RESTRICTEDWORLD TRADE
ORGANIZATIONIP/C/M/36
18 July 2002
(02-3979)
Council for Trade-Related Aspects
of Intellectual Property Rights
MINUTES OF MEETING
Held in the Centre William Rappard
on 25-27 June 2002
Chairperson:  Ambassador Eduardo Pérez Motta (Mexico)
The present document contains the record of the discussion which took place on agenda
items C(i) and (ii) during the TRIPS Council meeting held on 25-27 June 2002.  The discussion on the
remainder of the agenda items (contained in WTO/AIR/1818) will be recorded and circulated as an
addendum to this document.
Subjects discussed   Page Nos
C. T HE TRIPS A GREEMENT AND PUBLIC HEALTH
(i) Paragraph 6 of the Doha Declaration on the TRIPS Agreement and
Public Health
(ii) Extension of the transition period provided for in paragraph 7 of the
Doha Declaration on the TRIPS Agreement and Public Health1-47
48-53
_______________
C. THE TRIPS A GREEMENT AND PUBLIC HEALTH
(i) Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health
1. The Chairman recalled that paragraph 6 of the Doha Declaration on the TRIPS Agreement
and Public Health (hereinafter the Declaration) recognized that WTO Members with insufficient or no
manufacturing capacities in the pharmaceutical sector could face difficulties in making effective use
of compulsory licensing under the TRIPS Agreement and that the Ministers had instructed the
Council to find an expeditious solution to the problem and to report to the General Council before the
end of 2002.  He reminded delegates that his predecessor had already proposed at the TRIPS
Council's meeting in March 2002 that the TRIPS Council should plan to be in a position to makerecommendations to the General Council about how this matter should be dealt with by the end of
2002 and had invited Members to submit proposals for concrete solutions to the problems by the
present meeting, without this being a rigid deadline.  Furthermore, the Secretariat had been requested
to prepare notes providing available background information on, first, the extent to which patents
exist in regard to the diseases referred to in the Declaration and, second, manufacturing capacity formedicines in different countries.  The Chairman recalled that the first of the notes requested from the
Secretariat, namely a note on "Available information on the Existence of Patents in Regard toIP/C/M/36
Page 2
Diseases Referred to in the Declaration on the TRIPS Agreement and Public Health" had been
circulated in document IP/C/W/348.  The second Secretariat note on "Available Information on
Manufacturing Capacity for Medicines" had been circulated in document IP/C/W/345.
2. The Chairman reported that the Council had received the following communications
containing proposals on paragraph 6 of the Declar ation from Members:  a communication from Kenya
on behalf of the African group (IP/C/W/351);  a communication from the European Communities and
their Member States (IP/C/W/352);  a communi cation from the United Arab Emirates on its
understanding of the Doha Declaration on the TRIPS Agreement and Public Health (IP/C/W/354);  a
communication from Brazil on behalf of Bolivia, Br azil, Cuba, China, Dominican Republic, Ecuador,
India, Indonesia, Pakistan, Peru, Sri Lanka, Thailand and Venezuela (IP/C/W/355);  and a
communication from the Unit ed States (IP/C/W/358).
3. Introducing the submission on behalf of the African group as contained in document
IP/C/W/351, the representative from Kenya said that the document outlined possible elements of an
expeditious solution to the problem that Ministers had identified in paragraph 6 of the Declaration.While drawing up this document, the African group had given careful consideration to other
Members' suggestions in order to accommodate to the fullest extent their interests and concerns and
that the solution should be broad and reflect the objectives and principles of the TRIPS Agreement asthey were set up in Articles 7 and 8 and as clarified in the Declaration.
4. She said that the African group was of the view that, in trying to find an expeditious solution
to paragraph 6 of the Declaration, all relevant pr ovisions and flexibilities of the TRIPS Agreement
must be fully utilized.  The African group wished to see the term "pharmaceutical products", as used
in the proposal of the group, to be understood to include medicines, related technical processes andrelated technical equipment.  This understanding was implied by the expression "pharmaceutical
sector" as used in paragraph 6 and was important because building domestic manufacturing capacity
and a sound base in medical technology were the only concrete, as well as sustainable, solutions to the
problems identified in paragraph 6.
5. Outlining the main components of the proposal, she said that the African group reiterated
Members' right to import pharmaceutical products from the most affordable sources.  This included
the right to adopt nationally a doctrine of exhaustion of intellectual property rights, as well as the
possibility of compulsory licensing and other use without the authorization of the patent-holder.  As a
consequence, Members should have the right to export or import pharmaceutical products on the basis
of compulsory licensing.  It was the understanding of the members of the African group that Members
had the right to use compulsory licensing as one of the means for building domestic manufacturing
capacities.  In the view of the African group, Members might take measures, including compulsorylicensing, parallel and other importation and exportation, to address public health concerns, whether
or not there were patents in force on the pharmaceutical products concerned.  The proposal supported
domestic measures, such as the adoption of all necessary administrative orders or legal instruments,
the formation of joint ventures between governments and the private sector and the establishment of
appropriate sourcing or supply arrangements for pharmaceutical products at regional and other levels.In the proposal the word "domestic" should be interpreted in the same way as in footnote 1 to Article
2 of the Agreement on Safeguards, where "domestic industry" was interpreted to include the
combination of the industries at the regional level.  A positive outcome of this exercise in the TRIPS
Council would be a clear understanding that the term "domestic market", as used in Article 31(f)
should, under certain circumstances, mean the combined markets of the Members that had formed orwere in the process of forming a customs union or a free trade area or that had co-operated in the
procurement of medicines.  She said that this would assist in dealing with domestic markets, that were
too small to support viable production, or to utilize production capacity at the desired levels.  She
added that this would also promote regional supply centres for pharmaceutical products which was a
critical issue for poor Member countries.IP/C/M/36
Page 3
6. She proposed, as an alternative, the deletion of Article 31(f), or a clear exception to it,
provided that there was an assurance and undertaking that all procedures for amendment would be
completed by June 2003 and be binding on all Members.  She pointed out that WTO Members might
adopt laws and measures that address the need for technology transfer for innovation and production
of pharmaceuticals to build sound technological bases in less-developed countries.  The establishmentand location of production facilities in countries with insufficient or no manufacturing capacities to
meet the public health needs of these countries would be one practical outcome of such efforts.  The
African group had also proposed that the transition period be extended to allow for maximum
utilization of measures intended to address public health concerns.  Further, there was a need for a
comprehensive moratorium on disputes related to measures taken to address global health problems.
In her view such a moratorium should be related to the duration of the health concerns or problems, as
for instance the duration of the HIV/AIDS crisis or the prevalence of tuberculosis and malaria.  Sheexpected that the moratorium would operate until the disease was combated and that such a
determination could be sought from the authority in this area, the World Health Organization.
7. She concluded that the African group believed that all the options, taken as a package, would
provide essential elements for the solution required under paragraph 6 of the Declaration and that the
various elements would address the various stages or aspects of the process of ensuring access tolife-saving pharmaceutical products.  Members with sufficient manufacturing capacity would be able
to export to Members needing support in addressing public health concerns.  Producers would be able
to look at production facilities in Members with insufficient manufacturing capacity, assured that they
will be able to serve the entire regional market and to some extent other Members outside the regional
markets.  Developing and least-developed country Members that had unexpired or extended transition
periods on pharmaceutical products would benefit from the exceptions to protecting patent rights on
pharmaceutical products.  Conditions and pressures arising under bilateral and regional arrangements
should not prevent measures to protect public health ensuring access to medicines and that Members
should also refrain from putting pressure under bila teral or plurilateral arrangements on any other
Member to implement the TRIPS Agreement in a manner that would compromise the flexibilityinherent in the Agreement and the transition period allowed therein.  Finally, the moratorium would
be used in the event that any dispute threaten laws and measures covered by this solution.
8. The representative of the European Communities said it was the view of the European
Communities and their member States that finding "an expeditious solution" to the problem as defined
in paragraph 6 of the Declaration meant that one should be found before the end of 2002.  However,
the European Communities had reservations about th e introduction of new issues in this debate that
had no direct link with the subject-matter.  Doing so risked being counter-productive and couldseriously delay the process leading to the adoption of the solution.  From the European Communities'
point of view, the spirit of the Declaration rested upon two important principles:  first, it recognized
the important role of intellectual property in fostering innovation, research and development for new
medicines and second, it acknowledged that intellectual property protection had a bearing on the
prices of medicines and could therefore, under certain circumstances, have an impact on access tomedicines.  A synthesis of these principles was ex pressed in paragraph 5 of the Declaration and this
was a confirmation that the interplay between intellectual property protection and access to medicines
should not be considered in terms of a conflict between intellectual property and public health, or
between right holders and consumers, but in terms of mutual supportiveness and cooperation.  He
stressed  that TRIPS could and should be part of the solution.
9. He urged the TRIPS Council to concentrate on the issues that fell under its competence and to
make all possible efforts to find an effective solution by the end of 2002.  It was a fact, as had already
been argued at length, that patents and the pr ice of medicines were not the only elements that
determined the availability of health care in general and medicines in particular.  It was well known
that elements such as health infrastructure, research and development in neglected diseases orfinancing mechanisms played a key role too.  However, this should not be a pretext to escape from the
TRIPS Council's responsibilities.  He pointed out that, at the same time, the TRIPS Council had toIP/C/M/36
Page 4
keep what it did in proper perspective since, if no measures were taken in other areas by other bodies,
the TRIPS Council's work would be useless.  It wa s only if every stakeholder, including the TRIPS
Council, tackled the issues that fall under its responsibility, that the Members would come to a global
solution.
10. With regard to the legal mechanism for a possible solution, he said that the March 2002
TRIPS Council had proven to be very useful in outlining possible solutions as it had allowed
Members to present their preliminary views on the possible solutions to the problem and had brought
four basic options to the table: (i) an authoritative interpretation based on Article 30; (ii) an
amendment to Article 31(f); (iii) a dispute settlement moratorium; and (iv) a waiver with regard to
Article 31(f).  The European Communities had taken careful note of all positions and arguments and
had examined the pros and cons of the different options.  At the March TRIPS Council meeting, most
developing countries had pointed out that the problem – which he considered to be of particularimportance – mainly stemmed from the restriction contained in Article 31(f) of the TRIPS Agreement.
He noted that Article 31(f) limited the possibility to export goods manufactured under a compulsory
licence as the "predominant" part of that production must remain on the domestic market.  He
believed that an amendment to this particular paragraph went to the root of the problem and that was
why the European Communities had proposed a solution along these lines.  He particularlyemphasized that the European Communities did not propose a deletion of Article 31(f) because, in the
European Communities's view, the basic principle remained valid and there were good reasons why
Article 31(f) existed.  However, the European Communities saw clear merits in adding a new
paragraph to Article 31 that would carve out a clearly circumscribed exception to the restriction
embedded in Article 31(f).  This would facilitate the use of a patent under a compulsory licence on apharmaceutical product which was needed to address public health problems in another Member and
would allow Members in need of a given pharmaceutical product to deal with public health problems,
for which they had no or insufficient production capacity, to rely on another WTO Member to ensure
supply under a compulsory licence.  He added that the advantage of inserting a textual provision into
the TRIPS Agreement itself was that it would provide a straightforward, clear, legally secure,effective and permanent solution within an existing  legal framework, namely, within the framework
of Article 31 of the TRIPS Agreement as this would put in place a clear ground in the TRIPS
Agreement to export needed pharmaceutical products to a country without manufacturing capacities.
He added that the EC's proposed solution would apply to exports to countries with or without patents
on the particular products as Article 31(f) allowed for exports under compulsory licence without
distinction of the patent status of the product concerned in the country of destination.  He said the
European Communities were convinced that this amendment would strike the right balance betweenthe call for overcoming the restriction imposed by Article 31(f) to exports of pharmaceutical products
manufactured under compulsory licences, on the one hand, and the underlying rationale of Article
31(f) on the other.  He pointed out that the objective was to ensure speedy and affordable supplies of
pharmaceutical products to those in need, while maintaining a proper legal environment to encourage
research and development into new products, so that it fully conformed to the spirit of the Declarationand to the mandate contained in its paragraph 6.  He wanted to make it very clear that the European
Communities remained open to consider any alte rnative solution that might solve the problem
identified under paragraph 6 in a timely and adequate manner and, in this regard, appreciated the
communications made by other delegations that contained different approaches as these all
contributed significantly to the debate.
11. Turning to the scope of the solution he said that, whatever solution the TRIPS Council
considered, one would have to determine under which conditions the exception could be triggered and
applied as this was normal when dealing with exce ptions to legal principles.  As the TRIPS Council
dealt with this complex technical and legal issue, the delegations would have to clearly spell out the
scope and conditions in order to ensure legal security for all.  As regards the product scope, he urgedMembers to stick to the scope of the Declaration as set out in its paragraph 6, namely pharmaceutical
products that were needed to deal with public health problems, afflicting many developing and least-
developed countries, especially those resultin g from HIV/AIDS, tuberculosis, malaria and otherIP/C/M/36
Page 5
epidemics.  It was unwise to reopen that debate and that paragraph 6 should indeed be read in the light
of the entire Declaration.  As for countries that would qualify for importing these products, he called
upon delegations, in the first place, to concentrate on those developing or least-developed countries
where the needs were the highest and where production capacity was non-existent or clearly
insufficient.  It was clear in the EC's view from paragraph 6 of the Declaration that those countriesthat already disposed of significant manufacturing capacity in the pharmaceutical sector should not
qualify.
12. Turning to the issue of conditions and safeguards, the representative of the European
Communities said that adequate safeguards must be put in place in order to (i) avoid trade diversion
and abuse;  (ii) create sufficient transparency;  and (iii) ensure cooperation with right holders, while
ensuring that the solution remained effective.  Th ere was nothing new about these principles and that
this was what the existing conditions of Article 31, such as its paragraphs (b) and (f), were all about.However, if the Council created an exception that would allow situations not yet possible under
Article 31, the conditions needed to be adapted to that specific situation.  Further, any abuse could
open the door to illicit trade diversion of the goods to consumers others than those for which they
were intended or even to massive circumvention of intellectual property rules or to illicit trade which
would be detrimental to the interests of those in need of essential medicines.  Therefore, he proposedthat if one were to consider the exception to Article 31(f) one would have to specify that trade should
not be diverted.  In particular, products manufactur ed on the basis of the authorization given pursuant
to the new paragraph to Article 31 should not be put into circulation on the market of the country of
production but should in their entirety be exported to the Member or Members designated by the
authorization and not to any other country.  In addition, the product would be sold or distributedsolely in the Member(s) designated by the authorization and not be re-exported from that Member.  In
his delegation's view, each of the Members concerned, including the importing Member, would have
to take the necessary measures to prevent this diversion.  The obligation on the exporting Member
would be to ensure that all the products were exported effectively to the Member in need while that on
the importing Member would be to ensure that no fu rther re-export took place.  However, it would be
up to these Members themselves to determine the measures that would have to be taken to that effect.
He expressed understanding for the concerns that had been raised as to the additional burden such
obligations could impose on the Members concerned and said that it was not the EC's intention to
propose unreasonable restrictions that would not correspond to the spirit of the Declaration.  The
European Communities believed that it was crucial that the measures to be taken remained reasonable
and proportional, both with regard to the risk of trade diversion and with regard to the institutional
and administrative capacities of the Member concerned.  He, however, considered it to be only fairthat all WTO Members should take their responsibility in preventing the importation of the products
concerned into other markets.
13. Turning to the issues of transparency and coope ration with the right holder, he said that the
EC proposal on these issues stemmed mainly from tw o considerations:  first, the application of the
proposed exception would lead to the specific situation where a product that had been sold in onecountry would have been produced in another country under a compulsory licence for the specific
purpose of export;  second, that the best way to expedite the delivery of medicines to the populations
in need at strongly reduced prices was through reduced-pricing offers by the right holders.  Therefore
it was crucial to enable the patent holder to make a proposal to rapidly solve the problem by offering
sustainable voluntary licences and strongly reduced pricing offers, without unduly delaying theprocedure leading to the possible granting of a compulsory licence.  To ensure full transparency of the
process the European Communities proposed that both Members involved should, in any event,
promptly notify the right holder of their intention to issue a compulsory licence.  In case the product
in question was not patented in the country without manufacturing capacity, the intention to request
another Member to issue a licence to supply the product should be notified to the WTO.  A significantadvantage of this procedure would be that Members interested in manufacturing and delivering the
goods could make themselves known to the Member without manufacturing capacities.  The right
holder of the patent at stake should be given the opportunity, within a reasonably short timeframeIP/C/M/36
Page 6
after notification, to make an offer to supply the relevant products at strongly reduced prices.  This did
not mean that prior negotiation with a view to obta ining a voluntary licence, as prescribed by Article
31(b), should take place under all circumstances.  What was being proposed was that before a
compulsory licence was granted the right holder should be given an opportunity to offer the product at
strongly reduced prices.  Prior negotiation, as prescribed by Article 31(b), should only take place inthe absence of a situation of extreme urgency or emergency.  It would be appropriate to ensure that if
the use of the product was intended to address a case of a national emergency or other circumstances
of extreme urgency in the importing Member, the Member authorizing the production would not be
obliged to first try and obtain a voluntary licence.  However, the right holder should be notified and
left a short period of time to make an offer to the importing country.  Once this short period was over,
a licence could be granted, unless the offer from the right holder was deemed satisfactory by the
country in need.  This proposal, far from being a delaying tactic, was a mechanism to give the rightholder a last chance to propose a rapid solution to the problem.  If such an offer was deemed sufficient
by the importing Member without manufacturing capacity, there should be no reason for the exporting
Member to resort to a compulsory licence under the proposed exception.  It would be up to the
importing Member to judge whether the offer by the original manufacturer was sufficient to meet its
needs.  The representative wanted to make very clear that the conditions outlined above would onlyapply with regard to the new exception that would be inserted in Article 31 and that they would not
encroach on the flexibilities existing under the current Article 31 nor on the future interpretation of
these flexibilities.  He concluded that, in the view of the European Communities, these proposals were
reasonable and fully matched the objective of the Declaration to ensure access to affordable medicines
and, where appropriate, to make available the means, by the end of 2002, to overcome the obstaclesthat might be created by the existence of patents.
14. The representative of the United Arab Emirates recalled that the Declaration, which had been
one of the most successful decisions of the fourth Ministerial Conference, could and should be
interpreted in a manner supportive of WTO Members' right to protect public health and in particular
to promote access to medicines for all.  Many options had been explored by Members' during the lastsession of the TRIPS Council and that his delegation had taken note of the presentations by Kenya
and by the European Communities, which reflected a positive approach to dealing with this issue.  In
this respect the focus on Articles 30 and 31 of the TRIPS Agreement had been very important to reach
an expeditious solution as envisaged under paragraph 6 of the Declaration.  However, there were other
articles not less important and relevant to the discussion, namely Articles 6, 7, 8, 27 and 39 which
would help to see the big picture of the issue being discussed and which, in turn, would help in
finding a broader and long-term solution.  He sugge sted that paragraph 6 of Declaration should be
read in the context and spirit of the entire Declaration as a narrow approach would not help the TRIPS
Council in reaching a sustainable solution.
15. He said that the transfer of technology was crucial for developing countries to build a better
manufacturing capacity in the pharmaceutical sector with the aim to ensuring sustainable access to
medicines and other public health-related products.  Transfer of technology being one of the mainobjectives of the TRIPS Agreement, he proposed that the Council take fully into account these
objectives in exploring solutions and flexibilities decided by Ministers in Doha.  Any solution under
paragraph 6 of the Declaration should be sought to be available to all developing countries while
recognizing the specific problems and difficulties of the poorest among them.  The Declaration did
not indicate directly or indirectly that the envisaged solution should be restricted to a category ofcountries nor that some countries should be excluded from the solution since any developing country
could face inadequate access to medicines.  It was worth noting that developing countries faced
various challenges depending on their own situations.  There were developing countries that faced a
total absence of manufacturing capacities, while others, that were at the early stages of development,
faced difficulties in using fully the TRIPS provis ions because of their insufficient industrial and
technological capacities.  This was why a broad and sustainable solution should be envisaged to take
into account the concerns of all developing countries.  Referring to the proposal of the United Arab
Emirates contained in IP/C/W/345 he said that certain elements would contribute to exploringIP/C/M/36
Page 7
balanced and sustainable solutions to the problem, in particular paragraphs 16 and 18, which focus on
Article 30 and 31 of the TRIPS Agreement.
16. The representative of Brazil said that his delegation was one of the co-sponsors of the
proposal contained in document IP/C/W/355 together  with a group of other developing countries that
included Bolivia, Cuba, China, Dominican Republic, Ecuador, India, Indonesia, Pakistan, Peru, SriLanka, Thailand and Venezuela.  The initiative to circulate this proposal reflected the commitment of
these countries to find an "expeditious solution" to the problem identified in paragraph 6 of the
Declaration.  He recalled that the mandate of th is paragraph obliged the TRIPS Council to find a
solution before the end of 2002 and expressed the wish of his country to see this timeframe complied
with.  He indicated that his delegation would comment later on the other proposals that had been
submitted and that there was some overlap between IP/C/W/355 and the proposal of the African group
and that of the United Arab Emirates, while the EC proposal also contained some positive elements.
17. He said that the proposal was based on a thorough discussion among the group and had
benefited from occasional inputs from academic experts.  He added that, as far as he could ascertain,
it had found support in important sectors of civil society and among NGOs within and outside the co-
sponsoring countries.  The proposal was based on the view that paragraph 6 of the Ministerial
Declaration on the TRIPS Agreement and Public Health should be read in the light of the entirecontext of the Declaration as well as of the flex ibilities contained in the TRIPS Agreement itself.
Solutions based on paragraph 6 should not be detrimental to the fulfilment of the objectives of the
TRIPS Agreement in terms of transfer of technology, which was critical to improving manufacturing
capacity in the pharmaceutical sector and therefore to ensuring sustainable access to affordable
medicines.
18. Concerning the potential beneficiaries of the solution envisaged under paragraph 6, he said
the group had stressed that any WTO Member could face difficulties in making effective use of
compulsory licences due to insufficient or no manufacturing capacities in the pharmaceutical sector.
The solutions envisaged by the TRIPS Council should therefore not exclude specific categories of
countries.  Developing countries and least-developed countries should, in any event, be among themain beneficiaries of possible expeditious solutions.  He welcomed the fact that Members appeared to
recognize that difficulties of access to public health-related products were not limited to countries
with no or insufficient manufacturing capacities where these products were protected by patents.  He
believed that the expeditious solutions being contemplated by the TRIPS Council should also
envisage situations where no patents existed in the countries in need of access to public health-related
products.
