[Ip-health] New leak of TPP consolidated text on intellectual property provides details of pandering to drug companies and publishers

Claire Cassedy claire.cassedy at keionline.org
Thu Oct 16 05:02:03 PDT 2014


New leak of TPP consolidated text on intellectual property provides details
of pandering to drug companies and publishers

Submitted by James Love on 16. October 2014 - 7:03

For more information:
James Love, Knowledge Ecology International
email: james.love at keionline.org, +1.202.361.3040

The May 16, 2014 version of the consolidated negotiating text for the
Intellectual Property Chapter for the Trans-Pacific Partnership (TPP)
agreement is a long, complex document that taken as a whole is designed to
expand and extend monopolies on knowledge goods, including in particular
publisher-owned copyrights, patents on inventions, and monopoly rights in
data used to register new drugs, vaccines and agricultural chemical

See Wikileaks release here: https://www.wikileaks.org/tpp-ip2/ [3]

The document is 77 pages long. The last 11 pages include 7 annexes,
addendums, non-papers and place holders. The text contains 32,018 words,
including 265 footnotes, and 649 brackets, including one bracket in the

In contrast, the WTO TRIPS Agreement is 33 pages, with 13,259 words and 14

This is the most significant leak of the intellectual property text since
last year, when Wikileaks published the August 30, 2013 version of the
text. (KEI comments on the leak of the August 30, 2013 text are here:
http://keionline.org/node/1825 [4]).

Our first impression in reading the document is the extent to which the
United States has sought hundreds of changes in intellectual property
norms, some small and subtle, others blunt and aggressive, nearly of all of
which favor big corporate right holders, and undermine the public’s freedom
to use knowledge.

It will take awhile for the public to sift through the text and fully
appreciate the ramifications of the proposals for new regulations on the
use of knowledge goods. It is astounding that the U.S. Senate and U.S.
House of Representatives support the secrecy surrounding this negotiation,
which has been imposed by the Obama White House. Without the disclosure by
Wikileaks, there would be no opportunity to see and debate the actual
provisions in the text.

Pandering to corporate right holders, Ambassador Michael Froman, on behalf
of the United States, is favoring binding obligations for 95 years of
copyright protection for corporate entities, restrictions on copyright
exceptions allowed by the Berne Convention, new controls and liability for
use of copyrighted works in in-house intranet online services, damages for
infringements based upon the “suggested retail price” of goods, expanded
third parties liability for infringement, a requirement that compulsory
licenses of patents be subject to a restrictive three-step test [see
discussion below], 12 years of monopoly in data used to register biologic
drugs and vaccines, expanded scope of patent protection for pharmaceutical
drugs, vaccines and medical devices, extensions of patent terms beyond 20
years, and obligations of drug regulatory agencies to evaluate and enforce
assertions that registered drugs and vaccines infringe on evergreening
patents, to mention only a few issues in the 77 page document.

While pushing for radical expansions of the global standards for
intellectual property rights, Ambassador Froman is also trying to narrow or
eliminate the safeguards found in other intellectual property right
agreements. For example, the United States is blocking text that preserves
the ability of states to control anti-competitive practices - even though
similar language is found in the WTO TRIPS agreement and in other bilateral
trade agreements the United States has previously signed.

All of these changes become even more highly significant, because the TPP
agreement will be subject to ISDS, a system that allows private investors
to sue governments over the agreement -- something not allowed in the WTO
agreement on intellectual property rights.

