MODULE 8: PATENT FLEXIBILITIES AND

DEVELOPMENT GOALS
Study Note: This module should take approximately 1.5 hours to study.

Learning outcomes

After completing this module, you should be able to:

1. explain the concept of development generally and the WIPO Development Agenda,
particularly its interface between the protection, regulation and enforcement of patents

2. explain the concept of IP flexibilities and pinpoint the available flexibilities in various
international patent regimes; and

3. explain the role of patent flexibilities in policy formulation at institutional and national levels.

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1. Introduction to IP and development – special focus on patents

1.1 General introduction to IP and development

This module aims at helping you understand the interface between patents and broader
developmental issues in society. As you may remember from the introduction of Module 1, the
question of how intellectual property rights (IPRs) impact economic development and growth
processes has long been a subject of debate. A number of variables must be taken into account,
and in many cases the prevailing political and socio-economic circumstances determine the
extent to which IPRs may influence the development process.

Development is a very broad concept, which can be categorized into the following clusters:

• economic development;
• social and cultural development; and
• scientific and technological development.

These clusters reflect a recent approach that seeks to take a broader and more inclusive view of
development. The expansion of human capabilities to achieve certain valuable objectives is
considered the central feature of the development process. Thus, the Millennium Development
Goals (MDG), with a target achievement date of 2015, were intended to do the following at various
levels:

• eradicate extreme poverty and hunger;

• achieve universal primary education;
• promote gender equality and empower women;
• reduce child mortality;
• improve mental health;
• combat HIV/AIDS, malaria and other diseases;
• ensure environmental sustainability; and
• develop a global partnership for development.

Several countries took policy and regulatory measures to achieve these goals, including those
that are relevant for IPRs.

You will already be aware of some of the substantive and procedural components of the IPR
system, such as copyright, trademarks, patents and industrial designs. Understanding the role of
each of those IP subsets in developmental processes is likewise important, because it will help
you understand how the various aspects of IP can influence the formulation of national policies
and legislation in varying social and economic contexts. For instance, effective copyright
promotion and protection may lead to booming creative industries, improved access to information
and educational materials and preservation of cultural heritage, to mention just a few advantages.
These advantages may in turn lead to additional income generation, job creation, and
improvement of life in society overall and are important indicators of development in any society.

The same can be said of the patent system. The productive capacity of institutions and economies
largely depends on their research and development (R&D) efforts and the existing innovative
capacity in a particular context. The innovative capacity of a particular enterprise or nation is
directly linked to the system that nurtures and respects inventiveness. Therefore, the patent
system serves to create an enabling environment in which innovation can thrive.

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In order to understand how the patent system may contribute to societal development, it is
important to understand the fundamental economic objectives of IPR protection.

The first objective is to promote investment in knowledge creation and business innovation by
establishing an exclusive rights regime to deal with newly developed technologies, goods and
services. It stems from the recognition that the development or creation of new ideas would
normally involve a large upfront investment. It thus follows that those who have invested in the
creation of such new and innovative ideas should benefit by, among other things, acquiring
temporarily exclusive rights over those innovations, by means of preventing or excluding third
parties from making, using, offering for sale, selling, or importing the patented product or process
without the patent owner’s consent. Absent such rights, economically valuable information could
be appropriated without compensation by unscrupulous competitors. Without such protection,
individuals and institutions would be less inclined to incur the costs of investing in research and
commercialization activities. Therefore, in economic terms, weak or inefficient IPRs create a
negative dynamic externality. 1

Most firms and institutions that have strategically deployed efficient patent approaches have
experienced, among others, the following:

• Increase in production following the deployment of new production techniques;

• Business expansion – access to new markets and retention of market niches;
• New income generation streams through patent licensing;
• Job creation, as expanded markets require new operation centers which in turn require
new employees; and
• Transformation of life in society – the patent system has contributed to all the recent
technological innovation that has transformed life in many societies, such as new
money/payment systems, social networks and other communication media. While the
utility and benefits of these innovations may be questioned, there is general agreement
that they do play a role in transforming life in society.

The second objective underlying IP regimes is based on the need to promote widespread
dissemination and sharing of new knowledge by encouraging right holders to set down their
inventions and innovative ideas in publicly accessible records. The patent system does this by
requiring patent applicants to make full and complete disclosure of their inventions. In this sense,
it is evident that while no one will be allowed to use the information in the patent application
without the authorization of the inventor/applicant, people may access the information through
patent searches or perusal of the records. This is how the patent system is said to facilitate access
to and sharing of technical information – which in itself is crucial for the progress of science and
technology.

Now that you have learned about the underlying objectives of the patent system, you may now
be in a position to see the potential operational tradeoff between these two objectives. On one
hand, it may be asserted that an overly protective patent system could result in the limitation of
the social gains from inventive activities by reducing incentives to disseminate its fruits; on the
other, an excessively weak patent system could reduce innovation by failing to provide an

1 For more details, see Intellectual Property Rights and Economic Development, by Keith E. Maskus,
2002, prepared for the series “Beyond the Treaties: A Symposium on Compliance with International
Intellectual Property Law”, organized by the Fredrick K. Cox International Law Center at Case Western
Reserve University.

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adequate return on investment in R&D. Therefore, a strategic policy balance needs to be found
that is both dependent on and responsive to the prevailing social and economic conditions in
specific production contexts.

In order for the patent system to contribute to societal development, government intervention
through policy, enforcement, administration and legislation is crucial. Policymakers need to
understand the social, economic, and technical competitive dynamics in their own context that, in
turn, will serve to inform them on the appropriate patent choices to be made by the government.
Once that is done, it will be relatively easier to integrate the patent system into the production
process and into the institutional and individual levels.

1.1. The concept of development

The meaning of the term “development” has long been debated. There has never been a
consensus on what the term represents. This view is shared and reflected in the UNDP Human
Development Report (HDR), 1990, which contained the following paragraph:

“Although development has been a constant concern of government policymakers,

economists and other social scientists – and has touched the lives of more people
than ever before – there has been little agreement on what constitutes
development, how it is best measured and how it is best achieved. One reason for
this lack of agreement is that dissatisfaction with the pace and character of
economic and social change has instilled a desire to redefine the aims and
measures of development.” (UNDP 1990, 104)

The changing global economy is creating unprecedented challenges and opportunities for
continued progress in human development. Global economic and political structures are in flux at
a time when the world faces recurrent financial crises, worsening climate change and growing
social unrest. Global institutions appear unable to accommodate changing power relations,
ensure adequate provision of global public goods to meet global and regional challenges, or
respond to the growing need for greater equity and sustainability.

