The "patent term adjustment" provision extends the patent term to 20 years after TRIPS to make up for delays related to patent authorization or marketing approval. Many free trade agreements also often include "data exclusivity" clauses, which they claim originate from TRIPS Article 39(3)'s protection standard for test data investments is 5 to 10 years of exclusivity.
A patent is "evergreen" when it is granted for a secondary use or increment derived from the original patented invention, for example, patenting a salt or ester version of a compound. Then, there is "patent linkage", which requires the authority responsible for granting marketing authorization for pharmaceuticals to investigate the patent status of a medical product seeking approval, and if the product is patent pending or the application is opposed by a well-known patent owner, consideration of the application will be suspended once the patent status of the drug is determined. The author of
believes that some free trade agreements also restrict the use of "pre-grant opposition procedures", exclude them, and only allow objections after patent authorization. "Compulsory licensing" is one of the immediate flexibilities to correct the abuse of patent rights, and while the Doha Declaration reaffirms the right of WTO members to take advantage of this flexibility and, more importantly, to identify the grounds for granting such flexibility, many free trade agreements expressly limit these grounds.
Finally, regarding the provisions in FTAs regarding the use of " parallel imports ", many FTAs threaten the continued availability of parallel imports or exclude the application of contractual parallel imports by requiring parties to provide national exhaustion regimes. One might wonder how the TRIPS additional obligations constrain the use of flexibilities. Generally speaking, their binding effect may be futuristic or it may be immediate.
For example, obligations such as patent term adjustment, data exclusivity, evergreening, patent linking and removal of pre-grant objections are of future significance, since they delay the use of flexibilities and, consequently, the early entry of generic products into the commercial chain. Compulsory licenses and parallel imports, on the other hand, have a more direct effect, for example, if the patentee refuses to grant a voluntary license, a party requiring access to the product covered by the patented invention may not use a compulsory license if the reasons for its intention to use a compulsory license are not recognized in its FTA.
Similarly, a non-HTTA free trade area country seeking to use a compulsory export license regime will not be permitted to do so if the FTA to which the exporting country is a party contains a provision prohibiting the granting of compulsory licenses. Importing from abroad using parallel imports is also not possible if the country of destination has ratified a free trade agreement, provides for a national exhaustion regime or excludes parallel imports by contract.
Generally speaking, international agreements are only binding on the contracting parties that sign and ratify them. In this case, why should WTO members who are not parties to the free trade agreement worry about the potential impact of FTA's additional TRIPS obligations on TRIPS flexibility? This is because the Agreement on Trade-Related Aspects of Intellectual Property Rights incorporates the most-favored-nation principle similar to the General Agreement on Tariffs and Trade .
According to Article 4 of the Agreement on Trade-Related Aspects of Intellectual Property Rights: "In the protection of intellectual property rights, any benefits, preferences, privileges or immunities granted by a Member to nationals of any other country shall be immediately and unconditionally granted to the nationals of all other Members." According to this article, the higher intellectual property regime contained in the intellectual property chapter of the free trade agreement, which is also the "advantage" of the additional obligations of TRIPS, must be extended to all WTO members, regardless of whether they are signatories to these FTAs.
This interpretation has led some scholars to describe TRIPS MFN as a tool to “multilateralize” bilateral intellectual property obligations undertaken elsewhere. An important question regarding this interpretation is whether the FTA TRIPS additional obligations actually constitute a “benefit” or “benefits” to low- and middle-income countries.
The importance of TRIPS MFN as a real tool for modifying international IP norms is even more apparent when considered in conjunction with GATT MFN, which aims to promote trade inclusivity and exclude discrimination in terms of tariffs and customs duties by WTO members.
According to Article 1 of the General Agreement on Tariffs and Trade, WTO members must provide all members with "any advantages, preferences, privileges or exemptions" for like products originating from or flowing to a member state. However, the GATT allows discrimination in trade concessions contained in bilateral agreements between WTO members that are part of a customs union or free trade agreement, subject to certain conditions being met.
Subscribers, on the other hand, are able to retain the preferential trade conditions contained in their free trade agreements, excluding other WTO members, while relying on the GATT Article 24 exception to the non-discrimination rule, which is GATT most-favored-nation status. As a result of this outcome, many WTO members have joined FTAs, and more members (especially low- and middle-income countries) are expected to join in the near future.
