Direct effect of WTO law in India

Here is an interesting SSRN paper on the issue of the status of WTO law within the Indian legal system.

Chowdhury, Nupur,The (Absence of) Direct Effect of WTO Law – Current Developments within the Indian Legal System(May 20, 2008). Available at SSRN: http://ssrn.com/abstract=1136585

Abstract:
This chapter gives an overview of the status of international law under the Indian Constitution and its implications for the status of the WTO Agreement and the covered agreements within the Indian legal system. The Indian legal system is dualistic and international legal instruments ratified by the country become part of the national system only when it is transposed into national law. However such a strict interpretation has often been circumvented by the Courts in favor of a direct applicability of international law on the basis of the principle of consistent interpretation as provided for in the Constitution. In that sense it is interesting to note that notwithstanding the dualistic nature of the legal system, the Courts have applied the consistent interpretation, supremacy and the (in)direct effect principles in a varied number of cases to strengthen the conformity of national law with international law. In that sense, the relationship between these principles is dynamic and can be temporally located within the different trends of judicial activism in the Indian courts. Amongst the WTO agreement it is the TRIPS agreement that has been at the center of most legal disputes. Given the considerable economic interests of the Indian biotechnology sector (drugs and pharmaceuticals) and therefore the high stakes, in concomitance with the considerable textual ambiguity, which the TRIPS amendment has created, this is not surprising. It also underlines the currency of such a debate on the application of the principle of direct effect in the present context of the Indian legal system.

India rises to second position in IPR seizures by United States customs enforcement agency

The US Customs and Border Protection Agency issues annual statistics on IPR seizures. These are goods that are sought to be exported to the United States but are seized by the US customs for IPR infringement.   The latest figures available are for the year 2008. In 2008, exports from China accounted for 81% of all IPR seizures. India came next with 6%, followed  by Hong Kong at 5% and Korea at 1%.  

In 2007, IPR seizures of Indian exports were less than 1%, with China, Hong Kong, Pakistan, United Kingdom, Egypt, and Korea leading in that order.

The 2008 IPR seizures for goods exported from India were valued at 16,258,368 USD. Pharmaceutical seizures accounted for 99% of this total. Seizures of pharmaceuticals from China were only 5% of total seizures from China.

The annual statistics can be accessed here. 

Text of Indian statement on Generics seizure before TRIPS council

INTERVENTION by INDIA at TRIPS Council meeting on 3 March 2009

Agenda item ‘M’ – OTHER BUSINESS – Public Health dimension of TRIPS Agreement

Chair,

                My delegation would like to draw the attention of Members to developments which undermine the public health dimension of TRIPS Agreement. In the last few months, several consignments of Indian generic drugs have been seized in  transit at EC ports. We made an intervention on this issue in the General Council meeting of February 3, 2009. The intervention has been made available to Members at the back of this room.

                I will like to mention that my government has taken up the issue bilaterally with the EC and the Dutch Government to urgently review the relevant regulations and the actions of the national authorities based on such regulations, and bring them in conformity with the letter and spirit of the TRIPS Agreement, the rules based  WTO system and the DMD on Public Health.  We are still awaiting a response.

                In addition to the salient aspects of our intervention in the General Council, we would like to make some specific points today in the context of TRIPS Council.  Dutch customs authorities have ‘confiscated’ these consignments on grounds of alleged violations of domestic patents and trademarks. This is not a case of ‘temporary detention’ since some consignments continue to be held for over months.  Moreover, procedures for their destruction were also initiated.  Four such instances have come to the notice of my Government and  all these four instances have been reported from the Netherlands. These consignments were headed for Brazil, Peru and Colombia. While one consignment has been returned to the exporter after being held for over a month, the fate of the other three is still unclear. We pointed in GC last month about the consignment of losartan seized in transit in the Netherlands while it was headed for Brazil.  The generic drug in question was perfectly IP legitimate generic drug in both India and the destination country.  Also, trade of generic drugs is perfectly legitimate.

                The action of the Netherlands customs authorities to seize generic drugs, traded between developing countries in full conformity with international disciplines, runs counter to the spirit of the TRIPS Agreement and the resolution 2002/31 of the Commission on Human Rights on the right to enjoy the highest standards of physical and mental health. Measures of this nature have an adverse systemic impact on legitimate trade of generic medicines, South-South commerce, national public health policies and the principle of universal access to medicines. The importance of  generic drugs to public health in developing countries and particularly in the LDCs is obvious.  Such barriers to legitimate trade of generic drugs will also seriously impair the efforts of civil society organisations engaged in providing medicines and improving  public health in the least developed parts of the world. MSF has recently stated that they regularly transport and temporarily store medicines in Europe, en route to users in developing countries. In a letter to the EC Trade Commissioner, MSF has expressed concern over the potential consequences of the seizure of medicines in transit in the EU, which are destined for  developing countries. MSF has also asked the EC to clarify its position regarding the implementation of the EC Regulation No 1383/2003 with regard to pharmaceutical products.

                In addition to going against the spirit of a rules based trading system and impeding free trade, such acts represent a distorted use of the TRIPS Agreement and the international IP system and circumscribe  flexibilities enshrined in TRIPS. Let me elaborate.

                Article 41.1 of TRIPS provides that enforcement procedures “shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse” and Article 41.2 provides that the procedures shall be “fair and equitable.” These are ‘General Obligations’ which run through Part III of TRIPS Agreement on Enforcement of IPRs. As I just said, trade of generic drugs is perfectly legitimate. Measures taken by Dutch authorities, clearly, create barriers to such legitimate trade, particularly where there is no risk of diversion to the internal market.

                Members have always strived for a balance between public health concerns and protection and enforcement of IPRs.  The Doha Ministerial Declaration on TRIPS and Public Health recognized “the gravity of the public health problems afflicting many developing and least-developed countries” and stressed “the need for the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) to be part of the wider national and international action to address these problems.”  In Paragraph 4 of that Declaration, WTO members agreed that “the [TRIPS] Agreement can and should be interpreted and implemented in a manner supportive of WTO Members’ right to protect public health and, in particular, to promote access to medicines for all.”  We are aware of EC’s stated commitment to the full implementation of the Doha Declaration on TRIPS and Public health and the WTO August 30th decision. Measures taken by the EC therefore, create serious confusion in our minds.

                It is ironical that while on one hand WTO has taken steps to promote access to affordable medicines and remove obstacles to proper use of TRIPS flexibilities, on the other hand some Members seek to negate the same by seizing drug consignments in transit and creating barriers to legitimate trade.  Among other things, the implementation of the WTO’s Decision of 30 August 2003 regarding the export of pharmaceutical products to countries with inadequate manufacturing capacity (the Para 6 system), will become even more problematic if patent rights, which are territorial by definition,  are enforced for goods in transit. As it is, the Para 6 system has been used only once so far in the last five years.

                The concept of ‘territoriality’ is a key stone in the edifice of the TRIPS Agreement.  There are no indications that the drug consignment was meant for the markets of the EC. Seizure, and initiating procedures for destruction of such consignments, violates this key principle.

                The WTO rules based system provides for freedom of transit by the most economical and convenient routes and without unnecessary delays and restrictions. The act of seizure by the Dutch authorities is therefore, a denial of the rules based system which we seek to build and strengthen in the WTO. Repeat of such actions may have an impact on exporters’ choice of transit routes, which may affect the economics of trade of pharmaceutical products and consequently, have a deleterious effect on access to essential drugs and public health budgets of recipient countries.

                My delegation  would also like to draw the attention of Members to another trend that is acquiring huge dimensions.  This is the effort to implement the protection and enforcement of IPRs in a maximalist manner and thereby upset the delicate balance between rights of IPR holders and the public policy objectives under the TRIPS Agreement. A coordinated approach is being witnessed in several international fora like the World Customs Organisation, World Health Organisation, Universal Postal Organisation etc. to promote the IP maximalist agenda.  We also note with dismay efforts by some Members to link safe and efficacious but low cost generics with counterfeit medicines, which is essentially an IPR issue. There is an attempt to enlarge the definition of counterfeits beyond its definition in the TRIPS Agreement, to set maximalist enforcement norms, and to include TRIPS plus provisions in RTAs. These are subtle and concerted ways of circumscribing the flexibilities of the TRIPS Agreement. They also run counter to the spirit of the TRIPS Agreement which is a minimum standards agreement. And, this is certainly counter to the understanding given to developing countries when the TRIPS Agreement was being negotiated.

