

2. Manufacturing shall be allowed if the pharmaceutical product is intended for export to a Member that has issued a compulsory licence for that product or, where a patent is not in force, if there is a request to that effect of the health authorities of that Member.

3. In accordance with paragraph (2) of this Article, members may additionally, for reasonable periods of time, designate within their territories specific enterprises or locations for production for export to eligible importing members. Members shall annually report to the TRIPs Council on the operation and effectiveness of measures under this paragraph.

4. Adequate remuneration shall be paid in the exporting Member taking into account the economic value to the importing Member of the use made of the patent in the exporting Member.

Exceptions

While the TRIPs Agreement in Article 73 provides for the standard security exceptions, similar to the security exceptions in the General Agreement on Tariffs and Trade 1994 or GATT 1994 (Article 21) and the General Agreement on Trade in Services or GATS (Article 14 bis), it does not have general exceptions like the other Agreements. Unlike these latter agreements that have general exceptions to the entire agreement, drawn in broad terms (Nothing in this Agreement shall prevent the…) the TRIPs Agreement lacks similar general exceptions, which imbalances it against users of technology and developing Members.

In some cases, a start has been made towards clarifying exceptions to intellectual property rights, both within the WTO and in other international organisations. Within the TRIPs Agreement, Article 27.2 makes reference to some exceptions from patentability. The Declaration on the TRIPs Agreement and Public Health is a positive development in recognising the importance of protecting public health. The Treaty on the Plant Genetic Resources for Food and Agriculture, adopted in the framework of the FAO, prohibits patents on resources from the common bank.

However, the status of such exceptions within the WTO body of laws may still require further refinement for avoidance of doubt. In other cases, a beginning is yet to be made. The general exceptions should include in broad terms measures taken to protect:

· Ordre public or morality

· Human, animal or plant life or health

· The environment

· Public health particularly through ensuring access to medicines for all

· Food security through ensuring adequate access to seeds

· Genetic resources to support agriculture and protect biological diversity

· The integrity of rural and local communities through the protection of their resources and traditional practices

· Human welfare during emergencies or other circumstances of extreme urgency.

The omission of general exceptions from the TRIPs Agreement is curious and must be a basis for the position that this Agreement lacks the balance struck in the other Agreements as well as the balance traditionally sought in patent instruments. The various exceptions in the TRIPs Agreement do not compare with other exceptions in the other Agreements, and cannot be a basis for saying there is a balance. General exceptions take the form of: “Nothing in this Agreement shall prevent a member from (doing x, y, z)”, so that domestic authorities have ample policy space or flexibility as commonly known to take measures to achieve certain public policy goals without the sort of circumspection and uncertainty that the current provisions of the TRIPs Agreement tend to introduce.

In this context, members should have the clear and unambiguous right to limit:

· certain patents on the basis of protecting morality, ordre public, the environment, human animal and plant life or health;

· patents on plants, animals, the human body, and any elements or components of life including DNA and cells;

· patents on diagnostic, therapeutic and surgical methods for the treatment of humans or animals;

· patentability of pharmaceutical products and food substances;

A reading of paragraphs 2 and 3 of Article 27 of the TRIPs Agreement in accordance with the Declaration on the TRIPs Agreement and Public Health could clearly permit these exceptions but that is still not clearly settled; the matter needs to be taken up in domestic laws as a way of implementing the Declaration.

To address the public-private sector interface:

· Members should retain in their domestic laws a clear and flexible right to readily resort to government use and compulsory licensing[140], and

· to take other measures designed to achieve the objectives of “technological innovation and of 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”.[141]

· Further, members should retain the clear and flexible right to “adopt measures necessary to protect pubic health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development”, and

· to adopt “appropriate measures … to prevent the abuse of intellectual property rights by right holders or the resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology.[142]

It is absolutely important for members to clearly understand that the obligations under that TRIPs Agreement do not compel or demand patents on specific products or processes in relation to public health and other areas of possible exceptions. The obligation is to provide in domestic laws for the possibility of patents in those areas, but this does not take away the right of a member to limit patentability or to impose conditions on the basis of policy considerations to protect society. And, regarding plants and animals and essentially biological processes for the production of plants or animals, as well as medical equipment, the TRIPs Agreement provides members with the right to prohibit patenting all together.

