[Ip-health] US-Russia Bilateral/WTO Deal Pushes New Standards For IP Protection

[Ira Glazer]

http://www.bilaterals.org/article-print.php3?id_article=3D6570

<SNIP>

Russia committed to implementing TRIPS Article 39.3 requirements to
=93protect [undisclosed test or other] data against disclosure, except
where necessary to protect the public; or unless steps are taken to
ensure that the data are protected against unfair commercial use.=94

TRIPS does not specify a length of time for protection, but Russia
agreed to move to block by June 2007 (likely before its WTO accession)
the unapproved use of undisclosed information provided for marketing
approval for a minimum of six years, which many see as exceeding TRIPS.
US law states protection should be for five years, which has been the
standard included in recent US bilateral agreements, and which itself is
has come under criticism. TRIPS also contains exceptions for governments
that do not appear to be addressed in the bilateral deal.

The US side letter states that Russia =93will work with the Duma to enact
legislation and implementing regulations providing that undisclosed
information submitted to obtain marketing approval, i.e., registration,
of pharmaceutical products would provide for a period of at least six
years of protection against unfair commercial use starting from the date
of grant of marketing approval in the Russian Federation.=94

During this period, the letter continues, =93no person or entity (public
or private), other than the person or entity who submitted such
undisclosed data, could without the explicit consent of the person or
entity who submitted the data, rely on such data in support of an
application for product approval/registration.=94

Any subsequent application for marketing approval granted during the six
years would require the applicant to submit his own data or data used
with the right holder=92s authorisation, meeting the same requirements as
the first applicant.

=93The terms on data exclusivity add a new and more restrictive element
than even the China Working Party Report, paragraph 284, in that =93public
or private=94 entities are precluded from using undisclosed test data,=94
said Frederick Abbott, a law professor at Florida State University Law
School who is an expert on IP agreements.

=93The intent of this language would appear to be the prevention of even
public non-commercial use of data, e.g., for supply of medicines to
public health clinics (e.g., to treat HIV/AIDS),=94 Abbott said, =93thereby
aggravating concerns previously expressed regarding the impact these
provisions may have on addressing serious public health problems through
compulsory licensing, including government use.=94 This is permitted under
the TRIPS agreement and recognised by the Doha Declaration and the 2005
TRIPS public health amendment, which reinforced countries=92 right to
waive TRIPS for public health reasons. *


IP Watch | 24 November 2006

By William New

In its bilateral negotiation with the United States in order to join the
World Trade Organization, Russia appears to have agreed to intellectual
property rights standards that push those of the WTO and US law to new
levels.

IP issues have been a top priority for the United States in recent years
and particularly with Russia, where piracy and counterfeiting are seen
as highly problematic. The negotiation with Russia had in a way blurred
the lines between multilateral and bilateral agreements (IPW, WTO/TRIPS,
24 October 2005).

The two sides reached their [bilateral agreement on Russia=92s terms for
joining the WTO-6512] this week, and strongly focused on Russian IP
rights enforcement efforts. In the US side letter on intellectual
property rights, Russia appears to have given in to US demands to take
IP provisions well above the WTO Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS).

This can be seen in particular in the terms for protecting information
related to patented medicines. Russia committed to implementing TRIPS
Article 39.3 requirements to =93protect [undisclosed test or other] data
against disclosure, except where necessary to protect the public; or
unless steps are taken to ensure that the data are protected against
unfair commercial use.=94

TRIPS does not specify a length of time for protection, but Russia
agreed to move to block by June 2007 (likely before its WTO accession)
the unapproved use of undisclosed information provided for marketing
approval for a minimum of six years, which many see as exceeding TRIPS.
US law states protection should be for five years, which has been the
standard included in recent US bilateral agreements, and which itself is
has come under criticism. TRIPS also contains exceptions for governments
that do not appear to be addressed in the bilateral deal.

The US side letter states that Russia =93will work with the Duma to enact
legislation and implementing regulations providing that undisclosed
information submitted to obtain marketing approval, i.e., registration,
of pharmaceutical products would provide for a period of at least six
years of protection against unfair commercial use starting from the date
of grant of marketing approval in the Russian Federation.=94

During this period, the letter continues, =93no person or entity (public
or private), other than the person or entity who submitted such
undisclosed data, could without the explicit consent of the person or
entity who submitted the data, rely on such data in support of an
application for product approval/registration.=94

Any subsequent application for marketing approval granted during the six
years would require the applicant to submit his own data or data used
with the right holder=92s authorisation, meeting the same requirements as
the first applicant.

Potential Negative Impact on Russian Health Crises

Without specific time periods, generic drug producers are able to use
the data to ramp up their products so they may hit the market upon
expiration of drug patents. Patent holders see a need to increase
protection of their data so as to ensure full benefits of patent
lifespans they view as critical to recovering their research and
development costs. But public health activists see problems as this
could effectively extend the patent benefits beyond expiration by
delaying generic producers=92 activities.

Some countries, such as India, have chosen to implement the TRIPS
standard of non-disclosure of test data without specifying a number of
years, a source said. The source also said India blocked the United
States=92 effort to include a specific length of time during the early
1990s Uruguay Round negotiation that led to the TRIPS agreement.

=93The terms on data exclusivity add a new and more restrictive element
than even the China Working Party Report, paragraph 284, in that =93public
or private=94 entities are precluded from using undisclosed test data,=94
said Frederick Abbott, a law professor at Florida State University Law
School who is an expert on IP agreements.

=93The intent of this language would appear to be the prevention of even
public non-commercial use of data, e.g., for supply of medicines to
public health clinics (e.g., to treat HIV/AIDS),=94 Abbott said, =93thereby
aggravating concerns previously expressed regarding the impact these
provisions may have on addressing serious public health problems through
compulsory licensing, including government use.=94 This is permitted under
the TRIPS agreement and recognised by the Doha Declaration and the 2005
TRIPS public health amendment, which reinforced countries=92 right to
waive TRIPS for public health reasons.

