Jul 12 2010
Agreement on Trade Related Aspects of Intellectual Property Rights
The Uruguay Round, a series of multilateral trade negotiations spanning 1986-1994, produced most of the World Trade Organization agreements including the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). Prior to TRIPS, the extent and enforcement of intellectual property rights varied substantially around the world. In the context of pharmaceuticals, many developing countries failed to grant patents to innovator companies at all, distressing U.S. based pharmaceutical companies and dramatically affecting U.S. trade and competitiveness abroad.
TRIPS was signed as a way to bring intellectual property rights—including patents on pharmaceuticals—within an international structure. The agreement was designed to balance the long term goal of promoting innovation with the short term goal of using inventions. In the area of pharmaceutical patents, this meant a balance between innovation and access to medicines. TRIPS established minimum levels of IPR protection, including a mandatory 20-year patent term for pharmaceutical patents of both product and process, and made violations of the agreement subject to the WTO’s dispute settlement process.
Debates between innovators and public/global health advocates became heated after the implementation of TRIPS over whether an international patent scheme would deprive developing and least developed countries essential medicines. The Doha Declaration on the TRIPS Agreement and Public Health, adopted in 2001 during WTO trade negotiations, clarified TRIPS’s dedication to public health and access to medicines. It recognized the gripping global health crisis in the developing world and professed that TRIPS would not prevent WTO members from taking measures to protect public health. The Doha Declaration reiterated the flexibilities written in TRIPS, enabling members to grant compulsory licenses (allowing one company to manufacture a drug without the patent holder’s consent) to address public health concerns.
Additionally, the Doha Declaration flagged a problem with the compulsory license provision of TRIPS and called for a solution. Under TRIPS Art. 31(f) the use of compulsory licenses was limited to use “predominantly for the supply of the domestic market,” essentially limiting the amount of drugs a developed country with manufacturing capacity could export under the license. Countries without such manufacturing capacity, which need to import drugs from developed nations, were thus prevented from gaining access to essential medicines unless through import of generic drugs. The August Agreement solved this issue by eliminating, by means of an interim waiver, the “domestic market” requirement and issued a clear statement to protect public health and assure access to medicines.
In assessing the emerging market of biological and biosimilar medicines, U.S. lawmakers will be concerned as to how countries abroad, particularly Brazil, India, and China, are protecting patents on innovator biologics. In my next post, I will discuss the U.S. Trade Representative’s Special 301 Report, where USTR assesses the level of IPR protection and enforcement abroad for the purpose of adjusting trade policy.