Wednesday, April 24, 2019
Using Competition Law to Promote Access


Anti-Competitive Behaviours and the Remedies Available for Redress

Download here (Abbott - Chapter 3)

Download here (Full Text of Guidebook) - with Sean Flynn, Carlos Correa, Jonathan Berger & Natasha Nayak

IP-Watch Report on Guidebook Publication

in UNDP, Using Competition Law to Promote Access to Health Technologies: A guidebook for low- and middle-income countries 58-95 (ed. F. M. Abbott)(2014)


In this chapter, core doctrines of competition law generally applied by national authorities are reviewed. Most competition laws examine anti-competitive behavior in relation to agreements between enterprises, on the one hand, and monopolization or abuse of dominant position, on the other. Anti-competitive activity is further viewed as either ‘horizontal’ or ‘vertical’. Horizontal anti-competitive activity refers to conduct among independent enterprises that are suppliers of competitive (or potentially competitive) goods or services. Vertical anti-competitive activity refers to the supply chain controlled by a producer, beginning with inputs to production, into production, intermediate distribution and, ultimately, the retail sale of goods or services.

Some types of agreement between enterprises are so inherently anti-competitive that proof of the existence of the agreement is sufficient to establish a violation. Such agreements are referred to either as per se anti-competitive or hard-core competition law violations. Other types of conduct that may seem anti-competitive on their face may also have a pro-competitive justification, such that competition authorities assess the balance. This balancing is often referred to as assessment under the “rule of reason”. For a competition law violation to be found, the anti-competitive aspect of the arrangement should outweigh potential pro-competitive benefits.

Examples of horizontal anti-competitive behavior that are per se illegal in most jurisdictions include price-fixing among competitors, output restraints and allocation of geographic territories. Examples of vertical restraints that are per se illegal in many, but not all, jurisdictions are resale price maintenance (or fixing the minimum price at which retailers may sell) and “exclusive grantback” requirements in patent licenses.

There are some significant risks of anti-competitive conduct in pharmaceuticals markets that are fairly widespread and deserve close attention from competition authorities. These include bid manipulation in procurement of health technologies, whereby a group of potential competitors may agree not to submit bids below a set price and to allocate the ‘lowest set price’ bid to a particular firm. Such activity may also involve inappropriate payments to government officials who might otherwise report the anti-competitive practice. Anti-competitive conduct by patent-owning enterprises may include requiring a distributor or retailer of health technologies to purchase a complete line of products as a condition of purchasing a particular product or products (i.e. a tying arrangement). Perhaps the most widely discussed form of anti-competitive conduct involving patent owners involves ‘buying out’ generic challenges to patents that might otherwise result in generic products entering the market at an early date. Such buyouts upset the balance legislators strive to achieve between granting patents and authorizing their challenge to foster competition.

Mergers and acquisitions may adversely affect product markets by, for example, allowing combined companies to raise prices for therapies previously in competition with each other.

Anti-competitive conduct affects markets for innovation, such as when a patent is illegitimately used to prevent the development of new products not within the scope of the patent, or when patent-owning companies combine to control markets. Mergers and acquisitions can affect markets for innovation by reducing potential R&D targets and opportunities.

As noted earlier, competition law addresses dominant enterprises and monopolies as well as agreements between enterprises. A single enterprise (or a small group of enterprises) may alone exercise such significant power in a relevant market as to be able to raise prices above competitive market prices without concern that others will enter the market and undercut it. When an enterprise dominates a market, it does not need consensual agreements with potential competitors to control them; it may unilaterally dictate terms. One objective surrounding the control of mergers and acquisitions is to prevent an enterprise from combining with others precisely to take a dominant position in the market.

This chapter concludes with a discussion of the types of remedies that are available to national authorities and private parties as redress for anti-competitive conduct. It is not uncommon for the government to enter into some form of settlement agreement with an accused enterprise pursuant to which that enterprise agrees to cease its anti-competitive activities and may also make a payment either as damages or as a penalty. Such settlements may be approved and/or supervised by courts.

In some jurisdictions, particularly the United States, a good deal of competition enforcement is undertaken by private actors suing for damages. Anti-competitive conduct may also be subject to criminal penalties including substantial fines, and imprisonment for individuals. Specific types of remedies may be used to address anti-competitive conduct that is undertaken to block the introduction of generic products. This may include requiring pharmaceutical patent owners to compensate public procurement authorities, generic producers and others for damages occasioned by the unwarranted invocation of patents. Strong consideration should be given to prohibiting patent owners from “buying out” generic producers’ challenges to patent validity or assertions of non-infringement. Other types of specific remedies may be considered.

Number of Pages in PDF File: 170
Emerging Markets


Emerging Markets and the World Patent Order: The forces of change

Chapter 1 of Emerging Markets and the World Patent Order, eds. Frederick M. Abbott, Carlos M. Correa and Peter Drahos, Edward Elgar Publishing (Cheltenham UK and Northampton USA), 2013, pgs. 3-33 (made available with permission of the publisher)

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The implementation of patent law in the emerging market countries is having an impact on the international patent system. First, it is apparent that the principal emerging market economies are not strictly adhering to the patent regimen of the USA, Europe and Japan, but are instead adapting patent law to their own unique environments. This is more a story of adaptive management of existing standards than it is an innovation of new standards and models. Much of this adaptation of patent standards has been concentrated in the public health sector. Second, to the extent that these emerging economies want to maintain the operating space within which to chart their own paths, they are unlikely to sign on to a strong global patent harmonization exercise. Third, the emerging economies have placed some priority on addressing social welfare within the context of the patent regime, such as by using compulsory licensing to provide access to medicines.

Perhaps the most interesting trend among the emerging markets is the building up of local technology-dependent industries through use of preferential procurement policies and other industrial policy mechanisms. While the domestic and international patent system may play a role in the shape of industrial development, it seems that the emerging markets have concluded that a patent system “does not a high-growth economy make”. This does not truly represent a break from the industrial policy implemented by the USA, EU and Japan. The governments of each of these countries have used their vast resources to incentivize local R&D and production. For the USA, much of this has been done in the context of expenditures by the Department of Defense, and more recently by the Department of Energy. For Europe, Airbus Consortium R&D and local production was heavily supported by government subsidy. The Japanese government has invested heavily in its computer industries.

For countries that are pursuing an integrated industrial policy that focuses on the result, rather than the particular means used to accomplish the objective, patents are likely to remain a part of the industrial policy mix. This chapter does not suggest that emerging markets have discovered an alternative to patents. Rather, and not surprisingly, they appear to have concluded, despite simplistic arguments about patents and innovation, that they cannot simply rely on the patent system to build up a sound technological base and a competitive economy. Patents are a tool to be modified and used as the specific task requires. As the task changes, so may the terms of patenting.

Review of Trilateral Study


Review: The Trilateral Study on Health, Intellectual Property, and Trade: The Virtue in Paving a Cleared Roadway

Journal of International Economic Law, Vol. 16, No. 2, Pgs. 493-503 (Oxford University Press 2013) 

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This contribution reviews an important study—"Promoting Access to Medical Technologies and Innovation: Intersections between public health, intellectual property and trade" (the "Trilateral Study") jointly prepared by the Secretariats of the World Health Organization, World Intellectual Property Organization and World Trade Organization, and released in February 2013. The study is an effort to present a consolidated perspective on significant issues involving the relationship between public health, IP and trade subject matter, including how international rules addressing this subject matter may be interpreted, and how national and regional approaches may be implemented. The Trilateral Study affirms and highlights the discretion or flexibility express and inherent in the rule-system that allows governments to develop approaches suitable to the conditions within countries and regions. In this regard, the Trilateral Study is a noteworthy development in that it provides multilateral institutional support for differentiated approaches to addressing public health concerns, and this may help to alleviate or forestall external pressures being brought to bear on countries adopting such approaches.

