TRIPS – What is it and why is it important to the biotech industry?
In brief: Articled Clerk Erica Davis discusses the importance of the World Trade Organisation (WTO) Agreement on Trade Related Aspects of Intellectual Property (TRIPS) for the biotech industry, and the current debate about the flexibility of TRIPS to balance IP rights and access to medicines.
- TRIPS – What is it?
- Why is TRIPS important to the biotech industry?
- Scope of patent protection for biotech inventions under TRIPS
- Current review of TRIPS – balancing patent protection and IP rights
- What's next?
Would you spend millions developing a drug with global application only to have it given away? The competing rights of patent holders of pharmaceuticals and the needs of emerging countries were at centre stage of the WTO Ministerial world conference earlier this month.
TRIPS – What is it?
TRIPS is the WTO's Agreement on Trade Related Aspects of Intellectual Property. TRIPS lays down minimum international standards of intellectual property (IP) protection for all of the main areas of IP rights.
All WTO members, which includes Australia and all of Australia's major trading partners, have to comply with TRIPS. Developed countries have had to comply since 1996, developing countries have had to comply since 2000 and emerging countries have until 2006 to comply.
Why is TRIPS important to the biotech industry?
TRIPS sets minimum standards for patent protection and allows certain exceptions to patent rights.
Patent protection is vital to the biotech industry. Patents protect the IP in biotech inventions by granting inventors the right to stop other people from making, using, or selling the invention for a limited period of time.
Without patent protection and the exclusivity it gives biotech companies, the investors who fund them won't risk millions of dollars on research and development. Qualifications on patentability, patent rights and exclusivity of biotech inventions will limit the reward and return on investment.
International standards of patent protection set by TRIPS will be particularly relevant for biotech applications in the pharmaceutical and agricultural sectors which are aimed at global markets.
Scope of patent protection for biotech inventions under TRIPS
The general rule under TRIPS is that patents are to be available for inventions in all fields of technology. This rule is subject to a number of exceptions to patentability and patent rights which are relevant to the biotech industry.
Governments are allowed to make the following exceptions to patentability:
- inventions for which commercial exploitation needs to be prevented to protect morality (including to protect animal or plant life or health);
- diagnostic, therapeutic and surgical methods for treating humans or animals; and
- certain plant and animal inventions.
Governments may make certain exceptions to patent rights, subject to conditions aimed at protecting the interests of patent holders, including for:
- research – researchers can use patented inventions for research;
- generic drugs – certain manufacturers of generic drugs can use the patented invention to obtain marketing approval without the patent owner's permission before the patent expires;
- compulsory licences – governments can license a patented product or use it itself without the patent holder's authorisation, if the patent holder refuses to do so on reasonable commercial terms, so long as adequate compensation is paid to the patentee;
- parallel imports – in certain circumstances imports of products from countries where it is sold by a patent holder or licensee more cheaply cannot be challenged before the WTO.
Current review of TRIPS – balancing patent rights and access to medicines
A council for TRIPS monitors the working of the agreement and the compliance of governments with it.
Council members discuss controversial topics affecting biotech products including the ongoing review of the patentability exclusions for biological organisms.
The current focus of the TRIPS council is to clarify the flexibility of the exceptions to patent rights. This is in the context of balancing patent rights with the need to provide greater access to medicines for diseases such as HIV/AIDS, malaria and tuberculosis (pandemics) for emerging countries. Obviously, this is of direct relevance to the pharmaceutical industry. The flexibility of the exceptions to patent rights, however, will also have practical application to the biotech industry at large.
The TRIPS Council met in June and again on 19 and 21 September this year to discuss this issue. All members agreed on the need to strike a balance between protection of IP rights and effective access to medicines. Developing countries, however, emphasised the need for flexibility in TRIPS to protect public health objectives as a whole, whereas developed countries emphasised using the flexibility to deal with pandemics in particular.
The TRIPS Council called for a political declaration to be made about the flexibility of TRIPS in this respect at the WTO's 4th Ministerial Conference held in Doha, Qatar between 9-13 November 2001. Two draft Ministerial Declarations were submitted to the WTO for this purpose – one from the developing countries and one from the developed countries.
What's next?
The outcomes of the WTO's Ministerial Conference (unknown at the time of writing) will by no means resolve the balancing act of satisfying these opposing views. They will no doubt be a significant step in the process as the operation of the whole of TRIPS is under review – debate on balancing patent rights and access to medicines is just the beginning.
For the outcomes of the WTO's Ministerial Conference or for further information generally, visit the WTO's website: www.wto.org. For further information on Australia's involvement, go to the Australian Department of Foreign Affairs and Trade Website.