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Patent exemption extended for world’s poorest nations

Patients in the world’s poorest countries will continue to receive access to drugs cheaply for at least another decade.

That’s because, on June 11, the council in the World Trade Organisation (WTO) responsible for overseeing the agreement on Trade Related Aspects of Intellectual Property, or Trips, agreed to give the least-developed countries another eight years before they have to include globally standardised intellectual property protection in their own laws.

The Trips agreement, signed in 1995, outlines minimum intellectual property standards that all WTO members must adopt. Most of the world’s countries, save for a few in Africa, Asia, and the former Soviet Union, are now members of the WTO.

While all WTO members with developing country status were given until 2005 to enact Trips measures, least-developed countries, or LDCs, were granted a further seven and a half years to comply. That extension was to expire this month, until Haiti asked the Trips council to consider a further extension.

As of Tuesday’s agreement, the world’s poorest countries now have until they are either no longer considered an LDC, or until July 1 2021, whichever comes first, to become Trips-compliant.

Notably, the agreement allows for least-developed countries to amend or retract intellectual property laws already in place in their country.

No-rollback clause

This is at odds with the conditions attached to the seven-and-a-half-year extension granted in 2005, which included a “no-rollback clause”, restricting LDCs from amending already enacted laws. Those close to negotiations say that the United States pushed strongly for this clause to be included in the current extension, but it was rejected in negotiations by the developing country block.

LDCs, developed countries, Brics members such as India and South Africa, and nongovernmental organisations (NGOs), have nearly universally welcomed the extension.

“This [extension] gives LDCs time to overcome national restraints to work towards developing a viable technological base,” said Sangeeta Shashikant, a legal advisor for the NGO Third World Network.

Shashikant said the world’s poorest countries should focus their resources on basic development indicators and on strengthening their own industries, rather than setting up an intellectual property regimen.

The extension notably allows LDCs to continue to disregard patents on pharmaceutical products, allowing for cheaper versions of drugs to hit the market and for local producers to make generic versions of otherwise patented medicines.

Shashikant also noted that many of today’s most prosperous countries historically had lax intellectual property laws, which allowed them to develop their own industries. “What the LDCs are seeking is simply to have the policy space that industrialised countries and developing countries had when they were developing,” she said.

But an extra eight years, though welcome, isn’t what LDCs were asking for. They had been seeking an indefinite extension, expiring only when individual countries “graduate” from LDC status.

Their request was denied in negotiations with developed countries in the global north, with the US proposing a five-year extension instead.

A European Union official, speaking off the record, said that while the union always supported an extension, “we observed that [the agreement] provides for the possibility of granting time-specific extensions of the transition period, but does not speak about indefinite extensions”.

After seven months of back and forth, an eight-year extension was finally agreed upon.

Some NGOs and WTO members condemn the lack of transparency saying the negotiations took place secretly. Speaking at the council, the Indian representative expressed “concern about the process adopted in reaching this decision, which was negotiated between a small group of countries to the exclusion of the larger membership. This would, no doubt, have broader implications for negotiations in other areas as well and is something that is best avoided in the interest of the system and its membership.”

LDCs and their allies are expected to go back to the drawing board as the 2021 deadline approaches.  

Mara Kardas-Nelson was an OSF fellow at the Bhekisisa Centre for Health Journalism.