U.S. Welcomes New WTO Compulsory Licensing Policy

Portfolio Media, New York (December 6, 2005)--The U.S. government put its stamp of approval on new compulsory licensing rules by the World Trade Organization, which dramatically decrease intellectual property barriers faced by developing countries fighting life threatening diseases.

The agreement will solidify a similar, temporary arrangement in place since August 2003. It allows countries to override patent rights when exporting life-saving drugs to developing countries that lack a pharmaceutical industry.

The office of the U.S. Trade Representative hailed the move, which will amend the WTO’s Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). Delays earlier in the year frustrated member countries, who could not agree after several meetings on the details of the amendment.

"This is a landmark achievement that we hope will help developing countries devastated by HIV/AIDS and other public health crises," said chief U.S. Trade Representative Rob Portman.

WTO director general Pascal Lamy had earlier encouraged WTO members to permanently adopt the amendment before the group heads to Asia for the Hong Kong Ministerial Conference. That priority was shared by the WTO’s Africa Group and other developing countries, and the goal appears to have been met.

“We were pleased to work with [the Africa Group] to make it happen,” Portman said.

Although that was a significant step forward for developing countries, which also suffer from malaria and tuberculosis, it left out those countries that don’t have legacy or generic drug makers and therefore rely on imports.

Although the amendment has been finalized, it is up to each individual country to adopt it into their laws. It will take effect once two-thirds of member countries have done so. However, the WTO has not set a deadline for adoption, according to the U.S. Trade Representative.

The Pharmaceutical Research and Manufacturers of America (PhRMA) chimed in to support to agreement.

“PhRMA welcomes the completion of the negotiations on TRIPS and public health that will codify the August 2003 solution reached by WTO members,” said the groups chief executive officer Bill Tauzin, “The step…is part of a wider national and international action, including many activities taken by PhRMA companies.”

In 2001, at the organization’s Qatar Ministerial, members issued a landmark political declaration that provided an additional ten year transition period for pharmaceutical products for the least developed countries – an amendment that was proposed by the United States.

In November, the WTO announced it would extend the remaining TRIPS provisions for least developed countries from January 2006 until July 2013. That gave the world’s poorest countries seven additional years to provide protection for intellectual property under the WTO’s statutes.

Responding to the WTO’s proposal earlier this month, the European Parliament also approved a proposal from the European Commission allowing compulsory licensing. The European legislation sets policy for companies in the E.U. to apply for a license to make and export generic drugs without the authorization of the patent holder.

The TRIPS accord, signed in 1995, is “to date the most comprehensive multilateral agreement on intellectual property,” according to the WTO. It provides guidelines in areas of standards, compliance, and dispute settlement.

The Office of the U.S. Trade Representative is responsible for developing, coordinating and negotiating international trade, commodity, and direct investment policy with other countries. The U.S. Trade Representative is a presidential Cabinet member who serves as the president’s principal trade advisor spokesperson on trade issues.

For more information, please contact Conan Grames at cgrames@kmclaw.com.