WORLD TRADE
ORGANIZATIONIP/C/W/389
14 November 2002
(02-6329)
Council for Trade-Related Aspects
of Intellectual Property RightsOriginal:  English
ELEMENTS OF A PARAGRAPH 6 SOLUTION
Communication from Kenya, the Coordinator of the African Group
1. The Africa Group believes that the November 2002 TRIPS Council meeting should be in a
position to come up with an initial draft for a so lution to the paragraph 6 problem, in time for
recommendations to the General Council by December in accordance with the Doha Ministerialinstructions.  The Group therefore commends the efforts of the Chair in holding useful consultations
and timely producing and circulating his texts;  and wishes through this communication to
constructively contribute in this direction through concrete suggestions for improving upon that text
so that this exercise can lead to a satisfactory outcome for all Members.
Scope of the decision
Diseases
2. (a) It is the view of the African Group that the expression "other epidemics", in
paragraph 1 of the Declaration on the TRIPS Agreement and Public Health, covers
other diseases, including those that may be unforeseen for the moment, and that on
this basis Members shall have the right to  use the solution in the context of health
problems they may face.
(b) While paragraph 1 is part of the Declaration on the TRIPS Agreement and Public
Health, it should be read in the context of the whole Declaration and specifically in
light of the substantive provisions in, inter alia , paragraphs 4 and 5 highlighting the
right of Members to protect public health and the flexibilities in the TRIPSAgreement.  The substantive provisions cover all public health problems that a
Member may face.  If any regulation is required, it should be borne in mind that there
is a built-in mechanism in this regard, for a Member has to determine the health needs
of its people in accordance with its internal procedures before using the solution, and
the Declaration fully recognizes this right of Members by highlighting that diseasesmay constitute emergencies or other circumstances of extreme urgency as and when
the Member may itself determine.
3. (a) In this regard, emphasis should not be on "gravity" as used in paragraph 1 of the
Declaration on the TRIPS Agreement and Public Health but rather on the diseasesand the desirability of preventing suffering and deaths that could be prevented.
Gravity was used in the context of the huge scale of suffering and deaths resulting
from diseases.  Those diseases that were mentioned were only for illustrative
purposes at that point in time, and this should be clear from the addition "and other
epidemics".IP/C/W/389
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(b) Also, the African Group believes that the right of Members to protect public health,
as highlighted in the Declaration, applies to both present and imminent health
problems.  Indeed, preventive or preparatory measures are appropriate ways of
protecting public health without having to wait for diseases to run out of control and
for deaths to occur.
Products
4. The position of the African Group is to retain the expression "pharmaceutical sector" as used
in the Declaration, while at the same time explicitly agreeing that the expression should be broadly
construed in a manner that gives efficacy to the solution and in accordance with the right of Members
to take measures to protect public health as highlighted in the Declaration.
5. The African Group believes that the expression "pharmaceutical sector" should include both
products and processes.  The Group further believes that the expression should cover substances and
kits that are necessary for producing, preparing and administering treatments.
Rights and flexibility under the TRIPS Agreement6. (a) Regarding the scope of the solution, the African Group believes that it shall not
restrict the rights and flexibility under the TRIPS Agreement.  It should be agreed that
the solution is intended to be part of a permanent or long-term solution to the problem
of lack of or insufficiency of manufacturing capacity while at the same time
responding to the short-term or immediate needs of Members with such capacityproblems.
(b) The solution applies to cases where a Member requests another Member for supplies
to address its public health problems, but not where a Member issues a compulsory
licence to be worked by domestic production to address its public health problems.
Objective criteria for beneficiary importing Members
Eligible Members
7. The African Group believes that all Members should be eligible as importers, on the
understanding that they will use the solution only when they need it, that is, in cases where they lack
or have insufficient manufacturing capacity.  Indeed, paragraph 6 addresses "Members withinsufficient or no manufacturing capacity".
8. The proposal that some Members only use the solution in cases of emergencies and other
circumstances of extreme urgency relating to HIV/AIDS, tuberculosis, malaria and other epidemics,
introduces a distinction that does not have a good basis in the Declaration on the TRIPS Agreement
and Public Health, because reference was made to WTO Members with insufficient or nomanufacturing capacity.
9. Given that there would be a requirement for a request to the exporting Member, from the
importing Member, this amounts to a built-in mech anism for regulating exports in certain cases,
which however need not be re-iterated in the solution.  However, where a request is properly made
under the solution, there should be an obligation on the requested Member to take all measuresnecessary for the production and exportation to be speedily accomplished.IP/C/W/389
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Determination of manufacturing capacity
10. Any objective criteria should not be a way of imposing cumbersome domestic pre-conditions
for using the solution, and should not limit the existing rights of Members to protect public health in
any circumstances.