Ambassador Froman’s proposals on behalf of the United States would not only
lock-in many of the worst and most controversial features of U.S. law and
export them around the world, but would subject the United States taxpayers
to liability from lawsuits from drug companies and publishers over several
provisions in U.S. law that are plainly contrary to proposed text in the
TPP. For example, the US government limits compensation for the
infringement of patents, copyright and other intellectual property rights,
under 28 USC 1498, for uses “by or for” the US government. These
limitations on damages are important for the US Department of Defense, and
the NIH’s National Library of Medicine, as well as other federal agencies.
And, state governments are not subject to lawsuits for patent or copyright
damages, under a series of US Supreme Court decisions that have been
important not only to state agencies, but also to state universities. While
the U.S. exclusion of damages for infringement by state governments are
inconsistent with the WTO agreement, they have not been challenged in the
WTO. But the TPP will allow Paramount, Time Warner, Pfizer, Merck and
others including countless patent and copyright trolls to sue the United
States over the limitations on damages from federal and state governments.
(Note that drug companies can hold patents in any foreign country, to
create standing to sue under ISDS) . All this is made worse by the of
expansion rights required by the agreement, and the higher standards for

Ambassador Froman’s proposals also undermine a key feature of the
Affordable Care Act (ACA), the provision in the law that limits damages for
infringement of patents not disclosed to competitors who register
biosimilar products.

Always worth mentioning is the fact that USTR is continuing its efforts to
prevent countries from limiting certain types of pharmaceutical drug
patents that are used to extend drug monopolies (evergreening patents).

US/JP propose; CL/MY/PE/SG/VN/BN/AU/NZ/CA/MX oppose: 2bis. For greater
certainty, a Party may not deny a patent solely on the basis that the
product did not result in an enhanced efficacy of the known product when
the applicant has set forth distinguishing features establishing that the
invention is new, involves an inventive step, and is capable of industrial

Developing countries are being asked to accept very restrictive standards
for intellectual property in return for transition periods that defer the
harm until current governments are now longer held accountable. This will
be a short-term benefit in exchange for a long term harm.

Among the most significant changes from the August 30, 2013 version of the
text (the last version leaked) are the modifications to the articles in the
TPP that regulate exceptions to the exclusive rights in patents. In the August
2013 version
 [5] of the TPP IP Chapter, there were four articles setting out the
standards for exceptions to patent rights . This included (1) a general
3-step test based upon Article 30 of the TRIPS agreement, (2) a Regulatory
Review Exception, sometimes referred to as the “Bolar” provision, (3) an
experimental use exception, and (4) a provision on “Other Use Without
Authorisation of the Right Holder,” which referenced Article 31 of the
TRIPS. In the August 30, 2013 version only (1), the 3 step test, was out of

See: August 30, 2013 text: Page 30-31
Article QQ.E.5: {Exceptions}
Article QQ.E.5bis: {Regulatory Review Exception}
Article QQ.E.5ter: {Experimental Use of a Patent}
Article QQ.E.5quater: {Other Use Without Authorisation of the Right Holder}

In the May 16, 2013 version of the text, there are now just two articles on

See: May 16, 2013 text: Page 25.
Article QQ.E.4: {Exceptions}
Article QQ.E.1362 63: {Exceptions / Regulatory Review Exception}

The most shocking change in the text is the elimination of this article
from the August 30, 2013 text:

Article QQ.E.5quater: {Other Use Without Authorisation of the Right Holder}

Why was this important? Because QQ.E.5quater, on "Other Use Without
Authorisation of the Right Holder" provided that "Nothing in this Chapter
shall limit a Party's rights and obligations under Article 31 of the TRIPS
Agreement or any amendment thereto."

Article 31 of the TRIPS is the provision under which all developing country
compulsory licenses have been issued on drug patents.

By eliminating QQ.E.5quater, Ambassador Froman has created a new legal
framework that will require that all compulsory licenses on patents will be
subject to the restrictive language of TPP Article QQ.E.5: {Exceptions}.
This QQ.E.5 language (familiar to many as taken from Article 30 of the
TRIPS agreement), reads as follows:

Each Party may provide limited exceptions to the exclusive rights conferred
by a patent,provided that such exceptions do not unreasonably conflict with
a normal exploitation of the patent and do not unreasonably prejudice the
legitimate interests of the patent owner, taking account of the legitimate
interests of third parties.