This phenomenon presents an opportunity: the principles that have driven post-World War II
institutions and guided policymakers need recalibration to accommodate the growing diversity in
voice and power and to sustain development progress over the long term. These principles
require reconsideration, and global institutions need greater flexibility to reinforce directions that
put people first and nudge institutions to aim forcefully at a fairer, more just world. Potentially, the
growing diversity in development patterns is creating space, even demands, for such a global
dialogue and restructuring.

Despite the existing debate on what constitutes development, the concept of development is
evolving. The old school used to confine this concept to economic development. However,
recently we have seen that the concept is no longer seen as purely an economic phenomenon,
but rather a multi-dimensional process involving reorganization and reorientation of entire
economic and social systems. Development is the process of improving the quality of all human
lives in three equally important aspects. These aspects are:

• raising peoples’ standard of living, i.e., incomes and consumption, environment they
live in, levels of food, medical services and education through relevant growth
processes;

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 • creating conditions conducive to the growth of peoples’ self-esteem through the
establishment of social, political and economic systems and institutions that promote
human dignity and respect; and
• increasing peoples’ freedom to choose by enlarging the range of their choice variables,
e.g., varieties of goods and services.

Recently, there has been a more refined understanding of the term development, which has led
to the introduction of new expressions such as “sustainable development”. Sustainable
development refers to a mode of human development in which available resources (which as per
economic theories are “scarce”) are optimally used in a manner that is geared toward meeting
human needs while ensuring the sustainability of natural systems and the environment, so that
these needs can be met not only in the present, but also for generations to come.

An understanding of how patent systems constitute an integral part of the developmental process
is therefore very important.

1.2. The role of patents in development

Now that you have a clear understanding of the term “development”, this part aims at helping you
appreciate the role of patents in the development process. As you will have already noted, the
concept of development is very broad. A number of variables are essential for triggering growth
in economic and social terms. For instance, economists recognize several channels through
which patents could stimulate economic development and growth. As these channels are
sometimes interdependent, it is important for policymakers and development planners to
understand the interface between patents and development, so that they can devise the
appropriate policy incentives to promote integration of patents and development strategies.

Admittedly, the net impact of patents and development may, and actually does, vary from country
to country; yet, there is a growing consensus that in the final analysis embracing a strategic patent
regime generally leads to development. The preferred institutional and national approaches may
vary depending on the level of development and institutional frameworks. For instance,
developing countries and least-developed countries (LDCs) may prefer to have a patent system
that favors information diffusion through low-cost imitation of foreign products and technologies.

Such a policy approach may be selected where domestic inventive capacity and local innovation
potential are insufficiently developed to warrant excessive patent protection. However, even in
situations of low levels of innovation and weak interface between research institutions and
industry, inadequate IPRs could hamper technical changes essential for development. This is
partly because most of the inventions and product innovations are aimed at local markets and
could benefit from domestic protection of patents. Furthermore, in the absence of effective patent
protection, local firms and institutions may find themselves at a competitive disadvantage in
relation to foreign firms, which would mostly have their inventions protected, even in foreign
jurisdictions.

Two important developmental variables illustrate the significant role that patents may play.

• Encouraging innovation: In simple terms, innovation can be defined as the process

of applying new knowledge or solutions with a view to addressing existing market
needs and requirements. The concept of innovation may take various forms, including
innovative technologies and management skills and practices. The innovation process
requires important variables, such as access to relevant technologies and the ability

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 to control the use of such technologies. As you may know from your learning in the
previous modules, the patent system facilitates the realization of these two important
variables. Patent databases are rich reservoirs of information on patents and
inventions, which may be utilized for further innovation. The patent protection system
enables firms to recoup the costs of investment that they may have made in the
process of R&D. In this respect, patents therefore contribute to encouraging
innovation.

• Product development: Product development is a process of creating a product with

new or different characteristics that offer new or additional benefits to the customer.
The process may involve modification of an existing product or formulation of an
entirely new product that satisfies a newly defined customer want or market niche.
Modification of a product would normally involve introduction of new technical or
functional features. This is true for the formulation of a new product: there will be issues
related to new technologies and in some cases complementary technologies that must
be adopted or integrated in developing a new product. All these aspects require a
careful and strategic consideration of patents and other aspects of IP in terms of
protection mechanisms, access and the right to use.

Admittedly, in most cases invention involves minor adaptations of existing technologies and
products. When this happens, the cumulative impacts of these small inventions can be critical for
growth in knowledge and the productive activity of an enterprise or research institution. Other
equally important considerations must be taken into account in order for overall productivity to
increase. These considerations may entail adoption of new management and organizational
systems for technology controls and techniques for quality control, which can markedly raise
productivity. Research indicates that while such investments are costly, they ultimately tend to
have high social returns because they are crucial for raising productivity even in countries with
limited industrial capacity. 2 These investments are more likely to be undertaken in an environment
where the risks of unfair competition and patent infringement are small.

Conversely, countries that retain weak standards could remain dependent on dynamically
inefficient firms that rely on counterfeiting and imitation. In the long run, this may harm the process
of development by limiting the growth and foundations of local innovation capacities.

An example of this process is that protection for utility models has been shown to improve
productivity in countries with lagging technologies. In Brazil, utility models helped domestic
producers gain a significant share of the farm machinery market by encouraging adaptation of
foreign technologies to local conditions; in the Philippines, they encouraged the successful
adaptive invention of rice threshers.

SELF-ASSESSMENT QUESTION
SAQ 1: In not more than 100 words, explain how an appropriate patent system can
contribute to development.

Type your answer here:

2Evenson, R. and Westphal, L., (1995): Technological change and technology strategy, in: T.N.
Srinivasan and J. Behrman (eds.) Handbook of Development Economics, Vol. 3 (Amsterdam: North
Holland).

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Model Answer SAQ 1:

One of the ways in which strategic patents intervention can contribute to development is through
provision of necessary policy space for local innovation to take place. This can be done through
deliberate efforts to facilitate access to inventions which are in the public domain or negotiating
for free licenses. Patents have also a role at the enterprises levels by leveraging innovation
thereby improving production process and techniques, expansion of business and also can be
used to control market if an enterprise has monopoly on key technologies.