Domain Names


On the Duality of Internet Domain Names: propertization and its discontents

Download here: On the Duality of Internet Domain Names

Forthcoming in 3 N.Y.U. JOURNAL OF INTELL. PROP. & ENT. LAW (Fall 2013)(revision 1.0)

Domain names may have substantial economic and social value. They are often the object of dispute, whether based on allegations of abuse, or in contests over ownership. There is a recent judicial trend, particularly in the Court of Appeals for the Ninth Circuit, toward characterizing domain names as “property” (and more specifically, “intangible property”) subject to rules of sale and transfer typical of personal property. This judicial characterization identifies “alienability” as a fundamental characteristic of domain names. This sets up a real or potential conflict with jurisdictions or forums where domain names have been judicially or administratively characterized as “contract rights” based on the legal relationship between the domain name registrant and the registrar. Pursuant to the contract rights characterization, sales and transfers of domain names are subject to rules flowing from the Internet Corporation for Assigned Names and Numbers (ICANN) that govern the relationship among registries, registrars and registrants, and prescribe certain representations and warranties in connection with sales and transfers. This includes subjecting domain name registrants to alternative dispute settlement under the Uniform Domain Name Dispute Resolution Policy (UDRP). Several recent decisions among Ninth Circuit courts applying the federal Anticybersquatting Consumer Protection Act (ACPA), on one side, and administrative panels applying the UDRP, on the other, call attention to the possibility for different dispute settlement outcomes depending on whether domain names are treated as freely alienable property or contract rights incorporating various obligations on transferors and transferees. In this article, the author, an experienced administrative panelist for the WIPO Arbitration and Mediation Center, analyzes the legal bases used to characterize Internet domain names, and suggests that it may not be necessary to draw a line between “intangible property” and “contract rights”. Domain names may be treated as both. There is nothing unique about attaching conditions to the transfer of intangible property. For example, US law that authorizes assignment and transfer of trademarks conditions the transfer on associating the goodwill of the business. Similarly, domain names in transfer may be treated as intangible property conditioned with contract representations and warranties made pursuant to ICANN rules. The UDRP and ACPA provide for flexible assessment of the rights and legitimate interests of domain name registrants. These rules have allowed UDRP panels to consider the circumstances prevailing when a domain name transfer takes place, whether between related or unrelated parties, and this type of flexibility should appropriately take account of rights of transferors and transferees. Given the different contexts in which the UDRP and ACPA were adopted, and in which they are implemented, it should be expected that jurisprudential conflicts will from time to time arise and require attention. This article calls attention to one such conflict and proposes to resolve it through recognition that the legal character of the domain name need not be limited to a single class of subject matter.

EU Economic Partnership Agreements


Trade Costs and Shadow Benefits: EU Economic Partnership Agreements as Models for Progressive Development of International IP Law

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in EU BILATERAL TRADE AGREEMENTS & INTELLECTUAL PROPERTY FOR BETTER OR WORSE? (eds. J. Drexl, H. Grosse Ruse-Khan and S. Nadde-Phlix, Max Planck Institute Studies (Springer 2013 forthcoming)

This paper addresses the specific question whether “development-friendly” provisions incorporated in recent European Union (EU) economic partnership agreements (EPAs) may serve as models for the progressive development of international intellectual property law. Other articles in this volume strongly suggest that the intellectual property (IP) provisions represent a concession or cost for developing country parties in favor of the EU, including generally by eliminating flexibility to develop and implement industrial policy. The EU may view incorporation of the objective of sustainable development, enhanced protection of geographical indications (GIs), adherence to the Madrid System treaties and/or references to transfer of technology as representing benefits or gains for developing country parties. The general objective of sustainable development already is recognized in the Agreement establishing the World Trade Organization and various other international instruments, and its incorporation in EPAs does not confer material supplemental benefits on developing country parties. The EPA between the EU, on one side, and Colombia and Peru, on the other (EU/CP EPA), also incorporates references to sustainable development relating to protection of biodiverse resources. However, these references do not commit the EU beyond what it has already accepted in multilateral forums or internal legislation. While developing countries may (or may not) benefit from enhanced protection of GIs depending on their particular situation, the list of GIs subject to protection under the EU/CP EPA is weighted very heavily in favor of EU products, suggesting that EU producers will gain substantially more from the agreement than Colombian or Peruvian exporters. The latter countries will also bear costs associated with internal displacement of agricultural products. Developing country parties may gain from adherence to the Madrid System agreements because such adherence is helpful to small and medium-sized enterprises. But these countries do not need an EPA to undertake such adherence. Finally, the technology transfer provisions in the EPAs are framed in hortatory terms, and lack concrete funding mechanisms. In the absence of concrete funding commitments, it is difficult to construe these provisions as providing material benefits. In sum, the provisions that might be considered “development friendly” appear insufficient to offset the loss of flexibility and specific concessions on IP made by developing countries in the EPAs, and generally do not lend themselves as models for the progressive development of international IP law.

ECJ Philips/Nokia Judgment


Respect for Copyright Sovereignty in Transit: The European Court of Justice Decision in the Joined Philips/Nokia Cases

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Journal of Intellectual Property Rights (JIPR), National Institute of Scientific Communication and Information Resources (NISCAIR), CSIR, India (forthcoming May 2013) 

The decision by the ECJ in Philips/Nokia is welcome on a number of grounds. The Court affirmed that each country has the sovereign authority to make and apply IP rules for its own territory, and that applying IP rules governing the domestic market of transit countries would impair that authority. The Court rejected the production fiction approach that had been adopted by the Dutch Supreme Court, and advocated by Phillips and the Belgian government in the joined Philips/Nokia proceeding. Critically, the Court grounded its decision in the EC Treaty and the Treaty on the Functioning of the European Union (TFEU). The ECJ effectively acknowledged (though without expressly referring to it) Article V of the GATT regarding freedom of transit, and the role this provision plays in facilitating international trade. The ECJ reference to the TFEU constrains EU options in the context of present efforts to amend the EU IP Border Regulation.

The ECJ distinguished the level of proof or evidence that would justify seizure and temporary detention from the level of proof or evidence that is needed to establish infringement in a substantive enforcement proceeding. The types of evidence that may justify suspicion are broader than the concrete evidence that is needed to make out a case of infringement based on intention to divert. The ECJ placed a significant burden of proof on a right holder seeking the destruction or abandonment of goods “in transit” based on a substantive finding of infringement against the consignor/exporter of those goods. False transit must be proven with concrete evidence.

Local Production of Medicines


Trends in Local Production of Medicines and Related Technology Transfer

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World Health Organization 2011

This report identifies and analyses trends in the local production of medicines in developing countries and related technology transfer. The objective is to assist the World Health Organization (WHO) in its support for Member States in implementing the global strategy and plan of action on public health innovation and intellectual property with particular reference to the promotion of capacity-building for local production in developing countries. The methodology of research included interviews with a range of stakeholders, including industry actors, operators of product development partnerships (PDPs), government officials and members of public health advocacy groups; review of literature and Internet resources; and participation in meetings with stakeholder groups in Africa, Asia and Latin America.

This report makes a number of recommendations. These are focused mainly on the role that WHO, working in partnership with others, can take with respect to transfer of technology and local production of medicines in developing countries.

Meeting the Challenge


Intellectual Property and Public Health: Meeting the Challenge of Sustainability


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Global Health Programme Working Paper No. 7/2011, November 15, 2011

In the decade since the Doha Declaration was adopted, significant progress has been made in addressing problems associated with innovation and access to medicines, including through expanded financial support for procurement and distribution of treatments and vaccines and the establishment of new research and development (R&D) mechanisms. There has been enhanced cooperation among WHO, WIPO and the WTO. Nevertheless, significant gaps remain in placing the development and supply of medicines to the world’s population on a sustainable footing; gaps that are exacerbated by the present trend toward restrained government spending. This paper reflects on the political and legal constellation making progress on global public health matters difficult, and on economic and scientific trends in the medicines sector that may affect policy over the next decade. A sustainable medicines supply system should proceed from “first principles”, encompassing financing mechanisms to assure that essential medicines are provided for all, while affording opportunity to countries at all levels of development to offer access to advanced treatments on a fair compensation basis. Improved mechanisms to incentive R&D are necessary and feasible. First principles should encompass rational prescribing based on the best interests of the patient, and should attend to regulation and enforcement adequate to assure quality, safety and efficacy. Development of a sustainable system could require some modification to the WTO TRIPS Agreement, but this should not be a determinative factor in considering an improved international framework. A new mechanism for global coordination of medicines strategy may be helpful.