19. He said the co-sponsors believed that, in reporting to the General Council, the TRIPS Council
should recommend an authoritative interpretation of Article 30 of the TRIPS Agreement that would
recognize the right of WTO Members to authorize third parties to make, sell and export patented
public health-related products without the consent of the patent holder to address public health needs
in another country.  Members might also consider the possibility of establishing appropriate
safeguards as long as these did not have the effect of undermining the interpretation proposed orprejudicing the existing right of countries to make use of Article 30 in other circumstances.  Referring
to Article 30 of the TRIPS Agreement, he said that the group of developing countries, on behalf of
which he was speaking, was convinced that an interpretation such as the one that had been proposed
would not unreasonably conflict with the normal exploitation of the patent and would not
unreasonably prejudice the legitimate interests of th e patent owner as the limited exceptions addressed
specific public health problems outside the territory of the Member and therefore did not conflict with
the normal exploitation of the patent.  The acts of making, selling and exporting of the products by
third parties without the consent of the patent holder to countries with insufficient or no
manufacturing capacities did not unreasonably detract from the returns ordinarily earned by the patent
owner in the exporting country.  The act of exporting was not enumerated among the exclusive rightsconferred by the patent in Article 28 of the TRIPS Agreement.IP/C/M/36
Page 8
20. This proposal, he said, was without prejudice to the possibility of Members looking at other
expeditious solutions to the problem identified in paragraph 6 or to the discussion of other proposals.
He nevertheless underlined that it was the group's conviction that its proposal represented the simplest
and most efficient solution to the serious problem that had been identified in paragraph 6.  The group
remained ready to continue to contribute to efforts in the TRIPS Council which were aimed atfulfilling the Council's mandate to find an expeditious solution before the end of 2002.
21. The representative of the United States said that , in efforts to harness international trade rules
to help countries gain access to life-saving drugs and successfully fight pandemics such as HIV/AIDS,
the Bush Administration had stated in February 2001 the commitment of the United States to a
flexible approach that was sensitive to health crises and also protective of intellectual property rights.
Under this policy the US Administration had informed WTO Members that as they took steps to
address major health crises, such as the HIV/AIDS crisis in sub-Saharan Africa and elsewhere, theUnited States supported steps by Members to avail themselves of the flexibility afforded by the WTO
TRIPS Agreement.  She recalled that in Doha in November 2001, the United States had provided
critical leadership along with other Members in developing support for a separate, landmark political
declaration on public health and international trade rules.  This Declaration had helped pave the way
for a successful conclusion of the Ministerial.  She further recalled that the United States remained thelargest bilateral donor of HIV/AIDS assistance, providing 45 per cent of all international spending on
AIDS. In the fiscal year 2003, President Geor ge Bush had requested United States$1.1 billion to
combat HIV/AIDS internationally and had pledged United States$500 million to the Global Fund to
combat the international scourge of HIV/AIDS, malaria and tuberculosis.
22. Introducing the US paper, she explained that it set forth the fundamental aspects of a
workable, transparent, sustainable and legally certain solution that would fulfil the Declaration.  The
US proposal called for meeting the mandate WTO Ministers gave the TRIPS Council in Doha by
ensuring that all poor countries could obtain needed pharmaceuticals for public health crises, even
those with insufficient pharmaceutical manufacturing capabilities;  ensuring that other developing
nations with pharmaceutical production capacity could help supply these poor countries without therisk of running afoul of WTO rules, which should help develop capacity in these developing
countries;  encouraging Members to establish measures to prevent the diversion of such medicines
away from intended recipients in poor countries back to higher-income developed markets, which
would undermine the special flexibilities afforded to  poor countries;  being part of the growing WTO
consensus in favour of using the existing compulsory licensing flexibility under TRIPS Article 31 as
the most appropriate solution rather than by modifying other sections of the TRIPS Agreement;  and
continuing examination with other Members to determine the most expeditious mechanism forimplementing this solution.
23. She said that the United States was encouraged by the substantive contributions of other
Members toward this common goal and appreciated the communication and cooperation from WTO
Members in the development of the US proposal.  In reviewing the proposals tabled by other
Members, she said that there were areas of commonality  with respect to certain key issues such as the
scope of the solution, the need for safeguard against diversion, and the desire to have an expeditious
and legally certain solution.  She concluded that  the US delegation looked forward to ongoing
cooperation in the TRIPS Council towards meeting this important objective.
24. The representative of Zimbabwe expressed his delegation's full support for the statement
made by Kenya on behalf of the African group and for the proposal submitted by the African group.
The African group had suggested a broad-based solution that sought to take advantage of every
possible flexibility to enable Members to make effective use of compulsory licences.  The Declaration
had initiated the process of putting positive interpretations to provisions of the TRIPS Agreement
which the Council should ensure continues.  It was critical for every country to have the opportunity
to improve its manufacturing capacity where inadequate and to establish capacity where none existed.Africa did not see itself, and others should not see Africa, as only a market for their products.  Thus,IP/C/M/36
Page 9
the African group did not feel it was enough to say that the only workable solutions under paragraph 6
were the authoritative interpretation of Article 30 of the TRIPS Agreement or the amendment of
Article 31 to allow exports to other countries which issue compulsory licences or the observance of a
moratorium.  His view was that the possible solution was broader and included helping countries with
no manufacturing capacity to set up that capacity.  This necessitated the adoption of every possibleoption, a fact the African group had stressed many times previously.
25. He said that Zimbabwe fully supported the paper introduced by Brazil, on behalf of a group of
developing countries, which explored the elements for an Article 30 solution.  His delegation
considered the elements in this paper and similar elements in the Africa group proposal to be mutually
supportive and complementary.  The proposed elements in the African group paper could help focus
the Council's dialogue so that Members did not continue talking past each other.  All processes that
the Council sought to put in place should be supportive and be an integrally part of, rather thandetracting from, the setting up and implementation of an expeditious, comprehensive and enduring
solution to enable countries with insufficient or no manufacturing capacity in the pharmaceutical
sector to not only be able to make efficient use of compulsory licences but to realise the necessary
capacity as well.  In his view, the TRIPS Agreement had entered a new stage of being better
understood, interpreted and implemented.  This process deserved the greatest and most earnest efforton the part of all Members.  The process affected important public policy issues of development and
the social economic welfare of the majority of humankind, indeed of entire countries and peoples.
The African group did not wish to see the paragraph 6 process to be as drawn out as other processes
that had long subsisted in the Council.  They did not wish to keep going around in circles or repeating
the same thing with no tangible forward movement.  The Council had a mandate to discharge and adeadline to meet.  The African group awaited Members' comments and concrete suggestions on their
proposal to move the process along.
26. The representative of Canada said that her delegation believed that for the solution to be
expeditious, sustainable, workable, transparent and to have legal certainty, it had to be clear as to the
scope of solution covered, the countries involved and countries which could qualify, among otherfactors.  Measures to prevent abuse, such as diversion of medicines produced under the solution
would also be required.  The solution would also have to respect the other safeguards prescribed by
Article 31 including notification of the rights holder and compensation.  Canada shared the view that
paragraphs 1 and 6 of the Declaration clearly defined the scope of the products and countries which
should benefit from the solution.  The solution should only apply to developing and least-developed
countries which had insufficient or no manufacturing capacity in the pharmaceutical sector, and which
were faced public health crises such as HIV/AIDS, tuberculosis, malaria, and other epidemics.  Sheshared the concerns expressed by many countries that the solution should not be onerous or
burdensome but believed that there should be a transparent procedure and a mechanism to monitor
and address any problems of abuse.  She agreed with the idea behind both the EC proposal to first
provide the right holder with an opportunity to supply the medicines and the US proposal for
transparency.  Suppliers should also be encouraged to make medicines available on the basis of asclose-to-cost-recovery as possible.
27. She recalled that at the March meeting a number of delegations raised the possibility of using
an Article IX waiver as the basis for an expeditious solution.  Canada believed that this approach, the
modalities of which were clearly set out in Article IX of the Marrakesh Agreement, offered great
promise.  The waiver could be formulated for an extensive period of time with the annual reviewrequirement being essentially a pro forma assessment of any associated conditions such as
transparency, efforts to prevent diversion, and application of provisions in Article 31.  She observed
that while individual countries had mostly made requests for waivers under the WTO, there was also a
precedence for collective waivers.  The waiver approach also provided considerable legal certainty as
it was an established mechanism which could clearly delineate some of the provisions that the Councilneeded to consider.  Canada did not believe that the annual review requirement should be seen asIP/C/M/36
Page 10
burdensome since it was a recognized compromise be tween the need to be minimally intrusive and the
need for transparency and to monitor the process.
28. She recalled that another proposed solution was for Members to agree to a moratorium on
dispute settlement.  The delegations of the United States and Kenya, on behalf of the African group,
had outlined some of the obvious benefits.  A Memb er supplying medicines to others faced with the
challenge set out in paragraph 6 would not be subject to the WTO dispute settlement understanding.
Encouraging or permitting the diversion of medicines supplied under this approach would clearly be
outside the scope of the moratorium.  However, a moratorium would also enable an expeditious
solution and if specifically tied to the safeguards outlined in Article 31, would also have less of a risk
of an unintended effect on non-pharmaceutical sectors.
29. She further recalled that some Members had proposed two solutions involving an amendment
to Article 31:  one was deleting Article 31(f) and the other was creating an exception to Article 31(f)for situations raised by paragraph 6.  The modalities for amending WTO agreements were clearly set
out in Article X of the Marrakesh Agreement.  With respect to the deletion proposal, she reminded
Members that TRIPS Article 31(f) applied to all patents and not just pharmaceuticals which might be
needed to address public health crises.  She shared  the views of the European Communities that it was
worthwhile to maintain the basic principle contained in Article 31(f).  There was a sound policyrationale in respect of the territorial application of intellectual property law, national sovereignty and
the need to avoid the circumvention of patent rules.  The European Communities had proposed the
addition of a new paragraph to Article 31 and she believed that this approach also had merit, provided
that the exception was carefully drafted.  Recalling that since the Council's discussions began over a
year ago, a number of Members had proposed an approach relying on Article 30, she said that herinitial reading of the paper introduced by Brazil suggest ed that it called for a solution that would entail
interpreting Article 30 in a way that would allow a Member to introduce a specific exception in its
law to allow it to supply a Member facing a public health crisis that had granted a compulsory licence
but was unable to supply its own domestic market due to lack of manufacturing capabilities.  She
reiterated that Canada did not favour an Article 30 interpretation because it would ultimatelyundermine existing patent provisions in the agreement and said that other delegations had expressed
similar concerns.
30. Canada acknowledged the African group's and the United Arab Emirates' call for technology
transfer.  She shared the view that increased foreign investment and transfer of technology across all
sectors was critical to improve the general well-being and economy of African nations.  Reactions to
the NEPAD proposal submitted to the G8 leaders summit in Canada would be very important.  In
conclusion, she reiterated the importance of ongoing dialogue and cooperation between Members in avariety of international fora such as the WHO, UNGASS and UNAIDS.
31. The representative from Egypt said that, in his view, neither of the Secretariat papers
(IP/C/W/348 and IP/C/W/345) were complete or  updated and hence should not be taken as
authoritative guides to carrying out the Doha mandate.  The paper on available information on the
existence of patents seemed to suggest that the scope of the Declaration be confined to diseasesspecifically referred to in the Declaration such as HIV/AIDS, tuberculosis and malaria whereas prior
Council discussions and the scope of Declaration had covered other epidemics as well.  The typology
in annex 4 of the paper on manufacturing capacity for medicines truly reflected the different
categories in the pharmaceutical industries.  But having a manufacturing capacity did not
automatically mean innovative or production capabili ties.  A distinction had to be drawn between the
industrial capacity or the hardware on the one hand, and the technological capacity or the software on
the other.  Furthermore, capacity to produce differed from one case to another in the same country.
Accordingly, it was difficult to perceive a solution based on a clear-cut, rigid classification of
countries.  Information on capacity was, however, useful in the Council's deliberations under items
such as implementation of Article 66.2, technical cooperation and capacity building.IP/C/M/36
Page 11
32. He said that the solution envisaged under paragraph 6 of the Declaration was one which
addressed flexibility in the interpretation of the TRIPS Agreement itself, without which the problem
highlighted in that paragraph would be extremely difficult to resolve and that the solution should
reflect the overall objectives and spirit of the entire Declaration.  No attempt was being made to
renegotiate the Agreement or to amend it under Article 71.1 and that there should be no attempt totake away existing flexibilities.  In this context the simultaneous consideration of several Articles of
the TRIPS Agreement of horizontal nature and effect, such as Articles 6, 7, 8, 28.1 (including the
footnote), 30, 31, 65.4, 66 and 67, was required even if the TRIPS provisions directly related to the
problem at hand were those embodied in Articles 30 and 31(f).
33. He said that the Council could envisage three scenarios in order to test possible solutions.
The first scenario involved a source country "S" which had sufficient manufacturing capacities and
technological capabilities in the pharmaceutical field, and a target country "T" with insufficient or nomanufacturing capacities or technological capabilities in such field.  Country "S" could legitimately
export a portion of its surplus of the pharmaceutical pr oduct to "T", if the latter was afflicted with the
same public health crisis that was treated by the same pharmaceutical product.  The legitimacy of this
action derived from Articles 6, 28.1 and a flexible interpretation of 31(f), enforced by paragraph 5(a)
and paragraph 5(d) of the Declaration.  In a second scenario, the target country afflicted by a publichealth crisis, could issue a compulsory licence authorizing the importation of a patented
pharmaceutical from the source country "S", where a competent pharmaceutical firm was permitted to
manufacture the requisite pharmaceutical in sufficient quantities, under a limited exception allowed
by a flexible interpretation of Article 30 for the sole purpose of supply to the target country.  This
situation could be served either by an authoritative interpretation of Article 31(f), which might bedifficult to pursue without an amendment, or an authoritative interpretation to Article 30 in a manner
that allows pharmaceutical products manufactured under a compulsory licence in a source country to
be exported to address a public health crisis in a target country.  The European Communities in their
submission (IP/C/W/339) last March elaborated on th is point also calling for safeguards to prevent
diversion of trade from its destination, an element Egypt could support and was ready to discuss itsmodalities in the future.  But these safeguards should not be a tool for restriction beyond what was
already in the Agreement or the Declaration.  A third scenario would involve both countries being
members of the same regional market or bound by a free trade area, a customs union, or an economic
cooperation treaty.  When one or more target countries of the same regional trade arrangement, along
with the source country, were afflicted by a public health crisis requiring the use of a particular
pharmaceutical product protected by local patents, it could request the issuance of a compulsory
licence by the source country "S" to enable the production, in its own territory, of the requiredquantities of the needed pharmaceutical for the sole purpose of exporting to one or several target
countries.  This scenario clearly required a more complex level of flexibility in the application of the
TRIPS Agreement which could be served by agreeing to the adoption of an objective-bound
moratorium on dispute settlement measures against WTO Members who might be involved in such a
situation.  For such moratorium to be effective and useful, it should last for a duration that covered atleast the entire period of the public health crisis that strikes the country or countries of the region.
This scenario needed to engage the relevant international and regional organizations (e.g. WHO and
the ECA, in the case of Africa) during the period of application, for the purpose of monitoring its
operation and assessing the health situation in the country or countries in question, as a reasonable and
effective safeguard measure.
34. The representative of Egypt cited a distinct parallelism, if not coincidence, between two
situations where commercial interests and humanitarian considerations were involved.  Commercial
interests were well recognized where anti-competitive practices were concerned, as depicted in
Article 31(k) which offered a legitimate case for waiving the Agreement's limitation imposed under
Article 31(f) on the export of a pharmaceutical produced through a compulsory licence.  Humanitarianconsiderations, which arose when a public health crisis afflicted a poor country lacking manufacturing
capacity, offered sufficient cause for a similar waiver, thereby enabling the export of a pharmaceutical
produced under a compulsory licence to a destination where it was critically needed.  In the first case,IP/C/M/36
Page 12
the Council was faced with a situation where the waiver was punitive and offered correction or
remedy through an explicit TRIPS provision.  In the second, the Council faced a more serious
situation where the waiver, which remained to be instituted, could be a life-saver for millions of
human lives.
35. He said that in implementation of the envisaged solution under paragraph 6, there was a need
to ensure that such solution would bring the fullest  range of health benefits to the poor countries
afflicted by serious public health crisis without causing avoidable damage to the pharmaceutical
patent right-holder.  This required that effective measures be taken to prevent the misappropriation
and misuse of the pharmaceuticals produced under a compulsory licence and imported into a poor
country afflicted by a health crises in order to avoid trade diversion to countries which face no such
crisis or to countries which should not enjoy the privileges resulting from a solution in question.  A
fair and useful implementation of the envisaged solution should involve measures of transparency tonotify Members about relevant implementation steps, which could also accommodate safeguard
conditions.  The African group and developing group papers provided a number of practical, yet
expeditious, solutions for the Council to take up.
36. The representative of Mauritania said that paragraph 6 was clearly the most important
paragraph and was the focus of the public health issue.  There was an urgent need for the Council to
tackle this problem as this was a matter of life and death for millions of people and was the very spirit
and meaning of the Declaration.  The problem identified in paragraph 6 concerned two main points:
first, in the case of countries with lower production capacities in the pharmaceutical sector there was a
problem of lack of medicines as well as of proc edures and infrastructures and second, the scope of
application of compulsory licences was central to the problem, particularly in the light of Article 31(f)that limited, the scope of action by referring mainly to domestic markets.  Various options were viable
but emphasized the submission of the African group which proposed very practical solutions that
could be quickly implemented.  The first would be to draft a decision that would simply delete Article
31(f).  The European Communities had raised a procedural problem that this solution could only be
applied following the 5th Ministerial Conference.  If this interpretation was correct the Council should
be able to apply an authoritative interpretation of Article 30 to extend the scope of the exceptions.  He
believed that it was essential that the Council considered both these solutions and that a precise and
clear legal method was brought forward.  The approp riate legal mechanism should be proposed as was
done for paragraph 7 where a proposal was submitted to the Council.  The Council also needed to
separate the conditions of application of the solution from the principle of the solution.  Concerning
conditions of application such as countries of low capacity, safeguard measures, the possibility of
diversion of these provisions, the Council had WTO rules that applied in these cases as well asdomestic legislation, particularly regarding the exhaustion of rights.  These were common principles
and should be separated from the principle of needin g to find a solution in the light of the instructions
given to the Council by its Ministers as stated in the Declaration.  The submitted papers, particularly
that of the African group, presented very clear proposals and that the Council should be able to adopt
a practical, legal solution which could be quickly implemented to solve the public health problemsthat were in need of an urgent solution.
37. The representative of Brazil said that his country was proud to be one of the co-sponsors of
the proposal by developing countries on paragraph 6 as it reflected its national public health objective
of ensuring access to pharmaceutical products.  It was his view that sustainability of access to these
products was one of the most important elements related to the solution and to this end Brazil hadcarried out a number of initiatives to ensure access to medications, both generic and patented, for the
treatment of a number of diseases.  One of the most notable examples of these initiatives was the
Brazilian Programme on Universal Access to AIDS Medications which had become a reference of a
successful initiative among developing countries in light of its positive results in reducing by half the
number of deaths and infections caused by HIV/AIDS in Brazil.  He emphasized the importance ofthe local manufacturing of anti-retroviral drugs as a means of ensuring sustainable access and the
success of the Brazilian Programme and said that Brazil did not necessarily have full localIP/C/M/36
Page 13
manufacturing capacity as the active substance for their manufacturing was most often imported from
other countries, including Members availing themselves of the transitional period provided by the
TRIPS Agreement until 2005.  At the end of that transitional period access to affordable, off-patent
pharmaceutical products, including their active substances, would become more limited and that the
sustainability of the Brazilian public health policies could be put into question in Brazil and in manyother countries.
38. He said that discussions on paragraph 6 were relevant for Brazil not because of its export
interests, but given its limited domestic manufacturing capacity.  The sustainability of access to
pharmaceuticals would largely depend on complementary objectives between countries seeking
access to pharmaceutical products and countries interested in supplying affordable medicines.  As a
potential beneficiary of the solution envisaged under paragraph 6, Brazil fully subscribed to the view
expressed in the developing countries' paper that any WTO Member could face difficulties in makingeffective use of compulsory licences due to insufficient or no manufacturing capacity in the
pharmaceutical sector and that the solutions envisaged by the TRIPS Council should not exclude
specific categories of countries.
39. He said that the proposal on an authoritative interpretation of Article 30 of the TRIPS
Agreement represented the shortest line between the problem and the solution.  He disagreed withMembers who had argued that the scope of Arti cle 30 could not incorporate the interpretation
proposed by developing countries as nothing in the letter and spirit of Article 30 of TRIPS prevented
Members from authorizing producers (not having the consent of the patent holder) to make, sell and
export public health-related products, to address health needs in other countries with insufficient or no
manufacturing capacities as a limited exception.  He recalled that in its intervention in the last sessionof the TRIPS Council, the United States had argued that Article 30 authorized limited exceptions to
patent rights for such things as research exemptions, prior users' rights, pre-expiration testing.  He
endorsed the view that these are non-exhaustive examples of the acts that could be included in
Article 30 but believed that the provision did not preclude an interpretation along the lines suggested
by developing countries.  Limited exceptions to rights were deviations from rules that wereconstrained within boundaries and the suggested authoritative interpretation would clearly delineate
boundaries as it would apply to the specific context identified in paragraph 6.  In this sense, this
limited exception could not be extrapolated to intellectual property rights other than patents.
Members would not be able to reasonably invoke it in situations other than those arising out of
insufficient or no manufacturing capacities in the pharmaceutical sector and that it would not be able
to apply to sectors other than pharmaceuticals.  He reiterated Brazil's readiness to discuss such
safeguards provided that they did not have the effect of undermining the practical use of, or toprejudice the existing right of countries to use, Article 30 of TRIPS in other circumstances.  He
referred to the proposal by developing countries regarding the possibility of establishing appropriate
safeguards that would ensure legal predictability in this particular use of the provision.  While Brazil
was open to other possibilities including ones that might eventually result in amendments to the
TRIPS Agreement, an interpretation of Article 30 would not require modifications in the text of theAgreement, thus permitting the General Council to  adopt such a solution rather than requiring
approval by the Ministerial Conference.  One important feature of the authoritative interpretation was
that the decision on whether or not it was reasonable to authorize an Article 30 exception necessarily
resided in the country from which exports could be undertaken.  If a Member considered that
authorization of this limited exception would undermine its own interests, it might refuse to grantsuch an authorization.
