Challenges and Opportunities to Utilize TRIPS Flexibilities in Current Ukrainian Legislation: Potential Impact of IP Provisions in the Proposed EU FTA on Utilizing TRIPS Flexibilities Intellectual Property Rights and Access to Essential Medicines: Challenges and Opportunities in Free Trade Agreement Negotiations, Multilateral Instruments and National Laws June 2010 Kyiv, Ukraine Boyan Konstantinov HIV/AIDS Practice, UNDP

Why are TRIPS flexibilities important for Ukraine ? In 2010, at least 52 % of the persons in need of ART are not receiving it – possibly more Source: UNGASS Progress Report 2010 In Ukraine, in 2010, brand ARV medicines are in average 25.9 times more expensive then generics Source: S.Cherenyko, O.Baula, includes special prices for Ukraine Generic ARVs are considerably more affordable but access to them is under threat

By 2008, Ukraine has introduced many intellectual property protection provisions that hamper access to cheaper generic ARVs These provisions were introduced in the process of accession to the WTO but they are not required by the TRIPS Agreement (are TRIPS-plus) Ukraine has public health flexibilities in its current legislation

Patentability Article 7 of the Ukrainian Law on Protection of the Rights on Inventions and Utility Models (Patent Law) allows protection of pharmaceuticals with patents for utility models for 10 years. No inventive step required Article 27.3 (a) of TRIPS Agreement allows exclusion of “diagnostic, therapeutic and surgical methods” from patentability; Currently not in Ukrainian law Suggested: Excluding medicines, diagnostic, therapeutic and surgical methods from protection as utility models. Exclude diagnostic, therapeutic and surgical methods from patentability

Patenting of New Uses Article 6 of the Ukrainian Patent Law allows the patenting of products/processes, as well as “the novel use of a known product or process” No such requirement under TRIPS; Threat of “evergreening” of medicines Suggested: Exclude new uses from patentability, or provide exception for medicines

Patent Extensions Article 6, Section 4 of the Ukrainian Patent Law: 20 years of patent protection but extension is allowed specifically for medicines, up to 5 years TRIPS does not require extension of patents Suggested: Revise Article 6, Section 4 to exclude possibilities for extension of patents for medicines

Patent Opposition Once granted, patent can be invalidated only by the court (Article 33, Section 1 Ukrainian Patent Law); Objections to Patent Office decisions allowed only to the applicant, not to third persons (Article 24) Suggested: Allow patent opposition before an administrative body (Patent Office). Allow Patent Office to invalidate patents

Parallel Imports Article 28 Ukrainian Patent Law - exclusive right to the owner to use; import is considered “use” Article 31, Section 3: allows import under license but also introduction into the commercial circuit if product is obtained without violation of the patent owner rights. Next sentence: “without violation” = “manufactured by the patent holder”- international exhaustion of rights principle? Suggested: Revise unclear provision and introduce international exhaustion of rights regime

Compulsory Licensing Ukraine has retained this important TRIPS flexibility (Art. 31 TRIPS, Art. 30 Ukrainian Patent Law). Not only for domestic production but import as well. No consent of patent holder needed, just unsuccessful efforts to obtain it. Remuneration is paid Some ambiguous terms (e.g. "groundless rejection” of patent holder, “adequate compensation” instead of remuneration, etc.) Detailed regulations: request pursuant Government Regulation 8/ to the Ministry of Health, forwards to Ministry of Education and Science (1.5 months), then to the Ukrainian Cabinet of Ministers Source: Anastasia Mindrul

Compulsory Licensing - Continued Suggested: Consider utilizing in practice the compulsory licensing flexibility for the production /import of ARVs under Article 30 Interpretation on “remuneration” and “compensation” in Article 30 in order to establish that there is no compensatory element in CL Consider utilizing the tiered royalty method for calculating royalties (model of UNDP/WHO, recently used by Ecuador) Consider opportunities to utilize the WTO August 30, 2003 Mechanism

