This article was written by Faisal I. Chaudhry | University of Pennsylvania
Abstract: Issues surrounding patent protection for pharmaceuticals and access to essential medicines have long been a source of controversy in the context of multilateral trade agreements. Even as the battles that crystallized over anti-retroviral therapies for HIV/AIDS treatment and the implementation of the WTO’s agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) have subsided, new fault lines have opened up in recent years. The increasing proliferation of regionally based regimes for trade/investment liberalization has created new opportunities for the pharmaceutical lobby to re-open what were on their way to becoming settled issues. In the process, the fragile consensus that was beginning to emerge regarding TRIPS-compliant methods of creating exceptions to excessively strict standards of patentability in the pharmaceuticals context has come under great pressure. While such matters have started to attract significant attention among civil society actors monitoring the ongoing talks concerning the Trans Pacific Partnership (TPP), they have been less visible in discussions of the TAFTA | TTIP. In this article I consider the potential risks the TAFTA | TTIP poses to the hard-won exceptions to patentability in the pharmaceuticals context through functioning as a Trojan horse for advancing a so-called TRIPS-plus agenda.
The relationship between strict patent protection for pharmaceuticals under free trade agreements and the crisis faced by the world’s poor in accessing essential medicines has become increasingly controversial since the launch of the World Trade Organization (WTO) in 1995. By the late 1990s, concern crystallized around the impact of the WTO’s agreement on Trade Related Aspects of Intellectual Property (TRIPS) on the availability of generic versions of anti-retroviral therapies for HIV/AIDS patients in the developing world. In the years that followed, global civil society actors and popular forces achieved a major victory, with the WTO Ministerial Conference’s November 2001 Doha Declaration on the TRIPS Agreement and Public Health. By affirming the ability of developing countries to take a flexible approach to patent rights under the TRIPS in order to ensure access to life-saving drugs, the Doha declaration seemed to conciliate the worst fears about the impact of corporate-led globalization on the health of the world’s poor. Yet soon after the Ministerial had issued its declaration, it became plain that the increasingly assertive stance of developing countries was leading the advanced economies to attempt to bypass the newly chastened WTO framework altogether. In place of the broad multilateral approach to trade and investment liberalization, and especially with the stalling of the Doha Development Round of WTO negotiations after 2005, bilateral/regionally-based treaties took on renewed prominence.
By the end of the first decade of the new millennium, the move beyond WTO channels had clearly created new opportunities for the pharmaceutical lobby to re-open issues around patent flexibility once more. In the process, the fragile consensus that was beginning to emerge regarding TRIPS-compliant methods of creating exceptions to pharmaceutical patentability/patents (through devices like compulsory licensing and parallel imports) has once more come under threat. While concern over this push for so-called “TRIPS-plus” protection has garnered significant attention among civil society actors that monitor ongoing negotiations relating to the Trans-Pacific Partnership (TPP), this has not necessarily been the case in the context of the major transatlantic liberalization agreements that are now being negotiated between the US and EU. To date, concern over the incipient Transatlantic Free Trade Area (TAFTA), more recently referred to as the Transatlantic Trade and Investment Partnership (TTIP), has focused primarily on specific issues such as data protection or the general tendency toward downward regulatory harmonization that these agreements portend.
What, however, are the specific concerns the TAFTA | TTIP framework raises as a mechanism for pushing TRIPS-plus protections in the global intellectual property rights (IPR) context? This question is particularly important given that the TAFTA | TTIP negotiations may not seem to be as immediately connected to issues of treatment access as the TPP talks, which more directly implicate the developing-developed country divide. Such a view, however, is misguided. In fact, the relatively greater parity between the US and its EU partners may make careful scrutiny of the implications of TAFTA | TTIP for issues of treatment access all the more necessary. This is because discussion between equals is likely to become a more effective channel for pushing TRIPS-plus standards and, thereby, for normalizing patent rules that are liable to prove draconian for the world’s poor and infirm.