40. Regarding other possible solutions, he said that the Brazilian delegation had raised, at a prior
meeting, the possibility of amending Article 31 so as to eliminate its paragraph (f) but that Article 31-
based proposals raised a number of issues that might eventually impose restrictions on a solution
under paragraph 6, particularly in situations where a patent existed in the importing country.  Thoseissues, he continued, included the need to issue compulsory licences in both the importing and the
exporting countries, a step which could be administratively burdensome and difficult to coordinate.IP/C/M/36
Page 14
The issue of determination of remuneration was another point of concern as the patent holder should
not, in any case, be entitled to double remuneration, as both compulsory licences would be issued to
address essentially the same problem.  It might be more reasonable to determine compensation in the
country where the product was consumed, since the amount of compensation should maintain some
relationship with the ability of patients to afford the product.  The proposal by the EuropeanCommunities failed to address these points which were most important when addressing workable
solutions although, in principle, there seem ed to be a common ground between the European
Communities and the developing countries' proposals regarding the general recognition that solutions
based on moratoria or waivers would to be too na rrow in nature and might not be sustainable or
provide the necessary legal predictability.
41. The representative of Peru said that her delegation supported the statement made by Brazil on
behalf of many developing countries including her own.  Many Members with insufficient or non-
existent manufacturing capacities might face serious difficulties in efficiently applying a compulsory
licensing regime provided for in the TRIPS Agreement.  These difficulties were greater in the least-
developed countries and in developing countries that did not have economies of scale or did not have
the appropriate infrastructure and technology.  These Members were unable to exercise, in practice,
the rights recognized in Article 31 of the TRIPS Agreement because there were no domesticmanufacturers to whom such compulsory licences could be granted.  Consequently, these countries
did not enjoy the degree of flexibility nor did they have the room for manoeuvre that compulsory
licensing should give them and hence they could also encounter serious difficulties when negotiating
substantial reductions on prices for patent medicines.  She felt that the preferred solution to overcome
this problem was the adoption of an authoritative interpretation of Article 30 of the TRIPSAgreement.  The proposal of such an interpretation was solely intended to find an expeditious solution
to the problem described above without prejudice to th e legitimate interests of the right holders.  She
recognized that there were other possibilities in dealing with this problem, such a modification of
Article 31(f) or the addition of a new sub-paragr aph in Article 31 as proposed by the European
Communities but considered that an authoritative interpretation of Article 30 would be the easiest andmost expeditious solution.  Any other solution could be a complement, but should not be an exclusive
solution.  She agreed with the United Arab Emirates that the Council should look at solutions for the
medium and long-term and that what was required was the promotion of transfer of technology in
order to increase and improve the capacity of Members to produce pharmaceuticals.
42. The representative from Hong Kong, China said that any Member could potentially find itself
in the position of being unable to manufacture a particular treatment of sufficient quality and of
having to seek supplies abroad and that the solution identified should not, a priori , be restricted to
certain categories of Members, particularly as there was no such distinction made in the Declaration.
He expected developing country Members, in particular least-developed country Members, to be
among the main beneficiaries of the eventual solution.  Regarding the legal vehicle to effect the
eventual solution, he said he had an open mind and considered that all the four options identified so
far could provide the eventual solution.  An authoritative interpretation of Article 30 he felt wouldoffer an expeditious route with less procedural requirements.  On the other hand, he noted the concern
expressed by some Members over whether the limited exceptions under Article 30 offered sufficient
scope to cover the present scenario.  Seen in this light, his delegation was prepared to consider
favourably the option of amending Article 31, provided that a satisfactory temporary arrangement
would be put in place to operationalize the flexibility, pending the entry into force of the amendment.He concurred with the European Communities that the opportunity should first be afforded to the right
holder, within a short timeframe after notification, to make an offer to supply the relevant products at
strongly reduced prices.  Finally, his delegation agreed that whatever option the Council chose, it
needed to put in place sufficient and yet reasonable and proportionate safeguards to ensure that the
TRIPS Agreement was not undermined and to prevent abuses.  In this regard, he sought a clarificationfrom the European Communities on whether, in view of the proposal in paragraph 14 of its paper that
asked all WTO Members to take the responsibility in preventing the importation of the productsIP/C/M/36
Page 15
concerned into other markets, any new obligation would be imposed on third countries to prevent the
re-importation of medicines manufactured on the basis of the authorization.
43. The representative from Indonesia associated itself with the paper of a group of developing
countries (IP/C/W/355) introduced by Brazil.  She said that the proposals submitted suggested an
Article 30 approach, Article 31(f) approach, a mora torium, a waiver, and an Article 31(k) approach.
These proposals merited discussion and full exploration in the TRIPS Council, in order to find an
agreed solution.  She recalled that the Declaration was not just about finding an expeditious solution
to the problem of Members as recognized in paragraph 6, but equally about ensuring that there was an
effective and comprehensive solution to protect public health and in particular to promote access to
medicines for all.  She emphasized that for the majority of the world's governments spending on
medicines was far from adequate.  The pressing issue for this majority was how to have access to
needed pharmaceutical products as cheaply as possible and that it was important for the Council tolook at the Declaration in its entirety.  Any agreed solution must be available to all Members in need,
without exemption, as public health problems and epidemics are not exclusively the problem of a
certain group of countries or region.  In addition, the solution must not be administratively or
financially burdensome for Members to implement and must not compromise the sovereignty of
Members in its implementation.  The solution must also provide a clear framework and adequateincentives to enable the development of manufacturing capacities of pharmaceutical products in
countries where it was economically viable to do so.  Any agreed solution must support and be in line
with Article 7 and 8 of the TRIPS Agreement, particularly to provide access to medicines needed for
public health.
44. She said that, without prejudice to the possibility of other non-exhaustive expeditious
solutions, Indonesia believed that an authoritative interpretation of Article 30 of the TRIPS
Agreement was needed.  This authoritative interpretation would aim to authorize third parties to
make, sell and export public health-related products without the consent of the patent holder to
address public health needs in another country and was the most feasible and effective solution.  This
proposed solution, submitted by a number of developing countries, could fulfil the conditions andcriteria mentioned above, as well as provide the necessary legal predictability not available in a
moratorium or waiver.  More importantly, authoritative interpretation of Article 30 did not need to
refine or amend the TRIPS Agreement and so could provide an expeditious solution.
45. She said that the EC proposal to amend Article 31(f), while having some positive elements,
did not fully fulfil the criteria mentioned above.  She was concerned that the various conditions
proposed by the European Communities would not ensure the protection of public health objectives
set out in the Declaration.  For instance, the EC proposal to limit the product scope would prejudgethe future need of health products to protect public health and any emergencies that might arise and
limit the availability of the solution to selected countries and would not be in line with the
Declaration.
46. Turning to the issue of safeguards, she said that while safeguards might be necessary to
prevent abuses, they should not impose an unnecessary burden on Members and in this regard, shestood ready to work together with Members in finding appropriate safeguard provisions.  In the
interests of finding an expeditious solution and to ensuring that Members used the flexibility provided
by the TRIPS Agreement as confirmed by the Declaration, she strongly encouraged the TRIPS
Council to continue its collaboration with other international organizations such as the WHO and
WIPO.
47. The representative of Sri Lanka supporting the statement made by Brazil on behalf of a group
of developing countries including her own said that she was encouraged that almost all countries had
reiterated their commitment to continue efforts to find an expeditious solution before end of 2002.
She reiterated the ideas she had presented at the March meeting and said the effective use of
compulsory licences involved strategies to access essential medicines generally and in cases ofIP/C/M/36
Page 16
national emergencies, and to encourage the development of domestic capacities for the manufacture
of pharmaceuticals.  The solution should therefore not aim at getting medicines from countries with
capacity to those without capacity but should ensure that capacity was built up in the long-term.
48. She felt that the Council should avoid taking a narrow approach in considering expeditious
solutions to the problem as the Ministerial direction gave Members the option to look at a solutionwithin the strict confines of the existing Agreement or to look at broader solutions that would entail an
amendment to the Agreement.  The need to consider different scenarios under which the problem
could occur meant that the solution ultimately had to be an integrated one as paragraph 6 related to
both problems in the exporting countries with capacity as well as in importing countries without
capacity.  The latest EC and US proposals had tried to identify varying country situations on the basis
of whether the patents for pharmaceutical products were available in the importing and exporting
countries but she believed that more deliberations were needed on this point.
49. She said that the product coverage should not be narrowly construed in a manner that would
restrict it to only limited components of treatment or medicines.  She supported the suggested product
coverage contained in the African proposal that pharmaceutical products be understood to include
medicines, related technical processes and related technical equipment.  She questioned whether the
Council should limit coverage to only least-developed countries and some selected developingcountries or use the criteria of purchasing power or income levels to minimise the list of countries.
Before the Council got into the process of identifying countries, it was important to clarify and agree
upon what "insufficient or no manufacturing capacities in the pharmaceutical sector" was understood
to mean.  She questioned whether the Council should only consider the formulation of dosage forms
or whether the production of intermediaries, such as chemical intermediaries, raw materials or bulkdrugs, should be taken into account.  According to the papers prepared by the Secretariat, based on the
UNIDO studies, there were several stages in the production process in the pharmaceutical industry.
The process started with research and development to discover and develop new drugs called new
chemical entities.  The second stage consisted of th e production of chemical intermediaries from basic
chemicals and required innovative capabilities.  A ccording to UNIDO statistics there were only six
developing and 12 industrial countries that had such innovative capabilities.  The third stage involved
the production of raw materials or bulk drugs from chemical intermediates, fermentation and plant
sources and the fourth included the formulation of dosage forms or finished products from imported
raw materials or bulk drugs.  It would be important  for the Council to take into account the different
stages of the process and to draw a line as to the meaning of the production limitation.  UNIDO had
classified countries into five groups based on the degree of development of pharmaceuticals
technology and industrial production and that IP/C/W /345 in annex 4 outlined these five categories.
The Secretariat had apparently tried to categorize countries based on the criteria provided by UNIDO
but that this could give wrong signals because the definition of a finished product could be potentially
overly broad, for example formulating the dosage form might be considered to be finished products.
Her delegation instead proposed the following categorization, depending on the stage of development:
the Council could identify first countries without pharmaceutical industry at all;  second, countriesthat have capacity to formulate dosage forms from imported raw materials;  third, countries that have
the ability to produce therapeutic ingredients or raw materials from chemical intermediaries;  fourth,
countries with full innovation capacity, namely, the ability to copy new chemical entities through
reverse engineering and finally countries with a sophisticated, vertically integrated pharmaceutical
industry with a significant research base.
50. She said that the solution that Members were committed to identify should be comprehensive
and the procedures to operationalize the solution should be effective without being burdensome.  The
proposals of the developing countries and of the African group suggested an array of solutions that
deserved careful analysis by the Council.  The proposal submitted by the group of developing
countries, including her own, had made six relevant su ggestions:  first, an authoritative interpretation
of Article 30 was the best solution with the advantage that it avoided burdensome procedures related
to granting compulsory licences in the exporting country as it did not require a counterpartIP/C/M/36
Page 17
compulsory licence in the exporting country and circumvented the difficulties of the quantitative
restriction on exports from a compulsory licence under Article 31(f); second, the solutions based on
Article 31(f) were of limited value since they would need compulsory licences both in the importing
and exporting country, which would be administratively burdensome and would create difficulties
relating to remuneration and would require more implementation steps;  third, the determination ofwhether or not a Member had insufficient or no manufacturing capacity should be made by each
Member on its own;  fourth, the solution adopted by the Council should be grounded on economic
feasibility, especially questions of economies of scale;  fifth, the solution must be all encompassing
and cover Members without a patent system or wit hout patents on the particular products and finally,
with respect to safeguards and in order to ensure that the actions taken under Article 30 were limited,
safeguards to provide legal predictability might be part of the solution, provided they did not
prejudice the rights of Members under Article 30 and did not limit the actual existing flexibilities inthe TRIPS Agreement, as read with the Declarati on considering that the burden of enforcement with
respect to safeguards rested on the parties interested in the safeguards such as patent holders.
51. She said that both the US and EC papers presented in the March and June meetings
emphasized the need for conditions to avoid abuses and trade diversion of pharmaceutical products
exported to countries that needed them.  The current attempts were to address an unbalanced situationand that the Council should be careful not to create more imbalances by complicating any envisaged
solution with terms and conditions that might turn ou t to be more burdensome that what was currently
in the TRIPS Agreement.  Both the EC and US pape rs highlighted the fact that the objective of any
solution was the need to take care of "serious health problems" arising in small economies.  However,
her delegation saw the objective of a solution as the need to enable Members with insufficient or nomanufacturing capacities to make effective use of compulsory licences, as set out in paragraphs 6 of
the Declaration.  She stressed that paragraph 6 referred to any compulsory licence and not just to
those that related to serious health problems and that paragraph 5 recognized that countries were free
to determine the grounds upon which they could grant compulsory licences.
52. The representative of Australia was pleased that a number of the papers from delegations had
emphasized flexibility and had ventured a number of ideas which were practical and realistic and
could form part of a final package.  In his opinion, it appeared that on certain key issues such as
scope, safeguards, transparency and the need for an expeditious solution, there was considerable
convergence in the thinking of the Council.  Australia's focus was on a practical outcome to this
problem, one that could be found in a way that maintains the integrity of the TRIPS Agreement.  He
highlighted two key elements that he considered  the TRIPS Council should take into account in
crafting the details of the solution:  first, the scope should be to address the public health problemsafflicting developing countries and particularly least-developed countries, especially those resulting
from HIV/AIDS, tuberculosis, malaria and other epidemics and pandemics;  second, while safeguards
to prevent diversion were necessary for the credibility of the solution, they must be reasonable and
effective.  He highlighted existing TRIPS provisions, such as Article 44.1 on injunctions to prevent
imports, as a fundamental element of these safeguards.  Australia was attracted to this approach as itwould impose no new burden on the third countries, often developing countries, to which low cost
drugs could be diverted.  Technology transfer had been raised by some delegations and that there was
no doubt that further work needed to be done on this aspect and that Australia looked forward to the
discussions, based on Article 66.2 of TRIPS, later in the week.
53. He said that his delegation was looking carefully at all the proposals on the table but was
attracted to a solution based on Article 31(f).  Australia also saw the benefits of a waiver or a similar
approach, rather than an amendment, as this targ eted the anomaly which gave rise to the problem,
namely, the wording of Article 31(f).  A waiver, or some form of flexible instrument like a waiver,
would provide legal certainty and had the added advantage of being able to be put in place quickly.
He added that it could also be adjusted quickly in light of experience with the new system.  Whileconsideration of the most effective legal mechanism was important, it would not be helpful to get
bogged down in a detailed discussion of these finer legal points when the real focus of the discussion,IP/C/M/36
Page 18
at this time, should be on fleshing out the overall elements of a solution such as the scope of the
problem and appropriate safeguards.
54. The representative of Pakistan noted that the Declaration made a significant contribution
towards making the TRIPS Agreement more responsive to the needs of the developing countries by,
inter alia , reaffirming that its provisions shall be interpreted and implemented in a manner supportive
of WTO Members' right to protect public health and in particular, to promote access to medicines for
all.  It clarified the provisions in the Agreement providing for a certain degree of flexibility to
countries in application of the rules they prescribe, particularly those relating to the grant of
compulsory licences and the right to determine national emergencies.  The Declaration further
clarified that each Member had the right to grant compulsory licences and the freedom to determine
the grounds upon which such licences and the should be granted.  Likewise, it reaffirmed that each
Member had the right to determine what constituted a national emergency or other circumstances ofextreme urgency.  By clarifying and reaffirming these provisions the Declaration had effectively
ensured that the flexibility and freedom available under these provisions to the developing countries
to require patent holders to grant compulsory licences was not restricted in the future through narrow
judicial interpretations.  Although compulsory licen ces and parallel imports were measures to improve
access to essential drugs, these were not permanent sustainable solutions completely under the control
of the individual countries.  Strengthening the technological, economic and commercial development
of the pharmaceutical sector would, in his view, enable developing countries to build and strengthen
their pharmaceutical manufacturing capacities that were of vital national interest for all sovereign
nations.  He recalled that Pakistan, along with a group of Members, had co-sponsored a paper, as
presented by Brazil, proposing a possible expeditious solution to the problem and discussing at somelength the various options available to WTO Members.  While the paper proposed an authoritative
interpretation of Article 30 as an expeditious solution, it did not preclude or prejudice the possibility
of Members seeking an additional expeditious solution to the problem.  He acknowledged that the
African group and UAE papers had complementary elements and commonality in relation to the
developing group paper and that the EC proposal had positive elements to it.  He would make moresubstantive comments on these and the US paper at a later date.  Finally, he said that the key word
was expeditious and that any solution should be simple, without any onerous obligation of
operationalization, have legal certainty and, above all, encourage technology transfer to developing
and least-developed countries.  He assured the membership of Pakistan's commitment to engaging in
discussions for finding an expeditious solution to th is problem within the timeframe provided at Doha.
55. The representative of Japan recognized that with respect to the paragraph 6, four proposals
were now being considered.  In his view it was quite natural to explore the solution in the context of
Article 31 in the TRIPS Agreement because the issue at hand was closely related to this provision.
Whichever of these Article 31 approaches were taken, the solution must be explored on a case-by-
case basis in deference to the principle of compulsory licensing stipulated in Article 31(a).  To that
end, he called for the conduct a fact-finding survey in order to determine which countries were facing
difficulties, which diseases caused these difficulties and how serious they were.  This survey shouldalso gather information on the patent system of those Members, including the legal status of
pharmaceutical patents relating to those diseases and the manufacturing capacities with respect to
those pharmaceuticals.  He felt that through the analysis based on those facts it should be finally
decided what mechanism of Article 31 would be the most appropriate.  This process should be
combined with case studies and an analysis of merits and demerits from both the substantial andprocedural viewpoints, while taking into account the repercussions of the solution.
56. He elaborated that the proposed amendment of Article 31(f) that would add an exceptions
clause to it or delete it altogether would be most appropriate if the problem needed a permanent
solution.  However, very careful consideration would be necessary, even if the Council found the facts
suitable for this approach, in order to determine whether it was appropriate to amend the provisionwhen there were still many countries that did not have the obligation to introduce a product patent
system until 1 January 2006.IP/C/M/36
Page 19
57. He said that the mechanism of a moratorium could benefit Members that envisaged the
granting of compulsory licences for the purpose of predominantly exporting the medicines to
Members with insufficient or no manufacturing capacities in the pharmaceutical sector.  This would
enable issues such as the participating Members or the terms and conditions to be decided on a case-
by-case basis and decisions could be invalidated when the Council found that they are no longerapplicable.  A moratorium approach would thus be most appropriate if Members with insufficient or
no manufacturing capacities in the pharmaceutical sector were in a localized area and a sufficient
amount of pharmaceuticals could be provided in a relatively short time period.
58. He regarded the mechanism of waiver, which also permitted the Members or the terms and
conditions to be decided on a case-by-case basis subject to an annual review, as a valid approach
similar to that of the moratorium.  One key difference, he felt, was in terms of the strict procedures
that needed a Ministerial decision as laid down in the WTO Agreement.  He insisted that a fact-finding process was important to decide which mechanism was the most appropriate solution and
asked the Secretariat to provide more organized information, making full use of the documents
IP/C/W/345 and 348, in order to make such process smooth and effective.
59. He said that whichever mechanism was finally adopted establishing common key elements
was essential in order to have a substantial framework that defined the scope of diseases, the meaningof manufacturing capacities in the pharmaceutical sector, the qualification of importing or exporting
countries, how to avoid diversion, the review system and so on.  In this regard, first the scope of
diseases should be limited to the ones in the Declaration;  second, the meaning of manufacturing
capacities in the pharmaceutical sector should be limited in correspondence to the scope of the
diseases above-mentioned;  third, it was necessary to discuss the cases which depended on theexistence of the related product patent, taking account of the fact that some of developing countries
actually have manufacturing capacities in the pharmaceutical sector;  fourth, it was necessary to
discuss the cases which depend on the existence of obligations to introduce a product patent system;
fifth, it was important to establish a system to monitor and review issues of diversion and
transparency;  sixth, the work of establishing common key elements should be done in a mannerconsistent with the above-mentioned fact-findi ng process since both were closely related.  He
concluded by saying that since all these six elements have been pointed out and covered by the US
paper, his delegation basically supported the statement of the United States.
60. The representative of India associated his delegation with the statement made by Brazil, on
behalf of the co-sponsors of the paper which included his own.  He viewed the many commonalities
in the proposals submitted as an encouraging sign.  He shared the views of Kenya and Zimbabwe that,
in considering solutions to the problem described in paragraph 6, Members should bear in mind theneed to fulfil and operationalize the objectives and principles in the TRIPS Agreement.  The
envisaged solution under paragraph 6 should in no way be detrimental to the fulfilment of the
objectives of the TRIPS Agreement on transfer of technology and that the development of local
manufacturing capacities for public health-related products was critical in ensuring the development
of sustainable health policies and access to affordable medicines in developing countries.  Difficultiesin accessing public health-related products were not limited to countries which, at one point in time,
can be categorized as having insufficient manufacturing capacity because the ability to manufacture
pharmaceutical products was a dynamic concept.  He elaborated that a country could be construed to
have manufacturing capacity currently and yet might not in the future have the same effective
manufacturing capacity for various reasons such as a paradigm shift to the next generation oftechnologies. Thus any country, including developed ones, could find themselves in a situation of
temporarily not being able to manufacture medicines and that therefore, the proposed solution should
be far-sighted and address such situations as well.
61. Regarding the mechanism for giving effect to the proposed solution, he said that while India
was open to further discussion about the most appropriate method, it clearly preferred a solution basedon Article 30.  He believed that an authoritative interpretation of Article 30 would have the majorIP/C/M/36
Page 20
advantage of avoiding burdensome procedures related to granting compulsory licences in the
exporting country.  For the importing country, such a solution would leave the freedom to decide on
the need to issue or not a compulsory licence for th eir imports.  It would also avoid a dependency of
the country in need on the exporting country.  Other points such as double compensation, raised by
Brazil, were also extremely relevant.
62. Regarding safeguards, he wanted more time to analyse the specific suggestions that have been
made by the paper presented by the European Communities.  He requested the  United States to
provide more details about their proposal on safeguards.  He added that, in general, solutions should
not be bound by such conditionalities as would make the effective use of the instrument difficult and
that the existing flexibility of the TRIPS Agreement should in no way be compromised.
