Part I: The Legal Framework
2.4 Interpretation of Pharmaceutical Patent Rights under the TRIPS Patent
2.4.3 Substantive Patent Law Provisions under Part II Section 5 TRIPS
2.4.3.6 Article 30: Exceptions to Rights Conferred
The exclusive rights granted by patents under Article 28 TRIPS are not absolute, meaning that under specific circumstances exceptions to those rights are justified.273 In this consideration, Articles 30 and 31 TRIPS, as well as the newly adopted Article 31bis, provide exceptions to the exclusive rights conferred to patent holders.274 In this respect, Article 30 provides general exceptions, while Articles 31 and 31bis provide specific exceptions, meaning that Article 30 is only applicable in cases where the exceptions under Article 31 and 31bis cannot be utilised.275 It must be noted here that the following sections – on Articles 30, 31, and 31bis TRIPS – can merely provide a brief overview of eligible exceptions to the patent rights conferred by TRIPS, due to the constraints of this thesis.276
Article 30 TRIPS provides:
Members may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties.277
In general, WTO member states are free to legislate on the grounds for which exceptions to patent rights shall be available,278 provided that those exceptions fulfil the three conditions provided by Article 30;279 namely that an exception a) must be
273 Sellin J (n 35) 193; UNCTAD-ICTSD (n 35) 430.
274 cf. TRIPS Agreement (n 32) Articles 27(2) and 27(3); Sellin J (n 35) 193.
275 Sellin J (n 35) 193.
276 The limitation to a brief overview, however, is appropriate for the focus of this research, as the author generally suggests that the importance of public health and the accessibility of medicines is of such magnitude that their protections should not merely constitute an exception to the general rule, as further elaborated in chapter 4.2.3.
277 TRIPS Agreement (n 32) Article 30.
278 Exceptions under Article 30 can be adopted for a variety of reasons, such as research purposes without commercial intent, experimentation even with commercial intent in order to invent around or improve a product, individual prescriptions of on-demand drugs directly made in a pharmacy, and early working, also known as the Bolar exception, allowing the production of a patented product for marketing approval purposes for generic drugs to enter the market once the patent expires. See thereto: UNCTAD-ICTSD (n 35) 437.
279 UNCTAD-ICTSD (n 35) 431; Sellin J (n 35) 193.
82 limited, b) must not unreasonably conflict with the normal exploitation of a patent, and c) must not unreasonably prejudice the legitimate interests of a patent owner, taking into account, however, the legitimate interests of third parties.280 In 2000, controversies regarding the legitimacy of exceptions provided under Article 30 TRIPS were addressed by a WTO panel in the Canada – Patent Protection of Pharmaceutical Products case.281 The panel stated that for determining the justification of an exception, not only Article 30 TRIPS, but also the objectives and principles of Articles 7 and 8 have to be taken into consideration.282 Furthermore, the panel identified that the exceptions provided by both Article 30 and Article 31 TRIPS are subject to the non-discrimination principle of Article 27(1), indicating, however, that discrimination and differential treatment are not the same, and that, in accordance with the Doha Declaration, the differential treatment of different fields of technology is not generally prohibited.283 The panel then held that legitimate exceptions are narrowly confined by the three conditions provided by Article 30, which, in the view of the panel, are cumulative, in that all three requirements must be fulfilled independently and separately from each other to justify an exception under Article 30.284
Firstly, an exception must be limited,285 i.e. subject to certain boundaries or confined within definite limits, for example regarding permissible acts, the purpose of use, eligible persons, or their duration.286 In this consideration, the panel in the Canada – Patent Protection of Pharmaceutical Products case held that the Bolar exception287 provided for by Canadian legislation, is not inconsistent with Article 30, as it is
280 TRIPS Agreement (n 32) Article 30.
281 In the Canada – Patent Protection of Pharmaceutical Products case, the EC brought a complaint against Canada, which legislation provided two particularly controversial exceptions to
pharmaceutical patent rights: 1) the Bolar exception, which allows the production of a patented product by a competitor in order to apply for marketing approval of a generic medication; and 2) a stockpiling exception, allowing the production and stockpiling of patented products by competitors up to six months prior the expiry of a patent, so that generic medicines can enter the market sooner after a patent expires. In the view of the EC, the exceptions provided by Canadian law were inconsistent with Articles 27(1) and 28(1) TRIPS. Canada, however, argued that while these measures impact the rights conferred by Articles 27(1) and 28(1), they constituted legitimate exceptions under Article 30 TRIPS. For a further discussion of the Canada – Patent Protection for Pharmaceutical Products case see: Gervais DJ, The TRIPS Agreement (n 129) paras 2.364ff;
Sellin J (n 35) 196-198.
282 cf. UNCTAD-ICTSD (n 35) 440.
283 ibid 442.
284 ibid 432-433.
