WORLD TRADE
ORGANIZATIONIP/C/W/355
24 June 2002
(02-3475)
Council for Trade-Related Aspects
of Intellectual Property RightsOriginal:  English
PARAGRAPH 6 OF THE MINISTERIAL DECLARATION ON THE
TRIPS AGREEMENT AND PUBLIC HEALTH
By means of a communication dated 21 June 2002, the following text has been received from
the Permanent Mission of Brazil  on behalf of the delegations of Bolivia, Brazil, Cuba, China,Dominican Republic, Ecuador, India, Indonesia, Pa kistan, Peru, Sri Lanka, Thailand and Venezuela
with the request that it be circulated to TRIPS Council Members.
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Summary
- Paragraph 6 of the Ministerial Declaration on the TRIPS Agreement and Public Health
should be read in light of the entire context of the Declaration, as well as of the
flexibilities contained in the TRIPS Agreem ent.  In this sense, WTO Members should
avoid taking a narrow approach in considering expeditious solutions to the problemrecognized in Paragraph 6.
- Solutions based on Paragraph 6 should not be detrimental to the fulfilment of the
objective of the TRIPS Agreement of transfer of technology, which  is critical to
improving manufacturing capacities in the pharmaceutical sector and therefore to
ensuring sustainable access to affordable medicines.
- Any WTO Member could face difficulties in making effective use of compulsory licences
due to insufficient or no manufacturing capacities in the pharmaceutical sector.
Therefore, the solutions envisaged by the TRIPS Council to the problem recognized in
Paragraph 6 should not exclude specific categories of countries.  In any event, developing
countries, in particular least-developed countries, should certainly be among the mainbeneficiaries of possible expeditious solutions.
- Difficulties of access to public health-related products are not limited to countries with
insufficient or no manufacturing capacities where these products are protected by patents.
Therefore, the expeditious solutions envisaged by the TRIPS Council should also addresssituations where no patents exist in the countries in need of access to public health-related
products, or cases where economies of scale make domestic production for a particular
product impractical or too costly.
- Without prejudice to the possibility of Members seeking additional expeditious solutions
to the problem identified in Paragraph 6, the TRIPS Council should recommend an
authoritative interpretation of Article 30 of the TRIPS Agreement, so as to recognize the
right of WTO Members to authorize third parties to make, sell and export patented public
health-related products without the consent of the patent holder to address public health
needs in another country.IP/C/W/355
Page 2
PARAGRAPH 6 OF THE MINISTERIAL DECLARATION ON THE
TRIPS AGREEMENT AND PUBLIC HEALTH
I. INTRODUCTION
1. In Paragraph 6 of the Ministerial Declaration on the TRIPS Agreement and Public Health
(hereinafter referred to as “Paragraph 6”), Ministers “ 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. ”  In this sense, Ministers “ 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. ”
2. Paragraph 6 of the Ministerial Declaration on  TRIPS and Public Health should be read
in light of the entire context of the Ministerial Declaration on the TRIPS Agreement and Public
Health.   In Paragraph 4, for instance, Ministers agreed “ that the TRIPS Agreement does not and
should not prevent Members from taking measures to protect public health.  Accordingly, while
reiterating our commitment to the TRIPS Agreement,  we affirm that the Agreement can and should be
interpreted and implemented in a manner supportive of WTO Members' right to protect public health
and, in particular, to promote access to medicines for all . In this connection, we reaffirm the right of
WTO Members to use, to the full, the provisions in the TRIPS Agreement, which provide flexibility for
this purpose. ”  Furthermore, Paragraph 5 of the Ministerial Declaration recognizes some of the
existing flexibilities of the TRIPS Agreement, wh ich must be taken into account in considering
possible solutions under Paragraph 6.
3. In many situations, the problem of countries with insufficient or no manufacturing capacities
identified in Paragraph 6 stems from lack of technological infrastructure and manufacturing capacities
in the territory of WTO Members.  Consequently, in considering solutions to the problem
recognized in Paragraph 6, Members should bear in mind the need to fulfil and operationalize
the objectives and the principles of the TRIPS Agreement .  In this sense, in no way should the
envisaged solutions under Paragraph 6 be detrimental to the fulfilment of the objectives of the TRIPSAgreement of transfer of technology.  The development of local manufacturing capacities for public
health-related products, whenever economically feas ible, is critical to ensuring the development of
sustainable health policies and access to affordable medicines, particularly in developing countries
1.
