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Version 1.2-September 15, 2000
This report seeks to identify particular trade disputes over country policies on intellectual property and health care. This report is by no means comprehensive. Much of the content is taken directly from various US government reports, including USTR Special 301 Press Releases from 1995-2000, USTR's annual National Trade Estimate Report on Foreign Trade Barriers, and USTR "Reports to Congress on Section 301 Developments," (January 1995- June 1996) and (June 1996-January 1998). Over time we will be expanding and updating this page.
Comments and corrections to Thiru Balasubramaniam thiru@cptech.org
On December 1, 1999, President Clinton announced that the United States is committed to helping developing countries gain access to essential medicines, including those for HIV/AIDS. Also on December 1, United States Trade Representative Charlene Barshefsky and Secretary of Health and Human Services Donna E. Shalala announced their intention to develop a cooperative approach on health-related intellectual property matters to ensure that the application of U.S. trade law related to intellectual property remains sufficiently flexible to respond to public health crises.
Specifically, the announcement stated that USTR and HHS will work together to establish a process for analyzing and evaluating health issues that are relevant to the application of U.S. trade-related intellectual property laws and policy. When a foreign government expresses concern that U.S. trade law related to intellectual property protection significantly impedes its ability to address a health crisis in that country, USTR will seek and give full weight to the advice of HHS regarding the health considerations involved. This process will permit the application of U.S. trade-related intellectual property law to remain sufficiently flexible to react to public health crises brought to the attention of USTR. It will also ensure that the minimum standards of the TRIPS Agreement are respected.
In announcing the results of the Special 301 review today, Ambassador Barshefsky stated that USTR has begun implementation of the policy she and Secretary Shalala announced on December 1. USTR and HHS have done so by establishing a regular consultative mechanism on health-related intellectual property matters consistent with their goal of helping poor countries gain access to essential medicines. The agencies are also working closely with interested NGOs and industry to ensure that this policy is implemented effectively.
Since December 1, USTR and HHS staff have worked together to address individual health-related intellectual property issues that have arisen with U.S. trading partners, as in the case of Thailand, as well as with respect to the health-related issues that have arisen in this year's Special 301 process. For the first time, HHS has participated actively as a member of the Special 301 Trade Policy Staff Sub-Committee that is charged with developing the Special 301 recommendations. Ambassador Barshefsky said that she was very pleased to have been able to rely on the helpful support of HHS in making her final decisions in this review.
The Special 301 committee has not been approached directly by any government with a request under the December 1 policy. Nevertheless, the committee has taken health and development issues into account in accordance with the Administration's December 1 policy in making its Special 301 recommendations.
Ambassador Barshefsky went on to say that since December 1, USTR has encouraged U.S. trading partners facing a health care crisis to explore all options for extending access to effective treatments. Nevertheless, the U.S. Government has made clear that the final choice of what policies to employ is one for each government to make on its own. In the view of the U.S. Government, should a government determine to avail itself of the flexibility the TRIPS Agreement provides to address a health care crisis, the United States will raise no objection, provided the policy employed is consistent with the provisions of the WTO TRIPS Agreement.
Ambassador Barshefsky went on to stress that access to modern pharmaceuticals can and should be enhanced in a manner that assures the safety and efficacy of the drugs, preserves intellectual property rights, and promotes the worldwide pursuit of newer, more effective medicines. She concluded by noting that a modern patent system helps promote the rapid innovation, development, and commercialization of effective and safe drug therapies and that sound public health policy and intellectual property protection are mutually supportive (2000 Special 301 Report).
Agreement on Trade Relations between the Republic of Albania and the United States of America. This agreement has extensive provisions on intellectual property, including, for example, very restrictive terms on compulsory licensing. Signed on May 14, 1992.
On August 10, 1988 the Pharmaceutical Manufacturers Association (PMA) filed a petition [citing] Argentina's denial of product patent protection for pharmaceutical products and discriminatory product registration procedures (Report to Congress on Section 301 Developments, June 1996 - January 1998).
On September 25 1988, USTR initiated an investigation regarding PMA's allegations.
Following consultations, the petition was withdrawn on September 23, 1989 because of Argentina's willingness to modify its pharmaceutical registration procedures and to address constructively the issue of patent protection for pharmaceutical products (Ibid).
On October 10, 1991, Argentina "submitted...a comprehensive proposed revision to its patent law that was generally responsive to the United States' concerns (Ibid).
In January 1994, the USTR undertook an out-of-cycle review in January 1994 in light of Argentina's efforts in enacting an "acceptable patent law (Ibid)."
The US government placed Argentina on the 1995 Watch List for reasons including inadequate protection of test data submitted for marketing approval.
In April 1995, the Argentine Congress passed an
unacceptable patent bill that included a[n] eight year transition period for pharmaceutical patent protection [that] failed to meet even TRIPS standards (Report to Congress on Section 301 Developments, January 1995 - June 1996).
The Menem Administration vetoed the portions of the law that did not comply with the TRIPS agreement and replaced them with an interim decree by the end of April 1995. These actions would have provided strong patent protection in Argentina by January 1, 1996, and TRIPS-consistent compulsory licensing measures. However, in late May 1995, the Argentine Senate voted to override portions of Menem's veto, re-instituting an eight year transition period for pharmaceutical patent protection and onerous compulsory licensing provisions (Report to Congress on Section 301 Developments, June 1996-January 1998).