11. Rather than listing certain criteria, the idea could be that a Member should go through a
process of establishing that it needs certain pharmaceutical products and processes in which it has
insufficient or no capacity.  The mechanisms that a Member uses for establishing that this situation
exists, should be left to the Member itself.  In practice, the health departments assess the medical
needs of the country, and the procurement agencies look for sources of supplies – if there are none
domestically, they would have to be found abroad.
12. (a) So, rather than attempting to list objective criteria that in any case might not
comprehensively apply and might not cover certain unforeseen situations, there could
instead be a requirement that:
Before invoking (the solution), a Member through its relevant department (for
example the health department), shall determine that there is a need for certain
pharmaceutical products and processes to address existing or imminent public healthproblems, which the member has insufficient or no manufacturing capacity to
satisfactorily meet.
(b) In this regard, there should be no reference to any tendering procedures.
Eligible supplying Members13. (a) All Members should be eligible to supply pharmaceutical products and processes to
another to address public health problems.
(b) It needs to be noted that the solution woul d function on the basis of a request from the
importing Member.  This constitutes a built-in mechanism for the importing Members
to give preference to developing country suppliers rather than developed countysuppliers.  This could take place within the context of South-South cooperation.
However, there should be no obligation on importing Members to show to the TRIPS
Council that they have given preference to developing country suppliers.
Conditions/safeguards
14. Though the need for conditions and safeguards has not been concretely demonstrated, the
African Group has been prepared to consider them  in a spirit of compromise.  However, the Group
cannot accept conditions and safeguards that would make it difficult to use the solution or in any way
have the effect of rendering the solution meaningless.   On this basis, the Group's view is as follows:
(a) While there may be conditions and safeguards requiring the exporting Members to
produce only in accordance with requests and to export all the production to therequesting Member, there is no need for conditions on importing Members.  Part III
of the TRIPS Agreement provides enough safeguards in relation to importing
Members particularly if combined with the condition on supplying Members to
export all the production.  Importing Members according to Part III of the TRIPS
Agreement are already under detailed obligations to enforce the rights of the patentholder both in relation to border measures and to domestic legal procedures and
remedies.IP/C/W/389
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Labelling only
(b) Regarding the conditions on exporting countries, labelling is enough.  The other
conditions about shape and colouring, are unnecessary.  Also, the other conditionsmay further increase production and compliance costs;  and may have implications
relating to health standards.
No safeguards/conditions on production for domestic market(c) It is the view of the African Group that the conditions or safeguards shall not apply in
cases of production located within a Member to supply the domestic market toaddress public health problems.  The domestic market in this sense should be agreed
to encompass the entire regional market in  accordance with the interpretation to be
applied to "domestic market" in paragraph (f) of Article 31.
Building sufficient manufacturing capacity
Long-term solution
15. (a) The African Group believes that the ultimate solution to the paragraph 6 problem is to
build domestic manufacturing capacity and that this should be explicitly agreed andmentioned in the solution;  and that measures to support the building of domestic
manufacturing capacity are necessary and should be taken in the context of a
paragraph 6 solution as well as generally in the context of the TRIPS Agreement.
(b) The Group believes that there should be an undertaking by developed country
Members to take measures to facilitate the transfer of medical-related technology todeveloping and least-developed country Members, in operationalizing the objectives
stated in Article 7 and the provisions of Article 66.2 of the TRIPS Agreement as well
as paragraph 7 of the Declaration.
Economies of scale
16. The following clauses should be part of the solution:
(a) To enable utilisation of economies of scale in production, in granting compulsory
licences to address public health problems, Members agree that the TRIPS
Agreement should not prevent compulsory licences that are recognized and given
effect within context of the regional trade agreement that the Member issuing the
compulsory licence is party to.
(b) It is agreed that utilisation of economies of scale is an important element of the
solution under paragraph 6, in terms of making production attractive and feasible, in
order to support the location of production facilities within the territories of
developing and least-developed country Members.  Accordingly, the solution shall bepart of the legal incentives to support the location of production facilities within the
territories of developing and least-developed country Members.IP/C/W/389
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Regional trade agreements
(c) Accordingly, it is agreed that "domestic market", for developing country Members,
shall include collectively the markets of all parties to a regional trade agreement
within the meaning of the applicable provisions of the WTO Agreement particularlyArticle XXIV of GATT 1994 and the Enabling Clause.
(d) However, there should not be any reference to "duly notified RTAs" as this may raise
problems of the conformity of the RTA to WTO rules – conformity has been a big
problem in the history of GATT and the WTO/CRTA, which has yet to be
satisfactorily resolved.
