KENFOX IP & Law Office > IP Practice  > Related Matters in Vietnam  > Doha Declaration and Applicability of Compulsory Licensing

Doha Declaration and Applicability of Compulsory Licensing

Doha Declaration

The Doha Declaration on the TRIPS Agreement and Public Health (the “Doha Declaration”), which was ratified by the WTO Ministerial Conference in Doha on 14 November 2001, generally does not change the principles of TRIPS Agreement.

For the Doha Declaration, the following contents should be noted:

“4. The TRIPS Agreement does not and should not prevent Members from taking measures to protect public health. Accordingly, while reiterating our commitment to the TRIPS Agreement, we affirm that the Agreement can and should 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.

In this connection, we reaffirm the right of WTO Members to use, to the full, the provisions in the TRIPS Agreement, which provide flexibility for this purpose.

5. Accordingly and in the light of paragraph 4 above, while maintaining our commitments in the TRIPS Agreement, we recognize that these flexibilities include:

(a) In applying the customary rules of interpretation of public international law, each provision of the TRIPS Agreement shall be read in the light of the object and purpose of the Agreement as expressed, in particular, in its objectives and principles.

(b) Each Member has the right to grant compulsory licenses and the freedom to determine the grounds upon which such licenses are granted.

(c) Each Member has the right to determine what constitutes a national emergency or other circumstances of extreme urgency, it being understood that public health crises, including those relating to HIV/AIDS, tuberculosis, malaria and other epidemics, can represent a national emergency or other circumstances of extreme urgency.

(d) The effect of the provisions in the TRIPS Agreement that are relevant to the exhaustion of intellectual property rights is to leave each Member free to establish its own regime for such exhaustion without challenge, subject to the MFN and national treatment provisions of Articles 3 and 4.

6. We recognize 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. We instruct the Council for TRIPS to find an expeditious solution to this problem and to report to the General Council before the end of 2002.”

So the Doha Declaration mainly aims to clarify TRIPS’s flexible measures and ensure that governments can apply them. The Declaration affirmed that the TRIPS Agreement does not and will not prevent member countries from taking necessary measures to protect public health and reaffirm the rights of WTO member states to fully use the flexible regulations of the TRIPS Agreement for such purposes. It can be seen from paragraph 6 above that countries that are unable to produce drugs may face difficulties in using compulsory licenses in addressing public health issues, and the Council for TRIPS is instructed to find an expeditious solution to this problem.

In addition, the Doha Declaration has a change in relation to paragraph f, Article 31 of TRIPS Agreement, which stipulates that compulsory licenses are granted only for domestic cases. The 2001 WTO Ministerial Conference decided that this provision should be changed in such a way that compulsory generic drugs manufactured under license can be exported to countries that are not capable of producing such drugs under some required conditions and procedures. All WTO members have the right to import such drugs under this provision, but 23 developing countries have declared not to apply import rules, including: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Iceland, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom and United States. Having joined the EU, the following 10 countries have also joined the list: Czech, Sip, Estonia, Hungary, Latvia, Lithuani, Manta, Poland, Solvakia, and Slovenia. Meanwhile, 11 other countries have voluntarily stated that they will only apply this drug import system only in national emergencies or other emergency situations: Hong Kong, Israel, South Korea, Kuwait, Macau, Mexico, Qatar, Singapore, Taiwan, Turkey and the United Arab Emirates.

Applicability of compulsory licensing

The compulsory patent licensing is applied in special situations under certain conditions. These are normally situations that cause any imbalance of benefits which tends to damage the interests of society. The compulsory licensing of patent rights is considered an effective tool to combat the tendency of patent infringement, to hinder access to protected products by taking advantage of monopoly to unreasonably raise prices for selling products. The obvious effect of compulsory patent licensing in reducing product selling prices is to supplement the product supply, thereby reducing or breaking the monopoly of the patent owner.

We list below some situations where compulsory licensing is applicable:

(i)  when a generic drug is produced primarily for the domestic market and not for export, for pharmaceutical inventions, the patent protection in the pharmaceutical sector has a great impact on the price of medicines, thereby affecting the right to access cheap generic drugs to the poor in developing countries, including Vietnam.

(ii) in national emergencies, other emergencies or noncommercial use for the community, or any use by the government, or any opposition against the cases where competition must be taken, there is no need to negotiate a voluntary license but may grant a compulsory license immediately. TRIPS Agreement has made it possible to bypass voluntary licensing negotiations to save time in emergencies.

(iii) the patent owner fails to meet market requirements, makes the market scarce or pushes the price of goods up such that consumers are unable to access the goods, thereby threatening the safety of society.

In order to apply compulsory licensing of patent rights, some following other conditions must be met:

(i) the person who has the right to use the invention must be competent to perform the use;

(ii) the use of the invention after the compulsory licensing actually overcomes the previous inadequacy (for example, overcoming the shortage of goods or reducing the selling price of goods …);

(iii) a person who is granted the right to use an invention may not grant such right to others.

The patent license shall be invalidated if the reason for compulsory patent licensing no longer exists. The compulsory licensing must be notified to the patent owner, and the patent owner must be reasonably compensated for the loss of benefits due to the use of his or her invention by others.