                                                     
1 In this respect, in June, 2001 developing countries Members already clearly stressed the importance
of fulfilling the objectives of the TRIPS Agreement:  “ The objective of the promotion of technological
innovation and the transfer and dissemination of technology places the protection and enforcement of IPRs in
the context of the interests of society.  Such an objective is essential for the promotion of health policies, as it
encourages the development of domestic production of phar maceutical products .  Whenever economically
feasible, local production of pharmaceutical products is extremely important to ensure that medications aremore readily available in the market, and at more affordable prices.  Local manufacturing of pharmaceuticalproducts also encourages sustainable access to medications by insulatin g the price of patented medicines
against currency devaluations, as well as supporting the development of local exper tise, which is vital in
addressing local needs.  As mentioned above, these objecti ves can be obtained by the normal exercise of patent
rights.  Where the patent holder fails to meet the objectives of the TRIPS Agreement and of public health
policies, however, Members may take measures to ensure  transfer and dissemination of technology to provide
better access to pharmaceuticals ” (“TRIPS and Public Health - Submission by the African Group, Barbados,
Bolivia, Brazil, Cuba, Dominican Republic, Ecuador, Honduras, India, Indonesia, Jamaica, Pakistan, Paraguay,Philippines, Peru, Sri Lanka, Thailand and Venezuela”,  document IP/C/W/296, Paragraph 20) [emphasis in the
original].IP/C/W/355
Page 3
II. THE PROBLEM RECOGNIZED IN PARAGRAPH 6 OF THE MINISTERIAL
DECLARATION ON TRIPS AND PUBLIC HEALTH
4. Any WTO Member could face difficulties in ma king effective use of compulsory licences
due to insufficient or no manufacturing capacities in the pharmaceutical sector .  Therefore, the
solution to be considered by the TRIPS Council ne eds not and should not be limited to a specific
category of countries – although developing countries, in particular least-developed countries, might
figure among its main beneficiaries. Obstacles to granting compulsory licences for the supply of the
local market may result from a number of factors.  The lack of adequate manufacturing facilities
present within the country, for instance, may result fr om a failure to fulfil the objective of transfer of
technology of the TRIPS Agreement.  A country with  insufficient or no manufacturing capacities may
also lack potential licensees that are willing or capable of manufacturing locally.  In some countries,
capacity to manufacture public health-related products may be owned or controlled by the samecompanies that hold local patents, and there would be no enterprises interested in taking the role of a
compulsory licence supplier.  Even in cases where technology may be available, there may be no
potential licensees due to lack of economies of scale or other conditions for a viable economic
manufacturing.  Least-developed country Members generally face particularly dire difficulties in this
respect, as there may be no pharmaceutical manufacturing capacities at all in their territories.  In lightof the above, each Member shall have the right to determine whether it is in a situation of
insufficient or no manufacturing capa cities in the pharmaceutical sector.
5. Logically, difficulties in access to public health-related products are not limited to countries
with insufficient or no manufacturing capacities where these products are protected by patents.
Therefore, the expeditious solutions envisaged by the TRIPS Council should also apply to
countries where no patents exist.
III. EXPEDITIOUS SOLUTION TO THE PROBLEM: AUTHORITATIVE
INTERPRETATION OF ARTICLE 30 OF THE TRIPS AGREEMENT
6. Within the context of the problem identified in  Paragraph 6 of the Ministerial Declaration on
the TRIPS Agreement and Public Health, transfer of technology to the country in need may be neither
economically feasible nor expeditious enough to ensure access to affordable public health-related
products.  Consequently, the TRIPS Council should consider expeditious solutions under the TRIPS
Agreement to ensure access to public health-related products to countries in need.
7. In this sense, the problem recognized in Paragraph 6 suggests that, among other possible
solutions, a producer in a country with manufacturing capacities could be allowed to manufacture,
export and sell a patented product, without the consent of the right holder, to supply the country withinsufficient or no manufacturing capacities in the pharmaceutical sector.
