[Ip-health] Threat of Pharmaceutical-Related IP Investment

Baker, Brook b.baker at neu.edu
Mon Sep 23 06:59:55 PDT 2013


Thanks, Bryan, for your suggestion that 4(b) may be as good as we can get,
but I hope it is not.  My proposal is not so much this time that there be
no investment clause coverage of health regulations, but that there be no
investment clause coverage of IP-related claims.  However, upon
reflection, we probably do need something even stronger with respect to
public-interest-oriented regulation, including health.  Maybe you could
help us move this project forward by suggesting how we can defend against
claims that:  (1) rare circumstances are not present, (2) that regulations
are not discriminatory, or (3) that the regulations are designed and
applied to protect legitimate public welfare objectives.  The reason that
health/IP advocates are concerned is that the US and Pharma are willing to
twist any action into some they called discriminatory.  Thus, Members of
Congress and others call India's patent decisions discriminatory and
protectionist even when they are fully TRIPS compliant, and Eli Lilly
calls Canada's promise doctrine discriminatory even though it is the
result of judicial decisions made after patent challenges by third party
generics.  US and European pharmaceutical patent holders are always going
to get the bulk of the bad news on patent related matters because they own
the vast bulk of such patents!

On your second point, concerning direct expropriation, thanks for pointing
out that it was incorrect.  Although the history of direct expropriation
lies in physical seizures, it has been extended as you suggest.  Do you
think there's any merit to Eli Lilly's claim that there is direct
expropriation in the case of a patent invalidation decision?

Brook

Professor Brook K. Baker
Northeastern U. School of Law
Affiliate, Program on Human Rights and the Global Economy
400 Huntington Ave.
Boston, MA 02115 USA
Honorary Research Fellow, University of KwaZulu Natal, Durban, S. Africa
Senior Policy Analyst Health GAP (Global Access Project)
Alternate NGOs Board Member UNITAID
(w) 617-373-3217
(cell) 617-259-0760
(fax) 617-373-5056
skype: brook_baker
b.baker at neu.edu




On 9/23/13 1:44 AM, "Bryan MERCURIO (Faculty of Law)"
<b.mercurio at cuhk.edu.hk> wrote:

>Dear Brook
>
> 
>
>While I agree with you that Eli Lilly's claim against Canada should
>fail, I do not entirely agree with your analysis. In part II of your
>paper, I find your analysis of the draft TPP chapter (essentially, the
>US submission from 2011 rather than agreed upon text) at times to be
>unfairly negative. Language such as that of 4(b) [also seen in the
>KORUS, but not in earlier treaties] is a huge win for public health and
>the environment, and I fear the constant press without recognizing gains
>will eventually undermine the cause as governments tune out - no matter
>what they do it will never be enough. The intent of the language is
>clear, and it is worded as strongly as it possible could be:
>
> 
>
>"Except in rare circumstances, non-discriminatory regulatory actions by
>a Party that are designed  and applied to protect the legitimate public
>welfare objectives [23 For greater certainty, the list of legitimate
>public welfare objective in this subparagraph is not exhaustive] such as
>public  health, safety, and the environment, do not  constitute indirect
>expropriations."
>
> 
>
>Really, if this is not good enough what is it that you want? What would
>satisfy you? A blanket exception whenever the word "health" is used in a
>regulation?  So, while a provision such as "foreign investors cannot
>invest in Boston" would violate NT and MFN but "foreign investors cannot
>invest in Boston, for health reasons" would be immune to challenge? Of
>course, the language is no panacea or magic bullet, and it does shift
>the argument to whether something is a "rare circumstance",
>"legitimate", and actually a "public health/environment/etc" measure,
>but it's a pretty clear statement of intent from the parties.
>
> 
>
>I should also mention your claim that direct expropriation is "limit[ed]
>...to governmental seizure of real property" is flat out incorrect. If
>the US government seized the trademarks of foreign companies and
>distributed them to US companies, there would be a direct violation of
>the relevant treaties. Full stop. While the claims we have seen relating
>to IPRs (i.e. tobacco) are indirect expropriations, there is no
>limitation.
>
> 
>
>This is a case worth publicizing, and it should be receiving as much
>attention as the Indian cases of Glivec and Novartis (hello, NGOs!), but
>careful attention must be paid not to conflate issues or fail to
>recognize how treaty language is moving in the pro-health/environment
>direction.
>
> 
>
>Kind regards
>
> 
>
>Bryan
>
> 
>
> 
>
> 
>
> 
>
>Bryan Mercurio
>
>Professor and Vice Chancellor's Outstanding Fellow of the Faculty of Law
>
>Associate Dean (Research)
>
>The Chinese University of Hong Kong
>
>Shatin, NT
>
>HONG KONG
>
>Tel: +852 3943 1139
>
>Faculty webpage: http://www.law.cuhk.edu.hk/people/mercurio-bryan.php
><http://www.law.cuhk.edu.hk/people/mercurio-bryan.php>
>
>SSRN author page: http://ssrn.com/author=346439
><http://ssrn.com/author=346439>
>
> 
>
> 
>
> 
>
> 
>
>----------------------------------------------------------------------
>
> 
>
>Message: 1
>
>Date: Fri, 20 Sep 2013 14:34:03 +0000
>
>From: "Baker, Brook" <b.baker at neu.edu>
>
>To: IP-health <ip-health at lists.keionline.org>,
>
>                "healthgap at lists.critpath.org"
><healthgap at lists.critpath.org>,
>
>                "internationaltreatmentpreparedness at yahoogroups.com"
>
>                <internationaltreatmentpreparedness at yahoogroups.com>
>
>Subject: [Ip-health] Threat of Pharmaceutical-Related IP Investment
>
>                Rights in the Trans-Pacific Partnership Agreement: An
>Eli Lilly v.
>
>                Canada Case Study
>
>Message-ID: <CE61D516.437F0%b.baker at neu.edu
><mailto:CE61D516.437F0%25b.baker at neu.edu> >
>
>Content-Type: text/plain; charset="Windows-1252"
>
> 
>
>Threat of Pharmaceutical-Related IP Investment Rights in the
>Trans-Pacific Partnership Agreement: An Eli Lilly v. Canada Case Study
>
> 
>
>Brook K. Baker
>
> 
>
> 
>
>After losing two patent cases before the appellate courts of a Western
>democracy, should a disgruntled foreign multinational pharmaceutical
>company be free take that country to private arbitration claiming that
>its expectations of monopoly profits had been thwarted by the courts?
>decisions? Should governments continue to negotiate trade agreements
>where expansive Intellectual Property-related investor rights and
>investor- state dispute settlement (ISDS) are enshrined into hard law?
>Should we be concerned about the impact of billion dollar arbitral
>judgments on the willingness of governments to regulate pharmaceutical
>companies and to corral their efforts to expand their patent and data
>protection monopolies? Ultimately, should policy makers be concerned
>about the impact of investor rights on the affordability and
>accessibility of medicines both in rich and low- and middle-income
>countries?
>
> 
>
> 
>
>The answers to these questions become more urgent given proposed IP and
>Investment Chapters in the Trans- Pacific Partnership Agreement (TPP)1
>and the recent NAFTA investor dispute notifications by Eli Lilly against
>Canada.2 The Eli Lilly case clarifies the risks of including IP rights
>in investment chapters and the boundary- pushing claims that can be
>brought on behalf of foreign pharmaceutical companies.
>
> 
>
> 
>
>4:4 Investment Treaty News 8-10 (2013), available at,
>http://www.iisd.org/pdf/2013/iisd_itn_sept_2013_en.pdf
>
> 
>
> 
>
> 
>
> 
>
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