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Mega-Regional Trade Agreements pp 217–239Cite as

Intellectual Property in the Trans-Pacific Partnership: Increasing the Barriers for the Access to Affordable Medicines

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Abstract

Most free trade agreements (FTAs) signed by the United States, the European Union and the members of the European Free Trade Association (EFTA) in the last 15 years contain chapters on intellectual property rights with provisions applicable to pharmaceuticals. Such provisions considerably expand the rights recognized to pharmaceutical companies under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) established in the context of the World Trade Organization (WTO). The text on intellectual property of the Trans-Pacific Partnership (TPP) goes further than those FTAs. It reflects the ambition of such companies to obtain even higher levels of protection. This paper discusses some characteristics of the TPP negotiations and their main outcomes and how they may negatively affect access to medicines, notably in developing countries that may become parties to that agreement.

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Notes

  1. 1.

    Agreement on Trade-Related Aspects of Intellectual Property Rights, Annex 1C of the Marrakesh Agreement Establishing the World Trade Organization (opened for signature 15 Apr 1994) 1869 UNTS 299 (TRIPS Agreement).

  2. 2.

    See, e.g., Descheemaeker (2012–2013), p. 543.

  3. 3.

    The North American Free Trade Agreement (NAFTA) is the only precedent where the US negotiated and concluded an agreement with these two categories of countries in a single FTA.

  4. 4.

    The negative implications of this “one size fits all” approach has extensively been addressed in the literature and various reports. See, e.g., UK Commission on Intellectual Property (2002).

  5. 5.

    Krugman (2014).

  6. 6.

    This is probably one of the reasons for the skepticism of Pascal Lamy, former director of the WTO, in relation to the TPP, in his view an “old-fashioned agreement [...] the last of the big old-style agreements”. See Martin (2014). In accordance with one study, even if tariffs for agricultural products were entirely eliminated (an unlikely outcome) the intraregional trade expansion would be modest and mainly benefit US exports. See Burfisher et al. (2014).

  7. 7.

    Smith (2014).

  8. 8.

    See, e.g., Yu (2014), p. 1129; Armstrong (2011).

  9. 9.

    See Nayyar (2013).

  10. 10.

    Declaration on the TRIPS Agreement and Public Health (20 Nov 2001) WT/MIN(01)/DEC/2. http://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_trips_e.htm. Accessed 26 Aug 2015.

  11. 11.

    See, e.g., Reichman and Dreyfuss (2007), p. 85.

  12. 12.

    With the exception of the FTAs signed with Peru, Colombia and Panama, which introduced lower standards for pharmaceuticals as a result of a bipartisan agreement reached in June 2007 between the Republican administration and Democratic leaders in the US Congress. See Hong Kong Trade Development Council (2007).

  13. 13.

    The extension of the patent term required by FTAs is not generally subject to the limitations that can be found under US law where, for instance, the extension to compensate for delays in the marketing approval procedures does not exceed 5 years and, in no case, should exclusivity exceed 14 years from the date of approval by the Food and Drug Administration (35 USC § 156). In addition, the extension applies to only one patent per product.

  14. 14.

    One implication of this obligation is that under the utility standard patents on the second use of a medicine (which would fail to comply with the industrial applicability standard) may be admissible.

  15. 15.

    This obligation is clearly TRIPS-plus. See, e.g., Correa (2011).

  16. 16.

    See e.g. Correa (2008).

  17. 17.

    See Fundación Misión Salud/IFARMA (2009), 4.

  18. 18.

    See Gamba et al. (2012).

  19. 19.

    See, e.g., Kessomboon et al. (2010), p. 667; IFARMA (2009), Oxfam (2007).

  20. 20.

    Moir et al. (2014).

  21. 21.

    Ahumada (2009), p. 129.

  22. 22.

    Australian Government (2013), p. 20.

  23. 23.

    See, e.g., Correa (2013), p. 902.

  24. 24.

    Australian Government (2013), p. 32.

  25. 25.

    For a detailed analysis of the draft TPP provisions relating to access to medicines, see UNITAID (2014).

  26. 26.

    The USA embarked before in a plurilateral negotiation on intellectual property, which concluded with the signature of the Anti-Counterfeiting Trade Agreement (ACTA). This agreement, however, was limited to enforcement measures related to intellectual property rights. ACTA was not ratified by the European Union and other negotiating parties and failed to enter into force. See, e.g., Roffe and Seuba (2014).

  27. 27.

    USTR (2015a).

  28. 28.

    Dourado and Robinson (2014), p. 6.

  29. 29.

    Hong Kong Trade Development Council (2007).

  30. 30.

    Boldrin and Levine (2013), p. 3.

  31. 31.

    USTR (2015b).

  32. 32.

    Max Planck Institute for Innovation and Competition (2015).

  33. 33.

    See, e.g., Public Citizen (2015).

  34. 34.

    See US Department of Commerce and USTR (2015).

  35. 35.

    USTR (2015b).