1.3. Brief Introduction of the WIPO Development Agenda and its links with Patents

The Development Agenda (DA) adopted by the WIPO General Assembly in September 2007
contains 45 recommendations (from 111 original proposals) divided into 6 clusters. Its aim is to
ensure that development considerations form an integral part of WIPO’s work. As such, it is a
crosscutting issue that touches upon all sectors of WIPO. Of these recommendations, the
Assembly identified a total of 19 as requiring immediate implementation. This in no way suggests
that the remaining 26 are of lesser significance or priority. The 19 recommendations were chosen
primarily because their implementation does not require the immediate engagement of additional
staff and financial resources. 3

The six clusters in the DA cover the following broad themes:

A. Technical Assistance and Capacity Building

B. Norm-setting, flexibilities, public policy and public domain
C. Technology Transfer, Information and Communication Technologies (ICT) and Access
to Knowledge
D. Assessment, Evaluation and Impact Studies
E. Institutional Matters including Mandate and Governance
F. Other Issues

3See Preliminary Implementation Report in Respect of 19 Proposals, February 28, 2008 available at:
http://www.wipo.int/edocs/mdocs/mdocs/en/cdip_1/cdip_1_3.pdf.

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When WIPO adopted the DA, Member States also approved a recommendation to establish a
Committee on Development and Intellectual Property (CDIP), which currently deals with the issue
and makes proposals to the General Assembly.

The primary purpose for having adopted the DA was to repackage the framework underlying the
IP system so that it helps achieve society’s broader development goals. The DA seeks to achieve
this through the use of various IPR tools not only for economic growth in a particular society or
state, but also to make the IPR system serve as a vehicle to attain public welfare in sectors such
as health, education and research, the environment, technology transfer and self-determination.

The DA is a departure from the international IPR perception following the Agreement on Trade-
Related Aspects of Intellectual Property (TRIPS Agreement) that “one size fits all” to a more
inclusive and country-specific approach, in which the call is to devise IP regimes and implantation
strategies in line with the social and economic environment in a particular country.

However, this does not mean that the DA agenda to reduce the international IPR compliance
system restrictions for Member States. It rather intends to draw on a flexible and development-
oriented approach that may be deployed by Member States in implementing their IP obligations.
In other words, the DA presents a paradigm shift whereby the IPR system should not be viewed
as an end, but rather as a means for the attainment of public welfare.

For this reason, the DA seeks to:

1) Reflect on the traditional balance between public interest and private interest of
IP right holders;

2) Recognize Member States’ sovereignty in the implementation of IP laws and

obligations in accordance with their national domestic priorities and levels of
economic development; and

3) Ensure that the existing national laws uphold the public interest and that new
treaties do not hinder the ability of governments to use the flexibilities built into
existing instruments to meet their domestic needs.

1.3.1. Rationale for the adoption of the DA:

As noted previously, the idea behind the adoption of the DA centers on the need to repackage
the IP system so that it may serve broader societal development goals. In this context, the DA is
based on the following approaches:

1) Participatory and inclusive process: involvement of developing countries and

LDCs in the process of norm-setting;

2) Country-specific approaches: taking into account prevailing local conditions;

3) Immediate and long-term goals: cognizance that there are limited resources;

4) Principle of harmonization: IP should be integrated within broader national

development policies and strategies; and

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 5) Overreaching: the DA serves as a platform for the discussion and the
development of regulatory regimes for new frontiers and aspects of IP, such as
the protection of traditional knowledge.

2. Patent flexibilities in the IPRs

2.1. Brief introduction

One of the ways in which the patent system may contribute to development is through the use or
application of patent flexibilities.

The concept of flexibilities: Patent flexibilities may be defined as the substantive, enforcement
and administrative patent options available to countries under existing international patent
regimes, including the TRIPS Agreement. Under the system of flexibilities, all countries are
provided with leeway to develop patent protection systems that, while consistent with international
patent obligations, are adapted to local or other specific conditions or needs. Therefore, under
the patent flexibility framework, when countries design and implement patent regimes they must
make crucial choices on the type and scope of patent rights conferred and, on the procedures, or
statutory requirements that must be adhered to by applicants.

Flexibilities maybe used not only to opt for the lower minimum standard permissible in certain
matters, but also a higher one if the country policy so allows. These higher standards have
enabled some developing countries to agree to TRIPS plus commitment to several categories of
IPRs, including patents. In the end, the choices made must aim at enabling the local innovation
system to adapt existing technologies in a way that enhances the production capabilities and the
needs of local industry.

This section describes the flexibilities provided for in the key international patent regulatory
instruments and regimes, namely the TRIPS Agreement of 1994, which includes provisions of the
Paris Convention for the Protection of Industrial Property of 1883, among other WIPO
administered treaties.

At the very outset, it should be noted that the inclusion of flexibilities in these international
instruments is a result of concerted effort and sometimes extended debate among Member
States. In this sense, it can be said that these flexibilities are a consensus – or rather compromises
– that have been agreed to, explicitly or implicitly, by the Member States. Given the varying levels
of development and economic structure in the members to these agreements, it is thought that
inclusion of flexibilities provides an essential platform upon which the conditions of individual
countries can be accommodated within the framework of obligations.

2.2. Flexibilities in the Paris Convention for the Protection of Industrial Property

As you learned before in this course, the Paris Convention was the first comprehensive
international convention on matters of industrial property and was approved and signed by a
Diplomatic Conference convened in Paris in 1883.

There is a great degree of flexibility in the implementation of the obligations under the Paris
Convention. Its members, constituted into the Paris Union, are given great leeway with regard to
the compliance approaches. This policy space given to the members of the Union used to be

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called, by academics and experts, the “asymmetries” of the Paris Convention; 4 in contrast, the
more recent expression “flexibilities” is mainly used to refer to the policy space left by the TRIPS
Agreement.

2.2.1. Flexibilities in the scope of patent rights

Under the Paris Convention, specifically Article 1(3), members of the Union are given policy space
to determine what shall constitute patentable subject matter. The members of the Union thus have
room to devise laws and policies on patents that reflect the conditions of obtaining a patent in
their country, depending on their social and economic needs. A good example of this is United
States jurisprudence on patents, specifically the famous decision of the US Supreme Court in
Diamond v. Chakrabarty (1980), in which the Court ruled that living organisms are patentable
subject matter under US patent law. The Court established what may be said to be an “open-
ended” approach on patentable subject matter by pronouncing that “anything under the sun that
is made by man” is eligible for patenting. This is a classic case wherein the judicial authority has
adopted a broader approach in interpretation of patentable subject matter.

2.2.2. Flexibilities in the minimum standards of patents

The implementation options enjoyed by members of the Paris Union are derived from application
of the principle of national treatment, as established in Article 2(1) of the Convention. Based on
this principle, countries are free to set their own standards of patent protection in their national
laws, which will also apply to other members of the Union. However, in the event that no protection
is available to their own nationals – for instance because the invention is excluded from
patentability – the same standard would apply for nationals of other countries. Thus, if
pharmaceutical products are excluded in a given country, neither a national of that country nor of
any other country would be able to secure protection for their inventions on this type of product,
without contravening the Paris Convention.