Mr. Chairman, India attaches the highest importance to protection and enforcement of IPRs in accordance with the TRIPS Agreement. However, we do not see the Agreement as divorced from the Objectives and Principles set out in Art 7 and 8 of the Agreement.  Efforts to enshrine new, maximalist TRIPS plus provisions in other forums will seriously undermine the delicate balance in the TRIPS Agreement and raise systemic issues.

                Mr Chairman, my delegation will like this Council to take note of these points. 

———————————————————

Agenda item ‘M’ – OTHER BUSINESS – Effective operation of Para 6 system.

India has always been of the view that the Doha Declaration on TRIPS and Public Health constituted a major landmark in the short history of the WTO because it recognized the primacy of public health needs and the sensitivity of this organization to the problems faced by the poor in the less developed countries.  Alongwith several other Members, India worked relentlessly on DMD on Public Health (2001) and the  Decision of August 30, 2003 on implementation of Para 6 of the DMD.

The hope was that the Aug 30 Decision would genuinely and completely address the problems faced by WTO Members with insufficient or no manufacturing capacities in the pharmaceutical sector to address public health problems.  It may have sounded prophetic at that time when India voiced certain apprehensions in the GC meeting of August 2003. India sounded a word of caution and hoped that  “the results accruing from this mechanism would not be negated by the creation of cumbersome systems that would lead to huge delays in getting medicines across at reasonable cost to those that needed them or discourage Members from using the system for the benefit of the people.  In order to make this system successful, a sincere collective effort was required on the part of all Members and the entire pharmaceutical industry.” Regrettably, we have been proven right.

We note from our collective experience of 5 years that the export of HIV/AIDS drug "ApoTriavir" by the Canadian pharmaceutical company Apotex to Rawanda in Sept 2008 was the first and only use of the Para 6 system. Here too it took the Company 3 years to supply the medicine. It is time for reflection on the obstacles to use of the system. The Para 6 system, it may be recalled, was supposed to be an ‘expeditious solution’ to the crisis in access to medicines by countries with insufficient or no  manufacturing capacity.

Paragraph 8 of the waiver Decision provides that “the Council for TRIPS should review annually the functioning of the system set out in the Decision with a view to ensuring its effective operation and should annually report on its operation to the General Council.”  During the 5th Annual Review in the last Council meeting, factual information regarding the implementation and use of the 2003 Decision and the acceptance of the Protocol Amending the TRIPS Agreement was circulated. There was limited discussion on why the Para 6 system had been used only once in the last 5 years. My delegation would call for a wider discussion on legal, procedural, commercial or other obstacles to the ‘effective operation’ of the Para 6 system. In this connection we would request the Chair to consult with concerned Members in order to ascertain the obstacles and prepare recommendations for effective implementation of the Para 6 system. These recommendations could then be considered in the year end meting of the TRIPS Council as a part of the Annual Review.

India, Brazil raise EU seizure of generics in transit in TRIPS council

The Economic Times reports:

… The EU defended the actions of the Dutch authorities, claiming they were acting for the “benefit of mankind”, and said it would continue to do so, as the issue of counterfeit drugs is a public health issue. The EU Customs regulations are in complete conformity of the TRIPS agreement and the WTO disciplines. The European Commission claimed that one-third of the four million counterfeit medicines seized by EU authorities come from India.
Brazil stated that though both countries brought up what they considered was a serious violation of WTO rules at the General Council, as the TRIPS council was the forum dealing with intellectual property matters it could give a better analysis of the factual circumstances of the episode and legal implications. Seizure of goods in transit, regardless of if they were medicines or not, on grounds that they could violate IP rights registered in the country of transit, violates the GATT Article V and other GATT obligations. It is up to Brazil, and not any other country, to inspect whether the goods that Brazil was purchasing were substandard or fake.
Dutch authorities have been regularly acting ex-officio, based on EU procedures of 2003 on the infringement of IP rights, said Ambassador Roberto Azevedo, adding this was a case of extraterritorial application of Dutch patent rights.

Well, the EU is interpreting its action as an anti-counterfeiting exercise. I wondered in an earlier post about whether the EU seizure was an anti-counterfeiting action or an anti-infringement action. This clarifies that the counterfeiting issue was important. Here is a link to an earlier post that mentioned the ongoing disagreements surrounding the work of the WHO agency IMPACT or International Medical Products Anti-Counterfeiting Taskforce.

More posts on this issues can be found under the category public health

Prashant Reddy of SpicyIP has an interesting post on the Indian government’s position on the IMPACT negotiations, read here

India creates Traditional Knowledge Digital Library to fight bio-piracy

Indian scientists have completed an eight-year task of translating and compiling Indian traditional knowledge into a database (that lists over 200,000 treatments and extends to 30 million pages) to prevent patents being granted on this knowledge by overseas patent jurisdictions. The library which has an online home will be made accessible to patent examiners in the European Patent office to prevent attempts at patenting existing traditional knowledge. The EPO and the Government of India have entered into an access agreement that should be interesting to look at. Here is the news item from the website of the EPO:

India’s Traditional Knowledge Digital Library (TKDL): A powerful tool for patent examiners

On 2 February 2009 the Indian government granted access to its Traditional Knowledge Digital Library (TKDL), a unique database that houses the country’s traditional medical wisdom, to examiners at the European Patent Office (EPO).

EPO examiners will use the extensive database to prevent attempts at patenting existing traditional knowledge, a practice described as "bio-piracy".

The co-operation between India and the EPO comes at a time when many countries are struggling to protect traditional and respected knowledge against exploitation, primarily in the pharmaceutical sector.

"We take this seriously. Countries with rich traditional and holistic knowledge often have to spend lots of money on opposition procedures. The database could prevent that by helping the EPO to grant properly scoped patents", said Paul Schwander, Director of Information Acquisition at the EPO.

An improved patent granting process

Experts at the EPO say that access to the 30-million-page database will help to correctly examine patent applications relating to traditional knowledge.

"With the TKDL, examiners have improved access to background information at an early stage of patent examination", Schwander said. "In the old scenario, a patent may have been granted and the countries had to present evidence against it after the fact".

Prominent cases of patent disputes include a US patent on the wound-healing properties of turmeric (revoked in 1997) as well as an anti-fungal product from the Indian Neem tree (revoked in 2008). Both herbal practices were evidence of traditional knowledge and the patents were rescinded.

In both instances, the Indian government needed to prove that the patented methods were not novel and were based on traditional knowledge. The process to challenge the granted patents proved lengthy and cumbersome as some traditional knowledge had only been documented in Sanskrit or other ancient writings and thus required extensive translation.

With the advent of the TKDL however, the once onerous process has been transformed into an organised and objective system. The texts, many of which are hundreds of years old, offer extensive details about ancient medical practices and can now be accessed digitally.

Moreover, the TKDL has translated these texts – first written in Hindi, Sanskrit, Arabic, Persian and Urdu – into English, French, German, Japanese and Spanish, granting easier accessibility to examiners.

A unique encyclopaedia

The TKDL is the result of a US$ 2 million joint project between five Indian government organisations, including the Council of Scientific and Industrial Research (CSIR) and the National Institute of Science Communication and Informative Resources (NISCAIR).

Under the direction of Vinod Kumar Gupta, the head of NISCAIR, more than 150 experts in traditional medicine, law and computer science spent the past ten years arranging and classifying the TKDL.

Highlights of the vast database include:

• 54 authoritative textbooks on ayurvedic medicine
• Nearly 150,000 ayurvedic, unani and siddha medicines
• Over 1,500 physical exercises and postures in yoga, more than 5,000 years old

Protecting prior art

The TKDL allows examiners to compare patent applications with existing traditional knowledge. New patent applications need to demonstrate significant improvements and inventiveness compared to prior art in their field. If the medical use of an herb is a traditional practice, and thereby public knowledge, it is considered prior art under EPO regulations.

"Even if a treatment is only available in Sanskrit in an Indian library, it belongs to the prior art because it had been disclosed openly in the public domain at an earlier point in time", Schwander said.

If a company seeks to patent the medicinal use of an herb listed in the TKDL, EPO examiners conduct a thorough investigation. "In some cases this will lead to a reduction of the scope of the patent or its refusal", Schwander said.

However, the company may still be granted a patent on a new method for industrial-scale production of the active ingredient of the herb, for example, if this process is new and inventive, Schwander explained.

"The public may perceive this as bio-piracy, but there is a difference. The patent applicants would not claim ownership of the active ingredient itself. The scope would then be limited to a method of producing or isolating the ingredient".

