Newsletter
COMPULSORY LICENSING OF TAMIFLU PATENT
In December 2005, the IPO granted a compul-sory license to the Department of Health (DOH) for the patented technology used in the manu-facture of the antiviral drug oseltamivir (mar-keted under the name of Tamiflu®). This makes Taiwan the first country in the world where the government has acquired a conditional compul-sory license, for use in the fight against the H5N1 strain of avian influenza. The DOH's application sought a compulsory license to practice ROC Invention Patent No. 129988, owned by the US company Gilead Sciences, Inc. (Gilead), the counter party in the application. Because the case also affects the interests of the exclusive licensee of the patent, the Swiss pharmaceuticals manufacturer F. Hoffmann-La Roche Ltd. (Roche), the latter took part in the examination process as an interested party.
The decision issued by the IPO is summarized as follows:
The applicant is granted a compulsory license to practice Invention Patent No. 129988 dur-ing the period from the date of grant of license to 31 December 2007.
Product manufactured under the compulsory license may be used only for the purposes of disease control within the ROC.
The applicant may release product made under the compulsory license only when the counter party or its licensee are unable to supply suf-ficient quantities of oseltamivir capsules or their active pharmaceutical ingredient.
If, during the period for which the compulsory license is granted, the counter party or its li-censee concludes a licensing agreement with the applicant and registers that agreement with the IPO, the IPO may terminate the compul-sory license.
The applicant must pay appropriate compen-sation to the counter party, as required by law.
Article 76 Paragraph 1 of the Patent Act provides: "In response to a national emergency situation, or for non-profit use to promote public welfare, or if the applicant has been unable to negotiate a license under reasonable commercial conditions after a considerable period of time, the patent authority may, on application, grant the applicant a compulsory license to practice a patent. Such practice shall principally serve the needs of the domestic market."
Gilead and Roche raised both procedural and substantive objections to the DOH's application for a compulsory license. On the issue of whether the DOH, as a government agency, was eligible to apply for a compulsory license, the IPO stated that the DOH was the highest author-ity for health and hygiene, with special respon-sibility for maintaining public health; based on its mission to control avian influenza, the DOH had a need to use the patent in question, and had applied to the IPO for a compulsory license un-der the wording of Article 76 of the Patent Act regarding a "national emergency situation". The IPO had verified that it was appropriate for the matters stated in the application to be handled by the DOH. Therefore the IPO found that the DOH was eligible to make the application.
With regard to whether the situation regarding avian influenza in Taiwan at the time of the ap-plication amounted to a "national emergency", the IPO stated that Paragraph 5(c) of the 2001 Doha Declaration on the TRIPS Agreement and Public Health expressly provides that each member of the World Trade Organization has the right to determine for itself what constitutes a national emergency or other circumstances of extreme urgency, based on its own objective cir-cumstances. The Declaration affirms that each country may make its own determination as to what situation constitutes a national emergency in that country, in accordance with objective conditions such as its state of economic devel-opment, its degree of dependence on interna-tional traffic in people and goods, and its level of development in terms of the various types of basic infrastructure needed for disease control. This makes it clear that the DOH, as the nation's highest authority in the field of health and hy-giene, has the power to determine what circum-stances constitute a "national emergency."
The IPO's decision confirmed the DOH's opinion that the worsening bird flu epidemic has placed Taiwan in an emergency situation, thus fulfilling the statutory criteria for granting a compulsory license. However, the IPO also took account of the fact that the patent system is intended to en-courage inventors to disclose the results of their research and development, and to reward pat-entees for their effort and expense by granting a period of exclusivity over the manufacture, sale, etc., of items made under a patent. If govern-ments adopt a liberal approach to deprive pat-entees of their legitimate rights and thus damage their reasonable commercial interests, this would not only vitiate the purpose of the patent system, which is to give an incentive for people to ear-nestly devote themselves to research and devel-opment, but would also make the owners of in-tellectual property reluctant to apply for patents or invest in the countries concerned.
Accordingly, in order to protect the potential commercial interest of Gilead and Roche, the IPO ordered that the DOH may only release the drug made under the compulsory license if Gilead or its licensee are unable to supply the DOH in a timely manner with sufficient quanti-ties of oseltamivir capsules or the active phar-maceutical ingredient, and that the DOH must pay appropriate compensation to Gilead.