04-Jun-2020
The Agreement of Trade Related Intellectual Property Rights which became effective on January 1, 1995 (the “TRIPS Agreement”)
declared pharmaceutical products as an invention which can be protected
by a patent. When an inventor registers his pharmaceutical products as a
patent, no third party shall have the right to manufacture, supply or
sell such pharmaceutical product without the consent of the legal owner.
Nevertheless, a growing number of
governments issued legislations authorizing the use of compulsory
licenses for pharmaceutical and medical products as a response to the
COVID-19 pandemic; which enables third parties to use a registered and
protected patent without the owner’s consent under the umbrella of
public health interest.
Already, Canada, Chile and Ecuador have
taken steps to ignore the patent owners’ rights by issuing compulsory
licenses for COVID-19 medicines, vaccines and other medical tools as
follows:
- Canada: the
Canadian Government had issued the COVID-19 Emergency Response Act
which contains a section that enables the Minister of Health to apply
for an authorization for the Government or any specified person to make,
construct, use and sell a patented invention, to the extent necessary
to respond to a public health emergency. In such event, the Government
may grant such license to a public agency or a generic drug maker,
allowing it to copy a patented medicine without the consent of the
company that legally owns the patent.
- Chile: On
March 17, 2020, the parliament of Chile unanimously issued a resolution
which provides that the global Coronavirus pandemic justifies the use of
compulsory licensing to ease access to vaccines, drugs, medical
supplies and other technologies which are useful for the prevention and
treatment of people whom are diagnosed with Coronavirus in Chile. This
compulsory license suspends the rights of the patent owner and allows
third parties to produce, supply and sell such products.
- Ecuador: On
March 20, 2020, the Education, Culture, Science and Technology
Commission of the National Assembly in Ecuador adopted a resolution
requesting the Minister of Health to issue compulsory licenses over
patents related to medicines and vaccines overcoming and treating the
Coronavirus.
Many large corporations had offered the
manufacturing of medical supplies, such as General Motors whom are
offering to manufacture ventilators and other much needed medical
equipment, and companies of cosmetics products such as Louis Vuitton and
L’Oréal are offering to produce hand sanitizers.
As well, AbbVie whom is a well-known
drug manufacturer had suspended the enforcement of its patent rights on
the drug Kaletra (Aluvia) which is being tested to treat COVID-19. This
matter will allow third parties to reproduce generic versions of this
drug without being accused of patent infringement and this would allow
countries to purchase generic versions of Kaletra, if it is found
effective in treating COVID-19.
It is worth noting that compulsory
licensing also played a role in the year of 2001 facing the AIDS crisis
and the unaffordable prices for HIV medicines, where countries pushed
the World Trade Organization to adopt a resolution allowing the use of
compulsory licensing to lower costs. However, Canada and a number of
other developed countries did not allow the use compulsory licensing to
import lower-priced drugs.
In this content, it is worth
showing the position of the Lebanese Law as well as the Qatari Law in
regards of compulsory licensing taking into consideration that Lebanon
is not a member of the TRIPS Agreement while Qatar is a member.
As per Lebanon, according to the Patent Law no. 240 of the year 2000, two types of compulsory license exist:
(1) By a court decision:
based on a request from any interested
person provided that (a) the owner of the patent three years after the
patent’s registration has not exploited the patent, or has stopped its
exploitation for three consecutive years without a reason; and (b) the
applicant for the compulsory license provides an evidence that he tried
to obtain the license from the owner without success, however, this last
condition may be waives in the events of national emergencies, extreme necessity, or in cases of general use for non-commercial purposes. The consideration of royalty fees will be determined by the court.,
(2) By a decision of the Council of Ministers:
For the requirements of protecting
public health and food security and securing the public interest in
areas of vital importance in economic, social and technological
development, and upon the request of the competent minister, the
Council of Ministers may decide to include the patents granted in
Lebanon to the system of administrative compulsory licensing, if the
products obtained under those patents are offered to the public in a
quantity or quality that does not meet the needs of the market or are
abnormally highly priced. In such event, each interested person may
submit a request to the Minister of Economy to be granted such
compulsory license with a consideration of royalty fees to be paid to
the patent owner.
In the events of national defense,
the Lebanese Government has the right to be granted the ownership of the
relevant patents whether partially of full, with consideration of a
compensation to be settled to the patent owner.
It is worth noting that as per the
practice, the consideration of royalty fees or compensation which are
usually assessed by the court or Government, are never adequately fair.
