The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. Born in 1995, it is both a negotiating forum, working highly on consensus of the Members, and a forum for settling trade-related disputes. As of July 2008, there are 153 Member-countries.
Central to the functions of WTO are the Agreements negotiated and signed by its Members, and which cover three broad areas: goods, services, and intellectual property. The WTO Agreement on Trade Related Aspects of Intellectual Property Rights (The “TRIPS Agreement”) is thus far the most comprehensive on the matter of intellectual property.
Intellectual property rights, in general, are rights given to persons over the creation of their minds, with certain conditions. The areas covered by the TRIPS Agreement are copyright and related rights, trademarks (including service marks), geographical indication, industrial designs, patents, lay-out designs of integrated circuits, and undisclosed information, including trade secrets. Intellectual property protection is not new to most countries, as there are already domestic laws in set, apart from the Conventions existing under the World Intellectual Property Organization. However, the extent of protection and enforcement of these rights still vary around the world. The TRIPS Agreement is seen as a way to introduce more order and predictability.
The Agreement is important for developing countries like the Philippines because it establishes a multilateral rule of law in the area of intellectual property, therefore levelling the playing field in the world economy. In addition, it especially allows for balance and flexibility in its provisions, which developing countries can use to their advantage.
The TRIPS Agreement is a “minimum rights agreement”, providing simply a set of minimum standards of intellectual property protection for each category of rights, leaving the Members free to determine the appropriate method of implementing its provisions. The Philippines has chosen to exercise this right of flexibility in the area of patents in public health.
In the Philippines, patented drugs produced by large multinationals are often inaccessible because of high pricing. Recognizing that the level of intellectual property protection afforded to patents on medicines is a factor for this pricing, law and policymakers, with the support of the Intellectual Property Office- Philippines, sought to take full advantage of the flexibilities allowed by the TRIPS Agreement. In 2008, Congress enacted R.A. 9502, “The Universally Accessible Cheaper and Quality Medicines Act”, which contains amendments to the provisions of the old Patent Law (R.A. 8293, The Intellectual Property Code).
The TRIPS Agreement allows Members to exclude from patentability inventions in order to protect human life or health. Thus, the Cheaper Medicines Act adds to the list of what are not patentable:
- ” mere discovery of a new form of a new property of a known substance which does not result in the enhancement of the known efficacy of the substance
- ” mere discovery of any new property or new use for a known substance
- ” mere use of a known process unless such known process results in a new product that employs at least one new reactant
This prohibition is intended to curb “evergreening”, which is a scheme employed to extend patent protection on a product, i.e., through applying for multiple patents on a products separate properties. When a patent expires, it is only then that other manufacturers can produce their generic versions of the drug, to be made available at a lower price.
The other amendment under the Act pertains to strengthening “compulsory licensing”, which in the IP Code refers to a license granted by the IPO Director General to exploit a patented invention, even without the agreement of the patent owner, under certain conditions. In the WTO Doha Declaration on Public Health in November 2001, it was recognized that some Members with insufficient or no manufacturing capacities could face difficulties in making effective use of compulsory licensing under the TRIPS Agreement. Thus, the “Paragraph 6 System” was devised by the TRIPS General Council, whereby a Member may grant a compulsory license to export a drug or medicine to an eligible importing Member. This was an exception carved to the TRIPS rule that compulsory licenses shall be for a use authorized predominantly for the supply of the domestic market.
Incorporating this Paragraph 6 System in Philippine IP law, the Cheaper Medicines Act provides for the grant of “special compulsory licenses” allowing the importation of patented drugs or medicines, provided adequate remuneration shall be paid to the patent owner and there are reasonable measures to prevent the re-exportation of the products imported. Only the Philippine Supreme Court can issue an injunction to prevent the grant of such compulsory license. This special compulsory license is intended to address the problem of local production capacity not being able to meet the demand of the market.
Indeed, there is a need to balance the protection of intellectual property rights with the right of the public to health services at affordable cost. As enshrined under the Constitution, the State shall protect exclusive rights to intellectual property, particularly when beneficial to the people.