Shedding light on gray areas

The TKDL is so precise that it lists the time, place and medium of publication for prior art. This new catalogue system, called the Traditional Knowledge Resource Classification (TKRC), ensures meticulous documentation.

The classification sheds light on what used to be considered gray area. Before the advent of the TKDL, any bio-prospector for a pharmaceutical company could dig up ancient medical wisdom and lay claim to the practice’s healing ability without consequence.

Now, thanks to the TKDL, patent examiners can prove exactly when and where a medical treatment became public knowledge, stymieing would-be bio-pirates.

A collection aimed at Patent Offices

Examiners at the EPO will use secure access methods to work with the TKDL. To measure efficiency, the EPO will count cases in which the database proved helpful.

Other countries have also opened their digital archives on traditional medical knowledge to EPO patent examiners. In 2008, the Chinese patent office (SIPO) granted the EPO access to its 32 000-entry database on traditional Chinese medicine.

"It’s a win-win situation for all involved. These databases help the EPO improve the relevance and content of prior art searches, while the countries holding traditional knowledge can protect their assets against misappropriation", Schwander said.

A Mint story gives more background:

The Indian government is also in talks with the US Patents and Trademark Office, or USPTO, to extend the initiative to that country.

The Council for Scientific and Industrial Research, or CSIR, India’s largest state-managed research agency, will begin sharing the home-grown catalogue with EPO later this month. CSIR and EPO recently signed an access agreement to this effect. This will likely result in at least 40 patent filings in Europe getting rejected, which could have otherwise passed muster.

“The EPO doesn’t give a patent for an invention which has already been known in public anywhere else,” Rainer Osterwalder, director, media relations, EPO, told Mint by email.

The Traditional Knowledge Digital Library, or TKDL, has been created by the National Institute of Science Communication and Information Resources, or Niscair, a CSIR body, and contains a 24-million-page searchable database that translates text from Sanskrit into English, German, French, Spanish and Japanese.

“TKDL provides a new major source…in technical fields that are sometimes concerned with questions of traditional knowledge,” Osterwalder said.

CSIR has collaborated with the health ministry’s department of Ayush (Ayurveda, yoga and naturopathy, unani, siddhi and homeopathy) to make this happen.

A CSIR official said that though 2,000 existing patents can now be challenged, there were no plans to initiate litigation. “This is meant as a deterrent…though technically we can initiate litigation saying that these patents are based on well-known formulations, it would be too expensive and long-drawn,” the official said on condition of anonymity.

“This is a very positive step for us in protecting traditional knowledge. It’s a big achievement,” Samir Brahmachari, director general of CSIR, said over the phone. The next step is to take this initiative to the US. S. Jalaja, secretary, department of Ayush, said: “This is a big breakthrough for us and we are also in talks with the United States Patent and Trademark Office for a similar agreement.”

This will likely result in at least 40 patent filings in Europe getting rejected

Patenting of products that are based on of India’s traditional knowledge has long been an issue the government has been struggling to resolve. In a widely reported case, EPO in 1995 granted a patent on the anti-fungal properties of neem. India opposed the patent, which was finally revoked and invalidated after 10 years of litigation. Again in 1995, USPTO had granted a patent on the wound healing properties of turmeric that was revoked in 1997.

“India did fight successfully the revocation of patent on wound healing property of turmeric at United States Patent and Trademark Office and (a) patent on anti-fungal properties of neem at European Patent Office,” Niscair director V.K. Gupta, who is also lead coordinator for the project, said in a 2006 report. “However…(a) legal battle on revocation is extremely expensive and time consuming.”

For anything to be granted a patent, the applicant must prove that it is novel and not previously known. “Indian traditional knowledge is prior art, which means it is already known publicly. Hence, once TKDL opens out to EPO, anyone applying for a patent on which we hold traditional knowledge will not be successful,” said Elizabeth Varkey, an advocate at the Kerala high court.

“Any patents that have been granted already and fall under TKDL can also be revoked, though that would be a long, expensive process,” she said.

EPO, however, is unsure of the extent to which TKDL will be applicable. “Many cases affected by aspects of traditional knowledge are occurring in the field of medicinal preparations. We estimate that at the EPO, about 100 patent applications per year are related to such aspects, but not all of them relate to subjects covered by TKDL,” Osterwalder said.

There is an argument that the database be used other ways too. “The government should also think about negotiating access rights (to TKDL) to private parties and other non-governmental entities. Given that the new chemical entities pipeline is drying up, innovators need to focus more on traditional knowledge that offer potentially unique insights for new drugs,” said Shamnad Basheer, professor of intellectual property law at the National University of Juridical Sciences, Kolkata.

“Also private parties could then challenge patent applications that misappropriate Indian traditional knowledge.”

The comment by Shamnad Basheer quoted above on granting access rights to private parties and NGOs is interesting but likely to raise issues of compensation for use of this knowledge by private parties. The codification of this knowledge in a repository owned by the government will have ramifications for who will now benefit from this.

 

Indian statement on the generics seizure issue to the WTO General Council

India made the following statement to the General Council of the WTO in its intervention on the seizure of Indian generics (bound for Brazil) by the Dutch authorities:

WTO General Council Meeting February 03, 2008

INTERVENTION by INDIA (under agenda item ‘Other Business’)

Mr Chairman,

In the last few months, Dutch customs authorities have seized several consignments of generic drugs of Indian companies on grounds of alleged IP violations. Seizure of the consignment of losartan potassium in December, 2008 was one such case of what is emerging as a clear pattern. Such instances cause us great concern due to their systemic and far reaching implications. In addition to going against the spirit of a rule based trading system and impeding free trade, such acts represent a distorted use of the international IP system and circumscribe TRIPS flexibilities. Repeat of such actions may have an impact on exporters’ choice of transit routes, which may affect the economics of trade of pharmaceutical products and consequently, have a deleterious effect on access to essential drugs and public health budgets of recipient countries.

Losartan Potassium, used in treatment of hypertension, is a perfectly IP legitimate generic drug in both India and Brazil. Trade of such a drug is also perfectly legitimate. The WTO rule based system provides for freedom of transit by the most economical and convenient routes and without unnecessary delays and restrictions. The act of seizure by the Dutch authorities is therefore, a denial of the rule based system which we seek to build and strengthen in the WTO. The concept of ‘territoriality’ is a key stone in the edifice of the TRIPS Agreement. There are no indications that the drug consignment was meant for the markets of the EC. Seizure, and initiating procedures for destruction of such consignments, violates this key principle. Members have always strived for a balance between public health concerns and protection and enforcement of IPRs. The decisions on Public Heath are a valuable part of the WTO acquis and need to be adhered to in letter and spirit. It is ironical that while on one hand WTO has taken steps to promote access to affordable medicines and remove obstacles to proper use of TRIPS flexibilities, on the other hand some Members seek to negate the same by seizing drug consignments in transit.

Mr. Chairman, the importance of generic drugs and their essentiality may vary in inverse proportion to the level of development of a country. Therefore, high importance is attached to generic drugs in developing countries and particularly in the LDCs. Barriers to legitimate trade of generic drugs will seriously impair the efforts of organizations like the Medecins Sans Frontieres (MSF), Clinton Foundation, Bill and Melinda Gates Foundation and a whole lot of other organizations engaged in providing medicines and improving public health in the least developed parts of the world.

I would also like to draw the attention of Members to another trend that is acquiring huge dimensions. This is the effort to implement the protection and enforcement of IPRs in a maximalist manner and thereby upset the delicate balance between rights of IPR holders and the public policy objectives under the TRIPS Agreement. A coordinated approach is being witnessed in several international fora like the World Customs Organisation, World Health Organisation, Universal Postal Organisation etc. to promote the IP maximalist agenda. We also note with dismay efforts by some Members to link safe and efficacious but low cost generics with counterfeit medicines, which is essentially an IPR issue. There is an attempt to enlarge the definition of counterfeits beyond its definition in the TRIPS Agreement, to set maximalist enforcement norms, and to include TRIPS plus provisions in RTAs. These are subtle and concerted ways of circumscribing the flexibilities of the TRIPS Agreement. They also run counter to the spirit of the TRIPS Agreement which is a minimum standards agreement. And, this is certainly counter to the understanding given to developing countries when the TRIPS Agreement was being negotiated.