An International Legal Framework


An International Legal Framework for the Sharing of Pathogens: Issues and Challenges

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ICTSD Programme on IPRs and Sustainable Development, No. 30, October 2010

Access to biological material with human pathogenic potential (pathogen materials) is important because research directed toward the development of new drugs and vaccines is dependent on scientific analysis of the underlying causes of disease. Member States of the World Health Organization (WHO) began to address problems associated with the sharing of pathogen materials when controversy arose in 2007 following Indonesia’s decision to withhold samples of biological material containing the H5N1 virus (avian flu) from WHO researchers. As a general proposition, states have sovereign rights of ownership and control over access to biological resources located within their territories and thus may determine the conditions of access to those resources. This includes ownership and control over access to pathogen materials. Sovereign control over pathogen materials and access to them is complicated by the fact that they have a tendency to spread geographically, and at some stage, to cross national borders in the absence of intentional human intervention. These sovereign rights, however, do not imply that the host state is not constrained by international legal obligations, such as the obligation to protect human rights related to life and health and the obligation to protect against harm to neighboring states. As a general proposition, states have sovereign rights of ownership and control over access to biological resources located within their territories and thus may determine the conditions of access to those resources. This includes ownership and control over access to pathogen materials. Sovereign control over pathogen materials and access to them is complicated by the fact that they have a tendency to spread geographically, and at some stage, to cross national borders in the absence of intentional human intervention. The ownership and control of pathogen materials are regulated at the international level by a set of norms involving: public international law, the Convention on Biological Diversity (CBD), the WHO Constitution and the International Health Regulations (IHR), the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and international human rights norms. Supplemental norms are under negotiation at the WHO (in the Intergovernmental Meeting on Pandemic Influenza Preparedness) under the CBD (in the Ad Hoc Open-Ended Working Group on Access and Benefit Sharing) and at the WTO (as part of the Doha Round). The reasons pathogen materials may, or may not, be subject to the regime established by the CBD are technically complex from a legal standpoint. Pathogen materials, as a general matter, probably are covered by the CBD, though this is not intended to suggest that the CBD is better equipped than the WHO to address the sharing of pathogen materials in the public health context, but rather addresses the existing or “default” legal situation. There is room for debate concerning whether the CBD, or at least its provisions on ABS, covers viruses, because of specific definitional language in the CBD. New rules related to pathogen materials sharing should most appropriately be negotiated at the WHO, because of the specific relationship to public health, which is most closely associated with the WHO charter. Protecting global health will require that countries share at least some categories of pathogen materials. An important element of the WHO negotiations is to define the availability of IPRs protection for the results of research and development. A negotiated framework must necessarily address the question of the extent to which recipients of such materials may apply for and obtain patents and/or the terms and conditions that will be applicable with respect to any patents obtained. Underlying the WHO negotiations is the question of affordable access to vaccines and treatments for developing countries, which is a presumed condition of a pathogen materials sharing obligation, at least among some WHO Member States. There is a real risk that the result will be a two-tiered system of access to pathogen materials: one addressing certain influenza viruses under the auspices of the WHO and another addressing pathogen materials more generally under the auspices of the ABS Protocol and/or the CBD. As a practical matter, subjecting states, economic operators and individuals to separate agreements covering the same subject matter may create confusion, particularly if the relationship between the agreements is not clearly specified and the rights and obligations are not in harmony. When public health interests are at stake, it is important to avoid a result that generates legal uncertainty and insecurity. Recognizing that negotiators at the WHO and the CBD are engaged in substantially independent and complex exercises each in their own right, greater attention should be focused on how the results of these exercises will relate to each other. Moreover, negotiators at the WHO should be cognizant of the fact that the current IGM-PIP negotiations are not taking place in a legal vacuum. This not only suggests that increased effort should be made to bring the current negotiations that address influenza viruses to a satisfactory conclusion, but also that these negotiations should be followed by a broadened effort to more generally address pathogen materials.
NAFTA Encyclopedia Entries


NAFTA Entries in the Max Planck Encyclopedia of Public International Law

The North American Free Trade Agreement (NAFTA): Structure, Dispute Settlement and Case Law


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This paper combines three entries regarding the North American Free Trade Agreement (NAFTA) prepared by the author for the Max Planck Encyclopedia of Public International Law. These papers were initially published in the online edition in 2009, and in 2012 appeared in the hard copy bound volumes. The first contribution describes the genesis of the NAFTA and the resulting treaty arrangement. The second contribution summarizes and analyzes the decisions of the various dispute settlement mechanisms under the NAFTA. The third contribution describes those various dispute settlement mechanisms.

The North American Free Trade Agreement (‘NAFTA’) establishes a free trade area comprised of the territories of Canada, Mexico, and the US (‘the Parties’). The NAFTA entered into force on 1 January 1994. Negotiation of the NAFTA was initiated during the US presidency of George HW Bush at the suggestion of President Carlos Salinas of Mexico. This was during a period in which Mexico was undergoing a transition from State ownership to private ownership of key industries, as well as more generally opening the economy to imports and foreign investment. From the standpoint of the Mexican government, the NAFTA was an important element in a broader transition from a closed to an open market economy. The US had long sought to establish more favorable investment and trading terms with Mexico, and the proposal for a free trade agreement was consistent with expressed US interests. Two-way trade between Canada and the US far exceeded trade between Canada and Mexico, and the CUSFTA already promised to liberalize trade between Canada and its major trading partner. Nonetheless, Canada's participation in the negotiations allowed it to revisit some important subject matter and to otherwise remain engaged in a broader US plan for an eventual hemispheric Free Trade Area of the Americas (FTAA).

The NAFTA follows the customary ‘free trade area’ agreement model described in Art. XXIV, General Agreement on Tariffs and Trade (1947 and 1994)). The NAFTA is structured to reduce or eliminate tariffs and quotas on trade in goods between the Parties. The NAFTA extends to liberalization of trade in services, as now covered by Art. V, General Agreement on Trade in Services (1994). In addition, the NAFTA provides for liberalization of restrictions on foreign direct investment (‘FDI’), and establishes protection against nationalization or expropriation. The NAFTA is thus broader in terms of regulating economic activity than the classical ‘free trade area’ agreement as described in the GATT 1947 and 1994.

The NAFTA incorporates three distinct dispute settlement mechanisms within the main text of the agreement, and several additional mechanisms in its supplementary agreements.

International Intellectual Property in Max Planck Encyclopedia


Intellectual Property, International Protection Entry in Max Planck Encyclopedia of Public International Law

Intellectual property, International Protection


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This paper was prepared by the author for the Max Planck Encyclopedia of Public International Law. It was initially published in the online edition in 2009, and in 2012 appeared in the hard copy bound volumes. The paper describes the various forms of intellectual property, the international agreements and rules which regulate the field, the role of the various multilateral organizations and trends in development of the law. 

Intellectual property rights perform a variety of functions. They promote innovation and creative expression, and they protect investment. The promotion of innovation and protection of investment are important objectives for the global economy. New products and methods for producing them improve the quality of life and enhance productivity. It is important, however, to bear in mind that IPRs protection also imposes social and economic costs. It restricts the use of knowledge, even if for a limited time. The benefits of IPRs protection are not equitably shared among the richer and poorer nations. Just as national legislators must seek to strike a balance between the interests of various domestic stakeholders in IPRs protection, so must those responsible for negotiations at the multilateral level seek to strike an appropriate balance among industry and consumers, and among the wealthy and the poor. The people of the world are closely linked by new technologies and we share an interest in a stable and prosperous international environment.
Emerging Market Supply


Emerging Market Pharmaceutical Supply: A Prescription for Sharing the Benefits of Global Information Flow

in THE GLOBAL FLOW OF INFORMATION: LEGAL, SOCIAL, AND CULTURAL PERSPECTIVE 175-189 (eds. R. Subramanian & E. Katz), New York Univ. Press, 2011

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New information technologies enable individuals in disparate locations to conduct cutting-edge research, to move that research into the development and testing of new medicines, to manufacture high-quality products, and to move those products to patients around the world. Conceptually, the world pharmaceuticals supply market may become increasingly competitive at all stages: basic research, product development, manufacturing and distribution. The diffusion of technological competence to major developing country actors in the pharmaceutical sector, such as India and China, as well as to more specialized actors such as Bangladesh (manufacturing) and Singapore (research), could result in a significant expansion of the pool of products available to treat disease, as well as more affordable prices to consumers.

This chapter argues that the emergence of wider competition in the quest for new products, the development of those products, and the improvement of production technologies and distribution to patients/end users are strongly in the welfare interest of the global public. It further argues that emerging market countries are not yet at the stage in which the application of competition law will adequately promote and protect domestic pharmaceutical companies. It recommends that emerging market countries adopt industrial policies designed to promote and protect their infant pharmaceutical supply sectors. It recognizes that the United States, among other OECD countries, significantly subsidizes and otherwise protects its pharmaceutical industry and that emerging market countries cannot realistically compete with the advantages presently held by OECD industries without adopting and implementing their own industrial policy measures.

