[Ip-health] India, Brazil to take on EU over regulation

[Sangeeta]

India, Brazil to take on EU over regulation
The two countries have taken a strong stand against EU act of seizing Dr
Reddy=E2=80=99s in-transit shipment
Radhieka Pandeya
http://www.livemint.com/2009/01/30002200/India-Brazil-to-take-on-EU-ov.html=
?
d=3D1

New Delhi: A ship loaded with medicine from India drops anchor at a Europea=
n
port from where it will sail for Brazil. European officials seize the cargo
and later send it back to India. They say the drug is a generic version tha=
t
violates a patent protected in Europe. A generic drug is cheaper than the
patented version.

The seizure has led to a full-blown war of words in three corners of the
world=E2=80=94and put the spotlight back on contentious issues such as inte=
llectual
property (IP) laws, access to affordable medicines and the use of non-tarif=
f
barriers against exports from developing countries.

Patent tussle: India=E2=80=99s ministry of commerce and industry is working=
 out a
legal strategy to convince the European Union to drop the provision under
which the shipment from Dr Reddy=E2=80=99s Laboratories was seized. Bharath=
 Sai /
Mint

The governments of India and Brazil have taken a strong stand against the
European Union (EU) for seizing an in-transit shipment of a drug
manufactured by Dr Reddy=E2=80=99s Laboratories Ltd (DRL). Brazil=E2=80=99s=
 ministry of
external affairs has threatened to take the issue up with the World Trade
Organization (WTO) that settles trade disputes between countries. And
Brazil, with strong support from India and Bangladesh, at a recent executiv=
e
board session of the World Health Organization (WHO) in Geneva, also
succeeded in blocking a controversial resolution backed by the European
Commission (EC) and WHO-funded International Medical Product
Anti-Counterfeiting Taskforce, or IMPACT. The resolution had been widely
criticized for mixing up issues of public health and private IP rights in
the context of defining =E2=80=9Ccounterfeit=E2=80=9D drugs.

The Indian ministry of commerce and industry is working out a legal strateg=
y
to convince the EU to drop the provision under which the DRL shipment was
seized. =E2=80=9CWe plan to approach the WTO if the EU fails to take suitab=
le
action,=E2=80=9D said G.K. Pillai, secretary, department of commerce.

On 15 January, Mint had reported that a DRL shipment of the generic version
of losartan was seized in transit in the Netherlands. This shipment, on its
way to Brazil, was held by the customs authority at Rotterdam, which said i=
t
infringed the patent of the original drug=E2=80=94Cozaar. Losartan is not p=
atented
in India or Brazil. The patent for Cozaar in the Netherlands is held by
DuPont, while US-based pharma multinational Merck and Co. holds the
marketing rights.

=E2=80=9CWe have taken up the issue with a national-level industry body. Bu=
t we hope
the Indian government will take it up at the government-to-government
level...as it is an industry-wide problem,=E2=80=9D said DRL chief executiv=
e G.V.
Prasad.

Referring to the EC regulation, a DRL spokesperson told Mint in an email
response, =E2=80=9C...These provisions may have a significant impact on Ind=
ian
companies, most of which use the EU route to transport pharmaceutical
products to markets where the patent is not recognized or the product is of=
f
patent. By forcing (them) to opt for a different route...the cost of
transport may significantly add to the cost of producing...thus adversely
impacting the India=E2=80=99s ability to remain competitive.=E2=80=9D He ad=
ded, =E2=80=9CThis will,
obviously, also impact the availability of much needed medicines in
developing countries, to which India exports...=E2=80=9D

On its part, the Indian government will provide legal support to the
industry. =E2=80=9CIndian companies like DRL and IndSwift whose goods were =
seized in
transit will get legal and financial help from us to file cases in the EU
court of justice. They have shown interest in our offer,=E2=80=9D said Pill=
ai. (Mint
first reported about Indswift on 12 December.)

According to the EC regulation, the EU customs are empowered to detain good=
s
in transit on suspicion of an infringement of IPR. =E2=80=9CTherefore, cust=
oms have
a right to stop goods of which they suspect that an intellectual property
right (in this case a patent) is infringed,=E2=80=9D Maria Assimakopoulou,
spokesperson, taxation and customs union, EC, told Mint in an earlier email=
.
The spokesperson has not responded to the newspaper=E2=80=99s email about I=
ndia and
Brazil=E2=80=99s opposition.

