Schedule 2 of the INTELLECTUAL PROPERTY LAWS AMENDMENT BILL 2013 read before the House of Representatives on 30 May 2013 proposes amendments to enable least-developed and developing countries to source generic versions of patented pharmaceutical products from Australia to treat public health crises. In this, the second of 6 posts relating to the proposed changes, we take a closer look at the proposal for a ‘manufacture for export’ exception to pharmaceutical patent rights in Australia.

Background

The owner of a patent has the exclusive right to exploit their patent, which includes the sale of patented products and products made using patented processes, and importantly also includes manufacture, use and other activities. Accordingly, anyone making a patented product or using a patented process in Australia without the patent owner’s permission risks liability for infringement – even if they export the product without any intention of ever selling it domestically.

However, under the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property (the TRIPS Agreement), products made under compulsory licence must be predominantly for the supply of the domestic market and are not allowed to be exported. This creates a problem for WTO countries facing a public health crisis, such as an HIV/AIDS, malaria or influenza epidemic, that have insufficient capacity to manufacture the necessary pharmaceuticals themselves and cannot afford to purchase them in the normal manner. Such countries would not be able to obtain patented pharmaceuticals produced under compulsory licence in another WTO country because such products could not be exported under current laws.

The TRIPS protocol seeks to address this problem by amending the TRIPS Agreement to permit WTO members to issue compulsory licences to produce patented pharmaceutical products for export to least-developed and developing countries, and will be of interest to Australia’s thriving innovator and generic pharmaceutical industries

Proposed Changes

Australia had accepted the TRIPS Agreement and Schedule 2 of the INTELLECTUAL PROPERTY LAWS AMENDMENT BILL 2013 proposes amendments to implement the protocol in Australia, to enable countries to source generic versions of patented pharmaceutical products from Australia. The intention is to provide least-developed and developing countries that do not have the capacity to manufacture the medicines necessary to treat public health crises with the medicines they need.

The proposed amendments provide that a ‘pharmaceutical product’ is defined as any patented product, or product manufactured through a patented process, of the pharmaceutical sector.

A rough outline of the proposed process for obtaining and exercising a compulsory licence under the interim waiver / TRIPS Protocol is as follows:

Click here to view flowchart.

Extensions of Term

With regard to the pharmaceutical extensions of term, the proposals include that if an inclusion on the Australian Register of Therapeutic Goods was sought for the sole purpose of exporting goods containing the pharmaceutical substance from Australia to be used in an eligible importing country as set out above, then this inclusion is to be disregarded for the purposes of calculating both (1) the period within which an application for an extension of patent term must be made, and (2) the actual extension period.

We might see further discussion of the interface of TRIPS, extensions of patent term and The Australia-US Free Trade Agreement in the final report of the Pharmaceutical Patents Review due shortly.

Application

It is intended that the amendments are proposed to apply to all existing patents and patents for which the application was filed before the commencement of the changes.