Understanding the Avian Flu Patent Issue
To get a better understanding of the framework of international intellectual property law that relates to the Tamiflu issue, you can check out the WTO’s fact sheet on the TRIPS Agreement, which includes an overview of compulsory licensing:
COMPULSORY LICENSING
Compulsory licensing is when a government allows someone else to produce the patented product or process without the consent of the patent owner. In current public discussion, this is usually associated with pharmaceuticals, but it could also apply to patents in any field.
The agreement allows compulsory licensing as part of the agreement’s overall attempt to strike a balance between promoting access to existing drugs and promoting research and development into new drugs. But the term “compulsory licensing” does not appear in the TRIPS Agreement. Instead, the phrase “other use without authorization of the right holder” appears in the title of Article 31. Compulsory licensing is only part of this since “other use” includes use by governments for their own purposes.
Compulsory licensing and government use of a patent without the authorization of its owner can only be done under a number of conditions aimed at protecting the legitimate interests of the patent holder.
For example: Normally, the person or company applying for a licence must have first attempted, unsuccessfully, to obtain a voluntary licence from the right holder on reasonable commercial terms — Article 31b. If a compulsory licence is issued, adequate remuneration must still be paid to the patent holder — Article 31h.
However, for “national emergencies”, “other circumstances of extreme urgency” or “public non-commercial use” (or “government use”) or anti-competitive practices, there is no need to try for a voluntary licence — Article 31b.
Compulsory licensing must meet certain additional requirements. In particular, it cannot be given exclusively to licensees (e.g. the patent-holder can continue to produce), and usually it must be granted mainly to supply the domestic market. Compulsory licensing cannot be arbitrary
WHAT ARE THE GROUNDS FOR USING COMPULSORY LICENSING?
The TRIPS Agreement does not specifically list the reasons that might be used to justify compulsory licensing. In Article 31, it does mention national emergencies, other circumstances of extreme urgency and anti-competitive practices — but only as grounds when some of the normal requirements for compulsory licensing do not apply, such as the need to try for a voluntary licence first. Doha declaration 5(b) and (c).
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UPDATE: WTO now also has an FAQ on compulsory licensing, which you might find more accessible reading than the above.
