A substantive review of a rarely-used amendment to the World Trade Organization intellectual property rules and enforcement trends that may threaten the multilateral trade system topped the agenda this week in the Council on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

A 27 October discussion that lasted uncharacteristically late into the evening hashed out for the first time governments’ experiences using the so-called Paragraph 6 system, an exception within the TRIPS agreement meant to ease access to generic versions of patented medicines in countries that lack the manufacturing capacity to make the drugs themselves.

But the conversation was dominated by potential medicines exporters (including generics exporters from larger developing countries), several participants told Intellectual Property Watch, with Canada and India in particular sharing details on their experiences. Least-developed countries and others likely to import medicines on the Paragraph 6 system were largely silent, said participants.

The World Health Organization, an observer to the meeting, predicted that the system would become increasingly important for second-line antiretroviral (ARV) treatments for HIV/AIDS, participants said, as India – a crucial supplier of generic drugs to the developing world – is now TRIPS-compliant and less readily able to make generic versions of needed drugs under patent.

Paragraph 6 refers to the 2001 Doha Declaration on TRIPS and Public Health, and the resulting waiver to TRIPS dates from August 2003.

Developing countries are asking for a workshop on Paragraph 6 open to non-governmental organisations, pharmaceutical companies and other stakeholders. But Australia, Canada, the European Union and the United States are not supportive of holding such a workshop. The issue is meant to be on the agenda of the next TRIPS Council meeting, currently scheduled for 1-2 March 2011. Between now and then, TRIPS Council Chair Martin Glass will hold consultations on this issue with interested governments, according to participants in the meeting.

Developing countries had hoped the solution would be easy to use and low cost, but this has not been the case, said a statement of Venezuela in support of the workshop. It is curious, the statement added, that a system designed to support developing countries is defended fiercely by developed countries. Venezuela’s statement is available here [doc, in Spanish].

Also notably on the list of the 26-27 October TRIPS Council meeting were continued concerns from developing countries over the potential threat of the Anti-Counterfeiting Trade Agreement (ACTA) to valued TRIPS flexibilities. This discussion started in June (IPW, WTO/TRIPS, 10 June 2010) but intensified this week now that a near-final version of the ACTA text has been released.

Meanwhile, at the 28 October Special Session of the TRIPS Council, delegates continued discussing aspects of their national laws on geographical indications, or product names associated with a particular place and characteristic. The Special Sessions are devoted to negotiating an international register for GIs.

Switzerland and Chile said during the meeting they had asked the WTO secretariat to provide information on past WTO dispute settlement cases that have set precedence for interpreting the legal terms “prima facie”, “burden of proof”, and “due diligence,” according to a WTO official.

Outside the TRIPS Council, discussions continue in small group meetings under the responsibility of WTO Director General Pascal Lamy as well as informal small groups not involving the secretariat on two other key IP issues that have been linked to the GI register by a majority of WTO member states. These issues are the connection between the UN Convention on Biological Diversity and TRIPS, and the possibility of extending high-level protection to GIs other than wines and spirits.

A Bolivian proposal that opposes patenting life forms (IPW, WTO/TRIPS, 2 March 2010) was also briefly discussed in the TRIPS Council, participants told Intellectual Property Watch, with a WTO source saying that some opposed or expressed reservations on the proposition.

Enforcement Trends

The Anti-Counterfeiting Trade Agreement, whose mostly developed-nation negotiators are in the process of finalizing last details (IPW, Enforcement, 4 October 2010), sparked a spirited debate at the June TRIPS Council (IPW, WTO/TRIPS, 10 June 2010). Though a few of the provisions considered most worrisome by non-parties to the agreement – such as patents in border measures – no longer appear in the text, the presence of the agreement and the way it was negotiated still proved unsettling for many countries.

ACTA “completely bypasses the existing multilateral processes provided in particular by the WTO and WIPO” as well as providing for much higher level enforcement than called for under TRIPS, India said in prepared remarks. It is already doing so with a “startling” decision to overturn a decision of the WTO dispute settlement on a US-China dispute over counterfeiting and copyright piracy (IPW, WTO/TRIPS, 26 January 2010), India said. ACTA reinterprets the definition of “commercial scale” to mean “any activity carried out for a direct or indirect economic or commercial advantage” while the WTO recently determined that it meant a particular level of activity, the statement said.

As “ACTA members account for about 70% of world trade,” there is a risk the agreement will “undermine trade liberalisation when there already are several threats to the multilateral trading system in the form of trade protectionist measures in the wake of the economic crisis and a simmering currency issue,” India added. For this reason, India requested that “Enforcement Trends” be discussed at this TRIPS Council meeting, despite having a position in the past that enforcement should not be a permanent TRIPS agenda item, they said.

The concerns of India were echoed by several other developing countries, participants said.

