Thailand: IPR Educational Issues

In an interview with two personnel from Bangkok-based Tilleke & Gibbins International Ltd - Edward J Kelly, Partner & Chief Client Relationship Officer and Carlos Natera, IP Consultant, and University of San Francisco School of Law graduate Ifeoma Ajunwa, it was suggested that the Thai government, non-governmental organizations (NGOs), companies and the academia should form make a concerted effort to educate the country of accurate intellectual property (IP) issues and the appreciation appreciate of IP rights.

Pharma Asia: What are the IP issues in the pharmaceutical industry in Thailand?
Kelly, Natera, Ajunwa: There are numerous issues facing the pharmaceutical industry in Thailand - governmental, legal and regulatory, educational, technological and social.

Governmental
One of the major issues facing the industry is the Thai-US FTA issue. FTA discussions were tabled in January 2006 primarily because of IP issues involving medicines in Thailand. The results did not appear promising and American legislators now seem to have lost interest in Thailand. There are, however, FTA negotiations ongoing with other countries such as Korea, Malaysia, Indonesia and Vietnam.

Early this year, the US Trade Representative (USTR) downgraded Thailand in its Special 301 "Priority Watch List" due to the USTR's conclusion that Thailand does not have an effective and adequate system of intellectual property rights (IPRs) enforcement. The report lists the worst country offenders in terms of IPRs in the Priority Foreign Country category.

For less serious offenders, countries are listed on the "Watch List" with the lesser offenders on the "Monitoring List." Thailand consistently appears on the USTR list of trading partners that "deny adequate and effective prosecution of IPRs offences of fair and equitable market access for US persons that rely on intellectual property protection".

On November 29, 2006, and January 25, 2007, the Minister of Public Health (MOPH) Mongkol na Songkhla, announced a declaration of intent its decision to issue compulsory licenses on selected patented drugs. This move was intended to suspend exclusive patent rights owned by the originators, and to allow manufacturers to produce generic versions of the originators' patented drugs.

Abbott Laboratories, Merck & Co., and sanofi aventis were affected by this decision on their respective products. The products involved in the compulsory licenses are Kaletra and Stocrin (effective anti-AIDS products) and Plavix (a blood-thinning treatment or anti-clotting agent to treat heart disease). This policy has led criticisms of the Thai government that it has not complied with due process and substantive conditions in the TRIPS agreement on patents in accordance with the World Trade Organization (WTO) rules.

These MOPH announcements reflected the Thai government's budget priorities for its universal health system, utilizing a rationale that it allegedly cannot afford the necessary drugs for its people, and thus constituted a public health emergency. This decision was criticized because it seemed to be based on political and economic issues rather than on health issues.

The World Health Organization (WHO) does not consider Plavix an essential medicine. Many essential medicines in Thailand are not patented and so that any improvements to the patent system in Thailand would generally have no effect on the prices of patented drugs that have already been introduced into the market.

Legal and regulatory
While there have been improvements over the last decade, Thailand does not have a sustained and complete system of IPRs enforcement. Substantial progress was made with the implementation of the Copyright Act of 1994, the Patent Act in 1999 and the Trade Mark Act in 2000. Thailand has also established the specialist its Intellectual Property and International Trade Court in 1997. However, it does not have deterrent enforcement of seem to be able to enforce the laws and regulations it was meant to uphold and the some laws are selectively enforced.

There are also issues surrounding interpretation and implementation of current laws. Thailand's pharmaceutical patent laws are generally up to the standards of many of the world's developed nations. However, there is a deficiency in the mechanics for obtaining a patent (mostly having to do with unreasonable delays). Once a patent is granted, there is an inability to effectively enforce those patent rights.

Some pharmaceutical patents are taking in excess of seven or eight years to be granted. However, there is no reasonable compensation in the form of patent term extension on these unfair delays. Some laws are also interpreted selectively, incorrectly, or may be applied too restrictively, in a manner that is not in the interest of developing a knowledge-based economy.

There are several enforcement issues. One is lack of enforcement against counterfeits, which in the case of drug patents, involves fake medicine made out of inert materials such as glue and chalk. Another issue is the enforcement against unfair competition by copied products that are granted market approval by the FDA. Thailand does not have a formal "patent linkage" system, and this need to be remedied.

