Info Service on WTO and Trade Issues (Feb18/18)
21 February 2018
Third World Network
Developing nations, LDCs demand TRIPS flexibilities implementation
Published in SUNS #8625 dated 20 February 2018
Geneva, 19 Feb (D. Ravi Kanth) - Several developing countries and
the least-developed countries (LDCs) have upped the ante on their
core demands for implementing the flexibilities and commitments in
the World Trade Organization's Trade-Related Aspects of Intellectual
Property Rights (TRIPS ) Agreement.
They stress that this is to ensure the supply of generic medicines
at affordable prices and for technology-transfer by the industrialized
countries to poorest nations, according to proposals circulated on
As the United States and the European Union along with their allies
intensify their campaign for bringing "innovation" into
the TRIPS Agreement through the dubious route of negotiating disciplines
for micro, small, and medium enterprises (MSMEs) at the WTO, the developing
and poorest countries opposed attempts t o hijack the TRIPS debate
from unimplemented commitments to new issues.
Ahead of the WTO's TRIPS Council meeting on 27 February, the three
groups circulated separate proposals on their priority issues in the
controversial TRIPS Agreement.
The developing countries and the LDCs want a thorough review of the
TRIPS flexibilities, including the unimplemented commitment by the
industrialized countries for technology-transfer under Article 66.2
of the TRIPS Agreement .
In their proposal circulated on 16 February, a group of developing
countries - Bolivia, Brazil, Chile, and South Africa - have called
for continuing the discussion on "the WTO members making full
use of the flexibilities" as set out in the TRIPS Agreement for
promoting access to health technologies, as confirmed by the Doha
Declaration, especially as per the paragraph six mechanism as agreed
The four countries underscored the need to expand the debate on flexibilities
to issues concerning "the complex interplay between intellectual
property and public interest", particularly on how members are
implementing "the regulatory review exception ("Bolar exception")
under their national or regional framework."
The Bolar exception, which is derived from case law in the United
States, was upheld by the WTO dispute settlement panel in the Canada-Pharmaceutical
The panel maintained that Canada was justified to adopt the regulatory
exception under Article 30 of the TRIPS Agreement that deals with
exceptions to right s conferred as per the TRIPS provisions.
"Compliance with regulatory requirements often entails experimental
trials and other related preparatory steps by companies so they may
acquire data necessary for regulatory approval," the proponents
According to the proposal from the four developing countries, the
regulator y exception must enable "generic medicine producers
to make all necessary preparations to enter the market without delay
as soon as the patent expires."
In the absence of such an exception, the proponents argued, "generic
manufacturers would be blocked from undertaking the trails required
for regulatory approvals, taking months, perhaps years, to obtain
Because of the absence of the regulatory exception, the patent owners
have invariably resorted to extending the protection beyond the patent
term as determined by national law.
"Not only does this hurt competition, but it also runs counter
to the delicate balance of interest reflected in Article 7 of the
TRIPS Agreement between the interests of the inventors and those of
the public," the four proponents argued.
Given the enveloping global disease burden and growing need for providing
life-saving medicines at affordable prices, the developing countries
underscored the need for adopting an "integrated approach that
ensures the continuous production of new, innovative medicines without
endangering access to off-patent medicines."
Against this backdrop, the Bolar exception could act as "a valuable
tool fo r stimulating competition in the market and ensuring the protection
of public health."
Last year, the proponents from developing countries held a discussion
on th e flexibilities in the WTO's TRIPS agreement, particularly the
compulsory rights for promoting access to health technologies when
necessary under the paragraph six mechanism of the Doha Declaration.
The developing country proponents called for sharing experiences about
the general features of the Bolar exception. They posed the following
questions to be addressed at the TRIPS Council meeting:
* What is the general characteristic of the "Bolar exception"
or equivalent regulatory review exception in WTO member legislation?
* Which measures undertaken by legitimate parties are exempted from
the enforcement of patent protection under the exception?
* What were the challenges faced by WTO Members in implementing such
In their proposal on the failure to implement Article 66.2 by the
industrialized countries concerning the technology-transfer, the LDC
group expressed sharp concern.
The LDC group demanded "the TRIPS Council to enable the effective
implementation of TRIPS Article 66.2."
Under Art 66.2 of the TRIPS agreement, the industrialized countries
are required to provide incentives to enterprises and institutions
in their territories for the purpose of promoting and encouraging
The LDC group wants the TRIPS Council to deliberate on specific incentives
offered by industrialized countries to their enterprises for promoting
technology-transfer to the poorest countries.
"It called on the TRIPS Council to deliberate on the meaning
of "incentives to enterprises and institutions", found in
Article 66.2 and agree on possible ways to provide incentives by developed
country members to their enterprises and institutions in order to
meaningfully implement the letter and spirit of that provision."
In sharp contrast to the unimplemented commitments in the TRIPS Agreement,
the industrialized countries led by the US and the EU along with their
developing-country allies called for pressing ahead with their campaign
for "innovation" and intellectual property rights for the
micro, small, and medium enterprises (MSMEs) at the World Trade Organization.
The US with other proponents - the European Union, Japan, Canada,
Australia , Singapore, Switzerland, and Chinese Taipei among others
- maintained that "businesses using IP rights perform better
on average and this is often true in the case of MSMEs."
In a two-page proposal circulated on 16 February, the proponents argued
that "businesses owning IP [intellectual property] rights often
have a higher revenue per employee than businesses that do not."
IP rights, according to the proponents, "is important for smart
and sustainable growth".
Consequently, MSME-driven inclusive innovation has a significant social
as well as economic impact on both developed and developing economies
given the hug e presence of MSMEs.
The proponents pointed out that several key challenges concerning
the integration of "MSMEs into global trade and enhanced economic
outcomes" need to be addressed.
WTO members must consider initiatives for strengthening IP strategies
for MSMEs, the US and other sponsors of the proposal argued.
Unless the developing and poorest countries stand their ground at
the TRIPS Council meeting, they might witness an ugly prospect of
the debate being hijacked to framing commitments on an intangible
issue like innovation rather than addressing/clarifying TRIPS flexibilities,
including the Bolar exception and the implementation of Article 66.2
of the TRIPS Agreement.