The forgotten compulsory licences during the Covid-19 pandemic

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On 24 March 2020, shortly after the World Health Organization (WHO) declared Covid-19 a pandemic, the Mexican President announced that Mexico had officially entered Phase 2 (local transmission) of the Covid-19 outbreak. New and additional social distancing measures were brought into force to help contain the spread of Covid-19 and ‘flatten the curve’.

As a result of such measures, legislative bodies suspended activities, leaving on hold some pertinent and expected bill approvals. Among, the expected but suspended approvals was the Mexico’s new Industrial Property Law.

Despite the suspension of activities, it seemed like a good opportunity to review and eventually make a special modification on the provisions in relation to compulsory licences.

In brief, the former Article 77 of the Industrial Property Law established that for emergency or national security reasons, including serious diseases declared as such by the General Health Council (GHC), the Mexican Patent and Trademark Office (IMPI) would determine that certain patents can be exploited through a compulsory licence for reasons of ‘public benefit’, when the lack of a licence would hinder or over-value the production, supply or distribution of basic goods to the population. In cases of serious disease, for the IMPI to make such determination, the GHC would publish a declaration of national emergency in the Official Gazette. Once the declaration had been made, pharmaceutical companies may apply to obtain licences, which would be granted by IMPI, after a hearing of the parties and in accordance with the opinion of the GHC. Such licences should be issued within a period of 90 days from the date submitting the application to the IMPI.

This is not the first time that Mexico has been through a health crisis as a result of a virus. In 2009, Mexico was battling AH1N1 disease (‘swine flu’). In April that year, the WHO declared a pandemic was imminent. At the time, there were two patented treatments for AH1N1 disease, Oseltamivir and Zanamivir.

Nevertheless, requirements for compulsory licences were not met, as there was nothing that indicated that pharmaceutical companies were unable to supply drugs, that they had set prices too high or that they were blocking distribution. Although the GHC did declare a state of emergency, it did not publish a final declaration for compulsory licences in the Official Gazette.

Considering the magnitude of the ongoing pandemic, and the legislative process in place back then, it was expected that the Senate or the Lower Chamber would have mitigated the provisions that are key elements to providing better access to the treatment for the population in case of emergency, such as in the current Covid-19 crisis.

Nevertheless, the opportunity was missed at the beginning of the process, as none of the four proposals aimed at amending the IP Law or completely replacing it, included an innovative proposal to make the process of compulsory licences feasible, in case this became necessary.

Despite the ongoing pandemic, the United States–Mexico–Canada Agreement (USMCA) came into force on 1 July 2020, the day after, the Lower Chamber of the Mexican Congress approved the draft the Federal Law for the Protection of Industrial Property ('New Industrial Property Law').

The USMCA proposed a treaty on an efficient, high-standard Intellectual Property (IP) chapter which is expected to provide sound protection and a good path of enforcement of Industrial Property rights, which indeed, is well connected with the New Mexican Industrial Property Law, especially regarding patentability subject matter, linkage systems, patent term extensions/compensation and patent enforcement, among other relevant topics.

Despite the new legislation, compulsory licences were completely forgotten. The new Industrial Property law was approved by the Lower Chamber without any changes to the draft approved by the Senate. Consequently, no changes have been made to the text regarding compulsory licences.

The new Industrial Property Law will come into force on 5 November 2020, within the statutory period of 90 working days following its publication in the Official Gazette, and the text, especially the deadlines stated, concerning compulsory licences will remain the same as it did in the soon to be superseded Industrial Property Law.

So far, there is no universally-accepted treatment or cure for Covid-19. Some pharmaceutical products have been shown to help combat the disease. These products are already being marketed for other diseases, and some are either patented or in the process of being patented. There have also been some efforts to develop a vaccine, which is already being tested in clinical trials.

If a universally accepted Covid-19 treatment does become available and if it is protected by a patent, it should be expected the treatment would not be in short supply, nor that Covid-19 continues to pose a massive threat.

Yet in case that additional efforts to make the corresponding treatment available for everyone who needs it in Mexico (ie, in the issuing of compulsory licences) we should try to be assured that there are no obstacles, at least, in the legislation that prevent access to treatments when they eventually become available.

Up until now, it is clear that the current text and deadlines of the provisions concerning compulsory licences are still not in favour of the people who may require emergency treatment. In fact, some pharmaceutical companies dedicated to innovation are aware of the gaps in the legislations and have searched for a suitable strategy to withdraw their exclusive rights in order to contribute to efforts to have a pharmaceutical product available for treating Covid-19. It is therefore crucial to pay attention to such provisions.

An ideal opportunity to review the corresponding provisions was missed and ‘compulsory licences’ have been forgotten, since not even the Covid-19 pandemic was sufficient to trigger a full review of the Mexico’s Industrial Property Law.

In spite of the need to analyse carefully the corresponding provisions in respect to compulsory licences and to modify the requirements in order to avoid any obstacles, while providing suitable conditions to act, it is truly preferred that the conditions for compulsory licences, feasible or not, would never be met, since it would only show that a catastrophe has ruled over us.

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