2.2.3. Flexibilities in use and enforcement

a) Compulsory licensing and government use

The interface between patent protection and public interest has resulted in the adoption of certain
flexibilities in the use and enforcement of patent rights. One good example is the provision
regarding compulsory patent licensing. Compulsory licensing, contained in Article 5 (2) of the
Convention, allow members to take legislative measures for granting compulsory license to
prevent abuses related to the exercise of patent rights.

In most jurisdictions, local patent legislation has incorporated provisions on compulsory licensing.
The underlying policy for compulsory licensing rests on the search for balance between individual
rights (in the form of monopoly rights under patents) and public rights (in the form of right to access
certain essential services whose availability may be dependent on the patent rights). Flexibility on
compulsory licensing is also intended to prevent possible abuse of patent rights by patent holders

4 The term “asymmetries” is preferred in some quarters because it carries with it a connotation of
developmental inequalities between members of the Union which have prompted the inclusion of
provisions that allow room for the members of the Union to take into account their own social and
economic conditions in addressing their priorities when implementing the obligations under the
Conventions.

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who may unreasonably refuse to grant a license to a local manufacturer or insist on
unconscionable terms of licensing.

In certain extreme cases of flagrant abuse and in which compulsory licensing does not suffice to
deter that abuse, members of the Union are given more flexibility, which may entail outright
forfeiture of the patent (Article 5(3)).

We have now seen the framework upon which the flexibility on compulsory licensing can be
exercised by members of the Paris Union. However, it is important to note the restrictions that
must be adhered to by a country that invokes the provisions of compulsory licensing. Indeed, the
granting of compulsory licenses is subject to the following conditions:

o There is a serious public danger whose solution relies on the use of a particular
patented invention.
o There must be evidence that attempts were made to request a license from the
patent holder on terms that are consonant with the financial capability of the
licensee.
o The patent holder has refused to grant a license on such terms.
o There must be due process in the granting of a compulsory license.
o The use of products/processes of the patent must be for local consumption.
o Once the public danger has disappeared, the compulsory license should
immediately cease.
o Such a compulsory license shall be non-exclusive and non-transferable, even in
the form of the grant of a sub-license, except with that part of the enterprise or
goodwill which exploits such license.

b) Exhaustion of rights

As was mentioned before in this course, exhaustion of rights is the IPR principle that postulates
that once a product protected by an IP right has been marketed either by the IP owner or by others
with their consent, the IP rights of commercial exploitation over this given product can no longer
be exercised by the IP owner, as they are “exhausted.” Sometimes this limitation is also called
the “first-sale doctrine,” as the rights of commercial exploitation for a given product end with the
product’s first sale.

Countries may choose to legislate on the applicability of the doctrine of exhaustion based on the
compelling needs of the time. In this way, the use of flexibility on exhaustion of patents rights may
enhance access to essential products whose rights have been exhausted.

2.3. Flexibilities in the TRIPS Agreement

The preamble to the TRIPS Agreement set a basis for inclusion of flexibilities in the enforcement
of the Agreement. The preamble recognizes the need for effective and appropriate means for the
enforcement of trade related IPRs by taking into account differences in national legal systems.
The Preamble to the Agreement also states that the underlying public policy objectives of national
systems for the protection of intellectual property should include developmental and technological
objectives. The Agreement also recognizes the special needs its LDC Members for maximum
flexibility in the domestic implementation of laws and regulations to enable them to create a sound
and viable technological base.

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It is along these lines that Article 1 of the TRIPS Agreement states that members can implement
more extensive protection in their law by whatever method they deem appropriate, provided It
does not contravene the provisions of the agreement.

Therefore, from the very outset, the TRIPS Agreement introduces a framework upon which
flexibilities can be accommodated. In the sections that follow, we shall study some of the available
flexibilities under the TRIPS Agreement, and in the process, you should be able to determine how
these may be used for developmental purposes in a given society.

2.3.1. Flexibility on the scope of patent rights

One of the relevant provisions regarding the scope of rights on this matter is Article 27 of the
TRIPS Agreement. As a general rule, under Article 27 patents should be available for any
invention and in any field of technology. This is a very broad interpretation of the scope of
patentable subject matter.

However, while Article 27(1) confers such a broader approach to patent rights, the Agreement
recognizes that Member States may have their own special needs that may call for specific
approaches in implementing their obligations. For instance, Article 27(3)(b) allows (but does not
oblige) WTO Members to exclude plants from patent protection. In addition, countries that opt to
implement this exception may exclude plants, whether obtained through conventional breeding
processes or through the use of genetic engineering.

Under the TRIPS Agreement, microorganisms may be granted patent protection, yet the
obligation to protect microorganisms is limited to organisms that are not visible to the naked eye,
such as bacteria, viruses or fungi, provided that they constitute an “invention” that meets the
patentability requirements. The obligation does not extend to microorganisms found in nature,
even if isolated. Also, it does not extend to cells or genes, which “are naturally occurring entities
that are there to be discovered, like new species or new planets.”

In some jurisdictions, such as Europe and the US, isolated genes for which a function has been
identified have been deemed patentable. This approach has influenced patent legislation and
practices in many countries. However, it has been increasingly questioned in recent years.

An important question is whether the possibility of prohibiting patents on plants may be

understood as also applicable to plant cells, genes and other sub-cellular components. It could
be argued that none of those components are “plants” and, therefore, that they are not covered
by the exclusion provided for in Article 27.3(b). But patenting of such components (even if
modified) may be equivalent to patenting the plant as such, since the patent owner may prevent
commercial acts relating to any plant that contains the patented subject matter and thereby nullify,
in practice, the exclusion relating to patents for plants. This might be the case even where one
single modified gene or an artificial gene construct is incorporated into a plant (whose genotype
may contain several thousand coding genes).

2.3.2. Flexibility on patents on health-related inventions

The premise upon which the TRIPS Agreement is founded is provided under Article 8 of the
Agreement, which allows members to adopt measures to protect public health and nutrition and
to promote the public interest in sectors of vital importance for them.

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Immediately after the adoption of the TRIPS Agreement, problems arose largely due to what was
considered to be the prohibitive cost of patented antiretroviral medicines as well as of medicines
used in the treatment of opportunistic infections. The high prices for these medicines seriously
compromised the ability of governments, communities and other players in the health sector in
developing countries to manage the HIV/AIDS epidemic effectively. The cost disparity virtually
guaranteed that most of the sufferers in these countries would have little or no access to the best
available treatments. It is important to remember, however, that the problems of cost are not
limited to HIV/AIDS and other politically visible diseases such as malaria and tuberculosis.

