= = = Affidavit of Jacques J. Gorlin = = =
I, Jacques J. Gorlin, do hereby declare as follows:
1. I have been a consulting economist since October 1982 and am a
recognized expert on the nexus between intellectual property and trade
policy, specifically regarding the applicability of the WTO TRIPS
(Intellectual Property) Agreement. I received a B.A. from Columbia
College in 1965, an M.A. from the Johns Hopkins School of Advanced
International Studies in 1967, and a Ph.D. from the Johns Hopkins
University in 1971. From 1972 to 1982, I held various positions as an
economist and economic advisor in the U.S. Department of the Treasury,
the U.S. Senate, the U.S. Department of State and the U.S. Agency for
International Development. I am Vice-Chair of the Industrial
Functional Advisory Committee on Intellectual Property Rights for Trade
Policy Matters, a private sector group that advises the U.S. Secretary
of Commerce and the U.S. Trade Representative on trade policy.
I am the author of An Analysis of the Pharmaceutical-related
Provisions of the WTO TRIPS (Intellectual Property) Agreement,
published by the Intellectual Property Institute of London, and A Trade
Based Approach for the International Copyright Protection for Computer
Software, which provided the model for what later became known as the
WTO TRIPS Agreement. I am also the co-author of Financing Third World
Development and have contributed to numerous collections on
intellectual property protection, including Global Competition: The
Role of Intellectual Property and Intellectual Property Rights and
Capital Formation in the Next Decade. I have written a monograph,
¡°Foreign Trade and the Constitution¡±, which appeared in Foreign
Policy and the Constitution, published by the American Enterprise
Institute. My articles have appeared in the New York Times, Wall
Street Journal (European edition), the Journal of Commerce, Scrip
Magazine and other international publications.
Additionally, I have served as a member of the US delegation to the
APEC Seminar on TRIPS Implementation in Sydney, Australia, was a
featured speaker at the EU-US Workshops on Intellectual Property in
Washington, DC in October 1997 and in Rome, Italy in May 1996, and
chaired the panel on intellectual property at the 34th World Congress
of the International Chamber of Commerce in May 2002.
On the basis of my expertise with regard to international
intellectual property rights, and specifically with regard to the
applicability of the TRIPS Agreement to pharmaceutical related matters,
I provide this affidavit in order to clarify certain requirements of
the TRIPS Agreement with regard to the granting of compulsory licenses.
2. The provisions of the TRIPS Agreement, taken together, represent a
negotiated balance between rights and obligations.
The view that TRIPS Agreement represents a balance between rights
and obligations is principally found in TRIPS Article 7 and the
preamble to the Agreement. ¡°Article 7 of the Agreement is entitled
¡®Objectives.¡¯ It should be read in conjunction with the preamble¡¦¡±
[Matthjis Geuze (Counsellor, WTO Secretariat), ¡°Effectively Enforcing
Your Intellectual Property Rights: Understanding the Full Implications
of TRIPS for the Pharmaceutical Industry,¡± Maximizing Patent
Protection in the Pharmaceutical Industry, Institute for International
Research Conference, London, January 20-21, 1998, page 7.]
Article 7 (Objectives) of the TRIPS Agreement clearly stipulates
that the objective of the TRIPS Agreement is that the 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 advantages of producers and
users of technological knowledge and in a manner conductive to social
and economic welfare, and to a balance of rights and obligations.¡±
In the preamble to the TRIPS Agreement, the Ministers recognized
both ¡°the need for new rules and disciplines concerning: ¡¦ the
provision of adequate standards and principles concerning the
availability, scope and use of trade-related intellectual property
rights: [and] the provision of effective rights ¡¦ ¡± and also the
¡°underlying public policy objectives of national systems for the
protection of intellectual property, including developmental and
technological objectives.¡±
To the extent that any additional conditions that surpass those
contained in the TRIPS Agreement are imposed by governments, the
delicately-negotiated balance described in Article 7 and the preamble -
between the need to reward inventors for innovation and the need for
technological dissemination - and found in the entire TRIPS Agreement
is skewed.
3. The Doha Ministerial Declaration does not affect that balance. In
particular, it does not rescind, repudiate or contradict Article 7 of
the TRIPS Agreement.
Article 7 (Objectives) of the TRIPS Agreement clearly stipulates
that the objective of the TRIPS Agreement is that the 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 advantages of producers and
users of technological knowledge and in a manner conductive to social
and economic welfare, and to a balance of rights and obligations.¡±
Article 8 (Principles) of the TRIPS Agreement clarifies the
principle that Members may adopt measures necessary to protect public
health and nutrition so long as ¡°such measures are consistent with the
provisions of this Agreement.¡±
Thus, Article 31 of the TRIPS Agreement, when it relates to
compulsory license for the public interest, must be interpreted in the
context of the Agreement¡¯s ¡°objective¡± found in TRIPS Article 7 -
that the balance between rights and obligations must be respected - and
must also respect the ¡°principle¡± found in TRIPS Article 8 - that
public interest measures may only be undertaken in a manner consistent
with the provisions of TRIPS Agreement, which includes respect for the
balance of rights and obligations found in TRIPS Article 7.