Mr. Chairman, India attaches the highest importance to protection and enforcement of IPRs in accordance with the TRIPS Agreement. However, we do not see the Agreement as divorced from the Objectives and Principles set out in Art 7 and 8 of the Agreement. Efforts to enshrine new, maximalist TRIPS plus provisions in other forums will seriously undermine the delicate balance in the TRIPS Agreement and raise systemic issues.

I would like to conclude, Mr Chairman, by reverting to the issue of seizure of various drug consignments by the Dutch authorities. We have raised the issue here with the expectation that the EC will urgently review the relevant regulations and the actions of the national authorities based on such regulations, and bring them in conformity with the letter and spirit of the TRIPS Agreement and the rules-based WTO system.

For statements made by Brazil and the EU, see here.

See previous posts on this issue click here. 

India and TRIPS plus intellectual property rights

Latha Jishnu of the Business Standard has a very well-researched article recently on what she calls the "policy of encirclement" in the way TRIPS plus and TRIPS plus plus obligations are being pushed through in new international and forums where developing country resistance is not as strong as in the WTO, WIPO and the WHO. She writes about SECURE, which are voluntary new customs standards and best practices for intellectual property rights enforcement and are being formulated by the World Customs Organization (WCO).

That is, if a group of developed countries and their rights holders are successful in pushing through a clever initiative at the World Customs Organization (WCO) to lay down global norms and model laws for heightened protection of IP rights. Unsurprisingly, the majority of developing countries have been caught off guard by the move to push SECURE (Standards to be Employed by Customs for Uniform Rights Enforcement) simply because they did not expect WCO to be looking at IP issues. Besides, SECURE was not a member-driven initiative but put together by the secretariat of the 174-member organisation based in Brussels. SECURE, says the WCO, will be a set of standards, procedures, and best practices to coordinate the “global effort to suppress all kind of IP rights infringements”.

The most lethal provision of SECURE is that rights holders are not obliged to provide adequate evidence to show that there is prima facie an infringement to initiate action. This is not to be wondered at since rights holders (private industry associations) have been driving the agenda. Viviana Muñoz Tellez, programme officer for the Innovation and Access to Knowledge Programme of the South Centre in Geneva, has highlighted the “cosy relationship and role of right holder groups at the WCO” who were participating in the meetings at the same level as member-states. Shockingly, they have their own vice-chair in the SECURE working group.

Latha Jishnu points out the lack of Indian participation in the WCO on this issue and is scathing in her commentary:

India is once again missing in action. Bureaucratic and political apathy have been characteristic of India’s approach to critical trade negotiations, the country usually waking to a fait accompli, allege trade watchers. This has been specially so in the case of IMPACT (International Medical Products Anti-Counterfeiting Taskforce), a WHO-sponsored agency whose proposed regulations for stamping out counterfeit medicines would have had a lethal impact on India’s pharmaceuticals industry (see ‘Choking India’s generics exports’, Business Standard, January 29, 2009). Dilip Shah, secretary-general of the Indian Pharmaceutical Alliance, points out that although there was clear notice that IMPACT was planning a dangerous change in its definition of counterfeit goods, India had not participated in many working groups of IMPACT, “denying itself an opportunity to influence the outcome and thus faced with a definition of counterfeits that would harm its interests”.

As a developing country with a putative reputation for tough bargaining at the World Trade Organization (WTO), India’s officialdom needs to have its pulse on the processes being initiated in different forums by rich countries. Forum shopping is the name of the game: The agenda that cannot be successfully pushed in one forum is shifted to the next and the next till an objective —or part of it — is reached. Even an informal agreement on certain standards can be dangerous because it is then imported into the subsequent forum as a new standard. And as the SECURE proposal shows, even the most unlikely organisations can be used to promote the interests of the developed world and its industries.

Jishnu refers to a report by Professor Susan Sell of George Washington University which documents how "IP maximalists" are engaged in a relentless and multifaceted campaign in multiple forums to ratchet up IP protection and enforcement worldwide. Professor Sell’s report dated June 2008 can be accessed here

Annette Kur and Henning Grosse Ruse-Khan have an interesting paper on this titled "Enough is Enough: The Notion of Binding Ceilings in International Intellectual Property Protection" available on SSRN here. Annette and Henning propose a concept of maximum rights ceiling rules under TRIPS which would protect the flexibility and policy space under the TRIPS agreement from TRIPS plus standards being advocated by IP maximalists in other international forums and under developed country national regulation. Here is the abstract:

Traditionally, international agreements on IP rights are built on the concept of minimum protection which members must implement in their national laws. The concept implies that members are free to provide more extensive protection. However, that observation needs to be qualified in certain regards. First some agreements do contain provisions which seem to impose ceilings, i.e. maximum rights, or mandatory limitations. Examples for this are the express anchoring of the idea/expression dichotomy in TRIPS and the WCT, and the citation right to be found in Art.10 (2) Berne Convention. Furthermore, pursuant to TRIPS Art.1:1, more extensive protection may only be granted "provided that such protection does not contravene the provisions of this Agreement". In spite of that, the general perception in international IP regulation so far has been that above the prescribed minimum standards there is no ceiling or limit other than the sky. This construction results in a spiral movement – driven by bilateral agreements – towards ever-increasing levels of protection, and reducing the flexibilities and policy space left open under the TRIPS Agreement.
In this situation, the concept of maximum rights or ‘ceiling rules’ which provide for a binding maximum amount of IP protection WTO Members can offer in their national laws gains in importance: It might offer a way to ensure and maintain a balanced approach towards IP protection, and to protect members states’ autonomy in preserving public policy goals vis-a-vis pressure exerted against them in bilateral trade negotiations. However, as appealing as the concept may be, it also has potential drawbacks that must be thoroughly explored. This concerns substantive issues – such as the risk that to espouse the principle of maximum rules might reduce instead of enhance member states’ flexibilities – as well as institutional and procedural questions – in particular, how this would fit with the current WTO/TRIPS system. The paper will address those issues. In addition, the meaning and possible impact of existing maximum rules will be set forth, and initiatives will be presented which may give the concept of ceilings a broader range of application than to-date.

The relevance of the 1984 Indian Supreme Court decision in Gramophone Co for the present impasse on the EU seizure of generics in transit

There has been some discussion in the blogosphere on whether the Indian Supreme Court ruling from 1984 in Gramophone  Company of India Ltd v. Birendra Bahadur Pandey and Others, [(1984) 2 Supreme Court Cases 534] supports the Dutch seizure of Indian generics bound for Brazil.  See previous posts on this issue. The decision can be found here.

I do not agree with SpicyIP bloggers that this 1984 decision would help the Netherlands on the generics seizure issue. Before I set out my reasons, let me first quote the arguments made by SpicyIP that I disagree with. 

Shamnad Basheer of SpicyIP writes on the International Economic Law and Policy blog:

However, countries may define import more broadly. And this is exactly what the Indian courts did in the Gramophone Company of India case that Brian cites in his post (involving pirated casettes to Nepal). We discuss this case in an article dealing with the infamous Novartis case and whether the Indian court was correct in ducking the TRIPS issue claiming it had no jurisdiction to rule on this. If you’re interested, is is available on SSRN: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1329201

In the Gramophone case, the Supreme Court interpreted "import" to mean any inflow into India, whether or not it was meant for the Indian market. Sample this extract from the court:

"36. It was submitted by the learned Counsel for the respondents that where goods are brought into the country not for commerce, but for onward transmission to another country, there can, in law, be no importation.

It was said that the object of the Copyright Act was to prevent unauthorised reproduction of the work or the unauthorised exploitation of the reproduction of a work in India and this object would not be frustrated if infringing copies of a work were allowed transit across the country. If goods are brought in only to go out; there is no import, it was said.

It is difficult to agree with this submission thought it did find favour with the Division Bench of the Calcutta High Court, in the judgment under appeal. In the first place, the language of Section 53 does not justify reading the words ‘imported for commerce’ for the words ‘imported’. Nor is there any reason to assume that such was the object of the legislature."

Since the term "import" has not been defined by the TRIPS agreement, a panel is more likely to defer to the concerned member states’ definition (within reasonable bounds of course). I’m therefore not entirely sure that a panel would necessarily interpret import in the restricted way that you envisage. Therefore, at least on this count, my own view is that the EC may prevail in a TRIPS challenge by India or Brazil.

