[Ip-health] Intellectual Property Watch: Concern Erupts Over WTO System And Medicines Shipments;TRIPS Talks Rekindling

[IP Watch]

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Intellectual Property Watch, 3 February 2009=0D
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http://ip-watch.org/weblog/wp-trackback.php?p=3D1415=0D
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Concern Erupts Over WTO System And Medicines Shipments; TRIPS Talks Rekindl=
ing=0D
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By William New=0D
The ambassadors to the World Trade Organization from Brazil and India on Tu=
esday charged that other WTO members had no grounds to block legitimate shi=
pping of generic medicines on the basis of potential intellectual property =
rights conflicts in the transit country and said recent cases of doing so i=
n the Netherlands call into question WTO rules. The concern was supported b=
y 17 other developing country governments at Tuesday=E2=80=99s WTO General =
Council meeting.=0D
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Meanwhile, the ambassadors of Brazil, India, the European Union and Switzer=
land are expected to meet on Wednesday, according to an official, to discus=
s ways to start negotiating within the WTO on a proposal to extend higher n=
ame protection wines and spirits enjoy to geographical indications on other=
 products, and on a proposal to amend WTO rules on intellectual property ri=
ghts to require the disclosure of origin of genetic material in patent appl=
ications. Over 100 WTO members have called for these topics to be negotiate=
d but a smaller number has resisted.=0D
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On Thursday, the official said, a group of 16 interested parties also will =
meet at the ambassador level on the same subject. IP rules at the WTO mainl=
y fall under the Agreement on Trade-Related Aspects of Intellectual Propert=
y Rights (TRIPS).=0D
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Proponents of these two issues would like them to join a proposed register =
for geographical indications as mandated for negotiation in the ongoing rou=
nd of talks. There was a meeting on the GI register last week with Barbados=
 Ambassador Trevor Clarke, who chairs special sessions on the matter. The E=
uropean Union remains potentially in a defensive posture as it is being ask=
ed to explain its proposal on the GI register. It appears that what was agr=
eed in the meeting with Clarke was to hold a TRIPS special session in conju=
nction with the next TRIPS Council meeting in early March.=0D
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The flare-up on generics shipments came in the context of a somewhat soberi=
ng meeting in which ambassadors and WTO Director General Pascal Lamy stress=
ed a need to keep free-trade talks going at the WTO to counter increasingly=
 negative global economic news. Trade is projected to reach its lowest leve=
ls since 1982, Lamy said. Governments have begun again to negotiate.=0D
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In addition to Brazil and India, those voicing concerns about access to med=
icines and customs were: Argentina, Bolivia, Burkina Faso, China, Costa Ric=
a, Cuba, Ecuador, Egypt, Indonesia, Israel, Nigeria, Pakistan, Paraguay, Pe=
ru, South Africa, Thailand and Venezuela.=0D
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The statement by Brazil to the General Council is available here [doc]; the=
 statement by India to the General Council is available here [doc].=0D
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Meanwhile, the ambassador from the European Union sought to defend the acti=
ons and come to a better understanding of what happened. Both sides plan to=
 speak further about the matter.=0D
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The statement by the European Union to the General Council is here [doc].=
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On 4 December, Dutch customs authorities seized an air shipment of generic =
medicines sent by generics producer Dr Reddy=E2=80=99s in India bound for B=
razil, and held it for 36 days allegedly on suspicion of being counterfeit.=
 The cargo was 500 kilos of losartan potassium, an active ingredient used i=
n manufacturing medicines for arterial hypertension, a shipment the EU valu=
ed at =E2=82=AC55,000 euros. The action was taken on the request of a compa=
ny (possibly brand-name drug producer Merck, Sharp and Dohme) which holds t=
he patent in the Netherlands, the EU said. The ingredient is not patented i=
n India or Brazil and therefore could not be violating IP rights in those m=
arkets. In the end, the drug shipment was released back to the Indian owner=
, which decided at that point to return the shipment to India.=0D
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Trade in generics is fully legal worldwide - and governments and activists =
have been fighting to clear up any confusion between generics and counterfe=
its, which unlike generics might be substandard or illegal. Under the TRIPS=
 agreement, medicines are considered to be generic based on the country in =
which they are meant to be commercialised, meaning either Brazil or India, =
they said. The law of the country of transit does not matter, Brazil argued=
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The Dutch authorities=E2=80=99 action =E2=80=9Cclearly violates the freedom=
 of transit, which is a right enshrined in GATT [General Agreement on Tarif=
fs and Trade] Article V,=E2=80=9D Brazilian Ambassador Roberto Azev=C3=AAdo=
 told the WTO General Council Tuesday. =E2=80=9COnly very exceptional circu=
mstances warrant restrictions on that freedom. Brazil is not aware of any s=
uch circumstance in this concrete case.=E2=80=9D=0D
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EU Ambassador Eckart Guth countered at the General Council that the Dutch s=
eizure =E2=80=9Cis allowed by TRIPS and is based on provisions in EU custom=
