Fringe cases and their differences: compulsory licensing in the UAE and Bangladesh

It is of significance that there has been no excitement about either the UAEs’ or Bangladesh’s TRIPs compliance with regard to compulsory licensing, despite the fact that the UAE is not yet fully compliant, and Bangladesh is a producer of generic medicines and is yet to become TRIPs compliant.

In the UAE, a new Patent Law was enacted 1992. Its Article 6.2 grants specific exemption from patent protection to medicines and pharmaceutical compounds.

Ineffective process patents are the only available protection. Also, compulsory-licensing provisions are not yet fully TRIPs compliant.382 This has not drawn a great deal of attention, for the simple reason that the UAE market is affluent, and not in need of acquiring patents under the compulsory licensing provision. Simply, the people of the UAE pay for patent medicines.

382 _{United Arab Emirates, ‘Intellectual Property Protection’, http://www.cptech.org/ip/health/phrma/nte-}

In Bangladesh, the Provisions of the Patents and Designs Act 1911 and its amendments and the Patents and Designs Rules 1933 do provide for patent protection. However, that protection applies only to the process of producing pharmaceutical products, not to patented products.383 That leaves the law well short of being TRIPs compliant. The local industry imports ingredients, and manufactures and re-brands them for sale on the domestic market. But that has had little or no consequence: The Bangladeshi medicines market is weak, so foreign companies express no real interest in supplying it. Local low- cost producers of medicines without R&D capabilities are left alone to do their work. There is therefore no pressure on the country to become fully TRIPs compliant, other than from the WTO itself, with its extension to 2016 of the compliance period for least- developed countries. It is also true that the local manufacturers of pharmaceuticals do not have reverse-engineering capacity, and therefore pose no serious threat to holders of patents.384

Even if this country were to develop a reverse-engineering capacity, it is prevented from fully exploiting its eligibility, as a least-developed country, for SDT that would enable it to copy patent medicines for its own consumption and for export. As Ara Begum Ferdaus et al. point out, 385 under pressure from the major pharmaceutical companies, the

government of Bangladesh issued an executive order that the Department of Patents, Designs and Trademarks store all patent applications under the ‘mail box’ clause386 of the

383 _{Patent and Designs Act 1911, s. 3(e).}

384 _{Van Duzer, Tony ‘TRIPs and the Pharmaceutical Industry in Bangladesh:}

Towards a National Strategy’, http://www.cpd-bangladesh.org/publications/op/op24.pdf.

385 _{Ferdaus, Ara Begum, Uddin, Mesbah and Khan, Sharifa, ‘Assessing Technical Needs for Implementing}

the TRIPS Agreement in Bangladesh’, presentation to the Ministry of Industries, Dhaka, 22 January 2009.

386 _{Article 70(8) of the TRIPS makes the ‘mail-box’ provision for filing patent applications for}

TRIPS without dates, until Bangladeshi law becomes TRIPs compliant when the

extension period for least-developed countries’ compliance ends on 1 January 2016. This was so despite the fact that Bangladesh’s Patents and Designs Act 1911387 has not yet been amended to give effect to the TRIPS compulsory licence provisions and the mailbox clause. That effectively stymied the Department of Patents, Designs and Trademarks as assistant to the country’s manufacturers of generic medicines.

To further distance the possibility of SDT help here, Bangladesh has, in pursuit of investors and market access, signed two bilateral trade agreements388 that impose TRIPS- plus protections of patent pharmaceuticals. Carlos Correa notes that these were costly moves, for they carry the risk of patent terms extended to twenty years, of prohibiting the use of test data on efficacy and safety of drugs in applications for approval to

manufacturing generic products, and in some cases, the limiting of the grounds upon which compulsory licences can be issued.389 David Lea concurs, and adds that the TRIPS-plus demands of bilateral trade agreements work directly against the Doha Declaration’s resolve to protect public health interests.390

domestic laws become TRIPS compliant. The ‘mail-box’ provision is intended to ensure that the country concerned makes available a means by which patent applications for inventions can be filed and dated.

