TRIPS flexibilities allow countries to tailor their patent processes to suit specific needs, while still allowing substantive conformation with international treaty commitments. The following flexibilities of the TRIPS Agreement are relevant here.
Exhaustion of rights, also known as parallel importation (TRIPS Article 6) are where a member may allow the importation of a pharmaceutical product from a country where a patentee also holds a patent. Furthermore, the patentability criteria (novelty, inventiveness and industrial application) are not defined in the TRIPS Agreement, a WTO member is free to interpret their meanings and as such determine what is patentable in the pharmaceutical sector.
Bolar Provisions
Bolar Provisions allow the use of a patented invention for research and development, thereby ensuring that a patent does not hamper scientific research. Additionally; in order to ensure that generic medicines enter the market as soon as possible after the expiry of a patent, provision may be made for a regulatory (bolar) exception which allows a competitor to use an invention to undertake acts necessary for obtaining regulatory approval and registration of a generic product before the expiry of the patent term without the authorisation of the patent holder.
Compulsory licences
The grant of compulsory licenses is one of the most important flexibilities in the TRIPS Agreement and may be utilized to combat high prices of medicines, anti-competitive practices, failure to work a patent, and emergency public health situations. However, in order to make use of such compulsory licenses national legislation should provide for same and specify the circumstances under which such licences may be granted.
It is important to note that the above-mentioned flexibilities of the TRIPS Agreement will not necessarily have a synergistic effect on each other and, as such, each WTO member should conduct an in-depth research project to establish which of these flexibilities would be most beneficial to a specific WTO member.
TRIPS flexibilities in BRICS nations
In the South African context; international best practice and the experience of other countries (especially BRICS nations) may provide guidance on the implementation of substantive examination systems. Here, the implementation of substantive examination under TRIPS has resulted in substantially different outcomes in the various BRICS nations.
In Brazil the adoption of an examination-based system has resulted in years-long delays in the processing of patent applications, as well as historically high costs of prosecution. This has, however, been argued to have had a positive impact where pharmaceutical patents are concerned; as the low number of pharmaceutical patents being prosecuted in Brazil has opened up space for domestic generic drug companies to operate. Use of compulsory licences (or the threat thereof) has also been made to allow domestic pharmaceutical companies access to drugs currently under patent.
The Indian experience of substantive examination and TRIPS flexibility has, like Brazil, been driven by an ongoing policy of providing affordable healthcare to its citizens and protecting its own generic pharmaceutical industry. Here government policy is aided by a substantially more efficient (although still very costly) patent office, with patents being examined and granted in a timeous manner. Indian patent law is also notable for the extra efficacy requirement for pharmaceutical patents under section 3(d) of the Indian Patent Act of 1970.
The more stringent Indian approach to pharmaceutical patents, coupled with the use of compulsory licences, has been argued to have played a role in driving down drug prices in that country. Here, however, it should be mentioned that the patent regime in India has actually strengthened over time, as prior to its inclusion into the WTO it did not recognise patents for pharmaceutical products at all. Further, it is notable that Indian pharmaceutical development, unlike its generic sector, is primarily focussed on so-called Western diseases and is consequently towards extracting revenue from outside the country.
When looking at China, It has been noted that this nation has been reluctant to press for a structural reform of intellectual property rights regulation in the WTO, despite lending its support to developing countries when the negotiations over the Decision on Implementation of Paragraph 6 of the Doha Declaration were under way. China has accordingly not utilized any of the flexibilities of the TRIPS Agreement, and makes use of a fairly ordinary examination system.
Russia, by contrast, makes use of TRIPS flexibilities in a way that is profoundly different to either Brazil or India. Here, Russian law allows for six years of data exclusivity for pharmaceutical applications as well as a 5-year patent term extension for medical and agrochemical inventions. The result is a patent regime which is substantially friendlier to pharmaceutical companies, while limiting the market access of generic drug companies. This is in line with Russia’s historically well-developed pharmaceutical sector, which is a substantial contributor to the Russian economy and includes a significant state-owned component.
In conclusion, it is clear that international best practice varies according to the specific circumstances of the countries involved. Even within BRICS nations, substantial variation exists as to the utilization and purpose of TRIPS flexibilities. In all cases, however, IP policy is moulded by a need to assert national priorities while balancing international commitments.
Accordingly; further study and reflection is needed regarding the optimal approach which should be followed in the South African context, with serious consideration being given to both present social needs as well as overall economic policy in light of current budgetary and administrative resources.
Pieter Lombard
Senior Associate
Patent Attorney
Email pieterl@kisch-ip.com
Tel +27 11 324 3082
Allan John Rabie
Attorney
Patent Department
Email ajr@kisch-ip.com
Tel +27 11 324 3000
