Health Care and USTR IPR "Watch List"

[James Love <love@cptech.org>]

Re:	May 1, 1998 USTR Special 301 Review

These are excerpted sections of the USTR's May 1, 1998 Special 301 Watch list
which concern health care related intellectual property disputes.  The whole
report is 33 pages, and is on the web at:
http://www.ustr.gov/releases/1998/05/98-44.pdf (no period).  It contains a
"Priority Watch List," a "Watch List," and "Other Observations."  

     Jamie Love
     love@cptech.org


USTR announces results of Special 301 Review

   [snip]

PRIORITY WATCH LIST

The Administration is placing 15 countries on the Priority Watch List because of
the lack of adequate and effective intellectual property protection or market
access in these countries is particularly troublesome to U.S. interests. The
trading partners are:

Argentina: Argentina's patent regime denies adequate and effective protection to
U.S. right holders, particularly in the pharmaceutical industry. As a result, in
1997 President Clinton decided to withdraw benefits for approximately fifty
percent of Argentina's exports under the Generalized System of Preferences (GSP)
program. Argentina's patent law contains onerous compulsory licensing provisions
and pharmaceutical patent protection will not become available until November
2000. Its law does not provide TRIPS-consistent protection for exclusive test
data. There is no provision for pipeline protection or protection from parallel
imports, which are long-sought U.S. objectives. 

The Dominican Republic is being elevated to the Priority Watch List because it
continues to have inadequate enforcement of its existing laws and a legal regime
that does not meet international standards. . . The patent law still contains
broad exceptions from patentability, and provides an inadequate term of
protection.


Ecuador. For the past several years, the U.S. Government has repeatedly
expressed concern regarding Ecuador's failure to comply with its international
intellectual property obligations, failure to act on pending pipeline
applications . . . On April 22, the Ecuadoran Congress passed a new
comprehensive IPR law.  . . . We further understand that on April 29 the
Government of Ecuador issued the first approvals of pending pipeline
applications, but that the great majority remain pending. 

Egypt lacks adequate patent protection for pharmaceuticals. The current law
excludes pharmaceutical products from patentability and contains overly broad
compulsory licensing provisions. President Mubarak has indicated his intention
to delay pharmaceutical product protection until the year 2005, despite
substantial assistance from the U.S. Government to help Egypt prepare modern
legislation. 

India was a Priority Foreign Country from 1991-1993. India has failed to
implement its obligations under Articles 70.8 and 70.9 of the TRIPS Agreement.
These articles require developing countries not yet providing patent protection
for pharmaceutical and agricultural chemical products to provide a "mailbox" in
which to file patent applications, and the possibility of up to five years of
exclusive marketing rights for these products until patent protection is
provided. As a result, the United States initiated WTO dispute settlement
procedures with India on this matter. In December 1997, the WTO Appellate Body
upheld a panel ruling in favor of the United States in this case. On February
13, 1998, India committed to implement the results of the dispute settlement
proceedings. On April 22, 1998, India elaborated on this commitment, and pledged
to amend its law to comply with its TRIPS obligations as soon as possible, and
no later than April 19, 1999. While this commitment is welcome, India's patent
and trademark laws continue to fall well short of providing adequate and
effective protection. 

Israel. In February 1998, the Israeli Knesset amended the patent law to allow
non-patent holders to manufacture and export patented pharmaceutical products
prior to the expiration of the patent to seek foreign and Israeli marketing
approval when the patent expires. The law also contains a provision allowing a
relatively short term of patent extension.   Now pending are draft regulations
that would allow parallel importation of pharmaceuticals.   We urge the Israeli
government to . . . reconsider its pending parallel import regulations.


Kuwait.  There has been little tangible progress made on implementing adequate
and effective patent protection. Kuwait has claimed the developing-country
transition period to bring its intellectual property regime into compliance with
its TRIPS obligations, but the pace of work thus far has not been sufficient to
complete the needed steps by January 1, 2000. We will develop an Action Plan
with Kuwaiti authorities to make it possible to meet those obligations in a
timely manner.


	WATCH LIST

Australia: The Australian Government has introduced legislation to allow the
parallel importation of sound recordings. Australia has also introduced
legislation that would remove protection from parallel imports for copyrighted
labeling and packaging materials associated with other goods.  The United States
is seriously concerned by efforts to weaken intellectual property protection in
Australia and has made these concerns clear to the Government on several
occasions. In 1997, the Australian government also announced a new regime
governing the protection of test data for pharmaceuticals and agricultural
chemicals to come into effect on January 1, 1998. However, legislation setting
out these changes has not been passed by Parliament. The United States is
concerned that in the case of marketing approval for new uses of existing
products or new formulations, Australia continues to allow later applicants to
free ride on the data developed and submitted by the first applicant at great
expense, putting the first applicant at a competitive disadvantage.   The U.S.
Government is pleased that . . . the Government of Australia is considering the
grant of patent term extension to account for delays in the regulatory approval
process for pharmaceuticals.

Bahrain.  The patent law does provide for pharmaceutical product protection, but
only through re-registration of patents filed in the UK. 

Chile: While generally strong, Chile's IP laws are not fully consistent with
international standards in a number of respects. For example, the term of
protection in Chile's patent law is not consistent with TRIPS.  . . .However, we
note that operation of Chile's Department of Industrial Property has improved
and look forward to progress in 1998 on processing patent applications regarding
pharmaceutical products.

