WORLD TRADE
ORGANIZATIONIP/C/W/351
24 June 2002
(02-3460)
Council for Trade-Related Aspects
of Intellectual Property RightsOriginal:  English
PROPOSAL ON PARAGRAPH 6 OF THE DOHA DECLARATION ON
THE TRIPS AGREEMENT AND PUBLIC HEALTH
Joint Communication from the African Group in the WTO*
The Secretariat has received the following communication, dated 18 June 2002, from the
Permanent Mission of Kenya on behalf of the African Group in the WTO, with the request that it be
circulated as a TRIPS Council document.
Elements of the Problem
1. The Fourth Session of the Ministerial Conference adopted the Declaration on the TRIPS
Agreement and Public Health as an instrument to assist Members, and the international community at
large, deal with concerns over the perceived inflexibility and adverse effects of the TRIPS Agreement
in relation to public health.  While it clarified so me of the flexibility in the TRIPS Agreement, the
declaration recognised that some of the flexibility supposed to be available to Members may still be
constrained by practical circumstances, and envisaged further work to find better solutions.
2. One such specific problem was that Members with insufficient or no manufacturing capacity
in the pharmaceuticals sector would find it difficult to effectively use the right to issue compulsory
licences. In the words of paragraph 6 of the declaration,
“6. We recognize that WTO Members with insufficient or no manufacturing
capacities in the pharmaceutical sector could face difficulties in making
effective use of compulsory licensing under the TRIPS Agreement.  We instruct
the Council for TRIPS to find an expeditious solution to this problem and to
report to the General Council before the end of 2002.”
3. This problem, as recognised by Members, has various elements that include the following and
in this regard these various elements indicate th e elements of the expeditious solution to be adopted
under paragraph 6:
(a) The country may not have domestic technical know-how or skills and may lack the
necessary equipment to undertake the production of certain needed medicines.
(b) Where such capacity could be introduced through technology transfer or locating
within the country, considerations of returns on investment or profits for the investor or theproducer may work against countries with small domestic markets.  In conditions of poverty,
the purchasing power of countries facing public health crises or in urgent need of medicine
and medical technology may be so low that investors will not consider the country to provide
a sufficient market to sustain desired or profitable levels of production.
                                                     
*  This proposal is without prejudice to individual country positions, and to additional proposals that the
African Group may submit .IP/C/W/351
Page 2
(c) Where the possibility of exporting to other countries would have been considered, in
order to have a wider market beyond the country of production, Article 31(f) of the TRIPS
Agreement restricts this by the requirement that production under a compulsory licence be
“authorised predominantly for the supply of the domestic market of the Member authorisingsuch (production)”;  thus making it contrary to the Article 31(f) of the TRIPS Agreement for
production under a compulsory licence to be done predominantly for export to other
countries.  Yet the country itself may not have any domestic need or further domestic need for
the pharmaceutical product in question.
(d) Where a country not facing a public health crisis but with capacity to produce and
export pharmaceutical products, would have assisted Members that issue compulsory licencesby exporting the products to them, paragraph (f) of Article 31 still restricts this through the
apparent requirement that it is Members facing the public health crisis that can issue such
licences, this apparent requirement arising from the condition that production under a licence
should be predominantly for the supply of the domestic market of the Member that issues the
licence.
(e) These limitations show how paragraph (f) of Article 31 may be far out of line with
the needs of Members in the face of the international and national health crises upon us.  The
paragraph needs to be deleted, or a clear exception introduced, or an authoritative
interpretation adopted, bearing in mind the short time frame within which an expeditioussolution should be adopted.
(f) Compulsory licensing as an area for consideration and action falls both within and
beyond the TRIPS Agreement, or said differently, it is only partly covered by the TRIPS
Agreement. As the declaration points out, for instance, Members have the right to determinethe grounds on which to issue compulsory licences, and such grounds are not set out in the
TRIPS Agreement.  This flexibility will need to be protected against attempts to restrictively
define the scope of the freedom of Members to determine grounds for compulsory licences.
