Patents:
The Sellout Continues

Amit
Sen Gupta

EARLY
in 2005, the Indian Parliament passed an amendment to India’s Patent Act to
fulfill obligations that the government had agreed to at the time of signing the
WTO agreement in 1995. The Left Parties had been successful in introducing
changes in the amendment that safeguarded national interests. However, while
doing so, the Left had also warned that national interests could be fully served
only if India makes a sincere effort to renegotiate the TRIPS agreement under
the WTO. This is based on an understanding that the TRIPS agreement itself is
flawed and favours developed countries. Thus there are severe limitations to
what can be done to serve our interests if we only look to work within the
framework of the TRIPS agreement.

It
is, however, unfortunate that the Indian government has shown no inclination to
either renegotiate the TRIPS agreement or attempt to oppose the efforts by the
US and EU to impose higher standards of patent protection.

WTO
TEXT IN HONG KONG SILENT ON PATENTS

A
case in point is the recently concluded WTO Ministerial in Hong Kong. The
final draft text that was agreed upon was silent on major elements of the TRIPS
agreement. This has to be seen in the context that the TRIPS agreement itself
was supposed to have been reviewed five years after coming into force. This
review was not even placed on the agenda of the WTO Ministerial meeting in Hong
Kong!

This
silence is especially distressing given the growing evidence, globally, that the
TRIPS agreement jeopardizes access to medicines and has a detrimental effect on
the dissemination of scientific knowledge in diverse sectors such as software
and biotechnology. Keeping this in mind India should have pressed for a
review of TRIPS, not in the narrow sense that developed countries would want (in
terms of the actual translation of its provisions in the country laws of
different countries) but in the broader context of reviewing its impact and
pressing for changes in the Agreement itself. Such comprehensive review of the
TRIPS should have included:

No
Product Patents for Medicines and Food:
Clause on “non-discrimination” based on sectors should
be removed from the TRIPS Agreement and countries should have the right not
to provide for Product Patents in areas such as medicines and food security
(as our earlier Patent Act allowed).

Imports
cannot be treated as local production:
Amendment of the provision in the
TRIPS agreement that treats imports of patented products by patent holders on
par with locally produced patented products.

Reduce
20 year Monopoly by Patent protection:
The TRIPS Agreement allows the Patent holder monopoly over his invention for a
period of 20 years. The length of
Patent protection needs to be much shorter, and flexibility to allow this should
be negotiated again.

No
Patents on Life-Forms: Patenting
of micro-organisms and non-biological and micro-biological processes, enjoined
by the TRIPS Agreement, has tremendous implications for agriculture and
industrial sectors. Precisely because this issue was so contentious, a mandatory
review of the relevant clause was provided for in the TRIPS agreement. India
should have argued for exclusion of all life-forms from patentability –
including micro-organisms.

It
needs to be understood that the developed countries (especially the United
States) have extracted as much benefit as they wanted from the TRIPS Agreement.
They are not interested in any meaningful review of the Agreement. Only
developing countries whose interests have been damaged by TRIPs will have to
force such a review.

AMENDMENT
TO TRIPS AGREEMENT

The
other major development pertains to a proposed amendment to the TRIPS agreement
that was announced less than a week before the meeting in Hong Kong. The
amendment is a follow up of the declaration adopted in the Doha Ministerial
meeting of the WTO on “Public Health and TRIPS. To understand the
implications of the new amendment to TRIPS it is necessary to go back to the
context of the Doha Declaration and its aftermath.

Developing
countries pressed for a discussion on the issue of Public Health and TRIPS
before the Doha meeting. This proposal, which was sponsored by a number of
African countries, wanted the TRIPS Council to clarify that countries have the
flexibility under TRIPS to impose compulsory licenses or take recourse to
parallel imports, in order to address the problems associated with any public
health crisis. Initially this was opposed by a number of developed countries,
including, the US, Japan and Switzerland. With no resolution in sight, the
matter was taken up in the WTO Ministerial meeting in Doha, in November 2001.
The Doha Ministerial issued a ” Declaration on the TRIPS Agreement and
Public Health”. The declaration was hailed as a landmark in the negotiating
history of the World Trade Organisation as this was the first instance, since
the signing of the WTO Agreement in 1994, that a portion of that agreement has
been interpreted in a manner that was favourable to developing countries.

