1. 1 Review of Art 39.3 TRIPS – interpretation and controversy Sanya Smith Third World Network 25 August 2006 Bangkok

2. 2 What are intellectual property rights? (IPRs) Historically: a reward for inventiveness A limited monopoly given by the government as an exception to usual preference for competition Examples of IPRs  Patents for inventions  Copyright for books, music, films etc  Trade marks for brand names

3. 3 World Trade Organization (WTO) GATT (1947-1994)  Trade in goods WTO (1995- )  goods trade, services trade and intellectual property rights  150 countries are Members

4. 4 Comparative advantage Industrialised countries have higher wages so cannot produce manufactured or agricultural products as cheaply as developing countries  Pfizer CEO: ‘By the early 1970’s, it became clear that tougher global competition lay ahead for US business’ Industrialised countries/their companies still own most of the intellectual property.  Eg 98% of patents granted in Malaysia are to foreigners  Pfizer CEO: ‘Intellectual property rights are extremely important to the competitiveness of the US and other post-industrial economies’

5. 5 How did TRIPS come about? According to former Pfizer CEO, Mr Pratt:  ‘The industry became more active in the policy arena and by the next decade [1980s] our efforts began to bear fruit.’  ‘Having been successful in getting “TRIPS” on the GATT agenda, government asked the US private sector to provide specific proposals for an agreement’  ‘In conjunction with more than a dozen companies from all the relevant sectors of US business, Pfizer and IBM co-founded the Intellectual Property Committee... The USTR was impressed.’  USTR asked the IPC to join forces with the main European and Japanese business groups  ‘Working together, we were able to draft intellectual property standards... Our combined strength enabled us to establish a global private sector-government network which lay the groundwork for what became “TRIPS”.’ The Economist, 27/5/1995, Asian edition, page 26

6. 6 Registration of medicines For registration in many countries, need to show that the medicine  Is effective against the disease (efficacy)  Has minimal side effects (safety)  Is manufactured cleanly etc (quality) Safety and efficacy may need evidence from clinical trials etc First applicant has to provide evidence of efficacy, safety and quality.  Does a subsequent generic who wants the same medicine to be registered have to provide the same evidence?

7. 7 WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) TRIPS Article 39.3: “Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use.”

8. 8 Principles of interpretation When interpreting Art 39.3 TRIPS, international law allows consideration of the rest of TRIPS  Art 7: Objectives: ‘The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.’  Art 8.1: Principles: ‘Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of this Agreement.’

9. 9 TRIPS Article 39.3: main elements Only relates to pharmaceutical and agricultural chemical products Type of data that is protected:  Undisclosed data Ie not published Objective standard: government decides whether data is public, not the applicant  And that required considerable effort to generate Up to countries to define Countries could require applicant to prove that it took considerable effort  And is about new chemical entities (NCE). NCE is up to countries to define, could be: Never before registered anywhere in the world Never before patented anywhere in the world (does not have to be for: New therapeutic use for existing medicine, or New dosage form/isomer/delivery method/combination etc)

10. 10 TRIPS Article 39.3: main elements continued Use of data that is prohibited:  Unfair Not defined in TRIPS, so countries can define it for themselves Likely to be dishonest commercial behaviour  And commercial use Government use of the data by the first applicant to approve a generic medicine is clearly not commercial use. It is the government doing its regulatory functions. Government is not in commerce, it is the public sector. Conclusion: according to TRIPS, governments can rely on the first applicant’s data to approve generic versions, UNCTAD, Correa, Watal etc

11. 11 TRIPS negotiating history EU, Japan and US business groups and US Government wanted data exclusivity  Countries considered text that explicitly required data exclusivity, but rejected it No country has been sued at the WTO for failing to give data exclusivity

12. 12 Further information: ‘Protection of Data Submitted for the Registration of Pharmaceuticals: Implementing the Standards of the TRIPS Agreement’, Carlos Correa, South Centre, www.southcentre.org/publications/protection/protection.pdf Thank you Questions to sanya@myjaring.net