The reason for this is not far-fetched: low- and middle-income countries already have the ability to take advantage of flexibilities that are constrained by TRIPS additional obligations contained in FTAs to which they are not parties, and joining an FTA will at least ensure that they also benefit from the trade concessions component of the FTA.
The author believes that assuming that Brazil intends to use a compulsory export license to import a drug patented in both Australia and Brazil from a pharmaceutical company in Australia, this means that both countries must issue CLs separately for the patented drug. This is where the TRIPS most-favored-nation principle applies to alter Brazil's right to use the system, since the grounds on which Australia can issue compulsory licenses are limited to those recognized in its free trade agreements with other countries, and in this case it does not matter that Brazil is not a party to those free trade agreements.
Legitimization of external influence in national intellectual property rule-making
Long before the erosion of national flexibilities introduced by TRIPS and FTA, national intellectual property rule-making was only indirectly influenced by developed countries, using different strategies. For example, as of 1974, the United States enacted the Trade Act, creating the Generalized System of Preferences - a preferential tariff system that provides preferential and duty-free access to the U.S. market for eligible products from eligible low- and middle-income countries.
However, the extent to which potential beneficiaries protect U.S. intellectual property is a prerequisite to benefiting under the Act. In addition, Section 301 of the Trade Act gives the Office of the U.S. Trade Representative the power to impose extraterritorial penalties and suspend trade benefits or sanctions against any country that benefits from the Generalized System of Preferences for conduct that is “unreasonable and burdens or restricts U.S. commerce.”
This power was used to create the "Special 301" program, which the United States has since used to place countries unfriendly to its intellectual property regime on a "priority watch list" or "watch list." Although the United States could use this program to influence low- and middle-income countries’ pre-TRIPS IP rulemaking, it was widely criticized as a drag on the sovereign power of weaker countries to set their own IP rules.
In retrospect, this criticism is fair, especially since TRIPS lends legitimacy to this practice by establishing a minimum substantive standards intellectual property regime that amounts to "adequate and effective protection of intellectual property rights" as measured by U.S. standards.This means that when developed countries like the United States link trade concessions to intellectual property protection , they can easily justify this by referring to the minimum obligations of TRIPS. TRIPS therefore provides a basis for measuring whether the national intellectual property laws of low- and middle-income countries provide "adequate and effective protection."
This legalization essentially encourages the US and EU to expand their post-TRIPS linkage agenda. For example, the United States passed the Trade and Development Act of 2000 and enacted the African Growth Opportunities Act, which allows qualified products from sub-Saharan African countries to enter the market, provided they meet the eligibility requirements - again protecting U.S. intellectual property rights.
After TRIPS, the EU also promulgated a regulation to establish a general tariff preference scheme for low- and middle-income countries. One of the conditions that may lead to the temporary cancellation of benefits is "serious deficiencies in customs control of the export or transit of drugs." In other words, benefits under the program may be lost if a beneficiary country's national customs control enforcement system is judged to be inadequate. Again, this cannot be said to be illegal, as the EU will only "encourage" affected countries to fulfill their TRIPS enforcement obligations.
Developed countries have used economic and political pressure to weaken the determination of some low- and middle-income countries to take advantage of flexibilities. To complement the above, the current debate on the adoption of TRIPS exemptions is the most recent example. India and South Africa - among more than 100 mostly low- and middle-income countries - have proposed exemptions in 2020 to address unequal access to COVID-19 vaccines and treatments between developed and low- and middle-income countries.
Until recently, many developed countries continued to oppose exemptions, and the EU bloc only recently agreed to support a watered-down version of exemptions for . What were their main arguments? This would undermine the fundamentals of TRIPS by inhibiting other much-needed future innovation. The IP chapter of FTAs further narrows the already meager body of flexibilities, imposing additional restrictions on the use of certain flexibilities, particularly in developed countries that are signatories to these FTAs.
When joining a free trade agreement with TRIPS additional obligations, signatories must incorporate the higher intellectual property regime into national law and, in accordance with TRIPS Article 4, extend it to other WTO members (non-signatories to the free trade agreement) seeking intellectual property protection in their countries. On the other hand, where additional restrictions on the use of flexibilities apply, the right of WTO members (non-signatories to the FTA) to use flexibilities in those FTA countries is conditional on the terms of the FTA.