Regional Assessment


Regional Assessment of Patent and Related Issues and Access to Medicines: Caricom Member States and the Dominican Republic (HERA)

Health Research for Action Final Report- Main Report, Vol. 1, 2009  

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Country Studies, Vol. 2, 2009 download here

The objectives of this study were: (a) to explore the possibilities of developing a harmonized, pro-public health regional (Caribbean) IP regulation and drug policy (to include generic drugs) framework; (b) to make recommendations on the promulgation/up-dating of IP legislation and regulation that will maximize TRIPS flexibilities while being TRIPS compliant; (c) to identify the requirements and process for establishing a regional negotiating platform for drugs; (d) to identify mechanisms for building/strengthening coalitions and negotiating positions at the WTO, and in bilateral and regional fora for ensuring access to drugs; and (e) to make recommendations on the adequacy of the systems in Member States for regulation of the pharmaceutical market to ensure the timely supply of safe, effective and quality medicines. 

Innovation and Technology Transfer


Innovation and Technology Transfer to Address Climate Change

Lessons from the Global Debate on Intellectual Property and Public Health

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ICTSD Programme on IPRs and Sustainable Development, Issue Paper No. 24

This paper examines issues surrounding the development and transfer of technologies for addressing the problem of climate change based on the experience of developing countries in addressing problems of innovation and access in the field of medicines.

It looks at alternative energy resources (AERs) and climate change mitigation technologies (MTs), at the forms of intellectual property rights (IPRs) used to promote and protect innovation, and at the ways these IPRs may have different effects and implications for AERs/MTs as compared with pharmaceutical technologies. It is generally assumed that the originator pharmaceutical sector is highly dependent on strong patent protection, mainly because of the high cost involved in developing novel drug therapies and the low cost of reverse engineering these new drugs. Preliminary research suggests that most AERs/MTs industries may be less dependent on strong patent protection, and/or that patents are less likely to cause significant bottlenecks in the development and transfer of AERs/MTs. While it is premature to come to a definitive conclusion because researchers are only now focusing on the evidence, there is some basis for anticipating that IPRs will present fewer risks for developing countries in the context of climate change than for public health.

Developing country negotiators understood that the GATT Uruguay Round negotiations on trade related aspects of intellectual property rights would affect access to medicines. The resulting WTO TRIPS Agreement did, in fact, present serious risks to public health. These risks were addressed through negotiation of the Doha Declaration on the TRIPS Agreement and Public Health, the Article 31b is amendment and the WHO Global Strategy and Plan of Action on Public Health, Innovation and Intellectual Property. The “Doha Declaration process” broadly speaking has resulted in some positive movement.

There are a number of lessons that can be drawn from the public health-related negotiations, at the WTO and other forums that may be useful to developing country negotiators addressing IPRs and climate change. Some of these lessons are relatively straightforward: economic and political power substantially influences the outcome of negotiations; the involvement of NGOs and other stakeholders is essential; it is important to shape public opinion through effective communication. Other lessons may be somewhat less evident.

Public health negotiations suggest that zero-sum bargaining is unlikely to be productive from the standpoint of developing countries, and that appeal to “equity” as the basis for demanding concessions is not enough. The private sector in the developed countries controls most pharmaceutical technology and AERs/MTs. Governments in developed countries are unlikely to “order” that technology be transferred by the private sector. Developing countries therefore might usefully focus on establishing frameworks for mutually beneficial joint venture economic arrangements between developed and developing country enterprises that will stimulate innovation and concrete transfers of technology to address climate change.

To the extent possible, technology transfer commitments resulting from climate change negotiations should be specific and concrete. “Soft” commitments on transfer of technology typically do not bear fruit.

A number of developing countries and NGOs have proposed that a declaration comparable to the Doha Declaration on the TRIPS Agreement and Public Health be adopted with respect to IPRs and Climate Change. Even if current multilateral IPRs rules incorporate flexibilities and exceptions adequate to address most foreseeable obstacles to technology transfer, a declaration may be useful in the progressive development of international law so that it properly balances the rights of innovators and access by the public to the benefi ts arising from new technologies.

Global Pharmaceutical Policy


The Challenges We Face

in Frederick M. Abbott and Graham Dukes, GLOBAL PHARMACEUTICAL POLICY: Ensuring Medicines for Tomorrow's World 1-15 (2009)(Edward Elgar Publishing)

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Pharmaceutical products play a central role in the prevention and treatment of disease. Making safe and effective pharmaceutical products available and affordable to individuals around the world is a central challenge to the global governance system. There are however myriad obstacles to achieving and maintaining effective worldwide availability of medicines.

Despite the fact that people around the world face largely similar challenges from disease, the policy framework for promoting innovation and regulating pharmaceutical supply is remarkably disjointed. Innovation policy, insofar as it is implemented at all, is established on a country-to-country basis with minimal attention to coordination of research and development. Regulatory structures are almost equally fragmented. Each country has its own set of approval standards and regulatory procedures that must be dealt with, and only to a limited extent are there cooperative procedures or systems of mutual recognition. Corporate decisions concerning where to concentrate innovative efforts, what to produce, where to supply it and on what terms are based on the likely impact on profits and capital markets.

There are wide disparities in levels of income both among countries and within countries. Prices that are reasonably affordable for individuals covered by health insurance in developed countries are likely to be unaffordable for individuals without health insurance in developed and developing countries. There are compelling needs for new medicines to treat diseases affecting both the rich and poor, such as diabetes, cancer, heart disease and the degenerative disorders of old age. Innovation in these areas is costly, yet even with substantial sums invested in research and development rates of innovation are surprisingly low. There are equally compelling needs for new medicines to treat disease conditions predominantly afflicting tropical regions where poverty rates are typically high. Far less is invested in the diseases of the poor because of a lack of market demand.

Medicines must be safe and effective. Making and keeping them so is a challenge for both private and public sector suppliers, for the regulators charged with promoting and protecting public health and for the policy makers who determine the framework within which regulation operates. This book examines the state of play of the international system for the development and supply of pharmaceutical products, and offers insights into how some of its challenges might be addressed. This system is enormously complex, with many moving parts, and there is not likely to be a quick fix for the many challenges. There are quite a few good ideas circulating among individuals and groups involved in formulating and implementing public policy in the field of medicines.

Certainly new initiatives are needed in this field, and existing initiatives can and should be improved. We try to identify and explain those areas in which present policies are not working, and we offer suggestions regarding ways to improve them. We put forward our own proposals regarding directions that global public policy in the field of medicines should take. We do not claim a monopoly on promising ideas. We hope that this volume will succeed at least in moving the dialogue on these subjects forward.

Number of Pages in PDF File: 15

Cross-Retaliation in TRIPS


Cross-Retaliation in TRIPS: Options for Developing Countries

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ICTSD Programme on Dispute Settlement and Legal Aspects of International Trade, Issue Paper No. 8, April 2009

This paper addresses a World Trade Organization (WTO) dispute settlement remedy commonly known as 'cross-retaliation', and specifically the mechanism by which a WTO Member can suspend concessions in the field of trade-related intellectual property rights (TRIPS) to redress an injury suffered with respect to trade in goods or services. A WTO Member enforces compliance with a ruling by the Dispute Settlement Body (DSB) by suspending trade concessions enjoyed by the non-compliant Member. This might involve raising tariffs on products imported from the non-compliant Member. Economically powerful WTO Members are not likely to be harmed by the suspension of trade concessions in goods or services by substantially less powerful Members. The trade impact will be too small to 'induce compliance' and, equally important, the types of suspension that may be used in the fields of goods and services may cause economic harm to the less powerful Members using them. The WTO dispute settlement process strongly favors economically powerful countries, leaving most developing and least developed Members with few options for inducing compliance. Attention is increasingly being focused on the possibility for developing Members to suspend concessions relating to intellectual property rights (IPRs) as a means of inducing compliance by developed Members. Cross-retaliation is expressly contemplated by the WTO Dispute Settlement Understanding (DSU). WTO arbitrators have so far approved TRIPS cross-retaliation on two occasions: in favor of Ecuador (against the European Communities (EC)) and Antigua (against the United States (US)). Constructing and implementing a cross-retaliation program involving IPRs raises a substantial number of complex legal questions. The DSU establishes principles and procedures that must be respected. The various forms of IPR – copyright, patent, trademark, etc. – serve different social and industrial policy functions and have their own unique characteristics. There are multilateral and bilateral agreements and rules outside the WTO context that may influence the shaping of a cross-retaliation program. National constitutions and rules relating to property rights need to be addressed. This paper anticipates many legal questions raised by cross-retaliation in TRIPS and seeks to provide answers to them. It analyses the cross-cutting issues raised by external commitments and national IPRs-related rules, and looks at each major forms of IPR to suggest practical approaches to suspending (or not suspending) those forms. One of the difficult challenges less powerful WTO Members face in seeking to implement cross-retaliation in TRIPS is political pressure from industry groups as well as the governments of more powerful Members. While exporters of goods have not persuaded international media outlets that the suspension of tariff concessions is 'piracy of trade rights', IP-dependent industry groups use sophisticated and expensive propaganda campaigns that result in media portrayal of IPR suspension as 'piracy' and 'theft'. WTO Members must be prepared to deal with industry-induced media pressure.

