The US steers towards a 'differential approach' to pharmaceutical IPR issues in the Trans-Pacific Partnership

The draft IP chapter of the Trans-Pacific Partnership Agreement (TPP) was promptly analyzed in a series of posts published on the IPKat (general provisions, copyright, trademarks, and, of course, patents). Among the provisions dealing with patent rights, the most significant issues concerned the standards of protection for pharmaceutical innovation, including the following points:

• tailoring patent protection to social and economic development
  Articles QQ.A.2 and QQ.A.2 bis, in the formulation proposed by several parties, would recognize that the objectives of the TPP provisions concerning patents include the enhancement of the role of intellectual property in promoting economic and social growth, taking into account the differences between the national legal systems, and preserving the right of each party to adopt measures to promote the public interest in relation to, inter alia, public health and nutrition. The US and Japan oppose both provisions.
• relationship between TPP, TRIPS Agreement and Doha Declaration
  Although Articles QQ.A.4 and 5 reaffirm the commitment of the parties to the Doha Declaration on the TRIPS Agreement and Public Health, the negotiators disagree on the relationship between the TPP and existing international agreements. The US supports a formulation of Article QQ.A.6 that would allow the TPP to derogate to existing agreements, a solution opposed by most of the other parties, which seek to preserve the flexibility afforded by existing agreements with respect to the protection of equal access to knowledge, food and public health. 
• patentability of new uses or methods of using known substances
  The US proposes that the parties confirm the availability of patents for new uses or methods of using a known product and the commitment not to deny a patent solely due to lack of enhanced efficacy over a known product, when the applicant has set forth distinguishing features establishing that the invention satisfies patentability requirements. The other parties, with the exception of Japan, disagree.
• patentability of plants, animals, diagnostic, therapeutic and surgical methods, biological processes for the production of plants and animals
  The US seeks a commitment to the granting of patents for the above mentioned inventions, despite the disagreement of the other parties, which seek to maintain the flexibility guaranteed by Article 27(3) TRIPS. 
• the extension of the patent rights to deal with unreasonable delays or the unreasonable reduction of the effective patent term 
  Articles QQ.E.XX and QQ.E.14, both proposed by the US and opposed by the other parties, would require TPP members to adjust the term of a patent to compensate for unreasonable delays occurred in the granting of the patent, or for the unreasonable curtailment of the effective patent term as a result of the marketing approval process for patents concerning pharmaceutical products or methods of making or using pharmaceutical products.
• the protection of safety and efficacy information whose origination involved a considerable effort, as well as of clinical information needed for regulatory or marketing approval
  Essentially, the US also seeks to protect, for a period of at least five years, the safety and efficacy information submitted by the patent owner in order to obtain marketing or regulatory approval for a new pharmaceutical product, if their origination involved a considerable effort (Article QQ.E.16). At the same condition, a three-year period of exclusivity would protect new clinical information (except those related to bioequivalency) submitted for the approval of a pharmaceutical product containing a chemical entity previously approved for marketing in another pharmaceutical product. Most of the other negotiating parties oppose the provisions concerning data exclusivity.

Michael Froman

 United States Trade Representative

In a statement issued last Friday, the United States Trade Representative clarified its approach towards the protection of pharmaceutical innovation, suggesting that the US may be willing to seek a more balanced compromise on the most controversial issues, taking into account the different social and economic needs of the TPP members. The USTR explained that the US is actively engaged in identifying the right balance 'to make life-saving medicine more widely available while creating incentives for the development of new treatments and cures'. In this perspective, the statement noted that the negotiators are still discussing about the best ways to achieve that balance. However, the latest round of meetings, held in Salt Lake City in mid November, appears to have had a significant impact on the general approach of the US on the matter:

The United States is a leading voice both for strong IPR protections and for access to medicines for the world’s poor, including in developing country TPP partners. We believe the best approach to pharmaceutical IPR issues in the TPP would be one that offers countries flexibility based on their individual circumstances. That’s why we’ve begun to work with TPP partners to gauge their interest in a “differential approach,” and to identify ways to tailor potential flexibilities based on countries’ existing laws and international obligations.

This flexible approach is based on precedent: Previous U.S. trade agreements covered by the May 10, 2007 bipartisan agreement. Under May 10, developing free trade agreement partners (like Peru) were offered greater flexibility relative to more developed trade agreement partners (like Korea). In TPP, we are seeking to pursue a similar idea, using previous agreements – like those with Peru, Australia, Chile, Korea, and Singapore – as benchmarks, but keeping an open mind as to how these standards can be tailored to reflect the situations of individual partners.

The idea of a 'differential approach', tailoring patent protection to the peculiarities of each country, is remarkably similar to the approach endorsed by most of the negotiating parties in the provisions of Articles QQ.A.2, and QQ.A.2 bis and QQ.A.6, previously rejected by the US. The USTR's statement appears to signal a subtle, yet remarkably important, shift in attitude (from an 'aggressive' - as defined by the previous USTR - to a 'differential' approach), which, as I suggested on the IPKat, could be the key to the success of the TPP negotiations on the matter.

On biologic medicines, the statement clarified that they represent a critical area of innovation, whose growth is of great importance for the development of new and more effective drugs. 'Biologic drugs', according to the USTR, 'need data protection because those drugs require enormous amounts of time and money to develop'. Although the statement reaffirmed the US proposal of a 12 year period of data exclusivity, it hinted at the possibility of negotiating a shorter term of protection.

The USTR also caught the occasion to acknowledge a shift in its attitude towards pre-grant opposition procedures, which had attracted significant debate during TPP negotiations:

Reflecting input from stakeholders, the U.S. now supports a more flexible approach under which partners could retain reasonable patent pre-grant opposition procedures. These procedures, available in some countries, allow third parties to formally object to a patent at the initial application phase. Based on stakeholder input and ongoing discussions with TPP countries, we believe that other elements in TPP will meet the larger goals of ensuring that patents are of high quality and provide appropriate incentives for innovation, while ensuring access to medicines.