The international debate on the implications of the TRIPS Agreement on access to essential
medicines culminated in the Fourth Session of the WTO Ministerial Conference in Doha, at which
developing countries were pitted in a bitter debate against developed countries over the
interpretation and scope of TRIPS flexibilities and how these could be utilized to address the
public health needs in developing countries.

The Doha Declaration, adopted at the Conference, represents a final agreement between the two
groups of countries to the effect that public health considerations condition the extent to which
rules on patent protection are implemented. It is therefore a significant achievement for
developing countries in using TRIPS flexibilities, particularly in the context of pharmaceutical
patents. It testifies to the need for cooperation among the countries of the South in finding
solutions to alleviate the disease burden.

2.3.3. Essentially biological processes

Further to the above, TRIPS Article 27.3(b) allows exclusion from patentability in the case of
“essentially biological processes” for the production of plants. The meaning of “essentially
biological processes” – a concept drawn from the European Patent Convention (EPC) – has been
examined in many European Patent Office (EPO) decisions and given a rather narrow
interpretation.

Based on the jurisprudence of the EPO (mainly the Tomato and Broccoli cases, G1/08 and
G2/07), it is now clear that justifying patentability in essentially biological processes requires a
significant demonstration of human intervention that goes beyond being a process based solely
or principally on crossing and selection. In practice, it is likely that a step of genetic modification
within the initial crossing step and the selection steps of the claims may be necessary. This
decision is therefore likely to exclude from patentability even extremely technical plant breeding
methods. Consequently, many more applicants will need to consider applying instead to the
Community Plant Variety Office for protection of any new plant varieties generated.
The experience mentioned above illustrates the enormous policy space provided by the TRIPS
Agreement, which for developing countries could be instrumental in achieving a number of
developmental objectives, including food security and improvement of agricultural yields.

2.3.4. Flexibilities of patents regarding new plant varieties

Article 27(3)(b) of the TRIPS Agreement, national laws may provide for patents, a combination of
plant variety protection (PVP) with patents and/or sui generis forms of protection, whether
modeled in the context of the UPOV Convention. In choosing the form of protection, countries
have choices on whether to exclude new plant varieties from patent protection or provide a
protection framework within the patent law.

DL170 Essentials of Patents – Module 8 page 13 / 23

Currently, many countries exclude new plant varieties from the scope of patent protection and
have enacted separate legislation on matters of new plant varieties. The underlying reasons for
exclusion of new plant varieties may vary from country to country. However, from a substantive
law point of view, it may be asserted that the patentability requirements (particularly the inventive
step), which are one of the pillars of patent law, not only seem unsuited to plant varieties, but also
may – given the scope of rights generally granted under patents – deter further research and
breeding on protected materials and erode the rights of farmers to save and reuse seeds. Such
an outcome may be counter-productive and serves to explain why in many countries a sui generis
system has been preferred to accommodate developmental goals.

2.3.5. Exceptions based on ordre public and morality

Article 27.2 of the TRIPS Agreement provides for the possibility of refusing patents for inventions
the commercial exploitation of which is “necessary to protect ordre public or morality, including to
protect human, animal or plant life or health or to avoid serious prejudice to the environment,
provided that such exclusion is not made merely because the exploitation is prohibited by their
law.”

The exception based on ordre public or moral grounds to prevent the grant of patents relating to
plants has been invoked in some circumstances in national courts, but with limited success. In
Plant Genetic Systems, the Board of Appeal of the EPO found that the invention (a genetically
modified plant) was not improperly used, and it had not had destructive effects.

However, in other cases the challenge based on ordre public has been successful. A good
reference on this is the 1999 case in the US where a legal challenge was brought in the US
against a patent granted to a US citizen on the ayahuasca vine, which is native to the Amazonian
Rainforest. The Coordinating Body of Indigenous Organizations of the Amazon Basin (COICA)
and other indigenous and environmental groups objected to the patent not directly on ordre public
or moral grounds, but because it would have allowed a US citizen to appropriate a plant that is
not only well-known, but also sacred, to many indigenous peoples of the Amazon.

Summary of facts and decision concerning the ayahuasca case:

In 1986, Loren Miller, an American scientist and entrepreneur, obtained a US patent
on a strain of the ayahuasca vine. This vine is native to the Amazon Rain Forest and
has been used by healers and religious leaders throughout the Amazon for
generations to treat sicknesses, contact spirits, and foresee the future. Many
indigenous Amazon tribes also view the plant as a sacred symbol of their religion.

Tribal leaders learned of Miller’s patent several years after it was issued. They were
understandably angry and incredulous that a foreigner had patented a plant that they
had been using and worshiping for hundreds of years. Voicing his countrymen’s
frustration, Antonio Jacanamijoy, the leader of a council representing more than 400
indigenous tribes and groups in South America, stated, “[o]ur ancestors learned the
knowledge of this medicine and we are the owners of this knowledge.”

In 1999, Jacanimijoy’s council applied for and obtained a rejection of the ayahuasca
patent from the USPTO.

It is important to emphasize that the provisions of the TRIPS Agreement have placed greater
emphasis on morality. As stated above, Article 27(2) of TRIPS makes provision for Members to

DL170 Essentials of Patents – Module 8 page 14 / 23

exclude an invention from patent protection if prevention of “commercial exploitation” of an
invention is “necessary” to protect “ordre public or morality.” In other words, if exclusion of the
invention from patentability is the only way to prevent its commercial exploitation, then the State
may bar the granting of a patent. On the other hand, application of this provision by Member
States is limited, in that patent protection can be denied only if preventing commercial exploitation
of an invention is necessary to protect ordre public or morality.

Although Article 27.2 is likely to be relevant in only a limited number of circumstances, it may be
applied, for instance, when the diffusion of a certain plant technology, such as the sterilization of
seeds, may have negative effects on agricultural production or the environment. Such an
intervention is crucial for public policies on matters such as food security and sustainable
development.

2.3.6. Unintentional infringement

The patent laws may exclude liability in cases of bona fide infringement, as stipulated in Article
44.1 of the TRIPS Agreement. A scenario of bona fide infringement can be illustrated as follows:
In the field biotechnology, the presence of a trait in a plant protected by a patent may or may not
be intentional, as a patented gene trait may disseminate by natural means and appear in
plantations unintentionally. A perfect example in which the legal effects of this situation were
considered was the Monsanto Canada Inc. v. Schmeiser 5 case, wherein Monsanto sued
Schmeiser, a Canadian canola breeder and grower, who had harvested and saved from one of
his fields canola seeds containing Monsanto’s patented transgene that conferred resistance to
glyphosate. The Canadian Supreme Court ruled that Schmeiser had infringed Monsanto’s patent
despite the fact that the presence of the patented gene in the defendant’s field was deemed to be
unintentional.