In September 1995, the Menem Administration promulgated a
bill which would shorten the transition period for pharmaceutical patents to five years and fix problems with the compulsory licensing provisions (Report to Congress on Section 301 Developments, January 1995 - June 1996)."
In March 1996,
Argentina submitted a draft law to the Congress that would provide data submitted in the course of an approval process to be protected from disclosure and unfair commercial use (Ibid).
Despite Argentina's passing of a data exclusivity law in November 1996, the USTR deemed this "inadequate" and "announced that Argentina would lose 50% of its GSP benifits (Report to Congress on Section 301 Developments, June 1996 - January 1998)."
The US government placed Argentina on the 1996, 1997, 1998 and 1999 Priority Watch Lists for reasons including inadequate patent protection of pharmaceutical products, "onerous compulsory licensing provisions", inadequate protection of test data, and the lack of protection from parallel importing (USTR Special 301 Press Releases 1997-1999).
In 1998, the US government noted that Argentina's patent regime "will not provide pharmaceutical patent protection until November 2000 (USTR Special 301 Press Release, 1998)." According to USTR, however, many of Argentina's alleged TRIPS-inconsistencies "are not immediately actionable in the WTO," because Argentina's claim to "developing country status" accords her a special transitional period till November 2000 (USTR National Trade Estimate Report on Foreign Trade Barriers, 1999). Furthermore, Argentina "failed to provide effective exclusive marketing rights to qualifying pharmaceutical products in accordance with current TRIPS obligations (USTR Special 301 Press Release, 1998).
The US government placed Argentina on the 2000 Priority Watch List for reasons including the failure to provide exclusive marketing exclusivity rights for pharmaceuticals (see Article 70.9 of TRIPS), failure to protect confidential test data from unauthorized commercial use,
the denial of certain exclusive rights for patents, such as the protection of products produced by patented processes and the right of importation; the failure to provide prompt and effective provisional measures for purposes of preventing infringements of patent rights from occurring; and the improper exclusion of micro-organisms from patentability(USTR Special 301 Press Release, 2000).
In May 2000, the US government put Argentina on the 2000 Priority Watch List and initiated WTO dispute settlement consultations with Argentina for reasons including: failure to provide exclusive marketing exclusivity rights for pharmaceuticals (see Article 70.9 of TRIPS), failure to protect confidential test data from unauthorized commercial use, failure to "provide certain safeguards for the granting of compulsory licenses, including timing and justification safeguards for compulsory licenses granted on the basis of inadequate working," and failure to " provide prompt and effective provisional measures, such as preliminary injunctions, for purposes of preventing infringements of patent rights from occurring" (US Government Request for WTO consultations with Government of Argentina)
The US government placed Australia on the 1996, 1997 and the 1998 Watch Lists for reasons including the limited protection for test data on pharmaceutical products. This relates to Article 39 of the TRIPS provisions on test data which requires WTO members to protect test data from "unfair commercial use" when "approving the marketing of pharmaceutical...products (WTO TRIPS Agreement)."
In April 1998, Australia implemented a regime to protect test data submitted to regulatory authorities for marketing approval of pharmaceuticals as required by the TRIPS Agreement.
The US government placed Bahrain on the 1998 Watch List for reasons including inadequate patent protection for pharmaceuticals.
Bahrain's patent law does provide for pharmaceutical product protection, but only through re- registration of patents filed in the UK (USTR Special 301 Press Release, 1998).
On June 11, 1987 the Pharmaceutical Manufacturers Association (PMA) filed a petition alleging that the Government of Brazil's denial of patent protection to pharmaceutical products and processes is unreasonable and burdens or restricts United States commerce." Despite USTR consultations with the Brazilian government, Brazil offered no firm guarantees for providing patent protection for pharmaceutical products (Report to Congress on Section 301 Developments,January 1995 - June 1996).
On July 21, 1988, President Reagan deemed Brazil's policy on patent protection was "unreasonable and imposed restriction upon United States commerce, and that he would take appropriate action under section 301 (Ibid)."
On October 20, 1988 the President invoked section 301 authority to increase tariffs to 100 percent ad valorem for certain paper products, non-benzenoid drugs, and consumer electronic items, effective October 30, 1988. The level of retaliation was estimated to be approximately $39 million...The retaliatory tariffs virtually prohibited most Brazilian exports of these products from entering the US market during 1989 and the first half of 1990 (Ibid).
On June 26, 1990, the President of Brazil announced his intention to enact legislation that would provide patent protection for pharmaceutical products and production processes of pharmaceuticals.
On June 27, USTR "determined that it was in the interest of the United States to terminate the application of the increased duties...effective July 2, 1990 (Ibid)."
In May 1991, the Brazilian Government submitted legislation to the Brazilian Congress that if implemented, would have provided patent protection for pharmaceutical processes and products [albeit deficient by US standards of patent protection] (Ibid).
In May 1992, a new bill was submitted to the Brazilian Congress. This new bill fell short of world class standards for intellectual property protection, but represented a major improvement over the 1991 bill and responded to many of the concerns expressed by the United States (Ibid)."
In 1993, the USTR identified Brazil as a priority foreign country for reasons including inclusion of overly broad compulsory licensing provisions and requirements.
On April 17,1996, Brazil enacted a new law that would provide product patent protection for pharmaceuticals, pipeline protection and limit parallel imports thus prompting the US government to move Brazil from the Priority Watch List to the Watch List.