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General Guidelines

COMESA Members’ patent legislation must fully exploit the flexibilities in the TRIPS Agreement and as affirmed in the Doha Declaration, and must provide for straightforward, easy to use, fast and transparent procedures for the issuance of compulsory licenses and setting royalties. Care must be taken not to eliminate potential sources of low cost imports, or make these difficult to bring into their territories. Those least developed among them who are under no obligation to provide patent protection until 2016 and who currently provide patent protection should consider revising their laws, especially where these appear to contribute towards the unavailability of cheap and affordable medicines.

Exhaustion of intellectual property rights and parallel importation

The significance of the provision in the declaration that members retain the right to determine how they will apply the concept of exhaustion of intellectual property rights, is in availing members with a wide selection of sources for importation of medicines and medical technology, depending on the rules they adopt. International exhaustion of intellectual property rights gives a Member the widest scope for sources of supplies, in that they can source supplies from any country, from the most affordable source available globally. COMESA Members should allow, without restriction, the importation into their territories of products from any other country in which the product has been legally placed on the market, including where it has been placed on the market through a compulsory license.

Governmental use [public non-commercial use]

In the public interest, [defined widely to include, public health, nutrition, national emergency and other developmental goals] the Minister under whose authority patents fall, should be able to authorise any government department or any other person, and without first obtaining the consent of the patent holder, to make, use, import, sell or offer for sell a patented product, or make or use a patented process.

There should be no requirement for the government or the authorized party to first negotiate with the patent holder for a voluntary licence. The patent holder can be informed of such use at any time before or after such has begun. Any challenge by the patent holder as to the adequacy of the remuneration should not have the effect of suspending the operation of the Minister’s authorisation.

Compulsory licenses

The rights that a patent confers on its owner can be subject to compulsory licences. A compulsory licence issued to a licensee would mean that the licensee has the rights to undertake the acts that Article 28(1) of the TRIPs Agreement lists as exclusive rights a patent confers on its owner. Paragraph 5(b) of the Declaration on the TRIPs Agreement and Public Health states that “each Member has the right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted”.

On this basis, the grounds for compulsory licences, closely following the language of Articles 7 and 8, should include:

the promotion of technological innovation,
transfer and dissemination of technology,
protecting the right of society to benefit from advances in science and technology,
the protection of the social economic welfare of society including public health and nutrition,
the promotion of the public interest in sectors of vital importance for social economic and technological development,
to prevent the abuse of intellectual property rights, and
to prevent practices that unreasonably restrain trade or adversely affect the international transfer of technology.

And to take into account the broad language used, a judicial body, such as the High Court, could be given the jurisdiction to determine applications for compulsory licences that are made on these grounds.

Compulsory licences should be available additionally on any grounds so far developed through court decisions and administrative practice in various jurisdictions. These other grounds include,

Ensuring that the reasonable requirements of the public are met or satisfied;
Refusal to deal;
Failure to exploit or exploit on reasonable terms;
Failure to work or manufacture domestically;
Failure to obtain a licence with reasonable terms;
Remedy anti-competitive practices, unfair competition;
Inter-dependence of patents;
National emergencies; and
Protect the public interest – health, nutrition, and environment.

Exceptions to patent rights

At least the following exceptions must be included:

– Experimental use of an invention, for both scientific and commercial purposes,

– Teaching purposes, and other educational purposes;

– Early working [or “Bolar” exception], permitting the use of an invention for the purpose of obtaining marketing approval for a generic product before the expiry of the patent.

– Importation for individual use,

– Manufacturing where the medicinal product is intended for export to a third country that has issued a compulsory licence for that product, or where a patent is not in force, upon a request to that effect by the competent public health authorities of that third country,

– The carrying out of acts, including testing, using, making or selling of a patented invention solely for the purposes reasonably related to the development and submission of information required under any law of the country or of a third country which regulates the manufacture, construction, use, sale of any product;

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[1] Article 110 [1][a] of the COMESA Treaty

[2] Article 110 [2][b] of the COMESA Treaty

[3] Article 110 [b] of the COMESA TREATY

[4] Article 110 [2][e]

[5] Article 110 [2][h]

[6] Although the declaration refers to a Member’s ‘right’ to protect public health, strictly speaking, a country cannot have a ‘right’ to protect public health. Because in international law, there is an obligation corresponding to every right, a Member cannot have the right to protect public health since it is not enforceable against any entity. Rather, a Member has the duty to protect the right of its citizens’ to health.

