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The Impact of Trade Related Aspects of Intellectual Property Rights

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Published: 14th Aug 2019

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Jurisdiction / Tag(s): International Law


The United Nations Secretary General, Kofi Annan once said, “It is my aspiration that health will finally be seen not as a blessing to be wished for; but as a human right to be fought for.” Wise words indeed, especially in these days when deadly diseases such as HIV/AIDS devastate Africa. In fact in South Africa alone about 900 people or more die of this disease each and every day. Statistics show that AIDS kills more people than the sum total of all wars, famines and the ravages of deadly diseases such as malaria. Over 20 years after HIV/AIDS was discovered and almost 15 years after anti retroviral drugs became available this disease has killed almost 26 million people, and is still spreading. In addition to the rise in incidence of tuberculosis and malaria, drug resistance to many infections has also increased. HIV/AIDS, tuberculosis, and malaria are still major causes of mortality and morbidity in developing countries . Something should be done about this situation.

Several international and regional Human Rights Instruments guarantee people of the right to health. In fact every country in the world is now party to at least one human rights treaty that addresses health related rights, including the right to health and a number of rights related to conditions necessary for health .

This paper will examine the impact that TRIPS has on the right to health in Africa as well as, whether this agreement infringes on the right to health of the African people. It will be argued that the implementation of TRIPs in Africa stands in the way of endeavors of the African peoples and governments in trying to combat the deadly diseases that ravage the continent.

Part I

Trade Related Aspects of Intellectual Property Rights (TRIPs)

1. Overview: The TRIPS Agreement

The Trade Related Aspects of Intellectual Property Rights (TRIPs) Agreement is the most comprehensive multilateral agreement on intellectual property rights to date. It incorporates the main provisions of WIPO , the Berne Convention , and the Paris Convention as well as a number of additional obligations in areas where there were previous agreements on intellectual property rights . The intellectual property rights protected in this agreement include copyright, trademarks, geographical indications, industrial designs, patents, integrated circuit layout, trade secrets, and test data. This agreement also provides for enforcement measures through its use of civil and administrative procedures and remedies .

The obligations in the treaty apply equally to all members of the World Trade Organization. However, developing countries were given a longer period to implement the terms of this agreement. They were given between one and eleven years to implement their obligations under the agreement. The number of years given to each country to implement the agreement was dependent upon the country’s economic status . Least developed countries were given the longest time to implement the terms of the agreement. However, while this agreement required less developed countries to strengthen their intellectual property protection, it does not guarantee the prospects of technical assistance from developed countries nor increased foreign investment . Technical assistance is needed by these countries in order to effectively implement the terms of this agreement.

2. Historical Background of Intellectual Property Protection and the introduction to the TRIPS Agreement

Various forms of intellectual property rights began in Venice in the fifteenth century. This was followed by the Statute of Monopolies in England in 1623, and further codified in the patent laws of France and the United States in the late eighteenth century . Preceding the later years of the twentieth century, international Intellectual Property Rights (IPR) were regulated under public law regimes . In this perspective, original efforts at substantive harmonization of international IPR laws were, however, mostly ineffective.

The World Intellectual Property Organization (WIPO) carried out negotiations toward substantive coordination under the patronage of the United Nations . Nevertheless, WIPO negotiations, whether scrutinized as favorable to developing or developed nations, were routinely stymied .

Then in the beginning in the 1980s, companies realized that they were loosing a lot of profit due to piracy. The value of unrealized sales lost to piracy inspired developed countries to seek more stringent protection of intellectual property abroad . Companies encouraged the government of the United States and governments of other developed countries to make access to their markets conditional upon implementing stronger levels of intellectual property protection. The U.S. government initially demanded that countries where piracy was occurring enforce intellectual property protection or face trade sanctions.

The industry groups later convinced their governments that inadequate intellectual property protection was the reason for the piracy problem. The governments in turn sought higher levels of protection through multinational accords . A new and comprehensive treaty on intellectual property rights was then established in 1994, within the framework of the World Trade Organization (WTO). They called the agreement the Agreement on Trade Related Aspects of Intellectual Property Rights � the TRIPS agreement for short . Although this agreement has many implications for public health, it was negotiated with little or no participation from public health authorities.

As has been mentioned earlier in the paper, before the TRIPS agreement came into operation, intellectual property rights were regulated by the Berne and Paris conventions. These conventions were however criticized for their lack of enforcement procedures and failure to cover certain important subject matter areas .