In May 2000, the United States government initiated WTO dispute settlement proceedings against Brazil for the qualification in her patent law which requires "local working" as a condition for the exploitation of exclusive patent rights.
Agreement between the United States of America and the Kingdom of Camboida on Trade Relations and Intellectual Property Rights. Apparently signed in 1994.
TRIPS Agreement obligates Members to grant a term of protection for patents that runs at least until twenty years after the filing date of the underlying protection, and requires each Member to grant this minimum term to all patents existing as of the date of the application of the Agreement to that Member. The United States alleges that under the Canadian Patent Act, the term granted to patents issued on the basis of applications filed before 1 October 1989 is 17 years from the date on which the patent is issued. The United States contends that this situation is inconsistent with Articles 33, 65 and 70 of the TRIPS Agreement. On 15 July 1999, the United States requested the establishment of a panel. At its meeting on 22 September 1999, the DSB established a panel (Overview of the State-of-play of WTO Disputes).
The US government placed Chile on the 1996 and 1995 Watch Lists
for reasons including
TRIPS-inconsistent pipeline protection. "The term of patent
protection is not consistent with the TRIPS term of 20 years from
filing (1999 National Trade Estimates Report on Foreign Trade
Barriers)."
According to the USTR,
Chilean patent law regarding proprietary
test data offers inadequate and ineffective protection.
In 1991 and 1994, the US government designated China as a
Priority Foreign Country for reasons including inadequate
implementation of "administrative protection" programs for
pharmaceuticals" and overly-broad compulsory licensing
provisions (USTR Special 301 Press Release, 1994).
In 1998, the US government placed China under Section 306:
Monitoring for reasons including problems in obtaining
administrative protection for pharmaceuticals.
The US government placed Colombia on the 1996 and 1997 Watch
Lists for reasons including overly broad
compulsory licensing provisions, and the lack of protection
against parallel imports.
The US government placed Colombia on the 1996, 1997 and 1998
Watch Lists for the inadequate protection of pharmaceutical
patents.
The US government placed Costa Rica on the 1995, 1996 and 1997
Watch Lists because the
The US government placed Costa Rica on the 1998 and 1999 Watch
List for reasons including non-compliance with TRIPS and Paris
Convention requirements for patent protection on pharmaceuticals.
In 1996, the USTR noted Cyprus' inadequate patent protection of
pharmaceuticals. The government has opposed efforts by
Cyprus to enact a US style "Bolar" amendment, permiting
research on bioequivalancy, prior to patent expiration.
The US government placed the Dominican Republic on the 1999
Priority Watch List for reasons including the "granting of
marketings approvals for products that infringed on
pharmaceutical patents (USTR Special 301 Report, 1999)."
Note: The USTR Special 301 Press Release (2000) was published before the promulgation
of the new Industrial Property Law of the Dominican Republic. The US is currently in the process of reviewing
this law and making a determination of its "TRIPS-consistency."
The US government placed the Dominican Republic on the 2000 Priority Watch List for reasons including
the failure to
In 2000, the US government indicated that it would be considering a
potential dispute settlement case against the Dominican Republic
because the US government determined that the Dominican Republic was not in
compliance with its WTO TRIPS obligations.
The US government placed Ecuador on the 1999 Watch List for
reasons including inadequate pipeline protection,
In 1999, the USTR noted that El Salvador contained several
provisions that were not TRIPS consistent. These included patent terms:
The US government placed Egypt on the 1995, 1996, 1997, 1998, 1999 and
2000 Priority Watch Lists for reasons including the lack of
patent protection for pharmaceuticals. The Egyptian government will avail itself
of the full transition period for pharmaceutical product patent protection (January 1, 2005) as accorded her
by WTO TRIPS Article 66.4.
In 1998, the US government raised objections on Egypt's
In 2000, the US government raised objections to Egypt's inadequate
marketing exlusivity provisions for pharmaceuticals.
In 2000, the US government indicated that it would be considering a potential
dispute settlement case against Egypt because the US government determined that Egypt
was not in compliance with its WTO TRIPS obligations.
The US government placed Guatemala on the 1995, 1996 and 1997
Watch Lists for reasons including the inadequate patent
protection of pharmaceuticals.
The US government placed Honduras on the 1998 Watch List for reasons including
overly broad compulsory licensing provisions.
The US government placed Hungary on the 1999 Watch List for
reasons including inadequate pharmaceutical patents and
inadequate legal protection for confidential test data. USTR sought
further refinement on Hungary's law on pipeline
protection for pharmaceutical patents.
India was a Priority Foreign Country from 1991 to 1993 for
reasons including the failure to provide product patent
protection for pharmaceuticals, an inadequate term of
protection, and overly broad compulsory licensing provisions.
On April 29, 1992, under USTR's recommendations that India's
patent laws placed "unreasonable" burdens and restrictions on US
commerce, President Bush
The US government placed India on the 1995, 1996, 1997, 1998 and
1999 Priority Watch List for its failure to implement its
obligations under Article 70 of TRIPS which require
On July 2, 1996, the USTR registered a complaint against India
to the WTO Dispute Settlement Board (DSB) citing India's failure
to establish a "permanent formal mailbox system" for
pharmaceutical product applications or a "system for the
granting of exclusive marketing rights (Report to Congress on Section
301 Developments, June 1996 - January 1998)."
The US government placed India on the 2000 Priority Watch List for reasons including
In 2000, the US government indicated that it would be considering a
potential dispute settlement case against India because the US government determined that India was not in
compliance with its WTO TRIPS obligations.