His co-blogger on SpicyIP Prashant Reddy writes that India has also seized goods in transit in the past for IP issues. He goes on:

“In fact the irony is that India itself has been impounding shipments destined for Nepal whenever those transit shipments infringe Indian intellectual property laws. In the 1984 Supreme Court case of Gramophone Company of India v. Birendra Bahadur Pandey Indian custom authorities had impounded a shipment of pirated cassettes that were being sent through India to Nepal by a Singapore based company. The case eventually reached the Supreme Court and in an excellent judgment by Justice Chinappa Reddy the Court held that the term ‘import’ used in the Copyright Act covered the activity of transit. In para 39 of the judgment the Supreme Court held that

39. We have, therefore, no hesitation in coming to the conclusion that the word ‘import’ in Sections 51 and 53 of the Copyright Act means ‘bringing into India from outside India’, that it is not limited to importation for commerce only but includes importation for transit across the country. Our interpretation, far from being inconsistent with any principle of International law, is entirely in accord with International Conventions and the Treaties between India and Nepal.

…

Given the fact that India itself has defined ‘import’ as covering even those goods which are under ‘transit’ it is rather hypocritical of India to expect the E.U. to follow a different set of rules.”

Why do I think this old decision does not help the Netherlands case?

Well, first the Gramophone decision itself states in para 27 that “import” can mean different things in different places and takes color from the context where it occurs and that the sense of the statute is important. The Supreme Court expressly relied upon international opinion that protects copyright (para 29)as established by both international copyright and transit trade conventions. The Court ruled (para 29) “If this much is borne in mind, it becomes clear that the word “import” … cannot bear the narrow interpretation sought to be placed upon it to limit it to import for commerce. It must be interpreted in a sense which will fit the Copyright Act into the setting of the international conventions.”

This is the context in which the Supreme Court ruled that import would include importation for transit in addition to importation for commerce. The gramophone case dealt with copyright violation on which international opinion was clearly against such violations.

The present case is of patent infringement or alleged counterfeiting of generics. The policy context as well as international opinion as manifested by international law and treaties is completely different here. I think the Supreme Court (if this issue were ever to come before it) would take the different context into account and rule differently.

Both the export of generics by India and their import by Brazil are legal and supported by the flexibility provided under the TRIPS agreement in balancing public health and IP rights.

Second, and I will not discuss this here, the Gramophone decision is not in my opinion well-reasoned at all. It is dated and on many issues might not stand the test of time. Most obviously, it cannot be applied without modification to the TRIPS era and to the new IP regulation in India.

Are there any later Indian Supreme Court decisions after 1984? Prashant writes that “India itself has been impounding shipments destined for Nepal” but then only cites this one case from 1984.

I also have a question: Was the Dutch action based upon alleged patent infringement or on alleged counterfeiting?

Update

I have had an interesting discussion on this issue with Shamnad Basheer of SpicyIP on the International Economic Law and Policy Blog. I had posted the above post as a comment in the thread running there. For sake of continuty, here is the conversation:

Shamnad Basheer said…

Dear Seema,

Thanks for your post. I think you must keep my post/analysis on this issue (on this blog) separate and distinct from Prashant’s analysis on SpicyIP. As you will appreciate, although we’re part of the same blog, we think independently as well.

My short point in pointing to the Gramophone case was this: the term "import" does not have just one meaning. It is not defined in TRIPS. How then is it to be interpreted?

Henning makes some really valid points about how it might be differentially interpreted even within TRIPS keeping the context in mind. And you may perhaps be right (as Henning also argues) that given the context of Article 51, imports cannot include "in transit" consignments that violate patent rights..

ps: The Dutch action had nothing to do with counterfeiting–but was based on patents (to be best of my knowledge)

Reply January 30, 2009 at 04:31 AM

Seema Sapra said…

Dear Shamnad,
Mea culpa! I was responding to both Prashant’s SpicyIP post as well as your initial comment in this thread.

But leaving aside my references to Prashant’s post, my comment on the substantive issue of the relevance of gramophone was also addressed to your initial comment in this thread, when you wrote that:
“However, countries may define import more broadly. And this is exactly what the Indian courts did in the Gramophone Company of India case that Brian cites in his post (involving pirated casettes to Nepal). … Since the term "import" has not been defined by the TRIPS agreement, a panel is more likely to defer to the concerned member states’ definition (within reasonable bounds of course). I’m therefore not entirely sure that a panel would necessarily interpret import in the restricted way that you envisage. Therefore, at least on this count, my own view is that the EC may prevail in a TRIPS challenge by India or Brazil.”

But I agree with you that reference to domestic interpretations would be relevant, and that policy contexts would also determine the meaning of import.

Apparently there is an ECJ decision Montex Holdings Ltd. v. Diesel SpA (Case C-281/05), where the court held that there could be no infringement by virtue of goods merely passing through a member state if the goods are not in free circulation there. I get this reference courtesy a comment posted on SpicyIP. For the link see http://www.jenkins.eu/mym-spring-2007/keep-on-trucking.asp

This brings some more information to mind that I found while googling. Don’t know what to make of this or whether this would influence the issue we are discussing. According to http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=1907716:
“Spanish Court Finds in Favor of Stada in Generic Losartan Case Against Merck, Sharp & Dohme 10/4/2007
A high-level Spanish tribunal (APB) in Barcelona has found in favor of the Stada against Merck, Sharp & Dohme, a part of US drugmaker Merck & Co., in a case that followed the commercialization of Stada’s copycat version of the angiotensin receptor blocker Cozaar/Hyzaar (losartan).” Losartan is the very same product seized by the Dutch.”

Thanks for clarifying about whether the Dutch action was for patent infringement or counterfeiting. I ask because the EC regulation allows action for both and a lot of the news reports talk about the relevance of the WHO’s discussions on how to define counterfeiting. Plus I think I read somewhere quotes from some Indian pharma guys as well as Commerce Secy Pillai which mention the issue of counterfeiting in the context of the Dutch action. Let me see if I can dig up one of these reports again.

Reply January 30, 2009 at 05:27 AM

Shamnad Basheer said…

Dear Seema,

No worries. I think I might have made a mistake as well in assuming that the prospect of a successful TRIPS action by India was really weak. I am now reconsidering my position and have just shot off my initial thoughts to Bryan and Henning on private email. Once I am clearer on this, I will run another post on SpicyIP and I will look forward to your insights and inputs.

Reply January 30, 2009 at 08:22 AM

Shamnad Basheer said…

you’re also right abotu the fact that the WHO anticounterfeiting issue has been conflated with this issue. And I warn against this conflation in my very first interview with Mint on this theme. And yes, some EU cases suggest that the "transhipment" part of the EU council regulations have been read down–which might mean that India could moot a challenge in the EU courts itself. I am still studying these cases.

 

The whole thread can be accessed here.

More on the India generics seizure by Dutch authorities

Well, the issue has heated up now …

The background

Dutch authorities seized Indian generic exports of blood pressure drug bound for Brazil. The Dutch action took place under EC regulation 1383/2003.

Indian commerce secretary has described it as an act of piracy by the EU and both India and Brazil are threatening complaints to the WTO. See previous posts.

The Business Standard has a good story that provides some additional background information.

This might seem like a singular attempt by the EU to show extreme zeal in protecting the rights of pharmaceutical patent holders in the EU. But it has to be viewed against the backdrop a of a host of moves initiated by the developed world to ramp up intellectual property (IP) protection, far in excess of what is required under the TRIPS regime of the World Trade Organization (WTO), under the guise of public health concerns. These initiatives to enforce ever higher standards of IP protection have roped in global organisations with completely different mandates, such as the World Health Organisation (WHO), the World Customs Organisation and Interpol among others.

Leading the charge is the EU which apart from Regulation on trans-shipments is also planning to amend another directive (2001/83/EC) that seeks to prevent the entry of “medicinal products which are falsified in relation to their identity, history or source” into the legal supply chain through a change in the definition of such products. Interestingly, the new definition is based on the proposal accepted at a 2007 meeting of the controversial WHO agency IMPACT or International Medical Products Anti-Counterfeiting Taskforce which critics claim is a cover for protecting IP rights of MNCs. The US and other Organisation for Economic Co-operation and Development (OECD) countries are not far behind in ratcheting up IP enforcement through a host of initiatives ranging from a secretive multilateral treaty called ACTA, or the Anti-Counterfeit Trade Agreement, to a purely regional arrangement like The Security and Prosperity Partnership of North America that brings together North American Free Trade Agreement (NAFTA) signatories (the US, Canada and Mexico). But more on these initiatives later.

