[Ip-health] Brazil's proposal at WIPO on patent limitations and exceptions (SCP/14/7)

[Thiru Balasubramaniam]

http://keionline.org/node/769

Brazil's proposal at WIPO on patent limitations and exceptions (SCP/
14/7)
By thiru
Created 25 Jan 2010 - 7:56am

On January 15, 2010 the Permanent Mission of Brazil to the World Trade
Organization and other economic organizations in Geneva submitted a
proposal to the World Intellectual Property Organization (WIPO). The
Brazilian note verbale to WIPO notes that the proposal:

     "aims at contributing to the discussion of exceptions and
limitations to patent rights. . . While not purporting to cover all
interfaces of the matter with development concerns, it emphasizes the
importance of promoting a wide and sustained debate on the issue in
the SCP".

The 14th session of the the WIPO Standing Committee on the Law of
Patents (SCP) which is meeting in Geneva from January 25-January 29,
2010 will consider "Exclusions from Patentable Subject Matter and
Exceptions and Limitations to the Rights". The Brazilian submission
(SCP/14/7, January 20, 2010) would beef up the WIPO patent committee's
work on limitations and exceptions as it proposes a "work program be
established in the SCP to carry out a wide and sustained debate on
this issue in three phases".

SCP/14/17
EXCEPTIONS AND LIMITATIONS TO PATENT RIGHTS


submitted by the Delegation of Brazil

INTRODUCTION

1.At its twelfth session, in June 2008, the Standing Committee on the
Law of Patents (SCP) =93asked the WIPO Secretariat to establish, for the
next session of the SCP, preliminary studies on four issues=94. One of
the studies was to address =93exceptions from patentable subject matter
and limitations to the rights, inter alia research exemption and
compulsory licenses=94.1

2.This submission will then focus on the discussion of exceptions and
limitations to patent rights. While not purporting to cover all
interfaces of the matter with developmental concerns, it emphasizes
the importance of promoting a wide and sustained debate on the issue
in the SCP.

3.The issue of exceptions and limitations is of utmost importance in
the future work of the SCP, as it touches upon fundamental development
concerns. A number of recommendations of the Development Agenda
addresses directly or indirectly this issue, be it in connection with
norm setting, public policy, technology transfer, access to knowledge
or impact studies. For instance, recommendations 17 and 22 state that
WIPO should take into account, in their activities, the flexibilities
in international IP agreements2 as well as address in its working
documents for norm?setting activities, as appropriate and as directed
by Member States, issues such as potential flexibilities, exceptions
and limitations for Member States.3

THE ROLE OF EXCEPTIONS AND LIMITATIONS IN PATENT LAW

4.Exceptions and limitations are intrinsic elements of every law. They
serve a number of purposes by conferring the necessary flexibility to
guarantee national security and to shape public policies to meet inter
alia development, competition, and health surveillance goals. To build
roads, prevent crimes, promote elections or avoid pandemics, for
example, governments seek to ensure the compliance with rules that
protect private goods and rights, as well as to make use of exceptions
and limitations.

5.In order to fulfill the purposes above, patents may thus be subject
to a special treatment. The patent system must strive for the
equilibrium of rights among its users, which should, accordingly, not
only comprise IP title holders, but also the society as a whole, so
that the welfare of the society as a whole prevails. They all
constitute legitimate =93clients=94 of the system.

6.We understand that the enforcement of IPRs demands ensuring rights,
and imposing obligations to title holders, third parties and the
society, while guaranteeing that the society as a whole will reap
benefits from such protection. The focus of the current IP system,
however, heavily lies on ensuring rights to the IP title holders.
Their claims are, undoubtedly legitimate, but certainly incomplete
from the perspective of the public policy.

7.Director-General Francis Gurry in his report to the 47th Series of
Assemblies of the Members States of WIPO (September 22 to October 1,
2009), has asked =93What does a Member State get out of being part of
this Organization?=94. The question remains unanswered unless changes
occur. A judicious balance of rights and obligations would be a good
start in that direction, so as to help society as a whole to
understand, accept and thus fully support an improved IP system; and
exceptions and limitations to patent rights are fundamental elements
to reach this equilibrium.

