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The Governance of Patents and Pharmaceuticals: The Regional FTA Contribution

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Intellectual Property and Free Trade Agreements in the Asia-Pacific Region

Part of the book series: MPI Studies on Intellectual Property and Competition Law ((MSIP,volume 24))

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Abstract

This chapter assesses the contribution regional FTAs make to the governance of patents and pharmaceuticals. In regulating trade, these FTAs form part of an international pattern of intellectual property law making. The chapter puts the provisions of the FTA Australia made with the United States in the context of international agreements and national laws. Dealing with such aspects as patentability, patent use rights, generics to market, compulsory licensing, and trade in pharmaceuticals, the purpose is to gauge whether these FTAs help meet the needs for medicines in the region. With the negotiation of the Trans-Pacific Partnership Agreement, this assessment remains alive.

C. Arup: BA, LLB (Hons) (Melbourne), LLM (Monash), PhD (Griffith), Professor of Business Law.

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Notes

  1. 1.

    Commenced in 2001 in Doha.

  2. 2.

    Fiorentino et al. (2006).

  3. 3.

    Wolf and Artigas (2007).

  4. 4.

    Kolsky (2008), p. 8. See further Lester and Mercurio (2009).

  5. 5.

    Hall and Soskice (2001).

  6. 6.

    Sell (2004).

  7. 7.

    Sell (2004), p. 363.

  8. 8.

    Picciotto (2008).

  9. 9.

    The effect on the WTO is the main concern here. See Drahos (2007).

  10. 10.

    One example is a model of investment rights, see Kantor (2004). Our case study is pharmaceutical patent rights.

  11. 11.

    Vivas-Ergui (2003) and Kuanpoth (2007).

  12. 12.

    Schneiderman (2008).

  13. 13.

    Picciotto (2008).

  14. 14.

    Morin (2009).

  15. 15.

    Katzenstein (2005) and Dent and Dosch (2012).

  16. 16.

    Bhagwati (1995), p. 2.

  17. 17.

    For details, see Australian Government, Department of Foreign Affairs and Trade (2014b).

  18. 18.

    See Clarke and Kiang (2007) and Jiang (2008).

  19. 19.

    For text of the New Zealand–China FTA, see New Zealand China Free Trade Agreement (2 July 2010). Of particular interest may be the sections on national treatment and market access (Arts 106–107) and intellectual property (ch. 12).

  20. 20.

    See Peter Yu, this volume.

  21. 21.

    Faunce and Shats (2008).

  22. 22.

    See Yu (2009).

  23. 23.

    Arup (2008a). Especially if, like AUSFTA and now the TPP, the officials negotiate them behind closed doors.

  24. 24.

    Drahos (2007), p. 191.

  25. 25.

    Vivas-Ergui (2003) and Mercurio (2006).

  26. 26.

    Arup (2008c), p. 339.

  27. 27.

    Frankel (2008, 2009). See further Vaver and Basheer (2006) and Endeshaw (2006).

  28. 28.

    Ng-Loy (2007), pp. 166–169.

  29. 29.

    See Kuanpoth (2010).

  30. 30.

    For very useful background on intellectual property laws in the region, see Goldstein and Straus (2009).

  31. 31.

    Antons (2004).

  32. 32.

    For full text of the Australia–United States Free Trade Agreement (AUSFTA) (2004). See ch. 17: Intellectual Property Rights.

  33. 33.

    Capling (2005).

  34. 34.

    Nicol (2009).

  35. 35.

    See Chaudhuri (2009).

  36. 36.

    World Health Organization, World Medicines Situation Report (2011). For evaluation, see Ng-Loy this volume; also Lim et al. (2009); Tran (2011).

  37. 37.

    Faunce and Shats (2008) and Lofgren (2007).

  38. 38.

    See National Conference of State Legislatures (2009). Further Nasu (2010).

  39. 39.

    Coriat (2008).

  40. 40.

    Von Braun (2011).

  41. 41.

    For analysis, see Flynn et al. (2011). Further, see Public Citizen (2011), also Faunce and Townsend (nd). A later version of the TPP draft was released by WikiLeaks in 2013.

  42. 42.

    WHO (2011).

  43. 43.

    Arup and Plahe (2010). Further, see Kuanpoth (2010).

  44. 44.

    See Shadlen (2007) for the implications.

  45. 45.

    Department of Foreign Affairs and Trade (2009).

  46. 46.

    See further Arup (2004); further Arup (2008b).

  47. 47.

    Davies (2007).

  48. 48.

    Art. 17.9.1 AUSTFA.

  49. 49.

    See Public Citizen (2011).

  50. 50.

    The US preferred TPP draft says the new forms, uses and methods should be patentable, ‘even if such invention does not result in the enhancement of a known efficacy of that product’, see Flynn et al. (2011), p. 20.

  51. 51.

    Novartis AG Switzerland v Union of India, through the Secretary of Industry and Commerce (2007).

  52. 52.

    For background, see Arup and Plahe (2010) and Novartis Global (2012).

  53. 53.

    Novartis AG v Union of India & Others (2013).

  54. 54.

    See Public Citizen (2011). The draft also aims to extend the presumption that a patent grant is valid to all civil and administrative proceedings (including infringement proceedings).

  55. 55.