Coherence
17. There should be recognition that in addressing public health problems in developing country
Members, measures under the TRIPS Agreement should be part of the international effort.  It should
be agreed that there must be coherence between  the WTO and other organizations such as UNIDO,
WHO, UNAIDS, UNCTAD, the World Bank, etc.;  particularly with regard to transferring
medical-related technology to developing country  Members.  The TRIPS Council should annually
receive reports on how this coherence is being implemented, for purposes of information sharing.
However, this must not in anyway be understood or taken to mean that the solution should be
restricted and made subject to efforts in other organizations;  rather the TRIPS Council must find acomplete solution within its competence and the WTO as an institution must fully exhaust its mandate
in this regard.
Amendment to Article 31(f) of the TRIPS Agreement
18. The amendments relating to paragraph (f) of Article 31 should be in the following terms:
(a) Paragraph (f) of Article 31 is hereby amended by adding the following sentence:
"This restriction to supply predominantly for the domestic market shall not apply to
laws and measures adopted to address public health problems."
(b) Members agree to ensure that they complete their domestic procedures for acceptance
of this amendment by 25 June 2003.
(c) The provisions of Articles XXII and XXIII of GATT 1994 as elaborated and applied
by the Dispute Settlement Understanding shall not apply to measures taken under (the
solution), until this amendment is accepted by all Members.
19. Or [a waiver]:  The General Council could adopt a long-term waiver to last until ALL
Members accept the amendment to paragraph (f) of Article 31, waiving, inter alia , the following
provisions in the TRIPS Agreement:
(a) the condition in paragraph (f) of Article 31 to supply predominantly for the domestic
market;  and
(b) the rights conferred by a patent under Article 28 in relation to pharmaceutical
products and processes needed to address public health problems, to the extent that
this enables the production for export, and the selling abroad and the exportation, of
the pharmaceutical products and processes requested for purposes of addressing
public health problems in third countries.  However, the waiver in this respect shallIP/C/W/389
Page 6
not be understood as waiving the right to remuneration or compensation for the use of
the patent;  that is, patent holders shall be compensated for using their patents for
production for export to third countries.
(c) However, the terms and conditions on which the waiver should be granted must
include:
(i) the clear agreement by Members that Articles XXII and XXIII of 
GATT 1994 as elaborated and applied by the Dispute Settlement 
Understanding shall not apply to measures (under the solution) for the 
duration and any extended periods of the waiver;  and
(ii) an explicit understanding that the annual reviews shall only be formalities, on
the basis that Members have recognised that the waiver was necessary to 
address health problems that are of a long-term nature.  In particular, 
Members shall not be required to justify their use of the solution.
Production for export to address public health problems
20. In order to explicitly provide for production for export under the solution, the General
Council decision should state that Members may take measures facilitating production for export and
the exportation, in the following terms:
(a) Without prejudice to the right to issue compulsory licences to supply other Members,
any Member may designate within its territory specific locations or enterprises for
production for export or supply to other Members in order to address public health
problems in the latter Members.
(b) Members that adopt laws or measures in this context, and Members that have public
health needs, may notify them to other Members directly or through the Secretariat of
the World Trade Organization and to any relevant international organizations.  It is
understood that this paragraph does not create a notification obligation on Members
but shall be for the purpose of information sharing designed to facilitate the use of the
solution.
Notification and transparency
21. The African Group takes the view that notification should serve the purpose of information
sharing but must not constitute a notification obligation.
22. It should be understood that in the context of the detailed procedural requirements under
Article 31 of the TRIPS Agreement, including paragraph (b), compulsory licences would be necessary
only when voluntary licences are not forthcoming,  without prejudice to the right of Members to
themselves determine the grounds for issuing compul sory licences and without prejudice to the rights
of Members relating to emergencies and other circumstances of extreme urgency.  Therefore,
additional notification requirements are unnecessary.
23. Nevertheless, the rights relating to emergencies and other circumstances of extreme urgency
as highlighted in the Declaration on the TRIPS Agreement and Public Health, shall not in anyway be
restricted or limited.  In particular, there must be no limitation of the right of Members to waive the
requirement in paragraph (b) that "use without authorization may only be permitted if, prior to such
use, the proposed user has made efforts to obtain authorization from the right holder on reasonablecommercial terms and that such efforts have not been successful within a reasonable period of time".IP/C/W/389
Page 7
It should be clearly understood that all the various elements of this requirement may be waived by
Members in cases of emergencies or other circumstances of extreme urgency, and that the solution in
building upon the Declaration should not seek to undermine any flexibility that Members have.
Integral with the Declaration24. This (solution) is based on the Declaration on the TRIPS Agreement and Public Health, and
shall not undermine or restrict the flexibilities in the TRIPS Agreement.  (The solution) shall be an
integral part of and shall be applied and interpreted in light of the Declaration on the TRIPS
Agreement and Public Health.
25. This communication is without prejudice to the positions of individual members of the
African Group.
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