“The ACTA initiative has failed to keep in line the TRIPS standards and thus undermined the safeguards provided by the TRIPS Agreement,” said a statement of Indonesia, available here [doc]. More clarification is needed on “civil enforcement, border measures, criminal enforcement and internet provisions,” including on the potential negative impact of non-parties to the agreement, added Indonesia. Public interest groups also share these concerns, they added.

“ACTA proposes only one remedy against counterfeiting and piracy, and that remedy is repression,” said a statement of Brazil [doc]. “Repression is necessary. Let there be no doubt about it. But it is not enough to combat a problem that results from the interplay of factors that are to be found in different economic and social realities.”

A WTO source said ACTA parties largely argued the agreement “does not affect TRIPS and that action is needed to tackle the real dangers arising from counterfeit products such as medicines and spare parts.”

The Future of Paragraph 6

Normally under TRIPS rules, drugs manufactured under compulsory licence must be primarily made for domestic markets. Paragraph 6 provides a waiver to this rule, on a case-by-case basis, so that countries that lack domestic manufacturing capacity can still access generic versions of patented drugs. It has been used only once since the waiver was put in place in 2003, for two shipments of HIV/AIDS medicines from Canadian pharmaceutical Apotex to Rwanda in 2009 and 2008.

It has therefore been criticised by public interest groups and developing countries as being ungainly and difficult to use.

But Canada – which implemented the waiver in 2005 under the Canadian Access to Medicines Regime (CAMR) – said that its own example “clearly shows that Canada’s regime and the waiver are efficient, effective and timely – if a need is identified,” in a statement made to the TRIPS Council and obtained by Intellectual Property Watch. The fact that there are other ways to get needed medicines does not mean that the waiver is inefficient – only that it has not been needed as often.

Canada listed several of these alternatives, such as charitable programmes in pharmaceutical companies, growing drug manufacturing sectors in developing countries, voluntary licences, and others, and that even with these it is still impossible for some countries to afford medicines. “The main problems of access to medicines are the result of poverty, not patent laws,” Canada concluded.

Further, Canada provided a timeline showing that delays in shipping the drugs were not the fault of the CAMR system – which it said took only two months to complete processing – but rather happened after the CAMR process was complete, in the steps needed to secure Rwanda’s agreement to procure the drugs from the Canadian firm. Canada’s full statement on its experience with the system is available here [doc]. Details of CAMR procedures provided by Canada are available here [doc].

Other participants in the meeting told Intellectual Property Watch that part of the lengthy bidding process was due to the fact that generic competitors for Apotex’s drug were on the market by the time they secured an export licence, and that the drug company found itself in competition with them to win public tender. There is also the suggestion that Apotex lost money on the deal, due to generic competition which reduced prices, and that this is more of a concern to the company than the complexity of the system.

India acknowledged in a separate statement “the role of the Canadian government and CAMR to provided AIDS drugs for 21,000 people in Rwanda,” but had several questions for the country.

These questions included why a 2005 request from Ghana to use the CAMR did not come to fruition, and suggested that there had likely been other attempts – and failures – to use the system. It listed two cases where India was directly involved: one in 2007, where a request for compulsory licences was withdrawn because of difficulties complying with aspects of the Paragraph 6 system; and one in 2004 where aid group Médecins Sans Frontières (Doctors Without Borders, MSF) attempted to use Apotex and the CAMR system but ended up employing Indian generics after two years of wrestling with the system.

India also asked for details of how developed country members had provided the technology transfer in pharmaceuticals recognized as a “desirable” aspect of the TRIPS agreement.

Indian generics supply a significant percentage of the low-cost drugs for developing countries around the world; MSF recently said they get 80 percent of their ARV drugs from India.

But the “Indian generic industry is not a panacea for addressing the reasons which have necessitated the Paragraph 6 system,” said India in a statement.

“Many life-saving medicines are still off patent in India and therefore they are readily available as generics. Actually, most 1st line ARVs are pre-TRIPS and therefore not patented in India. This edge, which the Indian generics have today, might not last for very long,” said India’s statement.

But new antiretrovirals, which will be under patent in recently TRIPS-compliant India, are where the real test will be for the paragraph 6 system. Donations and tiered pricing are not enough to guarantee access, added India.

The Paragraph 6 system is still considered a temporary waiver, and will only become a permanent amendment to the TRIPS agreement when it is accepted by two-thirds of WTO membership. Currently the deadline for this is 31 December 2011, though it can be extended as it has been in the past. To date, 29 individual members plus the European Communities (representing 27 countries) have accepted the agreement.

The WTO secretariat explained the legal difference between countries introducing laws to implement the system and their notifying the WTO that they have accepted the amendment. “The two are separate and do not depend on each other,” said a WTO official. To date, the following members have notified the TRIPS Council that they have implemented the decision: Canada, the European Communities, Hong Kong, India, Norway, the Philippines, Singapore, and Switzerland.