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Article
31(f) & Para 6: Need for pragmatic approach
N
B Zhaveri delves into the rationale and the supporting legal
basis and references to different solutions and options suggested
to the Article 31(f) in the first of the two-part series
Art
31(f) of the TRIPs Agreement requires that ‘‘the use without
authorisation of the right holder’’ allowable as per Art
31 of TRIPs - ‘‘shall be authorised predominantly for
the supply of the domestic market of the Member authorising such
use.’’ Though a bare reading of this clause does not so
suggest, it is being understood and implemented as a mandatory condition
preventing exports by such licensees.
The
problem
As
a consequence, people in many of the developing countries, not having
their own generic production capabilities, are being denied, and
would continue to be denied, access to affordable drugs, if such
interpretation of Art 31(f) continues to prevail and exports from
countries having generic production are barred. The situation will
worsen after 2005, when countries like India will also be required
to introduce product patent regime, and will be restricted in developing
and producing generic versions of patented medicines.
The
WTO Ministerial Conference at Doha, apprehending that ‘‘WTO
Members with insufficient or no manufacturing capacities in the
pharmaceutical sector could face difficulties in making effective
use of compulsory licensing under the TRIPs Agreement’’
has instructed the TRIPs Council to find an expeditious solution
to this problem (Para 6 of Doha Declaration, or DD).
Solutions
and options
Many
studies have already been made and published on the subject by eminent
experts during last one year. The possible options suggested in
most of these papers are for recourse to Art 30 exception, or Art
31 amendment, or to seek waiver or moratorium. These suggestions
appear to be based on the pre-Doha views and assumptions about patentee’s
rights, which need to be reviewed in light of DD.
Genesis
of the problem
The
Para 6 problem has arisen out of the pre-Doha protectionist view
of TRIPs being applied also to Art 31(f) requirement, by reading
it as conferring right on patentee to prevent exports by grantees
of compulsory licences (CL). As per this view, TRIPs provided foolproof
protection to right holders overriding all considerations of human
rights, human values, objects and purposes of TRIPs, or other societal
rights and obligations. This study shows that this protectionist
view is not supportable and needs to be reviewed in light of international
law and the Doha Declaration on TRIPs and WHO-WTO Report dated 22
August, 2002.
Objective
The
objective is to study and suggest some practicable solutions for
the problem within the existing framework of TRIPs, which do not
involve acceptance of any onerous conditions or obligations, or
elaborate or delaying procedures, as suggested in the other proposals
under consideration. For convenience and clarity, this study is
being presented in two parts. Part 1 attempts to show that patentee
has no right to prevent exports and later this paper goes on to
show that even if patentee is assumed to have any right under Art
31(f), it is exercisable by claiming and receiving ‘adequate
remuneration’ as per Art 31(h), and not by stopping or obstructing
supplies by way of exports on consideration of the following matters.
Right
to prevent exports
By
correct interpretation as per established ‘customary rules
of interpretation of public international law’ (WTO, DSU -
Art 3(b) and DD); it will be observed that:
(i)
‘Right to prevent’ exports is not included in Art 28.
There is no provision in Art 31(f) giving to patentee any right
‘to prevent’ exports. Therefore, exports by licensees
- even if the requirement of predominant domestic supplies is not
satisfied - cannot amount to infringement of patentee’s right,
as no exclusive right is given for exports.
(ii)
Art 31(f) does not prohibit exports by licensees. In fact it permits
exports of the non-predominant part, and does not prescribe any
conditions for the same. The EC also confirms the same vide communication
dated 18 June, 2002 (Para 3) to the TRIPs Council on Art 31(f).
(iii)
The different requirements of Art 31 are for the benefit either
of patentees, or third parties, or the domestic consumers. The patentee
can only complain about non-compliance with Art 31(a) and (h) requirements,
but not in respect of Art 31(f) or the other requirements.