3. Objectives and goals of the TRIPS Agreement

The general goals of the TRIPS Agreement are provided in the Preamble of this Agreement. This replicates the basic Uruguay Round negotiating objectives established in the TRIPS area by the 1986 Punta del Este Declaration and the 1988/89 Mid Term Review . These objectives consist of the reduction of distortions and impediments to international trade, promotion of effective and adequate protection of intellectual property rights, and ensuring that measures and procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade .

The objectives in the preamble should be examined in concurrence with Article 7 of the agreement. Article 7 is entitled “Objectives” and it provides that protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations .

Furthermore, according to the fact sheet pertaining to pharmaceutical patents, there is a proposition that ‘the philosophy underlying the TRIPS Agreement is one that seeks to strike a balance between the long term social objective of providing incentives for future inventions and creation, and the short term objective of allowing people to use existing inventions and creations . The relationship between these two, frequently conflicting, objectives resounds along lines that segregate the developed and developing world, and they offer the background for understanding a complex difficulty concerning issues varying from social justice and morality to economic and investment theory .

Moreover, with this practical consideration in mind, the third component of the philosophy underlying the TRIPS Agreement is the signatories’ need for flexibility in catering to inventors so that they recognize the safeguards established within particular domestic social, political, and economic realms .

Part II

TRIPS and the Doha Round of Negotiations

1. The Doha Declaration

The Doha declaration was adopted on the 14th November 2001. In recognition of the potential negative impact of TRIPS on public health, members of the WTO agreed on this declaration which supposedly gives primacy to public health over commercial interests . The Doha declaration leaves the 20 year implementation term intact; however, it exempted least developed countries from drug patenting rules until the year 2016. The declaration also reaffirmed that “the TRIPS Agreement is and should be interpreted and implemented in a manner supportive of WTO members’ right to protect public health and, in particular, to promote access to medicines for all” . It also reaffirmed a country’s right to override a patent in the interest of public health.

This declaration, however, did not come without glitches. The example is the USA insisting that only the poorest countries should be the beneficiaries of this declaration and only epidemic diseases should be protected. Accepting such restrictions means retreating from the agreed Doha declaration, and has profound implications for national and global public health . Furthermore, this Declaration is a political but not legally binding document. This means that pharmaceutical companies from developed countries are not obliged to comply with the terms of the agreement.

Moreover, even though it seemed that the developing countries had won this round, there are other problems faced by these countries. This includes the problem of lack of domestic industrial capacity to produce drugs Thus the Doha declaration is more useful to countries with sufficient local technological, productive, and regulatory capacity to support generic industries . For countries with lacking manufacturing capability and countries whose generic industries may not operate on an economy of scale for every drug required domestically, some scholars argue that the clear answer is to import generic drugs manufactured under compulsory licenses from other countries. However, the Doha Declaration did not make a decision to the question of whether such importation of generic drugs manufactured under compulsory licenses was allowed .

2. Flexibilities under the TRIPS: Compulsory Licensing; Parallel Importing and Safeguards

2.1. General

Some scholars argue that TRIPS does offer some flexibility to developing countries. This is by a way of compulsory licensing, parallel importing and safeguards. In this section of the paper these “flexibilities” will be discussed, and then critiqued.

2.2. Compulsory Licensing

Compulsory licensing is when a government compels the license of a patented product . The advantage offered to a patent holder is the capability to voluntarily issue a license for some or all of the rights of a product to another party. Thus, a compulsory license is a license for a patented invention issued by the government to a third party without the patent holder’s approval . In return, the government awards the holder of the patent what it considers to be sensible reimbursement . The rationalization for granting compulsory licenses consist of dropping an issuing country’s reliance on imports, growing the number of competitors in the marketplace, and protecting and developing local industry . Nevertheless, the motivation that ‘resonates with the highest moral tone, and is most often cited by developing countries and activists, is that compulsory licenses result in increased access to critical lifesaving medicines’ .

2.2.1 Compulsory Licensing Under TRIPS Article 31

The TRIPS agreement does not explicitly afford compulsory licensing. However, Article 31 of this agreement in effect provides for compulsory licensing by allowing ‘other use of [patents] without the authorization of the right holder.’ Normally the person or company applying for a license has to have tried to negotiate a voluntary license with the patent holder on reasonable commercial terms. Only if that fails can a compulsory license be issued, and even when a compulsory license has been issued, the patent owner has to receive payment. The TRIPS Agreement states that “the holder of the right to the patent shall be paid satisfactory compensation in the circumstances of each case, taking into account the economic value of the permission to use the product. The TRIPS agreement, however, does not define “adequate remuneration” or “economic value”.

