Christoph Spennemann, Legal Expert Intellectual Property Team Division on Investment and Enterprise UNCTAD

1. WTO Jurisprudence: Canada – Patent Protection of Pharmaceutical ProductsImplications for Public Health Policies Development Dimensions of Intellectual Property Rights Hanoi Foreign Trade University, 15 & 16 December 2008 Christoph Spennemann, Legal Expert Intellectual Property Team Division on Investment and Enterprise UNCTAD

2. Overview of Presentation • The facts • The findings of the Panel • Implications for public health policies

3. The facts • Canadian public health policy objective: • Promotion of generic drug producers against pharmaceutical patent holders • Competition lowers prices • Competition promotes innovation • Canadian pharmaceutical industry mainly generics-based (as opposed to US & EU) • Tool: Canadian Patents Act • Broad compulsory licensing (CL)  restricted by NAFTA in 1993 • New patent exception: regulatory review exception  subject of WTO case Canada – Patent Protection of Pharmaceutical Products

4. Section 55.2(1) Patents Act • No patent infringement to • make, construct, use or sell patented invention (Art 28.1 TRIPS!) • solely for uses reasonably related to submission of requests for marketing approval of any product • in Canada or in any other country • « Regulatory Review Exception »

5. Section 55.2(2) Patents Act • No patent infringement to • make, construct, use or sell patented invention (Art 28.1 TRIPS!) • during last 6 months of the patent term • for purpose of manufacture & storage of generic drugs intended for sale directly after patent expiry • « Stockpiling Exception »

6. Background (1) • Generic producers make affordable copies of existing drugs • They need marketing approval by drug regulatory authority (DRA) • Marketing approval procedures can take between 3 and 6 yrs • Initiating procedures during patent term will avoid extra, de facto, market exclusivity after patent expiry • Generic producers seeking regulatory approval need access to patented substance  need for exception to rights of patent holder

7. Background (2) • European Community (EC) filed complaint at WTO regarding Canada’s • Regulatory Review Exception • Stockpiling Exception • Main argument: violation of • Art 27 TRIPS (non-discrimination between fields of technology) • Art 28 TRIPS (patent rights) • No justification under Art 30 TRIPS (3ST)

8. Background (3) • Report issued 17 March 2000 • No appeal to WTO Appellate Body • Numerous third party observations • United States (US) partly supported Canada • US domestic regulatory review exception (« Hatch-Waxman Act », 1984) • Narrower than Canada’s • Only for domestic approvals • Patent term extension to compensate patent holder

9. Recapitulation: Art 30 TRIPS • Three-step test for any patent infringing activity • Exceptions are limited (step 1) • No unreasonable conflict with normal exploitation of patent (step 2) • No unreasonable prejudice to legitimate interests of patent owner, taking into account legitimate third party interests (step 3)

10. The Panel’s findings (1) • Stockpiling exception: violation of Art 28, not justified under Art 30, step 1 • During last 6 months of patent, exclusive rights are « entirely removed/abrogated » • Thus, exception is not « limited » • Failure to meet one of the three steps will necessarily result in overall failure to meet Art 30

11. The Panel’s findings (2) • Regulatory review exception: justified under Art 30 • Limited, because curtailment of rights only for particular purpose of enabling regulatory approval (legal analysis) • Does not block « normal » exploitation of patent • Through commercial sales (economic analysis) • No threat to goals of patent policy (normative analysis) • Legitimate interests of patentee not affected: no legal rights; no public policy goals that support de facto extension of exclusivity through late generic market entry (normative analysis)

12. The Panel’s findings (3) • Art 27 (non-discrimination): no violation by regulatory review exception: • applies to all fields of technology, not only pharmaceuticals (no de jure discrimination) • No purpose to impose disadvantages on pharmaceutical patents in particular (no de facto discrimination) • All exceptions under Art 30 need to respect non-discrimination principle • Discrimination differs from «differentiation» (bona fide purposes)

13. Implications for public health policies • WTO approval of recently created patent exception (regulatory review) • Implemented in many countries to promote early market entry of generic competitors • No reference under Vietnam’s Law on IP • Covers activities for domestic and foreign approvals • Effect diminished by exclusive rights on test data • DRA may not grant approval before lapse of exclusivity period

14. Contact Christoph Spennemann Legal Expert Intellectual Property Team Division on Investment and Enterprise (DIAE) UNCTAD E-mail: Christoph.Spennemann@unctad.org Tel: ++41 (0) 22 917 59 99 Fax: ++41 (0) 22 917 01 94 http://www.unctad.org/tot-ip