387 _{Act II of 1911, Bangladesh Code Vol. VI.}

388 _{United States-Bangladesh Bilateral Investment Treaty 1986 signed 12 March 1986, entered into force 25}

July 1989, Treaty Doc. 99-23 (US Congress); European Union-Bangladesh Cooperation Agreement on

Partnership and Development 1999, signed 22 May 2000 (LEX-FAOC036142, 27 April 2001). 389 _{Correa, Carlos, ‘Bilateralism in Intellectual Property: Defeating the WTO System for Access to}

Medicines’, vol. 36, no. 79, Case Western Reserve Journal of International Law, 2004, p. 82.

390 _{Lea, David, ‘The Expansion and Restructuring of Intellectual Property and Its Implications for the}

Carolyn Deere, however, perceives a success of the Doha Declaration’s ‘waiver

decision’391 in the fact that the Bangladeshi Draft Patent Act 2007 does not incorporate the ‘mailbox’ provision that the Patents and Designs Act 2003 had incorporated.392 (One of the effects of the waiver decision is that it exempts least-developed countries from the mailbox requirement, and thereby disallows the exclusive marketing rights of patent holders.) This brings in question the legality of the DPDT Order (referred to above) concerning the mail box provision. Nevertheless, as M. Rafiqul Islam points out,393 even though the s.84(10) provision of the Draft Patent Act concerning compulsory licences is worded thus to cover both the importing and exporting country:

… manufacture and export of patented pharmaceutical products to any country having insufficient or no manufacturing capacity in the pharmaceutical sector for the concerned product to address public health problems, provided compulsory license has been granted by such country,

argument is likely to arise about remuneration attendant upon the granting of the licence, and about whether export to non-WTO countries or countries without the requisite TRIPs compliance is permitted.

It is often claimed that Bangladesh has not done enough to exploit its right as an LDC to defer, pursuant to paragraph 6 of the Doha Declaration,394 the patent protection of pharmaceuticals until 2016, nor the attendant right under the waiver decision to reverse-

391 _{The ‘waiver decision’ of 2003 was the decision to implement Paragraph 6 of the Doha Declaration on}

the TRIPs Agreement and Public Health. The waiver decision allowed least-developed countries with a manufacturing capacity to reverse-engineer patented products, and to sell them in their domestic market, and to export those products to other least-developed countries under the compulsory licensing scheme.

392 _{Deere, Carolyn, 2009, Implementation Game: The TRIPS Agreement and the Global Politics of} Intellectual Property Regime in Developing Countries, Oxford University Press, p. 69.

393 _{Islam, M Rafiqul, ‘How Bangladesh Can Cope with TRIPS: The Case of Pharmaceutical Products’,}

Bangladesh Economic Association Conference, 2006.

394 _{Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health,}

engineer patented pharmaceutical products and make them available for sale on the domestic market and for export to other LDCs under the compulsory licensing scheme. Ferdaus, former executive director of the Saarc Chamber of Commerce & Industry, among others, advises that to avail itself of the potential benefits of this paragraph, this country has to amend the Patents and Designs Act 1911 and the Patent and Designs Rules 1933, or enact more competent new legislation.395

However, given the problems (discussed below) of implementing the compulsory licence law, and given the expense of the R&D necessary for developing a reverse-engineering technology, it is difficult to see that legislative reform can have an end other than the legally mandatory TRIPs compliance. Yet it is also true that UK Trade & Investment is ‘talking up’ the strength of the Bangladeshi pharmaceutical industry. It notes that ‘[a]round 80% of Bangladesh's total need of API is being met through imports’, but hastens to add that:

To meet the API demand locally the Bangladesh government's highest planning body, the executive committee of the national economic council (ECNEC), approved the Active Pharmaceutical Ingredient (API) park at Munshiganj at an overall project cost of $31 billion in May 2008. It will be the country's first hub for medicine raw materials … The project is expected to be completed by 2011.396 The reality is that the API park at Munshiganj is not yet in existence. According to UK Trade & Investment, ‘local companies have lined up some $285 million for investment in the API Park’, but at this point, foreign companies are merely being invited to invest. The hope often expressed locally is that Bangladesh can compete with countries like India,

395 _{Ferdaus, Ara Begum, ‘Policy issues concerning intellectual property rights’, 31 May 2008, Financial} Express.

