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Implementation of WTO decision on paragraph 6 of Doha: Proposed amendment to Swiss patent law and the comments of the Berne Declaration (09.12.04)
Implementation of WTO decision on paragraph 6 of Doha: Proposed amendment to Swiss patent law and the comments of the Berne Declaration
Switzerland is currently reviewing its patent law. It will add two articles in its patent law in order to implement the 30 August 2003 WTO decision on compulsory licences for export in countries without manufacturing capacities for pharmaceutical products. The Berne Declaration has taken part in the public consultation on the proposed law and has made comments and suggestions on it (see below II.).
I. Provisions proposed by the Swiss government in the draft for a revised patent law:
G. Compulsory licences for the exportation of pharmaceutical products
Art. 40c (new)
1. Any person can request a non exclusive compulsory license to the court for the manufacturing and exportation of pharmaceutical products protected by a patent to a country having insufficient or no manufacturing capacities in the pharmaceutical sector and whose population is affected by public health problems such as HIV/Aids, tuberculosis, malaria or other epidemics (beneficiary country).
2. If a country declares that it gives up partially or totally the possibility of benefiting from a license according to paragraph 1, it is accordingly excluded from the system.
3. Only the quantity of pharmaceutical products necessary to satisfy the needs of the beneficiary country may be produced under the license foreseen in paragraph. 1; the total amount of said production must be exported to the beneficiary country.
4. The licensee must ensure that his products may be distinguished from the ones protected by the patent.
5. The federal Council specifies the conditions for the granting of a license foreseen in paragraph 1. It lays down in particular the object, the beneficiary countries and the conditions of the license, as well as the measures that have to be taken in order to prevent the diversion of the products.
H. Provisions common to art 36 to 40c
Art. 40d
1. The licenses referred to in Articles 36 to 40c shall only be granted if the efforts undertaken by the petitioner to obtain a contractual license on reasonable commercial conditions have not succeeded within a reasonable period of time. Such efforts shall not be a requirement in situations of national emergency or in other circumstances of extreme urgency.
2. The scope and duration of licenses shall be limited to the purposes for which they have been granted.
3. Licenses may only be assigned together with that part of the enterprise in which they are worked. The same shall apply to sublicenses.
4. Licenses shall be granted mainly for the supply of the internal market. Art. 40c is reserved.
5. On a petition, the court may withdraw a license from the person holding it if the circumstances that have led to its grant cease to exist and it appears probable that they will not reoccur. The legitimate interests of the entitled person shall enjoy adequate protection.
6. The owner of the patent shall be entitled to equitable remuneration. That remuneration shall be determined as a function of the particular case and of the economic value of the license.
7. The court shall decide on the grant and withdrawal of a license, on the scope and duration of the license and on the remuneration to be paid.
Original documents are available in French:
http://www.ige.ch/F/jurinfo/j100.shtm#2
Original documents are available in German:
http://www.ige.ch/D/jurinfo/j100.shtm#2
II. Comments by the Berne Declaration
1) Scope of diseases
The proposed draft should be modified to make clear that all public health problems are included and that it is not limited to large epidemics of communicable diseases like HIV/AIDS, malaria and tuberculosis. This is important since the explanatory report of the Swiss government in German and French is ambiguous and only mentions serious public health problems such as HIV/AIDS or malaria (in German "gravierender öffentlicher Gesundheitsprobleme wie beispiels-weise von HIV/Aids oder Malaria" (page 32), in French "graves problèmes de santé publique, comme le VIH/sida ou le paludisme" (page 33) ). Such wording restricts the Doha Declaration on the TRIPS agreement and public health that Switzerland signed in November 2001.
2) Relevant products
In its explanatory report the Swiss government considers that vaccines and diagnostics tests are included in the definition of pharmaceutical products. This is a positive point.
3) Eligible countries
The proposed draft should be modified to make clear that all countries may be eligible. Switzerland should not add other conditions for excluding countries.
4) Type of procedure
In the draft the compulsory licences for export to countries without manufacturing capacities for pharmaceutical products would be granted through a procedure before a court. This might be a long, expensive and burdensome procedure. Compulsory licences granted through an administrative procedure would be shorter, cheaper and easier. We regret that the Swiss government does not explore that possibility.
5) Impact of measures against diversion on price
The procedure insists on measures against diversion regardless of their impact on the prices of the products. The draft should be modified to make clear that measures against diversion does not increase the prices of the products.
6) Royalties
The proposed draft should be modified to fix the royalties to a maximum of 2% of the value of the product. Other solutions such as a percentage in relation to the Human Development Index like in the similar Canadian patent law amendment (C9) should be explored.
7) No unnecessary double negotiations
According to the 30th August 2003 WTO decision, compulsory licences will have to be granted twice, in the importing country and the exporting country, if the product is patented in both countries. Therefore the proposed draft should be modified to ensure that the applicant is not obliged to negotiate a second time with the patent holder in the exporting country if the negotiation has already failed in the importing country.
The text of the comments and proposals on the revision of the Swiss patent law by the Berne Declaration is available in German (original text):
Vernehmlassung zum Entwurf zum Bundesgesetz über die Erfindungspatente
Also availalbe in French (translation):
Commentaire et propositions sur la consultation sur le projet de loi sur les brevets d'invention
JR/21.10.2004