8.The na=EFve assumption that providing IP title holders with stronger
rights will, by itself, foster innovation or attract investments is no
longer acceptable. The open and global economy has rejected this
assumption and severely hit the very essence of the patent system,
whereby a country would confer an artificial and temporary =93monopoly=94
for the inventor in exchange of having the invention revealed
allegedly benefiting the society. No such thing is currently taking
place, with a few countries excepted. What, then, does a Member State
get out of being part of WIPO? If contributing to the welfare of the
society does not constitute a major aspect of what a country could get
out of being part of a member-driven UN Organization such as WIPO,
what could it possibly be?

9.One could of course question what =93society=94 means in the current
patent system. Or what =93title holder=94 means for that matter, as the
actual inventor hardly corresponds today to the owner of the patent,
as it used to be in the recent past. One could, furthermore, argue
that society will reap no benefits if inventions and knowledge
generation are not fully protected, since investments would no longer
be made. However, to anyone with a minimum understanding of the
system, such simplistic conclusions and extreme situations are
unimaginable, and the reason is quite simple: creativity and creative
economy do not rely solely on an increasingly stronger IP systems.

10.It is neither a question of simply criticizing the system. The
current patent system is well anchored to multilateral agreements on
trade and will be supported by WIPO (and WTO) Members as long as the
majority of Members States decides to do so. Therefore, the key issue
is about revising old assumptions and starting to recover the
essentials of the patent system.

11.Let us turn our efforts to understand how we can effectively derive
benefits from the patent system as it stands today. Despite the
complaints, the protection is, as we see it, well defined. However, it
is not clear as to what extent such protection affects third parties
or as to where exactly the boundaries of the protection are.

12.In that context, some questions arise. How are Members making use
of exceptions and limitations provided in their legislation? Have they
really been useful for the purposes of meeting public policy goals or
society needs? Are compulsory licenses and other mechanisms
established in their legislations indeed available for prompt use
whenever deemed necessary, without authorization of the right holder?
Are exceptions or limitations truly being explored? Why and, if not,
why not?

13.Taking the example of the compulsory licensing mechanism, one must
soon notice that it is not that simple to make effective use of them.
The WTO Doha Ministerial Conference, which adopted the =93Declaration on
the TRIPS Agreement and Public Health=94, stressed quite clearly =93that
WTO Members with insufficient or no manufacturing capacities in the
pharmaceutical sector could face difficulties in making effective use
of compulsory licensing under the TRIPS Agreement=94.4 Although
specifically related to address public health issues, the Declaration
certainly reflected and continues to reflect the technology access
difficulties of several other =96 if not all =96 technological fields in
the majority of the countries.

14.A complex system was designed to try to tackle the problem and yet
just one single case of compulsory license has been notified to the
WTO so far, involving Rwanda and Canada5. Rwanda, however, is
certainly not the only country in the world to face critical public
health problems.

15.During the post WTO period, after a long period of negotiations,
the government of Brazil decided in May 2007 to sanction the
compulsory licensing of an antiretroviral drug in order to address
urgent public health problems. Our country then suffered an intense
discredit campaign led by some international actors, as if it was
ignoring the rules agreed by all WTO Members, with which we fully
complied. The defamatory process cast on Brazil an inconvenient image
of a piracy-lenient country. Is this what we should expect from the
supporters of the current system?

16.Our experience also illustrates how difficult it is to effectively
make use of compulsory licenses. Our pharmaceutical industry took
almost two years to develop and produce the licensed patent, because,
unfortunately the patent, as granted in Brazil and in other countries,
was not sufficiently revealed to allow its production as promptly as
desired.

17.We reserve the right to come back to the discussion of this problem
in other documents concerning to what extent the disclosure of patents
is preserving (or not) the essentials of the patent system. The
question we now pose ourselves is: considering the checks and balances
of the patent system, what is the value of a patent if a third party
cannot use it when it falls into the public domain or, exceptionally,
when its compulsory licensing is deemed necessary?

18.For instance, a study requested by the United States Federal Trade
Commission shed light on the risks that poor patent quality and legal
standards and procedures may bear to competition and how they
jeopardize innovation by raising its costs.6 In addition, the
Pharmaceutical Sector Inquiry, conducted by the Pharma Task Force of
the European Commission, has also proven that patents are increasingly
misused to delay or avoid generic competition even after their
expiration dates.7

19.Adopting such strategies may be considered normal in the corporate
world. Companies may be subject to penalties for not abiding by the
national or international rules of fair competition. However, they
absolutely cannot be deemed normal =96 or acceptable =96 within the patent
system, as they ultimately destroy its essentials.