For more information, see
http://www.cptech.org/ip/health/india/
The United States' objections to Indonesian patent law with
respect to pharmaceuticals include: importation not meeting the
In 1996, the USTR noted that
The US placed Israel on the 1998 and 1999 Priority Watch Lists
for reasons including the Israeli Knesset's amendment on
Israeli patent law to
The US government placed Israel on the 2000 Priority Watch List for reasons including
In 2000, the US government indicated that it would be considering a potential
dispute settlement case against Israel because the US government determined that Israel was not in
compliance with its WTO TRIPS obligations.
For more information, see
http://www.cptech.org/ip/health/israel/
The US government placed Jordan on the 1997, 1998 and the 1999
Watch Lists for reasons including the absence of patent
protection of pharmaceuticals which has led to a
The US government placed Korea on the 1999 Watch list for
reasons including the inadequate level of patent protection for
pharmaceuticals and the protection of data in Korea, as well as
with Korea's market access restrictions on pharmaceutical
products.
The US government placed Korea on the 2000 Priority Watch List for reasons including
unresolved differences concerning such issues as the
The US government place Kuwait on the 1999 Priority Watch List
and the 1997 and 1996 Watch Lists for reasons including the
deficient protection for pharmaceutical products and compulsory
licensing.
In 1999, the US government raised concerns that Lebanon was
"considering allowing the registration of generic copies of
drugs still protected by patents (USTR Special 301 Press Release,
1999)."
The US government placed Lebanon on the 2000 Watch List for reasons including
the Lebanese health authories' alleged registration of generic copies of
patented pharmaceuticals.
In 1998, the US governments noted the
"In April 1998, a Dutch court upheld the confidentiality of
pharmaceutical test data submitted to regulatory authorities
(USTR Special 301 Press Release, 1999)."
The US government placed Oman on the 1996, 1997 and 1999 Watch
List including the absence of legal protection for
pharmaceutical product patents.
The US government placed Pakistan on the 1995, 1996, 1997, 1998
and 1999 Watch Lists for reasons including Pakistan's patent law
which provides process protection but not product protection for
pharmaceutical products . The term of protection for patents
under its patent law for processes is not consistent with TRIPS.
The US government placed Pakistan on the 1996 Watch List for
its failure to "implement its obligations" under Articles 70 of
the TRIPS Agreement (USTR Special 301 Press Release, 1996).
On February 4, 1997, through USTR pressure at WTO consultations,
the President of Pakistan
The US government placed Pakistan on on the 2000 Watch List for reasons including
the US government determination that "
Pakistan's regime for protection of intellectual property does not yet comply with the
obligations of the TRIPS Agreement (USTR Special 301 Press Release, 2000)."
The US government identified Paraguay as a Priority Foreign
Country on January 16, 1998 for reasons including inadequate
intellectual property legislation covering patents.
The US government placed Peru on the 1996 Watch List for reasons
including inadequate protection of pharmaceutical patents,
deficiencies in its compulsory licensing provisions, and lack of
protection from parallel imports.
USTR commentary on Philippine intellectual property (1996):
USTR commentary on Philippine patent law (1996-1997):
USTR commentary on Philippine intellectual property (1998):
USTR commentary on Philippine patent law (1998):
The US government placed the Philippines on the 1999 Watch List
for reasons including the Philippines'
In 1999, USTR noted that US companies complained that Poland's
current pipeline and data protection of pharmaceuticals is
inadequate. Another USTR concern was that the lack of data exclusivity
which appears to be contrary to TRIPS' requirements.
The US government placed Poland on the 2000 Priority Watch List for reasons
including for providing only three years of exclusive protection for test data and the
weak protection of process patents.
In 2000, the US government indicated that it would be considering a potential
dispute settlement case against Poland because the US government determined that Poland was not in
compliance with its WTO TRIPS obligations.
In 1996, the USTR noted that
Under the provisions of the WTO Dispute Settlement
Understanding, the USTR pressured the Government of Portugal to
accede to the United States' interpretation of the TRIPS
agreement.
In 1997, the US government raised concerns about Qatar's lack of
legal protections for pharmaceutical patents.
The US governments placed Qatar on the 1998 and 1999 Watch List
because it has not enacted a program of patent law and therefore
does not protect pharmaceutical products.
In 1996 and 1997, the US government raised concerns on Romania's
failure to provide pipeline patent protection for
pharmaceuticals.
The US government placed Romania on the 1999 Watch List for
reasons including the inadequate protection of patents and
proprietary data.
The US government placed South Africa on the 1998 and 1999 Watch
List for reasons including its amendment of the Medicines Act in
December 1997. For considerably more detail, see
http://www.cptech.org/ip/health/sa.
In 1999, the USTR expressed concern that:
On January 30, 1991, the Pharmaceutical Manufacturers
Association (PMA) filed a petition citing Thailand's inadequate
and ineffective patent protection laws for pharmaceuticals. The
petition cited the
On February 27, 1992, Thailand's National Legislative Assembly
enacted amendments to its patent law. These amendments included
provisions that provided patent protection for pharmaceutical
products and a 20 year-year-from-filing term of protection.
USTR objected to provisions that offered
In 1993, USTR pressure compelled Thailand to issue regulations
curtailing the "adverse effects" of compulsory licensing.
