<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML xmlns:o = "urn:schemas-microsoft-com:office:office"><HEAD>
<META http-equiv=Content-Type content="text/html; charset=iso-8859-1">
<META content="MSHTML 6.00.2745.2800" name=GENERATOR>
<STYLE></STYLE>
</HEAD>
<BODY bgColor=#ffffff>
<DIV><FONT face=Arial size=2>(An excellent two-part piece to add to our
preparation for PHA II)</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify; tab-stops: 354.0pt 360.75pt"><SPAN
lang=EN-GB style="FONT-SIZE: 11pt"><FONT
face="Times New Roman"><STRONG> </STRONG></FONT></SPAN><SPAN
lang=EN-GB><FONT face="Times New Roman" size=3><STRONG>History of
Negotiations</STRONG> </FONT></SPAN></P>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify; tab-stops: 354.0pt 360.75pt"><SPAN
lang=EN-GB style="FONT-SIZE: 11pt"><FONT
face="Times New Roman"> <o:p></o:p></FONT></SPAN></P>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify; tab-stops: 354.0pt 360.75pt"><SPAN
lang=EN-GB style="FONT-SIZE: 11pt"><FONT face="Times New Roman">In 1986 a new
round of negotiations was initiated under GATT (General Agreement on Tariffs and
Trade). Popularly known as the Uruguay Round of negotiations, this new round was
used by the developed countries to orient world trade to suit their interests.
It was used to introduce a number of issues on the agenda, which were hitherto
not considered as trade issues and hence not covered by GATT. Prominent among
these were issues related to Patents, Investment, Environment and Labour
standards. The ploy was clear - to use the threat of trade embargoes to force
developing countries to follow the diktats of developed countries on a whole
range of economic and industrial policies on one hand, and on the other to use
these new issues to create barriers against developing countries wishing to
access the domestic markets of developed countries.
<o:p></o:p></FONT></SPAN></P>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify; tab-stops: 354.0pt 360.75pt"><SPAN
lang=EN-GB style="FONT-SIZE: 11pt"><FONT
face="Times New Roman"> <o:p></o:p></FONT></SPAN></P>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify; tab-stops: 354.0pt 360.75pt"><SPAN
lang=EN-GB style="FONT-SIZE: 11pt"><FONT face="Times New Roman">The basis for
negotiations was the infamous Dunkel Draft (named after Arthur Dunkel - the key
author of the negotiating text). The most contentious portion of the Dunkel
Draft was that which related to Patents - termed as Trade Related Intellectual
Property Rights (TRIPS) in the Dunkel Draft. Patent is a form of monopoly that
is granted to an inventor for a limited period (20 years according to the final
agreement), during which the inventor has the sole right to use the invention
and benefit from its applications. Patents are granted as an incentive for
innovation. At the same time Patent laws all over the world have safeguards to
prevent the abuse of the monopoly granted to the Patent holder.
<o:p></o:p></FONT></SPAN></P>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify; tab-stops: 354.0pt 360.75pt"><SPAN
lang=EN-GB style="FONT-SIZE: 11pt"><FONT
face="Times New Roman"> <o:p></o:p></FONT></SPAN></P>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify; tab-stops: 354.0pt 360.75pt"><SPAN
lang=EN-GB style="FONT-SIZE: 11pt"><FONT face="Times New Roman">India, since
1970, had a Patent law that was seen by many as a model for other developing
countries. The Indian Law stressed on the obligations of the Patent holder and
had strong provisions that prevented the abuse of the Patent holder’s monopoly
rights. Of particular importance was the fact that the Indian Patent law did not
provide for monopoly rights in the area of drugs and agro-chemicals. The results
were clear - the Indian drug industry developed to become the strongest and most
self-reliant industry in the developing world. Today the campaign on access to
drugs draws strength from Indian companies like Cipla who are offering anti-AIDS
drugs at one tenth to one fortieth of the prices being charged by large
pharmaceutical companies. This became possible because of India’s liberal Patent
law of 1970. <o:p></o:p></FONT></SPAN></P>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify; tab-stops: 354.0pt 360.75pt"><SPAN
lang=EN-GB style="FONT-SIZE: 11pt"><FONT
face="Times New Roman"> <o:p></o:p></FONT></SPAN></P>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify; tab-stops: 354.0pt 360.75pt"><SPAN
lang=EN-GB style="FONT-SIZE: 11pt"><FONT face="Times New Roman">It was, hence,
natural that India (along with Brazil, Argentine, Thailand, etc.) opposed the
inclusion of TRIPS in the negotiating agenda. They argued that the issue of
Patents was a non-trade issue and that the history of Patent laws across the