s law that allow customs to temporarily detain any goods if they suspect th=
at these goods infringe an intellectual property right.=E2=80=9D As the goo=
ds were eventually determined not to be headed for the EU market, they were=
 returned to the owner.=0D
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But Azev=C3=AAdo said that the decision to impede a shipment of generic med=
icines not destined for the Dutch market =E2=80=9Cis unacceptable and sets =
a dangerous precedent.=E2=80=9D And, he said, there are =E2=80=9Cindication=
s=E2=80=9D that this is not an isolated case, raising concerns about system=
ic problems with WTO rules if they do not prevent a transit country from in=
terfering with legitimate trade. India also asserted that this case is not =
alone.=0D
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=E2=80=9CBrazil is gravely concerned with the setting of a precedent for ex=
traterritorial enforcement of IP rights,=E2=80=9D Azev=C3=AAdo said. =E2=80=
=9CAttempts to extend the rights granted by patents beyond national borders=
 have critical systemic implications.=E2=80=9D=0D
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Furthermore, extraterritorial enforcement of patent rights cannot be reconc=
iled with the 2001 Doha Declaration on TRIPS and Public Health, Brazil said=
. The declaration reinforced nations=E2=80=99 sovereign rights to take meas=
ures to protect public health, and includes access to medicines.=0D
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The Dutch action also could undermine use of the so-called paragraph 6 syst=
em at the WTO, which refers to paragraph 6 of the TRIPS and public health a=
greement and allows countries lacking manufacturing ability to import neede=
d medicines from other members under a compulsory cross-licensing arrangeme=
nt.=0D
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=E2=80=98IP Maximalists=E2=80=99 at the WCO, WHO=0D
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Concern also was raised about efforts by some countries to increase enforce=
ment on goods in transit and blur the line between generic and counterfeit =
medicines at international organisations such as the Brussels-based World C=
ustoms Organization, the World Health Organization, and the Universal Posta=
l Union.=0D
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There is a concerted effort among these organisations to =E2=80=9Cpromote t=
he IP maximalist agenda,=E2=80=9D which is upsetting the delicate balance a=
chieved in the 1994 TRIPS agreement, India said.=0D
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=E2=80=9CThere is an attempt to enlarge the definition of counterfeits beyo=
nd its definition in the TRIPS Agreement, to set maximalist enforcement nor=
ms, and to include TRIPS-plus provisions in RTAs [regional trade agreements=
],=E2=80=9D Indian Ambassador Ujal Singh Bhatia said. =E2=80=9CThese are su=
btle and concerted ways of circumscribing the flexibilities of the TRIPS ag=
reement. They also run counter to the spirit of the TRIPS agreement, which =
is a minimum standards agreement. And this is certainly counter to the unde=
rstanding given to developing countries when the TRIPS agreement was being =
negotiated.=E2=80=9D=0D
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=E2=80=9CNeither the WCO nor the WHO are adequate fora for discussing IP ri=
ghts enforcement,=E2=80=9D Azev=C3=AAdo said. =E2=80=9CIn the WHO, the focu=
s should be on the quality, safety and efficacy of medicines, as well as on=
 the issue of access.=E2=80=9D The WCO, he said, =E2=80=9Cshould concentrat=
e on developing methodologies for enhancing customs=E2=80=99 performance, r=
ather than venturing into TRIPS-plus norm-setting.=E2=80=9D=0D
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The Indian ambassador said repeated actions like Holland=E2=80=99s could ca=
use exporters to change routes possibly having a negative impact on access =
to essential drugs and on public health budgets in developing countries. Th=
e health of poor populations could be at risk if their medicines access is =
impaired, he added.=0D
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=E2=80=9CWhat if countries commenced to create impediments to the legitimat=
e trade of generic medicines based on the wrongful allegation that it viola=
tes national patent rights?=E2=80=9D said Azev=C3=AAdo. =E2=80=9CIn that ca=
se, trade in generic medicines would be rendered virtually impossible.=E2=
=80=9D=0D
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EU Ambassador Guth responded to the charges by saying it would have been pr=
eferable for Brazil and India first to raise the issue bilaterally in order=
 to clarify facts =E2=80=9Cbefore triggering a highly emotional debate.=E2=
=80=9D Guth also referred to TRIPS Article 51, which allows customs authori=
ties to suspend the release of goods, and he said under EU law, companies w=
hose goods are wrongly detained are eligible for reimbursement.=0D
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=E2=80=9CLet me make it very clear that the EU has absolutely no intention =
to hamper any legitimate trade in generic medicines or to create legal barr=
iers to prevent movement of drugs to developing countries, nor have our mea=
sures had this effect,=E2=80=9D Guth said. =E2=80=9CWe are absolutely commi=
tted to all the efforts that are being made to facilitate access to medicin=
es.=E2=80=9D=0D
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But India said it raised the issue at the General Council =E2=80=9Cwith the=
 expectation that the EC will urgently review the relevant regulations and =
the actions of the national authorities based on such regulations, and brin=
g them in conformity with the letter and spirit of the TRIPS agreement and =
the rules-based WTO system.=E2=80=9D=0D
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William New may be reached at wnew@ip-watch.ch.

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