Bangkok Post, 17 January 2006
ANALYSIS / PHARMACEUTICAL PATENTS AND THE THAI-US FREE TRADE AREA AGREEMENT
Sacrificing lives for patents under FTA
Why do our leaders believe Thailand will be better of with such a patents protection scheme, when they are not even sufficiently knowledgeable to consider it?
By JADE DONAVANIK
On the last day of the sixth round of Thai-US Free Trade Area talks, several academics and non-governmental bodies were invited to discuss their concerns with US negotiators on aspects of intellectual property rights, with an emphasis on pharmaceutical and life form patents.
For a number of reasons, only one academic showed up. That was based on a sense of duty to gather information that could benefit the public should the government accept US proposals, and a belief that the participatory process was academically sound.
There was no political rationale to it, or this would amount to letting US authorities explain their positions. Although the FTA could benefit some industries, there is much to be said negatively of it, especially when it comes to protection for drugs and biological inventions, such as extension of the period of protection, data exclusivity, and the expansion of patent protection to cover plants and animals.
Interestingly, US negotiators who are experts from United States Trade Representative (USTR), United States Patent and Trademark Office (USPTO), and other branches of the US government overseeing patent issues, strongly argued that the add-on period of protection is not an "extension" but rather a restoration of the patent life.
Check out the Manual of Patent Examination Procedure of the USPTO, and look carefully at the index on patent law, in particular under "T", and the first thing to meet the eye is "term extension". Even with one word, the true fact was not given. Is this what one calls openness?
That is not as important as the substance of the "extension" itself.
Under Section 154 of the US Patent Act (35 USC 154), specifically S 154(b)(1)(B)(iii), the interpretation goes that if the issue of an original patent is delayed due to the failure of the USPTO to issue a patent within three years after the date of the application in the United States, the term of the patent shall be extended one day for each day after the end of that three-year period until the patent is issued.
Presumably, one would totally agree that only the cited designation of the aforementioned section of the US law is already complicated enough, notwithstanding the substance itself.
Nonetheless, if this part of the US law is to be implemented in Thailand, the Thai patent examiners would have three years to complete the examination; if not, the patent would be subject to an extension of up to whatever it takes for the examiners to complete the examination.
It is not quite so simple for examiners with Thai equipment and the current level of technological development to complete the examination, especially for pharmaceutical products or compositions, within six years and, in many cases, eight years.
This means that patent term, which should have been 20 years from the application date, would then be extended to 23-25 years from the application date if the US patent provisions get implemented by way of signing the FTA.
What if it takes 10 years for the examination period? The extension would be stretched out to cover the time period exceeding three years, i.e., another seven years.
It might sound fair to the US, considering the provision of the issue of patent extension anticipated by the Singapore-US FTA would read something like "each party, at the request of the patent owner, shall extend the term of a patent to compensate for unreasonable delays that occur in granting the patent. An unreasonable delay shall at least include a delay in the issuance of the patent of more than four years from the date of filing". This is one year longer than the period allowed for Thai examiners. Is it appropriate?
Besides, I have mentioned only a small part of the "extension" under the US law.
Of course, the US negotiators were not wrong to conceitedly suggest that the Thai counterparts study their laws before any disagreeing. But has any Thai negotiator had a chance to even glimpse through the provisions of the US patent law?
Are we well equipped to negotiate, then? If the negotiators have not had a chance to prepare themselves, Prime Minister Thaksin Shinawatra, Deputy Premier Somkid Jatusripitak and other disciples would have had even lesser chance to do so since they are much busier. Why then do they believe Thailand will be better of with such a scheme, when they are not even sufficiently knowledgeable to consider it?
The technique of switching words to take advantage of those who are not trained in a police-thief game was not applied only with regard to the "extension" issue, but also to the matter of "data exclusivity" or what the US calls "data protection" in the context of the FTA.
When asked whether or not this data exclusivity or data protection is another means of protecting drugs, the answer was an affirmative "no" — it is only protection for data. Let us walk through what is data exclusivity and give ourselves the answer.
The US interprets data exclusivity as protection required by Article 39.3 of the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs) under the umbrella of the World Trade Organisation (WTO). This article reads: "[M]embers, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilise new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use. In addition, Members shall protect such data against disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use." The safeguard provided under the said provision is called "data protection", but it has noting to do with "data exclusivity".
What is data exclusivity? It is additional market protection for originator pharmaceuticals that prevents health authorities from accepting applications for generic medicines during the period of exclusivity. It prevents regulatory authorities, such as the Food and Drug Administration (FDA) from assessing the safety and efficacy profile of a generics application for a period of time beginning from the first marketing approval of the originator product.
This means that the data are never used by generics producers.
The generics applications are approved on their own merits, using their own development data. The originator’s data is never released to third parties by the medicines’ authorities.
Therefore, "data exclusivity" is not mandatory protection under the TRIPs Agreement. Moreover, there has been no unfair commercial use or any commercial use at all since the assessment is carried out internally by the authorities. No data released or disclosed has ever been conferred on generics producers or anyone.
At this stage, you can throw light on what data exclusivity is. Would you argue that it is not another way to protect drugs? The explanation of patent extension and data exclusivity should now be clearer. What then are the implications?
The pharmaceutical industry that has been controlled by many multinational corporations (MNCs) from the US will be given more protection to take advantage of the market. Besides being protected for 20 years from the date of patent application, they will receive additional extension for the delay period, which may turn the lifetime of their patents to 25 years or more.
In addition, the data exclusivity sought by the US will be around five years from the approval date of the drug registration process. But the five years are separated from the patent life and can start at any time even after the patent expires. Imagine that there is one scale of 20 years given under the patent protection; data exclusivity allows for another five years that can start at any point on the patent scale or even afterwards. Is this not an extension of the protection for drug?
I am not sure whether drugs will be more expensive under this scheme, but surely it will be expensive for a longer period. Instead of poor people getting access to cheap drugs right after the expiration of the 20-year term, they will have to wait longer. Can anyone’s life wait even one day when death is jumping on her back?
More is being proposed under the Thai-US FTA with regard to patent, but what I have said should be enough for any sane person to reconsider the course.
The prime minister may be the intelligent person many have said he is, but does he have the heart and guts to use his ingenuity against the US for poor Thai people? Let us wait and see.
Jade Donavanik is dean of law at Siam University, and an expert in intellectual property rights with Manothai-Jade and Associates Law Office.