The following excerpts are from an exchange of messages on ip-health about a recent recent petition regarding the patent pool that has been posted to several public health email lists. Among the leaders in the petition are apparently ITPC and the New York based I-MAK. ITPC has a long history of advocating for the interests of persons living with HIV, and I-MAK has for many years sought to overcome patent barriers for access to medicines. A copy of the petition is here http://www.petitionbuzz.com/petitions/mppunitaid.
KEI did not sign the petition. We agreed with parts of the petition, but disagreed with other parts. This exchange sets out our initial reaction to the petition, including our concerns about several substantive and strategic issues raised in the petition, and the harsh tone of the comments directed at the patent pool staff.
October 10, 2011. James Love to ip-health:
The petition is highly critical of the MPP. It has at this point a large number of signatures. While we agree with some parts of the long petition, we disagree with other parts, and will not be signing the petition. In our opinion, some parts of the petition repeat assertions that are not accurate, and do not provide a helpful or balanced view of what the Gilead licenses did and did not do. In some other areas, we agree with the concerns set out in the petition, for example, as regards the importance of permitting generic product outside of India — a topic that we also think can be modified.When we have some time to go over the technical details, we will comment further. But in general, the petition will be seen by many, including those in UNITAID, as part of an effort to kill the patent pool, or remove its current leadership. If this effort succeeds, where does that leave everyone?
In theory, the licenses could have been better, and indeed, Gilead may agree to further amendments — for example, to allow products from some countries outside of India. However, the sweeping changes in the licenses that are set out the petition, while desirable, were not about to happen, and I think, won’t happen, without something more substantial changing the negotiation. People can set the bar higher — but setting the bar too high means no licenses at this point.
If the patent pool is stopped from negotiating further licenses, either telling them to stop or by setting the bar too high to get further licenses, I would ask, why is that a good thing?
There are some people who want to (a) change national laws to eliminate patents on drugs, and failing that to (b) invalidate patents that have been granted, and failing that to obtain (c) voluntary or (d) compulsory licenses (in different sequences). No one that has signed the petition and no one that has not signed the petition is going to eliminate all of the laws requiring the granting of patents, even in LDC countries (Since 2001, there has NOT been a rush to change patent laws in LDCs). No one is going to invalidate relevant patents on HIV drugs in 150 countries. No one is going to obtain compulsory license in all countries where patents exist, and without some big change in the negotiating strategy, no one is going to obtain voluntary licenses for all products and all countries. For the tens of millions of persons living with HIV, all of these mechanisms are important.
As I noted earlier, in some areas, we agree with the petition. KEI has long taken the position that the MPP should issue standardized licenses, and that the various proposals for the license should be presented for everyone to review and comment, before they are signed. The MPP is a norm setting process, and it should be open and inclusive.
The MPP can operate in a more transparent manner than it has, although, in defense of the patent pool, it has had an open door, and always been willing to meet with people, take calls, and answer questions. It is only recently than many groups have begun to engage on the technical details, and that discussion has not always been well informed on some key issues.
But even with a transparent process, there is the reality that the major patent owners are not all ready to give up their patent claims in all developing countries. This is not the fault of the patent pool. A good strategy going forward needs to address this reality, and present a feasible path for access to persons living with HIV.
Without some game changing innovations in the negotiating strategy, the patent pool licenses from big drug companies will only cover some products and some countries. In our opinion, the most important thing to push for in the licenses is that the licenses are open, not bundled, and that they freely permit license holders to challenge patents, patent laws, and obtain compulsory licenses. The MPP licenses did this. The many countries left outside of the license area have to have a strategy to obtain access to the new drugs. The MPP licenses do make them better off in one important way — they create a competitive source of supplies, in the event that they can obtain a paragraph 6 request from India to supply their markets. No one thinks this is perfect. But people who are being negative should set out the alternatives.
Subsequently, Jérôme Martin posted a note to ip-health, questioning the appropriatness of criticizing the petition, and asking for specifics regarding the suggestion the “some parts of the petition repeat assertions that are not accurate, and do not provide a helpful or balanced view of what the Gilead licenses did and did not do.” I responded as follows.
Dear Jérôme Martin,Last I checked, I was an activist. And, whether there are 200 or 200,000 signatures on a petition, part of having a “debate” is having people express their opinions. That includes the people who signed the petition. That also includes others. To do justice to the issues raised in the petition takes at least a little bit of time.