TAFTA | TTIP and the Normalization of TRIPS-Plus Agenda
With negotiations having begun only in July 2013, concrete details about the precise rule content of the TAFTA | TTIP are yet to emerge. However, based on leaked EU documents (many of which since their leak have been released officially), it is clear that the TAFTA | TTIP agenda is meant to be broadly inclusive of a range of issues, including bolstering bilateral intellectual property (IP) rules. The desire to “go beyond the regulations and aspects covered by the WTO” agreements on Technical Barriers to Trade (TBT) and Sanitary and Phyotosanitary (SPS) standards, for example, is made explicit in the EU’s initial position paper (European Commission 2013a, 2), including as relating to the pharmaceuticals sector (ibid. 3; 5). In addition to the proposed TBT-plus and SPS-plus chapter, in its February 2013 final report, the US-EU High Level Working Group on Jobs and Growth (HLWG) proposes negotiations in three other areas. Most important among these are discussions about “cross-cutting disciplines on regulatory coherence and transparency” to create “efficient, cost-effective, and more compatible” regulations (US-EU HLWG 2013, 4). Provision for such cross-cutting disciplines is to be made as part of the text of a proposed ‘horizontal’ chapter, which the HLWG proposes to cover issues requiring ‘non-sector specific’ regulations (ibid., 5). While it remains to be worked out what, more precisely, these so-called cross-cutting disciplines will entail, in general they are meant to encode a commitment toward regulatory harmonization in accord with the TAFTA | TTIP’s most basic goal of “elimin[ating], reduc[ing], and prevent[ing]” rules that are deemed to be “unnecessary regulatory barriers” (European Commission 2013a, 1). As such, they are expected to focus on unifying approaches to regulation, first, through elaborating “regulatory principles, best practices, and transparency;” second, through creating mechanisms for the “assessment of the impact of draft regulations or regulatory initiatives on international trade and investment flows;” and, third, through guaranteeing “cooperation towards increased compatibility/convergence of regulations” (ibid., 3).
While the TBT, SPS, and horizontal chapters may appear narrowly focused in their proposed rule content, the HLGW also advocates a broader mandate for discussions between the EU and US. As it explains, the opportunity to broach other key issues follows naturally from “the size and influence of the transatlantic partnership” (US-EW HLGW 2013, 5). Under this mandate, the HLGW specifically recommends that the TAFTA | TTIP negotiations be used to engage in further discussions about areas such as labor, environmental regulation, and intellectual property rights (IPR) issues. While a later position paper adds the relationship between trade and sustainable development to this mix of broader issues (European Commission 2013b), significantly, the HLGW is yet to call for independent consideration of the TAFTA | TTIP’s implications for public health safeguards.
With specific reference to IPR standards, the HLGW urges that the US and EU explore their “commitment to maintaining and promoting a high level of intellectual property protection, including enforcement.” The negotiating parties are thus encouraged to “explore opportunities to address a limited number of significant IPR issues of interest to either side” (US-EW HLWG 2013, 5). Much the same general message has been since reiterated in more explicit terms. In a resolution passed on 14 May 2013, the European Parliament endorses a negotiating mandate “stress[ing] that intellectual property is one of the driving forces of innovation and creation and a pillar of the knowledge-based economy, and that the agreement should include strong protection of precisely and clearly defined areas of IPRs, including geographical indications, and should be consistent with existing international agreements.” It further expresses the Parliament’s “belie[f] that other areas of divergence relating to IPRs should be resolved in line with international standards of protection” (European Parliament 2013, par. 12). Similarly, an even more significant document outlining the European Commission’s express directives for negotiation – also leaked – instructs that:
27. The Agreement shall cover issues related to intellectual property rights and should complement and build upon the TRIPS. The Agreement will reflect the high value placed by both Parties on intellectual property protection and build on the existing EU-US dialogue in this sphere. (European Commission 2013c).
28. Negotiations should, in particular, address areas most relevant for fostering the exchange of goods and services with IP content, with a view to supporting innovation. Negotiations should provide for enhanced protection of EU Geographical Indications through the Agreement. Both sides should explore opportunities to address other significant IPR issues. (ibid.)
The Key Elements of TRIPS-plus
While negotiating guidance thus clearly points to using TAFTA | TTIP talks to reopen “significant IPR issues”; what, more specifically, will these include? If the overall shape of TRIPS-plus regimes that the advanced economies, led by the US, have pushed in other contexts is a guide, these are likely to be several. Four such IPR issues in particular are worth highlighting.