  36. 36.

    See Max Planck Institute for Innovation and Competition (2015). In the context of the negotiations on a Trans-Atlantic Trade and Investment Partnership (TTIP), the European Commission has recommended, on 25 November 2014, that the EU’s TTIP text proposals be released to the public, and that other information related to TTIP be shared more broadly with all Members of the European Parliament. See European Commission, Communication to the Commission Concerning Transparency in TTIP Negotiations (25 Nov 2015) C(2014) 9052 final.

  37. 37.

    Even members of the US Congress have limited access to negotiating texts, as they “must visit the offices of the United States Trade Representative to review the provisions. They are not allowed to bring anyone with them, nor can they make copies of any documents pertaining to the working agreement”. RT (2014); see also New (2013).

  38. 38.

    Least Developed Countries (LDCs) are still exempted from granting such protection under the TRIPS Agreement (in accordance with Article 66(1)), but many of them allow for such protection.

  39. 39.

    The draft texts of the TPP intellectiual property chapter referred to throughout this paper were made public by https://wikileaks.org/tpp-ip2/tpp-ip2-chapter.pdf. Accessed 8 May 2016; http://keionline.org/tpp/11may2015-ip-text. Accessed 8 May 2016.

  40. 40.

    See, e.g., Carlos Correa (2014).

  41. 41.

    This test has been interpreted as requiring an increase in therapeutic efficacy. See, e.g., various articles in the special issue of Economic and Political Weekly, Rangnekar et al. (2013).

  42. 42.

    See, e.g., Sampat et al. (2012), p. 38.

  43. 43.

    An amendment to the Indonesian patent law adopted on 28 July 2016 introduced a similar standard.

  44. 44.

    See Chapter 5 “Examination of Applications for Patents of Invention and Petty Patents on Chemical and Pharmaceutical Products” (2014).

  45. 45.

    Wagner (2009), pp. 2135, 2154.

  46. 46.

    This was one of the main objectives of the failed SPLT initiative, mentioned above.

  47. 47.

    While the reference to “a person skilled” may give TPP parties certain flexibility, it would have been desirable to refer to an expert in the field. As stated by the US Supreme Court in KSR v. Teleflex, parties may consider that “[a] person of ordinary skill is also a person of ordinary creativity, not an automaton”, see KSR Co. v. Teleflex, Inc., 550 U.S. 398 (2007). http://www.supremecourt.gov/opinions/06pdf/04-1350.pdf. Accessed 10 May 2016. The Indian Revised Draft Guidelines For Examination Of Patent Applications In The Field Of Pharmaceuticals state in this regard that “the person skilled in the art […] is not a dullard and has certain modicum of creativity”. http://ipindia.nic.in/iponew/draft_Pharma_Guidelines_12August2014.pdf. Accessed 30 June 2016.

  48. 48.

    See, e.g., Correa (2015).

  49. 49.

    See, e.g. Correa (2012), p. 143.

  50. 50.

    For the application of this principle in WTO jurisprudence see, e.g., WTO (2013), para. I.3.7.

  51. 51.

    Typically claims on the new use of a medicine are drafted in the USA as “a method of treating X in a patient, comprising administration of a therapeutically effective amount of compound Y”. The referred to provision would oblige parties to grant a patent if a new use were claimed in this form; alternatively, TPP parties may accept what are known as “Swiss claims” (“Use of substance or composition X for the treatment of disease Y”), but might not escape from the obligation to grant patents relating to new uses of a medicine.

  52. 52.

    See Article 21 of the Andean Community, Decision No. 486 Establishing the Common Regime on Intellectual Property (14 Sept 2000) which stipulates that “[p]roducts or processes that are already patented and included in the state of the art within the meaning of Article 16 of this Decision may not form the subject matter of a new patent owing to the fact of having a use ascribed to them different from that originally provided for in the first patent”.

  53. 53.

    Existing FTAs, including NAFTA, permit parties to exclude the patentability of such methods.

  54. 54.

    See Public Citizen (2013).

  55. 55.

    Article QQ.E.4 “Opposition to Grant of Patent”—as proposed by New Zealand, Canada, Singapore, Chile and Malaysia—states that “Each Party shall provide a procedure for third persons to oppose the grant of a patent, either before or after the grant of a patent, or both.”

  56. 56.

    The patent opposition procedures were reinforced in the USA by the “America Invents Act” in 2011. Other examples of proposed obligations inconsistent with US law are the lack of limitation for damages in case of infringement of patents on biologicals not disclosed to competitors, and in the case of use of patents and other intellectual property rights by or for the US government.

  57. 57.

    Article QQ.E.3: [US: “Without prejudice to Article 5A (3) of the Paris Convention,] Each Party shall provide that a patent may be cancelled, revoked or nullified only on grounds that would have justified a refusal to grant the patent [...].”.

  58. 58.

    Flynn et al. (2012), pp. 105, 163.

  59. 59.

