Minutes - TRIPS Council - View details of the intervention/statement

H.E. Ambassador Dr Walter Werner
362.   On behalf of the co-sponsors in respect of IP/C/W/643 and Add.1, we are honoured once again to introduce this very important ad hoc topic, which we have been able to sustain over the last few TRIPS Council meetings. Today's discussion focuses on Intellectual Property and the Public Interest: Promoting Public Health Through Competition Law and Policy. Members will recall that when we first addressed the issue, we had done so through the introduction of the High-Level Panel Report on Access to Medicines which investigated the relationship between intellectual property, access to health technologies, incentives for research and development and the opportunities to the strengthen governance accountability and transparency. In the process, we have looked at various flexibilities that are imbedded in the TRIPS Agreement, I will not go through all of it, the paper was circulated to Members (documents IP/C/W/643 and IP/C/W/643/Add.1) but I want to concentrate for a few minutes on the purpose of today's discussion, and that is competition law. 363.   Competition law is one of the least-discussed flexibilities within the WTO TRIPS Agreement. The fundamental objective of competition law is to protect the integrity of competitive markets against abusive conduct and to protect consumers from the effects of such conduct. Even though TRIPS sets minimum norms for standards of IP protection that significantly limit Members' discretion on a large number of IP rights issues, it is not the case with competition law. Members are free to design competition laws in a way so as to take account of their domestic interest and needs, including their respective levels of development, subject only to the natural limits defined by the territorial limitations of such laws. 364.   Various other provisions of the TRIPS Agreement are relevant to competition law including Article 6, Article 31(k) and Article 40. As such, these provisions leave broad discretion to Members in how they apply competition law in respect of the acquisition and exercise of IP rights. Article 6 of the TRIPS Agreement authorizes Members to allow parallel importation of health technologies, a major pro-competitive form of activity that can be used to secure the lowest priced products available on international markets. Article 31(k) of the TRIPS Agreement confirms the right of Members to use such licences as anti-competitive remedies. The only condition required by Article 31(k) for the grant of this type of compulsory licence is that anti-competitive practice needs to have been determined through a judicial or administrative process. 365.   The possible use of compulsory licences to deal with anti-competitive practices as explicitly recognized in Article 31(k) of the TRIPS Agreement is of particular importance to protect public health in cases, for instance, of excessive pricing of health technologies or refusal to grant licences on reasonable commercial terms. The sponsors of this communication urge Members to share their national experiences and examples of how competition law is used to achieve public health and related national objectives. 366.   The debate and information exchange could serve to enhance understanding of Members' various approaches to the use of competition law and policy to prevent or deter practices such as collusive pricing or the use of abusive clauses in licensing agreements that unreasonably restrict access to new technology, prevent the entry of generic companies and may result in higher prices for medicines. The issue of abuse of IP rights remains relevant in the context of the application of national and regional law regimes. We have framed the debate by posing certain questions, such as: what grounds are available in national laws to pursue competition law and policy to achieve our public health outcomes; what are the difficulties faced by WTO Members when using competition policy to prevent or deter abusive practices; whether unreasonably high royalties may deter the transfer of technology; what policies of Members established to deal with the technology pricing and other aspects of transfer of technology transactions; and whether or not compulsory licences have been used by competition authorities in some countries to restore competition in cases involving the exercise of IP rights.
44.   The Chair said that China and South Africa had initially requested the agenda item on Intellectual Property and the Public Interest: Promoting Public Health through Competition Law and Policy". It had also been cosponsored by Brazil and India. A communication had been circulated in document IP/C/W/643 and its addendum.
45.   The representatives of South Africa; Brazil; China; India; Indonesia; the United States; the European Union; Switzerland; the Republic of Korea; Australia; Japan; New Zealand; and UNCTAD took the floor.
46.   The Council took note of the statements made.
IP/C/M/89, IP/C/M/89/Add.1