Seizure of Generic Pharmaceuticals in Transit Based on Allegations of Patent Infringement: A Threat to International Trade, Development and Public Welfare


Seizure of Generic Pharmaceuticals in Transit Based on Allegations of Patent Infringement: A Threat to International Trade, Development and Public Welfare

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(1 W.I.P.O.J. 43 (2009)

This essay addresses the legitimacy of seizures by the customs authorities of some European Union member states of pharmaceutical products moving in transit through European ports and airports based on patents in force in the transit countries. Seizures have been directed to products off-patent in the countries of manufacture and destination. EU member state customs authorities have justified such seizures on the basis of a 2003 EU intellectual property border enforcement regulation. The seizures have generated intense controversy at the WTO and more widely among stakeholders interested in assuring affordable access to medicines. This essay argues that seizure of generic pharmaceutical products in transit contravenes GATT article V that obligates WTO Members to assure freedom of transit for goods passing through ports and airports, and obligates Members to refrain from imposing unreasonable regulations on such transit goods. It further argues that the seizures are fundamentally inconsistent with the Paris Convention principle of independence of patents that recognizes the sovereign right of states to adopt and implement patent protection as they consider appropriate, within the framework of a general set of rules. Rules permitting enforcement of transit country patents effectively deprives exporting and importing Paris Union and WTO Members of their right to make determinations regarding patents, and represents an overextension of patent jurisdiction by countries without a substantial interest in enforcement. Dutch court adoption of a manufacturing fiction to justify transit seizures – pretending that subject pharmaceuticals are manufactured in the Netherlands, when they clearly are not – represents a significant potential threat to the conduct of international trade. Each WTO Member might pretend that all manner of its domestic regulation – labor, environmental, social welfare – was violated in an exporting country when goods were manufactured, allowing the goods of that country to be seized in transit for a violation of transit country law. The international trading system could not function reasonably in such a fiction-laden environment. The seizure of generic pharmaceutical products in transit is inconsistent with the object and purpose of the Doha Declaration on the TRIPS Agreement and Public Health that promotes access to medicines for all.
A New Dominant Trade Species Emerges: Is Bilateralism a Threat?


A New Dominant Trade Species Emerges: Is Bilateralism a Threat?

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Over the past decade, government trade and finance ministries have increasingly turned toward negotiating bilateral and regional trading arrangements, and away from negotiations in multilateral forums like the WTO. There are several reasons for this shift, including changes in the global political environment and negotiating obstacles encountered by the multinational business community at the multilateral level. This shift appears to be an embedded phenomenon. Positive and negative aspects of preferential trading arrangements (PTAs) are in evidence. Trade creation-trade diversion economic analysis suggests the results may be net global welfare enhancing, although such analysis does not readily assess distributional effects. The global economy is enjoying a period of sustained and widely distributed economic growth, suggesting that the PTA phenomenon is not an immediate economic threat. On the negative side, the PTAs lead to administrative complexity, and may be somewhat destabilizing as businesses are encouraged to relocate. Some countries may suffer if left out, but this risk is ameliorated by the wide availability of potential negotiating partners. The PTA negotiating environment strongly favors powerful economic actors like the United States and European Union, which are largely dictating terms to developing (and developed) countries. Developing countries, particularly the less economically powerful, are losing autonomous decision-making authority. The consequences of this are difficult to quantify, and may raise questions better attuned to moral philosophers than economists. The WTO continues on its way, relegated to a less central status. A return to the WTO might reinvigorate the role of less powerful actors, but such return does not appear an immediate prospect. The PTA phenomenon, on balance, does not appear aggressively threatening. We may, however, be underestimating the positive role of multilateralism.

Parallel Importation


Parallel Importation: Economic and Social Welfare Dimensions

International Institute for Sustainable Development (IISD), Swiss Agency for Development and Cooperation (SDC), June 2007 

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This paper was prepared at the request of the Swiss Agency for Development and Cooperation for use in dialogue with members of the Swiss Federal Assembly as that legislative body considered proposals to modify Switzerland's law on patents and parallel importation. The paper provides an overview of the arguments for and against allowing international exhaustion of patent rights, with a focus on trade in pharmaceuticals and public health. It explains the different potential geographical bases for exhaustion: national, regional and international. It observes that there may be differences between the way exhaustion policies affect "ordinary goods" and goods with significant public health effects. It outlines arguments from the producer and consumer sides, including arguments made by pharmaceutical producers in favor of market segmentation to allow price discrimination in favor of low income populations. It notes the option of limiting exhaustion to a regional group with relatively homogenous income levels and regulatory supervision, observing also that this does not take advantage of lowest world market pricing. The objective of the paper was to provide parliamentarians with a concise overview of different sides of the parallel importation discussion.

World Trade Organization Accession Agreements: Intellectual Property Issues


World Trade Organization Accession Agreements: Intellectual Property Issues

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This paper addresses intellectual property issues that arise in the context of the accession process with a view toward assisting prospective WTO Members involved in negotiations. The Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS Agreement”) is one of the Multilateral Trade Agreements or MTAs to which all WTO Members are party. As an ordinary consequence of joining the WTO, a state or autonomous customs territory would be expected to become party to the TRIPS Agreement and take on the obligations applicable to other Members at their respective levels of development. However, the terms of the WTO Agreement do not expressly limit the “entry fee” imposed on newly acceding Members to an equivalence of concessions with existing Members. As a consequence of this, accession negotiations have been used by certain Members as a mechanism for securing commitment to obligations in the field of intellectual property rights (IPRs) that are more extensive than those established by the TRIPS Agreement.

For any country which has not been a Member of the WTO, there is a strong possibility that the national regime governing IPRs in place prior to the commencement of accession negotiations will be inconsistent with the requirements of the TRIPS Agreement. In this regard, the process of joining the WTO even at the same level of obligation as existing Members may require a substantial adjustment in national law and corresponding industrial policy. The impact of bringing national law into baseline or “normal” TRIPS Agreement compliance should not be underestimated.

A fundamental characteristic of the TRIPS Agreement is that WTO Members have flexibility regarding the manner in which obligations are implemented. This flexibility has been recognized by the WTO Appellate Body in the India-Mailbox decision. Countries acceding to the WTO may have limited experience in drafting and implementing IPRs law. The way in which such law is drafted may substantially affect social welfare interests within the country. Certain WTO Members will express strong opinions regarding what types of legislation satisfy TRIPS Agreement requirements. Those views are not necessarily shared by other Members. In addition, technical advisers regarding IPRs law may have materially different viewpoints regarding the way in which the interests of IPRs-holders and the general public should be balanced. It is therefore important to approach the process of legal reform cautiously, taking into account the different perspectives and objectives of WTO Members and technical advisers.

