[Ip-health] NZ Govt sneaks patent law change through Parliament...the Independent

[Daya Shanker]

Dear James
I was little amused by Dooug Calhoun's outburst against the
introduction of exemption in patenting provisions for regulatory
approval. This exemption is available in the USA since 1988 called
Bolar Exemption and was the matter of so called WTO dispute between
Canada and the EC in Canada-Patent Protection under presidentship of
Prof. Robert Hudec and has been a subject of immense analysis on this
bulletin. There is no relation between the exemption for regulatory
approval at any time and the extension of patent as argued by Doug
Calhoun. This relationship came in the picture in case of Eli Lilly v.
Medtronic 496 U.S. 661 where exemption under regulatory approval were
extended by the USA to medical devices on the basis that Section 156
dealing with extension includes medical devices. The matter was argued
by a number of drug companies that items which are not mentioned in
Section 156 of US Patent Code cannot qualify for exemption under
section 271(e)(1) of the US Patent Code. The US Supreme court did not
say that and this contention has been rejected consistently by the
Coourt of Appeals in Abtox (Abtox Inc. v. Exitron 122 F.3d 1019 (Fed.
Cir. 1997) and Chartex (Chartex International v. M.D.Pers. 5 F.3d
1505. The observation of Fed. Cir. in Chartex says
Chartex woudl read limitations thata may apply to 35 U.S.C. ss. 156
adn 156 (1988) into Section 271(e)(1). SEction 155 adn 156 , however,
deal with term extensions for patents relating to products susbject to
lengthy delays. Although sectin 156 adn Section 271(e)(1) of title 35
passed as sections 201 and 201 of the Drug Price Competition adn
Patent Term Restoration Act of 1984, this Court decliend to read
limitations from one sectin into another'. The latest decision on this
line is in Bristol-Myers Squibb v. Rhone Poulence Rorer (2001 U.S.
Dist. Lexis 19361) reiterating the above position. Although Canada did
not argue on this line, but on the basis of provisions in different
countries, the Panel rejected the EC's argument that they are related.
The contention of Doug Calhoun appears to have been at the behest of
members of PhRMA. I am not too sure that he has been a paid solicitor
for PhRMA, but if anybody knows about him, it should be brought into
picture. I think, the paid solicitors should not be permitted to give
such comments as if they have been made in public interest. This
exemption has been confirmed in case of Canada-Patent Protection by
the Panel as TRIPS compatible. >
> -------- Original Message --------
> Subject: Govt sneaks patent law change through Parliament...the
> Independent...NZ
> Date: Tue, 14 Jan 2003 09:17:35 -0500
> From: david langdon davidlangdon@mindspring.com>
>
> Back to Top <http://www.theindependent.co.nz/story2.html#top>
>
>   Latest News
>
> 18 December 2002
>
>    Govt sneaks patent law change through Parliament
>
>      LESLEY SPRINGALL
>
> Intellectual property specialists say the government sneaked through
> Parliament an amendment to the Patents Act which will jeopardise our
> chances of a free trade agreement with the Unites States.
>
> The amendment was championed by Associate Commerce Minister Judith
> Tizard on behalf of the government's drug-buying agency Pharmac and
> slipped through Parliament in the pre-Christmas rush via a
housekeeping
> Bill, the Statutes Amendment Bill (No. 2) 2001. The change is said
to
> contravene our international obligations and undermine the rights of
all
> New Zealand patent holders.
>
> Passed on Thursday, the amendment to the Patents Act is a back door
> amendment introduced after the Bill was reported back from a select
> committee in September &endash; "so no-one was looking for it," says
> patent lawyer and A J Park partner Doug Calhoun.
>
> "The amendment is so broadly worded, it allows anyone to do any of
the
> activities normally prohibited under a patent, provided the
activities
> are related to developing information for regulatory approval," he
says.
>
> Specifically the amendment says "that where a patent protects an
> invention, the production, use or sale of the invention, without the
> consent of the patent owner would not infringe the patent. This
would be
> solely for the purposes of gaining marketing approval to market the
> invention in New Zealand or any other country."
>
> Calhoun says: "Under this amendment, someone could copy and
manufacture
> a patented kayak, for example, and sell 5000 of them. If they were
then
> sued for patent infringement, they could claim in their defence that
the
> sales were to develop information to show the Ministry of Transport
that
> the kayaks were safe for use in New Zealand."
>
> The amendment was introduced to facilitate the entry of generic
drugs,
> says the government commentary, and mirrors similar legislation
overseas.
>
> However, this so-called "springboard" legislation, allowing a
generic
> drug company to embark on trials to ensure its drug is given
immediate
> regulatory approval when a patent ends, tends to be available only
in
> other countries when they have extended patent terms, beyond the
normal
> 20 years, says Calhoun.
>
> Under international obligations, specifically the World Trade
> Organisation (WTO) Agreement on Trade-Related Aspects of
Intellectual
> Property Rights (the TRIPS Agreement) all patented products are
given
> exclusive marketing rights for 20 years from the day the patent is
filed.
>
> The protection is heavily enforced by international drug developers
> because of the enormous cost and time involved in bringing new drugs
to
> market.
>
> But because of the regulatory hurdles, sometimes a drug isn't sold
> commercially until 10 to 15 years after a patent has been filed.
>
> In response to this, Australia, for example, has extended patent
terms,
> giving new drugs a patent life of 15 years after commercialisation.
> Australia's springboard provisions come into effect only after the
> 20-year protection provision runs out and during the 15-year
extension
> period.
>
> New Zealand law doesn't allow patent extensions.
