[Random-bits] KEI Statement on IPR/Health aspects of bipartisan "New Trade Policy"

[James Packard Love]

http://www.keionline.org/index.php?option=3Dcom_content&task=3Dview&id=3D4=
8

KEI Statement on IPR/Health aspects of bipartisan "New Trade Policy"
14 May 2007

FMI:  James Love james.love (at) keionline.org
+1.202.361.3040 or +41.76.413.6584 (until Saturday)

On May 10, 2007, Speaker Nancy Pelosi and Ways and Means Chair =20
Charles Rangel announced a "new bipartisan" trade package.   KEI has =20
reviewed the details of the elements of section III of the agreement, =20=

concerning "patents, IPR and access to medicine."

     In general, the House Democrats have negotiated important new =20
concessions from the Bush Administration in three areas.  There are =20
no more obligations for patent extensions, and mandatory linkage has =20
been eliminated.  These are both important changes that will benefit =20
patients and improve the trade agreements.  The changes regarding =20
protection of test data are more problematic, both because the =20
agreement still embraces a system of exclusive rights for data, =20
instead of alternatives such as cost sharing (sometimes referred to  =20
as compensatory liability), and because the flexibility for =20
limitiations and exceptions to the exclusive right is unfortunately =20
bound to a poorly drafted side letter, rather than a plain language =20
provision that makes it clear that countries can waive or limit the =20
exclusive right when it is necessary to protect patient interests, =20
regardless of patent status on products.   These problems in drafting =20=

may reflect a lack of technical understanding of the issue by certain =20=

parties involved in the negotiation.

     The trade agreement also does not address the current problem of =20=

USTR attacking countries for actually using such measures as =20
compulsory licensing of patents (such as putting Thailand on the 301 =20
priority watch list), or demanding that trading partners set limits =20
on the grounds for issuing a compulsory license (reportedly one of =20
the conditions presented in recent FTA negotiations and in the =20
"action plan" for Thailand to avoid trade sanctions).

     In general, the changes are welcome, as a partial but still =20
incomplete step toward honoring the 2001 Doha Declaration.   It is =20
our hope that members of Congress and Presidential candidates will =20
begin to think beyond IPR obligations as the only way to address the =20
global sharing of R&D costs.   Strong IPR is a mechanism to raise =20
drug prices, and high drug prices should be seen as one possible =20
means to support R&D, rather than an objective of trade policy .  We =20
need to be moving away from IPR agreements that create high drug =20
prices to  a new framework focusing on the support for R&D.  This new =20=

approach would give countries the flexibility to consider other =20
apporoaches to support R&D, which are less restrictive of access to =20
medicines.

Our comments on Section III of the agreement are given below:

III.  Provisions on Patents/IPR and Access to Medicines
A.  Data Exclusivity

     In general, any regime of =93data exclusivity=94 is objectionable, =20=

since it implicitly requires a generic competitor to replicate =20
scientific tests on humans, a practice that is both wasteful and =20
unethical.  The House/WH deal does not push the obligation toward one =20=

of cost sharing, which would have avoided these problems.

     The benefits of III.A. are very  minor, at best shortening the =20
term of exclusivity by six months, in cases where the foreign =20
registration is based upon the U.S. registration, and occurs within =20
six month of the U.S. registration, a set of facts which will often =20
not apply.

B. Patent Extensions

     The replacement of "may" for =93shall=94 means patent extensions =
are =20
now optional.  This is a significant and welcome change in the IPR =20
burdens for developing countries.

C. Linking Drug Approval to Patent Status

     The elimination of the mandatory linkage between drug =20
registration and patent status is also an important and beneficial =20
change.

     It was interesting that the language would in fact only allow =20
linkage when there were =93expeditious=94 ways to challenging patent =20
validity or relevance, and rewards for challenging patents, two good =20
provisions that recognize the possiblity that poor patent quality can =20=

be an unwanted barrier to competition and trade.

     It would be stronger if it mentioned that the obligations =20
regarding injunctions should not exceed those that currently exist in =20=

TRIPS Article 44.  The U.S. would also benefit from such language, =20
since U.S. law under the eBay decision provides significant =20
flexibility to deny injunctions.

D.  Side Letter on Public Health

     This provision on the side letter is potentially useful, but =20
only if it is not implemented mechanically, since the existing side =20
letters are not well written, and subject to interpretations that =20
limit their usefulness.   In particular, there must be clear language =20=

that:

         (1) the country may override the exclusive rights in test =20
data, in a manner similar to a compulsory license on a patent, =20
including cases where there is no patent on the product (the position =20=

that USTR has taken informally in several seminars and meetings where =20=

this topic has been discussed),

         (2) that TRIPS flexibilities are not limited to the flawed =20
2003/2005 =93solution=94 to paragraph 6 of the 2001 Doha Declaration, =
but =20
also include but are not limited to those referenced in Paragraphs 4, =20=

5 and 7 of the 2001 Declaration (which implicitly are also extended =20
to Articles 6,7,8, 30, 40 and 44 of the TRIPS), and

         (3)  the U.S. government will not be taking unilateral trade =20=

actions against countries that use such flexibilities in practice, =20
such as the listing of countries on the 301 list for actually issuing =20=

compulsory licenses.

Last Updated ( Monday, 14 May 2007 )

----------------------------------------------
James Packard Love
Knowledge Ecology International
mailto:james.love@keionline.org
tel. +1.202.332.2670 / U.S. mobile+1.202.361.3040, Geneva mobile =20
+41.76.413.6584

"If everyone thinks the same: No one thinks." Bill Walton"=