Intellectual Property Rights and Access to Medicines: The Struggle for HIV/AIDS Drugs in Thailand Noah Metheny, Esq. Thai AIDS Treatment Action Group (TTAG) Chiang Mai University, Faculty of Law February 2, 2011

Introduction to Intellectual Property Law General IP Law International Legal Regime Surrounding Patents Breakout Session #1 TRIPS Flexibilities Breakout Session #2 Coffee Break

Thailand: A Case Study The Fight for ARVs in Thailand over the Past Decade TRIPS-Plus Legal Mechanisms within Free Trade Agreements Breakout Session #3

Introduction to IP Law

An Animated Introduction

1. General IP Law What is a patent? A patent grants a legal right meant to offer incentives to innovators/inventors by giving them a time limited right to exclusively exploit their ideas for profit (monopoly) Patents confer legal rights on inventors, for at least 20 years Necessary to encourage R& D Patents create monopolies on the invention, limiting competition Patents cover pharmaceutical products -An intellectual property right (IPR) which prevents others from using or selling a new technology for a set period of time (usually 20 years)

How are Patents Granted in Thailand? An inventor must submit a (pharmaceutical) patent application to the Department of Intellectual Property. The application is then reviewed by the Division of Patents to determine whether the invention is: New, Involves an inventive step, and Is capable of industrial application Benefits of Patents Incentivize research and development Encourage disclosure of inventions to the public so everyone benefits Allow inventors to recoup their costs by disallowing copies from competing for many years (allowing a monopoly to exist for a set period) Costs to Society Litigation costs of prosecuting alleged infringements Higher costs of many essential products, including pharmaceuticals, for many years (e.g. generics) Exploitation of developing countries when negotiating free trade agreements with developed countries

2. International Legal Regime and Patents Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement 1994 Requires all 151 World Trade Organization (WTO) member states to adopt US-style patent protection rules (staggered deadlines) Established minimum standards for IP rights and rules for their enforcement Set a 20-year protection period for patented inventions Includes some ‘flexibilities’ which allow countries to get around or break patents

2. International Legal Regime and Patents Doha Declaration on the TRIPs Agreement and Public Health (2001) Reaffirmed the TRIPS flexibilities Clarified that developing countries and least developed countries (LDCs) have the right to implement flexibilities to promote public health under the TRIPS Agreement Created new rights for LDCs to delay the introduction and/or enforcement of patents until at least 2016 Few LDCs have the manufacturing capacity or technological base to fully implement TRIPS or the TRIPS flexibilities

International and Thai Right to Health Universal Declaration of Human Rights Article 25(1) – “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including…medical care and necessary social services…” International Convention on Economic, Social and Cultural Rights (ICESCR) Article 12(1) – Everyone has the right to “enjoyment of the highest attainable standard of physical and mental health.” Thai Constitution (2007) Section 52 – Everyone has an equal right to receive quality public health service

3. Breakout Session #1 How does one fairly balance the right to health (patients) vs. the right of the patent holder (inventor/pharmaceutical companies)? Who decides what the balance is? How is this balance maintained?

4. TRIPs Flexibilities Provisions in the TRIPs agreement that allows countries to break or work around patents Ways to break patents/achieve lower drug costs: a) Price Negotiations b) Voluntary Agreements c) Patentability Standards d) Exceptions to Patent Rights e) Parallel Importation f) Patent Challenges g) Compulsory licensing: Government use/Non- commercial use of patents

a) Price Negotiations Governments or NGOs negotiate with pharmaceutical companies to reduce the cost of patented pharmaceutical products needed in developing and least developed countries Targeted pharmaceutical products include those still under patent without therapeutic (generic) equivalents currently on the market If pharmaceutical companies are unwilling to negotiate, often governments will then pursue other TRIPs flexibilities to obtain the patented product

b) Voluntary Agreements Pharmaceutical companies agree to issue licenses to governments or NGOs to manufacture, import, export, and/or distribute a patented product, for which the companies receive royalties on every item Prevents governments from having to use other TRIPs flexibilities (like CLs) to get patented pharmaceutical products -voluntary liceneses in India and South Africa, but come with restrictions

c) Patentability Standards Art. 27 of TRIPS allows member states to exclude certain categories of inventions from patentability Member states may also set high patentability criteria, denying new patents on new uses, forms, formulations or combinations of known medicines Prevents “evergreening” of patents, where pharmaceutical companies will obtain new patents by making minor changes to the medicine to extend its monopoly period

d) Exceptions to Patent Rights Art. 30 of TRIPS allows states to establish limited exceptions to the exclusive rights of a patent owner, as long as they do not unreasonable prejudice his or her ownership rights Bolar Exception – an ‘early working’ exception which allows for research and experimental use of products still under patent This allows generic versions to promptly enter the market right after the patent expires The "Bolar" provisions allow generic manufacturers to prepare production and regulatory procedures (equivalency tests, don’t need efficacy tests) before patents expire so that products can be ready for sale as soon as the patent ends, rather than having to go through the lengthy preparatory process only after the patent period is over.