2.3.7. Compulsory licenses

As an alternative to an uncompensated exception, patent laws can provide for a remunerative

exception based on a compulsory license. A compulsory license is a license granted by an
administrative or judicial body to a third party to exploit an invention without the authorization of
the patent holder. This type of license is commonly referred to as a non-voluntary license,
connoting the lack of consent by the patent holder.

The TRIPS rules on compulsory licensing are contained in Article 31. The concept of compulsory
licensing itself, however, has a long history. One of the earliest legal instruments to incorporate
the concept was the United Kingdom (UK) Statute of Monopolies of 1623. At the international
level, compulsory licenses are recognized and provided for in the Paris Convention of 1883.
Indeed, by 1994, when TRIPS was adopted, compulsory licensing provisions had become a
typical feature of patent laws around the world.

Article 31 of TRIPS lists detailed conditions that must be complied with when a WTO Member
chooses to use compulsory licensing. These include the need to grant licenses on a case-by-case
basis, evidence of an unsuccessful prior request for a voluntary license, non-exclusivity of the
license and the requirement for compensation.

There are also conditions governing the termination of licenses and restrictions on export and on
assignment of licenses to third parties.

5 [2004] 1 S.C.R, 902.

DL170 Essentials of Patents – Module 8 page 15 / 23

Notwithstanding these conditions, the TRIPS Agreement still leaves considerable room for
flexibility in legislating on compulsory licenses. Compulsory licensing as a policy mechanism can
be used to address a number of situations, including but not limited to:

o the high prices of medicines;

o anticompetitive practices by patent holders;
o failure by patent holders to sufficiently supply the market with needed products;
o emergency public health situations;
o the need for establishing a pharmaceutical industrial base.

2.3.8. Research and experimental exception

Article 30 of the TRIPS Agreement establishes the general bases for exceptions to the exclusive
rights envisaged under the Agreement. The rule is that exceptions to the patent rights must, taking
into account the legitimate interests of third parties, be limited, not unreasonably conflict with the
normal exploitation of the patent, and not unreasonably prejudice the legitimate interests of the
patent holder. Although not explicitly mentioned in the Agreement, the research and
experimentation and “early working” exceptions are the two widely accepted exceptions under
Article 30 with implications for public health. In some countries, such as the United States, these
exceptions have traditionally been judicially determined while in others, such as Japan, they are
statutory rights.

The research and experimental-use exception is aimed at ensuring that scientific research for
generating new knowledge is fostered and is not impeded by patents. It is a longstanding
exception justified on the basis that one of the main aims of patent laws is to facilitate the
dissemination of knowledge, promote innovation and thereby facilitate the advancement of
science. The exception is useful in fostering technological progress in pharmaceutical research,
by exempting experimentation acts for purposes such as inventing around an initial invention,
improving on an invention or evaluating an invention to determine if it works.

The “early working” exception, on the other hand, covers the case of potential competitors that
use an invention without authorization from the patent holder, to undertake acts necessary for
obtaining regulatory approval and registration of a generic product before the expiry of the patent
term. The exception is intended to ensure that generic versions of the product are available on
the market immediately after or within a reasonable time following patent expiry.

Actual implementation of the exception differs from country to country. Under the 1984 United
States Drug Price Competition and Patent Term Restoration Act, the United States introduced
this type of provision while also allowing patent holders an extended period of protection. Other
countries such as Kenya, on the other hand, provide for the early working exception to generic
manufacturers without extending the life of the patent.

2.3.10 Control of abusive patents practices

The TRIPS Agreement envisages a balance between the promotion of technological innovation
and the transfer and dissemination of technology, in addition to a balance in the enjoyment of the
benefits accruing to the users and producers of technology.

The principles upon which the balance is to be achieved are, first, that Members when formulating
or amending their laws may adopt measures necessary for the protection of public health and

DL170 Essentials of Patents – Module 8 page 16 / 23

nutrition and take measures to promote public interest in sectors of vital importance to their socio-
economic and technological development. Second, they may adopt appropriate measures to
prevent the abuse of IPRs by rights holders or the resort by them to practices that unreasonably
restrain trade or adversely affect the international transfer of technology.

The second principle, in particular, should be read as an interpretive principle in favor of the
adoption of measures deemed necessary for the promotion of competition and the prevention of
abuse of the monopoly position by patent holders, including that consisting in anticompetitive
licensing arrangements. Article 40 of the TRIPS Agreement specifically establishes a regime for
the control of anticompetitive practices in contractual licenses.

It follows that, apart from the measures aimed at improving competitiveness in the
pharmaceutical market that a country may take under Article 8(2), countries can also take
additional measures to control the licensing practices of pharmaceutical companies. By
prohibiting the use of terms such as exclusive grant back clauses, clauses that preclude
challenges to validity of the patent and coercive packaging, countries can reduce the
concentration of market power and improve competition in pharmaceutical markets.

3. The use of patent flexibilities in promoting developmental goals

3.1. General note

In this section you will be introduced to the underlying objectives of the patent flexibilities
framework, particularly regarding how flexibilities may be used to attain developmental goals. It
is important that you take note that the subject of flexibilities is a crosscutting issue, not just among
the different domains of intellectual property, but also among intellectual property policies and
other related policies. Nevertheless, particular attention has been given by Member States to the
implementation and use of flexibilities in the field of patents, presumably because policy makers
and experts have been confronted with the need for flexibilities in sensitive sectors, such as the
health sector, where flexibilities have played an important role in policies promoting access to
medicines.

Preamble to the TRIPS: The Preamble to TRIPS Agreement underlines the dual objectives of
the Agreement. These are:

• the need to promote effective and adequate protection of intellectual property; and
• the underlying public policy objectives of national systems for the protection of
intellectual property, including developmental and technological objectives and also
the special needs of the LDC Members with respect to maximum flexibility in the
domestic implementation of laws and regulations in order to enable them to create
a sound and viable technological base.

These fundamental objectives of the TRIPS Agreement have been elaborated further in its
Articles 7 (objectives) and 8 (principles). The two objectives require proper balancing between
the rights of the IP owner and the social objectives of the TRIPS Agreement. This is evident in
the “regulatory exceptions” (in Article 6, Article 30, Article 31, Article 40) and in the appropriate
scope of IP protection in the various other provisions of the TRIPS agreement.

