Limitations And Exceptions To Patent Rights Discussed In WIPO Committee

The World Intellectual Property Organization patent law committee this week is addressing a range of issues including patent quality, technology transfer for medicine production, limitations and exceptions to patents, and the confidentiality of communications between clients and their patent advisors.

Limitations and exceptions to patent rights were the object of a seminar [pdf] taking place on the afternoon of the first day of the 21st session of the Standing Committee on the Law of Patents (SCP). The SCP is meeting from 3-7 November.

The seminar, which was decided upon at the 20th session of the SCP (IPW, WIPO, 14 February 2014), focused on four exceptions and limitations: “(i) acts for obtaining regulatory approval from authorities; (ii) exhaustion of patent rights; (iii) compulsory licensing and/or government use; and (iv) exceptions and limitations relating to farmers’ and/or breeders’ use of patented inventions.”

Developing countries have shown strong interest in the work of the SCP on limitations and exceptions to patents rights, in particular health-related exceptions. Group B developed countries remarked yesterday that exceptions and limitations should be used under specific circumstances, and said the work of the SCP should relate and be beneficial to “the real world.”

Mokhtar Warida, former Egyptian mission delegate in Geneva, is back to resume his chairmanship of the meeting this week.

Other topics to be addressed by the SCP were noted as important by several groups. For example, the Czech Republic for the Group of Central European and Baltic States (CEBS) said patent harmonisation is an important issue and duplication of work should be avoided, in particular on issues dealt with by the World Health Organization and the World Trade Organization.

Belarus, on behalf of the Group of Central, Asian, Caucasus and Eastern European States, said the relationship between patent offices is vital for smooth functioning of the IP system.

Paraguay on behalf of the Latin American and Caribbean Group (GRULAC) said the discussion on the quality of patents, including opposition systems, and the sharing of work experiences is very important, in particular in the context of patent applications relating to similar or like inventions, which number is on the rise, the delegate said.

India said a patent is a social product and has a social function. India, as well as several other developing countries, such as the Dominican Republic, Pakistan, Chile, Egypt and Iran, supported a proposal [pdf] by Brazil first submitted in the 14th session of the SCP in 2010, suggesting a work programme on limitations and exceptions to patent rights.

The Brazilian proposal suggests a three-phased approach. The first phase would promote the exchange of detailed information on all exceptions and limitations provisions in national or regional legislations, and how countries use those exceptions and limitations provided in their legislation.

The second phase of the work programme proposed by Brazil is expected to investigate what exceptions or limitations are effective to address development concerns and the conditions for their implementation. The third phase considers the elaboration of an exceptions and limitations manual to serve as reference to WIPO members.

Comments by member states on Brazil’s proposal are available on the WIPO website.

Seminar on Exceptions and Limitations

The seminar taking place yesterday afternoon included three segments: a presentation of documents relating to exceptions and limitations to patent rights by the WIPO secretariat; two presentations on the effectiveness of exceptions and limitations when addressing developing concerns and how national capacities affect the use of exceptions and limitations; and case studies presented by member states.

The WIPO secretariat presented a set of five documents: Exceptions and Limitations to Patent Rights: Acts for obtaining Regulatory Approval from Authorities [pdf]; Exceptions and Limitations to Patent Rights: Compulsory Licenses and/or Government Use (Part I) [pdf]; Exceptions and Limitations to Patent Rights: Compulsory Licenses and/or Government Use (Part I) [pdf]; Exceptions and Limitations To Patent Rights: Farmers’ and/or Breeders’ Use of Patented Inventions [pdf]; Exceptions and Limitations to Patent Rights: Exhaustion of Patent Rights [pdf].

Margaret Kyle, professor at MINES ParisTech, and research associate at the Centre for Economic Policy Research, gave a presentation on the exhaustion of patent rights and parallel trade.

Parallel trade, which is also known as “re-importation” or “grey market trade” can be found in several sectors, and in particular in the pharmaceutical industry, she indicated. To address the loss of income created by parallel importation, the pharmaceutical sector might resort to delayed launch of medicines in poorer countries or restrictions in supplies to those countries, she said.

She also cited two examples in developed countries, one in Greece where medical products shortages post-crisis were allegedly caused by parallel trade, and Canada in which some supply shortages were noted when the United States was considering imports from Canada in the early 2000s.

The pharmaceutical industry says parallel trade creates quality risks as the industry loses control over the distribution of the products, and is lowering their profits and consequently their research and development capacity, she said. However, the cost of parallel trade on profit is not clear, she added.

Jayashree Watal, counsellor at the WTO Intellectual Property Division, gave a presentation on the Bolar exception to patent rights and its possible economic consequences. The Bolar exception, she said, comes from the US 1984 Federal Circuit case Roche Products v. Bolar Pharmaceutical.

According to the WTO, under this exception, “some countries allow researchers to use a patented invention for research, in order to understand the invention more fully.”

“In addition,” WTO says, “some countries allow manufacturers of generic drugs to use the patented invention to obtain marketing approval – for example from public health authorities – without the patent owner’s permission and before the patent protection expires.”

The basic rationale of the Bolar exception is to “maintain a balance in the patent system,” she said. It is considered that the entry of generic medicines brings average prices down rapidly and the originator product loses half the market share within one year of generic entry, she explained.

This generic entry depends on factors such as the size of the market, and the ease with which the products can be copied. Since the adoption of the 1984 Hatch-Waxman Amendments in US law, Watal said that the average delay in generic market entry after patent expiry decreased from more than three years to less than three months.

According to the US Food and Drug Administration, the Hatch-Waxman Amendments amended the Federal Food, Drug and Cosmetic Act and “created a statutory generic drug approval process … which permits generic versions of previously approved innovator drugs to be approved without submitting a full new drug application.”

Countries Present National Experiences

Brazil, which issued a compulsory licence in 2007, and Ecuador, which now has nine compulsory licences for pharmaceutical products (five of which were newly approved), commented on the large health expenditure savings allowed by those compulsory licences (IPW, Public Health, Guest Post, 12 September 2014).

Japan said exceptions and limitations should be used under limited and special circumstances. The delegate mentioned the Japan Patent Act under which the use of patented products during the term of patent protection is solely reserved to experiment or research.

India remarked on the documents presented by the secretariat saying that it would have been useful to describe the impact of exceptions and limitations on the economics of developing countries.

Other Agenda Items

The agenda [pdf] of the 21st session also includes a seminar [pdf] on the Confidentiality of Advice from Patent Advisors, and a study [pdf] on the Role of Patent Systems in Promoting Innovative Medicines, and in Fostering the Technology Transfer necessary to Make Generic and Patented Medicines available in Developing Countries and Least Developed Countries, as well as a summary [pdf]: Study on the Role of Patent Systems in Promoting Innovative Medicines, and in Fostering the Technology Transfer necessary to Make Generic and Patented Medicines available in Developing Countries and Least Developed Countries.

Also on the agenda is a feasibility Study [pdf] on the Disclosure of International Nonproprietary Names (INN) in Patent Applications and/or Patents, and a document on Patents and Transfer of Technology: Further Practical Examples and Experiences [pdf].

The tentative schedule for the week is here [pdf].

Image Credits: EPO