IP/C/W/643  
 
25 May 2018  
(18-3142) Page: 1/3 
Council for Trade -Related Aspects of  
Intellectual Property Rights  Original: English  
 
INTELLECTUAL PROPERT Y AND THE PUBLIC INT EREST:  
PROMOTING PUBLIC HEA LTH THROUGH COMPETIT ION LAW AND POLICY  
COMMUNICATION FROM C HINA AND SOUTH AFRIC A 
The following communication, dated 24 May 2018, is circulated at the request of the delegations of 
China and South Africa.   
 
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1.  In September 2015, 193 Member States of the United Nations adopted the 2030 Agenda for 
Sustainable Development ( 2030 Agenda). This agenda includes Sustainable Development Goal 
(SDG) 3 that aims to ensure healthy lives and promote the well -being of all people of all ages. 
Soon after Member States adopted the 2030 Agenda for Sustainable Development, Ban Ki -moon, 
then Secretary General of the United Nations, convened an independent High -Level Panel (HLP) on 
Access to Medicines to investigate the relationship between intellectual  property , access to health 
technologies, incentives for research and development and the opp ortunities to strengthen 
governance, accountability and transparency.  
2.  The HLP issued its report in September 2016 and called for steps to be taken "…to ensure that 
global intellectual property regimes and the application of the flexibilities of the Agreem ent on 
Trade -Related Aspects of Intellectual Property Rights (TRIPS) are fully consistent with and 
contribute to the goals of sustainable development. "1 
3.  The TRIPS Agreement strikes an appropriate balance between the interests of right  holders and 
users. Ar ticle 7 of the TRIPS Agreement recognizes that the protection of intellectual property 
should contribute to the promotion of technological innovation and to the transfer and 
dissemination of technology, to the mutual advantage of users and producers of tec hnological 
knowledge and in a manner conducive to social and economic welfare and to a balance of rights 
and obligations.  
4.  The TRIPS Agreement also recognizes that the principles of IP protection are based on 
underlying public policy objectives. Article 8 .1 of the TRIPS Agreement states that WTO Members 
may, in formulating or amending their laws and regulations, adopt measures necessary to protect 
public health and nutrition, and to promote the public interest in sectors of vital importance to 
their socio -economic and technological development, provided that such measures are consistent 
with the provisions of this Agreement. Article 8 .2 further states that appropriate measures may be 
adopted by Members to prevent the abuse of IPRs by right holders, or where right holders resort 
to practices which unreasonably restrain trade or adversely affect the international transfer of 
technology. It should be noted that Article 8 .2 is not exclusively concerned with competition law 
violations but can be applied more gener ally as a general concept of abuse of IPRs.  
5.  The "objectives " and "principles " enshrined in Articles 7 & 8 of  the TRIPS Agreement form 
central elements of interpretation of the TRIPS Agreement, especially with regard to such 
provisions that leave flexibilit ies to legislate at the national level. In the WTO case of 
                                                
1 United Nations "Report of the United Nations Secretary -General 's High -Level Panel Report on Access to 
Medicine: Promoting innovation and access to health technologies. " September (2016), p. 12.  IP/C/W/643  
 