63. The representative of Senegal said that the two documents prepared by the Secretariat,
including the paper giving information on manufacturing capacity for medicines, showed that there
was a great shortfall in manufacturing capacity in some countries. There were common elements in
the proposals tabled by the European Communities, the United States and the United Arab Emirates
that could serve as a basis for a future decision on the matter.
64. Regarding the regional approach under Article 31, his delegation believed the Council did not
need an overly legalistic interpretation of the concept of Member states and should not link it tointerpretation of Articles XI and XII of the Marrakesh Agreement.  In the TRIPS Agreement there
was no equivalent to Article XXIV of GATT or Ar ticle V of GATS and so his delegation saw no legal
or de facto  constraint.  He pointed out that if the Council considered the experience of OAPI, which
was the intellectual property body for sixteen French-speaking African countries and its English-
speaking equivalent, ARIPO, with its fourteen memb ers, most African countries south of the Sahara
were part of regional integration schemes relating to intellectual property in which WIPO and WTO
were involved.  Such regional agreements should be used since they had been useful in the past when
looking for a solution to paragraph 6.  He referred to the African group document which indicated in
paragraph 16 that a footnote to Article 2 in the Agreement on Safeguards mentioned the concept of a
regional approach in the context of domestic markets.  This should be used as the inspiration for theregional approach when considering solutions under paragraph 6.  It would be premature, at this point,
to reject this approach or not consider it at all es pecially since, in his view, the regional approach was
the only viable basis, at least for Africa, for equitable and lasting access for our countries to
medicines.  As Canada had reminded the Council earlier, Africa was trying to build a relationship
with the G8 countries and there had been a regional conference which could be used as a context and
framework for the transfer of technology.  He ag reed with Zimbabwe that Africa should not be
viewed just as a market for others' products because there were many other possibilities.  All solutionsin the framework of paragraph 6,  particularly for least-developed countries, should be based on a
holistic, comprehensive approach that included aspects such as the transfer of technology, an increase
in public assistance for development, an increase in assistance in other areas and greater market
access for African countries.  Finally, he reiterated that the key word was 'expeditious' and that the
Council should not look at the principles first and then the modalities in order to see whethersafeguards or other measures would be needed.  Within this framework Senegal expressed its
willingness to enter into consultations in order to make progress.
65. The representative of Hungary said that it was the objective of his delegation to fulfil the
mandate in paragraph 6 of the Declaration by working out and adopting a solution by the end of this
year.  The mandate in paragraph 6 recognized that the right to use the flexibilities provided in Article31 with respect to patented pharmaceuticals was of no practical use to WTO Members that possessed
no or insufficient manufacturing capacities.  This created a clearly unbalanced situation, not only with
regard to the flexibility to actually use compulsory licences, but also with regard to the leverage that
the possibility of using compulsory licences provided in price negotiations with manufacturers of
pharmaceuticals.  Redressing this imbalance was at the heart of the mandate although compulsoryIP/C/M/36
Page 21
licences should not be the norm and should only be issued in exceptional circumstances and in strict
adherence to the extensive safeguards laid down in Article 31 of the TRIPS Agreement.
66. He expressed agreement with those delegations who said that a narrow approach should be
avoided when seeking a solution to the problem cited in paragraph 6, which should be read in the
context of the whole Declaration.  Accordingly, the solution sought should not be confined to anyparticular disease or group of diseases nor the scope of beneficiaries limited by the specific exclusion
of any particular group of WTO Members as stated in the paper by Brazil and co-sponsors
(IP/C/W/355).  He also failed to see any reas on why particular groups of WTO Members should be
excluded from the possibility of supplying third Members that did not possess sufficient
manufacturing capacities with needed pharmaceuticals under the solution.  He said that such a
limitation could narrow the options available to Members in need of medicines and could adversely
impact the price of the products in question, thereby at least partially defeating the very purpose of thesolution.  He recalled that the wording for paragr aph 6 was originally suggested by his delegation
before Doha and that, to their great satisfaction, it found consensus in the end without substantive
changes.  When proposing the text it was never their intention to narrow the mandate to any particular
disease or group of diseases or limit the scope of the solution a priori , on the import or export side, to
any particular group of WTO Members.  Hungary had always expressed the view that paragraph 6addressed a genuine and general problem and was convinced that the mandate as adopted by the
Ministers reflected this approach.  Therefore he urged delegations not to seek to limit the scope of the
mandate set out in the Declaration and not to redraft the mandate that all Members had agreed to.
67. He said that any solution should create the legal possibility for third Members to respond to
requests made by Members facing public health problems and not possessing sufficient manufacturingcapacities to produce and export under compulsory licences pharmaceutical products that were under
patent protection in their territory.  Hungary believed that situations where no patents existed in a
country that possessed no or insufficient manufacturing capacities should also be covered by the
solution sought.  A solution should, naturally, include adequate safeguards against abuse, in particular
to avoid trade diversion, and the conditions of application should also contain adequate elements oftransparency.  However, when drawing up these conditions and safeguards the creation of new
imbalances should be avoided and the Council should not set stricter conditions for Members not
possessing sufficient manufacturing capacity in the pharmaceutical sector than those set in Article 31
for Members that have such an industrial base.  His delegation agreed with the communication from
the European Communities that the safeguards should contain obligations both for the importing and
the exporting Members.
68. Considering the form and characteristics of the solution, the representative of Hungary said
that the solution to redress the imbalances created by Article 31(f) should be permanent, balanced,
legally secure, efficient, and not overly burdensome.  In considering the four basic options listed in
paragraph 2 of the EC paper, only the first tw o, namely, an authoritative interpretation based on
Article 30 and an amendment of Article 31, could ensure such a solution.  His delegation failed to see
how a dispute settlement moratorium or a waiver procedure could offer a genuine permanent andworkable solution.  He then referred to the US papers IP/C/W/340 and IP/C/W/358 and questioned
how a moratorium could work in practice.  He asked if the United States was referring to the WTO
dispute settlement procedures and if so whether the United States believed that individual cases in
relation to granting of individual compulsory licences could be brought under the Dispute Settlement
Understanding (DSU), a situation he expressed hi s doubts over.  He further questioned what would
happen at the level of the national legal system and whether the moratorium would affect the ability of
companies to start legal proceedings at the national leve l to protect their patents.  If that was the case,
he questioned whether WTO Members could ensure that such a moratorium was respected by
companies and whether the United States thought that Members should change their patent laws for
the period while the solution under Article 31 was being considered to make sure that they werelegally covered.IP/C/M/36
Page 22
69. He continued by saying that the form of the solution was absolutely secondary to its content,
the speed of its development and the time necessary for its entry into force.  Hungary was ready to
work on the basis of both the Article 30 and the Article 31 approaches, both of which could lead to the
same desired effect of redressing the imbalance.  His delegation shared the view of those that
suggested that in the coming formal meetings and informal consultations the content of the solution
should be concentrated on and that once the Council had a clearer picture of what was desirable and
acceptable for the membership, the form could more easily be decided on.
70. He pointed out issues that should be further discussed in the Council such as the proposal in
paragraph 16 of the EC paper that suggests procedures for the involvement of the right holder and that
in paragraph 18 of IP/CW/355 that raised the issue of determination of remuneration in cases that
involve two compulsory licences.  He agreed that the patent holder should not be entitled to double
remuneration and that this concern should be addressed if the Council chose the Article 31 way.Finally, he referred to paragraph 12 of IP/C/W/355 on the need to consider how economies of scale
can be ensured under a solution.  His delegation had repeatedly raised this issue in the debate because
the majority of WTO Members not having sufficient manufacturing capacities in the pharmaceutical
sector were generally countries with relatively small markets and, in this context, he welcomed that
the wording of paragraph 14 of the EC communication.
71. The representative of Thailand expressed his concern over public health crises in Thailand as
well as world-wide and said that the mandate from the Declaration was to find an expeditious solution
to this problem.  Epidemic victims and their families around the world, particularly those with
HIV/AIDS, were anxiously and desperately waiting for the TRIPS Council to come up with an
acceptable solution that could help heal their pain and loss.  This was a situation that Thailand wantedto bring to the Council's immediate attention and Thailand urged other Members to give priority to the
problem to ensure that these unfortunate people would soon be provided access to affordable
pharmaceutical products.
72. He said that among the many possible approaches already tabled, Thailand would be pleased
to accept an approach that was convenient, quick, sustainable and legally predictable.  Afterdiscussions in previous weeks, his delegation had decided to co-sponsor IP/C/W/355 because it
contained an appropriate approach according to Th ailand's needs and priorities.  In his view, Article
30 should be interpreted to cover authorization to third parties to make, sell and export patented public
health-related products without the consent of th e patent holder to address public health needs in
another country as limited exception to the rights of the patent holder.  It was also important to note
that each Member should have the right to determine whether or not it was in a situation of
insufficient or no manufacturing capacities in the pharmaceutical sector and to provide limitedexceptions as stated in Article 30.  Exceptions provided under the Agreement should be given broad
interpretation for the developing countries and least-developed countries, whether or not they had
insufficient or no capacities in the pharmaceutical sector, as foreseen by the Declaration, to ensure
access to medicines for all.  Thailand supported the interpretation of Article 30 approach and was
ready to participate actively in finding an acceptable and possible solution.
73. Referring to the document prepared by the Secretariat, providing information on
manufacturing capacity for medicines, he agreed with the representative of Sri Lanka that it did not
reflect or even detracted from the real manufacturing capacity of each Member.  When considering
capacity, different kinds of medicines and active pharmaceutical ingredients should be taken into
account.  He suggested that the Secretariat cooperate with the WHO to obtain reliable information onthe manufacturing capacity for medicines, as this was vital to the discussion.
74. The representative of the Czech Republic said that her delegation attached a great importance
to the process of finding an expeditious solution to the problem, which some developing countries
faced in the field of fight against HIV/AIDS, malaria, tuberculosis and other epidemics and which
were identified in the paragraph 6 of the Declaration.  All basic options that had been suggested byIP/C/M/36
Page 23
Members merited detailed analysis.  In her view, the solution should be easy and quick to implement,
sustainable and should meet the interests of developing countries without manufacturing capacity that
face the health problems specified in the Declaration, without putting in question the TRIPS
Agreement the validity of which the Ministers in Doha confirmed in its entirety.
75. She said that she would not attempt to summarize her analysis of the options suggested
because the list of their positive and negative points was long but said that it confirmed that no one
solution could be adopted without a clear and exhaustive definition of circumstances and conditions,
under which such an arrangement could ensure full implementation of paragraph 6 of the Declaration.
These conditions should be defined with the aim of ensuring the balance between the need to
overcome the provision of TRIPS Agreement that made it difficult to use compulsory licensing in
developing and least-developed countries without manufacturing capacities and with public health
problems, and the need to maintain a legal environment encouraging research and development ofnew medicines, and could be used for all solutions.
76. It was necessary to define at least three groups of conditions:  general conditions, legal
conditions and economic conditions and that in defining the general conditions the Council should
fully respect the Declaration which stated clearly that the solution was sought for developing and
least-developed countries (paragraph 1) with insufficient or no manufacturing capacities in thepharmaceutical sector (paragraph 6).  It was evident to her that the solution should benefit only
countries that face difficulties in making effective use of compulsory licensing because of the lack of
manufacturing capacities generally and not because of the lack of special kind of manufacturing
pharmaceutical capacity.  Among general conditions, the supplier-countries should be also defined
and that while, in the spirit of the Declaration, her delegation sought to ensure better access tomedicines for the largest group of affected people, developing countries should also benefit as
primary suppliers as this could have a beneficial effect on the development of their pharmaceutical
industry.  At least developing countries should become suppliers in cases where money from the
Global Fund aiming to fight epidemics was used.
77. The legal conditions should ensure, by regulatory and administrative measures taken by
importer and supplier, that the product exported as a result of a solution implemented under paragraph
6 of the Declaration was not diverted to another than the beneficiary country.  Also obligations, with
the aim of preventing re-export, should be imposed on the importing country.  A further important
legal condition to be defined was the transparency of the process which should be ensured by full and
timely notification of all compulsory licences granted.  Her delegation felt that the Article 63.1 of the
TRIPS Agreement provided a sufficient basis for this notification since it also stated that judicial
decisions and administrative rulings of general application, made effective by a Member pertaining tothe subject matter of the Agreement (the availability, scope, acquisition, enforcement and prevention
of the abuse of IPRs) must be published, or where such publication was not practicable made publicly
available, in a national language, in such manner as to enable governments and right holders to
become acquainted with them.
78. From the economic point of view, she pointed out, it would be highly desirable if, before
delivering the compulsory licences both for import and production, the producer confirmed that it was
able to produce exactly the demanded quantity and quality of pharmaceutical product and which price
of the product was offered under clearly expressed delivery conditions.  As an economic tool this
binding confirmation could, to certain degree, discourage another destination for the product or re-
export based on over-production or on insolvency of importer due to unexpected elevation of price.In the course of studying this issue her delegation had come to the conclusion that it would be
desirable and important to discuss and clarify all conditions under which any solution to paragraph 6
would be adopted and to base the process of finding the final solution on these clearly stated
conditions.IP/C/M/36
Page 24
79. The representative of Malaysia noted that in recognizing that Members faced difficulties in
making use of compulsory licensing under the TRIPS Agreement there was an acknowledgement that
many Members were unable to avail themselves of the recourse to compulsory licensing, which was
one of the flexibilities allowed under TRIPS Agreement to protect public health.  In finding an
expeditious solution to the effective use of compulsory licensing, the Council would be removing ananomaly or discrimination in the Agreement that meant only very few Members could utilize this
flexibility.  Any agreed solution should make available this flexibility to all Members and effectively
restore the rights available under the TRIPS Agreement.
80. She noted that the Secretariat's note (IP/CW/345) on manufacturing capacity for medicines
mentioned that only 10 countries in the world had a sophisticated pharmaceutical industry and a
strong research base while another 17 had innovative capabilities.  The report stated that a number of
other countries had some capacity for producing finished or therapeutic products but was unclear as tothe extent of the manufacturing capacity of these Members and the level of competency.  Some
countries possessed some level of ability or capability but there was no indication whether these
countries possessed sufficient capacity.  Manufacturing capacity should also not be viewed solely in
terms of technological capability but should take into account economic feasibility and economies of
scale.
81. In seeking an expeditious solution, Malaysia, like many other Members, looked for a broad-
based solution involving at least all developing countries;  an agreement by the end of this year in
accordance with the deadline set by Ministers;  and a solution that would result in effective utilization
by ensuring a low price and speedy supply of medicines whenever the need arose.  In this context, her
delegation saw merit in the proposal by Brazil, on behalf of a group of developing countries, andsupported by the African and UAE submissions, for an authoritative interpretation of an Article 30
exception.  This proposal recognized the right of WTO Members to authorize third parties to make,
sell and export patented-public health products to address public health needs in accordance with the
procedures laid out in Article 31 of the TRIPS Agreement.
82. She said that the EC proposal to carve out an exception to the restriction under Article 31(f)
could achieve the same result.  However, there were a number of concerns related to this proposal,
namely: the need to issue two compulsory licence s, by the importing and the exporting countries,
which could lead to delays;  possible double compensation payments;  and cumbersome
administrative procedures.  Her delegation agreed with the European Communities that other options,
such as the waiver or a moratorium, did not provide a sustainable or secure legal solution to the issue
at hand.
83. The representative of Korea said that all of the tabled proposals and views deserved the
Council's sincere consideration and greatly helped the Council's work in finding an expeditious
solution to the problem described in the paragraph 6 of the Declaration.  There had been four options
put on the table for the Council's consideration and it appeared that the solution the Council sought
lay within this range of options.  The Council's work would be a reflection on how those approaches
could properly serve the mandate under paragraph 6.
84. Turning to an authoritative interpretation of Article 30, he said that Article 30 permitted
Members to provide limited exceptions to patent rights under certain conditions.  In view of the
intention of the provision, which he believed dealt with situations such as non-commercial
experimental use and prior user rights, an interpretation of Article 30 in a way that exempts the
exporting country from the obligations in Article 31(f) might go further than the intended scope of theprovision.  He expressed a concern that the Council's reliance on Article 30 might erode the
raison d'être  of Article 31 by rendering hollow all its provisions which are designed to balance the
rights and obligations of the Members concerned.IP/C/M/36
Page 25
85. With regard to an amendment to Article 31 in order to overcome the restriction under Article
31(f), he said that his delegation shared the EC's objective of producing a clear, legally secure,
effective and permanent solution within the existing legal framework and considered the approach
capable of achieving this objective.  However, his delegation was not fully convinced as to whether
the amendment of Article 31 was the only alternative to achieve the objective.  It was necessary forthe Council to engage in more study to get the answ er to that question.  Given that the Council aimed
to address situations that were quite extraordinary and rare, Korea was not convinced of the
desirability of the option of an amendment, particularly in view of preserving the integrity of the
TRIPS Agreement.
86. Turning to the moratorium or the waiver approach, the representative of Korea considered
these options to have the merit of providing a solution without having to amend the TRIPS
Agreement.  His delegation was particularly support ive of the waiver option since the waiver was an
existing mechanism built into the GATT/WTO regime to allow Members an exemption from
obligations under existing WTO rules in exceptional circumstances.  He stressed that the waiver
option harnessed the flexibility of the WTO legal system and could be properly utilized in the
endeavour to find a solution under paragraph 6.  Indeed, the Council had witnessed many incidents
where this mechanism had been invoked successfully.  In the interest of enhanced legal certainty, the
modality of granting waivers should be conceived on a long-term basis.
87. He concluded by noting that any solution should make the most of the flexibility within the
TRIPS Agreement and the WTO rules as a whole and that his delegation considered it crucial to find
options that boosted the Council's confidence in the TRIPS Agreement and sustained the legal
stability of the TRIPS Agreement as a framework for providing incentives for the development offuture inventions.  He therefore recommended the waiver approach on a long-term basis as a viable
mechanism to meet the call of paragraph 6 for an expeditious and transparent solution.
88. The representative of New Zealand expressed her hope that significant progress could be
made at the present meeting in identifying co mmon elements for a simple, but effective and
economically viable solution to the problem posed in paragraph 6.  She recalled that at the lastmeeting the Council had had a good discussion on a number of possible approaches floated by
Members and that further proposals had been tabled at the current meeting.  Her delegation had
listened carefully to that debate and, upon reflection, found the scope for a solution based around
Article 31 of the TRIPS Agreement the most convincing.  She suggested that the Council should take
a pragmatic approach to problem-solving and that she believed that a targeted approach to the specific
problem at hand would give rise to the most effective solution.  Therefore, her delegation would
support an effort made by the Council to design a mechanism to remove the problem caused byArticle 31(f) for exports of compulsory licensed products to those Members with insufficient capacity.
89. She recalled that there were a number of new papers on the table which explored possible
mechanisms or solutions and that it seemed that an acknowledgement of the 31(f) problem and a
willingness to address it were common to all the papers in varying degrees.  Her delegation wished to
focus its comments on areas of commonality between some of the proposals and areas of particularinterest to New Zealand as a delegation supporting an Article 31(f) approach.  The scope of the
solution should reflect the scope of the problem, as identified in the Declaration, as public health
problems, especially those resulting from HIV/AIDS, malaria, tuberculosis and other epidemics.  She
expressed interest in the idea that the solution be available only to developing countries and least-
developed countries, on both the importing and exporting side of the equation, if it could be shownthat such an approach might have positive effect on the improvement of capacity in these countries.
90. She said that an important aspect of any solution should be transparency and that making
information available in the context of a country applying the eventual solution, including to the
WTO, had a number of benefits.  Her delegation would not see such transparency as grounds for
challenging a country taking action in conformity with the solution and only as an aid to the CouncilIP/C/M/36
Page 26
in understanding whether in practice the solution was working and being used by those who needed it.
She agreed with the rationale that transparency s hould help to encourage competition and improve the
price and product quality options available to those with insufficient manufacturing capacity of their
own.  Such transparency could also allow original  right holders, working outside of any solution
envisaged in paragraph 6, to consider putting forward a competitive tender or offer alongside thoseproducers operating under compulsory licence.  New Zealand's own national experience in
government purchasing of pharmaceuticals had shown that mechanisms that provoke such
competition deliver better outcomes for purchasers.
91. With respect to the impact of any Article 31(f)-based solution on other provisions of
Article 31, the representative of New Zealand expressed a preference for the remaining provisions to
be respected.  However, she agreed with the European Communities that, since the context was one of
national emergency, there could be an exception to requiring to seek the right holder's authorizationeven where the compulsory licence was issued in a Member other than the Member facing a national
emergency on that capacity-constrained Member's request.  In a similar vein, the representative noted
that, when considering the issue of remuneration to the patent holder, New Zealand would not want to
see a doubling up of remuneration.
92. She recalled that the papers of the European Communities and the United States clearly
identified the need to avoid trade diversion to those countries not in need, which New Zealand
supported as a means to keep the benefits of the solution limited to those that need the access.  She
proposed that the use of provisions already in the TRIPS Agreement regarding enforcement might
provide the appropriate vehicle with which to explore the actions that could be taken by third
countries, such as New Zealand, to avoid diverted products reaching their markets.
93. She pointed out that clearly more work needed to be done to find the best mechanism, or tool
in which the solution could be embodied and at that stage her delegation would not want to preclude
options.  With respect to some of the Article 31(f)-related options currently on the table she noted that
a dispute settlement moratorium did not provide the sort of tangible solution needed.  She pointed out
that if the Membership agreed that Article 31(f) was a problem in the context of access to medicinesthen it should more honestly reflect this in any solution.  She recalled that the option of an amendment
had also been proposed and that her delegation had some reservations and was not sure how soon the
changes stemming from an amendment would be available to Members.  Given the urgent and special
nature of the problem, if such a solution could be shown to be effective and self-contained from a
systemic perspective then it should not be beyond consideration.
94. She felt that the concept of a waiver was potentially a well-targeted and legally secure, fast
approach.  With a view to avoiding onerous conditions and processes for waiver applications, NewZealand felt that the minimum level of specificity for granting any waiver should be on a country
basis.  Broader options could be considered, but not more restrictive ones such as compulsory licence-
by-compulsory licence or product-by-product.  Her delegation also expected commitments from all
Members that unrelated conditionalities would not be attached to the granting of any waivers and that
a strictly objective and permissive approach, based on clear criteria, such as lack of, or insufficiencyof, local manufacturing capacity in the pharmaceuticals sector would be used.