How does this change things? At present, a WTO member that wants to justify
an exception or limitation on the exclusive rights of a patent will often
justify that limitation under Article 30 OR Article 31 of the TRIPS. These
are two separate paths for exceptions. How do they differ? Article 30 has
the nice feature that there are no rules on procedures, and no requirement
to pay money to right holders. For this reason, Article 30 is typically
used to justify the exceptions that involve no money going to the right
holder, such as the personal use exception, or the research or reverse
engineering exceptions. But Article 30 is also restrictive, and risky,
because the exception cannot "unreasonably conflict with a normal
exploitation of the patent" or "unreasonably prejudice the legitimate
interests of the patent owner."

For compulsory licensing, governments typically rely upon Article 31 of the
TRIPS, which sets out in 642 words, a set of procedures that must be
followed, limitations on the uses of compulsory licenses, and standards for
remuneration of patent holders. Article 31 is seen as more complex, and
less risky, because if you follow the rules in Article 31, the compulsory
license cannot be challenged.

What Ambassador Froman is proposing in the TPP, and other TPP negotiators
have agreed to, is to require that all compulsory licenses be subject to
the so called 3-step test, which is risky and restrictive. This is a huge
change in global norms on compulsory licensing of patents, and perhaps the
single most consequential proposal in the TPP as regards patent rights.

USTR has defended its actions by pointing to the following Articles:

Article QQ.A.6: {Declaration on the TRIPS Agreement and Public Health}
Article QQ.A.7: {Understanding Regarding Certain Public Health Measures}

Article QQ.A.7 is a selective and abridged version of two WTO agreements on
access to medicines, and includes some helpful language, such as

"the obligations of this Chapter do not and should not prevent a Party from
taking measures to protect public health . . .


"this Chapter can and should be interpreted and implemented in a manner
supportive of each Party's right to protect public health and, in
particular, to promote access to medicines for all.

However, the TPP quotes do not make reference to other parts of the 2001
Doha Declaration on TRIPS and public health, such as the "clarifications"
of the use patent exceptions in Paragraph 5 of the 2001 document.

More significant, from a legal point of view, is the fact that the whole
TPP Chapter is full of things such as patent extensions, exclusive rights
in regulatory test data, obligations to expand the patenting of minor
innovations, and linkage between patents and drug registration, all of
which make it nearly impossible to have access to medicine for all. Like
all of these other measures, the new restrictions on compulsory licensing
do not just disappear because of Articles QQ.A.6 or QQ.A.7.

Note also that Ambassador Froman continues to block agreement on other
important safeguards, such as the bracketed text to protect the right to
control anti-competitive practices, a topic addressed in Article 40 of the
TRIPS, but opposed by Ambassador Froman in the TPP.

As noted above, some developing countries seem to be giving up a lot in
terms of the substance of the agreement in return for temporary transition
periods, a strategy the United States and others used to get developing
countries to agree to the TRIPS Agreement. These transition periods will be
apparently fixed in number of years, and not based upon actual development
milestones, or evaluation of access and affordability concerns within a

Overall, what does this agreement say about President Obama and USTR head
Ambassador Froman, as compared, for example, to President GW Bush and his
two USTR heads, Robert Zoellick and Susan Schwab?

President Bush and his trade team did push restrictive language in several
trade agreements, but nothing remotely as bad as the current TPP text.
President Bush did agree to the 2001 Doha Declaration on TRIPS and Public
Health, published the full text of the FTAA negotiating text, and in May
10, 2007, rolled back requirements for developing countries to implement
patent extensions, linkage and test data monopolies -- positions that are
being reversed in the TPP.

[1] http://keionline.org/user/4
[2] mailto:james.love at keionline.org
[3] https://www.wikileaks.org/tpp-ip2/
[4] http://keionline.org/node/1825
[6] http://keionline.org/sites/default/files/tpp-ip2-chapter-16May2014.pdf

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