[Ip-health] Intervention by Brazil at WTO General Council on seizure of 500 kilos of generic medicines by Dutch customs authorities

[Thiru Balasubramaniam]

http://www.keionline.org/blogs/2009/02/03/intervention-by-brazil-at-wto-gen=
eral-council-on-seizure-of-500-kilos-of-generic-medicines-by-dutch-customs-=
authorities/

Intervention by Brazil at WTO General Council on seizure of 500 kilos
of generic medicines by Dutch customs authorities

On this day, 3 February 2009, H.E. Ambassador Roberto AZEV=CADO,
Permanent Representative of Brazil to the World Trade Organization
(WTO) and other economic organizations in Geneva made the following
intervention at the WTO General Council meeting on the seizure by
Dutch authorities of a cargo of 500 kilos of losartan potassium en
route from India to Brazil.

An informed source notes that India and 16 other members of WTO
including Argentina, Bolivia, Burkina Faso, China, Costa Rica, Cuba,
Ecuador, Egypt, Indonesia, Israel, Nigeria, Peru, Pakistan, South
Africa, Thailand and Venezuela supported Brazil=92s intervention.

Intervention by Brazil

WTO General Council (February 03 and 04, 2008)

1. On December 04, 2008, the customs authorities of the Netherlands
seized a cargo of generic medicines en route from India to Brazil. The
cargo consisted of 500 kilos of losartan potassium, an active
pharmaceutical ingredient used in the production of medicines for
arterial hypertension. The substance was being traded between the
Indian company dr. reddy=92s and the Brazilian importer ems.

2. Apparently, the decision was motivated by an administrative request
lodged by a third company, which allegedly holds the patent of
losartan potassium in the Netherlands. To Brazil=92s knowledge, this
request was based on a claim of violation of patent rights pursuant to
provisions set out in the EC Council Regulation 1383, of 22 July 2003,
and in the Dutch Patent Act of 1995. This Regulation concerns customs
actions against goods suspected of infringing intellectual property
rights and the measures to be taken against goods found to have
infringed such rights. The cargo was held back by Dutch authorities
for 36 days, after which it was released to return to India. As a
result of the Dutch authorities=92 actions, the medicines never reached
Brazil.

3. The measure taken by the Dutch authorities clearly violates the
freedom of transit, which is a right enshrined in GATT Article V. Only
very exceptional circumstances warrant restrictions on that freedom.
Brazil is not aware of any such circumstance in this concrete case.

4. The decision to impede the transit of a cargo of generic medicines
=96 which was not headed for the Dutch market =96 is unacceptable and sets
a dangerous precedent. Worse still, there are indications that this is
not an isolated case.

5. Trade in generic medicines is perfectly legal from the intellectual
property point of view. Nevertheless, as we understand it, the EC
Regulation empowers customs authorities to interfere with the transit
of generic medicines. The concept of generic must not be mistaken with
counterfeit or pirated. Generic medicines are not substandard or
illegal. They simply do not enjoy patent protection in the relevant
market. In Brazil, the falsification of medicines is typified as
heinous crime.

6. Under TRIPS, the medicines seized are generic under the law of the
market in which they were meant to be commercialized. In this case,
they are generic as regards Brazilian law, and Indian law, as we
understand it. Whether or not the medicines were generic under the law
of the country of transit is an irrelevant question. What is not
irrelevant is the decision taken by Dutch customs authorities to block
the transit and thus impede the access of Brazilian hypertension
patients to safe and price-competitive generic medicines. In Brazil
and in other countries, hypertension is a common but serious disease,
often leading to death.

7. Irrespective of the value or volume of the cargo involved, Brazil
is gravely concerned with the setting of a precedent for
extraterritorial enforcement of IP rights. Attempts to extend the
rights granted by patents beyond national borders have critical
systemic implications. They affront fundamental canons of the
multilateral trade system, in particular the well-established
principle of territoriality, a fundamental pillar of the international
intellectual property regime.

