Australia: Bird Flu Meets Patent Rights – The Public/ Private Balance

In December 2005 the World Trade Organisation (WTO) members decided to transform a previously temporary waiver into a permanent amendment of the Trade Related Aspects of Intellectual Property (TRIPS) Agreement, which sets out agreed standards for national intellectual property systems. The waiver seeks to improve access to patented medicines for poorer countries.

This topic has received much attention recently due to the threat posed by the so-called "Bird Flu" virus, which has once again highlighted the need to balance private patent rights against public health issues. If the H5N1 Bird Flu strain were to mutate into a form capable of human-to-human transmission, a pandemic could result in millions of deaths. Past pandemics have attacked up to 25% to 35% of the total population, with at least 40 million people killed in the pandemic of 1918.

In light of such a potentially catastrophic outcome, some commentators have questioned whether access to drugs that could be used to fight the outbreak (such as TAMIFLU and RELENZA) will be hindered by patent owners asserting their rights to prevent others from manufacturing these products. On the other hand, it is argued that patent protection is critical to promote research and development. This is particularly so for the development of new drugs due to the substantial time and monetary investment required to bring a pharmaceutical to market and the relative ease with which competitors can copy new drugs. In short, a balance must be struck between allowing the use of existing inventions to respond to short-term threats while maintaining the long-term goal of encouraging on-going technical advancement.

In 2001 the worldwide debate on these issues gave rise to the Doha Declaration, which stated that compulsory licenses may be used to provide greater access to medicines. Compulsory licenses can enable third parties, or Governments, to make use of patented inventions without having the consent of the patent owner if warranted in the circumstances. In other words, a patent monopoly can be effectively "broken", for example to facilitate the manufacture of patented influenza vaccines.

Indeed, the mere fact that compulsory license provisions exist is often enough to shift the balance of power in negotiations to encourage a cooperative approach by patent owners. The Bird Flu has been most prevalent in Vietnam to date and the Ministry of Health in Vietnam has reached an agreement with pharmaceutical company Roche AG to become the first country in the world to produce TAMIFLU under license. As part of the negotiations, the Vietnamese Ministry of Health advised that Vietnam may exercise its right to issue compulsory licenses if Roche did not agree to its requests. Several other countries, including China and India, are reportedly now undertaking similar negotiations with Roche to produce TAMIFLU.

The Doha Declaration recognised that, due to a TRIPS condition, compulsory licensing could not assist less developed countries to access medicines if those countries lacked the capacity to manufacture pharmaceuticals domestically. Hence, less developed countries could not import medicines manufactured in another country under a compulsory licence.

This problem was addressed in August 2003 by an interim waiver allowing WTO countries to export pharmaceutical products made under compulsory licenses to meet the needs of another country. In other words, under the waiver, a more developed country can produce a medicine under a compulsory license and export that medicine to a less developed country. As noted above, WTO members recently agreed to make the waiver permanent. However, debate will no-doubt continue as to whether the present system strikes an appropriate balance in ensuring sufficient access to medicines.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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