If restrictively interpreted this too would render ineffective the freedom to determine grounds
for compulsory licences.  In this regard, there should be no basis in the TRIPS Agreement for
prohibiting the issuing of compulsory licences on grounds of addressing public health needs
abroad, and any remnant restrictions should be brought in line with the Declaration on theTRIPS Agreement and Public Health.
(g) There is a requirement for compensation to the patent holder on granting or issuing a
compulsory licence, and developing and least developed Members are usually short on
resources for such purposes.  The requirement under Article 31 is that the remunerationshould be adequate
1.  Members have the right to restrict any remedies relating to compulsory
licensing to this right to adequate remunerati on, notwithstanding what the other provisions of
the TRIPS Agreement say about the rights of patent holders.2  This important flexibility will
need to be clearly highlighted along the same lines as the declaration does for other areas, in
order hopefully to put it within ready use by Members that need it.  It will also be importantfor international mechanisms to be put in pl ace for assisting in funding the compensation
required on compulsory licences.
4. Care should be exercised not to use the existence of other categories of problems as an
argument against finding an expeditious solution as envisaged under the declaration.
3  The solution
                                                     
1 Article 31(h) of the TRIPS Agreement
2 Article 44(2) of the TRIPS Agreement.
3 For instance, it has been argued that the problem of access to medicine should be solved solely
through improving distribution infrastructure in the country and through fighting poverty.IP/C/W/351
Page 3
envisaged under the declaration relates to the spirit and flesh of the declaration, that is, for the TRIPS
Agreement to be supportive of measures to protect public health including access to medicine and to
be supportive through the manner it is interpreted, implemented and applied both in the short and long
term.  In this effort, the entire declaration and the TRIPS Agreement should be looked at and a
solution devised on the basis of all relevant provisions and all available flexibility.  But above all, theexpeditious solution under paragraph 6 should relate to the lack of or insufficiency of local
manufacturing capacity in the pharmaceutical sector, rather than inadequacy of infrastructure or even
poverty.
Elements of the Solution Under Paragraph 6
5. In trying to find an expeditious solution under paragraph 6 of the Doha Ministerial
Declaration on the TRIPS Agreement and Public Health (an expeditious solution to enable Members
with insufficient or no manufacturing capacity in the pharmaceutical sector to make effective use of
compulsory licences), all relevant provisions and all flexibility in the TRIPS Agreement should be
used to the full, as indeed directed by the Declaration.4  These provisions – on parallel imports,
technology transfer, compulsory licences, exceptions in favour of the public, and transition periods fordeveloping and least developed Members – together clearly suggest that Members should collectively
have the right to adopt the laws and take effective measures that are required as practical solutions in
the circumstances to address the international health crisis that is upon us.
6. The provisions show that a supportive interpretation and application of the TRIPS Agreement
in the context of the Declaration on the TRIPS Agreement and Public Health could allow the
following as elements of an expeditious solution under paragraph 6.
(a) Members should be permitted to provide in their laws or to adopt measures for
exports of necessary pharmaceutical products to any countries particularly developing andleast developed Members that need support to address public health concerns.  This could be
permitted as a limited and reasonable exception to patent rights under Article 30, or as a
ground for a compulsory licence determined by a Member in its own discretion (the ground
being to protect public health in another country), or as a measure taken in compliance with
UN responsibilities regarding the internationa l health crisis as recognised by the UN
(Declaration of the United Nations General Assembly of 27 June 2001) and the World Health
Organisation.  In addition, if grace periods are given to countries with public health concerns,so that they do not protect certain pharmaceutical patents, exports to such countries would not
contravene the TRIPS Agreement (but domestic patent laws in place would still apply).
