U.S. IPR Proposals for US-Thai FTA Worse than Feared

Brook K. Baker, Health GAP
Feb. 1, 2006

Recently released text of the “secret” U.S.T.R. IPR proposal in the US-Thai FTA is much worse than suspected (it is far more restrictive than CAFTA or Peru for example). Its TRIPS-plus/Doha-minus provisions include:

  1. Scope of patent - "patents shall be available for any new uses or methods of using a known product." This provision allows ever-greening of patents whereby minor changes in formulation or additional clinical uses are used to extend the 20-year patent term already given to the basic pharmaceutical product.

  2. No allowance of pre-grant opposition. The disallowance of pre-grant opposition would prevent procedures like those just concluded in India where an invalid patent claim on Gleevec was defeated before rather than after the patent was granted. Pre-grant opposition procedures allow intervenors to challenge weak patent applications by providing critical, but sometimes non-disclosed, information to patent examination offices before patents are improvidently granted.

  3. Compulsory licenses are limited to those that remedy anti-competitive practices, that permit public non-commercial use, or that are in response to a national emergency or other matter of extreme urgency. This attempt to limit grounds for compulsory licenses is patently TRIPS- and Doha-plus. Developing countries, including Thailand, fought long and hard to clarify that countries are free to grant compulsory license for health related purposes without restrictions. Despite signing on to the Doha Declaration on the TRIPS Agreement and Public Health, the U.S. has consistently sought to limit the application of compulsory licenses to competition cases, emergencies, and government use. However, in more recent negotiations with developing countries in Central America and the Andes, the U.S. has not succeeded in restricting compulsory license rights in the text of FTAs, but it is now trying to do so in Thailand. (Note: such a limitation might well impact the scope of so-called public health side letters.)

  4. Public non-commercial use and emergency licenses are limited to use "by the government or third parties authorized by the government" and thus could limit private sector utilization of cheaper medicines. Compensation for such CLs has to be "reasonable and entire compensation," a compensation standard higher than that required by the TRIPS Agreement. Finally, such CLs may not require the patent holder to provide undisclosed information or technical know-how, limitations that might foreclose effective utilization of an issued license.

  5. Delays in granting patents longer than 4 years shall result in an extension of the patent term. Although the length of any such extension is unspecified, the cost of these unwarranted extensions will be borne by government and consumers who will wait longer for cheaper generic equivalents.

  6. Unreasonable delays in granting marketing approval shall result in an extension of the patent term. The length of delay and of extensions are not specified, but once again patent holders will get longer patent terms that will delay generic competition.

  7. Data exclusivity of 5 years is granted for both disclosed and undisclosed data, whether based on safety and efficacy data or on evidence of marketing approval, whenever Thailand relies on such data or evidence of marketing approval. No matter how Thailand relies on registration (clinical) data provided by originators and no matter how it might choose to rely a prior registration of the identical product domestically or elsewhere, the 5-year data exclusivity rule will given originators another impenetrable form of market exclusivity. This exclusivity will apply even if a patent has not been filed in Thailand and even if the patent term expires.

  8. Data exclusivity is for new pharmaceutical products that does not include a previously approved chemical entity. (Note: it's unclear whether this term is substantially different from the TRIPS term, "new chemical entity).

  9. Data exclusivity of 3 years is granted for marketing approvals of new uses of existing pharmaceutical products if based on new clinical information. Just as drug companies will be able to evergreen patents, they will be able to evergreen generic drug registration for new uses.

  10. The US proposal provides for full patent/registration linkage, meaning that Thailand’s drug regulatory agency will be required to confirm that there are no existing patent claims (valid or invalid) implicated in the new generic product – if there are such patents claims, the agency must refuse to grant marketing approval. The agency must also inform the patent holder of a potential infringing registration application so that it can enforce its rights.

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