European Commission spin on "delicate issue of compulsory licensing"

James Love

Below is a press release from the European Commission on negotiations in Europe to implement the provisions for exports of medicines manufactured under a compulsory license. Here are a few things that caught my eye:

"The Commission's proposal implements the relevant decision taken by the World Trade Organisation (WTO) General Council in August 2003, which provided for the possibility of such compulsory licensing of medicines in order to lower their price and address public health issues in some of the poorest countries of the world."

Well, the EC has indeed pushed to limit the 2001 Doha Declaration to the "poorest countries" only, and of course, force the opt-out of the export provision for its own members, including its own poorest members.

"The delicate issue of compulsory licensing has been long discussed in the WTO and the adoption of this new Regulation is expected to play a key role in the relations between the EU and the developing countries during negotiations at the forthcoming WTO Ministerial Conference in Hong Kong."

I guess the EU negotiators think that negotiating a really restrictive implementation of the already bad decision will delight the WTO negotiators from developing countries. Of course, given the outcome of the negotiations, there must be some reason for hope at DG-Trade. After all, what else could be advertised as being part of the "development round." Looks like "para 6" of the 2001 Doha Declaration is turning out to be a long term strategy to avoid actually helping anyone, and as noted by Scott Forseth, is good for plenty of pats-on-own-backs, apparently for years and years (as Ellen 't Hoen points out, quite independent of evidence of effects).

No mention of why DG-Trade thinks it is good public policy to have a WTO rule in place that makes is impossible for one country Europe to export to another country in Europe, even in the case of a compulsory license being issued to address a public interest, abuse or national emergency, or that the EU recently amended the "opt-out" language in the agreement to cover all present and future members of the EU. Apparently this is not a topic not worthy of debate in Europe, and is better left to the trade negotiators who attend WTO meetings.

Given that compulsory licensing is such a "delicate issue," one wonders how a mandatory compulsory licensing program found its way into the European Union Directive on Biotechnology. I'm sure the European plant breeders are pleased that the benefits of that compulsory license were expressed targeted to help Europeans. I'm sure that Microsoft wished the European Commission would be more restrained in its compulsory licensing proceeding against them. All of which brings up another point. Exports under a compulsory license have always been permitted when issued to remedy anticompetitive practices -- such as the failures to license technology that are at the root of the European Biotechnology Directive and the Microsoft case.

Read Article 31.k of the TRIPS, which says “Members are not obliged to apply the conditions set forth in subparagraphs (b) and (f) where such use is permitted to remedy a practice determined after judicial or administrative process to be anti-competitive.” These are the paragraphs which address negotiations on reasonable commerical terms, and limits of exports. And, you can also read Article 40 of the TRIPS, which reads in part:

Members agree that some licensing practices or conditions pertaining to intellectual property rights which restrain competition may have adverse effects on trade and may impede the transfer and dissemination of technology. . . Nothing in this Agreement shall prevent Members from specifying in their legislation licensing practices or conditions that may in particular cases constitute an abuse of intellectual property rights having an adverse effect on competition in the relevant market. As provided above, a Member may adopt, consistently with the other provisions of this Agreement, appropriate measures to prevent or control such practices. . .

But of course, that’s for the non-poorest countries to use, when efficiency, competition and economies of scale are important.

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http://www.ipr-helpdesk.org/controlador/noticia?seccion=noticia&tipoListado=all&id=0000005803&len=en 2005/12/09. IP European Union. Closer to the adoption of a Regulation to enable copies of patented medicines to be exported in developing countries The European Parliament recently voted on the Commission's proposal for a Regulation that would enable European companies to fabricate copies of patented medicines to be exported to developing countries without the authorisation of the patent holder. The Commission's proposal implements the relevant decision taken by the World Trade Organisation (WTO) General Council in August 2003, which provided for the possibility of such compulsory licensing of medicines in order to lower their price and address public health issues in some of the poorest countries of the world. The delicate issue of compulsory licensing has been long discussed in the WTO and the adoption of this new Regulation is expected to play a key role in the relations between the EU and the developing countries during negotiations at the forthcoming WTO Ministerial Conference in Hong Kong. Related Links: Related press release from the European Commission IPR-Helpdesk related news item: 2004/11/02 "European Union. The Commission proposes a Regulation to enable the export of pharmaceutical products to poor countries"