285 TRIPS Agreement (n 32) Article 30.
286 UNCTAD-ICTSD (n 35) 433; Correa CM, A commentary on the TRIPS Agreement (n 129) 306-307.
287 See notes 278 and 281.
83 sufficiently limited regarding permissible acts and the purpose of use; i.e. the production of a patented product by a competitor, for the sole purpose of obtaining marketing approval.288 The stockpiling exception,289 however, was not considered to be sufficiently limited, in that the exception was for commercial purposes,290 and did not impose any limitation on the quantity of production.291 The panel thus held that this exception unreasonably interfered with the right of a patent owner to prevent competitive commercial activities by others.292
Secondly, an exception shall not unreasonably conflict with the normal exploitation of a patent.293 As the TRIPS Agreement leaves this requirement undefined, the panel in the Canada – Patent Protection of Pharmaceutical Products case defined that the normal exploitation of a patent includes the right ‘to exclude all forms of competition that could detract significantly from the economic returns anticipated’ by a patent owner.294 A measure conflicting with the normal exploitation of a patent, however, may nevertheless be justified under Article 30, as long as the conflict is not unreasonable.295 As the term ‘unreasonable’ is not further defined, it can be suggested that the identification of the reasonableness of an exception should be conducted on a case by case basis, paying due regard to the objectives and principles of TRIPS, as reaffirmed by paragraph 5(a) of the Doha Declaration.296
Thirdly, an exception shall not unreasonably prejudice the legitimate interests of a patent owner, however, taking into account the legitimate interests of third parties.297 According to the WTO panel, legitimate interests are interests that are justified, i.e.
288 cf. Gervais DJ, The TRIPS Agreement (n 129) para 2.365; Sellin J (n 35) 197.
289 See note 281.
290 The stockpiling exception was regarded as being for commercial purposes as it facilitated the production and stockpiling of generic versions of patented products by competitors, with the purpose selling these products once a patent expired.
291 WTO Panel Report, Canada – Patent Protection of Pharmaceutical Products (n 198) para 7.35;
Gervais DJ, The TRIPS Agreement (n 129) para 2.365; Sellin J (n 35) 197-198.
292 WTO Panel Report, Canada – Patent Protection of Pharmaceutical Products (n 198) para 7.35;
Gervais DJ, The TRIPS Agreement (n 129) para 2.365; Sellin J (n 35) 197-198.
The narrow interpretation of the ‘limited’ requirement by the panel is not uncontroversial, and can be criticised for not putting enough emphasis on the objectives and principles of TRIPS, as the rejection of the stockpiling exception seems to disregard public health interests in the timely availability of cheaper generic drugs once a patent expires. See thereto: Sellin J (n 35) 197.
293 TRIPS Agreement (n 32) Article 30.
294 WTO Panel Report, Canada – Patent Protection of Pharmaceutical Products (n 198) para 7.55.
295 Sellin J (n 35) 198.
296 UNCTAD-ICTSD (n 35) 435.
297 TRIPS Agreement (n 32) Article 30.
84 supported by public policies and social norms.298 In this regard, and especially in consideration of the legitimate interests of third parties, it seems logical to suggest that legitimate interests are not limited to purely legal interests.299 While certain interpretative issues of Article 30 were clarified by the panel, some of the arguments of the EC and Canada raised new obscurities, for example regarding the term ‘third parties’, which were not further clarified by the panel.300 In particular, the EC argued that third parties under Article 30 encompass competitors only,301 while Canada suggested that the interests of third parties include ‘general societal interests and particularly interests connected with health policy’.302 In the absence of clarification by the panel, it is submitted by the author that in light of Articles 7 and 8 TRIPS, and the Doha Declaration, it seems sensible to follow Canada’s interpretation suggesting that the public interest constitutes a legitimate interest of third parties.
In conclusion, Article 30 TRIPS can provide distinct limitations for the exclusive rights granted to patent holders, intended to mitigate some of the detrimental effects patents may have.303 Particularly, the Bolar exception is of relevance for protecting public health, and for enhancing the accessibility of medicines, by enabling generic drugs to enter the market more rapidly after a patent expires.304 The narrow interpretation of the three requirements of Article 30, provided by the WTO panel, however, considerably limits the number of legitimate exceptions available for the protection of public health.305 Ultimately, it is therefore submitted that the narrow limitations of Article 30 constrain its capability to adequately protect public interests against the detrimental impacts of the exclusive patent rights provided by TRIPS.
298 WTO Panel Report, Canada – Patent Protection of Pharmaceutical Products (n 198) para 7.69.
299 Gervais DJ, The TRIPS Agreement (n 129) para 2.398ff.
300 Sellin J (n 35) 199.
301 WTO Panel Report, Canada – Patent Protection of Pharmaceutical Products (n 198) para 7.62.
302 ibid para 7.67.
303 cf. UNCTAD-ICTSD (n 35) 445.
304 cf. ibid.
305 Sellin J (n 35) 199-200.
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