[Pharm-policy] US Talking Points on Thai ddi CL

[James Love]

The USTR just provided us with a copy of the following talking
points that were delivered by the US government (USG) to the
Thailand government (RGT) on Wednesday, January 19, 2000.  The
document is one page on plain paper, and has no identifying marks
other than what is presented below, so it is of marginal value
for showing to other governments -- which is probably intentional
by the US government.   I was told that the procedure was that
the US government official would discuss this with a Thai
official, and perhaps, but not necessarily, leave the document
with the Thai official.  I assume that the document was indeed left 
with the Thai official.

The document doesn't say "don't issue a compulsory license," but
it does say, the US government considers compulsory licenses
"undesirable because they may undermine intellectual property
rights."  That's about it for the positive side.  

On the negative side, the document gives an incomplete and
misleading account of the TRIPS provisions, which will likely be
read as an effort to discourage the issuance of the license.  

For example, in the fifth un-numbered talking point, the
statement says the TRIPS says that a compulsory license is only
permitted "if 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," a phrase that
comes directly from Article 31b of the TRIPS.  Omitted from the
US government's document is the very next sentence in 31b that
reads:

     "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."

This a very relevant paragraph because (1) the Thai case involves
a public health emergency, and (2) the license is being sought by
a government owned pharmaceutical company, for non-commercial
public use.  

To put this into context, consider that in the USA, for example,
the government isn't even required to negotiate for patent
licenses -- it just takes the patent, subject to compensation. 
Also, compensation for public use isn't based upon commercial
terms (lost profits) in the US, but rather "what the [patent]
owner has lost"  (Leesona 599 F.2nd at 969).   

In general, I would have to say that the US government has failed
to send a "clear signal" that the Thai government can issue a
compulsory license for ddI.  Here is the document itself, which
as indicated above, is undated, without letterhead or any marks
identifying authorship:

   Jamie Love <love@cptech.org>

<---begin Jan 18 USG talking points on Thai license for ddi----->


-    We recognize your desire to address all health issues as
     effectively as possible.  This is a goal we fully endorse
     and support.  We believe that your goals can be achieved
     while promoting adequate and effective intellectual property
     protection, including patent protection for pharmaceutical
     products.

-    We understand that negotiations continue between Thai health
     officials and a U.S. pharmaceutical manufacturer (Bristol
     Myer Squibb) over the cost of the anti-HIV drug Videx (often
     identified by the active ingredient "ddI").

-    We also understand the Thai Government is considering
     issuance of a compulsory license to permit local manufacture
     of ddI.

-    We are hopeful that in choosing a course of action in this
     matter your government will explore all opportunities to
     obtain the lowest price possible for ddI, including through
     negotiations with BMS.

-    The USG has generally viewed compulsory licenses as being
     undesirable because they may undermine intellectual property
     rights.  However, if the RTG determines a compulsory license
     is necessary to obtain the lowest price for ddI, the TRIPS
     Agreement establishes conditions that must be followed.  For
     example, such use may only be permitted if 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, any license granted must be
     considered on a case-by-case basis and the government must
     limit the authority to use that patented invention to acts
     needed to address the given situation, and predominately to
     supply the domestic market.

-    Furthermore, the license must be terminated when the
     circumstances that give rise to its necessity no longer
     exist.  The patent owner must be paid adequate compensation
     under the license that takes into account the economic value
     of the license.  The license cannot be transferred to other
     parties, and must not preclude the ability of the patent
     owner to make, use, sell or import the patent product.

-    Finally, the U.S. Department of Health and Human Services
     would be interested in learning from the RTG its expected
     outcomes from the use of ddI in the treatment of HIV.

-------------------------------
James Love 
Center for Study of Responsive Law | Consumer Project on Technology 
P.O. Box 19367, Washington, DC 20036 | http://www.cptech.org
Voice 202/387-8030 | Fax 202/234-5176 | love@cptech.org