The Doha Round's Public Health Legacy


The Doha Round's Public Health Legacy: Strategies for the Production and Diffusion of Patented Medicines Under the Amended TRIPS Provisions

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Journal of International Economic Law, Vol. 10, pp. 921-87, 2007

The entry into force of the WTO TRIPS Agreement in 1995 transformed the international intellectual property system. The harmonization of basic intellectual property standards has operated to protect investment in innovation, limiting risks from unjustified free riding. Yet these same harmonized IP standards sharply curtailed the traditional capacity of suppliers of public goods, such as health care and nutrition, to address priority needs of less affluent members of society, particularly in (but not limited to) developing countries. In the Doha Declaration, the Waiver Decision of 30 August 2003 and the Article 31bis Protocol of Amendment, stakeholders concerned with re-opening policy space for the supply of newer pharmaceutical products pushed back against restrictive elements of the TRIPS Agreement. Governments around the world are in the process of deciding whether to ratify and accept the Article 31bis Amendment. Based on their Study for the International Trade Committee of the European Parliament, the authors argue that acceptance of the Amendment will provide a ¿net benefit¿ for countries seeking to improve access to medicines. At the insistence of WTO delegations acting on behalf of the originator pharmaceutical industry lobby, Article 31bis regrettably is saddled with unnecessary administrative hurdles. Nonetheless, through skillful lawyering, political determination and coordinated planning, the system can be made to work. Among other options, expeditious back-to-back compulsory licensing linked with pooled procurement strategies may effectively achieve economies of scale in medicines production and distribution. The authors doubt that the international political environment would support renegotiation of an 'improved' solution. They express concern that failure to bring the Amendment into force will open the door to a campaign to undermine the Waiver Decision. Recent events in Brazil and Thailand illustrate both the opportunities and risks associated with implementing TRIPS exception mechanisms, and help to inform views on the negotiating environment. Specific proposals for regional cooperation in implementing the Amendment are laid out, and the authors emphasize the importance of pursuing concrete transfer of technology measures in support of developing country pharmaceutical manufacturing. Over-reliance on private market mechanisms for the supply of public health goods leaves the international community with an unresolved collective action problem on a large scale.
Comparative Study of Selected Government Policies for Promoting Transfer of Technology and Competitiveness in the Colombian Pharmaceutical Sector


Comparative Study of Selected Government Policies for Promoting Transfer of Technology and Competitiveness in the Colombian Pharmaceutical Sector


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Annex 1

Annex 2

Annex 3

Annex 4

Annex 5

Annex 6

The overall conclusion of this study is that domestic pharmaceutical producers in Colombia will face increasing challenges from foreign enterprises if and as the market is further opened to competition. If there is a national interest in maintaining or improving the local and global market position of Colombian enterprises, steps should be considered to encourage upgrade of the facilities of private operators to meet standards prevalent among major international generics suppliers. Facilities upgrading would have positive consequences for the Colombian public in terms of improving the quality of products on costs, financial assistance to local firms will be required. Some restructuring of the local industry (in terms of consolidation) should be anticipated.

Strengthening Colombia’s domestic manufacturing industry should, over the long term, increase local private investment in R&D. Nonetheless, Colombia is presently at the low end of government funding for R&D programs, and at the low end of R&D as a percentage of GDP (reflecting low private investment in R&D). If Colombia seeks to take advantage of its strength in areas such as ownership of biodiverse resources, it should likely increase its public funding for R&D in sectors with potential opportunity. It might also consider promoting partnerships with firms and institutions from countries already heavily invested in biotechnology R&D, taking care in negotiations for fairly sharing in the commercial output of such ventures, and to promote training opportunities for its scientific community.

From an industrial policy standpoint, it is important to assess whether Colombia has a comparative advantage in the pharmaceutical sector that justifies government intervention and support in favor of local industry. Because government resources are scarce, it is sensible to allocate them toward industry sectors in which prospects for success in the global economy are higher. However, it also should be recognized that the pharmaceutical sector is not the same as other industry sectors. A strong local pharmaceutical industry can help to assure reasonably priced high quality medicines for local consumers, and it is important for public security. Particularly in times of public health emergency, a country runs substantial risk if it is wholly dependent on foreign sources of medicines supply. Maintaining a strong base of industrial capacity is important. Without a technologically sound local industry, the capacity to respond to public health threats may be jeopardized. This is not to suggest a policy of pharmaceutical “autarky” or self-sufficiency, but rather to emphasize that production capacity in pharmaceuticals raises different issues than production capacity in flowers or coffee. Economics and public health must be considered in tandem.
China in the WTO 2006: 'Law and its Limitations' in the Context of TRIPS


China in the WTO 2006: 'Law and its Limitations' in the Context of TRIPS

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China's transition from a statist to market economy over the past 15 years and its successful establishment of globally competitive industry are unprecedented historical events. Although China's entry into the WTO is not responsible for that transformation, it has played an important role. Accession to the WTO was used by the government as a means not only to stabilize access to foreign markets and increase the attractiveness of China to foreign investors but also to reorient internal policies in a way that deemphasized a profound shift in government attitudes.

However, the law of unintended consequences is always at work, and the rate of China's growth and success in world markets may have been unanticipated. Developing countries that for many years had pressed in the WTO for an agreement to eliminate textile quotas found themselves seeking to re-impose restrictions in the face of highly efficient Chinese producers. China is absorbing a large and increasing share of the world's natural resources, including oil and minerals, and Chinese demand is adding to global price and availability pressures.

China's trade relations with the rest of the world are not without friction. China maintains a large trade surplus with the United States and European Union. Politicians and economists express concern that this surplus is due, at least in part, to a Chinese policy of deliberately undervaluing its currency. In late 2005, largely in response to U.S. political pressures, China moved from a fixed currency conversion rate for the Yuan to a limited floating rate tied to a basket of currencies. This move provided modest relief from currency-related confrontation with the United States, which continues at a somewhat more subdued level.

This paper focuses on the legal and WTO governance implications of China's alleged failure to fulfill its obligations under the Agreement on Trade-Related Intellectual Property Rights (TRIPS Agreement). The significant escalation of interest by the United States and other developed countries in China's intellectual property rights enforcement activity merits special attention because of its systemic implications. This subject matter forms a critical part of China's continuing WTO dialogue with the United States, European Union, Japan, and Switzerland, and it tests the capacity of the WTO dispute settlement system to constrain state behaviors.

China appears to perceive that its national interest is not aligned with its TRIPS Agreement and Accession Protocol obligations. Though the United States may well initiate a WTO dispute settlement action, it seems unlikely that doing so will result in near-term changes to China's conduct. WTO dispute settlement is not designed to force immediate changes to government behaviors, particularly when the complained-against party is not overly concerned about the potential for withdrawal of concessions. Politicians and industry leaders who are demanding changes by China will almost certainly be frustrated at the WTO.

This response will raise two questions: will the United States be justified in imposing extra-WTO legal sanctions on China, and if this is justified, will it be a good idea? The answers to these questions, explored in this paper, are 'probably yes" and "probably no,' respectively. To paraphrase the title of Olivier Long's classic work on the GATT, this case may help define the limits of the law in the WTO system
IP in World Trade


Intellectual Property Rights in World Trade

in Research Handbook in International Economic Law 444-84 (A. Guzman & A. Sykes) (Edward Elgar 2007)

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Technology has always played a significant role in economic development and the shifting fortunes of nations. Yet when the GATT was established in 1947, very limited attention was paid to 'intellectual property.' This is largelyexplained by the evolution of an international system for the regulation of intellectual property (IP) under the auspices of what today is known as the World Intellectual Property Organization (WIPO). As a subject of international regulation, intellectual property had not been overlooked. In fact, it was perhaps the first element of world trade subject to truly multilateral discipline with the Paris Convention for the Protection of Industrial Property of 1883 andthe Berne Convention for the Protection of Literary and Artistic Work of 1886.

IP is regulated at the multilateral, regional, bilateral, national and subnational levels. This chapter focuses on the multilateral regulatory system largely concentrated at the WTO and WIPO, but also refers to regulation at other levels of governance.

Patents, Biotechnology and Human Rights: The Preservation of Biodiverse Resources for Future Generations


Patents, Biotechnology and Human Rights: The Preservation of Biodiverse Resources for Future Generations


The patenting of biotechnological inventions potentially affects human rights in a number of ways. Human rights to identity and the practice of religion may be affected by the availability of patents on genetically modified human beings (or elements of the human body). Patents as mechanisms for market exclusion affect access to new medicines, including those based on biotechnological innovation. Access to medicines and health care are part of the panoply of human rights.

During the past decade, the international community has focused significant attention on the protection of biological diversity and the potential impact of patents and other intellectual property rights on that protection. All of mankind benefits from the preservation of biological diversity. Genetic resource stocks likely will be the source of future agricultural, medicinal and other innovations. The preservation of plant and animal species is important to the functioning and continuing evolution of the Earth’s ecosystem, and therefore to the preservation of human life. While the maintenance of biological diversity is not part of the traditional catalogue of protectable human rights, a generalized human interest in the preservation of such diversity might be considered part of the common human interest in the wellbeing of future generations.

Differentiated biological resources are concentrated in a group of megadiverse countries, almost all of which are developing countries. The geographic territories in which such resources are located are often populated by poor indigenous peoples. The exploitation of biological resources from territories inhabited by these individuals has the potential substantially to affect their economic well being. The maintenance of basic human rights, including rights to security, food and shelter, are dependent on a minimum level of economic welfare. The Convention on Biological Diversity (CBD) recognizes sovereign rights over biological resources located within national territories, in part with a view towards assuring that individuals benefit financially from biotechnological inventions derived from such resources. The potential for conflict between the objectives and terms of the CBD and the rules governing the international patent system has been debated since the conclusion of negotiations on the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) in late 1993. In 2006 this subject is on the active agenda of the WTO TRIPS Council, and it is being considered at the World Intellectual Property Organization (WIPO).