The Ministerial Declaration on TRIPS and Public Health, adopted by
the WTO Ministers in Doha, Qatar on November 14, 2001 (¡°Doha
Ministerial Declaration¡±), merely clarifies the basic theoretical
principal that Members may grant compulsory licenses in order to
protect public health and enumerates the conditions under which such
compulsory licenses may be issued and does not amend, revise or replace
the TRIPS Agreement.
It was not the intent of the Ministers that the Doha Ministerial
Declaration would repudiate, rescind or contradict the basic objective
of the TRIPS Agreement, as set forth in Article 7 thereof. US Trade
Representative Zoellick is on record as declaring: ¡°Some WTO members
and non-governmental organizations did exert considerable pressure on
the United States to agree to ¡°clarification¡± language at Doha that
would have severely undermined obligations in the Agreement. In the
end, no clarifications of this nature were included in the Declaration
on the TRIPS Agreement and Public Health.¡± (Letter from Ambassador
Zoellick to US Congressman Pete Sessions, December 5, 2001)
The Doha Declaration does not amend, revise or replace the TRIPS
Agreement. Accordingly, the obligation found in TRIPS Article 7 that
signatory countries meet the TRIPS objective regarding the need for a
balance between the interests of intellectual property producers and
users remains in force.
4. The TRIPS Agreement, therefore, requires that the public interest
from the protection of patent rights be balanced against the public
interest from the compulsory license.
The objective of the TRIPS Agreement, as set forth be Article 7
thereof, requires that the system for the granting of a compulsory
license for the public interest not be intended as a sanction against
the abuse of the patent right relative to a specific person. Rather,
it requires a judgment that the working of the patented invention for
the public interest is more important than the public interest in the
protection and enforcement of intellectual property rights.
The TRIPS negotiators did consider the relationship between the
exclusive patent rights enumerated in TRIPS Article 28 and a specific
person but it was in the context of drafting TRIPS Article 30
(¡°Exceptions to Rights Conferred¡±) and not Article 31, which contains
the TRIPS obligations on compulsory licensing. The July 23, 1990 draft
test of the TRIPS Agreement, for example, listed ¡°preparation on a
pharmacy in individual cases¡± as one of the possible acts that would
generate an acceptable limited exception and, hence, not upset the
balance found in the TRIPS Agreement. (Jacques J. Gorlin, An Analysis
of the Pharmaceutical-related Provisions of the WTO TRIPS (Intellectual
Property) Agreement, London, Intellectual Property Institute, 1999,
page 29). The negotiators, however, considered that acts taken on
behalf of more that one person impaired the balance set out in the
TRIPS Agreement and could not be justified under Article 30. Neither
could acts taken on behalf of specific persons serve as a justification
for compulsory licenses under TRIPS Article 31.
Under the TRIPS Agreement, when considering the grant of a
compulsory license for a non-commercial working of a patented invention
that is necessary for the public interest, the expectations of those
who require the protection and enforcement of intellectual property
rights and the public benefit that derives from such protection must be
taken into account.
As the Report of the WTO Dispute Settlement Panel in India-Patent
Protection for Pharmaceutical and Agricultural Chemical Products
(97-3496, September 5, 1997) stated: ¡° ¡¦ One of the precepts
developed under GATT 1947 [the original GATT Agreement] is that rules
and disciplines governing the multilateral trading system serve to
protect legitimate expectations of members as to the competitive
relationship between their products and those of other Members. As the
Superfund panel pointed out, such rules and disciplines ¡®are not only
to protect trade but also to create the predictability needed to plan
future trade.¡¯ Predictability in the intellectual property regime is
indeed essential for the nationals of WTO Members when they make trade
and investment decisions in the course of their business.¡± The India
panel also went on to say that in its view, ¡°good faith interpretation
[of the TRIPS Agreement] requires the protection of legitimate
expectations derived from the protection of intellectual property
rights provided for in the Agreement.¡±
Thus, not only does the TRIPS Agreement provide the minimum
standards of substantive patent protection that foreign patent holders
can expect to receive under a country¡¯s domestic law, but it also
creates certain expectations about the resultant commercial access to
that country¡¯s market that will flow to the patent holder from the
patent protection. The notion that foreign patent holders develop
legitimate expectations about both the availability and enjoyment of
patent rights in other markets is reflected, for example, in TRIPS
Article 27.1, which requires that patent be ¡°available and patent
rights enjoyable without discrimination as to the place of invention,
the field of technology and weather products are imported or locally
produced.¡± The obligation that is incumbent upon a WTO Member
contained in that article is not to provide for both the availability
of patents and the enjoyment of the patent right - that is taken for
granted - but to make sure that they are provided in a
non-discriminatory manner.
These expectations that relate to the ability to the patent holder
to commercially exploit his patent are protected, according to the
India panel, by the TRIPS Agreement. Thus, if any WTO member believes
that a benefit that it had expected to receive under the terms of the
TRIPS Agreement is either directly or indirectly impaired by measures
taken by another WTO member, it may resort to the WTO multilateral
dispute settlement system.
