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• confirm, with the exception of LDCs, that the importing member has insufficient or no manufacturing capacity for the product in question;
• confirm, that if the product is patented in the importing country, a compulsory licence is or will be granted.516
Paragraph four requires an importing member to use reasonable measures, proportionate to its administrative capacity and the risk of trade diversion, to restrict the re-exportation of products imported into its territory under the system.
The exporting/manufacturing members would have to issue a compulsory licence in order to export a generic version of a patented medicine. The exporting members must also notify the TRIPS Council of the grant of a compulsory licence and the conditions attached to it.
In addition, the following conditions must be met:
• Only the amount necessary to meet the needs of the eligible importing member(s) may be manufactured under the licence and the entire production must be exported to the member(s) that has(have) notified its (their) needs to the TRIPS Council.
• Products produced under the licence must be clearly identified as being produced under the system set out in the Council’s Decision through specific labeling or marking.517The licensee is required to post the quantities being supplied and the distinguishing features of the product(s) on a website.518
6.10 Procedural requirements
516 WTO, Implementation of paragraph 6 of the Declaration on the TRIPS Agreement and public health, WTO Doc.
WT/L/540 (2003), online: WTO http://www.wto.org/English/tratop_e/implem_para6_e.htm [Council’s decision] at para. 2(a)
517 Id para 2(b)(i)-(ii).
518 Id para 2(b)(iii).
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Carlos Correa has outlined the procedures that are required when using the system.519
• Unless the prior request for a voluntary licence does not apply, an entity in the importing country must seek a voluntary licence from the patent owner.520
• Failing this, an application for a compulsory licence must be submitted and the licence be obtained in the importing country (pursuant to procedures satisfying article 31 of the TRIPS Agreement including individual determinations, article 31(a) limited scope and duration, article 31(c) and (g) 521non-exclusivity and non-assignability, articles 31(d) and (e) and rights of review articles 31(i) and (j)).
• The importing country must assess its generic industry’s capacity to produce the required medicine locally.
• If capacity is inadequate, it must notify the WTO of its decision to use the paragraph 6 system.
• The interested importing party must identify a potential exporter.
• That exporter must in turn seek a voluntary licence from the patent owner on commercially reasonable terms for a commercially reasonable period.522
519 See Carlos, “TRIPS and Access to Drugs: Towards a Solution for Developing Countries without Manufacturing Capacity?” (2003) 17 Emory International Law Review 389 at 399-402.
520 Non-exclusive voluntary licences with relaxed geographical limitations could have some advantages. In the best-case scenario, the patent holder could transfer technology and manufacturing know-how to the voluntary licensee, which might produce greater efficiencies and ensure quality. In addition, the patent holder would ordinarily allow its licensee to obtain registration by comparing bio-availability and bio-equivalence of the generic product to
confidential data previously filed with the drug registration authority.
521 Article 31(c) limits a licence to the purpose for which it was authorised; Article 31(g) mandates termination when the circumstances which led to it cease to exist and are unlikely to reoccur; and the Annex to the Implementation Agreement limits it to the period that local capacity is insufficient. In the event of ordinary public health licenses, the duration would at least be as long as the public health problem prevails. However, the duration can be shortened further because of increased capacity in the domestic pharmaceutical sector. Paragraph 6 Implementation
agreement, supra note 16, Annex, Option ii. infojustice.org/download/.../access.../baker%20article%204.pdf.
522 This requirement is needlessly repetitious and irrational, especially since the company involved probably first sought a voluntary licence in the importing country, the current text of art 31(b) and the failure of the Paragraph 6 Implementation Agreement to address this second negotiation would seem to require such a ridiculous result. See Brook K Baker ,Arthritic Flexibilities For Accessing Medicines: Analysis of WTO Action Regarding Paragraph 6
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• If the voluntary licence is refused, the potential exporter must seek a compulsory licence (to be granted on a single-supply basis) from its own government.
• Compensation by royalty must be individually determined based on economic value in the importing country.
• The exporter will need to seek product registration and prove bio-equivalence and bioavailability, as required by national law in the importing country (despite the patent holder’s effort to prevent ‘unfair commercial use of its confidential registration data).523
• If exclusive rights (as promoted by the USA) are granted in the importing country with regard to data submitted for the registration of a medicine, the supplier will have to obtain authorisation from the possessor of the data to use them, or to develop its own studies on toxicity and efficacy.
• Before shipment begins, the licensee shall post information about the quantities being supplied and the distinguishing features of the product on a website. 524
• The exporting member must notify the Council for TRIPS of the grant of the licence, including the conditions attached to it.525
One potential consequence of the issuing of double compulsory licences in the importing and exporting members was that the remuneration provided for under article 31(h) of the TRIPS Agreement might have to be paid twice. The 2005 Amendment avoids this outcome by providing that remuneration be paid in the country of export, taking into account the economic
Of The Doha Declaration On TRIPS Agreement and Public Health. Published in 14 Indiana International and Comparative Law Review, 613, 92004) at page 653
523 See the TRIPS Agreement art 39.3.
524 See para 62 (b)(iii) of the Implementation Decision.
525 See C Correa ‘TRIPS Agreement and access to drugs’ (2003) 17/2 Emory International Law Review 401-402.
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circumstances of the importing country. This reasonable solution to the remuneration issue should not lead to difficulties. 526
While the Amendment does strive to resolve the Paragraph-6 problem, the procedure introduced is very cumbersome. There are several hurdles that need to be overcome before a LDC or any other member can invoke the use of a compulsory licence. It further does not serve the interest of the marginalised and vulnerable people worst affected by life-threatening diseases. This is not in the spirit of the Doha Declaration: it is akin to giving with the right hand and taking with the left.
No other country wishes to have the type of experience that Rwanda had.
The remuneration requirement that a royalty is payable even if the medicine is being produced for a country where it is not patented, is highly regrettable. In this regard an importing poor country is worse off under the Implementation decision than it would have been had it had local capacity to produce medicines. As the ultimate consumer, the importing, non-patent member will be required to pay the added cost of a licence royalty even though there would have been no royalty on locally produced medicines. This is yet another example of how the Implementation decision is unfairly biased against generic imports.527