I noted some of the areas where we agree with the petition, and there are other areas where I think the petition presents a compelling case. In some other areas, we don’t think the petition presents a balanced view of the license. One concerns is this statement in the petition:
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3) The undermining of the free and full use of TRIPS flexibilities by countries through restrictive provisions in the licences including:(b) the imposition of restrictions on the use of compulsory licenses (CLs) by requiring the prior permission of Gilead, thus affecting both importing and exporting countries (and placing additional barriers on the use of the August 30 Decision);
===========It is true that the MPP sub-license does require an agreement, but not to obtain a CL, but rather on such things as the “requirements of such law, rule or regulation” and the “affect” on the agreement, or “regarding the existence, scope and content of such compulsory license,” noting that such agreement may “not to be unreasonably withheld.”
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7.3 Law Compliance
(c) Conflicts. None of the parties shall be required to take any action or perform any obligation under this Agreement to the extent that such action or obligation is in direct conflict with any applicable law, rule or regulation, including rights or obligations created as a result of a government issuance of a compulsory license relating to API or Product, provided, however, that Gilead and Licensee are in agreement (with such agreement not to be unreasonably withheld) regarding (i) the requirements of such law, rule or regulation, and (ii) the affect that such law, rule or regulation has on such action or obligation required under this Agreement.
—————-10.3 Gilead Right to Terminate
(d) For further clarity, and notwithstanding anything to the contrary in this Agreement, it shall not be deemed to be a breach of the Agreement for Licensee to supply an API or Product outside the Territory into a country where (i) the government of such country has issued a compulsory license relating to such API or Product allowing for the importation of such API or Product into such country, provided Licensee and Gilead are in agreement (with such agreement not to be unreasonably withheld) regarding the existence, scope and content of such compulsory license and/or (ii) the Government of India has issued a compulsory license allowing for the export of an API or Product from India and into such country, provided that (Y) there are no Patents containing a valid claim covering the use, import, offer for sale or sale of such API or such Product in such country or a compulsory license has also been issued by the relevant authorities of such country and (Z) Licensee and Gilead are in agreement (with such agreement not to be unreasonably withheld) regarding the existence, scope and content of such compulsory license.
————————————-Not to put too fine a point on it, but I think the petition will be read by some to suggest that Gilead gets to agree on a compulsory license being issued, and that certainty is not the case. This is very important, and worth focusing on. Are there different ways to write such a clause? Maybe. Do people have examples one can look at? I personally did not think the issue raised in the petition was a problem in the license. Indeed, I thought it was a very big achievement from the MPP to get this clause in the license. It changes the restrictive nature of the earlier Gilead license — the one that KEI had earlier (2007) filed an antitrust compliant about with the FTC.
I do appreciate the point in the petition that Gilead can to raise paragraph 6 issues, but I don’t think they will get far if the CL for export is issued under India law.
Another point is the following. The petition says the licenses harm LDCs by:
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(a) circumventing the 2016 TRIPS deadline for least developing countries (LDCs) by allowing royalties on medicines supplied to them, even though these countries do not have to impose patents on essential medicines until 2016;
————–Strictly speaking, one might (and some have) argue that the license only requires royalties be paid in India, if India has a patent, and not in countries where the product is exported to. But I agree with the petition on the broader point. As a practical matter, by limiting production to India, the license is designed to ensure that royalties are paid everywhere in the licensed areas. And I agree that it is unfortunate that the license does this. But I don’t think this has anything to do with the 2016 TRIPS extension in LDCs, or for that matter, for LDC countries in general. Almost all LDCs already grant pharmaceutical product patents, and as the patent landscape documents show, lots of patents are filed in LDC countries, not only by big pharma, but even by universities and generic drug companies. Moreover, I think that LDC countries are big beneficiaries of the voluntary licenses, because you don’t have to sort through the legal issues in LDCs — the voluntary license includes all of the LDCs. Plus, even the paragraph 6 provisions are much easier for LDC countries to comply with. So the petition takes a general point about paying royalties everywhere, and makes it look as if this is something attacking LDC countries. I don’t think that deepens people’s understanding of the license.
It is late for me, given some other big deadlines I have. But we can comment more later. In general however, I don’t want to sound entirely negative, because we are not. The petition raises lots of points, and often does so with clarity and power. We are not signing the petition, due to some differences we have with the analysis, and in the tone and strategy, including what we see as unnecessary attacks on the patent pool staff and board.
>>So you should reconsider this public reaction : it is still time to accept a legitimate and constructive debate, and to act properly with your partners.
Jérôme Martin, I find parts of your note unnecessarily insulting. But given your suggestion to reconsider our public reaction and role in these debates, I have to ask, what constraints do you recommend? What is “legitimate and constructive”? We are saying what we honestly believe on something we have worked on for 9 years.
I think the petition contributes to the debate, even though we don’t agree with everything it says. I would hope you would listen to us, as we listen to others.
Jérôme Martin responded again, to which I replied as follows (with some typos and grammar fixed).