This chapter analyses the relationship between the CBD and the rules governing the international patent system with a view to making a recommendation regarding whether a multilaterally agreed mandatory requirement for disclosure of the source and origin of genetic resources in patent applications would aid in achieving greater complementarity. The chapter concludes that adoption of such a requirement would be useful. This chapter does not expressly address information referred to as ‘traditional knowledge’ except to the extent that such information is relevant to evaluating applications for patents on inventions under the generally applied criteria of patentability. Traditional knowledge may itself be protected as intellectual property distinct from patentable invention.

TRIPS II, Asia and the Mercantile


Trips II, Asia and the Mercantile Pharmaceutical War: Implications for Innovation and Access

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Stanford Center for International Development, Working Paper No. 308, Dec. 2006

A powerful agenda for adoption of high levels of intellectual property protection, including related regulatory protection, is being advanced by the United States (and certain other developed countries) for developing countries, including developing and emerging market countries of Asia. This agenda essentially reflects a TRIPS II exercise, but is largely being carried out in bilateral and regional negotiations, as well as in WTO accession negotiations.

The TRIPS II agenda, as the TRIPS I agenda, is explained by strong mercantile interests seeking to increase technology and expression rents. Circumstances since the launch of the GATT Uruguay Round in 1986 have changed substantially. In 1986, OECD industries were principally concerned with preventing weak developing country industries from substituting low-cost and often lower quality “copied” versions of products on local markets, but were not threatened with competition in their home markets or with respect to originator and high-quality products. The OECD industry groups driving the TRIPS II agenda are (1) the copyright-dependent audio-visual industry concerned with unauthorized duplication and distribution of video and audio content and (2) the pharmaceutical (and agricultural chemical) industry concerned with competition from generic producers and, in a forward-looking sense, emerging originator enterprises.

This paper focuses on the implications of the TRIPS II agenda for the pharmaceutical sector in the Asian region. Copyright protection has significant implications for “access to knowledge”, in addition to entertainment, and this paper acknowledges the public welfare implications of developments with respect to copyright. However, the applicable legal norms and public welfare analysis differ substantially as between the copyright-dependent and patent-dependent industry sectors, and this paper will focus on the latter. TRIPS Agreement, TRIPS II, Pharmaceuticals, Asia, Trade, Investment, Public Health

Intellectual Property Provisions


Intellectual Property Provisions of Bilateral and Regional Trade Agreements in Light of U.S. Federal Law

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UNCTAD - ICTSD Project on IPRs and Sustainable Development, Issue Paper No. 12, Feb. 2006

During the past several years, the United States has concluded a substantial number of bilateral and regional free trade agreements (hereinafter “FTAs”), largely with developing countries. Each of those FTAs includes substantial commitments in the field of intellectual property rights (IPRs) and related regulatory matters. These commitments exceed those required by the TRIPS Agreement which establishes minimum substantive standards of protection and enforcement for all WTO Members.

There is a relatively consistent view among economists studying intellectual property rights that the interests of countries with respect to standards of protection varies depending upon the level of development and other characteristics of the country adopting such protection. The TRIPS Agreement provides some flexibility to WTO Members with respect to the level of protection, allowing developing countries a measure of leeway. Since there has been little enthusiasm at the WTO for raising standards of IPRs protection above that mandated by TRIPS, the United States has shifted its attention to other fora to accomplish its objective of securing greater levels of IPRs-based rents or royalties. The U.S. FTA policy weakly takes into account developmental interests. In some areas, such as the protection of pharmaceutical patent holders, U.S. policy threatens to cause harm to the interests of comparatively poor populations. 

IPRs and related regulatory standards deemed appropriate for the United States may not be appropriate for developing countries. Even so, within the United States the law establishes a particular balance between the interests of IPRs holders and consumers. Most U.S. IPRs rules are formulated in terms of general principles, with limitations and exceptions to them. The FTAs negotiated by the United States largely reflect the general rules of application, though not in all cases. What the FTAs do not adequately reflect is the interplay between rule, limitation and exception that establishes the balance. This is of special importance in areas such as public health regulation where incomplete familiarity with the flexibility inherent in the U.S. system may lead its trading partners to conclude that restrictive implementation of the FTAs is required. Differences in the capacity of the United States and many developing countries to create and manage legal infrastructure may lead to a disparity in the way FTA rules are implemented. 

In the negotiating process, developing countries should carefully consider whether the capacity of their domestic legal and regulatory system will permit them to balance interests as does the United States. It is probably unwise to accept commitments that will strain domestic capacity and which may lead to the application of rules in a more restrictive manner than the agreements require. If commitments are accepted, developing countries should pay careful attention to implementing them in a way which properly reflects the domestic public interest.

In conclusion, this study suggests that it is not only the public in developing countries that encounters risk from these FTAs. The U.S. public faces similar risks. The USTR assures the United States Congress that the agreements do not tie the hands of the domestic legislator. This is a position perhaps comfortably asserted within the more powerful of the parties to an FTA. Yet it is almost inevitable that when Congress considers changing domestic law, arguments will be made by industry groups that to do so may violate America’s international obligations and damage the national interest. Congress may choose to ignore U.S. international obligations, but it would be surprising if Congress were not at least somewhat reluctant to do so. The United States is increasingly bound by a set of highly restrictive intellectual property and regulatory commitments that may not over time be seen to be consistent with the American public interest.

TRIPS and Human Rights: Preliminary Reflections


TRIPS and Human Rights: Preliminary Reflections


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We are considering the relationship between human rights and trade-related aspects of intellectual property rights (TRIPS). Intellectual property rights (IPRs) have always reflected a balancing of general public interests and private stakeholder interests, and in this sense IPRs take into account social welfare concerns as well as those of individual inventors and artists. While the balance struck in the TRIPS Agreement is flawed, it is capable of flexible interpretation and amendment. Human rights represent the values for establishing a global constitutional balance between the interests of the public and the private holders of IPRs.

We are collectively at a somewhat early stage of analyzing from a legal standpoint the relationship between human rights and the TRIPS Agreement. The observations in this paper reflect the preliminary nature of this inquiry. From a legal perspective, the sources of human rights relating to TRIPS are customary international law, the Universal Declaration of Human Rights, and various other human rights instruments including the International Covenant on Civil and Political Rights (lCCPR) and the International Covenant on Economic, Social and Cultural Rights (ICESCR). The Report prepared by the Office of the High Commissioner for Human Rights, entitled "The impact of the Agreement on Trade-Related Aspects on Intellectual Property Rights on human rights", insightfully surveys the relevant human rights instruments and their potential application to TRIPS issues.

The idea or concept of human rights as it applies to the field of IPRs involves something beyond the specific norms we may identify in human rights instruments or customary law. Human rights involve the shared perceptions of individuals regarding basic questions of right and wrong, fairness and equity. When an overwhelming part of the world's public perceives a situation as unjust, and expresses its concern, that shared perception itself becomes a part of our human rights dialogue, and informs public policy makers in their actions.

Human rights take on character, and become appropriately multidimensional in the context of specific cases, and reflect the spirit of the times. Lawyers may incline to be dismissive of public perception because the legal profession is by nature analytical, and the lawyer prides him or herself on objectivity and precision. Yet laws do not operate in clinical isolation from events, and events (particularly those of great moment) are rarely analytical and precise. One does not stop a war on a legal technicality. In the combating of social wrongs, it is the shared perception of the public, and the willingness of the public to take on the responsibility for setting things back in their proper order, that matters.

Meetings in the TRIPS Council on access to medicines that ultimately resulted in the Doha Declaration on the TRIPS Agreement and Public Health flowed largely from efforts by developing WTO Members to deal with public health problems affecting their people. The TRIPS Council did not begin taking access to medicines issues seriously because the OECD governments became more enlightened about the consequences of TRIPS and patents. Rather, this took place because the worldwide public did not accept that the rights of pharmaceutical industry patent holders should take precedence over the rights to life and health of millions of individuals. The human rights dimension will play a substantial role in the response of the WTO and other multilateral organizations to public health issues. It is precisely because fundamental human rights are at stake, and that these rights are paramount in public consciousness, that the legal situation will adapt.