The
declaration noted: “the gravity of the public health problems
afflicting many developing and least-developed countries, especially those
resulting from HIV/AIDS, tuberculosis, malaria and other epidemics“. It
also said: “Accordingly, while reiterating our commitment to the
TRIPS Agreement, we affirm that the Agreement can and should be interpreted and
implemented in a manner supportive of WTO Members’ right to protect public
health and, in particular, to promote access to medicines for all“.
It further added: “Each
Member has the right to grant compulsory licences and the freedom to determine
the grounds upon which such licences are granted“.

While
the Doha declaration constituted an advance for developing countries. Para 6 of
the declaration pointed to an area that remained unresolved. The declaration
clarified that compulsory licenses could be issued to domestic manufacturers for
medicines under Patents, so that they could manufacture generic versions of
these drugs and sell them at much cheaper prices. The declaration was of little
or no help to countries without domestic manufacturing capability. As a
majority of countries who were reeling under the impact of HIV-AIDS, fell under
this category, the declaration was in many senses a hollow victory for
developing countries. The Doha meeting authorised the TRIPS Council to find a
solution to this problem. Developed countries saw this as an opportunity to
nullify the gains made by developing countries through the Doha declaration.

In
August 2003, the WTO General Council attempted to resolved the issue by adopting
what is known as the Perez Motta text. The Motta text, was a far cry from what
developing countries had wanted. They had argued that the TRIPS agreement should
be amended (amendment of Art.30 of
the TRIPS text) to treat exports to countries without manufacturing capacity as
“exceptions” to patentability, i.e. patent protection would not be
valid in such cases.

The
text allowed WTO Members to issue compulsory licenses for export to countries
with little or no manufacturing capability. Thus it allowed countries like India
and Brazil, with developed manufacturing facilities, to issue compulsory
licenses to authorise domestic manufacturers to produce generic versions of
patented drugs for export to countries without manufacturing capability.
Potentially this should benefit a large number of developing countries in Africa
and Asia, many of whom are reeling under the impact of the HIV-AIDS epidemic.
However, the Motta text prescribes
cumbersome procedures and places onerous conditions on countries that wish to
avail of the facility. Conditions and procedures would also add to costs and
make such exports commercially less attractive or even unviable. Both exporting
and importing countries have to seek a “case by case” clearance. Given
this, few manufacturers in countries like India were interested in making use of
the new provision.

It
is precisely these cumbersome provisions based on the Motta text that has
been adopted by the WTO as an amendment to the TRIPS agreement.  This
provision was anyway available for the past two years as a result of the
decision of the TRIPS Council, but it has remained inoperative because of the
restrictions and conditions it enjoins. Till
date there is not a single instance where the mechanism has been used, and not
one patient has benefited from its use despite the fact that newer medicines,
such as second-line AIDS drugs, are priced out of reach of poor patients.

It is extremely surprising that India did not oppose this decision of the WTO to
amend the TRIPS Agreement based on a mechanism that has failed to prove it can
increase access to medicines. India should have argued for delaying of the
amendment and exploring the possibility of an improved mechanism for supply of
Patented drugs at affordable prices to countries without manufacturing
capabilities. The amendment has made permanent a burdensome drug-by-drug,
country-by-country decision-making process, which does not take into account the
fact that economies of scale are needed to attract interest from manufacturers
of medicines.

Clearly
the present government has no intentions of pursuing a course that would amend
the TRIPS agreement in favour of developing countries like India. It is
necessary that sustained pressure be applied to force the government on a
different path – that shuns the illusory benefits of strong Patent protection
in favour of Patent laws that are tailored to the country’s needs.