As per the State of Qatar,
according to the Patent Law no. 30 for the year 2006, after the lapse
of three (3) years from the registration of a patent, any interested
person may submit a request to issue a compulsory license of such patent
in the following events: (a) there is no serious exploitation of such
patent throughout such period; (b) if the exploitation of such patent
has been suspended by the patent holder for two (2) consecutive years
without an acceptable reason; or (c) if the patent owner had refused to
grant a license for the exploitation of such patent which will lead to
the impeding the establishment or development of industrial and
commercial activities in Qatar.
Based on the above, the State of Qatar
did not issue any provisions related to the compulsory licensing by the
Government in any events.
After reviewing the article 31 of the
TRIPS Agreement, we note that the TRIPS Agreement granted the States
members a flexibility on the compulsory license where it provides
clearly that each State member has the right to issue compulsory
licenses subject to meet specific conditions (such as to be for the
protection of a legitimate interest). Moreover, the declaration of TRIPS
agreement and public health adopted on November 14, 2001 read as
follows:
"(i) Each Member has the right to grant
compulsory licenses and the freedom to determine the grounds upon which
such licenses are granted.
(ii) Each Member has the right to
determine what constitutes a national emergency or other circumstances
of extreme urgency, it being understood that public health crises,
including those relating to HIV/AIDS, tuberculosis, malaria and other
epidemics, can represent a national emergency or other circumstances of
extreme urgency.
Despite the provisions of the Lebanese Patent Law and despite the
State of Qatar being a member of the TRIPS Agreement, and thus
benefiting from the flexibility of the TRIPS Agreement and its
declaration , none of these two (2) countries had ever resorted to issue
any compulsory license throughout the years for any reason or event.
Based on all of the above,
We note that the practice over
the years showed that compulsory licensed medicines often do not result
in lower prices. Instead they limit investment, limit clinical trials
and researches, and discourage new medicines from entering the market.
Furthermore, compulsory licensing may
help prevent drug shortage; however, patents provide exclusive rights to
its owners to manufacture and sell their products; and without patents,
inventors and innovators can neither be fairly compensated for their
costs of research to continue such matter, nor be encouraged or
motivated for further research to develop new and improved products, and
would obliterate the incentive to invent and create new drugs. By
issuing compulsory licensing, Governments are ignoring the intellectual
property rights of the patent owners and are causing huge losses to such
owners especially for multinational pharmaceutical companies which have
a team of specialists whom have been devotedly working over many
decades to issue the right drugs and vaccinations for each epidemic.
We note that developed countries are
very much concerned about protection of intellectual property rights
because their progress and economic growth, depends on investment in
research and development. Their patent system provides
incentives to speed up their technological progress, enhance their
productivity, and improve their world trade position by strengthening
their economy.
A limited exclusive right must be given
to the patent owner to enable them to use their invention and to recover
the cost of their invention and to have an incentive for further
inventive research. Anything that interferes with the exclusive right of
the patentee would certainly discourage investment in the field of
research; and such imposing of compulsory licensing is definitely
violating the private property right protection which is a consecrated
right by law.
Moreover, compulsory licensing may
danger safety concerns, as the consumers of counterfeit products are at
risk because of the lower quality of unapproved generics may contain
many dangerous consequences. Furthermore, there are many diseases which
are unique to the third world countries. If patent
protection is ensured in these countries, it would provide an incentive
to multinationals to invest in the research to investigate these
diseases which would otherwise remain incurable.
In conclusion, we refer once
again to the TRIPS Agreement, which is one of the most comprehensive
international treaties on intellectual property rights (the “IP
Rights”); the TRIPS Agreement had provided the legal process for the
protection of IP Rights which is particularly very important in the
pharmaceutical sector to enable such sector to recover its investment,
research and development costs and to provide more incentive for further
innovations and researches in order to save the world population.
Therefore, patents are considered the lifeblood of the pharmaceutical
industry, and without patents, which protect ownership, the incentive
for high-value, long-term investments will definitely diminish.
It is highly important to protect the owners’ rights and prevent any obligatory license whether
a member of the TRIPS Agreement or not, as it will be a destruction to
its pharmaceutical industry as well as to its economy, and thus
amendments to the national patent law in order to limit any interference
from the government and avoid any abuse of power from their ends. As
well, and due to the fact that a convention is higher than a national
law, and facing such flexibility from the TRIPS Agreement and its
declaration of November 2001, it is very important to issue an amendment
of the TRIPS Agreement to put an end to any interference from any
government.