(b) As is well recognised now, Members have a right to take certain measures such as the
issuing of compulsory licences on pharmaceutical products, and the adoption of suitableregimes on exhaustion of intellectual property rights including the regional and international
exhaustion.  In this regard, the phrase “pharmaceutical products” should construed broadly in
order to be meaningful, rather than narrowly in  a manner that would restrict it to only limited
components of treatment or medicines.  “Pharmaceutical products” should be understood to
include, medicines, related technical processes, and related technical equipment.  Membersshould have a right to import or accept these pharmaceutical products, as broadly understood,
from the most affordable sources, either on the basis of the doctrine of regional or
international exhaustion of intellectual property rights adopted in the country or on the basis
of compulsory licences issued by other Members that export some of the products produced
                                                     
4 The relevant provisions that may guide Members include that entire Declaration particularly its
paragraph 4; Articles 6, 7, 8, 27, 28, 30, 31, 66, 65, 70 and 73 of the TRIPS Agreement;  and the DisputeSettlement Understanding.IP/C/W/351
Page 4
under the licence, or importation under compulsory licences they issue from legitimate
sources abroad.
(c) Members may take such measures (compulsory licences, parallel imports5, other
importation6, and exportation7 where there are patents in force on the pharmaceutical products
concerned as well as where there are no such patents, or where the TRIPS Agreement or the
provisions on pharmaceutical patents are not yet in force. The solution should provide and
operate as an exception to any legal provisions that would prohibit or restrict any of these
measures, and be a supportive international basis for domestic measures such as the adoption
or publication of necessary Orders by administrations, the formation of joint ventures between
governments and the private sector where that would be appropriate, and the establishment
within regions of appropriate sourcing arrangements for pharmaceutical products.
(d) Members, in respect of licences issued to address practices that restrain trade, other
abusive practices, and insufficiency of supplies of pharmaceutical products, may recognise or
give effect to the licences at a regional level where a domestic market is part and parcel of a
regional market for instance under a free trade area or a customs union or the interimarrangements. In this regard, some Members have shown some indication of willingness to
qualify the principle of territoriality. Members may wish to make reference to footnote 1 to
Article 2 of the Agreement on Safeguards, where domestic industry is interpreted to include
the combination of the industries at the regional level where Members have formed a customs
union. A positive outcome of this exercise in the TRIPS Council would be a clearunderstanding that the phrase “domestic market” as used in Article 31(f), should under certain
circumstances mean the combined markets of th e Members that have formed or are in the
process of forming a customs union or a free trade area. This would assist in dealing with the
problem of domestic markets being too small to support viable production or utilisation of
production capacity at desired levels, and would also assist in promoting regional supplycentres for pharmaceutical products. Further, the requirement in Article 31(f) that the supply
be predominantly for the domestic market of  the Member issuing the compulsory licence,
should be interpreted to mean that up to 49.9 percent of the production can be exported.
(e) Developed Members on the one hand and developing and least developed Members
on the other, may adopt measures to build sound technological bases in the latter countries,
such laws and measures immediately operating to transfer technical skills and technicalproducts necessary for sustainable technolog ical innovation and sustainable domestic
production of pharmaceutical products to meet public health needs in developing and least
developed Members. One practical outcome or go al of such laws and measures, would be the
location or establishment of production facilities within countries with insufficient or no
manufacturing capacity but especially where these are developing or least developedMembers. In this regard, the expeditious solution the TRIPS Council is required to find
should be part and parcel of a broader implementation of the TRIPS Agreement, taking into
account the objectives and principles set out in Articles 7 and 8, as well as Article 66.2 that
deals specifically with least developed Members. But this broad context must not ignore due
                                                     
5 For instance, importing from affordable sources medi cines that have been put on the market with the
consent (express or implied) of the patent holder.
