International patent regime for pharmaceuticals from the Paris Convention to the TRIPS Agreement

Hong, Tzay-Pyng

Law; Law enforcement; Information science; International trade; Prisons
October 2000

Thesis or dissertation

© 2000 Tzay-Pyng Hong. All rights reserved. No part of this publication may be reproduced without the written permission of the copyright holder.

Intellectual property protection (IPP) attained its importance in recent years because of the steady increase of intellectual property-endowed goods and technology in global trade. Technology producers, among them multilateral pharmaceutical companies (MPCs) felt that the Paris Convention (the Convention) was not adequate in dealing with trade related issues, and that an agreement was needed to integrate the subject of IPP; especially patent protection for pharmaceuticals, into the broader context of global trade law. The Agreement on Trade-Related Aspects of Intellectual Property Rights (the TRIPS Agreement) concluded in the Uruguay Round in 1994 brought IPP into the global trading system. The patent system contained in the Agreement reflects to a large extent MPCs' proposal for a strengthened patent system which paves the way to ensure market access and equal competition opportunity in their endeavour to expand global operation. The objective of the global trading system is to liberalise trade, achieved by securing commitments of market access and equal competition opportunity through the application of the principles of most-favoured-nation treatment, national treatment and reciprocity, reinforced by domestic competition policy to ensure efficient functioning of markets.However, in regard to patent protection for pharmaceuticals, the exercise of the exclusive marketing rights conferred by patent protection has trade restricting effect because competition is excluded during the patent term. This trade restricting effect does not compliment the objective of the global trading system nor promote competition. But the TRIPS Agreement does not cover a negotiated result on securing the recognition in domestic competition policy of the exclusive marketing rights conferred by patent protection, especially when domestic competition policy is designed to compliment microeconomic policy such as health care cost control. The implementation of international exhaustion to allow parallel importation of patented products during the term of patent is an example in point. It is an issue the TRIPS Agreement does not address and is excluded from the World Trade Organisation (WTO) dispute settlement mechanism. It is a legal issue because the disparity among national competition policy will cause trade distortions. It is political because the issue touches upon nations' regulatory autonomy in designing their competition policy to compliment other government policies. It also has economic implications in that countries might wish to rely on parallel importation as a mechanism to bring down prices of patent products. A complex issue as such requires- a multilateral solution enshrined in a legally binding agreement. In the absence of such an agreement, patent system under the TRIPS Agreement will be inadequate and ineffective because it will become inoperable and nations will incline to retrieve to unilateral actions for the resolution of grievances.

Department of Law, The University of Hull
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