[Ip-health] Wall Street Journal Editorial: Bangkok's Drug War Goes Global

[James Packard Love]

The WSJ Asia editorial on the Thai compulsory license had this quote:

> We're not lawyers, but WTO rules say patents can't be
> seized without "efforts to obtain authorization from the right holder
> on reasonable commercial terms and conditions" and only when "such
> efforts have not been successful within a reasonable period of time."

The editors are referring to Article 31.b of the TRIPS, but they
apparently can't read the entire paragraph, which is given below:

--------
Article 31

Other Use Without Authorization of the Right Holder

Where the law of a Member allows for other use  of the subject matter
of a patent without the authorization of the right holder, including
use by the government or third parties authorized by the government,
the following provisions shall be respected:

(b)	such use may only be permitted if, prior to such use, the
proposed user has made efforts to obtain authorization from the right
holder on reasonable commercial terms and conditions and that such
efforts have not been successful within a reasonable period of time.
This requirement may be waived by a Member in the case of a national
emergency or other circumstances of extreme urgency or in cases of
public non-commercial use.  In situations of national emergency or
other circumstances of extreme urgency, the right holder shall,
nevertheless, be notified as soon as reasonably practicable.  In the
case of public non-commercial use, where the government or
contractor, without making a patent search, knows or has demonstrable
grounds to know that a valid patent is or will be used by or for the
government, the right holder shall be informed promptly;
---------

Even an intern at the WSJ should appreciate that the prior
negotiation on reasonable commercial terms provision is waived in
three cases, including public non-commercial use, or emergency, or
remedy to anticompetitive practices.

Even more baffling is the WSJ note that says this:

> Article 31 provides for
> compulsory licensing in case of "national emergency" or for "public
> non-commercial use." Thailand clearly doesn't have an HIV/AIDS
> epidemic
> and heart disease isn't a "national emergency." So Bangkok claims the
> latter case, which is hard to rebut. What does "public non-commercial
> use" mean, anyway?

This paragraph contains many different errors.   It implies that a CL
is limited to these cases, which is false.  These are just two of the
three cases where prior negotiation on reasonable commercial terms
are waived.

The WSJ might have also noted that United States issued compulsory
licenses on patents five times since June of 2006, including cases
involving patents on set-top boxes for satellite television
(DirectTV), automatic transmissions (Toyota), software (Digital
Rights Management patents used by Microsoft), medical devices
(patents used by Johnson and Johnson), and computer memory chips (the
FTC Rambus case).  This would have been impossible if a CL was
limited to the cases identified by the WJS.

In the United States, public commercial use, which does not require
prior negotiation with patent owners, is defined in 28 USC 1498 was
follows:

"For the purposes of this section, the use or manufacture of an
invention described in and covered by a patent of the United States
by a contractor, a subcontractor, or any person, firm, or corporation
for the Government and with the authorization or consent of the
Government, shall be construed as use or manufacture for the United
States."

Finally, how could the WSJ imply that HIV/AIDS is not a epidemic in
Thailand?   They might also read Paragraph 5 of the Doha Declaration,
a document that was approved by the US government.

Jamie

On Mar 7, 2007, at 6:18 AM, Thiru Balasubramaniam wrote:

>
> Bangkok's Drug War Goes Global
>
> March 7, 2007
>
> Thailand's seizures of foreign drug patents earlier this year elicited
> cheers from the usual crowd of anti-patent hooligans. That's not
> serious, per se. But by letting Bangkok's actions go unchallenged --
> and in some official quarters, by supporting them -- a dangerous
> precedent now risks being set.
>
> If you don't believe us, consider the proposals recently floated at
> the
> World Health Organization. In its January executive board meeting,
> Thailand's representative, Dr. Suwit Wibulpolprasert, declared that if
> an influenza pandemic hit, he'd counsel Bangkok to hold Western
> tourists hostage until those countries gave Thailand the necessary
> vaccines. The Kenyan delegation said it would present a proposal to
> its
> health ministry to seize Novartis's patent on Coartem, a malaria drug.
> And Bolivia chipped in that member states have to "put people over
> profit."
>
> This kind of rhetoric is dangerous. Drug companies spend billions of
> dollars to develop, test and deliver drugs, as well as educate
> physicians on how to use them. There's no reason for Big Pharma to
> sink
> money into an expensive enterprise unless it is duly rewarded for it.
> That's why no serious government has contemplated using compulsory
> licensing, even if it's allowed to do so under WTO rules. Thailand and
> NGOs cite, among other countries, Mozambique, Zimbabwe and Cameroon as
> anti-patent precedents -- hardly the world's economic role models.
>
> In seizing the patents for HIV/AIDS and heart medication, Thailand is
> exploiting vague language in the WTO's Agreement on Trade-Related
> Aspects of Intellectual Property Rights, or TRIPs, which sets down
> rules under which countries can seize patents. Article 31 provides for
> compulsory licensing in case of "national emergency" or for "public
> non-commercial use." Thailand clearly doesn't have an HIV/AIDS
> epidemic
> and heart disease isn't a "national emergency." So Bangkok claims the
> latter case, which is hard to rebut. What does "public non-commercial
> use" mean, anyway?
>
> It's also unclear that Thailand's motives are purely altruistic. The
> national health security board that issued the compulsory licenses is
> under the Ministry of Public Health and allows outside NGOs on the
> board. Thailand's military government claims it can't afford to pay
> for
> rising drug costs, but at the same time promises free drugs for the
> poor. Yet it hasn't done a thing to address the taxes levied on drug
> imports, nor the often double-digit markups on drugs as they wend
> their
> way through Thailand's domestic delivery system to patients. It's also
> unclear what role Bangkok envisions for the Government Pharmaceutical
> Organization, Thailand's state-owned, for-profit monopoly. Could
> Thailand be considering seizing drug patents, producing pills at home,
> and turning GPO into a regional pharmaceutical provider?
>
> Dr. Suwit and the Minister for Public Health, Dr. Mongkol na Songkhla,
> have friends in high places. Peter Piot, the head of the United
> Nation's joint program on HIV/AIDS, wrote in a Dec. 26 letter to the
> Public Health Minister that Bangkok's decision to seize Merck's
> HIV/AIDS drug patent was "a good example" of the country's commitment
> to "provide access" to antiretrovirals and lower the cost of the
> drugs.
> Margaret Chan, whom these pages praised in January for criticizing
> Thailand's IP abuse, retracted her statement in a conciliatory letter
> to the Thai government shortly thereafter.
>
> "I deeply regret that my comments... may have caused embarrassment to
> the government of Thailand," she wrote. "They should not be taken as a
> criticism of the decision of the Royal Thai government to issue
> compulsory licenses, which is entirely the prerogative of the
> government, and fully in line with the TRIPs agreement."
>
> Well, maybe. We're not lawyers, but WTO rules say patents can't be
> seized without "efforts to obtain authorization from the right holder
> on reasonable commercial terms and conditions" and only when "such
> efforts have not been successful within a reasonable period of time."
> Thailand did neither. It didn't consult with the drug companies before
> it seized the licenses in January, nor has it done so since then.
>
> The irony is that firms like Merck don't make money on the seized
> patents in Thailand. In a January 2005 letter addressed to the Thai
> government, Merck's local subsidiary explained that the company sells
> Stocrin and Crixivan, two HIV/AIDS drugs, at a no-profit price in
> Thailand, "inclusive of custom duties, import duty, VAT,
> and...delivery
> costs." Sounds like Bangkok's levies, not Merck's profit motive, are
> helping push up drug prices.
>
> The WHO's executive board next meets in May. Unless Director-General
> Chan and other officials start publicly supporting intellectual
> property rights, there's a good chance that Thailand's actions will be
> replicated elsewhere. That's not only bad news for pharmaceutical
> companies, but for everyone else who cares about drug innovation and
> public health.
>
> URL for this article:
> http://online.wsj.com/article/SB117322181443628799.html
>
> ---------------------------------
> Thiru Balasubramaniam
> Geneva Representative
> Knowledge Ecology International (KEI)
> voice +41.22.791.6727
> fax +41.22.723.2988
> mobile +41 76 508 0997
> thiru@keionline.org
>
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>

----------------------------------------------
James Packard Love
Knowledge Ecology International
http://www.keionline.org
james.love@keionline.org
Washington, DC +1.202.332.2670

"If everyone thinks the same: No one thinks." Bill Walton"