This situation is well represented by the compulsory export licensing regime in Article 31bis of the TRIPS Agreement, which historically emerged in response to the shortcomings of Article 31 of the TRIPS Agreement, which were initially addressed through temporary waivers and later permanently through amendments to the TRIPS Agreement.
For example, as mentioned earlier, some free trade agreements limit the grounds on which compulsory licenses can be used, which means that if a low- and middle-income country applies for a compulsory license abroad on grounds that are not recognized in the exporting country's free trade agreement , that country, although it is a qualified exporting country, will be excluded from the issuance of a license.
Likewise, given that many free trade agreements also establish data exclusivity regimes, successful compulsory licenses granted to foreign low- and middle-income countries will be of no use if the authorizing country is a party to the free trade agreement that imposes a data exclusivity regime. In this case, although compulsory license has been granted, the test data required to demonstrate the bioequivalence of to , although available, will not be available.
The proliferation of free trade agreements may also limit the use of parallel imports by low- and middle-income countries because, while the Agreement on Trade-Related Aspects of Intellectual Property Rights allows for the use of this flexibility, most free trade agreements require a system of national exhaustion or exclude contractual parallel imports.
As we all know, the country exhaustion system precludes the use of parallel imports. For any low- and middle-income country that relies heavily on imports, this means that as more and more WTO members join bilateral, plurilateral and even multilateral free trade agreements, the number of countries that can use this flexibility continues to decrease.
An oft-repeated argument by developed countries in promoting higher intellectual property systems in low- and middle-income countries is that doing so will promote economic development through increased technology transfer and foreign direct investment flows. However, while this correlation, higher intellectual property systems and economic development may hold for developed and a few middle-income countries, there is substantial academic evidence that this is not the case in most low- and middle-income countries.
Correa attributes this to the lack of other complementary factors in low- and middle-income countries, such as local skills and a favorable industrial environment. Despite the lack of evidence, many low- and middle-income countries, especially least developed countries (LDC), have relied on this rationale to enact TRIPS additional obligations domestically, thereby depriving them of the right to use flexibilities.
By way of example: Least Developed CountriesTanzaniaoffers pharmaceutical patents, and taking advantage of transitional flexibilities, it could have been exempted from this protection until 2033.Kenyaand Tanzania have adopted TRIPS additional enforcement provisions in their anti-counterfeiting laws,The East African Community (EAC) has proposed TRIPS additional enforcement provisions through its regional policyand draft anti-counterfeiting legislation.
This self-abandonment of flexibility means that in times of crisis such as the COVID-19 pandemic, their countries' existing patent laws may prevent them from replicating the technology underlying COVID-19 vaccines and treatments to accelerate local production. Likewise, border authorities in Kenya and Tanzania, acting under their national anti-counterfeiting laws, can seize and detain imported COVID-19 universal vaccine treatments suspected of being counterfeit due to their generic origin.
The current status of flexibility bodes ill for the Indian generics market, as many low- and middle-income countries relied heavily on India's low-cost generic products to meet domestic demand prior to TRIPS. This was possible due to India's old patent laws, which provided process patents for pharmaceuticals only and limited the patent term to 7 years from the date of application or 5 years from the date of grant.
However, TRIPS ended this situation by requiring patent protection in "all fields of technology" and setting a minimum patent term of 20 years. Nonetheless, India remains a relevant market for affordable access due to its creative use of flexibility, and now even more so amid the COVID-19 Global Access (COVAX) pandemic. The initiative developed to deliver vaccines to low- and middle-income countries relies heavily on vaccines produced by the Serum Institute of India (under contract with AstraZeneca) to meet its mandate. The emergence of
TRIPS now provides cover for multiple attacks on the Indian generics industry, including from pharmaceuticals, the US government and a growing number of free trade agreements. On the first front, outlines the attempts of multinational corporations to use the judicial process to undermine the Indian generics industry, citing as an example how these multinational corporations resort to judicial harassment whenever the Indian Patent Office rejects their patent applications on the grounds that they do not meet India's patentability standards.
Gopakumar in another paper mentioned common practices by multinational companies, including lobbying powers to block the use of flexibilities contained in the Indian Patent Act , which cover provisions against evergreening, pre-grant opposition proceedings and experimental use exceptions respectively. The second line of attacks comes from the United States and is detailed in an article by Doctors Without Borders.