(iv)
Art 31(f) is a recommended policy objective for the benefit of the
domestic market and not a mandatory condition. Right to object or
waive compliance, is a matter of national law, and not WTO dispute,
and vests in the domestic consumers or the issuing government, and
not the patentee. The overriding public interest consideration under
paragraphs (b) and (f) is also brought out from paragraph (k).
(v)
There is, therefore, no question of prohibiting exports by licensees
or providing any special safeguards for patentees in respect of
any such exports.
Remuneration
and not obstruction
Law
and international law - including TRIPs and WTO Agreements - recognise
clear distinction between right and remedy, and between existence
and exercise and right to property. While protecting private right
to property - including patents - the mode of enjoyment, or the
manner of exercise, and the remedies to be provided for enforcement
of such rights, have always been matters to be regulated on various
considerations including public interests and national policies,
binding obligations under other national and international laws,
and treaties, and also equitable considerations which may arise.
 TRIPs
and WTO have also been drafted to provide for these matters. The
subsequent parts of this study refer to some of these matters to
show that even under TRIPs, though expressed ‘as an exclusive
right to prevent third parties not having his consent from the acts
of: making, using, offering for sale, selling, or importing’
these rights are subject to provisions of Art 30, 31, 40, 44(2),
and Art 5A of Paris Convention, all of which provide for permitting
use of the invention by government and third parties without the
consent of the patentee and on payment of adequate remuneration
in terms of Art 31(h).
Thus
the ‘right to prevent’ as per Art 28, does not necessarily
imply a ‘right to stop or obstruct’ exercise of the five
specific acts, and instead of the patentee’s consent, such
consent or authorisation can be given by statutory authority.
Therefore,
even on the assumption that Art 31(f) gives to the patentee a right
to prevent exports by licensee, such right would also be subject
to control on similar considerations, more than the five exclusive
rights specified in Art 28. Recognising that TRIPs was ‘part
of wider national and international action’ (DD), with binding
obligations under Charter of UN, WTO Agreement and other treaties
and applying the principles of proportionality and Jus Cogens, and
in recognition of the clear distinction between existence and exercise
of rights, the provisions of Art 31(f) have to be interpreted and
implemented by providing that the patentee will be entitled to exercise
his rights under Art 31(f), by claiming adequate remuneration in
terms of Art 31(h) and not by recourse to any stoppage or obstruction
of exports of the licensed products.
Jus
Cogens principles
Vienna
Convention on Law of Treaties (VCT) - which is the accepted version
of customary rules of interpretation of public international law
by Article 53 - stipulates that while interpreting or implementing
provisions of any international treaty or agreement, its provisions
which are in conflict with any ‘‘peremptory norms of general
international law,’’ (ie ‘‘norm from which no
derogation is permitted’’) have to be either treated as
void, or if and to the extent possible, read or implemented consistently
with such peremptory norms.
In
the context of the Art 31(f) problem, reference to this rule is
relevant and conclusive as the more fundamental obligations under
international law, mentioned above, prevail over Art 31(f) requirement.
In
the context of the Para 6 problem, reference to these matters is
most important and helpful in interpreting and implementing Art
31(f) because:
-
As per Art 3.2 of WTO DSU, the Dispute Settlement Body is required
to interpret WTO Agreements, and as reaffirmed by DD, by applying
the customary rules of public international law, the accepted
version of which is the Vienna Convention on Law of Treaties (VCT).
As per Art 31 & 53 of VCT, the binding obligations and commitments
under international law and principles of Jus Cogens have to be
taken into consideration.
-
Some of these provisions like Human Rights and fundamental freedoms
under UN Charter, UN Convention on Human Rights; and right to
health, better standards of living and obligation to remove barriers
of trade and freedom of movement of goods under WTO Agreements
are legally binding provisions, which override or prevail over
Art 31(f) requirement.
The
obligation to comply with such overriding provisions provide sufficient
justification for any such non-compliance. No other Member can raise
any dispute, and the DSB also cannot treat or entertain any such
matter as a WTO dispute or give any decision contrary to such binding
obligations.