The First Potential Element of a TRIPS-plus Push through TAFTA | TTIP
The first IPR issue of significance that the push for TRIPS-plus is likely to reopen involves a desire to make standards for patentability for ‘new’ inventions even more lax. Given the already broad scope of the TRIPS’ basic rules on the scope and availability of patents, the aim of further reducing barriers to patentability has been made manifest through pushing for new rules that would facilitate the practice of ‘evergreening’ existing drugs. In the pharmaceutical context, evergreening refers to the practice of extending a firm’s legal monopoly over an existing drug by obtaining a new patent on a substance based on minor modifications to its existing composition or dosage level. Because evergreening measures do not typically require the demonstration of new therapeutic efficacy, the assortment rules that can be classed under this heading function to effectively prohibit the market entry of generic competitors at the end of the original patent period.
The specific means by which TRIPS-plus frameworks have or are seeking to make evergreening easier center on elaborating new requirements obligating countries to adopt set approaches to defining when an invention is patentable. While expansive with respect to the class of inventions and fields of technology for which patentability has to be made possible, the TRIPS does not define precise criteria for evaluating the patentability of any given invention. This inherent flexibility within the TRIPS approach has allowed countries to overhaul domestic patent regimes in TRIPS-compliant ways while limiting the possibility of evergreening through mandating more or less rigorous approaches to defining the requisite novelty, applicability, and the like needed for an invention to be awarded patent monopoly. A long-running case, involving the rejection by Indian authorities of an application by Swiss pharmaceutical giant Novartis for a patent on the life-saving cancer drug Gleevec, illustrates these points well. In Novartis v. Union of India & Others after seven years of litigation the Indian Supreme Court upheld the rejection of a patent application on Gleevec (imatinib mesylate). In April 2013 it ruled that absent any demonstration that Novartis’ new form of the existing imatinib compound had novel therapeutic effects, the company had failed to meet the requirements for patentability under section 3(d) of India’s revised patent Act (Kapczynski 2013). In the years after the initial rejection by Indian authorities of Novartis patent claim in 2006, the opening of Gleevec to generic competition witnessed the drug’s price decreasing from $2400 per patient per year in India to a mere $200 per patient per year (Médecins Sans Frontières 2012, 10).
A Second Potential Element of a TRIPS-plus Push through TAFTA | TTIP
The intellectual property chapter of the leaked draft of the TPP suggests a second major element that is likely to be part of a push for a TAFTA | TTIP-based TRIPS-plus framework. This involves creating new rules to effectively extend patent terms beyond the two-decade minimum mandated under the TRIPS. Under Article 8(6)(b) of the TPP’s draft IPR chapter, at the request of a patent owner, signatories are to be required to “adjust the term of a patent to compensate for unreasonable delays that occur in the granting of the patent.” Without clarifying what constitutes an “unreasonable” basis for delay after the application’s filing, the draft provision suggests that a minimum of four additional years could be added to the life of the patent in the event that such a delay was deemed to have taken place (TPP Draft). Likewise, Article 8(6)(c) of the leaked IPR chapter of the TPP draft requires signatories to allow patent owners to require “an adjustment of the patent term of a patent which covers a new pharmaceutical product” or “a method of making or using a pharmaceutical product” as compensation for delays in the “marketing approval process” (TPP Draft).
A Third Potential Element of a TRIPS-plus Push through TAFTA | TTIP
A third avenue along which TAFTA | TTIP negotiations may be likely to push a TRIPS-plus agenda involves so-called data exclusivity rules. Beyond the direct limitations to market entry imposed by patent monopolies, generic manufacturers must meet further registration requirements even as patent expiration approaches. With the patent owner’s clinical data demonstrating safety and efficacy already available, generic registration has remained a fairly straightforward process, only requiring competitors to demonstrate that their non-brand version of a drug is the biological equivalent of the patented entity. As Médecins Sans Frontières (MSF) explains, the relative ease of this process is contingent on the existing TRIPS framework, which only requires that member states protect a patent owner’s clinical data and not that patent holder be given legal exclusivity over that data’s use (Médecins Sans Frontières 2012, 11). Given access to already extant clinical data, regulatory agencies have needed only to make a determination about the generic composition’s bio-equivalence. By creating monopoly rights to the use of clinical data under a TRIPS-plus agenda, this would no longer be the case. Regulatory agencies would instead be locked out of the patent holder’s data vault, leaving generic manufacturers stymied until the period of data exclusivity comes to an end. Moreover, what is effectively the secondary patent that a data exclusivity right would grant to its holder would be separate from the actual patent. That is to say, there is no reason why the period of data exclusivity could not persist beyond the life of the original patent, being that it would be a distinct measure of time.
