Patents: The Sellout Continues

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.