Compulsory Licensing Issues and Trends in Asia

Abstract

*Tilleke & Gibbins International Ltd., Supalai Grand Tower, 26th Floor 1011 Rama 3 Road, Chongnonsi, Yannawa, Thailand Tel.: +66 2653 5874 E-mail: siraprapha.r@tilleke.com Government-use compulsory licensing has almost always stirred up controversies and debates with regard to its appropriateness, actual benefits and detriments. Patent owners and advocates of IP protection remain firm on the position that while a country has the right to override patents by issuing compulsory licenses (CLs) in certain limited circumstances, this should be viewed as a last resort, not a preferred method of tackling public health issues. On the other hand, patient rights groups, NGOs and pro-CL governments argue that implementing CLs is in line with international obligations under the WTO framework, which affords member states the right to challenge patents in order to promote access to medicines and resolve public health problems. Although most of the earlier CLs issued in Asia mainly focused on solving health crises relating to HIV/AIDS or other epidemics, Thailand and India began to implement CLs as a means to increase access to drugs whose market prices are regarded as being too costly, including cancer drugs and cardiovascular drugs. This new trend is a slippery slope, and could easily turn into abuse of the patent system beyond what was intended under the WTO framework. Protection of intellectual property, including patents, was specifically recognized by the WTO in the TRIPS Agreement [1]. As an exception to patent rights, Article 31 of the TRIPS Agreement recognized that a member state may grant CLs where necessary, but it also set out a number of conditions and limitations for such government-use CLs. In particular, to provide an opportunity for fair negotiations, Article 31 subparagraph (b) mandated that before a CL is granted, the proposed user must have made efforts to obtain authorization from the patent owner on reasonable commercial terms, and such efforts must have been unsuccessful after a reasonable period of time. An exception is in the case of ‘a national emergency or other circumstances of extreme urgency’, for which a government need not consult with the patent owner in advance of granting the CL; however, the government should notify the patent owner as soon as reasonably practicable thereafter. Article 31 subparagraph (c) also limited the scope and duration of the CLs to the purposes for which they were authorized, and subparagraph (f) further restricted the CLs to the supply of the domestic market. In short, the TRIPS Agreement provides members with compulsory licensing flexibility, but with strong safeguards against an abuse of such power. Subsequently, with the rise of public health problems and issues regarding access to medicines, especially global concerns over the HIV/AIDS epidemic, at