[Ip-health] KOrea, Gleevec and Non-Commercial use in TRIPS

[ds20@uow.edu.au]

Dear James
While discussing "Slave Nations and the Unifinished US Tasks
at TRIPS" I had mentioned about my article "Korea, the
Pharmaceutical Industry and Non-commercial use of Compulsory
Licenses in TRIPS" analysiing US's attempt to restrict the
use of non-commerical use in Article 31 of the TRIPS
Agreement. The analysis is comparatively small i.e. only
12000 words as compared to 30,000 words in case of "Agentina-
US Mutually Agreed Solution and Failure of Dispute Settlemnt
System of the WTO." I am enclosing the abstract of this
article which essentially deals with the attemtp of the NGOs
and Hee Seob Nam to get the compulsory licensing for Gleevec,
a drug patented by NOvartis and sold in Korea at
exceptionally high price. In opposition, Jacques Gorlin
claming to be an adviser to USTR had filed an affidavit. This
article analyses his affidavit and concludes that the so
called affidavit from a so called expert had nothing to do
with law but was essentially to communicate displeasure of
USTR to the Korean Government against issue of compulsory
license for Gleevec. Teh USTR succeeded completely in its
effort when the KOrean Patent Office rejected teh application
on the basis that there is suffi cient availability of the
medicine without any basis for doing so. Thedirect
involvement of the US government of the US Governemnt in
denying compulsory licensing for Gleevec became apparent when
in Singapore-US Free Trade Agreement, a specific clause was
inluded that public non-commerical use woudl be confined to
government purposes only about which Sherrod Brown also
spoke. Let me know if anybody needs any clarification. The
full article is available on the address given below.
daya Shanker


DAYA SHANKER
University of Wollongong - General

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Abstract:
In 2002, a number of associations requested the Korean Patent
Office to issue a compulsory license for the manufacture of
Gleevec, a drug under Novartis' patent under the Korean
patent provision which permits issue of compulsory licensing
for public non-commercial use. This provision in the Korean
patent act was introduced in 1995 ostensibly to comply with
Article 31 of the TRIPS Agreement which permits issue of
compulsory licenses without prior consultations with the
patent holder. In a change of strategy, the objection was not
filed by either Novartis or by PhRMA, the association and
lobby group of the pharmaceutical industries but by certain
individuals claiming to have legal expertise and sympathizers
of the pharmaceutical industry, in particular one Jacques
Gorlin whose qualifications to file the objection included
Vice Chairmanship of the Industrial Functional Advisory
Committee on Intellectual Property Rights for Trade Policy
Matters, a private sector group that ostensibly advises the
U.S. Secretary of Commerce and the US Trade Representative on
Trade Policy. Apparently the pharmaceutical industries
resorted to this change of strategy when it didn't want to
come in the open to attract criticism in repetition of what
happened when the group of pharmaceutical industries moved
South African court to block South Africa's import of drugs
to deal with its AIDS pandemic. The objection raised by
Gorlin is based on the concept of legitimate expectation not
permitted by the Appellate Body in India-Patent protection
and use of the EC proposal and reproduced by Switzerland
during the TRIPS negotiation in 1990. The discussion of
negotiating history in treaty interpretations suggest that
the WTO and its accompanying agreements never had the luxury
of negotiating history for its interpretation as the
politically sensitive issues and in particular the TRIPS
Agreement was decided in smaller groups in oral discussion.
Gorlin also argued that public noncommercial use in Article
31.b of the TRIPS Agreement is limited only to government use
and that too only to legitimate government functions such as
defense and space program and cannot be extended to medicines
for health purposes. The objections raised by Gorlin not only
showed an ignorance of international law particularly the
TRIPS Agreement but sometimes his argument borders on
dishonesty. Apart from the fact that the concept of
legitimate expectations is not applicable to the violation
disputes in the TRIPS Agreement, the limitation of non-
commercial use for the governmental purposes was removed from
the Brussels Draft during the TRIPS negotiations. The use of
non-commercial purposes is not confined to the legitimate
government functions as argued by Gorlin in his affidavit is
apparent from the fact that even in the USA, Section 1498
dealing with eminent domain has been used widely including by
General Services Administration to procure medicines. Carter
Wallace case is a clear example. In the UK, section 56.2 of
the UK Patent Act permits "the production or supply of
specified drugs and medicines" as a function of the
government under Section 55(1) of its Patent Act, 1977. If
Article 27.2 of the TRIPS Agreement permits virtual
expropriation patentable invention for health reasons, the
application of non-commercial use in Article 31.b cannot be
limited to defense or space program. This analysis suggests
that public non-commercial use is neither confined to the
government use and in particular not to the so called
legitimate government functions such as defense and space
program as insisted by Gorlin nor it excludes the elements of
profitability in totality. It is true that the use of the
eminent domain power of the government would qualify for
public non-commercial use as practiced in the USA but the
private parties are equally qualified to use these provisions
if it is not done for trade or commercial purposes.
Keywords: Korea, non-commercial use, compulsory licenses,
TRIPS Agreement, Gleevec, pharmaceutical industry



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Contact Information for DAYA SHANKER (Contact Author)

DS20@UOW.EDU.AU (Email address for DAYA SHANKER )
University of Wollongong - General
Northfields Avenue
Dept. of Economics
Wollongong 2522 ,New South Wales
Australia
61242298741 (Phone)




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Suggested Citation
Shanker, Daya, "Korea, the Pharmaceutical Industry and Non-
commercial use of Compulsory Licenses in TRIPS" .
http://ssrn.com/abstract=438880


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