[7] Both patents and copyrights affect ICTs. Restricted access to ICTs adversely affects education, and the building and use of the infrastructure that is necessary for information economies.

[8] WIPO documents tend to take a certain perspective on issues and may not be that impartial.

[9] A/37/6 dated 19 August 2002

[10] Articles 7 and 8 set out the objectives and principles of the TRIPS Agreement, Article 30 provides for limited exceptions to address the legitimate interests of society, and Article 31 contains procedural requirements governments are to follow in issuing compulsory licences while recognising that there are exceptions to these procedural requirements – exceptions for instance in times of national emergencies or other circumstances of extreme urgency, or in cases of dealing with anti-competitive practices, or in cases of public non-commercial use.

[11] WTO document IP/C/W/296 dated 19 June 2001.

[12] Paragraphs 7 to 14 of the submission.

[13] For a detailed discussion, see Chapter 10, under ‘Zimbabwe’

[14] The Treaty Establishing the African Economic Community, signed in the Nigerian city of Abuja in June 1991, entered force on 12 May 1994. This treaty sets out the programme for building the African Economic Community on the basis of the regional economic communities that themselves have set periods for developing into customs unions and common markets, and then merging to form the Community.

[15] P.107

[16] WTO document IP/C/W/351 dated 24 June 2002

[17] Article 31(h) of the TRIPS Agreement

[18] Article 44(2) of the TRIPS Agreement.

[19] For instance, it has been argued that the problem of access to medicine should be solved solely through improving distribution infrastructure in the country and through fighting poverty.

[20] The arguments against Article 30 are captured in the discussion of the Brazilian proposal in the following section entitled “Proposals at the June 2002 meeting.”

[21] The other developing countries were Barbados, Bolivia, Brazil, Dominican Republic, Ecuador, Honduras, India, Indonesia, Jamaica, Pakistan, Paraguay, Philippines, Peru, Sri Lanka, Thailand and Venezuela.

[22] It may be pointed out that there are divergent definitions of “generic drugs” or medicine.

[23] China proposed that any solution should be accompanied by technical assistance to developing countries to enable them build domestic manufacturing capacity.

[24] Proposal by a group of developing countries in WTO Document IP/C/W/355

[25] Para 10.

[26] Para 10.

[27] Article 31(f) of the TRIPs Agreement provides that:

“Any such use shall be authorised predominantly for the supply of the domestic market of the Member authorising such use”

[28] Para 8.

[29] Canada – Patent Protection of Pharmaceutical Products; WT/DS114/R, dated 17 March 2000.

[30] Para 9.

[31] Para 8.

[32] Article 9.2 of the WTO Agreement

[33] The proposal stated as follows: “We agree that, for a period of five years from the date of this Declaration, the provisions of ArticlesXXII and XXIII of GATT 1994 as elaborated and applied by the Understanding on Rules and Procedures Governing the Settlement of Disputes and as incorporated in Article 64 of the TRIPS Agreement shall not be exercised with respect to any non-discriminatory intellectual property law, regulation or other measure of a developing country Member in sub-Saharan Africa that improves the access of affected populations in sub-Saharan Africa to patented pharmaceutical products used in the treatment of HIV/AIDS and other pandemics”.

[34] WTO document IP/C/W/363

[35] As of June 2003

[36] Article 4bis [2] of the Paris Convention.

[37] Andre Lucas, “Private international law aspects of the protection of works and objects of related rights transmitted through digital networks” in WIPO document GCPIC/1 dated November 25 1998.

[38] Carlos M. Correa, “Protection and promotion of traditional medicine implications for public health in developing countries” South Centre 2002, pages 44-5.

[39]Gretchen Ann Bender, “Clash of the titans: The territoriality of patent law vs. The European Union” in IDEA: The journal of Law and Technology, PTC Research Foundation of Franklin Pierce Law Centre, 2000.