95. She noted that two of the papers had highlighted the issue of technology transfer.  She hoped
that any technology transfer proposal, explored in the context of a paragraph 6 solution, would not
exclude those not currently applying patent protection. While solutions addressing the problem of
access to compulsory licensing might not be immediat ely relevant to such countries, their lack of
manufacturing capacity should still be considered when assessing technology transfer issues.  At the
same time she stressed that, from the perspective of a developed, but still net intellectual property
importing country, capacity issues should also be kept in mind when considering provision of
technology transfer.  She emphasized New Zealand's commitment to finding an expeditious solution
to report back to the General Council by the end of 2002.  Like all deadlines emanating from DohaIP/C/M/36
Page 27
her delegation took this seriously and were ready and willing to work with the Chairman and others to
ensure the Council could develop a simple, effective and economically viable solution by the end of
the year.
96. The representative of Singapore said that the TRIPS Council should try and take an
enlightened approach and match the breadth of vi sion which had come out of Doha and which had
given rise to paragraph 6 of the Declaration.  He recommended that the Council first look at the
substantive elements of what was to be done under paragraph 6 as it would be easier then to work out
an implementation solution within the terms of the TRIPS Agreement.  He proposed that the solution
should be simple and effective.  The term "expeditious" for him was included in the end-of-the-year
deadline.  He had not used the term "comprehensive", although the final text would need to be
comprehensive to avoid uncertainty, because one would not know how much could be achieved by
the end of the year.  He urged the TRIPS Council not to come up with a solution that mightunintentionally change parts of the Agreement and undermine it.
97. Turning to the elements of the solution, the de legate stated that the TRIPS Council needed to
come to an understanding about what exactly the scope of paragraph 6 was in terms of: (i) the scope
of the products;  (ii) who was intended to benefit;  and (iii) which countries could participate in the
scheme.  An important issue, in his view, was the question of the category of countries that hadinsufficient or no manufacturing capacity.
98. He said that the process needed to be transparent to make sure that it was a viable and durable
solution.  Moreover, he pointed out, the issue of diversion needed to be looked at but this should not
become a complicated exercise and, in this context, he supported the statements made by Australia
and New Zealand on the use of the provisions of the TRIPS Agreement.  He believed that importingand exporting countries should certainly be engaged in preventing diversion so as to safeguard the
interest of right holders.
99. He suggested that after having reached agreement on these elements the TRIPS Council could
move on to the provisions of TRIPS that would achieve these objectives, namely, Article 30,
Article 31, a waiver, a moratorium on dispute settle ment and so on.  He agreed with Hungary that
paragraph 6 was of broader application.
100. The representative of Switzerland recalled that Members had in the discussion focused so far
on what mechanism and approach a solution should take.  At this stage of the discussion it would be
premature for his delegation to take a firm position in favour or against any of the different
approaches that had been presented thus far.  He joined the delegate of the European Communities in
stressing that the introduction of new issues to the discussion which did not focus on achieving the
goal of paragraph 6 but served pure economic interests, such as the fostering of domestic production,were counter-productive in the context of finding an expeditious solution to the problem raised in
paragraph 6.  His delegation was convinced that whatever approach the Members eventually agreed
on, much of the success or failure of any solution recommended by the TRIPS Council to the General
Council would depend, in practice, on the establ ishment of adequate terms and conditions to
accompany such a solution.  He told the Council that  consensus on the necessary terms and conditions
would most likely be the key to an agreement of an expeditious solution, independently from the
approach that would eventually be chosen.
101. He stressed that responding to the mandate in paragraph 6 meant that the TRIPS Council
should find the proper balance between, on the one hand, the interests of countries without or with
insufficient manufacturing capacities in the pharmaceutical sector to make effective use ofcompulsory licensing under the TRIPS Agreement and, on the other hand, the interests of right
holders to preserve the rights conferred by a patent according to Article 28 of the TRIPS Agreement.
From his point of view, such a proper balance required a straightforward effective solution withoutIP/C/M/36
Page 28
burdensome procedures.  At the same time, achieving a properly balanced approach meant including
proper terms and conditions to avoid abuses and to guarantee maximum transparency.
102. He pointed out that, when looking at the ke y terms, the TRIPS Council would first have to
determine which Members should qualify as recipient countries under a paragraph 6 solution.  This
could be done first by a list of block-qualifying and block-exempted Members.  Referring to theclassification of the World Bank, he said that, on the one hand, so-called high income countries
should not make use of a paragraph 6 solution.  The reason for this was that the target countries of
paragraph 1 of the Declaration explicitly were l east-developed and many developing countries.  On
the other hand, he proposed that Members could decide that least-developed countries according to
ECOSOC's annual list, of which 30 of the 49 countries were WTO Members, should qualify
automatically as recipient countries without any fu rther examination as to eligibility.  As for the
remaining countries, belonging to neither the high income countries nor to the least-developedcountries, he considered a case-by-case examination to be appropriate in order to decide whether a
Member had sufficient manufacturing capacity.  A combination of different criteria could help
determine, in a given case, if a Member was in a paragraph 6 situation.  It was his view that document
IP/C/W/345 provided by the Secretariat on "Availa ble Information on Manufacturing Capacity" could
provide helpful guidance to the TRIPS Council in defining these criteria.
103. He further noted that the product scope of paragraph 6 was a second key modality and that
paragraph 6 used the term "pharmaceutical sector".  He recalled that Members recognized in
paragraph 1 of the Declaration the gravity of the public health problems afflicting many developing
and least-developed countries.  Hence, in his view, the scope of any solution should be
pharmaceutical products needed to deal with public health problems, especially those resulting fromHIV/AIDS, tuberculosis, malaria and other epidemics.
104. He added that agreement would have to be found on appropriate conditions to accompany any
solution.  In this regard he stressed the utmost importance of the prevention of diversion of medicines
delivered to the recipient country.  The exporting country would have to make sure that the entirety of
the pharmaceutical products that would be produced under a compulsory licence would be exported tothe recipient country or countries and that no diversion of such products would occur in national or
other markets.  He stressed that the supplier would have to pay adequate compensation to the right
holder and that such adequacy might be easiest dete rmined in the recipient country since the judicial
authorities there would be in the best situation to assess the factual situation.  Any compensation in
the exporting country should then take into account the compensation already allocated in the
recipient country.
105. He said that the transparency of any mechanism chosen was of crucial importance for all
stakeholders and for the proper functioning of any paragraph 6 solution.  Both export and recipient
countries should therefore provide the WTO with relevant information when actually using a
paragraph 6 mechanism.  Such transparency was a prerequisite to any mechanism agreed upon.
Moreover, transparency would enhance the response of potential suppliers to the request of the
recipient country and would also enable the WTO and its Members to control and review theexecution of the paragraph 6 mechanism to prevent abuse.
106. His delegation believed that the conditions which he had briefly outlined did in no way
represent unreasonable obstacles to an effective solution under paragraph 6 and met, in that respect,
the concerns that had been expressed by the representative of Brazil.  He drew Members' attention to
an instrument that his delegation was convinced could assist Members with insufficientmanufacturing capacity in the pharmaceutical sector if they were in need of pharmaceutical products.
This instrument, irrespective of whether it was used inside or outside a paragraph 6 mechanism, could
indeed help to ensure that the Member in need  would get the offer quickly and efficiently with
enhanced transparency.  Irrespective of the outcome of the TRIPS Council decision, a voluntary
public tender procedure could be of great benefit for eligible recipient countries in such a situation.IP/C/M/36
Page 29
Not all eligible recipient countries might have the necessary expertise to find potential suppliers and
the know-how to choose the best offer.  In a voluntary public tender procedure the Member with
insufficient manufacturing capacity could be assisted by another organization, for example, the WTO
or the WHO, in the examination of the offers.  He added that such a procedure should not be confused
with the WTO public procurement rules.  A voluntary public tender would ensure wide participationof potential suppliers in the process.  The provision of such a public tender procedure should be
voluntary and it would left to the choice of the Member with insufficient manufacturing capacity to
take advantage of it or not.  He added that the pr ovision of such a public tender procedure could be an
integral part of any paragraph 6 mechanism or it could simply complement it.  He concluded by
saying that Switzerland would be glad to discuss all these points further with Members of the TRIPS
Council and that voluntary public tender procedures do work in many fields and that he did not see
why they should not work in this field as well.
107. The representative of Norway said that in his country's view certain basic criteria should
remain central when the TRIPS Council recomme nds to the General Council how to solve the
important issue of paragraph 6.  In his view, one important criterion was the necessity of a sufficient
degree of legal clarity and security for all parties involved, Members as well as operators, and he
suggested that the Council should work toward a permanent solution.  He recalled that his delegationhad focused at the last meeting on two possible avenues which could be pursued further: an
interpretation of Article 30 and an amendment of Article 31.  Although both solutions had their
merits, in his view an amendment of Article 31 was preferable because it put aside several legal
ambiguities and legal clarity would be achieved and that this was not the case under other solutions.
108. He stated that, irrespective of the type of instrument the Council would choose, it had to
address certain central issues in more detail, one of which was which categories of Members would be
allowed to benefit from having otherwise patented pharmaceutical products being made for
exportation into recipient Members' markets.  In his view paragraph 6 did not distinguish between
categories of Members that should benefit from a solution nor did other operative paragraphs of the
Declaration say anything.  The mandate of paragraph 6 merely referred to Members with insufficientor no manufacturing capacities in the pharmaceutical sector and therefore, he believed that, from a
legal point of view, it was incorrect to make distinctions.  He stressed that, nevertheless, his
delegation believed that voluntary licences, negotiated by means of regular commercial arrangements,
should be the normal way by which patented medicines should become accessible to all Members.
This certainly applied to industrialized countries, but should, as far as possible, be also achieved for
developing countries, unless preferential pricing arrangements were made in favour of these countries.
He recalled that Ministers had recognized in paragraph 6 that the negotiating strength of eachindividual Member vis-à-vis  the producers in acquiring patented medicines at favourable conditions
should not depend on whether the Member had manufacturing capacity or not.
109. He said that another important question was whether there should be limits to the scope of
medicines which could be subject to a solution under paragraph 6.  He did not think that paragraph 6
restricted the types of medicines covered and that although certain epidemics were mentioned both inparagraph 1 and in paragraph 5(c) of the Declaration, there was guidance given to narrow the scope of
patented medicines which were to be covered by a solution under paragraph 6.  In his view, therefore,
the lack of any type of patented medicine should qualify for measures taken under paragraph 6.
110. He said that it must be ensured that products which were acquired under a paragraph 6
solution not end up in countries other than the country for whose benefit the authorization forproduction and export had been made.  He argued that this obligation must be a common obligation
falling on all Members concerned as well as on private parties involved in the production, distribution
and administering of the medicine.
111. He further noted that the TRIPS Council had a commitment to find a solution to this question
before the end of 2002.  If the Council agreed on an amendment of the TRIPS Agreement, it wouldIP/C/M/36
Page 30
take some time for Members to implement the agreed solution due to the ratification procedures
which had to be completed.  In this case the Council must agree on a suitable interim solution until the
amendment came into force.  One such interim arrangement could be a waiver under WTO Article IX
or an authoritative interpretation or a moratorium.  He asked Members not to exclude any type of
interim measure in the event that the Council opted for an amendment.
112. The representative of Colombia referred to the document prepared by the Secretariat on
manufacturing capacities for pharmaceutical products and said that Colombia and some other
developing countries could only be found on the list of countries that produced finished products.  She
recognized the seriousness of public health problems that affected a large proportion of the population
of many developing countries and least-developed c ountries.  She said that the life of many people
was at stake and that, to the extent that innovation found new technical solutions to the serious public
health problems, this debate meant life or death to many human beings.
113. She said that Colombia was moving towards the position of those that were suggesting a
solution in the context of Article 30 of the TRIPS Agreement, as had been proposed by Brazil and
many developing countries.  An authoritative interpretation of Article 30 would make it possible to
find an expeditious solution and this should be considered in greater detail in order to allow the
necessary flexibility that was required by the solution of public health problems.  The limitedexception, as mentioned in Article 30, had so far been  seen as a very narrow possibility that would
only lead to a minor reduction in the rights of the patent holder.  It was the view of the Colombian
delegation that this possibility should be explored so as to determine the possible effect on the patent
holder and, in particular, on any remuneration he might demand.  A solution in the context of Article
30 would avoid making amendments to the TRIPS Agreement unlike the solutions in the context ofArticle 31.  She drew the TRIPS Council's attenti on to two main points which in her view were
determinant in considering these problems of public health:  the scope of the flexibility and the cost of
this flexibility.  The first point was about the list of diseases that would be the subject of national
emergency and the medicines to which these excep tions on compulsory licences would apply.  The
exceptions should be broadened to include those cases which the governments of the countriesconsidered met accepted international criteria for describing a situation as being a national
emergency.  Otherwise countries lost the possibilit y of dealing not only with new diseases but also
with old ones that one had thought were extinct but which had shown a notable capacity to survive
and which went hand in hand with poverty, malnutrition and displacement.
114. She recalled that Article 31(h) assured the right holder adequate remuneration on a case-by-
case basis, taking into consideration the economic value of the authorization.  It was therefore up to
governments to state in each case what constituted an adequate compensation.  However, sheconsidered it necessary for the TRIPS Council to establish some guidelines, taking as its reference
whether or not the active ingredient was acquired by the patent holder, in which case remuneration
should be low, or whether it was acquired by third parties, in which case remuneration should be
higher.
115. She said that public health coverage in Colombia was low as 57 per cent of the population and
that the prices of medicines, whether patented or not, had a dramatic effect on the costs of the national
health system.  Therefore she reiterated that it was crucial that this issue be discussed in the TRIPS
Council because it might nullify any effort that had been directed at safeguarding public health,
bearing in mind the natural tendency of the right holder to extract the maximum income permitted by
the market.
116. The representative of Argentina stated that her delegation agreed with all those delegations
that had said that the solution that the Council had to find, in relation to paragraph 6, should be
effective, broad, and non-discriminatory.  Argentina also agreed that the solution should not be
limited to certain categories of countries or diseases.  Referring to an earlier statement, she said that
her delegation was concerned about the creation of new categories of countries within the frameworkIP/C/M/36
Page 31
of the WTO.  The solution found should not increase the burden of obligations that existed in
connection with the Agreement nor should it lead to the establishment of mechanisms of direct
interference of the WTO in the trade of the different countries such as the proposal that had been
made on the possible establishment of certain mechanisms for control purposes.  A sustainable
solution should be based on an effective transfer of technology.
117. With regard to the submissions on the table, she said that her delegation would need more
time before commenting on them.  Regarding the two Secretariat papers (IP/C/W/345 and 348), she
inquired about the sources and the basis of research.  She recalled that the Declaration did not limit its
scope to HIV/AIDS, tuberculosis and malaria in contrast to what could be deduced from the
Secretariat's paper.  Her authorities had corroborated the data on Argentina contained in the document
although no final check had been made and therefore she reserved the right to return to this subject.
118. The representative of the Philippines said that it  appeared that the nature of the solution to be
found under this mandate might have less to do with the procedural approach to be taken than with the
substantive elements of the solution to be reported to the General Council.  The Philippines wished to
be added as a co-sponsor to the submission made by Brazil and a group of developing countries.  He
noted that, despite the varying approaches, all Members were imbued with the purpose of finding the
most appropriate and expeditious solution to the problem at stake.  Furthermore, the proposals,whether an authoritative interpretation of Article 30 or an amendment of Article 31(f), all provided
sufficient margin to accommodate the substantive elements contained in the submissions by other
Members.  Proposals on substance had included, for instance, a reading of paragraph 6 in the context
of the entire TRIPS Declaration on Public Health;  coverage of countries without reference to
exclusion of specific categories of countries;  product coverage referring to those relating to the
pharmaceutical sector, though this might need further definition;  due regard for the parallel objective
of developing domestic manufacturing capacities for pharmaceutical products through a real transfer
of technology;  provision for adequate remuneration which should ensure avoidance of double
remuneration;  and the need to ensure adequate regard for transparency, the avoidance of trade
diversion and certainty of supply at sufficiently lower prices.  He noted that, for instance, theEuropean Communities had suggested an interesting mechanism for ensuring sufficiently lower prices
while at the same time giving the patent holder a first opportunity to supply the relevant
pharmaceutical product to the domestic market at substantially lower prices.
119. He continued by saying that, as the TRIPS Council embarked on the exercise of building a
common framework for a solution, it should be mindful not to allow its due regard for defining
conditionalities and safeguards to defeat the very purpose for which paragraph 6 was intended nor the
spirit of Article 30.  While it was right to aim for le gal predictability, this should not be at the expense
of eventually having a solution applicable only with stultifying narrowness.  In this context, even the
conceptual approach of a moratorium could be seen in a constructive light as maintaining a
moratorium until such time as a permanent solution was agreed upon and operationalized.  He re-
emphasized that the foregoing elements were not fully dependent on nor exclusive to a particular
procedural approach or legal vehicle.  He agreed with Brazil which had earlier alluded to thedeveloping countries' paper's overlaps with the other submissions.  The task that faced Members was
to work on the identification of all the relevant issues, on the basis of existing general commonality,
and to seek further definition and refinement of the elements arising from these so as to find the
solution to be reported to the General Council.
120. The representative of China said that her Government was extremely concerned about the
grave public health problems afflicting developing and least-developed countries, especially those
resulting from HIV/AIDS, tuberculosis, malaria and other epidemic diseases.  China believed that the
WTO, through the TRIPS Agreement, could make its contributions to alleviating these problems.  She
informed the Council that China had also joined in the submission which had been introduced by
Brazil and, as a co-sponsor, supported the views contained in this paper.  An authoritativeinterpretation of Article 30 seemed, in her view, to be the easiest, simplest and most expeditious andIP/C/M/36
Page 32
sustainable solution, though her delegation was open to other possible solutions, none of them should
be exclusive.  She reminded Members that, in addition to the legal solutions, Article 7, the objectives
of the TRIPS Agreement, and Article 66.2 should not be forgotten.  In many cases the problem of
countries with insufficient or no manufacturing capacities stemmed from a lack of technology.
Therefore developed Members should provide incentives to encourage their companies to transfertechnology to those countries to enable them to build up their technological base and manufacturing
capacity.
121. The representative of Cuba said that her country had made and continued to make enormous
efforts to provide public health as one of the priorities of public health policy.  This political
determination, which could be seen in enormous efforts in spite of difficulties to provide
infrastructure for the importation of medicines with technologies transferred to those countries
requiring it was not, however, sufficient to get the necessary pharmaceutical products, not only toensure human health but to prolong people's lives.  To provide prompt access to medicines was
therefore crucial and the interests of the holders of patents, although just, had to be balanced with the
interests of the majority of the countries with insufficient manufacturing capacities, including Cuba.
122. As a co-sponsor of the submission of Brazil and without prejudice to that, the Cuban
delegation recognized the viability of other proposals, particularly those by the African group.  Inspite of the fact that Article 30 provided an expeditious solution, other alternatives mentioned could
be applicable and could be immediately applied, no t only in situations of crisis, like Article 6 or
Article 31 in order to implement policies for public health.  The word "principle" did not exclude
other possibilities for action and that situations could be different and so the solutions applicable to
each situation would depend on the product involved.  She welcomed any solution that did notundermine the rights of Members and was in accordance with the principles and objectives of the
Agreement, without impairing the rights of Members to use other possibilities.  A moratorium, in her
view, was not justified.
123. The representative of Jamaica said that her delegation had taken full note of the
communications which had been tabled concerning the Article 30 and the Article 31 approach to give
effect to paragraph 6 of the Declaration.  Her delegation supported the view that the solution found
should not be burdensome or onerous.  In this context, paragraph 14 of the final remarks of the
proposal co-sponsored by a number of developing countries, and introduced by Brazil, was
instructive.  This paragraph stated, inter alia , that in the light of the importance of the possible
solutions to alleviate public health problems, it would be unacceptable to consider safeguards or
conditions that would in any way limit either the flexibilities under the TRIPS Agreement or the
clarifications established in the Declaration.
124. The representative of UNAIDS recalled the impact of the AIDS epidemic in developing
countries, and its catastrophic dimensions in Africa.  The impact of the AIDS epidemic in
undermining development and reversing hard-won gains was not abstract.  Striking primarily adults in
their most productive years, AIDS cut productivity, eroded human capital, hindered knowledge and
expertise being passed to future generations, and deterred trade and investment.  The annual per capitagrowth rate in half the countries of sub-Saharan Africa was falling by 0.5 – 1.2 per cent as a direct
result of AIDS, and falling by up to 2 per cent in the high prevalence countries.  AIDS was having a
devastating impact on major sectors, such as agriculture and mining.  The epidemic had killed some 7
million agricultural workers since 1985 in the 25 most affected African countries.  Although Africa
was the most affected, AIDS did not respect international or regional borders;  all regions and allcountries were affected.
125. He said that since 1996, the availability of medicines for HIV/AIDS had significantly reduced
the impact of AIDS in industrialized countries, allowing many HIV-positive people to live a healthier
life and to continue to contribute to their familie s and societies, in many cases turning HIV into a
manageable chronic disease.  He recalled that the vast majority of HIV-positive people in developingIP/C/M/36
Page 33
countries did not have access to HIV-related medicines.  Of the 40 million people in the world living
with HIV at the end of 2001, it was estimated that in developing countries some six million were in
need of antiretroviral medicines.  Only a fraction, some 235,000 people, had access in developing
countries and half of these were in one country, Brazil, one of the very first countries to commit to
universal access.
126. He explained that UNAIDS advocated working simultaneously on all aspects of the treatment
gap:  affordability, access to sustained financing, health and social service infrastructure and human
resources.  For this reason, UNAIDS was grateful for the work of the WTO, and this Council in
particular, to clarify the flexibility that TRIPS afforded to governments to protect the public health of
their peoples, as expressed in the Declaration.  He welcomed the efforts of the Council to follow up
on paragraph 6 of the Declaration and to identify a long-term, sustainable, workable and expeditious
solution to allow countries with inadequate or  without pharmaceutical manufacturing capacity to
benefit from the flexibility otherwise provid ed under the TRIPS Agreement with regard to
compulsory licensing.
127. He told Members that the vast majority of the countries hardest hit by AIDS did not have
sufficient manufacturing capacity in the pharmaceutical sector to formulate and synthesize their own
HIV antiretroviral medicines.  For example, of  the 15 countries with HIV prevalence above 10 per
cent, only one had the capacity to manufacture these HIV medicines.  In other words, 14 of the 15
hardest-hit countries would have to be able to find affordable sources of supply of generic medicines
in exporting countries if they, the very countries in  greatest need, were to benefit from the flexibility
in Article 31.  He recognized fully that the Council's deliberations were very relevant for other
diseases and for public health in general, but its efforts to find a sustainable, simple and expeditioussolution for countries with insufficient or no manufacturing capacity were certainly extremely
important in the context of the AIDS epidemic.  The magnitude of this epidemic and the glaring
global inequity in access to HIV treatments called for a new way of doing business that must be based
on the ethical imperative of ensuring that the fruits of science benefit all, including the poorest.