A new battleground between big pharma and public health activists over generics is emerging. The Business Standard story goes on:

Big Pharma is very clearly setting the agenda for these changes, according to public health activists promoting access to medicines and domestic industry associations. This charge has been affirmed by trade analysts and academics who point out that recommendations made by Pharmaceutical Research and Manufacturers of America (PhRMA), the powerful lobby of the world’s biggest drug corporations, to the US Trade Representative on ACTA are identical to the ‘Principles and elements for national legislation’ endorsed by IMPACT. The latter is supported by the International Federation of Pharmaceutical Associations (IFPMA) and there are reports that suggest 8 per cent of the funding for the WHO agency is provided by industry.

Developments at the WHO on this issue are being reported by ICTSD:

In a particularly contentious exchange at the WHO meeting, the Brazilian ambassador criticised the seizure. She stated that the “Brazilian Government considers that the decision by the Dutch authorities to detain an input which is strategic to public health in a developing country, and exported in conformity with the existing international norms, represents a grave drawback in the treatment of the issue of the universal access to medicines

The Netherlands’ decision represented a “distorted use of the international intellectual property system, supposedly upheld by European Union legislation, and contrary to the spirit and provisions of the Doha Declaration on TRIPs and Public Health,” the ambassador added.

Brazil indicated that “other possible reactions will be taken into consideration according to how this problem evolves, including within the World Trade Organisation (WTO)”.

This ICTSD story has more. Here is the full story:

Intellectual property was one of the contentious issues debated at the recent World Health Organisation Executive Board (EB) meeting, which concluded on Tuesday after just over a week of talks. Discussions centered on the WHO report and draft resolution on counterfeit medicines and on the global strategy and plan of action on public health, innovation and intellectual property.

Controversy over Counterfeit Medicines

The recent seizure of a shipment of generic medicines, headed to Brazil, by the European Union (EU) customs officials energized debate on the issue of counterfeit medical products. Brazil expressed “great concern” over retention of the hypertension medicines by the Dutch Authorities and indicated that it was considering taking further action in response. (see related story, this issue).

This debate also sparked questions regarding the definition of the term ‘counterfeit’, especially as it relates to the WHO mandate. . Some developing countries, as well as an NGO pointed out that as it stands the term ‘counterfeit’ is associated with trademark violations as defined in the WTO’s Trade-related Aspects of Intellectual Property Agreement (TRIPS). The Swiss delegate suggested that perhaps given the mandate for WHO in the protection of public health, the term ‘counterfeit medical products’ is more appropriate.

At the same time, however, some members questioned why the WHO is focusing on the definition of ‘counterfeit’ rather than directly addressing health issues associated with spurious and substandard drugs. Furthermore, a source present at the meeting suggested that the delegates were apprehensive to use the term ‘counterfeit’ as it can be used to facilitate and expedite the IP enforcement agenda under the guise of working to combat the falsification of medical products and other such illegalities that are a risk to public health.

But the US delegation indicated that it was disturbed that the “WHO secretariat originally circulated a document with a draft resolution with language that significantly widened the scope of the ‘patent’ exclusion to an exclusion for “all intellectual property.” The original WHO report stated that “disputes about, or violations of, intellectual property rights are not to be confused with counterfeiting.” However the US representative added that “such a broad exclusion is technically incorrect” and asked the “secretariat to explain how such a mistake occurred, given the importance of this issue to member states.”

In response, Director General Dr. Margaret Chan apologised, stating that use of the term “intellectual property was unintentional.” The WHO consequently issued a correction to the definition, reverting to the term ‘patents’, as set out in the IMPACT version, instead of ‘intellectual property’.

Concerns about IMPACT

Some members, primarily developing countries, expressed some concerns over the role and working methods of the IMPACT, which was launched in 2006 following a WHO conference in Rome. Included in the mandate of IMPACT, as outlined in the Rome Declaration, is the task of raising awareness among national authorities and decision-makers about counterfeit medicines, and calling for effective legislative measures to combat the spread of the spurious drugs. The taskforce is also charged with promoting coordination among different anti-counterfeiting initiatives.

Members’ concerns focused on the fact that the chair of IMPACT’s working group on technology is also the Director General of the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA), an association of multinational companies. Other members of the IMPACT board include the Organisation for Economic Cooperation and Development (OECD), INTERPOL, and the International Federa¬tion of Pharmaceutical Wholesal¬ers.

Developing countries and several NGOs were also uneasy about what appears to be an endorsement of IMPACT’s work by the WHO. The Secretariat’s report and draft resolution for the Executive Board meeting were propelled largely by the work of its partnership with IMPACT.

Such direct private-sector participation in a WHO initiative could raise serious issues of conflict of interest, some members say. One non-governmental source expressed concern that such endorsement could establish a significant precedent of private sector involvement in WHO activities.

Given these issues, many members were not keen to adopt the proposed resolution. Paraguay on behalf of the group of Latin American and Caribbean Countries (GRULAC) stated that its members were not ready to support the draft in its current form. This position was endorsed by other countries, including Barbados and Uruguay. Ultimately, members agreed that the WHO Secretariat should prepare further reports on the impact of counterfeit medicines on public health, as well as a new document, without resolution, on the way forward to the World Health Assembly in May of this year.

Public Health, Innovation and IP

While the issue of counterfeit medicines gave rise to extensive discussions, the agenda item on public health, innovation and intellectual property was dealt with more swiftly.

The WHO revealed the costing estimates for the implementation of the WHO strategy on global public health and intellection property, giving a detailed breakdown of the funding required from 2009 to 2015 to “carry out the activities associated with each specific actions at two levels: national and international.” The activities include building and improving innovative capacity, promoting the transfer of technology, and improving the application and management of IP. The total cost of the estimated needs (excluding research and development) exceeds US $2 billion; national-level activities constitute approximately 60 percent of this total figure.

On research and development the funding is expected to be as much US $147 billion. Those funds will cover R&D, the education of R&D workers, R&D infrastructure, and support units. Taken together, the implementation of the strategy and action plan is budgeted at US $149 billion, or US $20 billion per year.

These estimated funding needs were one of the outstanding components of the plan of action that the member states had requested the Director General to finalise during this meeting of the EB.

The Medecin Sans Frontieres’ Campaign for Access to Essential Medicines contended that “further work is needed” by the WHO Executive Board on this issue. James Arkinstall, an MSF spokesman called for specific actions on this front, and urged the EB to adopt qualitative indicators as part of Global Plan of Action. “It’s not just the number or the process that needs to be measured, it is the effect and the impact,” the spokesman said.

Barbados and Bolivia presented a proposal on ways to use the ‘prize fund model’ to encourage research with respect to diseases that disproportionately affect developing countries. Both countries requested confirmation from the Secretariat that the proposals would be examined by the expert working group the Director General had established. The Secretariat indicated that the proposals would be examined at the second meeting of the working group later this year. The WHO has also encouraged other member states to submit proposals on ways to encourage research into diseases that disproportionately affect developing countries.

Discussions on counterfeit medical products and the global strategy and plan of action are likely to receive significant attention at the next meeting of the World Health Assembly.

ICTSD reporting; “India may drag EU to WTO on Seizure of Drugs,” HINDUSTAN TIMES, 18 January 2009; “Brazil to object to Dutch Seizure of generic drug,” REUTERS, 23 January 2009; “WHO Puts nearly $150 Billion Proce Tag on Global R & D Strategy for Neglected Diseases,” IP-WATCH, 22 January 2009; “Hope for Consensus on WHO and Counterfeits Moves to May assembly,” IP-WATCH, 27 January 2009.

For some animated discussion in the blogosphere, see the exchange at the International Economic Law and Policy Blog.

Update to EU seizures of Indian generics: Brazil threatens WTO complaint

In an earlier post I had written about the Indian government’s protest against the EU seizing certain Indian generic pharma exports in transit to third country importers.  Reuters is now reporting that the Brazilian government has issued a statement threatening a WTO complaint against the EU. A new battleground in the fight to the right to public health versus patent protection seems to be emerging here … will keep an eye on this.

Brazil said it would file a complaint at the World Trade Organization over the seizure by Dutch authorities of a shipment of a generic high blood pressure drug made in India.

Local foreign and health ministries said a company claiming to have intellectual property rights to the arterial hypertension drug losartan in the Netherlands requested customs authorities seize a shipment of a generic version of the drug in transit from India to Brazil, two countries where the patent is not protected.

The Brazilian government can withhold intellectual property rights for a drug if it considers it “in the public interest.” Its health-care system provides free drug treatment for certain conditions such as AIDS and high blood pressure.