Government Use Ukraine has retained this important TRIPS flexibility. Article 31, Section 2 Ukrainian Patent Law: emergency conditions, including epidemic. No consent of patent owner, just informing (immediately). “Relevant Compensation” Article 17 of the Ukrainian Law on Prevention of AIDS and Social Protection: ARV to be provided free of charge. Fits the definition of “public non-commercial use” In force majeure and epidemics Article 17 of the Law on Medical Products allows import even of unregistered medicines by the Health Ministry

Exceptions under TRIPS Prior Use (Article 31 Section 1 of Ukrainian Patent Law) Exception for scientific or experimental purposes (Article 31.2.) Use “for non-commercial purposes” – individual use “Bolar”, regulatory, or early working exception – unclear, suggested to include it.

Data Exclusivity A TRIPS-plus standard. Article 39 Section 3 TRIPS - protection against disclosure and “unfair commercial use”. Generic manufacturers do not seek disclosure, just reference (they never see the files). Is producing affordable medicines “unfair commercial use”? Is conducting redundant clinical experiments “fair”? Article 9 Law on Pharmaceutical Products – five years after the date of registration in Ukraine (!), regardless of the validity of any patent which concerns the medical product (!!) Evidence that data exclusivity is already being used to prevent access to affordable ARVs (and other medicines) in Ukraine Sources: K.Lezhentsev, O.Baula Order of the Ministry of Health of Ukraine # 426 of , Section 6.3 – no requirement for applicant to provide clinical test results if the product is a generic?

Data Exclusivity - Continued In negotiating the EU – UA FTA, request to introduce the “8+2+1” data exclusivity regime (Directive 2004/27/EC) In addition, (Supplementary Protection Certificates – EC No 469/2009), which are TRIPS-plus-plus

Data Exclusivity - Continued Suggested: Consider revising Article 9 of the Law on Pharmaceutical Products to abolish data exclusivity provisions In the alternative, apply a broad interpretation of Section 6.3 of the Ministry of Health Order # 426 of allow registration of generics without reference to exclusive data Consider refraining from providing supplementary protection certificates (Regulation (EC) No 469/2009) Consider refraining from adopting the provisions of Directive 2004/27/EC

Enforcement – Border Measures Art 51 TRIPS Agreement regulates only cases of counterfeit trademark or pirated copyright goods Article 255 Ukrainian Customs Code “goods that contain objects of intellectual property rights” – TRIPS- plus Request to adopt provisions of Council Regulation 1383/2003 (Customs Actions) – already lead to seizures of legitimate generics in the EU Suggested: Consider revising Article 255 of the Ukrainian Customs code in order to explicitly exclude pharmaceuticals; Consider refraining from adopting provisions of Regulation 1383/2003

Enforcement – Criminal Measures Article 61 TRIPS: criminal procedures and penalties “at least” in cases of willful trademark counterfeiting or copyright piracy on a commercial scale Article 177 of Ukraine’s Criminal Code, a TRIPS- plus regime (illegal use of an invention, utility model … where such actions caused a significant pecuniary loss). Exceptionally strict, could lead to up to two years of imprisonment and significant fines.

Conclusions Ukraine has legislation in public health that provides for free antiretroviral treatment but no enabling provisions in its IP legislation that facilitate access to more affordable medicines Numerous TRIPS-plus provisions provide IP protection in excess to the WTO minimum requirements. They have already been used to hinder generics; In the same time, Ukraine is mobilizing substantial resources, including through loans, to facilitate access to treatment (Source 2010 UNGASS Progress Report); Yet the gap is growing There is an evident need to consider utilizing the existing TRIPS flexibilities in Ukrainian law in practice, in order to facilitate the access to affordable ARVs There is a need to refrain from adoption of further TRIPS-plus provisions as well as to consider amendments of existing TRIPS-plus regulations, and develop and implement policies that balance protection of intellectual property rights with public health priorities