128. Referring to comments on the papers provided by the Secretariat (IP/C/W/345 and
IP/C/W/348), a representative of the Secretariat explained that the sentence in paragraph 1 of
document IP/C/W/348 stating the diseases specifica lly referred to in the Declaration were HIV/AIDS,
tuberculosis and malaria, did not purport to be any kind of interpretation of the scope of the
Declaration - which, of course, referred to HIV/AIDS , tuberculosis, malaria and other epidemics.  The
sentence was there to explain the approach that the Secretariat had taken, for reasons of making the
task before it in preparing the document manageable, of focus on those three diseases - the ones
explicitly referred to in the Declaration.  On IP/C/W/345, Annex 4 which contained a typology of the
world's pharmaceutical industries, he explained that this had been taken as a quote from a UNIDO
study, as referred to on the first page of the document.  The categories and countries under each
category were just taken from the UNIDO study and not determined by the Secretariat.  As was
pointed out in the note, this study had become a little bit dated;  a more modern listing might put some
countries in different boxes.
129. The representative of the European Communities said that he had the impression that most
delegations were of the opinion that the cause of the problem lay in the wording of Article 31(f) and
that was there that a solution should be sought.  His delegation believed that its proposal to tackle
Article 31(f) through an amendment was the way forward.  Responding to interventions by several
delegations that had suggested that a formal amendment was too cumbersome and time-consuming aprocedure, he referred to the written communicat ion from the European Communities indicating that
such concerns could be overcome.  The TRIPS Council needed to find an expeditious solution, but
that was only possible if Members also provided for an interim solution, preferably through a
moratorium on dispute settlement or possibly even through a waiver for a short period of time until
the procedural aspect of the formal amendment of Article 31 was sorted out.IP/C/M/36
Page 34
130. With regard to the product scope, which was an important aspect of the discussion, and on the
basis of the interventions of many delegations, his delegation believed that the description of product
scope in its written communication, which referred to paragraph 1 of the Declaration, was probably
the way forward.  He had not heard of any delegation having a major difficulty with such an
approach.  He also referred to a suggestion made by some delegations that the TRIPS Council shoulddefine the meaning of "pharmaceutical sector" or pharmaceutical products.  He was not convinced
that Members should do so at this stage of the debate, although he remained open to suggestions by
other delegations in this respect.
131. He added that there seemed to be common ground on the need for the TRIPS Council not
only to find an expeditious solution, but also the n eed for safeguards, provided that such safeguards
were workable and proportional, as indicated in European Communities written communication.
132. Further, he referred to another aspect mentioned by the representative of Brazil and dwelt
upon by several delegations, namely that Members should have the right to determine whether or not
they disposed of sufficient manufacturing capacity.  His delegation agreed that it was up to each
Member to make such an assessment as far as its own industry was concerned.  Nevertheless, he
emphasized, it was necessary that the TRIPS Council ensured that the assessment was done on the
basis of objective criteria and not on an arbitrary basis.  He suggested that the TRIPS Council discussfurther possible objective criteria and referred to a suggestion made by one delegation that an
indicative list could be prepared, saying his delegation was ready to look at such an approach.
133. With regard to the category of importing countries, he said that the entire process leading up
to the Declaration was the result of a request made by developing and least-developed countries, as
more than a year ago, the debate had been launched upon a request from the African group.  Theentire Declaration needed to be seen in that context and he thought that the issue was clearly
highlighted by several paragraphs, not least by paragraph 1 of the Declaration.  His delegation did not
think that the solution should benefit developed countries as well, especially since they disposed of
the necessary public resources to deal with public health.  As regards the category of exporting or
producing countries under a compulsory licence, the EC delegation had no fixed views.
134. The representative of the United States began by pointing out that one issue that had not been
discussed much was the critical role played by intellectual property protection in the development of
new medicines.  Like all other Members, the United  States was hopeful that research and development
would eventually lead to a cure, or at least in the near term a vaccine, for the world's epidemics, not
least of which was the pandemic of HIV/AIDS.  He reiterated that it was important for Members,
when devising a solution, to ensure that they did not undermine the incentives to develop such new
medicines.  He was concerned that this point had lost meaning for Members and had not beinganalysed in any detail.  However, it was a fund amental point that Members had agreed to in the
TRIPS Agreement that patent protection was the mechanism by which Member countries provided an
incentive to develop new drugs.  That fact was real and valuable and the TRIPS Council should not
lose sight of it because should the Council do so, progress towards eradicating these diseases would
be reduced.  He emphasized that he did not want to  be accused of creating disincentives to the work
that was under way to improve the quality of life for all of WTO Members' citizens.  While generic
industries made a valuable contribution to bringing down prices for all consumers, such industries do
not innovate and innovation was key to the developmen t of new drugs.  He noted that industry and
government both had an important role to play in developing medicines and that there was an
appropriate balance in this regard in the TRIPS Agreement, a balance that the Members hadrecognized at Doha.  Nevertheless, the Council had be en asked to address a particular issue identified
in paragraph 6, which his delegation was prepared to do.
135. He recalled that Members did agree in Doha that least-developed countries would have an
extension of their obligations with respect to pharmaceutical products until 2016.  The US paper did
not in any way seek to suggest that obligations would be imposed on those countries as result of theIP/C/M/36
Page 35
solution being developed.  He clarified that the paper did not contain new obligations and that a
transition had been agreed upon in Doha.  He referred to the comments made by the representative of
the European Communities that highlighted some of the key issues or elements on which Members
had expressed some common views during the discussion.  Paragraph 1 of the Doha Ministerial
Declaration provided the appropriate context for defining the problems Ministers had asked theTRIPS Council to address, namely the health problems faced by developing and least-developed
countries, especially HIV/AIDS, malaria, tuberculosis, and other epidemics.  With regard to which
countries with limited means needed cheap medicines in order to address public problems, many
issues should be kept in mind, including infrastructure, financing, elimination of impediments such as
tariffs and internal taxes, and training.  However, recognizing that these issues should be addressed in
other appropriate forums, his delegation did not put these issues in their proposal as elements of the
solution, but did recognize that a solution to health problems must be comprehensive and includeefforts that really were pursued outside the TRIPS Council.
136. He said that in order to ensure that medicines were produced for export to countries and that
they actually reached the people for whom they were intended, all Members had to commit to take
necessary steps to prevent diversion of these drugs from the intended beneficiary countries to higher
income markets by those whose interest was not in relieving the sufferings of those Members most inneed but in facilitating their own well-being.  His delegation had included in its paper an obligation
for all Members to guard against diversion and a request to exporting Members to direct all of their
production to the Members in need.  However, the TRIPS Agreement already provided obligations in
this regard, under Articles 28 and 44.1, which were sufficient. The US paper therefore did not in any
way suggest that Members should undertake new obligations to enforce the proposed measures.
137. With regard to the circumstances in which the proposed measures would apply, he said that
the countries that would be potential suppliers of needed pharmaceuticals under a solution should be
developing or least-developed countries that had the capacity to produce the needed pharmaceuticals.
Many Members had expressed the importance of such a solution to contribute to technology transfer.
A solution could only provide or facilitate technology transfer if developed country Members werenot included as exporters.  This did not mean, howev er, that developed country producers did not have
a role in this process of alleviating suffering.  Developed countries had in fact a very significant role
to play as they could most effectively participate through partnerships, discounted pricing,
arrangements with multilateral organizations and efforts such as the Global Fund.  Nevertheless, if
developed country producers were included in this solution, there would be no incentive for
production capacity to shift to the developing and leas t-developed countries.  In his view, focusing the
solution on producers in developed and least-developed countries might create an opportunity forthese countries to export to regions as was discussed in the African group paper.  He added that such a
possibility could be significantly eroded if the TRIPS Council did not keep the solution focused on
developing and least-developed countries.
138. He raised another point relating to a section in the US paper on transparency, which could
serve a number of useful functions. For Members to guard against diversion and help ensure that theproduct reached the intended beneficiary countries it was important to know what was transpiring, for
instance in terms of who was exporting products.  The transparency provisions included in the US
proposal should by no means be burdensome, nor should they prevent governments from making use
of this mechanism or frustrate the implementation of the solution.  Instead the provisions should help
ensure that patent holders themselves were, in the first instance, provided with information and
thereby provided a significant incentive to respond.  He also referred to suggestions made by a
number of delegations regarding the need to notify the patent holder and was of the opinion that these
were not suggestions to impose additional obligations under the TRIPS Agreement.  He believed that
it was made clear by one delegation that this was not the same as first seeking a voluntary licence
from the patent holder.  Transparency provisions and advice to industry would provide an opportunityfor the patent holder to respond first and thus the mechanism would not need to be employed.IP/C/M/36
Page 36
139. He said that paragraph 6 dealt with the pharmaceutical sector and therefore keeping the
discussions of scope focussed on pharmaceutical products was, in his view, the best way for an
expeditious solution.  The Council should keep in mind that the focus was access to medicines and
while he remained open to understanding better the concerns of Members who might consider such an
approach overly narrow, he cautioned against any suggestion that expanded the proposed solution toall medical technologies, as this was a very broad concept that could easily and needlessly complicate
Members' efforts to find a credible, workable, efficient and timely solution to concerns on access to
medicines.
140. Turning to the discussions on the legal mechanis m, he said that Members should first focus
their attention on identifying the key elements of the solution.  The actual implementation mechanism
of any proposed solution should be left to other debates later in the year.  He wished, nonetheless, to
offer a few observations.  A dispute settlement morato rium or waiver of Article 31(f) was, in specific
circumstances, more easily and quickly achievable than an amendment of these provisions.  The
Council needed to have a better understanding of what each of the legal mechanisms might entail.
For example, it might not be well understood that an amendment to the TRIPS Agreement would not
become effective until two thirds of WTO Members had deposited instruments of acceptance and that
it would be effective only for those Members that had accepted the amendment.  Moreover, theprocess could take a considerable amount of time and, if an amendment proved ineffective or not
responsive to the concerns Members were trying to address, it would have to be amended again
through yet another lengthy process and consequently would not serve the TRIPS Council's
objectives.  He suggested that it would be beneficial if the Secretariat could lay out the basic issues
associated with each legal mechanism so as to also allow Members to consult on them and to considerexactly how each would be implemented.
141. The representative of China reiterated that her delegation believed that an authoritative
interpretation of Article 30 of the TRIPS Agreement was the best way forward.  She also believed that
intellectual property rights protection and enforcement should be mutually beneficial to both
producers and users of technological knowledge, should be conducive to socio-economic welfare andresult in a balance of rights and obligations as illustrated by Article 7 of the TRIPS Agreement.  As
reaffirmed in the Declaration, Members had the right to use to the full the flexibility provided in the
TRIPS Agreement to protect public health and promote access to medicines.  Article 30 exceptions to
patent rights obligations, including the right of third parties to make, sell, import or export without the
consent of right holders, was a built-in flexibility.  China recognized the concerns of some delegations
that interpreting Article 30 might result in unreasonable conflict with the normal exploitation of a
patent or prejudice the legitimate interest of the patent owner.  However, an authoritativeinterpretation of Article 30 could be made to apply only in the rare situation where a developing
country or least-developed country Member encountered a public health crisis, which constituted a
national emergency or in situations of extreme urgency as stated in paragraph 5(c) of the Declaration.
Moreover, she said, the interpretation could include terms and conditions on expiration of a public
health crisis in order to protect a patent right holder and to balance the rights and obligations of usersand producers.
142. She said that while suggestions of a possible amendment, a dispute settlement moratorium or
waiver of Article 31(f) had value, they constituted a narrow approach dealing only with possible
rights of exportation.  In addition, the proposed safeguard measures such as notifying the patent owner
of any use, and any decision by the TRIPS Council to make voluntary licences a prerequisite would
undermine Members' flexibility to address the grave public health crisis.  With regard to the coverage
of diseases, the public health problems affecting many developing and least-developed Members,
especially those resulting from HIV/AIDS, malaria, tuberculosis, and other epidemics was not an
exclusive or exhaustive list of illnesses that might cause public health crises.
143. With respect to country coverage, China believed that any developing country or least-
developed country might in some circumstances have insufficient or no manufacturing capacities inIP/C/M/36
Page 37
certain pharmaceutical areas. Prejudging any country's manufacturing capacity might not help to
address public health crises.  China remained open, however, to any other possible solutions that
might be expeditious.
144. The representative of Argentina reiterated that, according to the Declaration, Members could
take the measures they considered necessary to protect public health and to promote access to
medicines.  The Declaration clearly stated that Members had the right to use the flexibility contained
in the TRIPS Agreement to meet public health requirements.  Therefore, any proposed solution should
not be limited to compulsory licensing of those pharmaceutical products required only to address
HIV/AIDS, tuberculosis, and malaria as listed in the Declaration.  These were only given as examples.
The solution should be a permanent one which did not limit an individual country's capacity to deal
with any public health problems that might arise.  The Declaration had stated clearly that the TRIPS
Agreement only referred to conditions that shou ld be considered for the granting of compulsory
licensing and not the causing factors, which should be determined domestically by each Member.  The
proposals already tabled attempted to find a solution in the short term, but any solution should also
make it possible to ensure compliance with Articles 7 and 8 of the TRIPS Agreement by facilitating
transfer of technology and development of a viable scientific and technological infrastructure in
developing and least-developed countries.  With regard to the statement made by the representative ofthe European Communities to exclude developed countries from the solution, she suggested that a
work programme on the definition of elements be set up in the TRIPS Council to categorize importing
and exporting countries.
145. The representative of Kenya, speaking on behalf of the African group, agreed in principle to
the suggestions on the way forward outlined by the Chairman but did not see any need for two
separate documents addressing the substantive elements and the legal structure.  These issues were
connected and inseparable and therefore should be dealt with in one document.  With regard to
domestic manufacturing capacities, this was an essential element of the solution to the problems
identified in paragraph 6 of the Declaration.  She noted that some Members regarded the issue of
building capacity as not necessarily connected to the expeditious solution, a view that was surprisingand incomprehensible.  In her view, although building domestic manufacturing capacity in the
pharmaceutical sector was a medium to long-term project, it could be established in many ways.  It
was also possible to engage in efforts to build domestic manufacturing capacity building in the short
term.  One practical measure would be the location or establishment of production facilities in
Members with insufficient or no manufacturing capacity.  Such a location would have to be made
commercially viable, for instance by facilitating production at optimal scale and tapping economies of
scale.  In addition, limitations of small domestic markets could be addressed by providing sustainableand guaranteed access to wider markets, particularly the regional market.  There should also be
certainty that would permit long-term and large-scale investment in production facilities, without
unexpected or untimely changes.  This would require collective efforts of all actors on the domestic
scene, including the public and private sectors.
146. Furthermore, it should be certain that the dispute settlement procedures of the WTO would
not unduly interfere with the confidence and consistency required for the building and maintenance of
production, marketing and supply infrastructure.  Members, particularly the developing and least-
developed country Members, would need the certainty that their programmes, measures or domestic
laws would not be unravelled or interrupted in an untimely manner or lead to setbacks that would cost
human lives and loss of resources.  A mere waiver subject to review would thus not, in her view,
serve as a positive solution.  However, the African group was prepared to consider a moratorium
which was (i) objectively related to the scale and duration of the health problems;  (ii) not a stand-
alone solution; and (iii) operated as part of the interim solution pending the acceptance and entry into
force of any amendments by each Member.  There should also be assurance that the solution agreed
upon would be given time to grow and mature a nd would be readily available for use, without
uncertainty.IP/C/M/36
Page 38
147. She said that she was aware that the issue of capacity building was part of a broader approach
within the WTO, but was convinced that there was scope to deal with the issue of establishing
manufacturing capacity in the process of searching for a solution that would enable Members with
insufficient or no manufacturing capacity to make effective use of compulsory licences.  This specific
public health problem was a specialized area, but should be viewed against the general background ofbuilding capacity to effectively address domestic public policy concerns and to promote mutually
supportive competitiveness.  It needed to be clearly acknowledged that the effective solution to
insufficiency or lack of domestic manufacturing capacity was to build such domestic manufacturing
capacity.  The TRIPS Council could not be expected to find merely temporary solutions to a problem
that was long-term in nature and therefore Members should come up with a solution that would not
only effectively address the problem at hand, but one that also would take into consideration the
specific needs and development concerns of developing and least-developed country Members.  Inthis respect, the Council should provide an indi cative timeframe within which a solution could be
reached, possibly in the immediate future, and report to the General Council before the end of 2002.
She believed that the aim of this exercise was not to arrive at a solution that only enabled Members to
perpetually import the needed pharmaceutical products as this would clearly not be a desirable
outcome.
148. She took note of the concern that the envisaged solution should not adversely affect patent
rights and supported the proposal to safeguard against re-export. She shared the view of the US
delegation that patent holders should be allowed to seek legal remedies in accordance with the TRIPS
Agreement against re-exports.  However, she was concerned by the continued suggestions of
additional, unnecessary and overly cumbersome safeguards and said that any safeguards must bereasonable and proportional.  She noted that the European Communities had taken the view that re-
exports into the European Communities from poor developing countries was theoretical.  It was
understood that the figure would be negligible.  Members should agree that any safeguard measures
contained in the solution would still be subject to the general provisions of the TRIPS Agreement.
They would also be subject to the commitments under the Doha Development Agenda on technicaland financial assistance to developing and least-developed country Members.  Furthermore,
safeguards should not be costly, complicated, burdensome, or impose additional obligations on
developing and least-developed country Members in consistent with their resources and development
needs and they must not, in effect, negate or undermine the full operation of the solution found.
149. She said that developed countries had made it clear that they did not see themselves as
potential beneficiaries of any system that Members might come up with.  The Declaration neither
excluded any Member, nor was understood to have the basis to limit the scope of the sources ofsupplies of pharmaceutical products.  A limitation would only infringe the flexibilities envisaged in
the Declaration and, as such, was not acceptable.  However, if developed countries insisted that they
had no desire to be included as beneficiaries, that should be respected fully.
150. The representative of Zimbabwe agreed with the statement made by the Kenyan delegation on
behalf of the African group.  He also supported the suggestion of having one document rather than
two on issues and legal elements.  He said that the issue of domestic manufacturing capacity had to be
viewed as part of a short, medium and long-term solution.  A multifaceted approach was durable and
would ensure that developing countries individually and as a region had the capacity to manufacture
medicines for their people.  He agreed that there was need for safeguards but said these should not
result in additional obligations for Members or be burdensome.  He shared the view expressed by theUnited States that the safeguard provisions of the TRIPS Agreement provided enough scope to
prevent trade diversion or re-exportation of pharmaceutical products.  He also shared the view that
patent protection was important not just as an incentive to research and development, but as an
obligation for all Members.  However, there wa s need to strike a balance between providing
incentives for research and development and resolving a pressing problem of public health.  Peoplewere dying in large numbers and some countries, like Zimbabwe, were losing 200 people per week.
There was therefore need to come up with a solution immediately.IP/C/M/36
Page 39
151. With regard to a waiver or a moratorium, he reiterated the African group's position that the
issue be dealt with as a package and in the context of meeting the immediate needs of people who
were suffering rather than in its own right.  A moratorium or waiver, on its own, would not be
acceptable because it would only address short-term symptoms.  With respect to potential exporters of
pharmaceutical products, it was not stated in the Declaration that developed countries should beexcluded.  This should remain open to all countries as pandemic problems were not predictable and as
restricting potential exporters to developing countries would narrow the options available to the
people most in need of the medicines.  Moreover, not many of the developing countries had sufficient
capacity to export.
152. The representative of Brazil supported the two previous interventions.  He referred to the
point raised by the representative of the United States on the need to recognize a comprehensive
solution and said that his delegation subscribed to the view that no Member would be naïve enough toexpect that the solution would automatically result in medicines for all.  However, Ministers in Doha
had pointed out a specific problem in the spirit of the whole Declaration and the TRIPS Council had
to find a solution to ensure that nothing in the TRIPS Agreement would prevent the TRIPS Council
from solving the problem identified.  In this regard, there were a number of initiatives that needed to
be taken at both national and international level on several other areas regarding public health and noMember should expect that the TRIPS Council would actually solve the whole problem.  He said that
because Brazil was interested in a comprehensive so lution, it fully subscribed to the views expressed
by many countries on the issue of transfer of technology and on the need for improving domestic
manufacturing capacities.  This underlying issue in the debate was extremely important for Brazil.
The problem focused on countries with limited or no manufacturing capacities and so it was criticalthat the TRIPS Council did not lose sight of the very objective of the TRIPS Agreement.  Responding
to the representative of the United States, he said that no one was against innovation of new drugs.  As
the representative of Zimbabwe had very eloquently expressed, the TRIPS Council was trying to seek
an expeditious solution for an extremely serious problem.  Therefore the TRIPS Council should be
pragmatic and make sure that the TRIPS Agreement was not going to stand in the way of solutions,
especially after the entry into force of the obligation to provide patents for pharmaceuticals after 2005.
153. With regard to the issue of scope, he fully ag reed with Argentina that in no way should the
TRIPS Council limit itself to only a specific number of diseases.  It was clear from the whole
discussion on the Declaration and from the result of the Declaration that the scope was not limited to
two or three diseases, but that the diseases menti oned were extremely dramatic examples of possible
diseases.  The Declaration mentioned in paragraph 1 health problems, but did not limit the problems
that countries might have to those diseases.  These were examples and they were there because theywere very important, but they were not exhaustive.
154. Regarding the countries involved in the solution, he also agreed with Kenya that it would be
extremely unfortunate to see developed countries voluntarily exclude themselves from the solution.
From the point of view of the countries that subscribed to the developing countries' joint proposal,
specific categories should not be included or excluded in this kind of solution.  Individual Membersshould decide to be part of the solution or not to be part of the solution.  It would be disappointing if
the solution did not necessarily include developed country Members as exporters since this would
significantly restrict the potential supply of pharmaceutical products.  However, that was something
that developed countries, if they were speaking as a group, should judge for themselves.  His
delegation, however, agreed with Hungary that its ve ry important contribution to the drafting process
of the Declaration, paragraph 6, was never intended to be read narrowly.  The Brazilian delegation
certainly agreed that the purpose was not limited to specific categories of countries and that it would
not be constructive to have an exclusionary approach.