Furthermore, compulsory licensing must meet certain additional requirements: it cannot be given exclusively to licensees and it should be subject to legal review in the country.

The compulsory licensing provisions under TRIPS have restrictions, the most noteworthy of which consist of: (a) the compulsory license may be established only after sensible discussions have failed ; (b) the extent and duration must be restricted to the purpose for which the license was endorsed and must cease if and when conditions change to eliminate the purpose ; (c) the license must be exclusive and non assignable ; (d) the license shall be used mainly for the supply of the national market of the granting nation ; and (e) the right holder shall be paid adequate payment under the situation of each case .

2.3. Parallel importing

Parallel importing allows a country to import a product from another country where a patent holder sells it at a lower price. Parallel imports are therefore legitimate products imported without the authorization of the trademark proprietor in the importing country, even though the trademarks appearing on these products have been legitimately applied by or with the consent of the trademark owner . The typical case of parallel imports is where the producer assigns or licenses his trademark to an exclusive dispenser in one region, and a third party obtains the manufacturer’s products from elsewhere and imports them into the exclusive distributor’s designated region without the latter’s consent . Therefore the unauthorized importation and sale of the goods in foreign markets is infringing on the rights of the trademark owner.

Although it appears that member countries have a very leeway to import parallel licensing, there is an economic risk that the doctrine of exhaustion may discourage discrimination, favoring the developing countries. However, a number of developing countries have been forced to remove parallel importing provisions from their legislation.

2. 4. Public interest Safeguards: TRIPS Article 7 and Article 8.1

While the TRIPS Agreement created many obligations in less developed countries, it also includes some important

public interest safeguards. Commentators have noted the importance of articles 7 and 8 of the agreement, which provide a basis for seeking waivers “to meet unforeseen conditions of hardship” . Article 7 was discussed in detail above in this paper.

Article 8.1 of TRIPS provides: members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio economic and technological development, provided that such measures are consistent with the provisions of this agreement .

3. Critique of the “Flexibilities”: The Developed versus Developing Countries debate

Both developed and developing countries have fiercely debated the extremely controversial issue of compulsory licensing . Developed countries are the most vocal critics of TRIPS flexibilities. First, numerous developed nations and the brand name pharmaceutical industry resist compulsory licensing because they argue that a weak intellectual property regime in foreign countries undermines patent holders’ rights and reduces amounts spent on research and development .

Furthermore, according to the pharmaceutical industry, only a little digit of highly successful products creates the majority of the industry’s profits. Therefore, strong patent protection for these products is vital for financing future Research and Development . However, despite this seemingly valid argument, the unfolding AIDS catastrophe requires a more immediate palliative than the distant hope of discovering a cure or treatment, ‘neither of which would likely be any more accessible to infected populations than current patented drug therapies’ .

Secondly, critics of the TRIPS flexibilities argue that the flexibilities afforded by TRIPS have a potential of being harmful instead of beneficial to developing nations. They are of the opinion that compulsory licensing is harmful to the social and economic interests of developing nations with weak patent protection systems . They argue that developed countries are unwilling to export products and technologies to such nations, for which technological and industrial progression is an essential component of national prosperity .

On the other hand, developing countries are in favor of compulsory licensing. However, even though these countries are in favor of compulsory licensing, there has been fierce opposition of the use of compulsory licensing from the developed world. Legitimate efforts by a few developing countries to practice these measures in the face of high predominance of HIV/AIDS among their populations were either blocked or legally challenged by some developed member states of the WTO. Traditionally, the United States forcefully opposed the use of compulsory licensing by foreign countries with respect to patented pharmaceutical inventions . The United States Trade Representative (“USTR”) has used, or threatened to use, trade sanctions against countries that pass laws allowing compulsory licensing . For example, in 1997, the incompatible interests of the United States and the developing world relating to patent rights attracted international attention when the South African Parliament passed compulsory licensing legislation to reduce the cost of pharmaceuticals . Forty pharmaceutical companies filed a law suit against the government of South Africa, claiming that the South African Medicines and Related Substances Control Amendment Act of 1997 violated the TRIPS agreement.

This law suit is an example of how powerful nations and big multinational pharmaceuticals use whatever they possess in their power to prevent developing countries from using compulsory licensing, as it was done by the United States of America. The law suit against South Africa by these forty pharmaceutical companies set a contemptible pattern by which corporations could sue a sovereign government claiming rights and benefits under the TRIPS Agreement .

