Just as everywhere, political factors play an important part in the use of compulsory licensing in Thailand. One factor to reckon with seems to be the lack of political will by the Thai government to actually invoke the scheme of compulsory licensing in the public interest. The legal issues regarding compulsory licensing in Thailand are the following.

1. Grounds for Compulsory Licensing
The Thai patent law provides for the grant of a compulsory license in four situations, including:⁵

(i) non-working or inadequate working of patents so as to meet the local demand for the patented products, Sec. 46 Patent Act;
(ii) use for working of dependent patents, Secs. 47 and 47bis;⁶
(iii) public non-commercial use of patented substances for meeting the public needs, Sec. 51;
(iv) uses for public interest due to war or national emergency, Sec. 52.

Under Thai law, the system of compulsory licensing is envisaged as a mechanism to encourage local working and improve free competition (i.e. situations (i) and (ii), respectively), and to authorise the use of patented article for public interest (i.e. situations (iii) and (iv)). While in the former situations, a compulsory license is granted to a private competitor, the compulsory licensing in the latter circumstances allows the State agency to authorise the use of patented substances for meeting public needs. Although the mechanism is important and can be used to enhance access to medicines, there is still a practical difficulty in applying this provision due to the incongruity of the Thai legal system.

2. Compulsory Licensing for Failure to Work the Invention
Non-working of the patent within the national economy is regarded as an abuse that would justify the grant of a compulsory licence. Although the term ?working? is not clearly defined, the provision comprises both the manufacture of the product and the import of the patented product into Thailand. The patent may be worked either by the patentee or with his consent. Thai law
considers non-working in two particular circumstances. First, Section 46 explicitly states that the failure to work arises when a patented product has not been produced or the patented process has not been applied for manufacture in Thailand. Second, non-working is defined as charging such a high price for a patented product that the latter is not available (i.e. affordable) in sufficient
quantities to meet domestic demand, Sec. 46 Patent Act. It follows from this provision that a patentee has an obligation not only to work the invention, but also to work it in a manner sufficient to fulfil domestic demand. In conformity with Art. 5 Paris Convention, the failure to work must not be less than three years.⁷

In the above circumstances, any person seeking a compulsory license must submit an application to the Director-General of the DIP upon showing that no agreement with the patentee could be reached within a reasonable period of time.⁸ Proving abuse by non-working and the absence of reasons to justify such conduct is up to the applicant⁹, which does not look justified in light of the fact that under the Paris Convention, an obligation to work the invention in the granting country is placed on the patent holder.¹⁰ The patentee should thus have the duty to present evidence to justify his inaction, the more so since justifying reasons for the inaction will be known foremost to the patentee. The current allocation of the burden of proof makes the Thai compulsory licensing system rather impractical.¹¹

3. Compulsory Licensing in the Public Interest
a) Compulsory Licensing for Public Non-Commercial Use

A compulsory license may also be issued in the public interest (e.g., the protection of the environment, public health, nutrition, and concerns of basic importance to the technological, social and economic development of the country), Sec. 51 Patent Act B.E. 2522. Authorisation for the production under a compulsory licence in the above circumstances can be granted to government undertakings or other private enterprises.

TRIPS requires a consultation with the patent holder prior to granting a compulsory license save in the in the following three situations:¹²

(i) to remedy anti-competitive practices,
(ii) in a national emergency or other circumstances of extreme urgency, or
(iii) for public non-commercial use.¹³

The TRIPS provision regarding the issuance of a compulsory license for ?public non-commercial use? is particularly favourable to developing countries as it may include the situation when the government authorises a state-owned enterprise to produce generics for public distribution for free. Although the current law of Thailand envisages compulsory licensing in the case of public non-commercial use, it does not waive the obligation for consultation with the patent holder, Sec. 51(2) Patent Act. Such waiver should be available so as to facilitate the granting of a compulsory license.

b) Compulsory Licensing in Cases of Emergency

Sec. 52 Patent Act also authorises the use of patented products in cases of a national emergency, e.g. health-related emergencies due to an insufficient availability of drugs on HIV/AIDS, Anthrax, SARS and Bird Flu. In these and other circumstances (e.g. war, epidemics, a natural catastrophe, etc.), the State agency may issue an authorisation to use the patented substance at any time during that national emergency on terms and conditions as the State may deem fit. No use has been made of this provision despite the emergency situation related to the AIDS epidemic.

c) Review of Compulsory Licensing

Thai patent law has gone further than the country?s current international obligations under TRIPS by permitting a judicial review of a compulsory licence. Such review by a court would allow the patentee to delay the grant of a compulsory license. In fact, the assessment of a strong compulsory licensing mechanism lies not so much in its actual use, but in the threat thereof.¹⁴ Overly cumbersome review procedures with a deferential effect will not do much to safeguard the country?s public health. It is advisable that this provision should be replaced by an administrative review in order to avoid time-consuming court procedures and any possible delaying tactics adopted by the patent holders.

Footnotes

5. The extent of the discussion regarding various grounds for compulsory licensing is reflected in C. CORREA, ?Integrating Public Health Concerns into Patent Legislation in Developing Countries? (South Centre, Geneva 2000).
6. When the exploitation of an invention under a patent cannot be made without infringing a patent held by another person, the holder of the patent desiring to exploit his own right may apply for a compulsory license to use the invention contained in the other patent on condition that he is prepared to cross-license his own patent on reasonable terms.
7. It might be appropriate to note that already Art. 5 Paris Convention was a hotly disputed provision that replaced the far stricter rules on forfeiture many countries had adopted. For a history of the provision, see A. KOURY MENESCAL, Those Behind the TRIPS Agreement: The Role of the ICC and the AIPPI on International Intellectual Property Decisions, [2005] I.P.Q. 155.
8. The earliest time for applying for a compulsory license is three years from the grant of the patent or four year from the filing date, whichever period expires later.
9. Patent Act B.E. 2522, Sec. 46(3); Ministerial Regulations No. 6 (B.E. 2524), clause 14(1).
10. According to Article 5A(4) Paris Convention, a compulsory licence ?... should be refused if the patentee justifies his inaction by legitimate reason?.
11. As mentioned above, due to the fact that BMS did not develop ddI itself and was bound by a fair-pricing clause in the agreement with the NIH, charging exorbitant prices should at least have made a prima facie case for an abuse without good reason.
12. TRIPS Agreement, Article 31(b).
13. CORREA, op. cit., at 102-103.
14. J. RICH, ?Roche Asks for Meeting with Brazil Health Minister?, NY Times, Aug. 24, 2001.