Jérôme Martin,No one appreciates being told they need permission from anyone to speak freely on this or any other issue. People should say that they think, and think about what they say.
There is a very long and very relevant history to the development of the patent pool that people should talk about. One aspect is that the idea of a patent pool was proposed and considered by all sorts of fora and entities before it was embraced by UNITAID. The African Union, a BRICS group, CARICOM, ASEAN, and other regional developing country groups at various times from 2002 to 2007 discussed creating various types of patent pools similar to what UNITAID eventually set up. The WHO and the Global Fund were asked to sponsor the patent pool, for example, in 2005, some 6 years ago. The UK Commission for Africa considered a proposal. There was also a proposal to create a completely private patent pool, called the Essential Medical Innovation Licensing Agency (EMILA), that probably would have moved forward if UNITAID did not embrace the patent pool, as it did quite seriously in 2008. One of the early launches of the UNITAID patent pool was in the 2008 AIDS conference in Mexico.
UNITAID’s interest in this was due to the leadership of Jorge Bermudez, the first UNITAID Executive Secretary. As a Brazilian negotiator at the WHO, it was Bermudez who pushed to create the WHO CIPIH, which started the modern efforts at the WHO to deal with IPR and innovation and access issues. UNITAID reached out to activists, and presented the patent pool work at a zillion conferences and regional meetings, as I am sure that you know. I have repeatedly asked UNITAID to provide a list of the various meetings and consultations that UNITAID held on this. I think people should look at it, when considering the allegations of lack of transparency and secrecy, because these are relevant data points in how people evaluate the motivations of the patent pool leadership, which have been questioned so harshly in the petition.
During the 3 years between the Mexico AIDS Conference and the first licenses, there was considerable confusion about what a pool would would look like and do, since the collective management of IPR rights was something fairly novel in this area. Many thought it would be something like a standards patent pool – the most common model for a patent pool in recent years. There was some discussion about the relationship between voluntary and non-voluntary licensing, and about how comprehensive would be the geographic coverage, particularly in light to the existing voluntary Pharma company licensing programs, which were not comprehensive.
KEI had filed a competition complaint against Gilead in 2007, with the US FTC, over its 2007 voluntary license. The FTC thought the license was actionable, except that the harm was to foreign consumers only, leaving the FTC without jurisdiction under US law, as elaborated by recent US court decisions. We encouraged WIPO to discuss the cross broader enforcement of anti-competitive contracts, under Article 40 of the TRIPS. During this period, we meet with Gilead, and lots of other patent owners, academics and NGOs, to discuss the patent pool, as well as the donor prize fund proposal, which several developing countries had proposed to the WHO, as a mechanism to expand the geographic coverage of voluntary licenses.
In an ideal world, there would be no need for the patent pool. There would be no big HIV problem, and if there was, developing countries would not be granting patents right and left, and if they did, they would be granting compulsory licenses right and left. Having worked on these health and patent issues since 1991, and extensively internationally since 1994, I agree with those who say that it is difficult to do much of anything to address IPR issues. It is hard to change national laws, hard to stop bad patents from being issued, hard to invalidate bad patents, hard to issue compulsory licenses on good and bad patents, and hard to get voluntary licenses. Nothing is easy. I think lacking from some of the criticism of the MPP is just how hard is this issue, when trying to address the situation in 150+ countries.
In considering the Medicines Patent Pool early on, the UNITAID Board make it clear that the pool should not undermine the uses of compulsory licenses. This came from the NGOs on the UNITAID board, many who were very active in the IPR issues outside of UNITAID, and from developing country governments, led by Brazil and Chile. The decision on CLs was also backed up by Norway, the UK and other board members. So one negotiating objective for the MPP was to make sure that the licenses could not be used to undermine CLs.
There was quite a bit of discussion about transparency. KEI and others, including several India NGOs, wanted the “offers” from UNITAID and the responses to be public. UNITAID and the MPP was told that negotiations could not take place with public offers and answers. It was our view, and others, that UNITAID was engaged in a norm setting activity, and it should be transparent, and that we wanted to evidence of an offer and a refusal to license, as something that could be used in a CL proceeding. Ok, the asks and responses were public. But what about the licensing terms themselves? Here, the MPP was not that open about the private talks, and here we agree with the petitioners, that the MPP should have and should in the future publish proposed license terms, and accept comments from everyone, before signing agreements.
I also think that in the run-up to the Gilead license, some of the proponents of the MPP, including its own staff, could have been more clear about the challenges of getting every country into the pool, so no one would have been surprised when this did not in fact happen in the Gilead license. It was quite clear to KEI that comprehensive coverage of all developing countries would not happen by simply offering a 5 percent or even a tiered royalty method (TRM) royalty. The donor prize fund was a proposal to provide an additional incentive to license to all countries. UNITAID has been asked to study this, and *any* other alternative strategy for expanding the scope of the license.