Another critique of the TRIPS agreement is that this agreement undercuts the flexibility compulsory licensing and parallel importing might otherwise give these countries by concurrently obliging that such measure be consistent with the patent protection requirements of the agreement . Specifically what measure a member state might implement that would be consistent with other TRIPS provisions has created a debate between developing and industrialized countries seeking to enforce patent protection. Moreover, TRIPS has produced confusion as to what constitutes a “national emergency” under Article 31(b), whether individual members have the right to describe such an emergency, and how much discretion developing states enjoy to make use of any patent related flexibilities TRIPS appears to offer .

When the option is between making profits or saving lives, the preference should be straightforward. If the purpose of these flexibilities is really to assist developing countries develop, patent laws that restrain the health of nations should not be a priority when there is a cheaper substitute available . Exceptions to patent protection on pharmaceuticals for essential medicines can be deemed consistent with TRIPs provisions on parallel imports and compulsory licenses . The WTO ought to spell out the rules as presented in TRIPs to grant developing countries the irrefutable right to compulsory licenses and parallel imports for essential pharmaceuticals .

Part IV

THE Concept of the Right to health

1. Introduction

Health is a fundamental human right indispensable for the exercise of other human rights. From the earliest days of the codification of the right to health, it can be seen that this right was conceived in broad terms that included a right to standard of living adequate for basic health . This right should not be seen as a right to be healthy. It is the right to enjoyment of the highest attainable standard of health, taking into account holistic approach to health that regards both health care and social conditions as being crucial determinants of health status .

The right to health comprises of two basic components: a right to healthcare and a right to healthy conditions. It also contains both freedoms and entitlements. On one hand, included in the freedoms is the right to have control over one’s health and the right to be free from non consensual medical treatment and experimentation. On the other hand entitlements include the right to access to a suitable system of health protection .

2. The evolution of the right to health

In 1978, during The Hague Academy of International Law, a discussion was held on the right to health. In this discussion participants distinguished three aspects related to the right to health: Negative, positive and egalitarian . The negative aspect means that the state should abstain from any act that may endanger human life. In the ‘positive sense’ the right to health signifies that the state must take action to advance the realization of the right to health. The fact that there must be no discrimination in people’s enjoyment to the right to health is what the ‘egalitarian aspect’ means .

In the last couple of years the right to health has gained great momentum. This was mainly manifested by the adoption of the General Comment on the right to health and the appointment of the special Rapporteur on the Right to Health.

3. Health and Human rights: International declarations, Conventions and Treaties

The right to health is enshrined in several international declarations, conventions and treaties. The Universal Declaration of Human Rights states that ‘everyone has the right to a standard of living adequate for the health and well being of himself and his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control’.

The protection of the right to health is also found in the International Covenant on Economic, Social and Cultural Rights (thereafter ICESCR). Article 12 (1) of this Article State that “the states Parties to the present convention recognize the right to the enjoyment of the highest attainable standard of physical and mental health”.

On the 26th November 2002 General Comment 14, 2000 was adopted by the United Nations Committee on Economic, Social and Cultural Rights. This committee interpreted the right to health as ” extending not only to timely and appropriate health care but also underlying determinants of health, including access to safe and potable water and adequate sanitation, an adequate supply of safe food, nutrition and housing, healthy occupational and environmental conditions, and access to health related education and information, including sexual and reproductive health”

Furthermore, Article 24 of the Convention on the Rights of the Child also guarantees each child that “states Parties recognizes the right of the child to the highest attainable standard of health…”

In Addition to the international charters, the right to health is recognized in regional human rights treaties. These charters include the African Charter on Human and Peoples’ sights (article 16) and the African Charter on the Rights and Welfare of the Child (Article14).

Part V

Holding States accountable and claiming the right to health.

When states ratify international treaties and conventions, they agree to be accountable to the international community as well as to people living within the jurisdiction of such states. State parties to international agreements are obliged to adopt legislative measures and to employ appropriate measures to ensure that the people enjoy the rights conferred by the treaty . As mentioned earlier in this paper, almost all countries are a party to at least one treaty guaranteeing the right to health. This means that all the states have an obligation to provide their people with health services.

However, no treaty necessarily guarantees anyone of the right to be healthy. These treaties guarantee the right to the highest attainable standard of health. This phrase acknowledges that there are differences between countries in their state of development, financial resources and social conditions. Thus not all countries would afford to provide their people with the highest standard of healthcare services or at least with immediate effect. In fact with as little as $8 to spend on health care per person annually, the governments of the most sub Saharan countries cannot afford the $10,000 price tag for a year’s supply of name brand anti retrovirals .