e) Parallel Importation The purchase of a patented medicine from a lawful source in an exporting country, the importation of which is without the consent of the “parallel” patent holder in the importing country Allows countries to import a patented medicine from other countries where it is produced and sold at a lower price than in the domestic market Example: A Thai firm buys ARVs produced in India and imports them into Thailand without the approval of the local distributor owning the patent rights The Principle of Exhaustion (of IP rights) determines under what circumstances the local patentee may oppose the importation of a patented product into the local market (domestic or international exhaustion)

f) Patent Oppositions Countries may permit any person to oppose patent applications before the patent is granted by filing a case in court (pre-grant opposition) Under certain circumstances, a patent can be challenged after it has been granted by filing a case in court (post-grant opposition) Ensures higher scrutiny of patent applications before and after they are granted (to ensure a novel, inventive step) -main example of this in india, will look at the few cases here in Thailand later

g) Compulsory Licensing Government license that breaks a patent, authorizing a 3rd party to make, use, or sell a patented invention without the patent owner’s consent (Art. 31) Allows for increased competition and lower prices (especially with generics) Member states are able to decide the grounds on which to issue compulsory licenses: An inventor’s refusal to grant a voluntary license Promotion of the public interest or public health A national emergency or situation of extreme urgency To encourage anti-competitive practices

CLs: Government Use A type of compulsory license which allows the government to use a patented invention for a public, non-commercial use Countries can also issue government licenses to third parties to make patented medications available to the public at a much lower cost Art. 31 of TRIPS, which requires prior negotiations with the patentee before the issuance of a compulsory license, does not apply to government use

Breakout Session #2 What are the ways the TRIPS flexibilities – Help developed countries protect intellectual property rights (IPRs)? Hurt developed countries by hampering research and development of new inventions? Help developing countries access crucial pharmaceuticals? Hurt developing countries in accessing crucial pharmaceuticals?

Coffee Break!

Thailand, A Case Study: The Fight for ARVs

TRIPS+ Provisions in Free Trade Agreements

History of FTA Negotiations US and Thailand started negotiating FTA in 2004 Stalled negotiations, but recent efforts to restart Draft language of US-Thai FTA Patent section leaked during 6th round of negotiations in 2006 EU and ASEAN entered into negations for EU- ASEAN FTA in 2007, in part due to break down in Doha negotiations Draft language of FTA again leaked

Categories of Enhanced IPR in Draft FTAs Stronger IP rules than what is required in TRIPS Weakening of TRIPS flexibilities Greater IP enforcement mechanisms

I. Beyond TRIPS—stronger IP rules

Expansion of IP Rules Definition of Patentable: Expand products able to patent to include plants, animals, diagnostics, therapeutics, and surgical procedures (EU FTA Art. 2;US FTA Art. 9.2) Evergreening: Ability to patent new uses of already commercialized products (EU Art. 10.4; US Art. 9.8) Parties to Other Treaties: Must become signatories to other treaties and incorporate provisions into domestic IP Law: Patent Cooperation Treaty, Patent Law Treaty, and Budapest Treaty on the International Recognition of the Deposit of Micro-organisms for the Purposes of Patent Procedure (EU Art. 9.1)

Increasing Length of Patent and Data Protection Extend exclusive rights to patent holder for the time needed for marketing authorization—covers duration of examination of patent and process to grant marketing approval (US FTA Art. 9.7; EU FTA Art. 9.3) Data exclusivity for undisclosed information (EU Art. 10; US Art. 10.1)

II. Weakening of TRIPS Flexibilities

Increasing Procedural Barriers on TRIPS Flexibilities 3rd parties are not allowed to challenge patent applications before they are granted=no pre- grant opposition (US FTA, Art. 9.4) Stricter conditions for issuing CL (even for government use): Higher compensation for use (US Art. 9.6) Higher data protection (US Art. 9.6).

III. Greater IP Enforcement Mechanisms

FTA IP Enforcement Measures Efforts to make generic manufacturers more vulnerable to IP challenges Increase in the number of parties that have standing to defend IPRs (EU FTA Art. 14) Decrease in the rights of the accused infringers (EU Art 15 &16). more information required from alleged infringers Increased punishments for infringement (more than just fines, includes imprisonment, confiscation, disqualification, etc)

State Enforcement of Increased IPRs Burden on the State to implement new enforcement mechanisms Stricter border measures (EU FTA Art. 28) Customs authorities would have greater power to suspend the release of goods Increases the number of IPRs whose alleged infringement can trigger custom measures Already see in action: seizure of Indian generic drugs by Dutch and French customs authorities in transit to Brazil

Challenges to Using TRIPS Flexibilities FTAs (and other efforts) will shift the current delicate balance between IP protection and public health in favor of IP protection by: Increasing IPR protection standards (expanding the scope of what falls in the realm of IP protection, extending the duration of exclusive rights, introduction data exclusivity, etc) Limiting the scope of the Doha declaration on TRIPs and public health. Increasing enforcement standards as well as a broad set of enforcement measures and actions 

Breakout Session #3 There is an outbreak of ox flu in Thailand. An international pharmaceutical company has developed a vaccine for it, but it costs 325,000 baht per shot. The vaccine is patented in Thailand. What strategies and approaches would you take to tackle the problem?