396 _{UK Trade & Investment, Sector briefing: Pharmaceutical Opportunities in Bangladesh,}

China, Brazil and Turkey on the global pharmaceuticals market. Obviously, whether it will be able to depends heavily on its ability to produce its own API. That in turn depends on the successful erection and operation of its API Park. But ironically, if it does become competitive in this context, it will have risen above LCD status, and with that, it will lose its LDCs-regarding, Doha Declaration-born licence to produce generic medicines.

The unavoidable, if cynical, view is that TRIPs compliance is merely of cosmetic importance in a state such as the UAE, because it is an excellent market for patent medicines. It is on the same level of unimportance in Bangladesh, but this time because that least-developed country’s pharmaceutical industry is already substantively restrained by the TRIPS-compliance of the suppliers of its active pharmaceutical ingredients (AIPs). Besides, its market is not worth capturing by holders of pharmaceutical patents while the local-market favouring Drug (Control) Ordinance 1982 remains the current (not-TRIPs- compliant) law. This is likely to change after 2016, with Bangladesh’s TRIPs

compliance.

According to a report of the Netherlands Embassy in Dakar, most pharmaceutical multinationals have either abandoned or sold their interests in Bangladesh.397 Also

according to this Netherlands report, the pharmaceutical sector is a major growth industry in Bangladesh. The country is nearly self-sufficient in pharmaceuticals, and is exporting

397 _{Netherlands Embassy in Dhaka, Report of 29 May 2008, ‘Pharmaceutical Industry in Bangladesh:}

to 72 countries in Asia, Africa and Europe.398 But then, all that will necessarily change when TRIPs compliance is forced upon it in 2016.

There are optimistic views that Bangladesh can legislate in a manner that will protect public health once its transition period ends in 2016. Shamnad Basheer399 gives a very interesting account of how India made optimal use of TRIPS flexibilities to enable the protection of public health. One can extrapolate from this certain imperatives for Bangladesh: It must amend the Patents and Designs Act 1911 (the Act) and the Patent

and Designs Rules 1933 (the Rules) such that (i) the Act contain a compulsory-licensing

provision to the effect that Bangladesh is entitled to export pharmaceuticals under compulsory licence to TRIPS-compliant countries and to non-WTO-member countries without the capacity to manufacture them; (ii) the Act authorise the parallel importation of pharmaceuticals when it is in the interest of public health to do so, provided that the exporter is a licensed producer and seller of them; (iii) both the Act and the Rules be amended to provide against unfair commercial use of data submitted for the purpose of registering a new pharmaceutical product, and to provide, as India and Thailand had done, that the use of such data in an application for approval for the reproduction of generic medicines is not an unfair use. These provisions are unlikely to be challenged per

se, for reason alone that they purport to support the human right to health, which is a

principle of international law. But they are far from being provisions capable of regulating the extent to which applications for reproduction can be successful once

398 _{‘Square Pharma sets up insulin manfcg unit’, Bangladesh Economic New, 28 April 2010,}

http://bangladesheconomy.wordpress.com/category/pharmaceutical-industryhealthcare/.

399 _{Basheer, Shamnad, ‘India’s Tryst with TRIPS: the Patents Amendment Act 2005’, vol. 1, Indian} Journal of Law and Technology, 2005, pp. 30 et seq.

TRIPS compliance becomes effective in 2016, and patents can be imposed on all generic pharmaceuticals.

Bangladesh’s access to APIs, which the country needs for the continued functioning of its domestic industry, is already restricted by the now-full TRIPS compliance of India and China, upon which countries Bangladesh had relied for its API imports. It expects to set up its own API productions unit by 2011, with United Nations Industrial Development Organization (UNIDO) aid and partnership with global firms. In other words, the TRIPS effect is already visible. The Bangladeshi pharmaceutical industry was built on the manufacture of branded generic final formulations using approximately 80 percent of imported APIs, most of which are generic.400 _{Now, as the World Bank says, ‘if}

Bangladesh wants to produce APIs, its workforce will need to acquire these skills’.401 The erstwhile availability of generic AIPs is the stool that was kicked out from under the Bangladeshi pharmaceutical industry in 2005, with India’s and China’s TRIPS

compliance.