    Australian Government, IP Australia (2009).

  56. 56.

    WTO (2000).

  57. 57.

    Stacey and Matheson (2007).

  58. 58.

    See Australian Government, Pharmaceutical Patents Review (2013). But the Coalition Government will not issue the final report or provide a response to the recommendations.

  59. 59.

    For discussion of this requirement, see Reichman (2006).

  60. 60.

    Art. 17.10.1(a) AUSFTA.

  61. 61.

    One consideration is whether data exclusivity rights will delay marketing approval for generics that are made under compulsory licence. The draft TPP agreement carries this implication, whereas the US–Columbia and US–Peru FTAs explicitly allowed an exception to data exclusivity.

  62. 62.

    Federal Trade Commission (2003). See also European Commission, Competition Directorate (2009).

  63. 63.

    Faunce and Lexchin (2007).

  64. 64.

    Tyacke (2004).

  65. 65.

    Therapeutic Goods Act 1989 (Cth), section 26C.

  66. 66.

    Arup (2008b), p. 23.

  67. 67.

    Patents Act 1990 (Cth), section 133.

  68. 68.

    WTO, Declaration on the TRIPS agreement and public health, DOHA WTO Ministerial 2001, adopted 14 November 2001, WT/MIN(01)/DEC/2.

  69. 69.

    Several countries in the region have issued licences for supply of HIV/AIDS antiretrovirals—Malaysia, Thailand and in October 2012 Indonesia. An emerging issue, as evidenced by the compulsory licences issued in India and Thailand, is access to medicines for non-communicable diseases such as cancer and heart ailments, see Kuanpoth (2010) and Beal and Kuhn (2012).

  70. 70.

    Though it also contains TRIPS-plus provisions, for example on data exclusivity, see Correa (2009).

  71. 71.

    Interestingly, the draft of the TPP Agreement has included an acknowledgement of the Declaration.

  72. 72.

    The PBS effectively subsidizes patient and hospital purchase of listed pharmaceuticals. The Australian Drug Evaluation Committee first approves a product for sale in Australia. Listing may be sought from the Pharmaceutical Benefits Advisory Committee, whose evaluations include efficacy and cost-effectiveness. If listing is recommended, the Pharmaceutical Benefits Pricing Authority negotiates the list price with the pharmaceutical manufacturer: see Australian Parliamentary Library (2004). It should be noted that AUSFTA is also a challenge to the autonomy of government decision making under the PBS, see Drahos et al. (2004).

  73. 73.

    Clinton (2007).

  74. 74.

    Kuhlik (2004). Yet, as it has in the EC, this market differentiation can become a competition law issue.

  75. 75.

    At paragraph 5.d of the Doha Declaration.

  76. 76.

    Ng-Loy (2007), pp. 166–169.

  77. 77.

    Such as labelling, see Ng-Loy (2007), pp. 166–169.

  78. 78.

    WTO, Notification Under Paragraph 2(a) of the Decision of 30 August 2003 on the Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health, Rwanda, IP/N/9/RWA/1, 17 July 2007.

  79. 79.

    Arup (2008b), p. 19.

  80. 80.

    The Australia–Malaysia FTA is an example. For text, see Malaysia–Australia Free Trade Agreement, DFAT website www.dfat.gov.au/fta/mafta/documents/Malaysia-Australia-Free-Trade-Agreement.pdf. Accessed 2 October 2012. Likewise, for the ASEAN–Australia–New Zealand Free Trade Agreement, see Chapter 13: Intellectual Property. www.dfat.gov.au/fta/aanzfta/chapters/aanzfta_chapter13.PDF. Accessed 2 October 2012. However, for the countries involved such as Malaysia, the conclusion of the TPP agreement might well override these bilateral variations.

  81. 81.

    The Australia–China agreement negotiations progressed this way: see Leahy et al. (2008).

  82. 82.

    Matthews (2005) and Drahos (2008, 2010).

  83. 83.

    Arup (2008c), p. 493.

  84. 84.

    Faunce and Shats (2008).

  85. 85.

    Arup (2008a), p. 177.

  86. 86.

    Frankel (2008).

  87. 87.

    Arup (2008a), p. 181.

  88. 88.

    Dodge (2006).

  89. 89.

    See AUSFTA Chapter 21: Institutional Arrangements and Dispute Settlement.

  90. 90.

    Drahos (2007).

  91. 91.

    Arup (2008b), p. 23.

  92. 92.

    For constructive ideas regarding these strategies, see Barton (2004); Tansey (2006). See Australian Government, Department of Foreign Affairs and Trade (2014a) for the most recent policy.

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  1. Faculty of Business and Economics, Department of Business Law and Taxation, Monash University, Caulfield, Australia

    Christopher Arup

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  1. School of Law Faculty of Business and Law, Deakin University, Melbourne, Australia

    Christoph Antons

  2. Max Planck Institute for Innovation and Competition, Munich, Germany

    Reto M. Hilty

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Arup, C. (2015). The Governance of Patents and Pharmaceuticals: The Regional FTA Contribution. In: Antons, C., Hilty, R. (eds) Intellectual Property and Free Trade Agreements in the Asia-Pacific Region. MPI Studies on Intellectual Property and Competition Law, vol 24. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-30888-8_10

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