On 11 March 2020 the World Health Organisation declared COVID-19 a global pandemic. Since this declaration, compulsory licensing has remained a hot topic in the IP world.
Several countries – including France, Germany and Canada – have amended or passed new legislation in light of the COVID-19 pandemic to provide for compulsory licensing.(1)
As of 30 April 2020, Turkey had 120,204 confirmed cases of COVID-19. Although the official authorities have so far made no public announcements concerning compulsory licensing, this article sets out why Turkey has a significant role to play in the discussion.
The response should be positive according to the Industrial Property Code 6769 (IP Code), which entered into force on 10 January 2017 by repealing the decree-laws on patents, utility models, trademarks and service marks, industrial designs and geographical indications which had been in force since 1995.
Compulsory licensing provisions existed in the repealed legislation and the practice is now regulated under Articles 129 to 137 of the IP Code, with some changes and additions.
Article 129 sets out six grounds on which the basis of compulsory licences may be requested and granted:
if the patent is not put to use (Art. 117 of the Implementing Regulation mentions that "market conditions" and "the circumstances/conditions beyond patentee's control and will" shall be taken into consideration when assessing non-use),
the existence of dependent patents indicated in Art. 131,
the public interest described in Art. 132,
exportation of pharmaceutical products for addressing public health needs in other countries (This ground is introduced on the basis of the Protocol amending the TRIPs Agreement – Additional Art. 31 bis) (New Ground)
if a plant breeder cannot develop a new plant variety without infringing an existing patent; and similarly, if a patentee cannot make use of its patent without infringing an existing plant breeders right (in which case the Law No. 5042 on Plant Varieties will be applied); (New Ground)
acts of patentee resulting in a restriction, distortion or breach of competition rules (New Ground).
Article 129/2 of the IP Code has introduced a new body, the Competition Board, to work alongside the courts when the ground for requesting a compulsory licence is the restriction, distortion or breach of competition rules. Compulsory licence requests are heard and decided by the courts or by the Competition Board when the ground is the restriction, distortion or breach of competition rules. However, a compulsory licence based on the public interest is decided by the Turkish presidency. Therefore, there are arguably three main bodies (ie, the courts, the Competition Board and the presidency) that oversee compulsory licensing in Turkey.
The IP Code provides for compulsory licensing provisions to be implemented during the COVID-19 pandemic, especially regarding matters of public interest (Article 132) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) (Article 31bis), which is referenced in Article 129/c.
Compulsory licensing based on public interest
Article 132 of the IP Code clearly states that the president (previously, such decisions were rendered by the Council of Ministers) is entitled to grant a compulsory licence if:
- the patent is important for public health or national defence purposes; or
- the non-use or insufficient use of the patent in terms of quality or quantity could cause serious damage to Turkey's economic or technical development.
If a patent is important for national defence or public health purposes, the IP Code allows the Ministry of National Defence or the Ministry of Health to trigger a compulsory licensing by making a proposal to the presidency. The presidency then decides the compulsory licensing (Article 133/a) on which the related ministry may initiate the compulsory licensing procedure. The presidency may also order a conditional compulsory licence to the patent holder if the use of the invention can sufficiently satisfy public interest through the use realised by the patent holder (Article 133/b).
A compulsory licence which is granted on grounds of public interest can be an exclusive licence depending the circumstances. If a compulsory licence is granted, the licensee has no right to grant sub-licences or import the patent's subject matter. However, the IP Code allows the patent's subject matter to be imported only if the licensee is explicitly authorised to do so in the compulsory licence. In such cases, the IP Code requires the import authorisation to be issued on a temporary basis and limited in order to meet the required demand.
A compulsory licence can be granted under specific conditions by considering the term, fee and field of use. The patent's economic value is taken into consideration when determining the fee. The IP Code provides for a licence fee reduction should the patent holder violate the principles of mutual trust and confidence during the licensing of the patent.
TRIPS Agreement and Article 31bis
Turkey has been a member of the World Trade Organisation and a party to TRIPS Agreement since 1995. As mentioned above, the IP Code also contains a provision concerning the most recent amendment of the TRIPS Agreement – namely, Article 31bis, which was a continuation of the Doha Declaration.
As a party to the amended TRIPS Agreement, Turkey is also entitled to grant compulsory licences for the exportation of pharmaceutical products for addressing public health needs in other countries.
To determine compulsory licence fees under Article 31bis of the TRIPS Agreement, the IP Code stipulates that a patent's economic value for an importing country must consider non-commercial and humane purposes.
In Turkey, compulsory licensing is rarely used in practice – only one dispute was amicably resolved before the courts while the repealed decree-laws were in force (ie, between 1995 and 2017). However, as the current IP Code provides more possibilities for and includes broader wording on compulsory licensing, disputes involving this practice are expected to increase in future.
Endnotes
(1) Israel was the first country to approve a compulsory licence for importing generics of AbbVie's patented Kaletra® medicine from India for use in the treatment of COVID-19. However, AbbVie announced that it will not enforce its patent rights for Kaletra® medicine. Further, Gilead, a research-based biopharmaceutical company, announced that it will rescind its Remdesivir orphan drug designation before the US Food and Drug Administration. In another announcement, Medtronic declared that it will make its design rights and the specs concerning the (PB) 560 portable ventilator available to the public.
