[Ip-health] Brazil to break US patents

[Sean Flynn]

From: WTO-INTL [mailto:WTO-INTL@LISTSERVER.CITIZEN.ORG] On Behalf Of Victor=
 Menotti


Financial Times FT.com

Brazil ready to infringe US drug patents
By Jonathan Wheatley in S=E3o Paulo
Published: August 30 2009 17:41 | Last updated: August 30 2009 17:41

Brazil is preparing to infringe patents on US pharmaceutical products, in
retaliation against subsidies for US cotton farmers, according to the
Brazilian press.

The World Trade Organisation is expected to rule on Monday that Brazil can
contravene the drug patents, say the reports.

Brazil led a challenge against US cotton subsidies in 2002 and, two years
later, the WTO ruled that about $3bn paid to US cotton farmers each year
distorted global prices and violated trade rules.

The US has continued the subsidies, arguing that the measures were
consistent with its WTO obligations. But the WTO has supported Brazil=B9s
case. It allowed Brazil to retaliate in 2005 but Bras=EDlia has instead sou=
ght
a negotiated settlement to avoid damaging relations with the US, until
recently its biggest trading partner.

However, Brazil has become increasingly frustrated by the US refusal to
remove its subsidies and, under pressure from its own cotton growers, is
reported to be preparing to retaliate.

One option would be to raise import tariffs against US goods. But Brazil is
a relatively small US market, taking $32bn out of $1,287bn of US exports
last year.

Instead it is preparing to take action over intellectual property, an area
of much greater significance to the US. The WTO is expected to include this
possibility in its ruling on Monday. According to a report in a Brazilian
newspaper the government has prepared a =B3provisional measure=B2 =AD a
presidential decree that takes immediate effect, although it must later be
ratified by Congress =AD to allow Brazilian pharmaceuticals companies to co=
py
medicines protected by US patents.

In 2007 Brazil followed Thailand in overriding a patent on a pivotal HIV
medicine, allowing it to buy equivalents of Efavirenz, patented by Merck,
from rival generic suppliers under provisions permitted by WTO rules.

The move followed years of brinkmanship during which Brazil achieved steep
discounts on HIV drugs by threatening to break patents.

Its expected move on Monday comes in the context of growing frustration in
Bras=EDlia at the Obama administration=B9s reluctance to act on farm subsid=
ies
affecting cotton and other sectors of Brazilian agribusiness, especially
sugar and ethanol.

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Victor Menotti
Executive Director
International Forum on Globalization
1009 General Kennedy Avenue #2
San Francisco, CA 94129
Cel: +1-415-351-8065
Tel: +1-415-561-3491
Fax:+1-415-561-7651
Email: vmenotti@ifg.org
Skype: victormenotti
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