There are some technical limitations with enforcement officials and the courts. For example, Thailand's IP enforcement is primarily based on criminal remedies, enabling fast access to the courts where infringement can be curtailed quickly. However, the technical nature of patents often requires reliance on the civil system. Patent owners rarely attempt to enforce their rights, due to perceived inability to obtain a satisfactory and cost-effective remedy. Enforcement officials are uncomfortable in assisting patent owners.

Educational
At every level of Thai society, there is a tremendous lack of understanding of the role, function and economic nature of IP and IP rights. There is also a lack of economic understanding about the investment of funds for R&D is particularly regrettable. Thailand does not produce sufficient scientists and technical graduates for a fully functioning pharmaceutical system.

Development and education of the policies and programs on the value and benefits of an IP system is needed in schools. The private sector has already begun such educational efforts with the pharmaceutical firms leading by example. The message conveyed is that IP, technology and innovation do not come easy; investment is needed and that this requires protection for safeguarding investment for the future. There are also ownership rights in IP. IP infringement is considered as "theft", and violation of IP rights is not a victimless crime with severe consequences.

Technological
Thailand does not have sufficient modern, high technology R&D capability to develop new drugs and new treatments for diseases. The country depends mostly upon foreign technology transfer from foreign multi-national players. There needs an internally grown technology transfer industry in Thailand that exports technology.

Pharm Asia: What is being done to work around to resolve these issues?
Kelly, Natera, Ajunwa: The main work on these issues is the dissemination of information about the importance and necessity for IP protection. By educational and informational programs that dispel misconceptions about IP rights, clearly outline the economic and other benefits of IP protection. These would enable Thailand to have a greater understanding and appreciation for IP rights.

With the knowledge of the true benefits a strong IP system confers; for example, economic incentives for innovation and the curtailing of public health issues surrounding counterfeit products (particularly fake medicines), the Thai people will want to encourage and work with the government in implementing a solid IP system.

Further, our firm is proud to be the legal counsel for the Pharmaceutical Research and Manufacturers Association (PReMA) that boasts 43 members that includes such leading companies as Pfizer, Novartis, Sanofi Aventis, Merck, Schering Plough, Eli Lilly, and Gilead Sciences.

PReMA has been instrumental in disseminating accurate and full information to the public about topical IP issues such as compulsory licensing. PReMA also makes it a priority to engage in constant dialogue with the Thai government and policy-makers. Its members often involve themselves in conducting informational meetings, seminars and open debates with NGOs and prominent Thais. PReMA's viewpoint is that confrontation and antagonism (especially of the pharmaceutical companies) is not the best way to achieve the objectives of both the Thai government and the many for-profit-making companies in Thailand. Rather, its focus is on cooperative work to both strengthen IP protecting protection while assuaging any concerns, and dispelling any misconceptions.


Pharma Asia: What do you appreciate about the IP protection measures in Thailand?
Kelly, Natera, Ajunwa: The most significant aspect of IP protection measures in Thailand is that, in addition to civil action against infringers, there also exists the possibility of criminal actions. The existence of criminal penalties, if properly implemented and enforced, sends the message that IP theft is a serious offense, just like any other theft of other kinds of property.

Many infringers would like to pretend that what they are doing is harmless, imitation, but the existence of criminal codes clearly denotes that IP infringement is a crime and there is no escape from punishment. Further, we also appreciate the cooperation of the police and customs in removing counterfeit goods by conducting raids and seizures.

Pharma Asia: What should Thailand do to strengthen IP protection in the pharmaceutical industry?
Kelly, Natera, Ajunwa: Thailand should considerably strengthen its IP protection by modernizing the legislation it has, and enforce the legislation in a consistent way. For example, there are pending amendments to the Copyright act, Patent Act, Trademark Act, and Trade Secrets Act. Negotiations for an FTA with the US should be revived and concluded to the satisfaction of both countries.

Industry players at all levels should organize themselves and come together on a regular basis to discuss issues openly with due media coverage. This would help to resolve the issues of education and work in the industry, and allow the media who have great power in disseminating to disseminate the news to the general public.

Thailand should consider initiatives that used by other countries that have undertaken measures to stop counterfeiting drugs and piracy of goods. For example, Burkina Faso (West Africa) has created developed government strategies to set up an independent anti-piracy organization and has issued a common policy with other neighboring countries to secure the border against pirated goods.

Another initiative has been the establishment of a sub-regional court that's responsible for copyrights and providing provides intellectual property rights training to judges, gendarmes, and police and customs officials. In addition, criminal charges are should be pressed brought against advocates and sellers of pirated goods.