globe shows that all countries have evolved their domestic laws in consonance
with the stage of economic development and development of scientific and
technological capabilities. Laws that provide strong Patent protection limit the
ability of developing countries to enhance their S&T capabilities and retard
dissemination of knowledge. But in the negotiations giant pharmaceutical MNCs
railroaded all opposition and forced the signing of the TRIPS accord. The draft
which formed the basis of the accord was prepared by industry representatives
from the US, Europe and Japan. Curiously, in 1988-89 India made a complete
volte-face and agreed to the inclusion of TRIPS in the GATT negotiations. The
capitulation by India punctured the opposition of other developing countries,
and TRIPS entered the negotiations on world trade. The TRIPS agreement was
signed in 1995 (as part of the WTO agreement) and countries like India were
provided a transition period of ten years till 2005, to enact laws that were
compliant with the provisions of TRIPS.<o:p></o:p></FONT></SPAN></P>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify; tab-stops: 354.0pt 360.75pt"><SPAN
lang=EN-GB style="FONT-SIZE: 11pt"><FONT
face="Times New Roman"> <o:p></o:p></FONT></SPAN></P>
<H1 style="MARGIN: 0in 0in 0pt"><SPAN lang=EN-GB><FONT face="Times New Roman"
size=3>Global Opposition to TRIPS</FONT></SPAN></H1>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify; tab-stops: 354.0pt 360.75pt"><SPAN
lang=EN-GB style="FONT-SIZE: 11pt"><FONT
face="Times New Roman"> <o:p></o:p></FONT></SPAN></P>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify; tab-stops: 354.0pt 360.75pt"><SPAN
lang=EN-GB style="FONT-SIZE: 11pt"><FONT face="Times New Roman">Since 1995,
however, public opinion against TRIPS has hardened across the globe. In large
measure this is because of the outcry regarding the HIV-AIDS epidemic. Since the
nineties almost the whole continent of Africa has come under the grip of this
epidemic and in some countries an estimated third of the adult population is
infected by AIDS. The tragedy was compounded when drugs to contain AIDS started
being developed. These drugs allowed AIDS patients the opportunity to live
normal lives even if they were infected. But there was a catch. Because of
Patent protection these drugs were priced beyond the reach of patients in
developing countries. The ridiculous effect of Patent protection was evident
when one found that the cost of treating AIDS patients in some African countries
was many times their total GNP! Even more ridiculous, and tragic, when we know
that these drugs can be produced at one fortieth of prices being charged by
MNCs. <o:p></o:p></FONT></SPAN></P>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify; tab-stops: 354.0pt 360.75pt"><SPAN
lang=EN-GB style="FONT-SIZE: 11pt"><FONT
face="Times New Roman"> <o:p></o:p></FONT></SPAN></P>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify; tab-stops: 354.0pt 360.75pt"><SPAN
lang=EN-GB style="FONT-SIZE: 11pt"><FONT face="Times New Roman">AIDS has become
a rallying point for activists from all parts of the world and developing
country governments alike. The coalition that was built around the AIDS issue
then pressed for clarifications from the WTO that the TRIPS accord did not
prevent country governments from legislating in favour of protection of public
health. In this they were supported by almost the entire community of developing
nations. The global drug MNCs fought to the last to prevent this. But the
momentum of the global movement was able to force the adoption of a declaration
at the WTO Ministerial Conference in Doha in November 2001 that clarified that
countries could legislate to curb the monopoly powers provided by patent
protection to drug MNCs, in order to safeguard public health.
<o:p></o:p></FONT></SPAN></P>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify; tab-stops: 354.0pt 360.75pt"><SPAN
lang=EN-GB style="FONT-SIZE: 11pt"><FONT face="Times New Roman"><SPAN
style="mso-spacerun: yes"> </SPAN><o:p></o:p></FONT></SPAN></P>
<H1 style="MARGIN: 0in 0in 0pt"><SPAN lang=EN-GB><FONT face="Times New Roman"
size=3>Amendments in the Indian Law</FONT></SPAN></H1>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify; tab-stops: 354.0pt 360.75pt"><SPAN
lang=EN-GB style="FONT-SIZE: 11pt"><FONT
face="Times New Roman"> <o:p></o:p></FONT></SPAN></P>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify; tab-stops: 354.0pt 360.75pt"><SPAN
lang=EN-GB style="FONT-SIZE: 11pt"><FONT face="Times New Roman">In order to
comply with the TRIPS Agreement the Indian Patent Act has been amended twice in
1999 and 2002. A third Amendment is to be moved before January 2005.