In the 1999 USTR NTE Report:
For more information, including copies of
correspondence and agreements between the US and Thailand,
see
http://www.cptech.org/ip/health/thailand/
In 1998, the USTR noted Tunisia's "lack of patent protection for pharmaceuticals"
meant that
In January 1999, Turkey extended patent protection to
pharmaceuticals.
The US government placed Turkey on the 1995 Priority Watch List
because of its lack of modern patent legislation. The USTR
compared the Turkey policy of exempting pharmaceutical
drugs from patent protection to "piracy."
The US government placed UAE on the 1997, 1998 and 1999 Watch
List for reasons including UAE's exemptions on medicines and
pharmaceutical compounds from protection in its patent laws.
In 1999, USTR expressed concern over reports that "UAE
authorities continue to allow the copying of European and
American patented pharmaceutical products (USTR Special 301 Press
Release, 1999)."
The USTR stressed the critical need for "pipeline" protection of
new products in the research and development cycle.
In 1997, the US government also raised objections about the
UAE's onerous compulsory licensing provisions and the
unauthorized production of pharmaceutical products.
The US government placed Uruguay on the 2000 Watch List for reasons
including "omission of protection for confidential test data, overly
broad compulsory licensing provisions, failure to address exclusive marketing rights,
and international exhaustion of patent rights (USTR Special 301 Press Release,
2000)."
In 2000, the US government indicated that it would be considering a potential
dispute settlement case against Uruguay because the US government determined that Uruguay was not in
compliance with its WTO TRIPS obligations.
The US government placed Venezuela on the 1996 and 1997 Watch
Lists for reasons including overly restrictive compulsory
licensing provisions, inadequate protection of pharmaceutical
patents, and the lack of protection against parallel imports.
The US government placed Vietnam on the 1998 and 1999 Watch
Lists for reasons including inadequate patent protection for
pharmaceutical products.
The US government placed Vietnam on the 2000 Watch List for reasons including the US government's
determination that Vietnam's intellectual property law was "not fully consistent with international standards
(USTR Special 301 Press Release, 2000)."
China
Colombia
Costa Rica
Costa Rican term of patent coverage is a
non-extendable 12 year term from the date of grant which is less
than the patent term coverage of 20 years from filing as required
by [Article 33 of] TRIPS (USTR Special 301 Reports, 1995-1997).
Pharmaceuticals fall under the category of products deemed to be in the "public interest." The term of
protection is only one year from the date of grant for "public
interest" products .
Cyprus
Dominican Republic
The existing 1911 Law provides for broad exclusions of subject matter
from patentability, and includ onerous local working requirements.
...The Fernandez Government has submitted new intellectual property legislation
to the Congress as part of a broader commercial code. As now written,
this legislation will contravene several TRIPS provisions, such
as those pertaining to compulsory licenses
(National Trade Estimate Report on Foreign Trade Barriers)
.
correct deficiencies in its legal framework to meet its obligations under the TRIPS
Agreement...[the US government] will continue to consult informally with the Government of the Dominican Republic in an effort
to encourage it to resolve outstanding TRIPS compliance concerns as soon as possible in the coming months
(USTR Special 301 Press Release, 2000) .
Ecuador
provisions permitting
parallel importation, working requirements for patents, and
ambiguities surrounding protection for test data
(National Trade Estimate Report on Foreign Trade Barriers).
El Salvador
only 15 years from the date of solicitation for pharmaceutical
products and processes; overly broad compulsory licensing
provisions, the potential for obligatory compulsory licenses; and
no protection for products in the pipeline
(USTR Special 301 Report, 1999).
Egypt
overly
broad compulsory licensing provisions. In the area of
pharmaceuticals and medicines, manufacturing process are
patentable, but the term for process patents is only 10 years.
The Egyptian government has stated its intention to delay
pharmaceutical patent protection until the year 2005, availing
itself of the TRIPS transitional period for certain developing
countries (USTR Special 301 Report, 1998).
Guatemala
Honduras
Hungary
India
raised the most favored nation rate of
duty with respect to approximately $60 million in trade with
India, including all imports of pharmaceuticals products,
chemicals, and related products (Report to Congress on Section 301
Developments, January 1995 - June 1996).
all
countries that do not provide product patent protection for
pharmaceuticals... on January 1, 1995, to establish by that time
a means by which applications for patents for such inventions
can be filed, which is commonly referred to as a 'mailbox'
(Ibid).
This is a transitional provision for developing to countries to
enact. Article 70 of the TRIPS Agreement also requires WTO
members delaying the grant of pharmaceutical...patent protection
to grant "mailbox" applicants up to five years of marketing
exclusivity if such applicants are granted a patent and
marketing approval in another WTO member and marketing approval
in the member providing marketing exclusivity (Ibid).
In September 1997, the WTO [DSB] Panel ruled in favor of the
United States in the case against India regarding India's
failure to establish a "mailbox" system for filing patent
applications for pharmaceuticals and the failure to establish a
system of exclusive marketing rights for these products
(Ibid).
In December 1997, the WTO Appellate Body ruled in favor of the
United States on India's appeal of the Panel's decision in
India- Patent Protection for Pharmaceuticals and Agricultural
Chemicals Products (USTR Special 301 Press Release, 1998).
In April 1999, India enacted legislation and drafted
implementing regulations establishing mailbox and exclusive
marketing rights systems for pharmaceutical products (Ibid).