155. Referring to the coverage of products, it was important to note that paragraph 6 related to
limited manufacturing capacity in the pharmaceutica l industry.  But the TRIPS Council should not
necessarily limit the scope to medicines.  From his delegation's initial intervention it was very clearIP/C/M/36
Page 40
that the scope should not be confined to medicines as final products and that active substances
necessary for the manufacturing of the medicines ought not be excluded.  Likewise test kits for
HIV/AIDS should not be excluded. These were important products related to the pharmaceutical
industry but not necessarily medicines as final pr oducts. At the very least the TRIPS Council could
seek some constructive ambiguity rather than being too specific about the products included.However, he wanted to assure all Members that his delegation was not seeking to expand the coverage
of the solution to other areas or products that were definitely unrelated, such as bicycles, golf clubs, or
vacuum cleaners.
156. Concerning the Secretariat papers, his delegation would need to digest some of the elements
of document IP/C/W/345 on manufacturing capacity for medicines containing data available from
UNIDO.  His initial impression on the information contained there was that it might not be the best
reference given that this document was about horizontal manufacturing capacity.  The solution thatwas being negotiated in the Council was going to refer to  specific situations.  It might be the case that,
even for a country with horizontal manufacturing capacity, there was limited or no manufacturing
capacity for a specific product and so it might be necessary to make use of this solution.  Just because
a country was included in Table A, B or C of the UNIDO list, it did not necessarily mean that this
country had full manufacturing capacity for every product that could be potentially covered.
157. Referring to Secretariat document IP/C/W/348 on existence of patents in regard to diseases
referred to in the Declaration, he reiterated that the reference to HIV/AIDS, tuberculosis and malaria
was non-exhaustive.  However, the document was very interesting and potentially useful for the
TRIPS Council.  He noted that it also made use of a study by Professor Amir Ataran, which might
provide an interesting snapshot of the situation of HIV/AIDS and other diseases in many countriesbut, for the purposes of the work in the Council, he still wanted to look further to determine how
useful this study would be since this snapshot migh t be too narrow to have the full understanding of
this future use of the solution.  The TRIPS Council mi ght need to consider the solution also from the
impact that it might have in the future.
158. He brought to the attention of the TRIPS Council a document issued by the WHO's Essential
Drugs and Medicines Division, whic h had commissioned Professor Carlos Correa from the University
of Buenos Aires to examine the public health implications of the Declaration.  The resulting paper
contained extremely useful references for the purpos e of the Council's specific discussion.  Professor
Carlos Correa had pointed out that the solution should not only be expeditious but effective as well.
Thus, while the proposal by the United States on a moratorium might not take that long, he questioned
its effectiveness.  The moratorium approach offered an expeditious response to the problem posed by
paragraph 6, but not a solution since it would not be  straightforward enough either to influence those
potential exporting countries to change their legislation or to permit protection for export or to induce
generic manufacturers to invest in creating or increasing export capacity.  In addition, it was not clear
what procedures would be applied in order to adopt a moratorium and whether formal changes to the
TRIPS Agreement would be necessary.
159. Concerning the waiver possibility, Professor Correa had noted that a waiver was bureaucratic
to administer since it required annual review by the Ministerial Conference if granted for a period of
more than one year, as stated in Article IX:3 and IX:4 of the WTO Agreement.  Thus it would still be
subject to the possibility of extensive modifications and termination.  Regarding the decision-making
process, the problems would not actually be too different from the problems presented by the US
delegation on the need for approval by three quarters of the membership.
160. He said that it was also interesting to note that the criticism on the limited exceptions
proposed by developing countries regarding an interpretation of Article 30 did not apply to the actual
reading of Article IX.3 of the WTO Agreement, given that Article IX.3 began with the expression "in
exceptional circumstances", while the proposal on a waiver did not seem to be in exceptional
circumstances but was rather a regular mechanism.  His delegation was extremely pleased to see aIP/C/M/36
Page 41
comprehensive and flexible reading of the provisions that could apply to this solution but saw that,
mutatis mutandis , the same could be applied to its own proposal on an interpretation of Article 30.
His delegation also noted that in its comments on the proposal on Article 30, the United States had
limited itself to repeat basically the same paragraph it had circulated in the TRIPS Council's session in
March.  In the absence of further comments, the Brazilian proposal should continue to be takenseriously.
161. With regard to safeguards, he wanted to seek further instructions from his capital, but noted
that his delegation was very flexible.  The issue of trade diversion was very important, and the
Council had to ensure that the solution would be a ccessible to the countries that needed to access the
solution.  A solution to trade diversion based on existing obligations of TRIPS under which the
burden would fall basically on the patent holder, as pointed out by the United States, sounded like a
reasonable element for discussion, but his delegation wanted to elaborate on this later.
162. He said that transparency was an issue to which his delegation would give positive
consideration as it might in fact be interesting from the point of view of ensuring that better
competition would take place when using the solution and might even encourage the avoidance of a
compulsory licence.  In this case he signalled to all countries that Brazil was willing to discuss this
issue in a very positive light.  Finally, it might be useful to have some sort of a checklist prepared bythe Secretariat containing the main elements of the proposals being considered and other issues
related to the specific legal proposals.  It might also be useful to consider the preparation of a paper
containing the necessary procedures for approving each of the solutions under consideration.
163. The representative of Venezuela said his delegation supported the three preceeding
interventions, most specifically that of Brazil, and that Venezuela had co-sponsored the proposal
made by the developing countries.  It was his view that the authoritative interpretation of Article 30
was an expeditious solution but his delegation was open to considering other solutions such as an
amendment of Article 31(f).
164. With respect to paragraph 4 of the EC proposal, he said that it was true that those measures
were part and parcel of the solution but they went beyond the competence of the WTO.  In thisparticular case the Council could not resolve all problems by the creation of a fund alone.  It was a
question of development, technology transfer and the development of scientific and technological
infrastructure.  His delegation appreciated that the solution offered by the European Communities was
very close to that of the developing countries as contained in the document which his country co-
sponsored.  However, the EC proposal was much more limited and imposed certain limitations with
respect to abuse, special circumstances and safeguards to avoid diverting drugs.  With respect to
domestic circumstances, the EC paper suggested that the solution should refer only to a group of very
small, poor countries but the TRIPS Council had to take into account the health situation in countries
such as Venezuela.  If a laboratory was not interested in producing a certain medication, the State in
question might nevertheless be interested in ensuring that supply existed, so a compulsory licence
should not be understood as a limitation of the rights of the right holder.  He believed that there was a
particular interest that the State ought to provide if there was a higher interest at stake.
165. Commenting on the document of the United States, he said that the idea of a moratorium or
waiver was not a solution.  The idea in the US proposal of seeking approval by the TRIPS Council of
the circumstances of each case was a condition not required by the TRIPS Agreement and was
unacceptable to Venezuela.  Lastly the delegation of Venezuela was flexible with respect to the way
in which the work was organised, provided that the TRIPS Council came up with an immediatesolution that would resolve the problem.
166. The representative of Peru highlighted the fact that the solution for countries with limited or
non-existent manufacturing capacity had to be sustainable, effective, lasting and appropriate.  The
Peruvian delegation felt that the proposal made by certain developed countries to afford a moratoriumIP/C/M/36
Page 42
or a waiver was not conducive to such an end because it did not allow the necessary legal ability and
would only be feasible in the short term.  For this reason, she could not accept this proposal.  She
repeated the willingness of her delegation to continue working with the Chairman and other
delegations in order to find an expeditious and appropriate solution to this problem.
167. The representative of India noted that the representative of Kenya had tried to put in
perspective the safeguard issue, what kind of problems might arise and whether they were overly
restrictive conditions.  He observed that there were already different kinds of patent regimes or patent
rights in different countries at present and there was manufacturing by generic producers of products
that were patent protected in other territories.  He questioned whether it was possible to determine the
extent of diversion that was taking place at present from generic producers to those territories where
patent rights were enjoyed.  If such information was available it would give the TRIPS Council an
idea of how to design targeted and very effective safeguards because without such information theCouncil would talk about diversion in a vacuum.  He agreed with but did not intend to repeat the
positions which had already been stated by Kenya, Zimbabwe, Brazil and other previous speakers.
168. The representative of Malaysia said her delegation's understanding of the paragraph 6 solution
was that it was meant to address the anomaly in the TRIPS Agreement whereby the use of compulsory
licensing was not currently made available to all Members.  In her view the solution was meant toensure that this flexibility was made available to Members, particularly at this time of the AIDS
pandemic.  It should not be seen as the grant of a new right and hence the issue of additional
obligations would not arise.  Therefore her delegation did not see it as an issue of diluting patent
rights but how the existing flexibility could be utilized by all Members.  She saw the need for a long-
term and durable solution taking into account to a certain degree the need to improve the capacity ofcountries to promote technological innovation and to promote transfer of technology. Her delegation
agreed that the rights of patent holders should be protected and noted that the Secretariat paper made
clear that Malaysia provided patents to a large number of drugs.
169. Her delegation also believed that the solution should involve all Members, at least all
developing country Members, whether in the provision of pharmaceutical products or in the import ofdrugs.  Her delegation had difficulty in trying to catalogue countries into categories or in limiting the
supply of medicines from only developing countries.  She stressed that this would mean limiting the
scope of the solution or even limiting access to the medicines themselves.
170. Turning to the issue of transparency, her delegation viewed the rationale behind the proposals
as sound but noted that this certainly involved steps beyond the Article 31 procedures, which only
considered efforts to obtain authorization from the patent holder.  Her delegation agreed, however,
that transparency issues should be viewed in li ght of the safeguards considered in any possible
solution.  Her country would support a long-term durable solution open to at least all developing
countries and covering all possible public health problems.
171. The representative of Singapore welcomed the paper from the United States as part of the
contribution to this very important debate, together with the contributions by other delegations.  He
reiterated that the TRIPS Council should look at th e elements first before proceeding with a debate
about legal instruments.  He said that one factor that should be borne in mind in working out a
solution to this problem was commercial viability.  Potential investors would invest to supply
medicines in response to commercial viability and any solution that did not consider commercial
factors would result in the TRIPS Council having to deal with this problem again and again.  In this
connection, he drew attention to the intervention by Kenya which made, in his view, useful points onthe question of commercial issues.
172. He recalled that paragraph 6 stated that countries with insufficient or no manufacturing
capacity needed help because they would find it difficult to make use of compulsory licensing but did
not refer to how these countries were to be helped.  On the question of insufficient or noIP/C/M/36
Page 43
manufacturing capacities, the TRIPS Council's attention was drawn to paragraph 1 of the Declaration,
which indicated the context.  However, in his view, paragraph 6 indicated that it was possible for
almost all countries to qualify because even countries with manufacturing capacity might not have
capacity in every area of the pharmaceutical sector.  To illustrate, he recalled the anthrax problem
which suddenly faced the United States and Canada.  In his view, both countries found themselvesshort of that particular medicine and while the United States apparently solved it through obtaining
large amounts of the medicines at a reduced price, Canada had to resort to compulsory licensing.  He
emphasized that such problems could arise in many c ountries of the world in a variety of contexts and
that the TRIPS Council should bear that in mind when searching for a solution to the problem.
173. The representative of Norway said that his delegation continued to believe that the preferable
solution to the paragraph 6 question would be an amendment to Article 31.  He underlined however
that other solutions, including interim solutions, might be necessary.  Irrespective of which  solutionsthe TRIPS Council chose, the purpose of the TRIPS Council's exercise was to safeguard the interests
of developing countries and particularly the poor ones.  Nevertheless, a solution should be applicable
to all Members.  On the recipient side, the author ities in the respective Member countries, when an
application for authorization was made, should merely make sure that the legal criteria mentioned in
Article 31 were fulfilled.  In addition they might verify whether a recipient Member had "insufficientor no manufacturing capacities in the pharmaceutical sector".  The TRIPS Council should avoid
establishing different categories of Members based, for instance, on tables like the one presented in
the Secretariat document IP/C/W/345, because they gave a misleading impression as to the production
capacities actually existing in a given country.  These categories were of a general nature and did not
sufficiently take into consideration that one had to make a concrete assessment of a given Member'scapacity to produce a specific drug.  For instance, even if a country had general production capacity, it
still  might not be able to adjust its production lines to produce the specific drug in sufficient time.
Such a transformation process could be costly given that one would have to adjust the production line
in order to take into consideration the production of goods which presently were not produced in that
country.
174. As to the question of who should qualify as countries of production, the Norwegian
delegation agreed that all Members in the WTO should qualify on the producing side.  In this respect
Members had to take into account the fact that the patented product might actually be under
production only in very few countries because today's production systems were highly specialized.
Big pharmaceutical companies often had only one place of production with several back-up plants.
However, if all these plants were in industrialized countries it would be very difficult for recipient
countries to access these products, at least in the short term.  His delegation appreciated the argumentput forward by the United States that developing countries should receive adequate technical
assistance in order to be able to produce the necessary medicines themselves, but this often had to be
seen in a long-term perspective.  His view was that, if production capacity was simply not available in
a developing country, a requesting country quite clearly would have to have its medicines supplied by
an industrialized country and that the TRIPS Council's solution should not limit these options.
175. Finally, he observed that a recipient country should be able to seek authorization in more than
one producing country at the same time if several countries were producing the medicines in question.
After all, different countries' authorities might view an application for authorization under the same
patent differently.  He added that the recipient country should have the possibility to apply for
authorizations for different products under different patents but for the same therapeutic effect.  Thiswould give the recipient country the possibility of choosing between possible producers once
authorization was given for a product.
176. The representative of Mauritius stressed that the deadline was fast approaching on this item of
work and that the fact that Members had made serious efforts in bringing contributions to the table
demonstrated a willingness to work together.  Duri ng this TRIPS meeting, four important proposals
had been placed on the table: from a group of developing countries, the European Communities, theIP/C/M/36
Page 44
United States and the African group.  His delegation had carefully analysed all these proposals and
recognized that tremendous efforts had been made by the proponents.  There were differences in these
proposals, but his delegation was struck by the significant commonalities, which inspired his
delegation to believe that there was great promise that the differences could be dealt with in a manner
that would allow Members to reach common understa nding and complete the task assigned to the
TRIPS Council.
177. He highlighted briefly the salient points of each of the proposals so that the Members could
appreciate the commonalities.  First, thirteen developing countries had proposed an authoritative
interpretation of Article 30 that would enable a country with manufacturing capacity to authorize the
production and export of genetic drugs to a third country in order to meet public health needs in that
third country without the consent of the patent holder.  The African group's comprehensive proposal
called for a decision on Article 31(f) and Article 30, as  well as an extension of transition periods and
moratorium on disputes.  On Article 31, the African group proposal identified three options for
addressing the problem, namely the deletion of paragraph (f) in Article 31, an amendment to exclude
its application to public health or access to medicines measures, or an amendment to expand the
definition of domestic market to include regional markets, free-trade areas or customs unions.  Under
Article 30, the African group proposed an exception to patent rights so as to enable a country toproduce and export to another WTO Member to meet its public health needs.  This would be along the
lines of the 13 developing countries' proposal.  The African proposal also called for an extension of
transition periods for developing and least-developed countries that had insufficient or no
manufacturing capacity to allow them to enhance their socio-economic development so they could
meaningfully and sustainably protect public health on the basis of domestic capacity.
178. Regarding the proposal for a moratorium on disputes related to measures adopted to address
public health concerns in countries with insufficient or no manufacturing capacity in the
pharmaceutical sector, the European Communities proposed the introduction of a new paragraph in
Article 31 that would exclude application of Article 31(f) to cases where a compulsory licence was
granted in one country for the production export to another country to address its public healthproblems.  The EC's proposal obliged both exporting and importing countries to take steps to prevent
trade diversion and included further procedural steps which required exporting and importing
countries to inform and provide the patent holder with the opportunity within a short time after
notification to make an offer to supply the product at strongly reduced prices.  The US proposal was
in favour of either a moratorium on dispute settlement or a waiver of the obligations in Article 31(f).
This proposal suggested that exporting countries could be exempted from the Article 31(f) obligation
via a moratorium or a waiver.  However, to qualify the US proposal required that exporting countriesensure that the entirety of the production was exported to the importing country.  The proposal also
asked that all WTO Members be obliged to take steps to prevent pharmaceuticals made available
under the waiver/moratorium mechanism from being di verted from the markets for which they were
intended.
179. The representative of Mauritius dwelt on the important issue of manufacturing capacity which
he said was at the core of the Doha decision.  His delegation sincerely believed that there was great
need to support efforts in respect of building this  capacity in developing countries and emphasized
that while this required medium to long-term efforts, the TRIPS Council should also encourage efforts
in the immediate and short term towards building the required domestic manufacturing capacity.  The
African group proposal referred to the location of production facilities by enterprises from Memberswithin the Member countries with insufficient or no manufacturing capacity as one possible practical
measure.  Such location would have to be commercially viable, for instance through sustainable and
guaranteed access to wider markets, particularly regional markets.  It would need the certainty that
permitted long-term and large-scale investment in such a critical operation for setting up production
facilities.  Thus, in his view, the solution should not, from the perspective of such investments, besubject to unexpected or untimely changes.  It w ould also need the certainty that dispute settlement
procedures at the WTO would not unduly interfere with the commitment and consistency required forIP/C/M/36
Page 45
the building and maintenance of production, marketing and supply infrastructure.  It would need to
support the collective effort of all actors on the domestic scene, including the public and private
sectors. Members, especially from developing and least-developed countries, would need certainty
that their programmes, their measures, or even domestic laws would not be ultimately unravelled or
interrupted or lead to setbacks that would cost human lives and resources.  In working on this aspectof the manufacturing sector, he had drawn heavily from the very useful WTO documents IP/C/W/345
and IP/C/W/348.  He saluted the efforts of the Secr etariat in providing such information which set out
in clear terms the status of the manufacturing capacity in Member countries.  The statistics on the
African countries were quite revealing in that they  showed the dire need for increasing manufacturing
capacities in Africa. In conclusion, his delegation was very much encouraged by the commonalities of
the proposals and the efforts of the Council.  He was confident that the Council could work out the
differences in approaches, for example waiver versus moratorium.
180. The representative of the United States said he wanted to provide some further clarity to the
Members about its delegation's proposals in response to some of the comments that had been made.
The representative from Hungary had asked some specific questions directed to the United States and
these questions went to the issue of dispute settlement; how much legal certainty there was, how
certain could Members be that they would not be faced with dispute settlement under one proposal oranother and what was the effect on Members' domestic law under one proposal or another.  In
response to the latter point, he stated that it would be up to each and every individual Member to
determine what they did with their domestic law under any of these procedures.  Whether talking
about a waiver, an amendment or any other proposal , Members were free to decide whether to change
their laws or not.  That was their decision and, of course, depending on what decision they took theymight be open to dispute settlement or not.
181. With respect to dispute settlement itself, in  his view there was an important difference
between the various legal mechanisms with respect to providing certainty against dispute settlement.
It was quite safe to assume that, if Members were granted a waiver by the TRIPS Council to act in a
particular way, it was highly unlikely that, after that had been granted, some Members would comealong later and file a dispute settlement case against them.  On the other hand, some of the other
proposals might not provide this certainty.  For example, the language of Article 30 was quite vague.
If the TRIPS Council relied only on the language of this Article, then he did not think that anybody
had much certainty about their ability to avoid dispute settlement because the terms of that Article
could be interpreted a million different ways.  One of the reasons why his delegation did not think the
Article 30 approach really served the Council's interest was because in order to provide Members the
kind of legal certainty they wanted in this process, the Council would have to flesh out Article 30.There were no safeguards, there were no contracts, there was nothing for Members to rely on and the
Council would have to embark on a negotiation to flesh that out, line by line.  Whereas on the other
hand, Article 31, which contained the compulsory licensing provisions that had already been
negotiated in the Uruguay Round, already had the conditions outlined in paragraphs (a) through (l).
These were built-in security for Members in k nowing how they could operate and avoid dispute
settlement and would not require renegotiation.  So, in his view, if it was legal certainty that the
TRIPS Council wanted, Article 31 provided a much better opportunity.  In addition, the TRIPS
Council had recognized that Article 31(f) contained the export restriction that was of primary concern.
He asked Members why they did not go to the root of the problem and have a very clear focus on that
problem, rather than trying to tackle Article 30, which was a much broader provision, and then tryingto build in the safeguards.
182. Recalling that a number of delegations had referred to his suggestion that developed country
producers be excluded, he re-emphasized that devel oped country producers were not excluded.  There
was opportunity for developed country producers to respond under this mechanism and that was the
importance of the transparency provisions.  In the first instance, the patent holders should be able torespond with offers of severely discounted prices to address the situation of the country in need.   This
certainly had been the case with the situation in Brazil which had not issued a compulsory licenceIP/C/M/36
Page 46
ultimately because the patent holder had, when notified of the need, given a response.  He believed
that this was in fact the exact situation the TRIPS Council was trying to establish for all Members.  So
again he wanted to correct any impression that Members had that his delegation did not feel that
developed country producers had an opportunity and a responsibility to be part of the solution.
183. Lastly he emphasized that the reason why the solution had always, in his view, focused on
developing and least-developed countries was because of the fact that, prior to Doha, when Members
were discussing this issue in Geneva, he had understood that the concern Members had was about
what happened after 2005 when certain developing country Members, that had enormous
pharmaceutical industries and were going to be required to provide patent protection, and about
whether such Members could still be able to be low- cost suppliers.  It was not a discussion about the
situation in the developed world but about how Members could fix the problem that might be created
in 2005 when there was patent protection in these countries.  For Members to now claim that this wasnot the problem that concerned the TRIPS Council but that it was  actually a much broader problem
about the global availability of generic drugs was incorrect.  Clearly, if the TRIPS Council provided
Members an opportunity to seek pharmaceuticals from another developing country through a
compulsory licensing system, the TRIPS Council would have addressed the problem about what
would happen in 2005, when some governments had to provide pharmaceutical patent protection.  Itwas not the case that the TRIPS Council needed to address the situation in the developed world in
order to be responsive to the original concern.
184. There was no question, in his view, that it was perfectly consistent with the TRIPS Agreement
to issue a compulsory licence to an importer in  a country to bring a pharmaceutical in or any patented
invention in from another Member.  The only issue was whether or not there was a patent in the otherMember so that it could export.  If there was a patent, then there was the restriction of Article 31(f).
However, there should be no question that under the TRIPS Agreement one could issue a compulsory
licence to import.  The representative from India had advocated Article 30 because of some
uncertainty about being able to import under a compulsory licence and he hoped there was no
question or confusion about that issue.