6 For instance, importation from a country that has issued a compulsory licence and exports some of
the products resulting from production under the licence; or from a country that produces pharmaceutical
products primarily for export to a country that needs thes e products, say in circumstances that meet the criteria
of Article 30 of the TRIPS Agreement (limited exceptions to meet the legitimate interests of third parties and
that do not conflict with the normal exploitation of the patent in the country of production)
7 For instance exportation of some of the product s produced under a compulsory licence, to any
countries, or specifically to the other countries within  the free trade area or customs union or their interim
arrangements .IP/C/W/351
Page 5
performance of the specific mandate to the TRIPS Council to find an expeditious solution to
the specific problem of insufficiency or lack of manufacturing capacity in the pharmaceuticals
sector.
(f) Transition periods relating to pharmaceutical and agricultural chemical products for
developing country Members should be extended in advance to permit and give predictability
for certain measures that may be necessary to address public health concerns, for instance
where that would permit the exportation by or into those developing Members of
pharmaceutical products.  In relation to this, the transition period for least developed
Members, now extended to 1 January 2016, should cover the requirement under paragraphs 8
and 9 of Article 70 to grant exclusive marketing rights, and in order that exclusive marketing
rights do otherwise operate as de facto patents they should be clearly delineated or defined tohighlight the flexibility.
(g) There should be a comprehensive moratorium on disputes against any Member that
takes measures to address the international and national health concerns in countries with
insufficient or no manufacturing capacity.  Such a moratorium would be meaningful or ofsome practical use if objectively related to the duration of the health needs, crises and other
epidemics, for instance the duration of the HIV/AIDS crisis and the prevalence of malaria and
tuberculosis in Africa.  It would therefore have to be envisaged that the moratorium would
operate for as long as it would take the inte rnational community to effectively combat the
diseases, and such a determination could be made by the World Health Organisation inaccordance with its statutes.
(h) In light of the tendency seen in some bilateral and plurilateral arrangements involving
some developed and developing countries, where the latter countries have sometimes given
up the flexibility due to them under the TRIPS Agreement, there should be some clearrecognition that in these arrangements, Members should avoid the fragmentation of the
multilateral regime on intellectual property rights provided by the TRIPS Agreement, and
should respect and ensure the use to the full of the flexibility in the TRIPS Agreement.
(i) All these options together would provide elements of the solution required under
paragraph 6 of the Declaration.  The various elements would address the various stages or
aspects of the process of ensuring access to pharmaceutical products.  That is, Members withsufficient manufacturing capacity would be able to export to Members needing support in
addressing public health concerns (in the short term); producers would be able to locate
production facilities in Members with insufficient manufacturing capacity assured that they
will be able to serve the entire regional market and to some extent other Members outside the
regional markets, in this sense benefiting from economies of scale in their production;developing and least developed country Members that have unexpired or extended transition
periods on pharmaceutical products would benefit from the exception to protecting patent
rights on pharmaceutical products; conditions and pressure arising under bilateral and
plurilateral arrangements would not prevent measures to protect public health particularly
ensuring access to medicine; and the moratorium would prevent or deal with disputesthreatened on laws and measures covered by this solution.IP/C/W/351
Page 6
ANNEX:  DRAFT DECISION
Decision under Paragraph 6 of the Ministerial Declaration on the TRIPS
Agreement and Public Health
Paragraph 6 of the Ministerial Declaration on the TRIPS Agreement and Public Health
adopted on the 14 November 2001, states as follows:
6. We recognize that WTO Members with insufficient or no manufacturing
capacities in the pharmaceutical sector could face difficulties in making effective use
of compulsory licensing under the TRIPS Agreement.  We instruct the Council forTRIPS to find an expeditious solution to th is problem and to report to the General
Council before the end of 2002.