[40] Gretchen Ann Bender, “Clash of the titans: The territoriality of patent law vs. The European Union” in The Journal of Law and Technology, PTC Research Foundation of Franklin Pierce Law Centre, 2000.

[41] Gretchen Ann Bender, “Clash of the titans: The territoriality of patent law vs. The European Union” in IDEA: The journal of Law and Technology, PTC Research Foundation of Franklin Pierce Law Centre, 2000.

[42] Bender, ibid, notes that Members States retain the ability to legislate on questions of industrial property according to their interests or preferences; can establish their own standards of patentability; can impose a "first to invent" or a "first to file" standard; can also restrict whether a patent can be granted for products only, for processes only, or for both, and retain the ability to determine in which fields of technology patents may be allowed.

[43]Bender, ibid

[44] Bender, ibid

[45] Bender, ibid

[46] On September 27, 1968, the original six Member States of the European Economic Community signed the Convention on Jurisdiction in the Enforcement of Judgments in Civil and Commercial Matters (Brussels Convention), which significantly changed the way in which a judgment may be recognized and enforced in the European Union. Bender, ibid, notes that the Convention wholly replaced the convoluted system of bilateral recognition and enforcement treaties existing between Member States and introduced a clever and streamlined body of laws applicable to the recognition and enforcement of judgments in Europe. Today the Brussels Convention is binding on Belgium, Germany, France, Italy, Luxembourg, Netherlands, Denmark, Ireland, United Kingdom, Greece, Spain and Portugal, n111 Austria, Finland and Sweden.

[47] Bender, ibid

[48] US has proposed a restrictive moratorium to permit the export of products produced under a compulsory licence to poor countries, in WTO document IP/C/W/340. In the build up to Doha, the US proposed a 5-year moratorium for developing Sub-Saharan African countries that took non-discriminatory measures to improve access to medicine for treating hivaids. It may be noted that former US President Clinton issued an executive order to the effect that the US would not challenge measures such measures, which is still in force.

[49] Please see the part discussing the Declaration on the TRIPs Agreement and Public Health, the section on the right of members to themselves determine the grounds for compulsory licences. That section sets out the following grounds:

· Ensuring that the reasonable requirements of the public are met or satisfied;

· Refusal to deal;

· Failure to exploit or exploit on reasonable terms;

· Failure to work or manufacture domestically;

· Failure to obtain a licence with reasonable terms;

· Remedy anti-competitive practices, unfair competition;

· Inter-dependence of patents;

· National emergencies; and

· Protect the public interest – health, nutrition, and environment.

[50] Article 58 (2)

[51] Section 37 of The Industrial Property Regulations

[52] Part X

[53] Section 74(2)

[54] Section 75(2)

[55] Part XI Section 80 of the Act

[56] For example, the donated drug nevirapine is meant for the child only while the treatment of the mother is the responsibility of Government.

[57] About 7000 out of an infected population of about 3 million.

[58] During the visit to Malawi, the study was able to meet with Mr Nkoma and Mr J. Hara, Ministry of Trade and Commerce, Dr Sangala, Technical Support Services, Mr Wynn Chalira, Pharmacy and Medicines Board, Mrs Mhango, Christian Hospitals Association of Malawi, and visited the library of the Ministry of Justice.

[59] Section 35 of the Act

[60] Section 45 of the Act

[61] Section 38 of the Act

[62] Section 10

[63] All pharmacists, pharmacy technologists and pharmacy assistants are supposed to be registered under the Act.

[64] Section 37 of the Act

[65] Section 37[6]

[66] Section 40 of the Act

[67] Section 41

[68] Section 38 of the Patents Act

[69] The Pharmacy, Medicines and Poisons Board explained however that registration in Malawi had probably been done through ARIPO

[70] Pfizer and GSK were mentioned

[71] It was noted that nevirapine, which was supposed to be part of a combination, was being donated as a single drug there leading to it being used only to prevent mother to child transmission.

