Recently, China's State Intellectual Property Office issued an order (Order #37) implementing the August 30th decision, to take effect as of 1 January 2006. We have not yet seen an official translation, so please note that the following comments are based on the *unofficial* translation below. The original Chinese version can be found at: www.sipo.gov.cn/sipo/ggtz/jzl/t20051129_61455.htm with an explanatory note (also only in Chinese) at: http://www.sipo.gov.cn/sipo/flfg/bmgz/t20051129_61461.htm

First of all, Order #37 removes the legal hurdle to producing drugs under compulsory license predominantly for export, and therefore this may be taken as an encouraging sign that the Chinese government is willing to issue compulsory licenses in order to increase the availability of treatments both domestically and abroad. However, unfortunately, the order seems to limit application of the system unnecessarily to infectious diseases only – this was not required by the WTO in the August 30th decision and means that many important medicines may be excluded from export. (The list of eligible infectious diseases is also below, based on the Chinese national law). The order also allows for parallel importation into China, a potentially useful tool for decreasing drug prices, which previously was not allowed.

Ellen 't Hoen
MSF Access Campaign,
ellen.t.hoen@paris.msf.org
Phone nr in Hong Kong: + 852 91737268

Suerie Moon
MSF Access Campaign, Beijing
msfb-beijing-access@msf.be
+852 91737927

State Intellectual Property Office Order #37

“Measures to Implement Public Health-Related Compulsory Licensing” has been discussed, checked and passed in meetings of the State Intellectual Property Office (editor’s note: hereinafter called SIPO), and SIPO hereby announces that the said measures will be effective starting 1 January 2006.

Director
State Intellectual Property Office
November 2005

Measures to Implement Public Health-Related Compulsory Licensing

Article 1

In order to deal with public health problems facing our country (editor’s note: hereinafter called China), to help countries and districts concerned to deal with public health problems they face, and to implement the “Declaration on the TRIPS Agreement and Public Health” of the WTO Ministerial Conference in Doha (hereinafter called “Doha Declaration”) and the “Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health” of the WTO General Council (hereinafter called “General Council Decision”), SIPO formulated these measures in accordance with the Patent Law of the PRC (hereinafter called “Patent Law”).

Article 2

“Infectious disease” in this document means HIV/AIDS, tuberculosis, malaria or other infectious diseases as listed in the document “PRC Measures in Prevention and Treatment of Infectious Diseases” that have led to public health problems

“Pharmaceutical product” in this document means any patented product, or products manufactured through a patented process, of the pharmaceutical sector needed to treat an infectious disease listed in the first paragraph of this Article. The term here also includes active ingredients necessary for its manufacture and diagnostic kits needed for its use.

Article 3

To prevent and control the emergence and spread of infectious diseases, and to treat infectious diseases in China, are acts for public interest covered by Patent Law Article 49.

Public health crises caused by the emergence and spread of infectious diseases in China are national emergencies covered by Patent Law Article 49.

Article 4

In the case of a pharmaceutical product for treating an infectious disease being granted patent rights in China, and China having the ability to produce that pharmaceutical product, relevant department(s) under the (Chinese) State Council can request SIPO to grant a compulsory license in accordance with regulations in Patent Law, Article 49.

Article 5

In the case of a pharmaceutical product for treating an infectious disease being granted patent rights in China, and China being unable or having insufficient capacity to produce that pharmaceutical product, relevant department(s) under the (Chinese) State Council can request SIPO to grant a compulsory license to allow authorised third parties to import the said pharmaceutical product manufactured by a WTO Member under the General Council Decision affirmed system to help China solve its public health problems.

Article 6

No one or any third party is allowed to export to other countries or districts any pharmaceutical product that is imported under a compulsory license granted by SIPO as described in Article 5 of this document.

Article 7

Authorised third parties should pay the patent owner adequate remuneration for the pharmaceutical product imported under a compulsory license granted by SIPO as described in Article 5 of this document. However, if the producer of the pharmaceutical product has already paid the patent owner remuneration, then the authorised third parties are not required to pay remuneration to the patent owner.

Article 8

In the case of a pharmaceutical product for treating an infectious disease being granted patent rights in China, third parties do not need to request SIPO to grant a compulsory license to buy and import into China the said pharmaceutical product which is made and sold by the patent owner, or made and sold with its authorization, in countries or districts outside China.

Article 9

In the case of a WTO Member who, according to the General Council Decision affirmed mechanism, has made a notification to the Council for TRIPS its intention to import a pharmaceutical product to treat an infectious disease, or of a non-WTO Member of Least-Developed Countries who through diplomatic channels has informed the Chinese government its intention to import from China a pharmaceutical product to treat an infectious disease, relevant department(s) under the (Chinese) State Council can request SIPO to grant a compulsory license to allow authorized third parties to use the General Council Decision affirmed system to produce and export the aforesaid pharmaceutical product to the WTO Member or country mentioned above.

Article 10

A compulsory license granted by SIPO in situations covered by Article 9 of this document should record clearly in the decision of granting that compulsory license the relevant conditions required by the General Council Decision. Authorised third parties should respect the required conditions in that compulsory license.

Article 11

Authorised third parties of a compulsory license granted by SIPO in situations covered by Article 9 of this document should pay adequate remuneration to the patent owner of the said pharmaceutical product.

Article 12

Besides regulations specifically listed in this document, regulations in “Measures to Implement Compulsory Licensing” also apply for the requesting of compulsory licenses according to Article 4, 5 and 9 of this document.

Article 13

Implementation of this document will commence on 1 Jan 2006.

Infectious Diseases: Official list of China relating to China Infectious Disease Prevention Law

(Last amended on 28 August 2004, to go into effect 1 January 2005)

Classification :A

Plague, Cholera;

Classification: B

SARS; AIDS; Viral Hepatitis. Poliomyelitis, Avian Flu, Measles, Epidemic Haemorrhagic Fever, Rabies, Japanese B Encephalitis, Dengue Fever, Anthrax, Bacterial & Amoebic dysentary, Pulmonary TB, Typhoid & sub-typhoid, Epidemic Cerebrospinal Meningitis,Whooping cough, Diphtheria, New Born Tetanus, Scarlet Fever, Brucelosis, Gonorrhea, Syphilis, Leptospirosis, Schistosomiasis, Malaria.

Classification C;

Influenza, Mumps, Rubella (German measles), Acute haemorrhagic conjunctivitis, Leprosy, epidemic & endemic spot typhoid, black fever, echinococcosis, filariasis, infectious diarrhea excluding cholera, dysentery of bacteria&amoeba , typhoid and sub-typhoid.