Of particular concern is that Russia, according to the World Health
Organization, =93is facing very serious public health problems in areas
such as HIV/AIDS and tuberculosis, and access to medicines questions are
very significant in this context,=94 Abbott said.

He said it was =93widely anticipated=94 that the US would seek equal or
stronger terms for Russia as it had for China since there has been
congressional dissatisfaction with China=92s implementation of IP provision=
s.

Binding Bilateral Agreement or Step to WTO Accession?

The US side letter was dated 19 November, signed by US Trade
Representative Susan Schwab and sent to German Gref, the Russian trade
minister. The side letters from each government are viewed by the Bush
administration as representing a formal agreement.

The final line of the US letter states: =93I have the honor to confirm
that my government shares these understandings and that your letter and
this letter of confirmation in rely constitute an agreement between our
two governments.=94

=93As far as public international law is concerned, this is a treaty,=94
said Andrew Shoyer of the Sidley Austin law firm in Washington. It is
enforceable under Section 301 of US trade law, but without its own
dispute settlement mechanism, it would at a minimum =93presumably be
enforceable in the International Court of Justice,=94 he said.

But it is clearly not a WTO agreement enforceable under the WTO dispute
settlement mechanism, Shoyer said. It remains to be seen whether the WTO
secretariat will take the bilateral commitments into the WTO working
party report. =93If the commitments are reflected in the working party
report, and if the paragraphs are incorporated by reference by the
Protocol of Accession (that=92s what normally happens), then the
commitments in the exchange of letters become WTO commitments
enforceable under the WTO dispute settlement mechanism,=94 he said.

The biggest part of the agreement by far is focused on a variety of
specific actions to be taken by Russia to better protect and enforce IP
rights against piracy and counterfeiting, especially in relation to
copyrighted optical media such as CDs and DVDs as well as on the
Internet. The US letter appears to lower the threshold for criminal
penalties in these areas. Specific reference is made to shutting down a
Russian-based online music download site called allofmp3.com, perhaps
the biggest such site in the world.

Russia agreed to implement the World Intellectual Property Organization
Copyright Treaty and the WIPO Performances and Phonograms Treaty. The US
letter is less strong on agricultural chemical products, but pledges
Russia to work cooperatively with the United States strengthen
enforcement of IP rights on these.

The Final Path to Accession

In order to join the WTO, Russia has to complete bilateral negotiations
with the other countries that chose to negotiate directly with it, but
the US deal was seen as one of the most comprehensive, according to
Sidley Austin. The best commitments made by Russia in each of its
bilaterals will be available to all WTO members. The WTO working party
on Russia=92s accession will complete a final agreement.

For the United States to recognise Russia=92s WTO membership and get the
benefits of its commitments, the US Congress in 2007 will have to
approve legislation granting Russia Permanent Normal Trade Relations
(PNTR). The passage of PNTR for China several years ago proved highly
contentious. In 2007, the Congress will revert to Democratic Party
control, which raises new questions about the fate of trade deals
negotiated by the Republican administration.

The United States has retained leverage in the negotiation because all
members of the working party, including the United States, must agree
with the results before Russia can accede to the WTO, sources said.
Implementation of WTO agreements is left up to the governments but with
the specific dates in this case, accession might be blocked if the
actual implementation, rather than the promise of implementation as in
the past, is seen as inadequate by other members. But as Shoyer noted,
=93On its face, it is not a commitment to pass legislation,=94 but rather t=
o
work toward legislation by the agreed dates.

US Industries Hail Agreement

US industry groups concerned with intellectual property rights,
including film, music, pharmaceuticals, and manufacturing praised the
agreement but said final support would be conditioned upon Russia=92s
upfront implementation of commitments, a point echoed by Schwab in
recent comments.

=93This is so important, because a lesson we learned from China=92s WTO
accession is that we have to see intellectual property enforcement come
up to speed before - not after - we sign on the dotted line,=94 said Frank
Vargo of the National Association of Manufacturers.

Pharmaceutical Research and Manufacturers of America President and CEO
Billy Tauzin, in a statement, praised Russia=92s commitment to =93strong
intellectual property rights=94 which he called =93the life blood of the
innovative biopharmaceutical industry.=94

=93Russia has agreed to provide a high standard of data protection for
pharmaceuticals in its domestic law and this is a clear success for
Russian patients,=94 Tauzin said. The industry will push in the ongoing
multilateral talks at the WTO =93to resolve other outstanding market
barriers such as existing preferences for local manufacturing,=94 he said.
The group also predicated its support for PNTR and WTO accession on
Russia=92s implementation of the agreed-upon legislation.

Dan Glickman, chairman and CEO of the Motion Picture Association of
America, praised the enforcement provisions, but stated, =93Equally
important is the affirmation by the United States that it will veto
Russia=92s accession to the WTO unless Russia makes substantial progress
on the agreement=92s elements.=94

Mitch Bainwol, chairman and CEO of the Recording Industry Association of
America, echoed these views. =93The administration and Congress must
insist on achievement of these benchmarks before concluding a
multilateral agreement that will pave the way for Russia=92s entry into
the WTO,=94 he said in a statement. =93What happens next is completely in
the hands of the Russian authorities.=94

Separately, the UN Educational, Scientific and Cultural Organization
(UNESCO) issued a release recently stating that it had begun
participating in an initiative of the IPOS UNESCO IFAP to forward seized
pirated CDs and DVDs to charitable purposes instead of destroying them.
For instance, DVDs of children=92s stories have been sent to children=92s
libraries in Moscow and elsewhere.