-
Art 31(f) has to be interpreted and applied consistently with
the WTO Members obligations under various prior and existing binding
legal commitments. It cannot be presumed that the Members intended
to violate these commitments, nor can Member be compelled to do
so. On the other hand, Members can be compelled to act in conformity
with human rights obligations, and actions can be taken, under
such UN HR Treaties by UN or National HR Commissions.
-
Art 31(f) has either to be ‘read down’ or treated as
void, to avoid any conflict with such prior binding obligations.
-
Legislative, administrative and judicial authorities while exercising
their discretionary powers in implementation or enforcement of
Art 31(f), would act consistently with such prior commitments.
-
On application of principle of proportionality, and comparing
the huge devastating and incalculable loss with no loss to the
patentee, resulting from denial of exports (as discussed below),
Art 31(f) can only be interpreted and implemented to allow exports
by licensees. Seen in proper perspective, DD and the WHO-WTO Report
provide authoritative and correct guidance for this purpose. This
also provides the rationale and the supporting legal basis and
references for the different solutions and options suggested.
These matters can be considered under the following provisions:
TRIPs
provisions
Art
31(f): By not giving any special or different rights or remedies
to patentee for domestic supplies or exports by licensees. And by
providing the same remuneration as per Art 31(h) for both.
Art
44(2): By providing for payment of remuneration as per Art 31(h)
as the permissible remedy, even for proved infringement of Art 28.
It is clear that TRIPS does not recognise or give to the patentee,
any right or remedy to prevent (by way of stoppage of) the supplies
being made by licensee to export markets, except to claim the remuneration
as per Art 31(h).
Binding
obligations
Binding
obligations under UN Charter, WTO and Human Rights Conventions,
which override Art 31(f) provisions.
Human
rights obligations: Improvement of public health has been universally
accepted as a primary and sacrosanct duty of state by WHO, Declaration
of Human Rights, and in laws of most nations. Protecting the vast
population of the poor against diseases like AIDS, HIV, drug resistant
diseases like TB, malaria, dengue etc., calls for all out national
efforts on war-footing. UN Charter and different international treaties
contain provision for promotion and protection of ‘fundamental
human rights’ - ‘right to life,’ ‘right to development’,
‘right to higher standards of living’ etc.
As
per UN Charter, Preamble, and Articles 1.3, 2.2, 2.4, 55, and 56
it is obligatory for all UN members to abide by UN Charter provisions
and to ‘promote higher standards of living.’ The obligations
relevant to Para 6 problem in the UN Charter are contained in Art
55. All members having pledged themselves (Art 56 - UN Charter)
‘to take joint and separate action in co-operation,’ ‘for
the achievement of the purposes set forth in Art 55,’ namely
for promotion of ‘universal respect for, and observance of,
human rights and fundamental freedoms for all.’ It is obligatory
for each members country to respect such rights not only within
their own territory, but for all people, universally, and also to
refrain from doing anything which would deny or defeat enjoyment
of such rights.
Such
other legally binding obligations and peremptory norms exist under
Universal Declaration of Human Rights and related Conventions ICCPR,
and several declarations and resolutions adopted by UN Commission
on Human Rights. The ICCPR 1966 declares: ‘‘Every human
being has the inherent right to life. This right shall be protected
by law’’ (Art. 6), and further ‘‘no derogation
was permissible from this right’’(Art. 4). Human Right
Conventions and Treaties of UN and also Regional Treaties and National
Acts on Fundamental Human Rights - including right to life, right
to healthcare, right to better standard of living. EC has separate
treaty. UK, India, USA and most of the countries have their own
national legislation on human rights containing binding obligations.
The
specific reference to WTO Members right to protect public health
made in both - DD and WHO-WTO Report (para 3) - is supported by
Clause (b) of Art. XX of GATT providing General Exceptions, which
reads: ‘‘nothing in this Agreement shall be construed
to prevent the adoption or enforcement by any contracting party
of measures necessary to protect human, animal or plant life or
health.’’
To
be concluded
The
author is the legal advisor of IDMA
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