TIPS^®  Taiwan Intellectual Property Special

The First Compulsory License to Tamiflu Patent in the World

Taiwan Intellectual Property Office (TIPO) granted a conditional compulsory license of Tamiflu Patent to the Department of Health in Taiwan (DOH), by Decision Chih-Fa No.09418601140 on December 8, 2005. The patentee has the right to file an administrative appeal against the Decision to the Committee of Administrative Appeals, the Ministry of Economic Affairs.

Pursuant to Article 31(b) of the TRIPS Agreement and Article 76 of Taiwan Patent Law, in case of national emergency, the competent authority of patent matters may decide to grant a compulsory license to allow use of a patent without consent of the patentee. Moreover, the DOHA Declaration of TRIPS Agreement and Public Health stipulates that each WTO member has the right to determine what constitutes a “national emergency.”

TIPO reached the decision for granting the compulsory license after having two hearings, and the decision was made on the following reasons:

1.Imminent Threat of Influenza Pandemic to Taiwan
The WHO has in numerous occasion issued warnings that the influenza pandemic is on the verge of breaking out. Although there is no incident of avian influenza infection reported in Taiwan, Taiwan is located on the direct path of migratory birds. Furthermore, due to frequent travels between Taiwan and China and the South East Asia region, where 133 incidents of infections and 68 cases of death have been reported, the threat of Influenza Pandemic to Taiwan is imminent. Under such circumstances, the DOH has to be fully prepared for such pressing emergency.

2.Urgent Need to Stockpile Sufficient Supplies of Anti-Virus Medication

The DOH has, since 2003, been placing orders of Tamiflu with Roche Holding AG. However, since many countries are placing large orders at the same time, the large demands of Tamiflu from each country cannot be adequately met. Taiwan’s current stockpile is only 0.7% of its total population, which is much lower than the suggested 10% (2.3 million treatments) by the WHO, and is insufficient to control and prevent the spread of a potential pandemic. In view of such urgency and emergency, the DOH applied for compulsory license of the Tamiflu patent. Although Roche agreed on November 24, 2005, to supply 2.3 million treatments of Tamiflu to Taiwan by the end of June 2006, the DOH and public health and disease control advisors believe that such promise will still put the public health of Taiwan people at risk if an earlier than expected outbreak of the influenza pandemic takes place or the delivery timelines cannot be met by Roche. Also, since Taiwan is not a member of the WHO, Taiwan may not receive any of the Tamiflu stockpile from the WHO should regional or global pandemic take place. In view of the needs for disease control and prevention, the uncertainty of whether Roche can supply adequate amount of Tamiflu in time, and the particular international situation that Taiwan is in, we need to come up with a way to stockpile enough anti-virus medication to stop and contain the spread of influenza pandemic.

3.Balancing between Respect of Intellectual Property Rights and National Disease Control and Prevention

As a member of the WTO, Taiwan observes and complies with the TRIPS Agreement. Any party who has obtained patent rights in Taiwan is adequately protected. This compulsory license is granted in reacting to the urgency and necessity of domestic disease control and prevention. In consideration of the rights and interests of the right holder, the following conditions are attached to the compulsory license:

(i)The compulsory license is valid only until December 31, 2007.

(ii)Products produced under the compulsory license should be supplied for domestic disease control and prevention use only.

(iii)The DOH should use Tamiflu supplied by Roche first and only release the anti-virus medication produced under the compulsory license when Roche cannot supply the Tamiflu in time.

(iv)If the DOH obtains voluntary license during the compulsory license period, TIPO may annul this compulsory license.

(v)Pursuant to Article 76.5 of the Taiwan Patent Law, it is required that the DOH should make compensation payment to Roche.

Although the DOH may commission local pharmaceutics manufacturers to produce Tamiflu after obtaining the compulsory license, according to Condition (iii), the local companies commissioned by the DOH to produce Tamiflu under the compulsory license can only release the products when Roche cannot supply its Tamiflu in time. As for the compensation payment stated in Condition (v), according to Taiwan Patent Law, the amount of compensation must be negotiated and agreed upon by the parties involved. When an agreement cannot be reached, the parties may apply with TIPO to render a final decision. All the conditions stipulated above have amply taken the right holder and Roche’s business interests into consideration. Also, the DOH will take full responsibility in the overall exercise of the compulsory license, thus the interests of the right holder will not be impaired.