=E2=80=9CThe shipment was seized on grounds that it infringed... the patent=
...
However, it is made in India with full respect to international legislation
concerning (IP) rights. In Brazil and in India, the product is not protecte=
d
by a patent and can be imported freely,=E2=80=9D said an official of the Br=
azilian
ministry of external affairs in an email.

The fear of more such episodes has been expressed earlier. =E2=80=9CAfter t=
he EU
regulation was introduced, MSF (Medecins Sans Frontieres, an international
medical and humanitarian aid organization) expressed concern about its
potential to hamper the transit of perfectly legitimate medicines for use i=
n
developing countries. This concern remains,=E2=80=9D said Michelle Childs, =
policy
director of the non-profit, MSF Campaign for Access to Essential Medicines.
Patent lawyers suggest a larger battle lies ahead. Rajeshwari Hariharan,
partner, patents division of the law firm K&S Partners, said, =E2=80=9C...i=
f it is
in transit...it is deemed to be in storage, and storage is one of the acts
that fall under IPR... I would agree though that it is a non-tariff
barrier... (I)t would still remain (an) infringement but the countries can
take it up with WTO and ask for=E2=80=8Aamendment in the law.=E2=80=9D

=E2=80=9CThe seizure of in-transit consignments not meant for the EU market=
s
operates as a non-tariff barrier and is antithetical to the very spirit of
free trade envisaged under the WTO. But the current wording of TRIPS leaves
much to be desired and may provide enough flexibility to the EU to justify
such seizures. It may be far more fruitful for India and Brazil to engage i=
n
a diplomatic dialogue with the EU to resolve this issue and amend the text
of TRIPS to prohibit such seizures in the guise of IP enforcement,=E2=80=9D=
 said
Shamnad Basheer, a professor in IP law at the National University of
Juridical Sciences, Kolkata.

TRIPS, or the agreement on aspects of intellectual property rights related
to trade, provides for basic protection that each government has to give to
the IP of fellow WTO members, while balancing the long-term benefits and
possible short-term costs to society. Governments have certain flexibilitie=
s
to be able to tackle, for instance, public health problems.

This gives an option, argue others. Sangeeta Shashikant, a lawyer with the
Third World Network, an international non-profit, says India and Brazil can
and should explore legal options including approaching the WTO Dispute
Resolution Body. =E2=80=9CThe TRIPS agreement clearly states that any IP en=
forcement
measures should be applied in such a manner as to avoid the creation of
barriers to legitimate trade,=E2=80=9D she said.

Asked how Brazil would now deal with issues such as seizure of generic
shipments in transit, the official said in an email, =E2=80=9C...(A) motion=
 to
accept recommendations by IMPACT that could lead to confusions (between
counterfeit and generic drugs) was stopped by countries such as Brazil and
India. Other options, including (going) to the WTO, are still being
considered.=E2=80=9D

India, Brazil and other countries from the South-East Asia region, been
campaigning against the IMPACT resolution for its attempt to redefine
counterfeit drugs to include generics. The losartan case led Brazil to take
an aggressive and successful stance this time.

But the battle between affordable generics and costly patented drugs is far
from over. =E2=80=9CThere is the Acta (anti counterfeiting trade agreement)=
 being
negotiated between certain countries as well as the SECURE (standards to be
employed by customs for uniform rights enforcement) which promotes strict I=
P
enforcement being developed by the World Customs Organization,=E2=80=9D sai=
d Dilip
G. Shah, secretary general of the Indian Pharmaceutical Alliance.
Meanwhile, the EC regulation continues to provide ample scope for abuse, as
customs authorities are unlikely to be able to gauge what constitutes IP
violation. As Hariharan said, =E2=80=9CThe customs officials aren=E2=80=99t=
 aware of
patents. The patent owner traces the entire shipment and is aware of the
route of the product and knows exactly which port they can seize the
shipment at. Then they notify the customs authority of that port, and the
product is seized.=E2=80=9D

radhieka.p@livemint.com