June 2017 – WTO TRIPS Council – Statement of Brazil on IP and the Public Interest – Compulsory Licensing

As reported by Knowledge Ecology International (KEI), on 6 June 2017, the World Trade Organization (WTO), published a paper tabled by Brazil, China, Fiji, India, and South Africa, entitled “Intellectual Property and the Public Interest.” In their communication (IP/C/W/630), the proponents called for a series of discussions at the WTO TRIPS Council on Intellectual Property and the Public Interest. Brazil, China, Fiji, India, and South Africa proposed compulsory licensing as the first theme of IP and the Public Interest discussions at the TRIPS Council session for 13-14 June 2017.

Brazil delivered the following statement on compulsory licensing, recounting its experience with the granting of a compulsory license in 2007 on efavirenz, an antiretroviral used by 40 percent of HIV patients in Brazil (at the time).

In spite of strictly following the requirements contained in the national and international legal framework, the Brazilian Government faced legal disputes in national courts, which were initiated by the owner of the patent. These disputes, however, were not successful.

As a result of such efforts by the Brazilian Government, and taking full advantage of legally permissible limitations and exceptions, it was possible to substantially reduce the price of Efavirenz from US$ 1,59 to US$ 0,45 per tablet at nominal prices. This helped to ensure the adequate provision of medicine to HIV patients who need to take it on a daily basis to keep the disease under control.

And we all know that, thanks to successful public policies combined with the steady availability of innovative drugs, Brazil is able to provide treatment to the vast majority of patients diagnosed with HIV/AIDS. Nowadays, among those receiving treatment, 90% of them have no detectable viral load, a sign of success of the treatment. This is a result only possible with the active participation of Government, pharmaceutical companies and patients association, in line with the higher level goals of the IP system.

The full intervention can be found below.

Brazil’s statement to the WTO TRIPS Council (on compulsory licensing)

I would like first to thank the delegations of China, India, Fiji and South Africa who are also co-sponsoring this agenda item.

The proposal for inclusion of the item on intellectual property and the public interest aims at spurring the discussion regarding the many facets of IP within the broader socioeconomic framework of Member States. The complex and complementary relation between these aspects is a topic that merits careful reflection and broad discussion by Member States.

IP addresses the public interest by providing incentives for innovation. At the same time, governments have the responsibility of safeguarding the public against a potential negative impact, notably on competition. A balanced IP system, therefore, provides powerful incentives for innovation with the least effects on the competitive landscape; in economic terms, it will stimulate the procompetitive dynamic effects of intellectual property while limiting and controlling its potential anticompetitive static effects.

An efficient IP system, by definition, results from a delicate balancing act. There is no one-size-fits-all approach. Rather, a flexible policy space is necessary to allow each Member State to develop and adapt the set of IP regulations more adequate for its reality. This is to be done, of course, within the boundaries of the internationally agreed objectives, principles and standards, to ensure predictability and mutual confidence. One of the tools to reach that result is the use of exceptions and limitation to IP rights, an intrinsic element of the law of every Member State. They serve a number of purposes by conferring the necessary flexibility to guarantee national security and to shape public policies to meet, inter alia, development, competition, and health surveillance goals.

Therefore, they will generate an increased societal welfare without unreasonably prejudicing the legitimate interests of the patent owner.

Madam Chair,

In recognition of the underlying public policy objectives of national systems for the protection of intellectual property, including developmental and technological objectives, Articles 7 and 8 of TRIPS contain clear language regarding the relationship between public interest and the protection and enforcement of intellectual property rights.

The discussion under this agenda item has, among its goals, the increase of knowledge regarding those aspects and the exploration of possible solutions for developing as well as for developed countries.

As an initial effort to broaden the understanding of how the IP system can be more responsive to public interest considerations, the proponents would like to mention the topic of compulsory licenses.