A Fourth Potential Element of a TRIPS-plus Push through TAFTA | TTIP
A final way in which the TAFTA | TTIP could function as a Trojan horse for a TRIPS-plus regime involves creating rules to limit the ability to challenge patent applications. Under the current rules of the TRIPS there are no restrictions on member states to prohibit or limit procedures for filing such opposition, whether before or after a patent is actually granted. Pre-grant opposition procedures have generally enabled any party – whether NGOs, researchers, or competitor firms – to submit information and analysis to a patent examiner in opposition to pending applications (Public Citizen 2011, 1). They have thus been crucial in fighting frivolous or otherwise suspect filings. However, US support for eliminating so-called ‘pre-grant opposition’ in the TPP context became public in July 2011, with the leak of a document circulated to negotiating parties that strongly implied American disfavor of such procedures (Public Citizen 2013). The position of US negotiators now casts pre-grant opposition as a form of “harass[ing] the examiner and/or applicant” in order to “delay or confuse the examination process” or otherwise “overburden” patent offices (ibid., 1).
The first decade after the WTO agreement came into force witnessed a remarkably quick and effective effort by developing countries and civil society groups to ensure that the TRIPS would not entirely forestall member states from designing intellectual property regimes responsive to concerns about health, public safety, and the like. In the period since, however, there has occurred just as marked an effort to push this victory back. Insofar as advanced countries have used bilateral and regional trade agreements like the impending TAFTA | TTIP to do so, civil society actors may face a more severe challenge than they did in the late 1990s. This is because battle lines are now drawn less around the challenge of exposing the interpretive ambiguities within the TRIPS than they are around the wholesale institutionalization of new and more exacting TRIPS-plus requirements. Given that the TAFTA | TTIP is, like its trans-Pacific counterpart the TPP, still being negotiated, however, ample opportunity exists to call attention to the most glaring potential negative consequences of TRIPS-plus patent rules. Reducing standards for what counts as a “new” invention through facilitating evergreening of patents, effectively extending patent terms beyond the period designated in the TRIPS, data exclusivity rules, and limiting the ability to challenge patent applications are just four of the most prominent areas of concern.
European Commission (2013a): EU-US Transatlantic Trade and Investment Partnership: Trade Cross-Cutting Disciplines and Institutional Provisions: Initial EU Position Paper. Available online: http://trade.ec.europa.eu/doclib/docs/2013/july/tradoc_151622.pdf
European Commission (2013b): EU-US Transatlantic Trade and Investment Partnership: Trade and Sustainable Development. Available online: http://trade.ec.europa.eu/doclib/html/151626.htm
European Commission (2013c): Annex. Available online: https://netzpolitik.org/wp-upload/DS1353_13_REV1_Annex.doc
European Parliament (2013): Resolution on EU Trade and Investment Negotiations with the United States of America, (2013/2558(RSP). Available online: http://www.europarl.europa.eu/sides/getDoc.do?type=MOTION&reference=B7-2013-0187&language=EN
Kapczynski A. (2013): Engineered in India: Patent Law 2.0, New England Journal of Medicine, vol. 369 (August 8, 2013), pp. 497-499.
US-EU High Level Working Group on Jobs and Growth (2013): Final Report, February 11, 2013. Available online: http://trade.ec.europa.eu/doclib/docs/2013/february/tradoc_150519.pdf
Médecins Sans Frontières (2012): Trading Away Health, MSF Access Campaign Issue Brief, August 2012. Available online: http://aids2012.msf.org/wp-content/uploads/2012/07/TPP-Issue-Brief-IAC-July2012.pdf
Public Citizen (2011): Risks of the Trans-Pacific Free Trade Agreement for Access to Medicines, July 7, 2011. Available online: http://www.citizen.org/documents/analysis-of-leaked-US-paper-on-eliminating-pregrant-opposition.pdf
Public Citizen (2013): US-TPP Paper, Pre-Grant Opposition (Leaked: 14 November 2014). Available online: http://www.citizen.org/documents/Leaked-US-TPPA-paper-on-eliminating-pre-grant-opposition.pdf
TPP Draft (2011): Chapter on Intellectual Property Rights, in Leaked TPP Draft Text. Available online: http://www.citizenstrade.org/ctc/wp-content/uploads/2011/10/TransPacificIP1.pdf
WTO (1994): Agreement on Trade-Related Aspects of Intellectual Property Rights. Available online: http://www.wto.org/english/docs_e/legal_e/27-trips_01_e.htm