India's patent act prohibits patents for any invention intended
for use or capable of being used for pharmaceuticals. India
does not provide product patent protection. Under existing law
product patents expire 14 years from the date of patent filing.
Stringent compulsory licensing provisions have the potential to
render patent protection virtually meaningless, and broad
"licenses of right" apply automatically to food and drug
patents (1999 National Trade Estimate Report on Foreign Trade
Barriers).
India's Drug Policy is an issue of concern for U.S. industries. The policy imposes a stringent price control
regime which adversely affects U.S. companies from a commercial standpoint. There is no system allowing
for automatic adjustment of prices to offset cost fluctuations. With the lack of effective intellectual property
protection coupled with a rigid pricing system, U.S. industries face extreme obstacles to maintain viable
businesses in India. Industries most significantly affected are pharmaceutical companies placing the best and
latest innovative drugs out on the Indian market. Industry representatives have expressed interest in the
Government of India proceeding to the adoption of free
pricing measures (Ibid).
failing to comply with the obligations of the TRIPS Agreement in a number of areas, especially with regard to
local working requirements, patentable subject matter and exclusive patent rights, term of protection, and
protection for test data (USTR Special 301 Press Release, 2000).
Indonesia
requirement to 'work' or exploit the invention domestically as
required by the first paragraph of TRIPS Article 27; the right
to prevent importation of products made by patented processes is available
only if the process is also worked in Indonesia;...there is no
requirement that Government use of patented invention comply with the
provisions of TRIPS Article 31 (Ibid)."
The US pharmaceutical industry expressed concerned over Indonesia's
"TRIPS-inconsistent" patent law which contains compulsory licensing
provisions and restrictive working requirements.
Ireland
Ireland's patent law was not in
conformity with the patent compulsory licensing provision of the
TRIPs Agreement. The law appears to violate the discrimination
and "working requirement" limitations under Article 27.1 of the
TRIPs Agreement and the limitations on the grant of compulsory
licenses under Artical 31 of the TRIPs Agreement. The
Administrations expects that Ireland will comply promptly with
its TRIPS obligations (USTR Special 301 Press Release, 1996).
Israel
allow non-patent holders to manufacture
and export patented pharmaceutical products prior to the
expiration of the patent to seek foreign and Israeli marketing
approval when the patent expires (USTR Special 301 Press Release,
1998-1999)."
The February 1999 amendment to the Pharmacists Law diminished
pharmaceutical patent protection by permitting the parallel
importation of pharmaceuticals and sanctioned the unfair
commercial use of test data (USTR Special 301
Press Release, 1999).
The US government also objected
to the relatively short term of patent extensions
possible TRIPS deficiencies such as failure to protect adequately confidential test
data... and continued concerns about possible adoption of amendments to the Pharmacists Law which would weaken patent protection for
pharmaceuticals and permit the unfair commercial use of test data (USTR Special 301 Press Release,
2000).
Jordan
growing
problem of patent infringement for pharmaceuticals which are
manufactured for both domestic and export markets (USTR Special
301 Press Releases, 1997-1999).
Korea
protection of clinical test data against unfair
commercial use and disclosure,... intellectual property
authorities such that approval is not granted for the launch into the Korean
market of drugs that would infringe valid patents (USTR
Special 301 Press Release, 2000).
US Korea agreement on protection of intellectual property
rights. Apparently negotiated from November
1985 to July 1986.
Kuwait
In December 1998, Kuwait signed a decree banning the
registration of copies of pharmaceutical products still under
patent protection (USTR Special 301 Press Release, 1999).
Lebanon
Netherlands
repeated concern it had
with the Netherlands' failure to provide protection for
proprietary data submitted to the Government for gaining
marketing approval of pharmaceuticals in a manner consistent
with its obligation under TRIPS 39.3 (USTR Special 301 Press
Release, 1998).
New Zealand
New Zealand established the Pharmaceutical Management Agency
(PHARMAC) in 1993 as a "limited liability" company to manage the
purchasing or funding of pharmaceuticals for the Health Funding
Authority (HFA). PHARMAC administers the National Pharmaceutical
Schedule...The Schedule lists medicines subsidized by the
government and the reimbursement paid for each pharmaceutical.
The schedule also specifies conditions for prescription of a
product listed for reimbursement." From its inception, PHARMAC
has been exempted from New Zealand's normal completion laws.
"While New Zealand does not per se restrict the sale of non-
subsidized pharmaceuticals in New Zealand, private medical
insurance companies will not cover unsubsidized medicines.
Thus, PHARMAC effectively controls what prescription medicines
will be sold in New Zealand and, to a large extent, at what
price they will be sold (National Trade Estimate Report on
Foreign Trade Barriers, 1999).
Pharmaceutical suppliers complain that it is difficult to list
new chemical entities and line extension on PHARMAC's schedule.
In general, PHARMAC will not apply a subsidy to a new medicine
unless it is offered at a price lower than currently available
subsidized medicines in the same therapeutic class or unless the
producer is willing to lower its price on another medicine
already subsidized in another class. Pharmaceuticals can also
be delisted if a competing product is selected to serve the
market as the result of a tender or if a cheaper alternative
becomes available and the manufacturer of the original product
refuses to discount its price to that of the lower-priced
alternative. PHARMAC's use of reference pricing, the practice
of doing trade-off deals between classes of drugs, and tendering
practices can negatively affect a company's revenue return on
its intellectual property. The United States and New Zealand
governments have begun a dialogue with the aim of alleviating
impediments to market access from PHARMAC's practices (Ibid).