185. Lastly, with respect to the US paper, he explained that there was a footnote on the kind of
remuneration that was available under a compulsory licencing mechanism.  This footnote was
motivated by two purposes:  first, to make sure Members knew that the paper was not in any way
suggesting that a right holder be provided double remuneration, namely remuneration in the exporting
and importing markets; and  second, to clarify that the paper was also not trying to suggest how that
remuneration was calculated.  The paper did not suggest that because, in his view, the burden should
fall on the exporting country and the level of remuneration should be calculated based on the value ofthe licence in that exporting country.  He was suggesting that a country with insufficient capacity
facing a tremendous health crisis and seeking drugs from somewhere else, that importing country
should not also bear the burden of compensating the patent holder for this compulsory licence.  It was
the exporting country that clearly had more resources or it would not be an exporter.  But in terms of
the calculation, he thought it should be worked out based on the value of the licence, which clearlyhad to take into account that the licence was most likely being used to export to a least-developed or a
poor developing country.
186. The representative of Indonesia said that her delegation was encouraged to see that Members
were convinced of the need to arrive at a solution by the end of the year.  Her delegation believed that
this issue should not be addressed as a problem of a certain group of countries, but rather as ahumanitarian issue in which could give all people the peace of mind that, when a public health
concern arose, the TRIPS Agreement could ensure that all needed medicines would be easily
accessible at affordable prices and at the time they were needed.  The Indonesian delegation agreed
with many others that the best way to move forward was to first agree on the criteria or elements
which the TRIPS Council would like to have in the solution.  She believed that once the Councilfleshed out and agreed on criteria and elements, it would be easier for it to arrive at the most suitableIP/C/M/36
Page 47
solution.  With regard to the proposals that had been tabled, and given some of the criteria that had
been mentioned by Members, in her view there was no one solution that could resolve the problem
identified in paragraph 6.  The Council might have to consider using a combination of solutions and
timeframes.  To this end, her delegation was of the opinion that a combination of an authoritative
interpretation of Article 30 and the Article 31(f) solution could be developed as a comprehensivepackage.  Her delegation did not see the moratorium concept or waiver as  a long-term or durable
solution.
187. The representative of Brazil reacted to the earlier intervention by the United States by raising
some points and asking some questions that could be answered in future meetings.  If the United
States was of the view that it was up to each Member to modify its national law, he questioned why
the TRIPS Council would pre-empt this by excluding a category of countries.  He expressed concern
about the message the TRIPS Council would send if it talked about using a mechanism in whichdeveloped countries were not part of a solution.  He asked whether, once a decision was made, say by
a developing country, to resort to the envisaged mechanism, the beneficiary country could seek
generics in a developed country Member.
188. He recalled that the US representative had mentioned that it was "unlikely" that after a waiver
there would be use of dispute settlement procedures and said that the word "unlikely" did not offerMembers any legal security.  He recalled that the representative of the United States had mentioned
that there would be a million different interpretations possible in the application of Article 30 and
agreed with this statement.  In this particular case and for this particular purpose, the TRIPS Council
was about to pick one out of the million that would give it legal certainty on how to use this solution.
His delegation absolutely agreed with the clarification made by the US representative that it waspossible to make use of compulsory licences for importation.  As a matter of fact, this possibility was
in the Brazilian law.  He further noted that the reference to the case of Brazil might or might not be an
good example because in those cases a compulsory licences had never been issued.  However, the
proceedings relating to the two compulsory licences, which were not issued, had been very useful in
persuading the patent holders to cooperate in exchange for not issuing those compulsory licences. TheBrazilian Government was not entirely sure, because it had never happened, whether, for example, it
had full manufacturing capacity to produce the active substance to produce the antiretrovirals in
question.  Thus these might or might not be a good examples of the problem on the table.
189. The Chairman said the discussion had been extremely valuable and important for all
Members.  It had been a rich and comprehensive debate in which approximately 50 delegations had
participated.  He suggested that the TRIPS Council in its next working phase should structure its
discussions in a more systematic manner.  To make this possible, he suggested that the Secretariatprepare a thematic compilation of the five written proposals that had been submitted.  This document
would identify various elements or components of these proposals and then set out how each of the
papers addressed each of these elements.  The note s hould also take into account the points raised in
the discussion at the meeting.  In addition, the note should also provide factual information regarding
each of the different legal techniques that had been proposed, covering e.g. the proceduralrequirements relating to each one and information on GATT/WTO experience with the use of these
techniques. As a deadline for the circulation of the document, he proposed mid-July, at least for its
English version.  The Council would then be in a pos ition to plan for a more structured discussion in
the September meeting. The Council would hold an informal meeting on the implementation of
paragraph 6 of the Doha Declaration on TRIPS and Public Health with the help of this note on theafternoon of 24 July and the morning of 25 July.
190. The Council agreed to proceed as suggested by the Chairman.IP/C/M/36
Page 48
(ii) Extension of the transition period provided for in paragraph 7 of the Doha Declaration on the
TRIPS Agreement and Public Health
191. The Chairman recalled that, in paragraph 7 of the Declaration on the TRIPS Agreement and
Public Health, the Ministerial Conference had agreed that least-developed country Members would
not be obliged, with respect to pharmaceutical products, to implement or apply Sections 5 and 7 ofPart II of the TRIPS Agreement or to enforce rights provided for under these Sections until
1 January 2016, without prejudice to the right of least-developed country Members to seek other
extensions of the transition periods as provided for in Article 66.1 of the TRIPS Agreement.  In
paragraph 7, the Ministerial Conference had instructed the Council for TRIPS to take the necessary
action to give effect to this pursuant to Article 66.1 of the TRIPS Agreement.
192. At the Council's informal meeting in February, the Secretariat had been requested to prepare a
draft Decision for the Council to consider in order to carry out that instruction given by the Ministerial
Conference.  This draft Decision had been circ ulated before the Council's meeting in March in
document JOB(02)/12.  At that meeting, the Chair had not pressed for a decision because he had been
aware that some delegations had had some concerns and wanted to reflect on the matter further.  The
Council had agreed that the Chair would hold consultations on that draft Decision before the meeting
in June.
193. The question that had come up in the Chairman's subsequent consultations had been whether
the decision to be made under Article 66.1 of the TRIPS Agreement to extend the transition period
could or should extend to Article 70.8 and 70.9 of the Agreement that contained, respectively, the so-
called mailbox and exclusive marketing rights provisions.  This question had been taken up at the
Council's informal meeting of 17 May 2002.  Views had been expressed that Article 66.1 did notauthorize the Council to apply the extended transition period to the provisions of Article 70.8 and
70.9, but at the same time delegations had indicated a willingness to cover the obligations under the
latter Article, or at least they had expressed flexibility in this regard.  At that informal meeting, the
Secretariat had been requested to prepare prior to the present meeting a draft waiver that could be
applied to least-developed country Members that had obligations under Article 70.8 and 70.9.Accordingly, the Secretariat had circulated a draft waiver in document JOB(02)/57.
194. Turning to the procedures for the adoption of these two Decisions and their interrelationship,
the Chairman said that the TRIPS Council had authority pursuant to Article 66.1 of the TRIPS
Agreement to adopt the draft Decision on the extension of the transitional period for least-developed
countries in respect of pharmaceutical products.  The draft waiver was designed to supplement the
decision on extension by waiving the obligations under Article 70.8 and 70.9 with respect to
pharmaceutical products that some least-developed country Members might have.  If the Councilwould approve the waiver, it would then forward it  to the General Council for adoption in accordance
with Article IX.3 of the WTO Agreement.
195. The representative of Switzerland said that he fully shared the view that obligations under
Article 70.8 and 70.9 of the TRIPS Agreement, where ap plicable, should not prevent attainment of the
objectives of paragraph 7 of the Declaration.  Therefore his delegation understood the arguments infavour of a waiver of least-developed country Memb ers' obligations under Article 70.9 with regard to
exclusive marketing rights with respect to pharmaceutical products.  However, he did not understand
how Article 70.8, the mailbox system, could prevent atta inment of the objectives of paragraph 7 of the
Declaration.  The mailbox system was a simple but effective means to allow least-developed country
Members to adapt their legal systems gradually to the patent obligations under the TRIPS Agreement.Applying such a mechanism in time would put leas t-developed countries in a better position to avoid
being overloaded with patent applications at the date of entry into force of their adapted laws.
Moreover, the Council should give thought to the effects that a waiver on Article 70.8 could have on
the Members' common efforts to increase the transfer of technology to these least-developed
countries.  Before being in a position to approve the draft waiver of the obligations under Article 70.8,IP/C/M/36
Page 49
he wished to have more information in order to understand its implications and whether it would be
for the benefit of least-developed countries.
196. The representative of Senegal, speaking on behalf of least-developed countries, said that the
issue of extension of the transition period for least-developed country Members to 1 January 2016 in
respect of patents and undisclosed information in the area of pharmaceutical products was extremelyimportant for the Members in question.  Given that it affected their development prospects and their
resources available for implementing and complyin g with the TRIPS Agreement, they needed some
grace period to adjust to the TRIPS Agreement.
197. The Ministerial Declaration on the TRIPS Agreement and Public Health had provided least-
developed country Members with an extension of the transition period, in respect of pharmaceutical
products, until the year 2016.  Paragraph 7 started with a reference to the commitment of developed
country Members to give incentives to their enterprises and institutions for technology transfer toleast-developed country Members.  This was elaborated in more concrete terms in paragraph 11.2 of
the Decision on Implementation Issues and Relate d Concerns.  This was important for the least-
developed country Members because the extension of the transition period should not be seen as an
end in itself.  Rather, it should be seen as the period for building institutional, administrative and other
capabilities to enable least-developed countries both to fulfil their obligations and commitments aswell as take advantage of their rights.
198. In various paragraphs of the Doha Ministerial Declaration, Members had agreed that special
and positive measures would be undertaken by the WTO to assist least-developed country Members
to benefit from and be equitably integrated into th e multilateral trading system.  It had been in this
regard that Members had appreciated some unilateral initiatives some Members had taken in favour ofleast-developed country Members as well as the commitments under the Brussels Declaration, and
had gone on to take specific measures in the area of public health with a view to ensure that the
TRIPS Agreement was more responsive to the needs of least-developed country Members and was
interpreted and implemented in a manner that supported Members' efforts to protect public health.
The objectives and principles of the TRIPS Agreement, as stated in Articles 7 and 8 respectively,were designed to ensure an equitable balance between  rights of the society to benefit from advances in
science and technology and private rights relating to intellectual property as defined in the TRIPS
Agreement, taking into account the special circumstances of developing and least-developed country
Members.
199. He thanked the Secretariat for preparing a draft Decision for a waiver, and hoped that
delegations in the TRIPS Council would have no objection to carrying out Ministers' instructions to
the Council.  He said that least-developed country Members would like to request that the extensionof the transition period to 1 January 2016 under paragraph 7 of the Declaration on the TRIPS
Agreement and Public Health be broadened to cover the requirement to grant exclusive marketing
rights under Article 70.8(a) and 70.9 of the TRI PS Agreement, with the understanding that the
enabling provisions for this purpose include Article IX.3 and IX.4 of the WTO Agreement relating to
waivers of WTO obligations, and the provisions of the TRIPS Agreement on the objectives andprinciples of intellectual property protection and on exceptions to intellectual property rights.  This
was necessary to ensure that the requirement to grant exclusive marketing rights did not adversely
affect least-developed country Members, undermine the objectives and principles of the TRIPS
Agreement, and undermine the extended transition period agreed by Members at the Ministerial
Conference.
200. Concluding, he said that, on the basis of the objectives and principles of the TRIPS
Agreement and in line with the Declaration on the TRIPS Agreement and Public Health, least-
developed country Members requested the TRIPS Council, in considering the action to take, to ensure
that the action fully reflected Ministers' instructions  to the TRIPS Council and, further, that the actionIP/C/M/36
Page 50
fully reflected the positive and supportive approach required by the Doha Ministerial Declaration and
the Declaration on the TRIPS Agreement and Public Health.
201. The representative of the European Communities said that his delegation was prepared to
adopt the draft Decision which had been submitted by the Secretariat in March 2002.  A number of
least-developed country Members had meanwhile expressed concerns on the fact that they would stillbe required to comply with the mailbox and exclusive marketing rights requirements before 2016.  He
agreed that exclusive marketing rights were difficult to reconcile with the objectives of paragraph 7 of
the Declaration.  Although they applied for only five years, exclusive marketing rights arguably had
effects similar to those of patents.  They did not confer the same rights as patents, as they were limited
to the right to offer for sale and to sell.  However, their practical effect was that they created a
situation of a market monopoly for a period of fi ve years during the extended transition period.  This
did not match with the spirit of paragraph 7 because generic competition for pharmaceuticals in thebeneficiary countries could be hindered even before 2016.  On these grounds, he agreed that the
exclusive marketing rights requirement could be waived along the lines of the text which had been
prepared by the Secretariat.
202. On the other hand, he said that he failed to see how the mailbox provisions could be counter
to the fulfilment of the objectives of the Declaration because the only obligation they entailed was toset up a procedure for prospective patent applicants to file a patent application.  A mailbox application
had to be taken up after the end of the transition period, in 2016 at the earliest.  If a patent was then
granted, its duration would be limited to the remaining term of protection.  Therefore, it was unclear
what use a waiver of this obligation would have , but he was open to discuss the subject further.
203. The representative of Brazil said that the statements made by Senegal and Zimbabwe
reflected some very important and legitimate concerns, and that he was entirely flexible on this issue
of a waiver.  He said that the draft Decision to gi ve effect to paragraph 7 of the Declaration should be
approved without problems, and that he supported the draft waiver.
204. The representative of the United States said that he fully supported the Secretariat's draft
decision on the extension of the transition period.  He equally supported a waiver of obligations under
Article 70.9 for the reasons that had already been laid out.  He joined Switzerland and the European
Communities in asking what the concern associated with Article 70.8 was, given that it merely
required Members to provide an opportunity for patent applications to be filed and that those
applications be assigned a filing date for patent grants after 2016.  Further consideration should be
given to whether or not it was necessary or even beneficial to waive the obligations under
Article 70.8.
205. The representative of Argentina said that she supported the draft decision on the extension of
the transitional period and the draft waiver of the obligations for the least-developed countries.  She
supported Senegal's statement that waivers should be granted in the spirit of the Doha Ministerial
Declaration and of Article 66.1 of the TRIPS Agreemen t, with the objective of establishing a viable
technological basis.
206. The representative of Canada said she looked forward to an early implementation of
paragraph 7 of the Declaration and added that progress concerning the extensions of the transition
period might serve as a useful model for the waiver approach to of paragraph 6.
207. The delegation of Senegal, speaking this time on behalf of his own delegation, said that he
was seeking legal security for least-developed countries.  Three points had to be cleared up:  (i)
whether the scope of the Decision covered both pharmaceutical products and processes;  (ii) theapplicability of the mailbox provisions;  and (iii) exclusive marketing rights.  He wished to have both
pharmaceutical products and processes included in the coverage of the Decision.  An argument from
the African group in this regard was that "pharmaceutical products should be construed broadly inIP/C/M/36
Page 51
order to be meaningful, rather than narrowly in  a manner that would restrict it to only limited
components of treatment of medicines".1  The draft waiver should cover mailbox and exclusive
marketing rights provisions under Article 70.8 and 70.9.  The review mechanism envisaged in
paragraph 2 of the draft waiver would need further consideration, given that least-developed countries
were not even subject to a review of their legislation in the TRIPS Council until 2006.  A reviewprocess would overburden least-developed countries with work, and would not be in line with the
spirit or the letter of the Declaration.  The Secretariat draft Decision on the extension of the transition
period and draft waiver should be merged and paragraph 2 of the draft waiver should be deleted.  He
was hoping for a rapid decision on the matter.
208. The representative of Zambia said he supported the two statements made by Senegal.
Speaking as the focal point for least-developed countries on TRIPS issues, he said that the decision to
extend the transitional period for least-developed country Members was being made within aparticular context.  It was important that Members fully take into account this context to properly
appreciate the suggestions and approach which had been taken by least-developed countries on this
issue.  Paragraph 7 should be read in the context of the entire Declaration and the objectives of the
TRIPS Agreement.  Apart from affirming that the TRIPS Agreement could and should be interpreted
and implemented in a manner supportive of Members' rights to protect public health, the Declarationconfirmed that the objectives of the Agreement provided an important context with respect to
interpretation and implementation.  In determining the scope and effect of the draft Decision under
Article 66.1, the TRIPS Council must interpret paragraph 7 of the Declaration to ensure that the
Decision fulfil the object and purpose of prov iding least-developed countries with maximum
flexibility in the domestic implementation of laws and regulations in order to protect public health andalso to enable them to create a sound and viable technological base.
209. The first part of paragraph 7 was being discussed in the context of the mandate under
paragraph 11.2 of the Decision on Implementation Issues and Related Concerns as contained in
document WT/MIN(01)/I7).  He announced that a separate communication would be submitted by
least-developed countries regarding the monitoring mechanism.
2  It was the second part of
paragraph 7 that the present draft Decision was meant to address.  There were three main issues that
had immediate relevance in regard to the implementation of paragraph 7 of the Declaration.  These
were:  (i) the applicability of the Decision to pharmaceutical processes and other types of
pharmaceutical patents;  (ii) clarity that least-developed countries shall still have full rights under
Article 66.1 to ask for further extensions not just in respect of the other parts or sections of the TRIPS
Agreement not covered by this Decision but also further extensions with respect to the application and
implementation of Sections 5 and 7 of Part II of the Agreement;  and (iii) whether the obligationsunder Article 70.8(a) and 70.9 would still apply to least-developed country Members during the
period of extension.
210. He further noted that the Declaration referred to "pharmaceutical products" and this was the
language that had been used in the draft Decisio n.  This wording might seem to suggest that the
envisaged extension would not apply in respect of pharmaceutical process patents or other types ofpharmaceutical patents such as use patents.  This concern arose from the distinction under Article 27.1
where it was provided, inter alia ,  that "patents shall be available for any inventions, whether products
or processes".  Least-developed countries were prepared to accept paragraph 1 of the Decision as
drafted by the Secretariat provided that there was a clear understanding that the use of the word
"products" was understood to mean all types of processes under Article 27.1 of the TRIPS Agreement.
211. Regarding the entitlement to further extensions in respect of Sections 5 and 7 of Part II of the
TRIPS Agreement, he stated that least-developed country Members appreciated that paragraph 2 of
the draft Decision might already address this concern.  However, for purposes of clarity, least-
                                                     
1 See paragraph 6(b) of document IP/C/W/351.
2 See document IP/C/W/357.IP/C/M/36
Page 52
developed countries wanted to bring to the notice of all Members their understanding of paragraph 2
of the draft Decision.  The use of the word "other" should be read to mean extensions in respect of all
other sections and parts of the TRIPS Agreement as applicable, as well as further extensions after
2016 in respect of Sections 5 and 7 of Part II of the TRIPS Agreement.
212. As regards the mailbox and exclusive marketing rights, the representative of Zambia said that
the provisions of Article 70.8(a) and 70.9 of the TRIPS Agreement generally applied to Members that
had patent protection for other products and processes but did not allow patents on pharmaceuticals
and agricultural chemicals.  The provisions would therefore not apply to least-developed countries
that had had no patent systems at all at the time of entry into force of the TRIPS Agreement or those
that had already provided patent protection for pharmaceuticals and agricultural chemicals by that
time.  With respect to least-developed countries that  did not fall within the two categories above, if
Article 70.8(a) and 70.9 continued to apply, they would erode the benefits of the extension.  Inparticular, exclusive marketing rights had the effect of enforcing a foreign patent and for all intents
and purposes had the same effect as the grant of a patent for five years.  Least-developed countries
considered it critical that an effective solution be found to ensure that the provisions of Article 70.8(a)
and 70.9 would not apply during the period of extension.  There should be an understanding that the
"enforcement of patent rights" referred to in the Declaration included the provisional enforcementthrough the mailbox and exclusive marketing rights provisions.
213. He explained that the difficulty with addressing this concern through the Decision under
Article 66.1 stemmed from the language of Article 70.8(a) and 70.9, which excluded the application
of the transitional arrangements under Part VI, including those under Article 66.1, to the mailbox and
exclusive marketing rights provisions under Article 70.8(a) and 70.9.  The two paragraphs weredrafted in the language of "notwithstanding the prov isions of Part VI".  In this context, it would
appear that the powers of the TRIPS Council under Article 66.1 of the TRIPS Agreement did not
include powers to suspend and/or postpone the application of the mailbox and the exclusive marketing
rights provisions.  The Secretariat had prepared a draft waiver to facilitate the suspension of the
obligations under Article 70.8(a) and 70.9 for least-developed country Members where applicableuntil 2016.  Having considered the draft waiver, least-developed countries were of the view that the
TRIPS Council should approve the draft waiver Decision as it was and recommend that the General
Council adopt it to facilitate this process.
214. The Chairman proposed that the Council revert to this matter later in the course of the present
meeting and that, in the meantime, he consult with the delegations most involved in this issue.
215. Following these consultations, the Chairman proposed that the Council adopt the Decision on
the "Extension of the Transition Period under Article 66.1 of the TRIPS Agreement for Least-Developed Country Members for Certain Obligations with respect to Pharmaceutical Products"
contained in document JOB(02)/12
3 and approve the revised draft waiver on "Least-Developed
Country Members – Obligations under Article 70.9 of the TRIPS Agreement with respect to
Pharmaceutical Products" contained in document JOB(02)/57/Rev.14 and agree to forward it to the
General Council for adoption.  In doing so, he stated that it was understood, in regard to the reviewforeseen in paragraph 2 of the draft waiver, that the exceptional circumstances justifying this waiver
would continue to exist for least-developed country Members until its expiry date of 2016.
216. The Council so agreed.
217. The representative of Uganda, speaking on behalf of least-developed countries, thanked the
Chairman and the Secretariat for their efforts and delegations for their understanding that had allowed
the Council to reach a successful conclusion to the matter.  While he would have preferred the waiver
                                                     
3 Subsequently circulated in document IP/C/25.
4 Subsequently circulated in document IP/C/W/359.IP/C/M/36
Page 53
to cover also Article 70.8, he had not, in the spirit of compromise and cooperation, insisted on this.
However, he expressed his hope that this would not bring least-developed countries an overbearing
pressure to grant patents based on applications that were filed before the expiry of the transition
period.  The waiver had been granted to be co-existing and last for the period of the extension of the
transition period agreed in Doha, namely until 1 January 2016.  He did not expect the waiver to be
terminated before the expiration of this transition period.  He added that the review process in
paragraph 2 of the draft waiver should not be unduly cumbersome or burdensome or in any way
inconsistent with the administrative and financial capacities of least-developed countries and,
therefore, it was understood that it would be without prejudice to an automatic application until the
year 2016.
__________