[72] USAID Country profile on Malawi, available at http://www.usaid.gov/pop-health/aids/countries/africa/malawibrief.pdf

[73] Pharmanova, SADM and Malawi Pharmacy were cited

[74] During the visit to Namibia, the study met Mr Tileinge S. Andima, Deputy Director, Internal Trade Division: registration of Companies, Close Corporations, Patents, Trade Marks and designs, Ministry of Trade and Industry. Ph. 264.61.2837111. Fax; 264.61.222576, Mr Free Zenda, Legal Officer, Legal Drafting, Ministry of Justice. Mr Sebil Dhewa, Executive Director, Health Care Medical and Pharmaceuticals [Pvt] Ltd, 264.61.249010; Fax; 264.61.227221. Dr Norbert P. Forster, Under Secretary; Policy Development and Resource Management, Ph. 264.61.203 2811; Fax. 264.61.227 607. Mr Ruigi Njiriri, Pharmacist, Pharmaceutical Services, Ministry of Health, Mr Rite, Registration Pharmacist, Ministry of Health.

[75] The study could not establish whether this was the legislation on patents currently applicable in Namibia. Namibia has had resort to South African legislation in several areas where it has not promulgated its own. This Act was also used in South Africa which however since replaced it with the Patents Act of 1978 as amended from time to time since then.

[76] Section 19 of the Draft Bill

[77] Section 20 of the Draft Bill

[78] Section 19[a]

[79] Section 19[2]

[80] Section 20 of the Draft Bill

[81] These requirements are contained in the drug registration form but do not appear to be set out in a piece of legislation or in regulations.

[82] Section 22 of the Act

[83] Recital and section 2[3] of the Act

[84] Section 11 of the Act

[85] Section 12 of the Act

[86] According to section 18 of the Act, a patient upon admission to a state hospital for treatment shall elect to be classified as either a state patient or as a privet patient.

[87] Part 2, section 2.

[88] As per the interview with Doctor Forster

[89] USAID Country profile on Namibia, available at http://www.usaid.gov/pop-health/aids/countries/africa/malawibrief.pdf

[90] Bayer was mentioned as one of the companies that was donating the drug.

[91] Sebil Dhewa, Executive Director, Health Care medical and Pharmaceuticals [Pvt] Ltd. No. 7 Kasch Street, Windhoek. Ph. 264.61.249010. Fax. 264.61.227221

[92] Section 3 (c)

[93] Section 12.6 (a)

[94] The study did not carry-out a visit to Uganda and only made an assessment of its legislation.

[95] Preamble recitation

[96] Section 3 of the Act

[97] Section 6 of the Act

[98] Section 9 of the Act

[99] Section 11 of the Act

[100] Section 12 of the Act

[101] Section 33 of the Act

[102] Section 38 of the Act

[103] Section 31 of the Act

[104] Section 30 of the Act

[105] Section 3 of the Act

[106] These include dentists, pharmacists, othorpaedicians, physiotherapists, and radiographers, as set out in section 6 in the list of those who should sit on the Council.

[107] Since Zambia is an LDC she is not expected to incorporate the TRIPS Agreement into national laws until 2005 and the health related aspects until 2016.

[108] Section 18.1(c)

[109] Asked whether there are any medicines patented in Zambia, the Patent Office indicated that Prof. Lukwesa (a Zambian) had been granted a patent for his Aids "cure" but could not indicate whether any other medicines were under patent.

[110] Pharco and Gamma

[111] During the visit to Zimbabwe carried out during the period 18 April-26 May, the study team met the Minister of Justice, Hon. P.A. Chinamasa, the Secretary for Justice, Mr D. Mangota, Mr Mafuratidze of the Ministry of Justice, Mr. C. Kumire – NATPHARM, Mrs. R. Hove – MCAZ, Mrs. E. Wilson – MOHCW, Dr E.T. Mabiza – Acting Provincial Medical Director MOHCW, Mr. S.L. Chihanga – Acting Director, Planning and Policy, MOHCW Mrs. A. Mahomva – Aids and TB unit, [PMTCT], Mr C.K. Chitemerere, Marketing Director, Varichem, Mr Deven Patel owner of Regent Pharmacy, and Mr. Teverai Masike – brands manager [bio-cehmist] Independent Health Care Company

[112] Section 35 of the Regulations

[113] Section 66. This Section makes reference to a ‘specially restricted preparation’ defined as a drug listed in Part 1 of the Eighth Schedule or a drug registered as such by the Council. It was indicated during the study that the Eighth Schedule is regularly updated and includes all useful known drugs in Zimbabwe.