For example, when India granted Natco a compulsory license to produce Bayer's anti-cancer drug, and when the Indian Supreme Court ruled Novartis applied for a patent for "Gleevec" in India, the US government condemned both decisions, calling them "violations" of TRIPS. In fact, the United States has become accustomed to including India on its "priority watch list" every year.
The third and final threat is the proliferation of free trade agreements. While India is currently not a party to free trade agreements with TRIPS additional obligations and has recently withdrawn from the Regional Comprehensive Economic Partnership India contains many TRIPS additional obligations, India is currently negotiating free trade agreements with the European Union, Australia and the United States with intellectual property chapters.
With obligations such as data exclusivity, limited grounds for use of compulsory licenses, patent term extension, patent linkage and inability to use pre-grant opposition procedures all on the table, if India successfully ratifies TRIPS plus FTA, it will have a rebound effect on its generics industry, affecting the availability of affordable generics products in several low- and middle-income countries.
The inclusion of flexibilities in supranational agreements is a deliberate move to reassure sovereign states that, despite their general obligations under the agreement, they will always be able to act in national interests. How these cumulative attacks on state flexibilities affect access to medicines in low- and middle-income countries will have four main effects:
First: legitimization of foreign influence in IP rulemaking;
Second: additional restrictions on the use of certain flexibilities;
Third: LMICs accepting a higher-than-necessary IP regime;
Fourth: a growing threat to the Indian generics market.
As evidence from the ongoing COVID-19 pandemic demonstrates, the threat to the Indian pharmaceutical market is now more real than ever as players in the industry increasingly embrace stronger patent protection.
To give one example: India worked with South Africa in 2020 to propose a temporary TRIPS exemption that would allow WTO members to produce their own vaccines without intellectual property barriers. The proposed exemption would also promote open access to important technology platforms as well as trade secrets and testing data.
However, some writers have criticized India, rightly so, for its hypocrisy in playing the role of a "champion" for exemptions at the WTO while refusing to give up patents or grant compulsory licenses or provide clinical trial data for Covaxin, a COVID-19 vaccine funded by the Indian government and jointly developed by Bharat Biotech, Indian Council of Medical Research and the National Institute of Virology.
Of course, this increased proclivity for patents in India predates the pandemic, for example, there were earlier reports of pharmaceutical multinationals targeting some Indian generic companies in one of two ways: granting them voluntary licenses to enforce the multinationals’ patent rights, or engaging in mergers or acquisitions with generic companies to reduce generic competition.
Given India's strategic positioning as the "pharmacy of the developing world," its government must seek policy and legislative avenues to continue balancing the need for IP protection with access. Going forward, low- and middle-income countries will need to muster the much-needed political will to best utilize TRIPS flexibilities, regardless of the threat of economic or political sanctions that may arise from their developed country counterparts.
Yes, TRIPS is not perfect, however, given the difficulties involved in revising TRIPS, for example, the situation with TRIPS Article 31 and the current attempts to pass TRIPS exemptions, strategic use of existing flexibilities may be key to solving access issues for low- and middle-income countries. Low- and middle-income countries such as India, Brazil and Thailand have demonstrated the efficacy of this option, taking advantage of flexibilities in the past despite threats of political or economic sanctions from developed country partners.
Source: Mario Simoli et al. "Intellectual Property: Legal and Economic Challenges of Development"
Paul Champ and Amir Attaran, "Patents and local jobs under the WTOTRIPS Agreement: An analysis of the U.S.-Brazilian patent dispute"
Gervais, "The Agreement on Trade-Related Aspects of Intellectual Property Rights"
Martin J Adelman, "Prospects and Limitations of Patent Provisions in of the TRIPS Agreement: The Case of India"
Carlos María Correa, "Protecting Data Submitted for Registration of Pharmaceutical Products: Standards for the Implementation of the TRIPS Agreement"
Article 33 of the Agreement on Trade-Related Aspects of Intellectual Property Rights
Patrick Osewe, Yvonne Nkrumah and Emmanuel Sakki, Improving Access to HIV/AIDS Medicines in Africa: TRIPS Flexibilities
Carlos M. Correa, "Intellectual Property, the WTO and Developing Countries: The TRIPS Agreement and Policy Options"