Now therefore,
Affirming that the existence in countries or regions of public health problems as well as the
occurrence of any health crises or epidemics, would constitute national emergencies or other
circumstances of extreme urgency; and
Recognising the present international health crises constituted by certain diseases as grounds
for compulsory licences or public non-commercial use,
Members agree as follows:
[Compulsory licences]
1. (1)Option 1
Article 31 of the TRIPS Agreement is hereby amended to read as follows:
Article 31
Other Use Without the Authorisation of the Right Holder
Where a Member allows for other use of the subject matter of a patent without the
authorisation of the right holder, including use by the government or third parties authorised by the
government, the authorisation shall be considered on its individual merits and shall be granted only in
pursuance of the objectives and in accordance with the principles of this Agreement.  Where a
compulsory licence has been issued, the legitimate interests of the licensee shall always be taken into
account including in the consideration of when and whether to terminate the licence.  Productionunder a compulsory licence shall be in accordance with the licence and with the provisions of the
Decision adopted under paragraph 6 of the Declaration on the TRIPS Agreement and Public Health.
Members shall provide for the rights of the right holder to just compensation and to judicial review in
courts of record on all aspects of the compulsory licence.
OrIP/C/W/351
Page 7
Option 2
Paragraph (f) of Article 31 is hereby deleted.  The numbering of the paragraphs in Article 31
shall change accordingly.8
Or
Option 3
The following provision is hereby added to and shall be part of paragraph (f).  “This
paragraph shall not apply to any laws, measures and administrative regulations including compulsory
licences, adopted to protect public health and in particular to ensure affordable access to
pharmaceutical products”.
(2) Members agree to ensure that they complete their domestic procedures for approval
of this amendment (or modification) by 25 June 2003.
[Production for the domestic market]
2. For purposes of Article 31 of the TRIPS Agreement, “domestic market” of the Member shall
be understood to mean 9,
(a) The domestic market of the Member provided that up to 49.9 per cent of the
production under a compulsory licence may be for exports to or consumption in markets otherthan the domestic market;
(b) The whole free trade area or customs union, including their interim arrangements,
where the Member is party to a free trade area or customs union or the interim arrangements
within the meaning of the General Agreement on Tariffs and Trade 1994;
(c) All the territories collectively of the parties to that arrangement, where the Member is
party to an arrangement among developing countries within the meaning of the Enabling
Clause; and
(d) All least developed countries, where the Member is a least developed country and the
public health needs to be addressed by the authorisation under Article 31 generally applies to
least developed countries as a whole, for instance the need for medical technology and
essential medicines for the treatment or alleviat ion of the hivaids, malaria, tuberculosis and
other health crises within the meaning of th e Ministerial Declaration on the TRIPS Agreement
and Public Health.
[Production for other Members]
3. (1) Any Member may authorise production and use of a process, for export to, or under
compulsory licences issued by, another Member in the context of measures to address publichealth concerns.
                                                     
8 If this option is adopted, it would be necessary to define a domestic market .
9 This clause provides an authoritative interpretation of the phrase “predominantly for the supply of the
domestic market”, that occurs in paragraph (f) of Article 31 of the TRIPS Agreement .IP/C/W/351
Page 8
(2) Any Member may designate within its territory specific locations, enterprises, or
quantities of production by certain enterprises, for export or supply to other Members in order
to address public health needs in the latter Members.
(3) It is agreed that production and exportation to other Members in order to address
public health needs in the latter Members, is permitted under Articles 7, 8 and 30 of the
TRIPS Agreement as an exception to patent rights in all Members.
[Notification and information sharing]
4. Members that, adopt laws or measures to produce for export to address public health needs
abroad, or issue compulsory licences, or that have public health concerns, may notify them to other
Members directly or through the Secretariat of the World Trade Organisation and to any relevant
international organisations.  It is understood that this paragraph does not create a notification
obligation on Members.
[Transition periods]
5. (1) The TRIPS Council is instructed to grant extensions of transition periods relating
to Article 65.4 of the Agreement to developing and least developed country Members with
insufficient or no manufacturing capacity in the pharmaceuticals sector.
