[thaifta] Re: [Ip-health] USTR Nat. Trade Barriers Report on Thai compulsory licenses

[B.Baker@neu.edu]

Miles and Mickey have raised sensible questions about whether it is
politically wise to raise royalty rates in the hopes of encountering less
resistance from patent holders and their governmental proxies in the USTR
and European Union.  It may well be that there is no real appeasing of
opponents to lawful utilization of TRIPS-compliant compulsory licenses -
that they will always use disinformation and misinformation to challenge
CLs and whatever royalties are paid.

Evidence of such continuing opposition can be found in the still strident
attacks against Thailand's recent compulsory licenses on cancer drugs, even
though Thailand raised the royalty rate from .5% to 5%.

All that Article 31 of the TRIPS Agreement requires is that "the right
holder shall be paid adequate remuneration in the circumstances of each
case, taking into account the economic value of the authorization." This
clause gives wide latitude to governments to assess the circumstances and
the economic value of the license.  As Jamie Love's detailed study of
remuneration rates showed, countries can make such choice by weighing
factors or pursuant to percentage royalty guidelines, so as long as
individual determinations are made in each case.

However, contrary to Miles' and Mikey's critique, I think it is useful for
ATM activists to speculate about royalty rates that "might" reduce
political opposition and about royalty schemes that might actually increase
research and development into neglected diseases and/or spur increased R&D
activity in developing countries.  There is no presumptively "polically
correct" royalty rate, and Thailand engaged in a politically astute,
self-determined decision to raise its royalty rate on the new cancer CLs.
Did they do so as Guantanamo prisoners or as colonial subjects - I think
the suggestion is a little insulting.

Professor Brook K. Baker, Health GAP
Northeastern U. School of Law
Program on Human Rights and the Global Economy
400 Huntington Ave.
Boston, MA 02115
617-373-3217 (office)
617-259-0760 (cell)



-----thaifta-owner@lists.riseup.net wrote: -----


To: "Miles Teg" <b.miles.teg@gmail.com>
From: michael.davis@law.csuohio.edu
Sent by: thaifta-owner@lists.riseup.net
Date: 04/02/2008 10:45AM
cc: "Untitled" <ip-health@lists.essential.org>, thaifta@lists.riseup.net
Subject: [thaifta] Re: [Ip-health] USTR Nat. Trade Barriers Report on Thai
compulsory licenses

There is no reason for them to do that. It is a classic trap, the kind of
advice you would give to a prisoner at Guantanamo ("Behave and we won't
torture you.") It also smacks too much of the unstated "Trust me," which
is never advice you should take from an adversary.

Mickey Davis

> Why should developing countries reduce their legal flexibility to
> determine royalty rates by such "self regulation"? Is it a realistic
> that opposition to CLs in developing countries would reduce?
>
> bmt
>
> mko wrote:
>> I agree that middle-income countries should explore higher royalty rates
>> on
>> generically-priced drugs sold under a CL.  Doing so wouldn't harm access
>> much; indeed if the higher royalty reduced opposition from USTR & IFPMA,
>> then access could be dramatically improved.  I've tried to model these
>> CL
>> royalties or patent buy-outs from the opportunity cost in R&D from the
>> foregone revenues:
>>
>> http://papers.ssrn.com/sol3/papers.cfm?abstract_id=873402
>>
>> Kevin Outterson
>> Boston University
>>
>>
>> On 4/1/08 9:54 AM, "B.Baker@neu.edu" <B.Baker@neu.edu> wrote:
>>
>>
>>> I think there are four interest facets of the U.S. statement in the
>>> Thai
>>> NTB report (reprinted below).
>>>
>>
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> Ip-health mailing list
> Ip-health@lists.essential.org
> http://lists.essential.org/mailman/listinfo/ip-health
>


Mickey Davis
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