The United States has recently found itself on both sides of the ongoing international debate about how stringently patents should be enforced when a patented technology is needed to help address national emergencies.
The recent anthrax situation in the United States generated calls to federal officials to authorize unlicensed manufacturers to produce Cipro, the anti-anthrax antibiotic whose patent is held by Bayer AG. These calls, including those from Senator Charles Schumer (D-NY) and Ralph Nader's Consumer Project on Technology, arose from concerns about whether Bayer would be able to supply the drug in sufficient quantity should cases of infection become more widespread. They also expressed concerns that the high cost of the drug, possibly exacerbated further by an imbalanced supply-demand situation, may make it prohibitively expensive for large segments of the public to obtain the drug.
A federal statute (28 U.S.C. §1498) insulates manufacturers against patent infringement claims for goods manufactured for use by, and with the authorization or consent of, the United States. The United States has used this statute to bypass patent owners in providing technology to the armed forces, including camouflage screens, laser-protective eyewear, and underwater coupling devices. The statute permits patent holders to take action against the United States to recover reasonable compensation for such use, effectively creating a vehicle for compulsory licensing.
In October, Canada authorized Apotex, Inc., a generic drug manufacturer, to produce a million tablets of Cipro for a government emergency stockpile in spite of Bayer's patent. Although Canada reversed their position only days later, after reaching an agreement with Bayer to produce the desired supply at an acceptable price, Apotex representatives have stated it still plans to fill the government's purchase order.
The issue of compulsory licensing of patented drugs was being debated long before the anthrax cases. Countries such as South Africa, Thailand and Brazil have sought to authorize unlicensed manufacture of patented anti-HIV/AIDS drugs to help address their own health emergencies.
The World Trade Organization's Trade-Related Intellectual Property Rights (TRIPs) Agreement, which provides for enforcement of intellectual property through trade sanctions, also contains government use provisions. At the WTO meeting November 9-13, 2001 in Qatar, the issue of compulsory licensing of drugs, and imports under a compulsory license where a country cannot produce the drugs locally, was a central issue. This issue pitted the US, Canada, Japan, Australia and the EU, pushing for stricter limits on compulsory licensing, against developing countries suffering from HIV/AIDS pandemics and other health crises.
The meetings produced a "Declaration on the TRIPS agreement and public health", which includes recognition that "each [WTO] Member has the right to grant compulsory licenses and the freedom to determine the grounds upon which such licenses are granted" and that "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."
Developed countries and the pharmaceutical industry have sought tight limits on compulsory licensing because they fear this practice could discourage the large investments necessary to create breakthrough drugs.
RELATED LINKS:
"Bayer wins battle over anti-anthrax patent in Canada"
Consumer Project on Technology
BBC article "America's anthrax patent dilemma"