20.We are now facing a moral deadlock. Developed countries seem to be
the only ones capable of reaping any advantage from the system, as
very little guidance is provided in order to satisfy the objectives of
the TRIPS Agreement, whereby =93the protection and enforcement of
intellectual property rights should contribute to the promotion of
technological innovation and to the transfer and dissemination of
technology, to the mutual advantage of producers and users of
technological knowledge and in a manner conducive to social and
economic welfare, and to a balance of rights and obligations=94.8

PROPOSAL

21.The Paris Convention for the Protection of Industrial Property does
not expressly prescribe specific rules on limitations and exceptions
to patent rights, allowing the parties to adopt varied approaches to
the matter. The TRIPS Agreement contains a more detailed provision,
which foresees a three-step test to establish the acceptable limits to
the exceptions on patent exclusive rights. According to TRIPS Article
30, exceptions: (a) must not unreasonably conflict with normal
exploitation of the patent; (b) must not unreasonably prejudice the
legitimate interests of the patent owner; and (c) must take account of
the legitimate interests of third parties. In addition, Article 31
provides for =93Other Use Without the Authorization of the Right Holder=94.

22.On national or regional level, a cursory analysis shows that IP
legislations frequently foresee a number of situations where patent
exclusive rights may be exempted.9 A non-exhaustive list of them
includes: (a) private non-commercial use; (b) use in teaching; (c)
research and experimentation; (d) preparation of individually
prescribed medicines; (e) certain uses of foreign means of
transportation, temporarily in national territory; (f) bona fide prior
use; (g) submission of information for regulatory approval; (h) non-
commercial use of propagating material; and (i) compulsory license.

23.Limitations and exceptions to patent rights are common parts of
laws and legal doctrine. One can thus argue that there may be palpable
convergence among Members as to the importance of those flexibilities
to the patent system. Yet, the existence of different approaches to
limitations and exceptions may cause uncertainties on policy spaces
used by Members regarding why and how they are being used, if so, and
how they are linked to innovation policies or addressing public
health, nutrition, or environmental concerns. Moreover, it seems that
a minority of countries makes effective use of them, especially when
considering developing countries.

24.In light of the systemic importance of having well functioning
provisions of limitations and exceptions in national or regional
legislations and the concerns raised by the limited use of limitations
and exceptions by developing countries, Brazil proposes that a working
program be established in the SCP to carry out a wide and sustained
debate on this issue, in three phases.

25.The first phase shall promote the exchange of detailed information
on all exceptions and limitations provisions in national or regional
legislations, as well as on the experience of implementation of such
provisions, including jurisprudence. The first phase shall also
address why and how countries use =96 or how they understand the
possibility of using =96 the limitations and exceptions provided in
their legislations.

26.The second phase shall investigate what exceptions or limitations
are effective to address development concerns and what are the
conditions for their implementation. It is also important to evaluate
how national capacities affect the use of exceptions and limitations.

27.The third phase shall consider the elaboration of an exceptions and
limitations manual, in a non-exhaustive manner, to serve as a
reference to WIPO Members.

28.The establishment of such working program would be an important
step in the implementation of the Development Agenda.

FOOTNOTES

1. Document SCP/12/4/Rev. par.8(c)
2. Document A/43/13/Rev. Recommendation 17.
3. Idem. Recommendation 22.
4. Paragraph 6 of the WTO Declaration on the TRIPS Agreement and
Public Health.
5. See http://www.wto.org/english/news_e/news07_e/trips_health_notif_oct07_=
e.htm
  [1] as well as
http://www.wto.org/english/tratop_e/trips_e/
public_health_notif_export_e... [2]
6. USFTC =96 To Promote Innovation: the Proper Balance of Competition
and Patent Law and Policy. October
2003. Available in http://www.ftc.gov/os/2003/10/innovationrpt.pdf [3]
7. See http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/inde=
x.html
  [4]
8. Objectives of the WTO TRIPS Agreement (article 7).
9. Document SCP/12/3 =96 Report on the International Patent System.

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Source URL: http://keionline.org/node/769

Links:
[1] http://www.wto.org/english/news_e/news07_e/trips_health_notif_oct07_e.h=
tm
[2] http://www.wto.org/english/tratop_e/trips_e/public_health_notif_export_=
e.htm
[3] http://www.ftc.gov/os/2003/10/innovationrpt.pdf
[4] http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/index.h=
tml


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Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)
thiru@keionline.org


Tel: +41 22 791 6727
Mobile: +41 76 508 0997