To the extent that granting of a compulsory license undercuts the
patent holder¡¯s expectations, it is incompatible with the
international trading rules contained in GATT 1947, in general, and the
TRIPS Agreement, in particular.
5. The TRIPS Agreement generally contemplates the existence of urgent
necessity in order for compulsory licenses to be granted without prior
consultation of the right holder.
While the TRIPS Agreement does not exhaustively enumerate the
grounds available for the issuance of a compulsory license thereunder,
it does include the following conditions: ¡°national emergency or other
extreme urgency¡±, ¡°public non-commercial use¡±, ¡°to remedy a
practice determined after judicial or administrative process to be
anti-competitive¡± and ¡°exploitation of a dependent patent.¡±
It should, however, be noted that TRIPS Agreement only permits the
waiver of the requirement for prior consultations with the right holder
in instances of ¡°national emergency or other circumstances of extreme
urgency¡± and in the case of ¡°public non-commercial use.¡± In this
regard, paragraph 5(b) of the Doha Ministerial Declaration on TRIPS and
Public Health specifically notes the understanding of the Ministers
that ¡°public health crises, including those relating to HIV/AIDS,
tuberculosis, malaria and other epidemics, can represent a national
emergency or other circumstances of extreme urgency.¡± Waiver of the
right of consultation in such instances is justifiable precisely
because of the ¡°extreme urgency¡± and seriousness of such
circumstances. The TRIPS Agreement also applies the same rationale to
situations of ¡°public non-commercial use,¡± where it also permits the
waiver of prior consultation.
However, it would not be reasonable to waive prior consultation in
instances in which a compulsory license is being sought for public
health reasons that are not of extreme urgency. In such instances, it
is reasonable to understand the TRIPS Agreement as requiring prior
consultation with the right holder before a compulsory license may be
sought from the government.
The view was reflected in the initial texts of a TRIPS Agreement
that both the EU and the Swiss Government submitted to the TRIPS
Negotiating Group in 1990.
¡°Except in the case of manifest national emergency, a compulsory
license may only be issued after unsuccessful efforts made by the
applicants in line with normal commercial practices to negotiate a
voluntary license with the right holder.¡± (Submission of the
Delegation of the European Communities, March 27, 1990, Document
MTN.GNG/NG11/W/68)
¡°Where the exploitation of the patented invention is required by
reason of an overriding public interest, the possibility of
exploitation of the patented invention by the government, or by third
persons authorized by it, may be made available by means of a
compulsory license at any time, provided that the patent owner had
refused to grant a contractual license on terms that are in line with
normal commercial practices.¡± (Submission of the Swiss Delegation, May
14, 1990, Document MTN.GNG/NG11/W/73)
6. ¡°Public Non-Commercial Use¡± as required by Article 31(b) of the
TRIPS Agreement has a very specific meaning.
The ¡°public non-commercial use¡± rationale found in TRIPS Article
31(b) may only be used after the government has demonstrated that it or
an entity on its behalf is undertaking the infringement and that the
unauthorized use is non-commercial in nature. This would appear to bar
¡°failure to supply a pharmaceutical at a reasonable price,¡± which
clearly involves a commercial finding, as a rationale for seeking a
¡°public non-commercial use¡± compulsory license.
Not every infringement by a government is permitted by TRIPS.
While the concept of a ¡°public purpose¡± does cover a broad range of
objectives and may include dealing with a ¡°health crisis¡± involving
an infectious, communicable disease, under the terms of the ¡°public
non-commercial use¡± exception, the government may only undertake
activities that are part of its legitimate functions. Hence, the TRIPS
Agreement specified that the unauthorized use permitted under the
¡°public non-commercial use¡± exception must be ¡°by and for the
government¡± [Article 31(b)].
During the TRIPS negotiations, US negotiators informally provided
the following pharmaceutical-related description of the difference
between ¡°public commercial use¡± and ¡°public non-commercial use¡±:
supplying the general public with a drug that it manufactures or has
manufactured on its behalf is not a legitimate function of government
and would not fall under the exception. One the other hand, supplying
drugs to soldiers in the army could be considered a legitimate function
of government that might be permitted under the ¡°public non-commercial
use¡± exception.
The model for ¡°public non-commercial use¡± used by the TRIPS
negotiators was US Section 1498 (28 USC 1498), which required them to
provide a carve-out from the TRIPS limitations on compulsory licensing.
Notwithstanding that Section 1498 has been on the US statute books, in
one form or another, since 1910, it has been primarily used for defense
and space-related matters, which are legitimate government functions
and, in the scheme of things, involve relatively limited exceptions to
the patent right. Section 1498 has not been used in a commercial
manner that would interpose the government in clearly normal business
activities for the general population.
Dated: May 28, 2002
Jacques J. Gorlin
WASHINGTON, D.C.
SUBSCRIBED AND SHOWN TO
BEFORE ME THIS 28th DAY OF
May, 2002.
BY
NOTARY PUBLIC, DC.
CHANG HO CHOI, NOTARY PUBLIC
DISTRICT OF COLUMBIA
COMMISSION EXFIRES: 6/14/2004
= = = [End of Affidavit] = = =