Unfortunately, the previous amendment and the proposed Third Amendment have
failed even to use the flexibilities available in the TRIPS agreement. As we
have seen earlier, the TRIPS agreement was bad for developing countries. The
Indian Govt. is making it worse by not even using the possibilities available in
the agreement and the clarification issued in the Doha Declaration of 2001. Two
significant areas where the Indian Law seeks to go beyond what the TRIPS
agreement requires it to, relate to the areas of compulsory licensing and
pre-grant opposition.<o:p></o:p></FONT></SPAN></P>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify; tab-stops: 354.0pt 360.75pt"><SPAN
lang=EN-GB style="FONT-SIZE: 11pt"><FONT
face="Times New Roman"> <o:p></o:p></FONT></SPAN></P>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify; tab-stops: 354.0pt 360.75pt"><SPAN
lang=EN-GB style="FONT-SIZE: 11pt"><FONT face="Times New Roman">The former
(compulsory licensing) is an instrument that the TRIPS allows by which
Governments can allow domestic manufacturers to manufacture patented products
within 3 years of their introduction. In the Indian law this provision is still
weak and cumbersome. Pre-grant opposition is an instrument by which Patent
applications can be challenged – and a strong provision would help in limiting
the numbers of Patents granted. The proposed amendment seeks to drastically
dilute this provision. What is disturbing is that these provisions in the Indian
law are unnecessary for us to comply with the obligations laid down by the TRIPS
agreement. In other words, when asked to bend the Government is willing to
kneel!<o:p></o:p></FONT></SPAN></P>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify; tab-stops: 354.0pt 360.75pt"><SPAN
lang=EN-GB style="FONT-SIZE: 11pt"><FONT
face="Times New Roman"> <o:p></o:p></FONT></SPAN></P>
<H1 style="MARGIN: 0in 0in 0pt"><SPAN lang=EN-GB><FONT face="Times New Roman"
size=3>Implications of a New Law</FONT></SPAN></H1>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify; tab-stops: 354.0pt 360.75pt"><SPAN
lang=EN-GB style="FONT-SIZE: 11pt"><FONT
face="Times New Roman"> <o:p></o:p></FONT></SPAN></P>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify; tab-stops: 354.0pt 360.75pt"><SPAN
lang=EN-GB style="FONT-SIZE: 11pt"><FONT face="Times New Roman">What will be the
implications of the new Act? Over a period of time Indian companies will lose
the opportunity to develop processes for patent protected drugs in the country.
India will become dependent on MNCs for technology to produce new drugs.
Votaries of the new Patents Act argue that old drugs will not be affected by
this Act. While this is true, it must be understood that the rate of
obsolescence of old drugs is extremely fast today. Further, technological
dependence on MNCs is the proverbial “thin edge” which will be used by the MNCs
to establish their dominance over the Indian drug market once again (a position
they had lost after the mid seventies). They will then again start charging
exorbitant prices for drugs in the Indian market. Since the early eighties, the
categories of drugs which show the maximum rise in sales are categories which
include overwhelming majority of drugs still under Product Patent or whose
Product patents have expired recently. In other words if we had a product patent
regime today, the drugs showing fastest growth would have been priced way beyond
the capacity of the average consumer. Not only that. Today Indian companies are
the largest suppliers of low cost drugs to developing countries. For example, an
estimated 60% of drugs to treat HIV-AIDS come from India. The new law will make
this impossible, thereby threatening the lives of hundreds of thousands – not
only in India, but across the globe.<o:p></o:p></FONT></SPAN></P>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt; TEXT-ALIGN: justify; tab-stops: .5in 1.0in 1.5in 2.0in 2.5in 3.0in 3.5in 4.0in 4.5in 5.0in 5.5in 6.0in 6.5in 7.0in 7.5in 8.0in 8.5in 9.0in 9.5in 10.0in 10.5in 11.0in 11.5in 12.0in 12.5in 13.0in 13.5in 14.0in 14.5in 15.0in 15.5in 16.0in 16.5in 17.0in 17.5in 18.0in 18.5in 19.0in 19.5in 20.0in"><SPAN
lang=EN-GB style="FONT-SIZE: 11pt"><FONT
face="Times New Roman"> <o:p></o:p></FONT></SPAN></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"></FONT><FONT face=Arial
size=2></FONT> </P></DIV></BODY></HTML>