[114] Section 67 of the Regulations

[115] Sections 68-70 of the Regulations.

[116] Section 31

[117] The reasonable requirements of the public shall be considered not to have been satisfied in any of the following circumstances:

a. if the patented invention, being an invention capable of being worked in Zimbabwe, is not being worked therein on a commercial scale and there is no satisfactory reason for such non-working.

b. If the working of the invention within Zimbabwe on a commercial scale is being prevented or hindered by the importation of the patented article;

c. If the demand of the patented article in Zimbabwe is not being met to an adequate extent on reasonable terms;

d. If, by reason of the refusal of the patentee to grant a license or licenses upon reasonable terms, the trade or industry of Zimbabwe or the trade of any person or class of persons trading in Zimbabwe or the establishment of any new trade or industry in Zimbabwe is being prejudiced, and it is in the public interest that a license or licenses should be granted;

e. If any trade or industry in Zimbabwe or any person or class of persons engaged therein is being prejudiced by unfair conditions attached by the patentee whether before or after the appointed day, to the purchase, hire license or use of the patented article or to the using or working of the patented process;

[118] Section 32

[119] Section 32 [2]. It is the duty of the Patents Tribunal to endeavour to secure availability in settling the terms of a license under this section.

[120] Section 32[3]

[121] Section 34[4] and [5]

[122] Section 34[2]

[123] Section 35 of the Act

[124] See preceding section entitled ‘Patents Act’

[125] Ibid

[126] USAID Country profile on Zimbabwe, available at http://www.usaid.gov/pop-health/aids/countries/africa/zimbabwebrief.pdf

[127] In Statutory Instrument 32 of 2003

[128] Zimbabwean law dose not however, deal with this issue

[129] An indigenous Zimbabwean Company based at 194 Gleneagles Road, Willowvale, Harare. P.O> Box ST 611, Southerton, Harare. Tel. 263.4.620181- 6. Fax. 263.4.620180. Website; www.varichem.co.zw

[130] Regent Pharmacy, trading as Mindev [Pvt] Ltd. 77 Leopold Takawira Street, Harare. Tel. 263.4.756088; Fax. 263.4.772861. P.O. Box CY 389. Causeway. Harare.

[131] In terms of Section 67[2] of the Regulations.

[132] The names of Pfizer and GlaxoSmithKline were mentioned.

[133] Mr Masike did indicate though that the price of the same drug is now creeping up and currently stands at Z$ 14 000 a month due mainly to the shortage of foreign currency that now has to sourced on the black market.

[134] VARICHEM believes if the Government assists it in getting foreign currency for the sourcing of the active ingredients, it can provide the drug at US$15 per month, but will have to raise the price of the drug considerably if it has to source the foreign currency on the black market.

[135] But the difficult economic climate that Zimbabwe is currently going through and the resultant lack of foreign currency continues to place limitations even on this option since this would require government funding not only for the drugs, but to train the health personnel as well to ensure that any such dedicated clinics did not turn out to be simply clinics for the rich.

[136] Mr. Teverai Masike – brands manager [bio-cehmist] Independent Health Care Company

[137] Please see the part discussing why compulsory licensing has not been regularly used in most developing countries

[138] Please see the discussion on regimes on exhaustion of intellectual property rights.

[139] This possibility will remain unaffected by the Decision if it starts operating, or the amendment if it is constructed on the basis of the Decision; for paragraph 9 of the Decision states that:

“9. This Decision is without prejudice to the rights, obligations and flexibilities that Members have under the provisions of the TRIPs Agreement other than paragraphs (f) and (h) of Article 31, including those reaffirmed by the Declaration, and to their interpretation. It is also without prejudice to the extent to which pharmaceutical products produced under a compulsory licence can be exported under the present provisions of Article 31(f) of the TRIPs Agreement.”

