There's been a lot of buzz lately about various developing countries ordering Compulsory Licenses. This scorecard tracks the countries, the products, timing of the ordered Licenses and provides updates as they arise.
Part of the buzz which has recently arisen surrounds allegations that some countries have used the mechanism to drive down drug prices.
Other similar mechanisms, such as those under the 'Paragraph 6' system are also be tracked in this Scorecard. The Paragraph 6 system was implemented in the 30 August 2003 Decision of the WTO. Paragraph 6 refers to Paragraph 6 of the DOHA Declaration on TRIPS. The mechanism basically enables importation of cheaper medicines for countries which are too poor to manufacture the medicines themselves. Paragraph 6 states:
"6. We recognize that WTO Members with insufficient or no manufacturing
capacities in the pharmaceutical sector could face difficulties in
making effective use of compulsory licensing under the TRIPS Agreement.
We instruct the Council for TRIPS to find an expeditious solution to
this problem and to report to the General Council before the end of
2002."
Article 31 of TRIPS states:
Article
31
Other Use Without Authorization of the Right Holder
Where
the law of a Member allows for other use of the subject matter of a patent without the
authorization of the right holder, including use by the
government or third parties authorized by the government,
the following provisions shall be respected:
(a) authorization
of such use shall be considered on its individual merits;
(b) such
use may only be permitted if, prior to such use, the
proposed user has made efforts to obtain authorization
from the right holder on reasonable commercial terms and
conditions and that such efforts have not been successful
within a reasonable period of time. This requirement may
be waived by a Member in the case of a national emergency
or other circumstances of extreme urgency or in cases of
public non-commercial use. In situations of national
emergency or other circumstances of extreme urgency, the
right holder shall, nevertheless, be notified as soon as
reasonably practicable. In the case of public
non-commercial use, where the government or contractor,
without making a patent search, knows or has demonstrable
grounds to know that a valid patent is or will be used by
or for the government, the right holder shall be informed
promptly;
(c) the
scope and duration of such use shall be limited to the
purpose for which it was authorized, and in the case of
semi-conductor technology shall only be for public
non-commercial use or to remedy a practice determined
after judicial or administrative process to be
anti-competitive;
(d) such
use shall be non-exclusive;
(e) such
use shall be non-assignable, except with that part of the
enterprise or goodwill which enjoys such use;
(f) any
such use shall be authorized predominantly for the supply
of the domestic market of the Member authorizing such
use;
(g) authorization
for such use shall be liable, subject to adequate
protection of the legitimate interests of the persons so
authorized, to be terminated if and when the
circumstances which led to it cease to exist and are
unlikely to recur. The competent authority shall have the
authority to review, upon motivated request, the
continued existence of these circumstances;
(h) the
right holder shall be paid adequate remuneration in the
circumstances of each case, taking into account the
economic value of the authorization;
(i) the
legal validity of any decision relating to the
authorization of such use shall be subject to judicial
review or other independent review by a distinct higher
authority in that Member;
(j) any
decision relating to the remuneration provided in respect
of such use shall be subject to judicial review or other
independent review by a distinct higher authority in that
Member;
(k) Members
are not obliged to apply the conditions set forth in
subparagraphs (b) and (f) where such use is
permitted to remedy a practice determined after judicial
or administrative process to be anti-competitive. The
need to correct anti-competitive practices may be taken
into account in determining the amount of remuneration in
such cases. Competent authorities shall have the
authority to refuse termination of authorization if and
when the conditions which led to such authorization are
likely to recur;
(l) where
such use is authorized to permit the exploitation of a
patent (“the second patent”) which cannot be
exploited without infringing another patent (“the
first patent”), the following additional conditions
shall apply:
(i) the
invention claimed in the second patent shall involve an
important technical advance of considerable economic
significance in relation to the invention claimed in the
first patent;
(ii) the
owner of the first patent shall be entitled to a
cross-licence on reasonable terms to use the invention
claimed in the second patent; and
(iii) the
use authorized in respect of the first patent shall be
non-assignable except with the assignment of the second
patent.