8. As an expeditious solution envisaged in Paragraph 6 of the Ministerial Declaration on TRIPS
and Public Health, Article 30 of TRIPS
2 should be interpreted so as to recognize the right of
WTO Members to authorize third parties to make, sell and export patented public health-
related products without the consent of the patent holder to address public health needs in
another country .  Therefore, the acts of making, selling and exporting public health-related products
under this circumstance could be recognized as limited exceptions to the exclusive rights conferred by
                                                     
2 Article 30 of TRIPS: “ Members may provide limited exceptions to  the exclusive rights conferred by a
patent, provided that such exceptions do not unreasonabl y conflict with a normal exploitation of the patent and
do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate
interests of third parties ”IP/C/W/355
Page 4
a patent.  An authoritative interpretation would confirm that Members may authorize local producers
to manufacture, sell and export public health-related products for other countries in need of access to
such products.  Additionally, in line with the spirit of the “limited” exceptions in Article 30, Members
may consider the possibility of establishing appropriate safeguards that would ensure legal
predictability in this particular use of the provision, if such safeguards do not have the effect ofundermining its practical use, or to prejudice the existing right of countries to use Article 30 of TRIPS
in other circumstances.
9. Such exceptions do not unreasonably conflict with the normal exploitation of the patent
and do not unreasonably prejudice the legitimate interests of the patent owner .  In the context of
the proposed authoritative interpretation of Article 30, the limited exceptions address public health
problems outside the territory of the Member and therefore do not conflict with the normal
exploitation of the patent.  Moreover, the acts of making, selling and exporting patented products bythird parties without the consent of the patent owner to countries with insufficient or no
manufacturing capacities do not unreasonably detract from the returns ordinarily earned by the patent
owner.  It should also be noted that the act of exporting is not enumerated among the exclusive rights
conferred by the patent in Article 28 of TRIPS.  Consequently, they do not unreasonably prejudice the
legitimate interests of the patent owner.
10. An authoritative interpretation of Article 30 of TRIPS would have the major advantage of
avoiding burdensome procedures related to the grant of compulsory licences in the exporting country.
For the importing country, such a solution would le ave the freedom to decide on the need to issue or
not a compulsory licence for the importer.  It woul d also avoid a dependency by the country in need
on the grant of a compulsory licence in the export country.  In addition, in situations where theauthorization of the limited exceptions under Article 30 is addressed to allow exports to a country
where a compulsory licence has been granted or where no patent protection exists, the current text of
Article 31(f) would not necessarily amount to an obstacle, as the compulsory licence would be
authorized for the supply of the domestic market of  the Member authorizing such use – that is, the
importing country.  Therefore, the limitation of the expression “predominantly” in this context doesnot affect the acts of making, selling and exporting public health-related products to the country
authorizing a compulsory licence to supply its domestic market.
11. Clearly, nothing in the letter and spirit of Article 30 of TRIPS prevents Members from
authorizing local producers to make, sell and export public health-related products, without the
consent of the patent holder, to address health needs in other countries with insufficient or no
manufacturing capacities, as a limited exception under this provision.  In light of the mandate to find
expeditious solutions to the problem recognized in Paragraph 6, an authoritative interpretation ofArticle 30 confirming this legal solution would be an important step to ensure legal certainty for all
WTO Members.  Moreover, in light of paragraph 4 of the Ministerial Declaration on the TRIPS
Agreement and Public Health, Article 30 of TRIPS “ should be interpreted and implemented in a
manner supportive of WTO Members' right to protect public health and, in particular, to promote
access to medicines for all ”.
12. Members should bear in mind that legal solutions based on Article 30 will be best achieved if
grounded in economic solutions. In many situations, a public health problem might affect more than a
single country (as in the case of – but not limited to – HIV/AIDS, tuberculosis, malaria and several
tropical diseases).  Therefore, in implementing such solutions, countries may consider establishing
economies of scale that would reduce costs of production and thus provide more affordable prices forthe beneficiary countries in situations, for instance, where domestic production in small quantities
from a compulsory licence for a particularly high-priced product may be impractical or too costly.IP/C/W/355
Page 5
13. Finally, it should be stressed that such an interpretation of Article 30 is not exhaustive and is
without prejudice to the right of Members to allow other exceptions to the rights conferred by patent
under Article 30 of TRIPS in their national legislation.
IV. FINAL REMARKS
14. The TRIPS Council should refrain from consid ering narrow, burdensome, or ineffective
solutions that would ultimately defeat the very purpose of the solution under Paragraph 6.  A few
Members have mentioned the possibility of considering the imposition of safeguards or conditions to
the solution envisaged by the TRIPS Council.  Such proposals should be carefully considered. In light
of the importance of the possible solutions to alleviate public health problems, it would be
unacceptable to consider safeguards or condition s that in any way would limit either the
flexibilities of Members under the TRIPS Agreemen t or the clarifications established in the
Doha Ministerial Declaration on the TRIPS Agreement and Public Health .  Members particularly
interested in such safeguards are encouraged to submit concrete proposals for consideration by the
TRIPS Council, to the extent they actually reflect legitimate concerns and that the burden of their
enforcement is placed on interested parties, such as the patent holder.