8. Extraterritorial enforcement of patent rights cannot be reconciled
with the terms of the Doha Declaration on TRIPS and Public Health.
That Declaration, adopted by the Ministerial Conference on November
14, 2001, states that the TRIPS Agreement =93can and should be
interpreted and implemented in a manner supportive of WTO Members=92
right to protect public health and (=85) to promote access to medicines
for all=94. The same declaration also establishes that each provision of
the TRIPS Agreement shall be read in the light of the objectives and
principles of the Agreement. In this sense, Brazil recalls that the
protection of public health and the promotion of the public interest
are still part of TRIPS fundamental principles.

9. The undue interference of Dutch authorities with the transit of the
generic medicines may have other serious systemic consequences. It
could undermine the ability of Members to address public health needs
by means of cross-licensing arrangements. It is worth recalling that
Paragraph 6 of the Doha Declaration on TRIPS and Public Health
represents a much needed and long awaited response to the specific
situation of countries with insufficient or no manufacturing
capacities in the pharmaceutical sector. The so-called =93paragraph 6
system=94 permits a Member without manufacturing capacity to import
medicines from other Members under a compulsory cross-licensing
arrangement.

10. What would happen to the Doha Declaration on TRIPS and Public
Health and, in particular, to the =93paragraph 6 system=94 if the denial
of transit to generic medicines became a systematic and widespread
practice? What if countries commenced to create impediments to the
legitimate trade of generic medicines based on the wrongful allegation
that it violates national patent rights? In that case, trade in
generic medicines would be rendered virtually impossible.

11. Brazil is fully committed to intellectual property protection. It
is a founding-Member of the Paris Convention, and Brazilian
legislation provides fair and adequate protection to IP rights
holders. Brazil also believes that a functioning and effective IP
international system can only be built on the solid basis of a fair
balance between private and public interests. This is the very
foundation of the TRIPS Agreement. The protection of intellectual
property cannot supersede the protection of more fundamental values,
such as the protection of life and the right to promote public health.

Mr. Chairman,

12. The application of enforcement procedures to goods in transit is
being advocated in the World Customs Organization and in the World
Health Organization. In the WCO, within the SECURE Working Group, some
countries are pushing for the adoption of standards that would give
customs the authority to seize goods in transit suspected of
infringing IP rights. Similarly, in the World Health Organization, the
IMPACT initiative claims that national legislations should provide for
enforcement procedures over goods in transit.

13. First, neither the WCO nor the WHO are adequate fora for
discussing IP rights enforcement. In the WHO, the focus should be on
the quality, safety and efficacy of medicines, as well as on the issue
of access. On its turn, the WCO should concentrate on developing
methodologies to enhancing customs=92 performance, rather than venturing
into TRIPS-plus norm-setting.

14. Second, interfering with the freedom of transit for the sake of
enforcing IP rights violate trade disciplines negotiated by Members of
this Organization. IP rights can =96 and should =96 be enforced in a
Member=92s own market. Such enforcement, however, cannot reach goods
that are not intended for that market.

15. Brazil has already expressed to the Netherlands its concern. In
light of the above, Brazil would appreciate if the Netherlands and/or
the European Communities could clarify the circumstances and legal
basis of the decision taken by Dutch authorities, which led to the
refusal of transit for generic intellectual property-free medicines.
Brazil also expects that the Netherlands and the EC bring their
legislation into conformity with multilateral trade disciplines so
that episodes such as this one no longer happen.

Posted in Competition policy, I+A, innovation plus access, Medical
technologies, compulsory licensing, pricing of medical technologies.
Tagged with Brazil, Doha Declaration, Europe, European Commission,
European Communities, Netherlands, SECURE, who, World Customs
Organization.


By thiru
February 3, 2009
------------------------------------------------------------


Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)
thiru@keionline.org


Tel: +41 22 791 6727
Mobile: +41 76 508 0997