Oman
Pakistan
Pakistan law protects patents for a duration of sixteen years,
although the government is committed to eventually offering product
patents in accordance with its WTO obligations (National Trade
Estimate Report on Foreign Trade Barriers).
Article 70 of the TRIPS Agreement requires all countries that
do not provide product patent protection for pharmaceuticals...
on January 1, 1995, to establish by that time a means by which
applications for patents for such inventions can be filed, which
is commonly referred to as a 'mailbox'." This is a transitional
provision for developing to countries to enact. "Article 70 of
the TRIPS Agreement also requires WTO members delaying the grant
of pharmaceutical...patent protection to grant "mailbox"
applicants up to five years of marketing exclusivity if such
applicants are granted a patent and marketing approval in
another WTO member and marketing approval in the member
providing marketing exclusivity (Report to Congress on Section 301
Developments, June 1996 - January 1998).
After the US initiated WTO dispute settlement against Pakistan
[April 30, 1996], the Government changed its patent law
[February 4, 1997] and regulations to comply with TRIPS
obligations to implement Articles 70.8 and Articles 70.9 of
TRIPS Agreement, the so-called 'mailbox' and 'exclusive
marketing rights provisions' (USTR Special 301 Press Release, 1997).
fulfilled Pakistan's obligations
under Article 70 and issued No. XXVI of 1997, establishing a
framework for a filing system for patent applications and a
system for the grant of exclusive marketing rights under certain
circumstances (Report to Congress on Section 301 Developments, June
1996 - January 1998).
Regulations governing product registration....act as a barrier to U.S. goods. U.S. industry has expressed
concerns in particular to the Pakistan governments unilateral adoption of a discriminatory policy against
transnational pharmaceutical companies by insisting that they can only register products that are on sale in the
country of incorporation of the respective company. Local companies, however, are not held to such a standard,
as they can register products from any source. This results in a policy that discriminates against the research-based
companies operating in Pakistan. In addition, the time required for the registration process for many
multinational pharmaceutical companies in Pakistan is often 2 years, if not longer. Further, industry has also
expressed concern with Pakistans drug labeling rules, noting that these laws appear to place Pakistan in violation
of the WTO TRIPs rules protecting trademarks (National Trade Estimate Report
on Foreign Trade Barriers).
Paraguay
Panama
Pharmaceutical patents are granted for only 15 years, but can
be renewed for an additional 10 years if the patent owner
licenses a national company (minimum of 30 percent Panamanian
ownership) to exploit the patent (National Trade Estimate Report on
Foreign Trade Barriers, 1999).
Peru
The Philippines
While it has made some progress in recent years, the
Philippines still fails to consistently and effectively protect
intellectual property rights. Significant problems have included
inadequate laws and regulations and insufficient resources of
enforcement. In April 1993,a significant step forward was taken
when the Philippines and the United States signed an agreement to
strengthen protection of intellectual property rights in the
Philippines. As a consequence, the Philippines was moved from the
Administration's Special 301 "priority watch list" to the "watch
list." The Philippine Government has generally complied with the
agreement except for legislative improvements. After considerable
delay, legislation to improve IPR protection was introduced in
the second half of 1995, and the government has certified these
measures as priority legislation. These measures are presently
pending in the Philippine Congress (National Trade Estimate
Report on Foreign Trade Barriers, 1996).
The Philippine Government is a party to the Paris Convention for
the Protection of Industrial Property and the Patent Cooperation
Treaty; it is also a member of the World Intellectual Property
Organization and the World Trade Organization (Ibid).
The present Philippine patent law requires that a compulsory
license be issued two years after registration with the Patent,
Trademark and Technology Transfer Board if a potential item is
not being used in the Philippines on a commercial scale or if
domestic demand for the item is not being met to an "adequate
extent and on reasonable terms." The requirement could impose a
significant burden on patent holders. Other concerns include
exceptions for experimental use of patented inventions,
government use provisions, "intervening rights" for reissuance of
patents, and treatment of plant varieties within the definition
of unpatentable inventions (National Trade Estimate Report on
Foreign Trade Barriers, (1996-1997).
In spite of governmental efforts, including the creation in
February 1993 of the Interagency Committee on Intellectual
Property Rights (IACIPR) as an entity charged with recommending
and coordinating enforcement oversight and program
implementation, serious problems continue to hamper the effective
operation of agencies tasked with IPR enforcement. Insufficient
government resources is a major problem. The IACIPR has
prioritized efforts to eliminate software piracy in government
agencies, but has also undertaken regional efforts within the
Philippines to increase public awareness of the importance and
benefits of IPR protection. Joint efforts between the private
sector and the National Bureau of Investigation (NBI), the
Philippine equivalent of the FBI, have resulted in a series of
successful enforcement actions. The judicial system remains a
stumbling block to more aggressive use of the courts to deter
effectively IPR violations.The designation of 48 IPR courts to
handle IPR violations has done little to speed up the process,
since these courts have not received additional resources and
continue to handle a heavy non-IPR workload. Because of the
lengthy nature of court action, many cases are settled out of
court (National Trade Estimate Report on Foreign Barriers to
Trade, 1998).
A new intellectual property code (R.A. 8293), which
was signed into law on June 6, 1997 and which took
effect January 1, 1998, improves the legal framework
for IPR protection in the Philippines.