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  Canada -Patent Protection for Pharmaceutical Products2 the panel noted that "the exact scope of 
Article 30 's authority will depend on the specific meaning given to its limiting conditions ." To this 
end, the goals enumerated in Articles 7 and 8.1 are relevant when doing so.  
6.  A plethora of safeguards or flexibilities have become integral parts of the TRIPS framework. 
These flexibilities can be used to pursue public health objectives. However, to  implement these 
flexibilities, action is needed at the domestic level by incorporating them into national IP regimes 
keeping in mind each country 's individual needs and policy objectives. Key TRIPS flexibilities 
include transition periods for LDCs (extend ed by the WTO until 1 January 2033), differing IP 
exhaustion regimes, refining the criteria for grant of a patent (patentability criteria), pre -grant and 
post-grant opposition procedures, as well as exceptions and limitations to patent rights once 
granted,  including regulatory review exception ( "Bolar" exception) to facilitate market entry of 
generics, compulsory licences and government use. Despite such flexibility, many least developed 
and developing countries cannot implement competition regimes due to t he lack of capacity to use 
competition law to achieve public health objectives. The WTO, WIPO and WHO report on IP and 
Public Health notes: "[S]everal potentially anti -competitive strategies in relation to IP rights 
involving medical technology have been o bserved and documented. These strategies mostly are 
designed to extend patent protection for originator drugs and to prevent market entry by generic 
competitors after patent expiry. "3 
7.  Competition law is one of the least discussed flexibilities within the W TO's TRIPS Agreement. 
The fundamental objective of competition law is to protect the integrity of competitive markets 
against abusive conduct, and to protect consumers from the effects of such conduct. Even though 
the TRIPS Agreement sets minimum norms for  standards of IP protection that significantly limit 
Members ' discretion on a large number of IP rights issues, it is not the case with competition law.  
Members are free to design competition laws in such a way so as to take account of their domestic 
interests and needs, including taking account of their respective levels of development, subject 
only to the natural limits defined by the territorial limits of such laws.4  
8.  Various other provisions of the TRIPS Agreement are relevant to competition law includ ing 
Article 6, Article 31( k) and Article 40. As such, these provisions leave broad discretion to Members 
in how they apply competition law in respect of the acquisition and exercise of IP rights. Article 6 
of the TRIPS Agreement authorizes WTO Members to a llow parallel importation of health 
technologies, a major pro -competitive form of activity that can be used to secure the lowest priced 
products available on international markets. Article 31(k) of the TRIPS Agreement confirms the 
right of Members to use s uch licences as anti -competitive remedies. The only condition required by 
Article 31(k) for the grant of this type of compulsory licence is that the anti -competitive practice 
needs to have been determined through a judicial or administrative process. The p ossible use of 
compulsory licences to deal with anti -competitive practices, as explicitly recognized in Article 31(k) 
of the TRIPS Agreement, is of particular importance to protect public health in cases, for instance , 
of excessive pricing of health techno logies or refusal to grant a licence on reasonable commercial 
terms.  
9.  The sponsors of this communication urge Members to share their national experiences and 
examples of how competition law is used to achieve public health and related national objectives. 
Debate and information exchange could serve to enhance understanding of Members of various 
approaches to the use of competition law and policy to prevent or deter practices such as collusive 
pricing or the use of abusive clauses in licensing agreement that  unreasonably restrict access to 
new technology, prevent the entry of generic companies and may result in higher prices for 
medicines. The issue of abuse of IP rights remain s relevant in the context of the application of 
national and regional competition l aw regimes.  
                                                
2 WT/DS114/R, 17 March 200 0, ad. par. 7.26.  
3 WHO/WIPO/WTO 'Promoting Access to Medical Technologies and Innovation. Intersections between  
Public Health, Intellectual Property and Trade ." Geneva 2012, 198  
 http://www.who.int/phi/promoting_access_medical_innovation/en/   
4 Carlos Correa "Intellectual property and  competition – room to legislate under international law. " in 
Using Competition Law to Promote Access to Health Technologies . (UNDP: 2014) at p. 36 . IP/C/W/643  
 
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  Guiding questions : 
 
 What grounds are available in their national laws to pursue competition law and policy to 
achieve public health outcomes?  
 What are the difficulties faced by WTO Members in using competition law policy to 
prevent or deter ab usive practices, including capacity constraints, pressure from other 
Members and Corporations?  
 Unreasonably high royalties may deter the transfer of technology. What policies have 
Members established to deal with technology pricing and other aspects of tra nsfer of 
technology transactions?  
 Compulsory licences have been used by competition authorities in some countries to 
restore competition in cases involving the exercise of IP rights. What are the experience s 
of Members in using compulsory licenses, noting the flexibilities inherent in Article 31(k) 
of the TRIPS Agreement ? 
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