On the topic of geographic scope and the LDC issue, I would like to bring up the 2003 TAC voluntary license, which was the end game for the Hazel Tau competition case in South Africa.
TAC entered an agreement with GSK and BI to license patents to some generic companies to supply 47 sub-Saharan countries. The license was designed to cover exports, and contained a 5 percent royalty, including for exports to LDCs and counties without patents. TAC’s leverage to obtain the licenses was enhanced by the fact that the South Africa competition commission staff had announced GSK and BI were in violation of the RSA competition laws. I think everyone will agree that the TACD agreement was a quite important for people living in Africa with HIV. However, it certainly would not meet some of the standards set out in the petition against the MPP. It did not permit exports to North Africa or outside of Africa. There were royalties from exports from South Africa, even to LDC countries. That said, it was more pro-competitive than the 2007 Gilead license. It was assumed that the licenses from the settlement did not make it a breach to persue a CL or patent challenge elsewhere, or to supply a county outside of the terms of the license. Overall the text of the settlement was considerably shorter than the Gilead/MPP license. But of course, the TAC settlement was also not a license. I have not seen the actual licenses signed under the any of the TAC agreements, and I don’t know if they are public or confidential. (I am sure others can clarify this.)
In negotiations for licenses, there is what people want, and what you can get. In the beginning of the MPP negotiation, it was not clear that any company would license anything of value to the pool. The pool was seen by GSK and the Gates Foundation as a big attack on exclusive rights. In order to put pressure on the companies, the pool staff engaged in an intense effort to seduce the companies and charm governments that normally protect them. To that end, Ellen ‘t Hoen was able to ring up an impressive list of endorsements, from the WHO, the G8, the White House, and many others. This was harder than it looks, and deserved more credit than it has received from NGOs.
On the one hand, the MPP is being asked to suck up to patent owners and OECD countries, on the other hand, they are supposed to be a co-conspirator in efforts to strip companies of their exclusive patent rights. It is a tall and confusing order, and at times, I think it is confusing to everyone, including the MPP staff and the readers of this list. I am impressed that the MPP has pulled it off as well as it has.
It would be easier to get better terms from the licenses if more firepower was focused on the patent owners than on the patent pool staff. There has been some NGO pressure on patent owners, but not as impressive to the patent owners as what they saw from 1999 to 2003.
The NYC based I-MAK and several of the other groups signing the petition are highly regarded for their tireless work on access to medicine issues. But some of the attacks on the patent pool about the process would be more persuasive if there had been efforts to be briefed by the MPP, and to engage in the process. The early problem was just getting people to take time to think about the issues.
The patent pool staff did have very talented and experienced Southern IPR experts working with them on the licenses, and they invited activists such as Zackie Achmat to join the MPP board. I encourage the MPP staff to share some details of this, as well as a more complete list of the countless meetings and briefings the have done.
KEI did not know the details of the Gilead license until the last moment, and we saw the licenses themselves when everyone else did. We had hoped the MPP would have based the negotiations on the EMILA license templates, which themselves were part of an extensive open review process, and we were as surprised as others that the MPP used the 2007 Gilead licenses as the template. That said, we thought the MPP had correctly identified the most important issues to fix in those licenses, given their limited bargaining power.
In terms of transparency, I would add a few additional points. The NIH does not reveal the royalties paid on its exclusive licenses. DNDi does not publish its license agreements. The WHO TDR program refused to show me the access provisions of its patent license agreements, during my review of TDR for the Human Rights Council. I look forward to seeking more effort to get greater transparency of all of these agreements.
If the current controversy is truly about the substance and norms of the MPP, then the conversation should be focusing on the future also, and in particular, what role should the MPP play in getting access to patented technologies, and what role will other strategies play. If you accept that you can’t force patent owners to license everything to everyone for nothing, then you have to explain the strategy for getting access. I believe that you push for the best terms you can, but know the difference between what you want and what you need. What I believe is most important is to get clear transparent licensing asks and responses, to have open unbundled licenses (including by not bundling know-how and patents), and to ensure that no one signing a license is prevented from busting a patent or obtaining and using a CL anywhere. I also think that it is a mistake to have licenses that limit production to India. I do think you have to accept limited geographic coverage, if this is a serious negotiation with big drug companies, unless you do something like the donor prize fund, or get more pressure on the companies from developing country governments. I think the VL efforts should complement all other strategies, including those involving busting patents, changing patent laws, and compulsory licensing, and the more ambitious and transformative effort to change the business and trade models for supporting R&D.