# CE2004088EN.01009001.xml

| 8.4.2004 | EN | Official Journal of the European Union | CE 88/90 |
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8.4.2004

EN

Official Journal of the European Union

CE 88/90

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(2004/C 88 E/0097)

WRITTEN QUESTION P-2514/03

by Dorette Corbey (PSE) to the Commission

(21 July 2003)

Subject:   Medicinal products: specific exception to patent rights

Subject:

In its amended proposal for a directive of the European Parliament and the Council amending Directive 2001/83/EC (1) on the Community code relating to medicinal products for human use, the Commission states that it does not accept amendment 196, which introduces a specific exception to patent rights, allowing for the production of medicinal products intended for export to third countries, at the request of the authorities of the third country in question, when it is covered by a patent.

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| 1. | Can the Commission clarify how the text of the amendment does not meet the strict conditions on exception on patent rights set by the TRIPs and what these conditions exactly are? |
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1.

Can the Commission clarify how the text of the amendment does not meet the strict conditions on exception on patent rights set by the TRIPs and what these conditions exactly are?

| 2. | How should the text be adapted in order to respect the conditions and correspond to the spirit in which this amendment is proposed? |
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2.

How should the text be adapted in order to respect the conditions and correspond to the spirit in which this amendment is proposed?

| 3. | Can the Commission clarify why such a provision does not have a place in this legislation and in which legislation this should be addressed in the Commission's view? |
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3.

Can the Commission clarify why such a provision does not have a place in this legislation and in which legislation this should be addressed in the Commission's view?

Answer given by Mr Lamy on behalf of the Commission

(14 August 2003)

(14 August 2003)

Article 30 of the Trade-Related aspects of Intellectual Property Rights (TRIPs) Agreement provides that Members of the World Trade Organisation (WTO) ‘may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties’.

This means that, when introducing exceptions to patent rights, WTO Members have to make sure that the following three conditions are fulfilled:

| 1. | the exception must be limited; |
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1.

the exception must be limited;

| 2. | it must not unreasonably conflict with a normal exploitation of the patent; |
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2.

it must not unreasonably conflict with a normal exploitation of the patent;

| 3. | it must not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties. |
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3.

it must not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties.

Typically, this provision has been invoked to justify ‘research exemptions’ (allowing free use of a patented invention for the purpose of research), so-called ‘Bolar exemptions’ (allowing free production of limited amounts of patented drugs for the purpose of submitting them to authorities in view of obtaining marketing approval) or ‘farmers’ privileges' (allowing certain categories of farmers to freely use protected propagating material for further multiplication on their own farm — see Article 11 of Directive 98/44/EC of the Parliament and the Council of 6 July 1998 on the protection of biotechnological inventions (2)). This list is not limitative.

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Article 30 has been interpreted by a panel under the dispute settlement provisions of the World Trade Organisation in the case ‘Canada — Patent Protection of Pharmaceutical Products’ (WT/DS114/R of 17 March 2000). The panel came to the conclusion that the Canadian ‘regulatory review exemption’ (Bolar provision) meets the three conditions of Article 30 of the TRIPs Agreement, but found that the so-called ‘stockpile exemption’ (allowing companies to produce and stockpile patented pharmaceuticals during the patent term in view of selling them immediately after expiration of the patent) does not meet these criteria. In particular, the panel found that the absence of any limitation upon the quantity of the production during the patent term resulted in a substantial curtailment of the exclusive rights of the patent holders. Therefore, the panel concluded that it could not be considered as a ‘limited exception’ within the meaning of Article 30 of the TRIPs Agreement. Although this panel report was not reviewed by the Appellate Body and has no binding precedential value, it provides useful guidance to the interpretation of Article 30 of the TRIPs Agreement.

The Commission takes the view that, as drafted, Amendment 196 of the Parliament's proposal amending the Community code relating to medicinal products for human use, provides no guarantee that the proposed exception would meet any of the three criteria. For example, the proposal does not provide any mechanism to ensure that the exception would indeed be applied only for manufacturing those products needed by countries without manufacturing capacity in the pharmaceutical sector. Likewise, it does not contain any condition to ensure that these products would indeed be exported only to the countries in need and to prevent diversion to other markets.

Moreover, the Commission takes the view that, since ongoing work in the World Trade Organisation to address the problems of countries without manufacturing capacity in the pharmaceutical sector (cf. paragraph 6 of the WTO Doha Declaration on the TRIPs Agreement and Public Health) is based on Article 31 of the TRIPs Agreement, it is inappropriate to implement, at Union level, a mechanism based on another provision of the TRIPs Agreement. Indeed, the Draft Decision of 30 December 2002 implementing paragraph 6 of the WTO Doha Declaration on the TRIPs Agreement and Public Health (the so called ‘Perez Motta text’) provides for a system based on the granting of compulsory licences for export (i.e. Article 31 of the TRIPs Agreement) rather than through the introduction of a general exception on the basis of Article 30 of the TRIPs Agreement. This Draft Decision was endorsed by all Members of the WTO, with the exception of the United States, and the Commission is working hard to ensure that it can be formally adopted by all WTO Members by the Ministerial Conference of Cancun (September 2003).

Finally, the Commission takes the view that any mechanism concerned with the relationship between the exercise of patent rights and the export of medicines to certain categories of third countries would in effect involve a partial harmonisation of patent law within the Union and would therefore not have its proper place in the present directive, which is concerned with placing on the market medicinal products within the Union.

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(1)  OJ L 311, 28.11.2001, p. 67.

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(2)  OJ L 213, 30.7.1998.

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