(2) The length of any additional transition periods to be granted shall be based on
objective criteria such as, adjustment costs, resource needs and constraints, levels of
development, and practical and operationalized technical assistance.  The transition periods
shall reflect periods that it will take developing and least developed Members withinsufficient or no manufacturing capacity to develop to social economic levels where they can
meaningfully and sustainably protect public health on the basis of domestic capacity.
[Exclusive marketing rights]6. (1) It is affirmed that any grant of exclus ive marketing rights shall be subject to the
following conditions:
(a) A patent must have been granted on the product in another Member country;(b) Marketing approval also must have been granted for the product in that other
Member;
(c) Both of these must have happened after the entry into force of the TRIPS
Agreement (1 January 1995);
(d) The Member where the application is pending must have agreed to grant
marketing approval for the product on which the patent application is pending (that is,
it is after the Member has granted marketing approval that the question of exclusive
marketing rights arises);
(e) The application for a patent must still be pending and a decision has not yet
been taken granting a patent or refusing or rejecting the application; and
(f) Exclusive marketing rights may be granted for only a period of 5 years and
the rights must terminate before the expiry of the 5 year period either when the patentIP/C/W/351
Page 9
is granted on the application in the mean time or when the application is processed
and refused or rejected.
(2) Exclusive marketing rights shall not prejudice the issue or operation of compulsory
licences under any intellectual property laws that  are in force for the time being in developing
and least developed country Members.
(3) It is understood that exclusive marketing rights are not equivalent to patent rights, and
that Members have the right and the freedom to define what constitutes exclusive marketing
rights.  In particular, exclusive marketing rights when granted shall not prevent the
importation or production in the country of any products relevant to the pending application.
[Remedies against re-exports]
7. Members shall provide or permit in their domestic laws and measures, the right for the right
holders to seek remedies against infringing re-expor ts out of the domestic market within the meaning
of this Decision. To this end, producers of products under compulsory licences to address publichealth needs in specific Members may label th em for consumption within designated domestic
markets.
[Integral to Declaration]
8. (1) This Decision is integral to and shall be read together with the Ministerial Declaration
on the TRIPS Agreement and Public Health and with paragraphs 17 and 19 of the Ministerial
Declaration, adopted at the Fourth Session of the Ministerial Conference on 14 November
2001.
(2) In this context,
(a) it is re-affirmed that all processes of interpretation, implementation and
application of any provision of the TRIPS Agreement should be supportive and
integral to, rather than detract from, the implementation of expeditious solutions to
enable Members with insufficient or no manufacturing capacity in the pharmaceutical
sector to make effective use of compulsory licences; and
(b) in their bilateral, regional and other arrangements, Members shall avoid the
fragmentation of the multilateral regime on intellectual property rights provided by
the TRIPS Agreement, and shall respect and ensure the use to the full of the
flexibility in the TRIPS Agreement.
[Private sector role]9. It is understood that:
(a) the private sector has an important role to play in the effective use of patent
systems especially in developing and least developed country Members;
(b) without prejudice to the rights and flexibility available to Members under the
TRIPS Agreement, the issue of compulsory licences is necessary where the marketfails to effectively address public policy concerns and in the context of this Decision
particularly those relating to protecting public health; and
(c) patent holders have obligations to society in exercising their rights, to ensure
that society benefits from advancement in science and technology.IP/C/W/351
Page 10
[Moratorium]
10. (1) Members agree that the provisions of Articles XXII and XXIII of GATT 1994 as
elaborated and applied by the Understanding on Rules and Procedures Governing theSettlement of Disputes and as incorporated in Article 64 of the TRIPS Agreement shall not be
exercised with respect to any non-discriminatory intellectual property law, regulation or other
measure adopted to address public health concerns in member countries with insufficient or
no manufacturing capacity in the pharmaceuticals sector.
(2) The moratorium in paragraph (1) may be terminated by a Decision of the TRIPS
Council in relation to specific diseases and public health needs when the World HealthOrganisation formally determines and certifies, in accordance with its statutes, that the
disease or public health need has been eliminated.
__________