Colombia needs to take an active role in the Andean Community to bring Decisions
344, 345 and 351 into conformity with TRIPS before the January 1, 2000 deadline.
The lack of adequate pharmaceutical patent protection costs the U.S. industry
substantial sums each year. 

Costa Rica.  Patent protection does not comply with a number of Paris Convention
and TRIPS requirements. Costa Rica must offer full protection for all products,
including pharmaceuticals, chemicals, and agricultural chemicals, by January 1,
2000. 

Guatemala.  The patent law does not meet international standards, and Guatemala
has not yet met even the minimal TRIPS requirements that already apply in this
regard. We hope that the copyright bill's passage is indicative of the
Guatemalan Government's commitment to improving intellectual property rights
protection and that we will see further evidence of the government's dedication
to addressing its IPR obligations.

Honduras.  The term of protection in the patent law does not meet international
standards, it contains overly broad compulsory licensing provisions, and no
protection for products in the pipeline. 

Jordan provides no patent protection for pharmaceutical products. . . Jordanian
companies market more than 50 pirated U.S. pharmaceuticals in Jordan and export
approximately $35 million of pirated pharmaceutical products to other countries
in the region. 

Korea: The Government of Korea has taken a number of steps to enhance the
protection and enforcement of intellectual property rights . . . These include
increasing budget allocations for IPR protection efforts, opening a Patent Court
on March 1, 1998, and introducing legislation to extend the term of protection
for patents. 

Pakistan took the steps necessary in 1997 to implement its patent mailbox
obligations under the TRIPS Agreement; however. . . Pakistan lacks patent
protection for pharmaceutical products and, the term of protection under it
patent law for processes is not consistent with TRIPS. 

Qatar is being raised to the Watch List because it has not enacted a patent law
and therefore does not protect pharmaceutical products. . . . In the coming
year, we will look to Qatar to . . . move rapidly toward providing product
patent protection for pharmaceuticals.

South Africa amended its Medicines Act in December 1997. The new law appears to
empower the Minister of Health to abrogate patent rights for pharmaceuticals. It
also would permit parallel imports. Implementation of the law has been suspended
pending the resolution of a constitutional challenge in the South African
courts. Undisclosed data also is not adequately protected under South African
Law. The need to provide such protection quickly is demonstrated by the approval
in South Africa of a generic copy of a medicine which still has undisclosed data
protected from competitors' use in many countries. South Africa took the welcome
step of amending its intellectual property laws in 1997 to criminalize trading
in counterfeit goods, though 22 TRIPS deficiencies remain. . . 1997. During the
coming year, we look to the Government of South Africa to enact TRIPs-consistent
legislation protecting undisclosed information, to make clear in regulations or
legislation that the powers granted in the Medicines Act are consistent with its
international obligations and to clarify what actions may be taken pursuant to
that Act and under what circumstances. We are committed to working with the
South African Government to achieve these ends while addressing serious health
care concerns in South Africa.


Thailand: Thailand has taken a number of positive actions over the past year --
in particular, establishment of a IP court and strengthening of their
enforcement system. Nonetheless, significant deficiencies remain in Thailand's
intellectual property regime. . . .  Thailand . . . needs to pass a
TRIPS-consistent patent law (including abolition of the Patent Review Board) . .
..


The United Arab Emirates.  There is still little progress toward enacting a new
patent law, and the need for "pipeline protection" of new products in the
research and development cycle is critical. . . We urge the United Arab Emirates
to move quickly to enact TRIPS-consistent copyright and patent laws … and to
provide patent protection for pharmaceutical products. 

Vietnam: The Government is still in the formative stages of drafting, enacting
and enforcing intellectual property laws. . . Vietnam's patent law excludes
protection for pharmaceutical and agricultural chemical products, and lacks
regulations or additional amendments that would make patent protection fully
consistent with international standards. 

OTHER OBSERVATIONS

Hungary also needs to refine the law on pipeline protection for patents. In the
next year, we look to Hungary to increase the effectiveness of its prosecution
of intellectual property offenses, meet the above-noted TRIPs obligations, and
address our concerns on pipeline protection.


Lebanon.  There . . . are concerns that Lebanon is considering allowing the
registration of generic copies of drugs still protected by patents. 

Netherlands: The United States has repeatedly expressed concern that the
Government of the Netherlands fails to provide protection for proprietary data
submitted to the Government for gaining marketing approval of pharmaceuticals in
a manner consistent with its obligations under TRIPS Article 39.3. However, we
note with satisfaction that a Dutch Court recently reversed an earlier
Government decision which was inconsistent with these obligations. 

On January 7, Nicaragua signed a bilateral IPR Agreement with the United States
- the first such agreement in Central America and the fourth in the hemisphere.
The agreement calls for full implementation by mid-1999.  Currently . . . the
patent law fails to meet international standards for term of protection and for
patentable subject matter.

Romania recently enacted a pipeline protection law.

In Tunisia, the lack of patent protection for pharmaceutical products means that
dozens of unauthorized copies of top-selling medicines are in the market. Once a
medicine is manufactured in Tunisia, its importation is restricted, hindering
access to the market for U.S. firms. . . We look to Tunisia to . . . move toward
providing patent protection for pharmaceutical products.

-- 
James Love
Consumer Project on Technology
P.O. Box 19367, Washington, DC 20036
love@cptech.org | http://www.cptech.org
voice 202.387.8030, fax 202.234.5176