15. While an authoritative interpretation of Article 30 is the most effective solution to the
problem identified in Paragraph 6, other non-exhaustive solutions could also be contemplated.
Merely partial or temporary arrangements, however, such as moratoriums or waivers, would not
amount to sustainable or legally predictable solutions.
16. Other possibilities  for the problem identified in Paragraph 6 might be related, for instance, to
Article 31 (f) of the TRIPS Agreement , which  establishes that compulsory licences “ shall be
authorized predominantly for the supply of the domestic market of the Member authorizing such use ”.
While this provision contains an in-built flexibility that allows Members to export products under a
compulsory licence, the expression “ predominantly ” limits the extent of such exports.  In a situation
where a Member is willing to grant a compulsory licence in order to grant a local manufacturer the
right to supply public health-related products for a country with insufficient or no manufacturingcapacities, the imposition of this limitation could result in inefficient production, if there is not enough
domestic demand where the compulsory licence has been issued (moreover, the exporting country
may not wish its domestic market to be supplied under compulsory licence, yet Article 31(f)
effectively requires this as a condition of supplying an export market.).  In this case, the TRIPS
Council could consider the possibility of an amendment of Article 31 of the TRIPS Agreement, in
order to eliminate paragraph (f).
17. Another additional solution based on Article 31 of TRIPS is related to its paragraph (k)
3,
under which Members are not obliged to apply the conditions set forth in paragraphs (b) and (f) where
such use is permitted to remedy a practice determined after judicial or administrative process to be
anti-competitive.  Therefore, the limitation of exports under compulsory licences based on
Article31(f) does not apply where the compulsory licence is granted to remedy a practice determined
after judicial or administrative process to be anti-competitive.  Members may explore the use of suchprovision of TRIPS as part of the expeditious solutions to the problem envisaged in Paragraph 6. In
this respect, the Secretariat could provide to the TRIPS Council a document on the current uses by
                                                     
3 “Members are not obliged to apply the conditions set forth in subparagraphs (b) and (f) where such
use is permitted to remedy a practice determined after judicial or administrative process to be anti-competitive.The need to correct anti-competitive practices may be taken into account in determining the amount ofremuneration in such cases.  Competent authorities shall have the authority to refuse termination of
authorization if and when the conditions which led to such authorization are likely to recur. ”IP/C/W/355
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Members of Article 31(k) of TRIPS in authorizing the export of products and also to elaborate on the
term “or administrative process”, as it relates to Article 31(k).  In this study, the Secretariat could also
provide the TRIPS Council with information regard ing the issue of compensation to patent owners
when patents are held in both exporting the importing countries, and on the exhaustion of rights in
31(k) cases.
18. Article 31-based proposals, however, raise a number of issues that might eventually impose
restrictions on a solution under Paragraph 6.  Those issues include, as the case may be, the need to
issue compulsory licences both in the importing and the exporting countries, which is administratively
burdensome.  The issue of determination of remuneration is another point of concern, as the patent
holder should not in any case be entitled to double remuneration, as both compulsory licences would
be issued to address essentially the same problem.  In this respect, it may be more reasonable to
determine compensation in the country where the product is consumed, since the amount ofcompensation should maintain some relationship with the ability of patients to afford the product.
19. In conclusion, the proposed solution based on an authoritative interpretation of Article 30 is
preferable to those based on Article 31, as the former would be administratively less burdensome,
involving less steps for implementation.
20. In addition to the fulfilment of the mandate of Paragraph 6, the TRIPS Council should also
consider measures under Article 66.2 of the TRIPS Agreement in order to encourage the transfer of
technology to least developed countries in order to strengthen local manufacturing capacities in their
territories.  Therefore, developed country Members should provide incentives to enterprises and
institutions in their territories for the purpose of promoting and encouraging technology transfer to
least-developed country Members in order to enable them to create a sound and viable technologicalbase in the pharmaceutical sector.  Further, in order to ensure their implementation, such incentives
should be monitored under the mechanism to be established by the TRIPS Council in light of the
mandate established by Paragraph 11.2 of the WTO Ministerial Decision on Implementation-Related
Issues and Concerns.
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