R.A. 8293 moves the Philippines to a first-to-file system,
increases the term of patents from 17 to 20 years, and provides
for the patent ability of micro-organisms and non-biological and
microbiological processes. The holder of a patent is guaranteed
an additional right of exclusive importation of his invention. A
compulsory license may be granted in some circumstances,
including if the patented invention is not being worked in the
Philippines without satisfactory reason, although importation of
the patented article constitutes working or using the patent.
Legislation is pending to include plant varieties within the
definition of patentable inventions, and to provide IPR
protection to layout-designs of integrated circuits (National
Trade Estimate Report on Foreign Trade Barriers, 1998).
tentative proposal which
would conflict with TRIPS trademark obligations by restricting
the use of brand names on pharmaceutical products (USTR Special
301 Press Release, 1999).
Poland
Portugal
Portuguese patent law did not
comport with the TRIPS requirement that the term of a patent be
20 years from filing and that this term apply to new patents
granted as well as to those that are still in effect. Portugal
chose to interpret TRIPS as requiring that the 20-year term
apply only to new patents granted after June 1, 1995 not to
existing patents (USTR Special 301 Press Release, 1996).
On August 23, 1996, Government of Portugal issued
Decree-Law 141/96, confirming that all patents that were in
force on January 1, 1996, and all patents granted after this
date based on applications that were pending on January 1, 1996,
will receive a term of protection that lasts 15 years from the
date of grant of the patent or 20 years from the effective
filing date of the patent, whichever is longer (Report to Congress
on Section 301 Developments, June 1996 - 1998).
Portugal and
the United States issued a joint notification of settlement to
the WTO on October 3, 1996.
Qatar
Romania
South Africa
According to the USTR, this new law "appears
to empower the Minister of Health to abrogate patent rights for
pharmaceuticals. It also would permit parallel imports (USTR
Special 301 Press Releases, 1998-1999).
USTR also said that "undisclosed data is not adequately protected
under South African law." In this dispute, the USTR was
complaining about the South Africa government's decision to
permit generic versions of Taxol (paclitaxel) on the market
(several months after the US government protections on
Paclitaxel health registration expired).
USTR also cited South Africa for expressing unwelcome
views at the World Health Assembly:
During the past year, South African representatives have
led a faction of nations in the World Health Organization
(WHO) in calling for a
reduction in the level of protection provided for pharmaceuticals
in TRIPS.
Taiwan
Taiwan's pricing system
discriminates against patented and brand-name pharmaceuticals
that are typically imported by providing a higher rate of return
on "generic" products that are produced in Taiwan. Since Taiwan
producers do not have to pay for research, development and
testing (but are entitled to a high price), they can offer
"unofficial" discounts on their products and thereby enjoy a
significant price advantage over brand-name competitors when
bidding on procurement contracts. Although Taiwan authorities
have eliminated situations where generic drugs receive the same price
as higher quality patented pharmaceuticals, US companies remain concerned
that in some cases, price differentials between generic and name brand
products remain overly narrow. (National Trade Estimate Report
on Foreign Trade Barriers, 1999).
And, the USTR complained about a Taiwan government program
to compensate patients who suffer from adverse reactions to
drugs.
During 1998, the Taiwan Department of Health promulgated a no-fault
compensation scheme for patients who suffer from adverse drug reactions.
While theoritically voluntary, the scheme has built-in incentives
which would put non-participating companies at a competitive disadvantage
in the marketplace. The scheme requires a contribution of 0.1% of sales
revenue from participating firms. U.S. firms claim this duplicates
existing expenses for product liability insurance (Ibid).
Thailand
lack of product patent protection for
pharmaceuticals, a short term of protection, requirements to
manufacture a product or use a process in Thailand, and
excessively broad compulsory licensing provisions. The petition
requested that Thailand amend its patent law promptly to remedy
these deficiencies. PMA also sought transitional or 'pipeline'
protection for pharmaceutical products that have been patented
in other countries, but have not been marketed in Thailand (Report
to Congress on Section 301 Developments, January 1995 - June 1996)."
no protection for
existing patented pharmaceutical products that have not been
marketed in Thailand" and overly broad compulsory licensing
provisions (Ibid). USTR also objected to the newly created "Board of
Pharmaceutical Patents charged with monitoring the prices of
patented pharmaceutical products and establishing criminal
penalties for failure to provide information to that board in
certain circumstances (Ibid).
On October 1, 1993, Thailand established a mechanism to
provide limited pipeline protection for pharmaceuticals (Ibid).
Thailand's Patent Law was amended by the Thai Parliament in
October 1998 and the amended provisions will enter into effect in
1999. Pursuant to the U.S.-Thai IPR Action Plan, the amended law
abolished the Pharmaceutical Review Board. According to initial
observations, businesses in Thailand are generally pleased with
the amendments. However, they foresee problems rising from new
provisions regarding compulsory licensing authorizing the
Director General of the Department of Intellectual Property to
override a patent and issue a compulsory license if the patent is
deemed as not being locally "worked" or if the price is deemed
unreasonably high.
Tunisia
dozens of unauthorized copies of
top-selling medicines [were] in the market. Once a medicine is
manufactured in Tunisia, its importation is restricted hindering
access to the market for US firms
(USTR Special 301 Press Release, 1998).
Turkey
United Arab Emirates (UAE)
Uruguay
Venezuela
Vietnam