IP Dragon beat me to this issue by one day (curses!), as he frequently does. On the plus side, he has all the links right there for you, alleviating me of the responsibility of cuttin' and pastin' a lot of stuff. Nothing wrong with that.

What's the issue this time? China debated an amendment to TRIPs last week, but their public statements about it, which IP Dragon cites, are confusing me. Some background first.

The amendment in question deals with compulsory licenses for pharmaceutical production in the face of public health emergencies. Hot button IPR topic over the years, particularly in Africa regarding access to AIDS drugs. Some litigation ensued over this years ago when the South African government issued compulsory licenses to domestic manufacturers and was sued by several MNCs (the U.S. government joined the case on their side as well, which was sweet of them).

South Africa's conduct was purely domestic, and since that time, the ability under TRIPs for a country to do so in the face of a public health emergency has been confirmed. The Declaration on the TRIPs Agreement and Public Health, which was adopted by the WTO on November 14, 2001 at the Doha Ministerial meeting, is clear that the issue is not whether additional limitations to patent rights should be added to TRIPs, but that existing rights under TRIPs (in the case of domestic actions) already allow for such compulsory licensing:

We agree 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.

There is also a good Q&A on this topic on the WTO site that clearly states that these rights have been around since January 1995.

OK, so member nations' ability to take care of their domestic markets is not an issue, right? Yes, provided that the country has the domestic capacity to manufacture the needed pharmaceuticals (i.e., it has a domestic drug industry). If the country has no domestic industry and it sought to import drugs made under compulsory license in another country, this would be a TRIPs violation. This was also covered in the 2001 declaration:

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.

So the WTO was supposed to address this gap in TRIPs quite a few years ago, and we (collectively) still haven't followed through. It is this permanent amendment that was discussed by the Chinese government last week. Here's Xinhua's take on the amendment:

The Chinese government hopes that approving the bill will help China tackle public health emergencies like SARS and bird flu more effectively.

Here's where my confusion comes in. I assume that by "tackling public health emergencies" the reference is to domestic crises, which is why SARS and bird flu are listed. But wait, I thought that TRIPs allowed for compulsory licensing to domestic producers already, and this provision has been in effect since 1995? If this is so, why would passing this amendment help China deal with a domestic public health crisis? Certainly China has an adequate domestic pharma industry that could handle any needed manufacturing. I'm not saying that China should not pass the amendment, I'm just trying to figure out the motivation here.

Ma Xiuhong, Vice Minister of Commerce, was also quoted as saying that passage of the amendment: ". . . would help promote the development of China's drug industry . . ." Interesting comment, since this is certainly not the purpose of the amendment. Is it possible that China is going to get into the business of being the low-cost supplier of generics to the developing world, using this provision to issue compulsory licenses? Canada has already gotten into the game and has notified the WTO under paragraph 6 that it will supply AIDS meds to Rwanda.

So what's the PRC plan here? No idea, but maybe I'm missing something important – wouldn't be the first time. As another, much better, blogger said recently:

One thing you learn very quickly when you blog is that no matter how smart and knowledgeable you are (or imagine yourself to be), some of your readers are going to be smarter than you and literally every one of your readers knows more than you do about something.