>
> For an amendment to be included in the Statutes Amendment Bill it
has to
> be non-contentious and have the unanimous support of all parties as
it
> won't be debated in the House.
>
> But this amendment is far from being non-contentious, says Calhoun.
> "Patent holders are losing a significant portion of their
exclusivity
> without any opportunity to even talk to the government about it."
>
> Richard Nottage, chairman of the drug-makers lobby group, the
Researched
> Medicines Industry Association (RMI), says the amendment should have
> been included and should still be included in the current review of
the
> Patents Act to give people a chance to discuss it.
>
> "Why has this major change been channelled through without any
> consultation with business?"
>
> The RMI has been lobbying to have patent extensions allowed in the
> legislation. "Thus, this seems like a double whammy against
> researched-based pharmaceutical firms," says Nottage. "Our request
to
> have extension provisions included [in the review] has not been
heard
> and [the government] has now slipped through this which gives people
> enormous scope to contravene patents."
>
> The amendment would also reverse two decisions in the Court of
Appeal:
> Monsanto v Stauffer Chemical (1984) and Smith Kline & French
> Laboratories v Attorney General (1991). Both cases protected patent
> holders rights by not allowing generic producers to bring their
products
> into New Zealand to trial before patents had expired.
>
> The amendment will also allow generic manufacturers to generate data
in
> New Zealand that can be used to springboard drugs into other
countries,
> says Baldwin Shelston Waters partner Tim Jackson.
>
> Places like China, India and Bangladesh, where pre-registration
testing
> is allowed, have limited patent protection. But the data collected
isn't
> of a high enough standard to fast track generic approvals, he says.
"But
> New Zealand has a good reputation, so our results would go flying
> through for the purposes of registration, even in the US."
>
> This amendment is contrary to New Zealand's drive to promote
> biotechnology and boost research and development investment, where
> intellectual property (IP) protection is key, says Nottage. More
> importantly, it will jeopardise trade negotiations with the US.
>
> "Pharmaceutical firms are enormously influential in the US and
oppose a
> free trade agreement with New Zealand for a variety of reasons: one,
> because they are not comfortable with New Zealand's protection of
> intellectual property rights at the moment. This will just further
the
> line they take."
>
> Both Calhoun and Jackson also say the amendment is likely to dampen
New
> Zealand's efforts to form a trade agreement with the US. "This is
hardly
> a smart move at this time," says Calhoun.
>
> Whether the amendment breaches TRIPS is a moot point.
>
> In 1999, after an outcry from the US and Europe following Canada's
move
> to introduce similar legislation, the WTO issued a 220 page ruling
on
> the issue.
>
> Part of Canada's amendment &endash; the part mirrored in our
amendment
> &endash; was found not to have breached TRIPS. But a further part
> allowing manufacturers to stockpile generic products did breach
TRIPS.
>
> At the WTO trade talks in Doha last year, in answer to pleas from
> developing countries about more affordable access to drugs,
ministers
> made it clear that TRIPS was flexible enough to allow governments to
use
> the accord to gain access to medicines. But more than a year later
they
> are still to agree on how the TRIPS provisions could be used in
> countries lacking production capacity and so cannot require
> patent-holding foreign drug makers to license their inventions to
> domestic producers.
>
> TRIPS is always evolving, says Nottage, and there's nothing to say
that
> even if New Zealand isn't breaching the accord now, it won't be in
the
> near future.
>
> ACT MP Stephen Franks says he knew nothing of the controversy until
> alerted to it a few days before the Bill was passed. Wrapped up with
> reviewing and then stopping another amendment in the Bill, that
would
> have given the Rugby Football Union statutory protection for its
fern
> and the "All Blacks" name (revealed by The Independent last week),
he
> says he didn't have time to review the Patents Amendment.
>
> Because it was introduced after the select committee hearing, no
patent
> lawyers, "who understand this type of thing," knew about it, he
says.
>
> After pointing out the potential contentious nature of the
amendment,
> Franks says he was assured it wouldn't go through by both the Leader
of
> the House, Michael Cullen, and National Party junior whip Lindsay
Tisch
> because National would vote against it.
>
> Tisch says there was confusion between the Rugby Union issue and the
> Patent Act amendment issue. "We voted the way caucus wanted," he
says.
>
> National's commerce spokesperson Gerry Brownlee says he was
initially
> uncomfortable with the amendment but his fears were swept aside by
> officials. "One of the issues was Pharmac &endash; New Zealand
struggles
> to afford topline drugs &endash; and the other was the amount of
> agricultural machinery produced in New Zealand that's an improvement
on
> the stuff that has come off patent. So there are benefits as well as
> negatives."
>
> The amendment's threat to a US free trade agreement is "being
massively
> over-hyped," he says, as we haven't even got to the debating table
yet.
>
> Tizard says the government was careful to ensure the amendment did
not
> breach WTO obligations. Canada, Argentina, Malaysia and Hungary have
> similar provisions, she says. We have done nothing that allows
someone
> to sell a product that violates a patent holder's rights, she says.
>
> The amendment wasn't included in the current review of the Patents
Act
> because all the work had been done on it, she says. "Cabinet was
> satisfied. Everyone was satisfied. Some things could be reviewed
forever."
>
> Tizard also dismisses concerns that this will jeopardise a US free
trade
> agreement. If the WTO approved the amendment in Canada, Argentina
and
> Malaysia, why should it have a problem with New Zealand? she asked.
>
> "Good faith is also about ensuring New Zealanders have access to a
range
> of goods they can afford. It's always a balance and we are doing our
> best to get the balance right."
>
> The issue of extending pharmaceutical patents will now be reviewed
as
> part the Patents Act review, she said.
>
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