University of Hamburg

Master of International Business

School of Business,

Administration(MiBA)

Economics and Social Sciences

Report

Economic Law

The TRIPs Agreement ­

Legal Implemantation of Patent Protection

and Resulting Impacts on LDCs

Author

Sven Löhr

Submission Date

2008/03/31

Course of Studies

MiBA, Summer Term 2007

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Table of Contents

I

TABLE OF CONTENTS

1

Introduction and Problem Definition 1

2

The TRIPs Agreement ­ An Overview 2

2.1

Central Principles and General Regulations 2

2.2

The TRIPs Agreement and Intellectual Property Rights 3

3

Implementation of Patent Protection in the TRIPs Agreement 5

3.1

Current Areas of Discussion 5

3.2

Relevant Articles and Interpretation 5

3.3

Problems of Interpretation in Terms of Patent Protection for Pharmaceutical Products

7

3.4

The Problem of Conflictive Interests between Industrialized and Developing Countries

and the Resulting Impact on LDC′s 8

4

Doha Declaration (2001) to TRIPS and Public Health 11

4.1

Reasons for the Doha Declaration 11

4.2

Content of the Doha Declaration 12

4.3

Interpretation of the Declaration and the "Paragraph 6 Solution" 13

4.4

Negotiation Process between Developing and Industrial Countries 14

5

Post-Doha: Compulsory Licences for Countries with Insufficient or no

Manufacturing Capacity 16

5.1

Accomplishment of the Decision 16

5.2

Content of the Decision 17

5.3

Critical Evaluation of the Decision 18

6

Case Study: Pharmaceutical Supply in Developing Countries 20

6.1

Background 20

6.2

Development of a Pharmaceutical Industry in Developing Countries 20

6.3

Undersupply of pharmaceuticals ­ the Case of HIV/Aids 21

6.4

Patent issues in access to HIV/AIDS drugs in Kenya 25

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Table of Contents

II

6.5

Resulting Problems 26

7

Conclusion 27

8

References 28

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Figures

II

I

FIGURES

Figure 1: The normative framework - the three pillars of the multilateral trade agreements 2

Figure 2: Consequences of competition in the generics production (June 2000 ­ June 2006)

23

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Abbreveations

I

V

ABBREVIATIONS

EDL Essential Drugs List

EU

European Union

GATS General Agreement on Trade in Services

GATT General Agreement on Tariffs and Trade

Inc.

Incorporation

LDC

Least Developed Country

NHI

National Health Institute

MSF

Médecins Sans Frontiéres

NGO

Non-Governmental Organization

R&D

Research & Development

TRIPs

Agreement on Trade-Related Aspects of Intellectual Property Rights

US

United Staates

VFA

Verband Forschender Arzneimittelhersteller

WIPO

World Intellectual Property Organization

WHO

World Health Organization

WTO

World Trade Organization

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1. Introduction and problem definition

1

1 Introduction and Problem Definition

Due to the ongoing globalisation process and the proceeding trade liberalisation the

protection of intellectual property rights is becoming more and more important. The fast-

paced technological progress and the shortened product life cycles call for a closer

consideration of material goods in the world economy and the necessity to protect those.1

The further development of production techniques, well developed communication chains

and the further development of new media enable the copying, imitating and the piracy of

goods or make it even easier. To thwart those acts of piracy the protection of intellectual

property rights has to be ensured. This is guaranteed by the TRIPs Agreement, the WTO′s

Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs).2

This paper will focus on the patent protection as one main area of the TRIPs Agreement.

Since the success and establishment of industries is dependent on a well-functioning and

predictable patent system, it is important to refer to questions of patent protection. Especially

the pharmaceutical sector is reliant on patent protection, which is emphasised by the

following quotation:3

"

Questions as to the patentability of inventions of pharmaceutical products or

biotechnological products, the rights conferred by a patent or the possibility to grant

compulsory licences resulted in barriers to the conclusion of a definitive agreement

on patent protection" 4

In light of this, since international conventions on patent protection left too much scope for

interpretation, TRIPs was implemented to fill in the gaps in the international patent systems

by setting up uniform minimum protection standards.5

The following article shall give an overview of the TRIPs Agreement and the concept to

protect intellectual property. The pharmaceutical production and the abuse of rights are the

main focus of this work. During the analysis of the articles and the exemplification of the

conflictive interests of the developing and the industrial countries the problem of compulsory

licences in the pharmaceutical sector will illustrate the problematic situation in the area of

patent protection in pharmaceutics. Finally, case studies will be integrated to back up the

findings.

1 Cf. Staehelin (1997), p. 14.

2 Cf. Stremmel (2004), p. 1.

3 Cf. Kolker (2000), p. 4.

4 Kolker (2000), p. 4.

5 Cf. Kolker (2000), p. 4.

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3. Implementation of patent protection in the TRIPs agreement

2

2 The TRIPs Agreement ­ An Overview

2.1 Central Principles and General Regulations

The Agreement on Trade-Related Aspects of Intellectual Property Rights is one of the three

pillars of the multilateral trade agreement that belong to the WTO. The further two

agreements are the General Agreement on Tariffs and Trade (GATT)6 and the General

Agreement on Trade in Services (GATS)7. All member states of the WTO are also

contracting states of the three mentioned agreements.8

WTO

GATS

GATT

TRIPs

Figure 1:

The normative framework - the three pillars of the multilateral trade agreements.9

The protection of intellectual property was implemented with the foundation of the WTO in

1995 by integrating the TRIPs Agreement within the WTO regulation framework. Under the

former GATT 1947 regulation patent protection was not compulsory. Before the WTO was

established and simultaneously the TRIPs Agreement was implemented, the WIPO10 had

sole responsibility with reference to intellectual property and its protection.11

The TRIPs Agreement is based on the principles of established conventions that were

already dealing with the protection of intellectual property before the TRIPs implementation.

These conventions are the following: Berner convention, Rome convention, Washington

contract and Paris convention. All contracting states of the TRIPs Agreement are also

members of the mentioned conventions. 12

6 In 1993 GATT 1967 was updated to GATT 1994. The existing GATT members became founding

members of the WTO. The WTO expanded its scope from traded goods to trade within the service

sector and intellectual property rights.

7 GATS entered into force as a treaty of the WTO in 1995. The treaty extends the multilateral trading

system to services, in the same way as GATT provides such a system for merchandise trade.

8 Cf. Geisel (2003), pp. 27-28.

9 According to Geisel (2003), pp. 27-28.

10 The WIPO was established in 1967 with the objective to foster the rights of intellectual property. The

WIPO had a consultant function and helped governments with questions of intellectual property in the

legislative. Since the TRIPs agreement was negotiated and implemented in the WTO regulation, the

WIPO sees itself affronted by loosing its former power and tries to win back its influence.

11 Cf. Geisel (2003), pp. 27-28.

12 Cf. Seiler (2000), p. 8.

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