    See, e.g., the case brought by the US Federal Trade Commission against Bristol Myers Squibb (information available at http://www.ftc.gov/opa/2003/03/bms.htm. Accessed 26 August 2015). See also Federal Trade Commission (2002). See also European Commission (2009).

  60. 60.

    See WTO, Canada—Patent Protection of Pharmaceutical Products, Panel Report (17 Mar 2000) WT/DS114/R.

  61. 61.

    This exception is generally known as “Bolar exception”.

  62. 62.

    The proponents of this clause suggest to clarify that “[f]or the purposes of this Article, experimental purposes may include, but need not be limited to, determining how the invention works, determining the scope of the invention, determining the validity of the claims, or seeking an improvement of the invention (for example, determining new properties, or new uses, of the invention)”.

  63. 63.

    Emphasis added.

  64. 64.

    See Love (2014).

  65. 65.

    See footnote 7 to Article 31 of the TRIPS Agreement.

  66. 66.

    In fact, it is unclear why certain provisions of the TRIPS Agreement—which is generally applicable to the TPP negotiating parties—are reproduced in the TPP (as well as in many existing FTAs) while other provisions are not.

  67. 67.

    “Article 18.41: The Parties understand that nothing in this Chapter limits a Party’s rights and obligations under Article 31 of the TRIPS Agreement, any waiver or any amendment to that Article that the Parties accept”.

  68. 68.

    Significantly, eight other negotiating countries opposed the US proposal.

  69. 69.

    See, e.g., Correa (2011).

  70. 70.

    As it was the case of Australia in 1998, following a threat of trade sanctions under the special Section 301 of the US Trade Act of 1974, 19 USC Ch 12.

  71. 71.

    On the potential scope and implications of the protection sought by the USA, see Smith (2015).

  72. 72.

    See Executive Office of the President of the United States (2014).

  73. 73.

    The minimum period of protection finally imposed for biological products is 8 years, as clarified in footnote 53 of the TPP text.

  74. 74.

    The case of colchicine, a drug known in the USA since the 19th century on which new clinical trials were conducted—for just 1 week—led to a 50-fold increase in the price from US$0.09 to US$4.85. See, e.g., Kesselheim and Solomon (2010), p. 2045.

  75. 75.

    Executive Office of the President of the United States (2014).

  76. 76.

    See, e.g., Correa (2008).

  77. 77.

    Correa (2008).

  78. 78.

    For instance, in 2003 a requirement was introduced in the US law to ensure that only relevant polymorphs are listed in the Orange Book. See Pohl (2004), p. 219.

  79. 79.

    Footnotes 126 and 128 to the proposed text, however, could be interpreted—despite the reference to “measures in its marketing approval process”—as allowing a party to satisfy its “linkage” obligation by making available judicial provisional injunctions, and to consider that the “consent or acquiescence of the patent owner” has been given when he has failed to avail itself of the opportunities afforded by administrative or judicial measures to prevent the marketing approval of a generic product.

  80. 80.

    See, e.g., Drexel and Lee (2013), p. 124.

  81. 81.

    Similar provisions can be found in the US FTAs with Australia and South Korea.

  82. 82.

    The TPP added other obligations, such as making public the composition of the reimbursement committees and to justify any decision made on reimbursement prices.

  83. 83.

    Intellectual property rights would also be protected, under the TPP investment chapter Article II.1, as “investments” including, in particular, the possibility for a right-owner to directly sue a state in case of an alleged violation of such rights, Section B. An example is the Eli Lilly claim against Canada under the investment chapter in NAFTA. See, e.g., Carlos Correa (forthcoming).

  84. 84.

    Another approach attempted by the USA has been the establishment of what has been termed an “access window”, according to which originator pharmaceutical companies would get stronger protection if they applied for marketing approval of a medicine in a second TPP country within a given period after the first marketing approval was obtained.

  85. 85.

    However, given the current level of the per capita GNI of some of these countries, such as Malaysia and Mexico, any transition period may have already expired for them by the time the TPP comes into force.

  86. 86.

    See Article 18.83.2.

  87. 87.

    The most rational approach—rejected by developed countries at the Council for TRIPS—would certainly have been to extend the transition period until a country ceases to be an LDC.

  88. 88.

    There is a vast literature on the implications on intellectual property on the fundamental right to health and on ways of realizing the latter through balanced regimes. See, e.g., Velásquez et al. (2012).

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  1. Faculty of Law, University of Buenos Aires, Buenos Aires, Argentina

    Carlos M. Correa

  2. The South Centre, Geneva, Switzerland

    Carlos M. Correa

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  1. Faculty of Law, University of Augsburg, Augsburg, Germany

    Thilo Rensmann

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Correa, C.M. (2017). Intellectual Property in the Trans-Pacific Partnership: Increasing the Barriers for the Access to Affordable Medicines. In: Rensmann, T. (eds) Mega-Regional Trade Agreements. Springer, Cham. https://doi.org/10.1007/978-3-319-56663-4_9

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