[140] Article 31 of the TRIPs Agreement

[141] Article 7 of the TRIPs Agreement

[142] Article 8/sites/acpsec.waw.be/files/geneva/COMESA%20study%20on%20public%20health%20-%20Final.doc

THE ORGANISATION OF AFRICAN, CARIBBEAN AND PACIFIC STATES

COMESA study on Public Health By Felix Maonera and Tadeous Chifamba

CHAPTER 1: OBJECTIVES AND METHODOLOGY OF THE STUDY

Objectives

Methodology

Missions

Deskwork and preparation of the study

CHAPTER 2: THE TRIPs AGREEMENT AND THE PROTECTION OF PUBLIC HEALTH AND THE PROMOTION OF ACCESS TO MEDICINE FOR ALL

The monopolistic nature of patents

Policy issues and areas for exceptions

The Declaration on the TRIPs Agreement and Public Health

Interpretation of the TRIPS Agreement

Grounds for Compulsory Licences

National emergencies and other circumstances of extreme urgency

Exhaustion of intellectual property rights

CHAPTER 3: EXPLAINING THE INEFFECTIVE USE OF COMPULSORY LICENCES – THE PROBLEM IDENTIFIED IN PARAGRAPH 6

CHAPTER 4: THE DISCUSSION IN THE TRIPS COUNCIL ON PARAGRAPH 6 OF THE DECLARATION

The Problem identified in paragraph 6

Solutions

Proposals at the June 2002 Meeting

Other Proposals

CHAPTER 5: EMERGING COMMON GROUND FOR A SOLUTION UNDER PARAGRAPH 6

Safeguards

General Considerations for safeguards

Safeguards against diversion

Transparency

Product Coverage

General Eligibility

Importing countries where the product is not patented

Assessment of Insufficient Manufacturing Capacity

Eligible Supplying Members

Applicability of Article 30/31 conditions

(a) In Exporting Countries

(b) In Importing Countries

(c) Remuneration to Right Holder

Legal Mechanisms

Building manufacturing capacity

CHAPTER 6: THE 16 DECEMBER 2002 DRAFT DECISION IMPLEMENTING PARAGRAPH 6

Regional markets

Territoriality and regional markets

CHAPTER 7: OFFERS FOR MORATORIA

The fresh offers from the US and the EU on moratoria

CHAPTER 8: DOMESTIC MANUFACTURING CAPACITY IN THE PHARMACEUTICAL SECTOR – THE CASE FOR A LEGAL FRAMEWORK

CHAPTER 9: THE PRIVATE SECTOR

CHAPTER 10: CURRENT LAWS, REGULATIONS, AND MEASURES IN SELECTED COMESA MEMBER STATES FOR PROTECTING PUBLIC HEALTH AND PROMOTING ACCESS TO MEDICINE FOR ALL

Kenya

The relevant laws for protecting public health and promoting access to medicine

General Assessment

Malawi[58]

The relevant laws for protecting public health and promoting access to medicine

General Assessment

Namibia[74]

The relevant laws for protecting public health and promoting access to medicine

Medicines and Related Substances Control Act No. 101 of 1965

Hospitals and health Facilities Act No. 36, 1994

Others

General Assessment

Swaziland

The relevant laws for protecting public health and promoting access to medicine

General Assessment

Uganda[94]

The relevant laws for protecting public health and promoting access to medicine for all

The National Drug Policy and Authority Statute, 1993

Zambia

The relevant laws for protecting public health and promoting access to medicine for all

General Assessment

Zimbabwe[111]

The relevant laws for protecting public health and promoting access to medicine for all

The emergency legislation

Basis under the Declaration on the TRIPs Agreement and Public Health

Assessment of Performance

CHAPTER 11. RECOMMENDATIONS

Common investment regime in the pharmaceutical sector

Common regional policy on public health and access to medicine

Institutions and procedures for compulsory licensing

Exhaustion of patent rights

Legal framework for the supply of pharmaceutical products within the COMESA regional market

Domestic laws providing for production and exportation of medicine as a limited exception to patent rights

CHAPTER 12: POSSIBILITIES FOR FURTHER WORK IN THE COUNCIL FOR TRIPs.

Negotiate new agreement

THE ORGANISATION OF AFRICAN,
CARIBBEAN AND PACIFIC STATES