“The Brazilian government feels that the decision by the Dutch authorities to detain the basic material critical for the public health of a developing country … a serious step backward on the question of universal access to drugs,” said the note released by the Brazilian ministries late Thursday.

The statement also said the government would take its complaint to the executive council of the World Trade Organization in Geneva.

High blood pressure is one of the leading causes of death among Brazilians.

The cargo of generic losartan that was seized in Rotterdam was sent back to India, where it was manufactured by Dr. Reddy’s, the ministries’ note said. The drug was being imported by Brazil’s EMS.

Losartan is the generic name for the drug Cozaar that was co-developed by Merck & Co and DuPont Co.

Brazil’s statement that it can withhold IP rights in public interest is interesting. Is there a compulsory licence issue here?

Looming India WTO complaint against the EU for "illegal"(?) seizures in EU ports of Indian generic drug exports during transit to third countries?

Doesn’t look very likely though…

I came across this report in the Economic Times recently, quoting Indian commerce secretary that India might ask for DSU consultations with the EU on what has elsewhere been described as acts of piracy committed by the EU.

The Economic Times report was not very illuminating as to what the issues were. A Mint story is more enlightening. Also see the post on this story by the blog Spicy IP.

Here is the Mint story in full:

Dr Reddy’s consignment of drugs to Brazil seized

This is the first time a shipment of a large Indian company has been held on charges of patent infringement

Radhieka Pandeya

New Delhi: A consignment of drugs sent by Dr Reddy’s Laboratories Ltd (DRL) from India to Brazil has been seized in transit by Dutch customs on charges of patent infringement.

This is the second such action in the Netherlands in three months. IPA has urged serious action

India’s commerce department has reacted strongly against such seizures in the European Union (EU), this being the second such seizure in the Netherlands in three months.

DRL’s consignment, worth $500,000 (Rs2.4 crore), was of bulk drug losartan used to lower blood pressure. The patent for losartan in the Netherlands is held by US-based DuPont under the Cozaar brand.

Commerce secretary G.K. Pillai said the department has taken up the matter with the European Commission (EC) and has written to them. “This is an act of piracy by the European Union. The consignment was going to Latin America and was seized in Europe… This is a dangerous thing happening, which is totally uncalled for. It is part of the strategy by these countries to target generic drugs from India.”

Mint had reported on 12 December that an increasing number of shipments of Indian small and medium-sized bulk drug makers were being seized at European ports on charges of patent infringement. This is the first time a shipment of a large Indian company has been seized.

To be sure, some Indian patent lawyers argue that the EU is following local laws and India cannot question their implementation.

“If the consignment does infringe a patent, then you cannot question the EU for seizing it under their patent laws,” said Shamnad Bashir, a professor in intellectual property law at the National University of Juridical Sciences, Kolkata.

Rajeshwari Hariharan, a partner at law firm K&S Partners, agreed. “There are cases where a product is in transit and is seized at a transit point. If this DRL product was in transit via the Netherlands, and was seized there due to patent infringement, it is a valid argument for the EU,” she said. “In fact, India takes the same stance.”

Others, however, view this as a public health issue. “The EC regulations that have led to the seizure of Indian generic drugs in transit to Brazil have created barriers to the export of affordable, quality, low-cost generic drugs from India to other developing countries. This is part of the IP (intellectual property) enforcement agenda,” said lawyer Leena Menghaney, who is also India project manager for the Campaign for Access to Essential Medicines, an initiative of Medecins Sans Frontieres, a non-profit organization.

“The fallout will be on patients’ lives in the developing world who will not be able to access affordable life-saving drugs from India,” she said.

Industry lobby group Indian Pharmaceutical Alliance (IPA) has also urged serious action on the matter.

“We are concerned that all our exports of generic medicines to South America and Africa passing through Europe will come to standstill unless the government were to challenge the EU Council Regulation of 22 July 2003 and seek its amendment,” D.G. Shah, secretary general, IPA, has written in a letter to the commerce department.

A medium-sized Indian company, whose consignment worth $100,000 was also seized at a European port while going to Latin America, said it now sends the drug through a different route. It also said it was not big enough to fight an expensive legal battle in the EU.

The commerce department seems to be gearing up to tackle that, too. “We are willing to assist the company through the Pharmaceutical Export Promotion Council (Pharmexcil),” secretary Pillai said.

However, Pharmexcil executive director P.V. Appaji admitted that India should not expect drastic changes in EU regulations since “we cannot dictate our terms on them”. At the same time, Pharmexcil is encouraging smaller drugs makers to get advise the issue. “We will provide the company with our adviser, who will highlight all potential legal issues with regard to patent before they ship a consignment through a particular route. This adviser will be available to these companies at throwaway prices,” Appaji said.

Emails to the European Commission, World Health Organization and World Trade Organization remained unanswered. A DRL spokesperson said the company was unavailable for answer owing to a holiday.

Asit Ranjan Mishra in New Delhi contributed to this story

Article on Madras High Court decision in Novartis v. Union of India

Castro and Arcuri have an interesting article titled “How Innovative is Innovative Enough? Reflections on the Interpretation of Article 27 TRIPS from Novartis v. Union of India’ on SSRN.

Access it here

Here is the abstract:

In 2006 a major lawsuit was initiated by Novartis AG against the Union of India. Novartis petitioned the High Court of Madras to declare Section 3(d) of the Indian Patents Act, as amended in 2005, to be non-compliant with the TRIPS Agreement and/or to be unconstitutional. Section 3 of the Patents Act identifies the cases of inventions which are not patentable and its letter (d), as amended in 2005, lists as such ‘the mere discovery of a new form of a known substance which does not result in the enhancement of the known efficacy of that substance or the mere discovery of any new property or new use for a known substance or of the mere use of a known process, machine or apparatus unless such known process results in a new product or employs at least one new reactant.’ On August 6, 2007 the High Court of Madras reached a verdict rejecting all the petitioner’s requests. In relation to the non-compliance with the TRIPS Agreement, the Court did not enter into the merits of the question as it held to have no jurisdiction on this issue.

The present analysis begins where the verdict of the High Court of Madras ends; while the judgment invites reflection on a number of interesting issues related to the role of WTO law at national level, this paper focuses only on the substantive question (left almost entirely unaddressed by the Indian Court) about the compatibility between Section 3(d) of the Indian Patent Act and the TRIPS Agreement. The core of the question relates to the interpretation of Article 27 TRIPS, and in particular to its paragraph 1 where the criteria for patentability are set (i.e. an invention should be non-obvious, novel and useful); clearly, a narrow or a broad interpretation of these criteria is likely to have a significant impact on patents regimes worldwide. This paper builds an interdisciplinary theoretical framework to answer the compatibility question raised by Novartis AG; it does so by combing a purely legal analysis, based on the general interpretative canons used by the WTO Appellate Body to solve disputes, with an economic analysis that aims at showing the socio-economic impact of different interpretations of the above mentioned criteria. Finally, the paper shows the extent to which this theoretical framework could be applied should such a case ever be brought before the WTO DSB.

India on US Priority Watch List for IPR

The Financial Express reports:

… the US government has put India on its ‘Priority Watch List’, along with nine other countries, saying that the country’s failure to protect intellectual property rights (IPR) is putting the health, safety and jobs of its citizens at risk. India has been on this list for a number of years and its continued inclusion does not come as a surprise. Besides India, the US has put countries like China, Russia, Pakistan, Argentina, Chile, Israel, Thailand and Venezuela in the watch list.

Countries on the list will be the subject of close scrutiny during the coming year. In 2007, too, the US administration had put India on its watch list under “section 301” and threatened to impose trade sanctions for violating IPR. Earlier, the Indian government adopted a slew of measures to check violation of IPR, including strong patent laws. The Patent Act, 1970 was amended in 1999, 2002 and then in 2005 to conform to the Trade Related Aspects of Intellectual Property Right (TRIPS) Agreement of the World Trade Organisation (WTO).

paper on intellectual property regulation and the Indian seed market

Wijk and Ramanna, Global convergence meets local divergence: intellectual property in Indian seed markets, in International Journal of Technology Management, Volume 39, Number 3-4 / 2007, 264 – 278

Abstract

International organisations advocate global convergence in intellectual property as a prerequisite for successful innovation strategies. The difficulties of achieving such harmonisation are, however, evident from the attempts of several nations to develop divergent intellectual property systems. This paper explores the causes of institutional divergence and uses intellectual property for seed markets in India as a case study. The Indian seed market case demonstrates that convergence and divergence may go hand in hand. The ‘domestication’ of global protection models for seed and biotechnology may require divergence in order to be accepted by domestic stakeholders.

available here.

