[Pharm-policy] RE: [Ip-health] Nafta and parallel imports

[Kasper, Toby]

A week or so ago Jamie posted a request for information about the legality
of parallel importing under NAFTA.  I forward the query to an expert I knew,
and her response is below, which I thought might be of interest to others.
Toby Kasper


-----Original Message-----
From:	Judy Rein [SMTP:rein@is4.nyu.edu] <mailto:[SMTP:rein@is4.nyu.edu]> 
Sent:	Wednesday, January 12, 2000 10:40 AM
To:	love@cptech.org <mailto:love@cptech.org> 
Cc:	Toby Kasper
Subject:	NAFTA and parallel imports

Hi, 

Toby forwarded me your question on suing for parallel importing under NAFTA.
I assume the question relates to a U.S. citizen seeking to sue the U.S.
government for the right to import under NAFTA.  My research on this
question leads me to say that this is not a viable strategy.  
NAFTA Chapter 17 covering Intellectual Property is almost identical to the
TRIPS agreement.  If anything, it is even more biased toward the protection
of IP "rights holders" against other users.  The best that can be said for
it in this regard is that it does not explicitly prohibit parallel imports,
but it also does not provide an enforceable right for would-be importers.
[Article 1709 (5)(a) on Patents states that "where the subject matter of a
patent is a product, the patent shall confer on the patent owner the right
to prevent other persons from making, using or selling the subject matter of
the patent..."  Process patents, on the other hand, are protected from
making, using, selling, or IMPORTING.  The omission of "importing" with
respect to product patents implies that parallel importation of products
already in the stream of commerce is not prohibited.]
The absence of coverage in this context merely allows for Parties to the
agreement (Mex-Canada-U.S.) to establish their own policies with regard to
parallel importing.  Like TRIPS, countries are allowed to institute higher
levels of  IP protection, but may not allow protection to fall below the
minimum standards established in the Agreement.  Parallel importing is
viewed by PhRMA and the USTR as an unfortunate loophole in both TRIPS and
NAFTA (even as they often have incorrectly stated that it is actually
illegal).  The Mexican 1992 Industrial Property Law, which reformed
pharmaceutical patent protection in compliance with NAFTA, allows parallel
importing.  
So, basically, as I understand it, international agreements leave parallel
importing as a problem for domestic law.
Have you been following the explosion of on-line pharmacies (essentially
parallel exporters)?  Most of these are offshore, many in Mexico.
I've probably told you more than you want to know, but if you have any other
questions, please let me know.  I have found your web site extremely useful
for my research and congratulate you on the success of your advocacy.
Would it be possible for me to get on your e-mail list?
				Best,

				Judy Rein
				jqr7352@is4.nyu.edu
<mailto:jqr7352@is4.nyu.edu> 



	-----Original Message-----
	From:	James Love [SMTP:love@cptech.org]
	Sent:	Monday, January 10, 2000 6:28 PM
	To:	IP-Health list; pharm-policy
	Subject:	[Ip-health] Nafta and parallel imports

	I had a call from someone who wants to sue under NAFTA, for the
right to
	provide parallel imports of pharmaceutical drugs (a potentially
	profitable business, given the huge differences in prices between
the
	USA and Canada.)  He wanted to know if he had a legal basis for
doing
	this, under Nafta.  So one else wanted to know if Nafta restricted
	parallel imports in any way.  

	Do any of the Nafta experts know much about this?

	 Jamie

	-- 
	James Love
	http://www.cptech.org
	mailto:love@cptech.org
	voice 1.202.387.8030



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