Article 6 relates to exhaustion of IP rights and leaves the issue of parallel imports open to
countries. They are free to adopt the “international exhaustion” principle and can import the
required patented product from cheap sources. TRIPS also empowers its Members to curtail the

DL170 Essentials of Patents – Module 8 page 17 / 23

exclusive rights of the patentee by providing limited exceptions, which should (i) not unreasonably
conflict with normal exploitation of the patent, (ii) not unreasonably prejudice the legitimate
interests of the patent owner, and (iii) take account of the interests of third parties. As mentioned
before, under Article 31 of the TRIPS Agreement, Members are allowed to grant compulsory
licenses for lack of or insufficiency in the working of an invention, to remedy anticompetitive
practices, for cases of emergency or government use, and on other public interest grounds.

In the context of the DA, the subject of flexibilities is expressly referred to in its
Recommendation 14, which states that WIPO shall make advice available to developing
countries, and especially LDCs, on the understanding and use of flexibilities contained in the
TRIPS Agreement.

Therefore, both the WTO-sponsored agreements such as TRIPS and the WIPO-sponsored
agreements and initiatives support the use of patent flexibilities. It is thus important to study how
these may be strategically used in the policy-making and legislative process, and in enforcement
of patent rights.

3.2. Patentable subject matter/Scope of patent protection

The use of flexibilities based on scope of the subject matter may be used to achieve various
developmental objectives.

o Patents can be prohibited in certain areas of strategic public benefit (such as health
and agriculture).
o The regulation of patent scope may also be used to encourage development in a
particular line of technologies (the Chakrabarty case in the US is a good example).
o Limiting the scope of rights may also be used to attain goals such as environmental
protection and development of local manufacturing companies.

This room for policy and legislative flexibility is possible based on the general rule on patentable
subject matter under Article 27 of the TRIPS Agreement. As you studied in the previous sections,
Article 27 is very broad but at the same time may be very limiting. The article extends patent
protection to all inventions, whether products or processes, in all fields of technology, provided
that they are new, involve an inventive step and are capable of industrial application. However, it
is pertinent to note that Article 27 does not define what an “invention” means. The effect of not
defining an invention under the Agreement is that countries have the flexibility to define the scope
of the concept of invention under their national laws and thus may exclude certain types of
inventions when they want to attain certain policy and developmental goals.

DL170 Essentials of Patents – Module 8 page 18 / 23

Useful Resources

a) Useful links:
www.wipo.int/ip-development/en/agenda
http://www.cptech.org/ip/wipo/da.html
http://www.eff.org/issues/development-agenda
www.ictsd.org/i/events/dialogues/45559/
https://www.wipo.int/ip-development/en/agenda/flexibilities/database.html

b) Suggested Reading

Sisule F. Musungu, South Centre, and Cecilia Oh, WHO Commission on Intellectual Property
Rights, Innovation and Public Health (CIPIH), “The Use of Flexibilities in TRIPS by Developing
Countries: Can they Promote Access to Medicines?”, Study 4C, 2005.
http://www.who.int/intellectualproperty/studies/TRIPSFLEXI.pdf

Max Planck Institute, “Declaration on Patent Protection”, 2014.

https://www.mpg.de/8132986/Patent-Declaration.pdf

CDIP, Document CDIP/10/11, “Future Work on Patent-Related Flexibilities in the Multilateral

Legal Framework”, 2012.
http://www.wipo.int/edocs/mdocs/mdocs/en/cdip_10/cdip_10_11.pdf

UNDP, “Using Law to Accelerate Treatment Access in South Africa. An Analysis of Patent,
Competition and Medicines Law”, October 2013.
http://www.undp.org/content/dam/undp/library/hivaids/English/using_law_to_accelerate_trea
tment_access_in_south_africa_undp_2013.pdf

CDIP, Document CDIP/8/INF/3, “Study on Patents and the Public Domain”, 2011.
https://www.wipo.int/edocs/mdocs/mdocs/en/cdip_8/cdip_8_inf_3.pdf

CDIP, Document CDIP/8/INF/3, “Study on Patents and the Public Domain (II)”, 2013.
https://www.wipo.int/edocs/mdocs/mdocs/en/cdip_12/cdip_12_inf_2_rev.pdf

Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional

Knowledge and Folklore, Document WIPO/GRTKF/IC/17/INF/8, “Note on the Meanings of the
Term ‘Public Domain’ in the Intellectual Property System with Special Reference to the
Protection of Traditional Knowledge and Traditional Cultural Expressions/Expressions of
Folklore”.
https://www.wipo.int/edocs/mdocs/tk/en/wipo_grtkf_ic_17/wipo_grtkf_ic_17_inf_8.pdf

DL170 Essentials of Patents – Module 8 page 19 / 23

 Summary of Module 8
1. Introduction to IP and development – special focus on patents

1.2 General introduction to IP and development

This module aims at helping you understand the interface between patents and broader
developmental issues in society and the question of how intellectual property rights (IPRs)
impact economic development and growth processes, a subject of long debate.
Development is a very broad concept, which can be categorized into the following clusters: i)
economic development; ii) social and cultural development; and iii) scientific and technological
development.

In order to understand how the patent system may contribute to societal development, it is
important to understand the fundamental economic objectives of IPR protection.

• The first objective is to promote investment in knowledge creation and business

innovation by establishing an exclusive rights regime to deal with newly developed
technologies, goods and services.
• The second objective underlying IP regimes is based on the need to promote
widespread dissemination and sharing of new knowledge by encouraging right holders
to set down their inventions and innovative ideas in publicly accessible records.

In order for the patent system to contribute to societal development, policymakers need to
understand the social, economic, and technical competitive dynamics in their own context that,
in turn, will serve to inform them on the appropriate patent choices to be made by the
government.

3.3. The concept of development

Despite the existing debate on what constitutes development, the concept of development is
evolving. The old school used to confine this concept to economic development. However,
recently we have seen that the concept is no longer seen as purely an economic phenomenon,
but rather a multi-dimensional process involving reorganization and reorientation of entire
economic and social systems. Development is the process of improving the quality of all human
lives in three equally important aspects: 1) raising people’s standard of living; 2) creating
conditions conducive to the growth of peoples’ self-esteem through the establishment of social,
political and economic systems and institutions that promote human dignity and respect; and 3)
increasing peoples’ freedom to choose by enlarging the range of their choice variables.