However, these countries should do all they can to make sure that the highest standard of health services possible, in their means is being offered to their citizens. Even though, in the Human Rights framework, there are obligations which require immediate implementation, there are however those obligations that can be realized gradually, depending on the circumstances and conditions in each country. The right to health is one of the latter rights. The obligation of the state to provide the highest attainable standard of health to their people is a progressive one. This is the reason why the principle of ‘progressive realization’ was adopted for the right to health. This principle is very important for the developing countries because in these countries, full realization of the right to health is a difficult process, as it requires both financial and human resources. Third world countries do not have these resources. Therefore the principle of progressive realization is important to the practical implementation of the right to health in these countries. Even though there is this principle, countries should not take this flexibility as an excuse for not fulfilling their obligation to provide their populations with the right to health .

Part V

TRIPS and the Right to Health

1. Overview

In what has develop into a life versus profit debate, TRIPS has resolutely pitted business profits against susceptible populations who live with HIV/AIDS worldwide, human right to life against intellectual property rights; and civil society groups against international pharmaceutical corporations .

This relationship between human rights, specifically the right to health, and intellectual property requires some examination. On the one hand, intellectual property does not provide much guidance concerning its links with other fields of law. On the other hand, human rights treaties show that the interests of the patent holder are recognized but not as fundamental rights and that the interests of the community at large come first. The TRIPS agreement was adopted as a stand alone agreement which makes no mention of the impacts it can have, for instance, in the field of health. Nevertheless, WTO member states that are also parties to human rights treaties cannot draft legislation to implement WTO obligations without considering its compatibility with other international obligations, such as human rights commitments . Therefore, the question here to ask is whether intellectual property rights are more important than the right to health? Do intellectual property rights qualify as human rights?

There is some conflict in answering this question. The leading treatment of the connection between human rights and intellectual property has been dialectic. Most of the writings outline the association in terms of how human rights might be used as a countervailing force against intellectual property rights . The institutional renaissance of the connection between human rights and intellectual property has mainly been the effort of the United Nations Sub Commission on the Promotion and Protection of Human Rights .

Proponents of Intellectual property protection view it as something of an ambiguity that intellectual property and human rights have remained strangers for so long . The human rights law’s foundational document, the 1948 Universal Declaration of Human Rights shelter authors’ “moral and material interests” in their “scientific, literary or artistic production[s]” as part of its catalogue of fundamental liberties . Furthermore, a comparable clause was incorporated in the International Covenant on Economic, Social and Cultural Rights (ICESCR) . Despite these provisions, intellectual property remained ‘a normative backwater in the human rights pantheon, neglected by treaty bodies, experts, and commentators while other rights emerged from the jurisprudential shadows’ .

Moreover, some economists and scholars have presented a number of philosophical justifications for patent protection. First, they argue that intellectual property rights originate from the “natural rights” of private property found in ideas and their resulting inventions . Furthermore, they argue that several human rights instruments recognize a human right to one’s own intellectual products. Article 27 of the Universal Declaration of Human Rights states that ‘Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author’. This right is linked to another provision of Article 27: ‘Everyone has the right freely to participate in the cultural life of the community, to enjoy the arts and to share in scientific advancement and its benefits’ .

An additional argument spotlights on the moral rights of the inventor to the reward of the fruits of his or her labor . The supporters of intellectual property protection have raised a view that ‘if one truly is the first to invent, he or she would naturally enjoy a period of time free from competition to recoup the initial investment of time and energy associated with the invention and to continue to profit from its commercialization ahead of any competitors. Such a position, which encourages inventors to invent more, was dubbed the “head start” theory of profits’ . However, Even if one were to accept this “incentives to innovate” argument without any reservations, it is not easy to see how this argument extends to the stringent enforcement of IPRs in “marginal” markets, such as the market for antiretroviral drugs in Africa . Notwithstanding the degree of the AIDS pandemic in sub Saharan Africa, the African market accounts for little more than one per cent of total worldwide sales of pharmaceutical products . In such a position, the proceeds attained are unlikely to have any impact on further innovation. The presence or absence of such marginal markets cannot have any impact on incentives to innovate .

On the other hand, proponents of human rights protection and critics of intelle

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International law, also known as public international law and the law of nations, is the set of rules, norms, and standards generally accepted in relations between nations. International law is studied as a distinctive part of the general structure of international relations.

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