Delhi patent office to decide petition for compulsory licensing

The Hindu reports that an Indian pharma company has applied for a “manufacture for export” licence under the compulsory licensing provision of the 2005 patent act amendment.

 

CHENNAI: The government is to consider whether or not it should allow its drugs companies to manufacture patented medicines for export to poor countries at a hearing scheduled in the Delhi Patent Office late next week.

But, in an unusual step, it will hear opposition from the patent owner before it takes its decision.

The hearing is a response to India’s first ever application for a manufacture-for-export licence under its 2005 Patent (Amendment) Act.

Hyderabad-based Natco Pharma has requested compulsory licences overriding patents owned by the Swiss company Roche on erlotinib and the U.S. company Pfizer on sunitinib — both are anti-cancer drugs. If the government agrees, it will be the second time an export licence has been granted for public health reasons since WTO members agreed on the trade provision in August 2003. The first was issued by Canada for the production of an HIV/AIDS drug for export to Rwanda.

“The Nepal government issued us an import licence and based on that we applied,” M. Adinarayana told The Hindu on Saturday. Natco, which intends to produce 30,000 tablets of erlotinib and 15,000 of sunitinib, has offered the patent holders a 5 per cent royalty, in line with the WTO requirement to provide remuneration.

A test case

“The hearing is a test case for India” he said referring to S.92A of the Patent Act, which states that a licence will be issued to supply medicines to “any country having insufficient or no manufacturing capacity … to address public health problems,” but under terms specified by the Patent Controller.

The Patent office has done something unusual, he explains. For compulsory licenses, the government is empowered to take decisions based on the strength of the application alone.

“I intend to ask the patent office why it is allowing representation from the patent holder,” he said. “And,” he continued, “I also want to know what options there are for redress.”

“These are the first compulsory licences under review in India and the outcome of these will decide how the mechanism operates,” said Leena Menghaney of Medecins Sans Frontiers, who believes that the decision could improve the availability of many low-cost drugs for many diseases to distribute to the world’s poorest countries.

“Compulsory licences,” she said, “should be available for all essential drugs that are unaffordable and unavailable.”

Because Natco has applied under S92A (for export only), if a compulsory licence were to be granted, Indians would not be able to buy the low-cost version produced by its industry.

In the case of erlotinib however, this could change.

The Delhi High Court is expected to rule soon on a case brought by Roche against Cipla for patent infringement after Cipla brought out its version of the drug in January.

But the patent on the drug may not be relevant if the drug is considered a derivative of gefitinib, licensed to Astra Zeneca, which does not qualify for an Indian patent because it was developed before India agreed to introduce product patents in 1995. A compulsory licence would only be necessary if the patent stands.

Indian pharma set to manufacture HIV drugs in Africa

Cipla of India is setting up an HIV anti-retroviral manufacturing unit in Uganda as a joint venture with a local Ugandan entity. NDTV reports that this unit is viewed as so important that the Ugandan president is personally supervising its progress.

To beat WTO rules, Indian manufacturers decided to set up factories in African nations, rather than just exporting the drugs. These factories mean that African countries are no longer dependent on others’ skills – while Indian businessmen can continue to make money.
This is where the Uganda factory comes in. It will produce Triomune, a combination containing lamivudine, stavudine and nevirapine. It will also make the anti-malarial combination Lumartem.
Said Emmanuel Katongole, managing director of Uganda’s QCI, which has teamed up with Cipla for the factor: ”Our first client is going to be the government, which is committed to providing free ARVs for all those who need them.
”For us TRIPS is a window of opportunity,” Katongole added. ”India has ratified the TRIPS agreement, so it ceases to be a source of generic drugs for Africa.”

If the TRIPS agreement closed some doors, it seems to have opened up others.

Indian govt project underway to protect ayurveda and yoga as traditional knowledge

The Independent has a report today about an Indian govt project to compile a multi-lingual digital database of traditional knowledge.

See http://news.independent.co.uk/world/asia/article3187089.ece

 

“The battle for ayurveda: India is racing to record the details of its traditional medicine

By Andrew Buncombe

Published: 23 November 2007

They range from the everyday to the decidedly obscure, from items with a specific, specialised use to those with a host of applications. Their common heritage is one of the world’s oldest cultures, and their details are being gathered together to guard against theft by the West.

For several years the Indian authorities have been collating information about hundreds of thousands of plants, cures, foods and even yoga poses to create a vast digital database of traditional knowledge dating back to up to 5,000 years ago, available in five international languages. Now, the first part of that database – relating to ayurveda or traditional Indian medicine – has been completed and it is set to launch the fight back against what some have termed “bio-colonialism”.

“The ayurveda part has been completed,” said Dr Vinod Gupta, the chairman of India’s National Institute for Science Communication and Information Resources (Niscair), which is overseeing the project. “Now we are negotiating an agreement with international patent offices [for access to this database].”

The database, totalling more than 30 million pages and known as the Traditional Knowledge Data Library, has come about for one very simple reason: to prevent Western pharmaceutical giants and others using this traditional Indian information to create a product for which they then obtain a patent.

The danger of such “misappropriation” is all too real. In 1994 an American company was granted a patent for a product based on the seeds of the need tree, an item that had for centuries been used in India as an insecticide. It took the Indian authorities more than 10 years to have the patent overturned. Similar battles were fought over a product based on the spice turmeric – traditionally used to heal wounds – as well as a Texan company’s attempt to trademark its strain of rice as “Texmati”.

“In 2000 we did a study of the US patent database. We found there were 4,986 patents for products based on medicinal plants,” said Dr Gupta. “Of those around 80 per cent were based on plants from India … 50 percent of those patents should never have been given – there was no change to the traditional knowledge.”

Under international guidelines, patents should not be given if it is shown there is “prior knowledge” or existing information about the product or item. In the United States – where many of the patent applications have been made – this prior existing knowledge is only recognised if the information has been written down. It does not consider information passed down for centuries by means of oral tradition to be valid.

Unlike many cultures from which traditional information has been misappropriated, India has an extensive written tradition. But most of the writing was in languages not widely read in the West. For example ayurvedic texts were written in Sanskrit or Hindi, writings about unani medicine – based on Ancient Greek practices now only practiced in the sub-continent – were in Arabic and Persian, while writings about another form of traditional medicine known as siddha was in the Tamil language.

To get around this challenge, Dr Gupta called in more than 100 practitioners of Ayurveda, siddha and unani to help compile the information using computer software. The database is being made available in Japanese, English, German, French and Spanish and the contents will be made available to patent officials once agreements on protecting the information and preventing it from being passed to corporations, are reached.

Also included within the database are more than 1,500 positions or asanas of yoga. This is because in recent years several yoga teachers in the West have tried to copyright methods of teaching yoga that they are argue are unique but which have existed for centuries in India.

One high-profile case involved Los Angeles-based Bikram Choudhury, the self-styled “yoga teacher to the stars”. Mr Choudhury, who moved to America in the 1970s, first obtained a copyright for a book he wrote. But when other teachers began copying the way he taught yoga – with 26 specific poses performed in a room heated to 41C (105F) – he sought legal advice and was told to obtain a copyright for the moves themselves. It has been recognised by the US courts despite India’s objections.

Dr Dinesh Katoch, an adviser on ayurveda within India’s Ministry of Health and Family Welfare, said more than 50,000 different ayurvedic formulations for treating everything from heart disease to memory loss had been entered into the database. Some of the information is mentioned in the Vedas, the ancient Hindu texts that date back several thousand years.

“We want to use this information for the global benefit but it should be done in a judicious way, not by stealing,” he said, sitting in his office in central Delhi. “We want to prevent misappropriation. Prevention is the most important thing because it is not easy to repeal a patent.”

In addition to the considerable cost incurred by the Indian authorities fighting patents they do not believe are genuine or fair, there is a widespread feeling that Western corporations should not be making vast profits from traditional knowledge while the people who discovered the information receive no benefit.

But campaigners say the misappropriation also has cultural and political implications. “I have termed it bio-colonialism,” said Vandana Shiva, an Indian environmental activist and author.

“The international intellectual property laws as promoted by the World Trade Organisation [WTO] promote bio-colonialism because while they say there should be a global system to patent everything, the reality is that patent inspection is done at a national level. If you want to have a global system you have to have global inspection,” she said. “This would involve setting up a global database. This will take a decade and cost billions of dollars.”"