[Ip-health] Inside U.S. Trade: U.S. Patent Office Unsure If ACTA Conflicts With Health Care Reform

Judit Rius Sanjuan judit.rius at keionline.org
Fri Oct 29 16:40:20 EDT 2010

Inside U.S. Trade 
An Inside Washington Publication
An exclusive weekly report on major government and industry trade action
from Vol. 28, No. 42, October 29, 2010

U.S. Patent Office Unsure If ACTA Conflicts With Health Care Reform

Officials in the U.S. Patent and Trademark Office (USPTO) believe that the nearly finalized Anticounterfeiting Trade Agreement (ACTA) may contradict a provision in the health care reform act and other laws related to U.S. patents, and are undertaking an analysis to find out if this is the case, sources said.

Despite claims by the Office of U.S. Trade Representative that the government has determined the ACTA would not require alterations to U.S. laws, the USPTO has not yet definitively determined whether that is accurate, sources said.

The USPTO has told stakeholders that it could not definitively say that the current ACTA text is in compliance with U.S. patent law until it is able to complete an assessment of the text, sources said.

The health care reform act limits damages and forbids injunctions for certain instances of patent infringement. If the U.S. agrees to the ACTA as now negotiated, it could mean that this provision would have to be repealed, they said.

USPTO officials told stakeholders attending an Oct. 22 meeting that they had based an initial analysis of the ACTA on the assumption that a draft text would only cover copyright piracy and trademark infringement, sources said. The scope of the agreement has since been expanded to include patents in most sections.

When asked if the U.S. would sign the agreement prior to the outcome of a new review by USPTO, a spokeswoman in the Office of the U.S. Trade Representative said that USTR “has been deeply engaged with expert agencies, including the PTO, the Copyright Office, DOJ [Department of Justice], DHS [Department of Homeland Security], and others, throughout every stage of the ACTA negotiating process, and we certainly expect that to continue.” 

In the ongoing ACTA talks, the U.S. is trying to include a footnote in the ACTA that would explicitly exclude patents from the civil enforcement section.
However, USTR has said that ACTA would stay consistent with U.S. law even if this footnote were not included.

Additionally, informed sources said U.S. negotiators were prepared to sign the agreement at the final round of negotiations in Tokyo without assurances that this footnote would be included.

These sources said the European Union had prevented the agreement from being signed because of its reservations in other areas of the text that it wished to see resolved.

One source with knowledge of the meeting with USPTO and Department of Commerce officials said the officials recognized that another analysis of the text would need to occur before the ACTA is signed. This source said officials also admitted that some laws had passed since their last analysis, such as the heath care reform bill, and it had not been considered if those new laws would create inconsistencies with the text of the ACTA.

Another source said Commerce officials at the meeting said that a new analysis of the agreement would need to occur if patents are included in the civil enforcement section of the agreement.

The health care reform act sets out provisions that limit damages and injunctions for patent infringement in the context of the development of generic biological drugs. Companies that patent a biological drug can choose to list their patents so that generic companies can determine the cost effectiveness of creating a generic version of that drug when it is authorized to do so.

Sources said this provision was passed because the development of generic biological drugs is expensive to undertake and companies need adequate study of a patent to determine if it is cost effective to produce a generic version of the drug.

Under the measure, a patent holder cannot pursue any remedy for an infringement if it did not disclose its patent. If a patent holder has disclosed the patent and alleges there has been an infringement but has not, in a timely manner, addressed the alleged infringement, the right holder is limited to receiving a “reasonable royalty” for the infringement.

Sources said the ACTA language on injunctions directly contradicts this new law because the ACTA requires that an injunction as a remedy for infringement must apply or, wherever inconsistent, declaratory judgments or adequate compensation must be made available.

Critics argue this would contradict the provision that a right holder cannot pursue any remedy, injunctions or damages or is limited to a reasonable royalty for an infringement of a biological drug patent if it has not disclosed its patent or addressed an alleged infringement in a timely manner.

Additionally, sources said the U.S. likely wants patents excluded from this ACTA section because it could also contradict a separate U.S. law that limits injunctions and damages in the case of an unauthorized use of a patented surgical method during a medical procedure.

Sens. Bernard Sanders (I-VT) and Sherrod Brown (D-OH) sent a letter to USPTO on Oct. 19 requesting an examination of the ACTA’s consistency with these laws by the USPTO.

USTR has supported its claim that the ACTA is consistent with U.S. law by highlighting Article 1.2 as a safeguard for instances of potential inconsistencies, sources said. The article that “each party shall be free to determine the appropriate method of implementing the provisions of this agreement within its own legal system and practice.”

This has caused legislators in other countries to question if ACTA is a binding agreement. In the European Parliament, French Socialist member Francoise Castex has tabled a formal question to the European Commission asking if ACTA is legally binding based on the interpretation by some that the U.S. is prepared to sign an agreement that counteracts its own domestic laws.

“Could the Commission clarify to what degree ACTA is a binding or voluntary agreement, considering that the U.S. apparently does not believe its laws must be compliant with ACTA?” Castex asks in her submission. “Can this be interpreted as allowing EU member states as well not to change any of their legislation which does not comply with ACTA?” - Adam Behsudi

Copyright 2010 Inside Washington Publishers. Reprinted with permission.

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