Recently, there has been a more refined understanding of the term, which has led to the
introduction of “sustainable development”, which refers to a mode of human development in
which (scarce) available resources are optimally used in a manner that is geared toward meeting
human needs while ensuring the sustainability of natural systems and the environment, so that
these needs can be met not only in the present, but also for generations to come.

3.4. The role of patents in development

Since the concept of development is very broad, a number of variables are essential for triggering
growth in economic and social terms. For instance, economists recognize several channels

DL170 Essentials of Patents – Module 8 page 20 / 23

through which patents could stimulate economic development and growth. As these channels are
sometimes interdependent, it is important for policymakers and development planners to
understand the interface between patents and development, so that they can devise the
appropriate policy incentives to promote integration of patents and development strategies.

Two important developmental variables illustrate the significant role that patents may play.

• Encouraging innovation: In simple terms, innovation can be defined as the process of

applying new knowledge or solutions with a view to addressing existing market needs
and requirements. The innovation process requires important variables, such as access
to relevant technologies and the ability to control the use of such technologies, which the
patent system promotes.
• Product development: Product development is a process of creating a product with
new or different characteristics that offer new or additional benefits to the customer. The
process may involve modification of an existing product or formulation of an entirely new
product that satisfies a newly defined customer want or market niche. These aspects
require a careful and strategic consideration of patents and other aspects of IP in terms
of protection mechanisms, access and the right to use.

3.5. Brief Introduction of the WIPO Development Agenda and its links with Patents

The Development Agenda (DA) adopted by the WIPO General Assembly in September 2007
contains 45 recommendations (from 111 original proposals) divided into 6 clusters. Its aim is to
ensure that development considerations form an integral part of WIPO’s work. As such, it is a
crosscutting issue that touches upon all sectors of WIPO.

3.5.1. Rationale for the adoption of the DA:

As noted previously, the idea behind the adoption of the DA centers on the need to repackage
the IP system so that it may serve broader societal development goals. In this context, the DA is
based on the following approaches:

6) Participatory and inclusive process: involvement of developing countries and

LDCs in the process of norm-setting;
7) Country-specific approaches: taking into account prevailing local conditions;
8) Immediate and long-term goals: cognizance that there are limited resources;
9) Principle of harmonization: IP should be integrated within broader national
development policies and strategies; and
10) Overreaching: the DA serves as a platform for the discussion and the
development of regulatory regimes for new frontiers and aspects of IP, such as
the protection of traditional knowledge.

4. Patent flexibilities in the IPRs

4.1. Brief introduction

One of the ways in which the patent system may contribute to development is through the use or
application of patent flexibilities. Patent flexibilities may be defined as the substantive,
enforcement and administrative patent options available to countries under existing international
patent regimes, including the TRIPS Agreement. Under the system of flexibilities, all countries are
provided with leeway to develop patent protection systems that, while consistent with international

DL170 Essentials of Patents – Module 8 page 21 / 23

patent obligations, are adapted to local or other specific conditions or needs. Therefore, under
the patent flexibility framework, when countries design and implement patent regimes they must
make crucial choices on the type and scope of patent rights conferred and, on the procedures, or
statutory requirements that must be adhered to by applicants.

This section describes the flexibilities provided for in the key international patent regulatory
instruments and regimes, namely the TRIPS Agreement of 1994, which includes provisions of the
Paris Convention for the Protection of Industrial Property of 1883, among other WIPO
administered treaties.

4.2. Flexibilities in the Paris Convention for the Protection of Industrial Property

There is a great degree of flexibility in the implementation of the obligations under the Paris
Convention. Its members, constituted into the Paris Union, are given great leeway with regard to
the compliance approaches in matter relating to: i) scope of patent rights; ii) minimum standards
of patents; and iii) use and enforcement, such as compulsory licensing and government use; and
exhaustion of rights.

4.3. Flexibilities in the TRIPS Agreement

The preamble to the TRIPS Agreement set a basis for inclusion of flexibilities in the enforcement
of the Agreement, as it recognizes the need for effective and appropriate means for the
enforcement of trade related IPRs by taking into account differences in national legal systems.
The Preamble also states that the underlying public policy objectives of national systems for the
protection of intellectual property should include developmental and technological objectives and
recognizes the special needs its LDC Members for maximum flexibility in the implementation of
laws and regulations to enable them to create a sound and viable technological base. The
Agreement introduces especial provisions in matters relating to: i) scope of patent rights (Article
27); ii) health-related inventions (Article 8); iii) essentially biological processes (Article 27.3); iv)
new plant varieties (Article 27(3)(b)); v) exceptions based on ordre public and morality (Article
27.2); vi) unintentional infringement (Article 44.1); vii) compulsory licenses (Article 31); viii)
research and experimental exception (Article 30); and ix) control of abusive patent practices.

5. The use of patent flexibilities in promoting developmental goals

5.1. General note

The subject of flexibilities is a crosscutting issue, not just among the different domains of
intellectual property, but also among intellectual property policies and other related policies.
Nevertheless, particular attention has been given by Member States to the implementation and
use of flexibilities in the field of patents, presumably because policy makers and experts have
been confronted with the need for flexibilities in sensitive sectors, such as the health sector,
where flexibilities have played an important role in policies promoting access to medicines.

Preamble to the TRIPS: The Preamble to TRIPS Agreement underlines the dual objectives of
the Agreement. These are:

• the need to promote effective and adequate protection of intellectual property; and
• the underlying public policy objectives of national systems for the protection of
intellectual property, including developmental and technological objectives and also
the special needs of the LDC Members with respect to maximum flexibility in the

DL170 Essentials of Patents – Module 8 page 22 / 23

 domestic implementation of laws and regulations in order to enable them to create
a sound and viable technological base.

In the context of the DA, the subject of flexibilities is expressly referred to in its
Recommendation 14, which states that WIPO shall advice developing countries, and especially
LDCs, on the understanding and use of flexibilities contained in the TRIPS Agreement. It is thus
important to study how these may be strategically used in the policy-making and legislative
process, and in enforcement of patent rights.

5.2. Patentable subject matter/Scope of patent protection

The use of flexibilities based on scope of the subject matter may be used to achieve various
developmental objectives.

o Patents can be prohibited in certain areas of strategic public benefit (such as health
and agriculture).
o The regulation of patent scope may also be used to encourage development in a
particular line of technologies (the Chakrabarty case in the US is a good example).
o Limiting the scope of rights may also be used to attain goals such as environmental
protection and development of local manufacturing companies.

This room for policy and legislative flexibility is possible based on the general rule on patentable
subject matter under Article 27 of the TRIPS Agreement.

DL170 Essentials of Patents – Module 8 page 23 / 23