Cycle of Action and Reaction


The Cycle of Action and Reaction: Developments and Trends in Intellectual Property and Health

in NEGOTIATING HEALTH: INTELLECTUAL PROPERTY AND ACCESS TO MEDICINES 27-40 (eds. P. Roffe, G. Tansey and D. Vivas-Eugui), Earthscan (2005)

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The wheel of the global medicines supply market is broken, but proposals for fixing it are at very early stages. The patent is an instrument designed to aggregate production capital, and for some product sectors the patent may be the best means for promoting the introduction of new products. But patents are not a stand-alone mechanism for addressing the world’s medicines supply needs. The patent-market system distributes output on the basis of capacity to pay, and allocates R&D toward financial demand, irrespective of public health priorities. The next chapter in the public health debate should consider the regulatory mechanisms most likely to serve the medicines interests of the wider world community, whether that involves new regulation of the existing patent system, or changing the patent spoke on the broken supply wheel.

Compulsory Licensing for Public Health


Compulsory Licensing for Public Health: A Guide and Model Documents for Implementation of the Doha Declaration Paragraph 6 Decision

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World Bank Working Paper No. 61 (2005)

The Doha Declaration on the TRIPS Agreement and Public Health (in its Paragraph 6) recognized that developing countries with insufficient or no manufacturing capacity in the pharmaceutical sector could face difficulties in making effective use of compulsory licensing under the TRIPS Agreement. The WTO’s decision of August 30, 2003 set up a system intended to overcome these difficulties. The present work is a guide to the implementation of that system.

The first part gives the reader an understanding of the issues involved; the second part provides model documents for use by governments. Four model instruments of notification are included: three for notification of the WTO as required by the Decision and one for notification of the patent or right holder pursuant to Article 31 of the TRIPS Agreement. Because most countries will have to amend their legislation (typically their patent law) to implement the system, model amendment provisions have been provided both for exporting countries and for importing countries. All model documents contain their own detailed commentary.

The WTO Medicines Decision


The WTO Medicines Decision: The Political Economy of World Pharmaceutical Trade and the Protection of Public Health

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American Journal of International Law, Vol. 99, pp. 317-58, 2005

On August 30, 2003, the member countries of the WTO adopted the Decision on Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health. This Decision provides flexibility for the export of pharmaceutical products under compulsory license (which flexibility might otherwise have been limited by the terms of the TRIPS Agreement). This article analyzes negotiating strategies used by developing countries to achieve their objectives regarding the Decision at the WTO. The United States is pursuing the negotiation of bilateral and regional trade agreements that restrict the regulatory flexibility of developing (and developed) countries under the WTO TRIPS Agreement, Doha Declaration and Decision. This article considers whether developing countries might adapt strategies used effectively at the WTO to prevent further loss of regulatory flexibility in alternative negotiating fora.

Preservation and Use of Genetic Resource Assets and the International Patent System


Preservation and Use of Genetic Resource Assets and the International Patent System

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In 1992 the Convention on Biological Diversity (CBD) was adopted at the Rio Conference. In 1994 the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) was adopted in Marrakech. From the outset, questions were raised as to whether there are conflicts or potential conflicts between the objectives and rules of these two international undertakings. These questions have been on the agenda of the WTO TRIPS Council and the Committee on Trade and Environment, they have been raised in the context of work programs and negotiations at the World Intellectual Property Organization (WIPO), they have been considered by the Conference of the Parties of the CBD, and they are the subject of numerous studies and reports by governments, intergovernmental and non-governmental organizations. This study attempts to clarify the issues at stake in analysis of the relationship between the TRIPS Agreement, related international patent system rules and the CBD. It examines the conflicts or potential conflicts between the objectives and rules of these international undertakings, and it makes certain recommendations regarding the promotion of complementarity among these systems. In terms of subject matter, this study considers only genetic resources and does not address "traditional knowledge".

This study first identifies the objectives of the international patent system as it is embodied in the TRIPS Agreement and WIPO Conventions, and how these objectives are implemented. Second, it identifies the objectives of the CBD and its method of implementation. Third, it identifies conflicts or potential conflicts between the objectives and methods of implementation of the two rule systems. Fourth, it examines proposals that have so far been made to ameliorate or resolve conflicts. Fifth, it suggests means for promoting complementarity between the two systems, including rule changes where necessary or appropriate.

The study concludes that promotion of the objectives of the CBD would be furthered by multilateral adoption of a mandatory requirement for the disclosure of the source and origin of genetic resources in patent applications. Such a requirement is appropriate to protect the interests of developing and developed countries which house genetic resource stocks. This requirement would be consistent with existing rules of the TRIPS Agreement. However, to give it effect it should be adopted as a new TRIPS Agreement rule. While national action to give effect to such a requirement is permitted under existing WIPO administrative treaties, establishing a mandatory multilateral standard under such treaties would also require amendment. The strength of any set of legal rules is dependent upon its enforceability. Therefore, it is important that states be obligated to provide for the effective enforcement of a mandatory disclosure requirement.

Existing patent law standards among advanced legal systems impose upon patent applicants affirmative duties with respect to the disclosure of information and establish penalties which include determinations of invalidity or provision for revocation of patents. Because the failure to disclose information regarding the source and origin of genetic resources may be relevant to the issue of patentability, including inventorship, it is appropriate that existing equitable doctrines that protect the integrity of the international patent system be extended to this area. It should not be an objective of prospective remedial measures to introduce insecurity into the international patent system, recognizing that patents are inherently insecure. Rather, the objective of prospective remedial measures should be to effectively encourage compliance with agreed upon rules, in this case designed to promote the objectives of the CBD.
Toward a New Era of Objective Assessment in the Field of TRIPS and Variable Geometry for the Preservation of Multilateralism


Toward a New Era of Objective Assessment in the Field of TRIPS and Variable Geometry for the Preservation of Multilateralism

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The TRIPS Agreement emerged from the Uruguay Round negotiations as one of the three pillars of the WTO. This article offers a preliminary assessment of the first ten years under the TRIPS Agreement. Based on that assessment, it makes suggestions for the future.

The objective of the principal developed country demandeurs of the TRIPS Agreement was to increase information and technology rent payments from developing countries. Incomplete implementation and enforcement was anticipated. Taking this into account, the Agreement has resulted in a substantial transformation of legal infrastructure in developing countries and has increased rent payment outflows to the owners of intellectual property (IP) rights. From this standpoint, the TRIPS Agreement has been successful in accomplishing its objectives.

From the standpoint of developing countries, it is more difficult to identify positive effects. China is the major developing country success story of the past decade, and it has achieved its historic accomplishments in the face of intensive criticism of its IP regime. The TRIPS Agreement has come under harsh public scrutiny for the role attributed to it by the pharmaceutical industry in South Africa, ultimately leading to the Doha Declaration on the TRIPS Agreement and Public Health. As a consequence of a somewhat more balanced approach to TRIPS now achieved at the WTO, the United States in particular has shifted to bilateral and regional fora to obtain higher standards of protection and enforcement, calling into question the relevance of TRIPS Council deliberations.

This article makes several recommendations. First, that new agreements concerning IP rights be subject to objective prior impact assessment. Second, that WTO Members give greater recognition to the fact that IP rules have significantly different public welfare implications depending on their field of application and the level of development of the implementing country. As the TRIPS Agreement transition periods have largely expired, the manner by which the TRIPS Council assesses its rules and makes provision for TRIPS-plus and TRIPS-minus adjustments might be restructured along industrial subject matter and developmental lines, taking better account of the impact-in-fact of IP rules on societies.

In June 2004 a group of trade specialists was brought together at the World Trade Forum in Berne in a `preliminary stocktaking` exercise to assess the first ten years of the World Trade Organization.1 This article was prepared for that occasion and addresses the Agreement on Trade-Related Aspects of Intellectual Property Rights (the `TRIPS Agreement`) on its ten-year anniversary. 

Procurement and IP


Intellectual Property Rights: A Concise Guide (Chapter 2), and Intellectual Property Rights: How They Affect Procurement and What Steps Can Be Taken (Annex B)


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The procurement of HIV/AIDS–related medicines and supplies is directly affected by rights in intellectual property, most notably patents. The subject of intellectual property is very complex. Some areas are confusing even to the most highly trained specialists. Yet procurement authorities cannot avoid the subject. When supplies of low-cost, high-quality medicines are sought from so-called “generic” producers, holders of patents on those same medicines may object. But procurement authorities may be able to overcome patent obstacles by using “flexibilities” established by internat