The judicious use of compulsory licenses assists countries to uphold the delicate balance of the TRIPS Agreement. While the topic is commonly referenced to with health issues, compulsory licensing can be used in other cases as well. As we all know, neither TRIPS Article 31 nor Article 5A of the Paris Convention contains any restriction with regard to the ground on which a compulsory license may be issued, a view confirmed by the Doha Declaration on TRIPS and Public Health.

Under Brazilian law, rightholders may be subject to compulsory licenses if they exercise patent rights in an abusive manner, or if they engage in abuse of economic power. In the case of dependent patents, for instance, anticompetitive behavior can be established if the holder of the main patent fails to reach agreement with the patentholder of the dependent patent on the exploitation of the earlier patent.

Madam Chair,

We would like to refer to a concrete case in order to further contribute to the debate.

In 2007 Brazil issued its first and only compulsory license to date, regarding the antiretroviral efavirenz for public non-commercial use. The underlying intention was to guarantee that HIV patients received appropriate treatment from the Brazilian Public Health System, as Efavirenz was used by 40% of all HIV patients in Brazil at the time.

Previously to the compulsory license, the Brazilian Government engaged with the patent owner in several meetings with the view of reaching a negotiated solution. Those negotiations, however, did not lead to an agreement in terms and conditions adequate for addressing the public interest.

– In conjunction with the procedures necessary for the compulsory license, the Brazilian Government initiated the preparation for the production of Efavirenz. As we all know, issuing a compulsory license is the initial element of a complex process that involves many actors.

The first step was to comprehensively analyze the invention as disclosed in the patent application, clarifying aspects of the phases of production. The disclosure of an invention as mandated by Article 29 of the TRIPS Agreement is an important element of the patent system and could be explored in future discussions under this agenda item.

The second step for the public laboratories responsible for manufacturing the medicine was to take advantage of a limitation contained in Article 43, subsection II of the Brazilian Industrial Property Law. The Article states that patent rights do not extend to acts carried out by [unauthorized] third parties for experimental purposes, in connection with scientific or technological studies or researches. It aims at maintaining the incentives for research and studies by third parties, thus allowing the progress of science and technology. Further to those actions, the last step required to initiate the production of the medicine under the compulsory license was to obtain regulatory authorization from the Brazilian health authority, known as ANVISA. To fulfill this requirement, Brazil used another aspect of IP rights, this time related to clinical test data.

In spite of strictly following the requirements contained in the national and international legal framework, the Brazilian Government faced legal disputes in national courts, which were initiated by the owner of the patent. These disputes, however, were not successful.

As a result of such efforts by the Brazilian Government, and taking full advantage of legally permissible limitations and exceptions, it was possible to substantially reduce the price of Efavirenz from US$ 1,59 to US$ 0,45 per tablet at nominal prices. This helped to ensure the adequate provision of medicine to HIV patients who need to take it on a daily basis to keep the disease under control.

And we all know that, thanks to successful public policies combined with the steady availability of innovative drugs, Brazil is able to provide treatment to the vast majority of patients diagnosed with HIV/AIDS. Nowadays, among those receiving treatment, 90% of them have no detectable viral load, a sign of success of the treatment. This is a result only possible with the active participation of Government, pharmaceutical companies and patients association, in line with the higher level goals of the IP system.

Madam Chair,

The recent entry into force of the Protocol of Amendment to the TRIPS Agreement demonstrates the need to have mechanisms that allow at the same time the adequate remuneration to intellectual property rights holders and the rights of Governments to adopt measures necessary to protect the public interest, in line with the provisions of Article 8 of TRIPS. Other recent development is the publication of the United Nations Secretary-General’s High Level Panel on Access to Medicines, which contains many recommendations regarding the interplay between intellectual property and access to medicine.

Brazil believes that respect for intellectual property and efforts to promote the public interest in sectors of vital importance to their socio-economic and technological development are not mutually exclusive. A balanced intellectual property system, with built-in flexibilities as well as complementary policies and incentives, is the best way to incentivize innovation in all fields of technology.

We would like to invite other Members to express their views and share their experiences regarding the topic, providing a rich discussion which would be beneficial to all countries and generating additional inputs to the TRIPS Council.

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