[Ip-health] News: Bridges Weekly (ICTSD)- The impact of EU Regulation 1383/2003 on ACP countries

Terri - Louise Beswick Terri at haiweb.org
Thu Sep 23 03:38:56 PDT 2010


The impact of EU Regulation 1383/2003 on ACP countries

 

by Xavier Seuba

 

Recent seizures of generic medicines have drawn attention to border
measure that go beyond the minimum standards set by the Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPS), and
particularly the implications for accessing medicines in developing
countries. Xavier Seuba analyses one such EU regulation, which has been
transposed to EU free trade agreements, including the ACP EPAs.

 

>From 25 March to 7 June of this year, the European Union held
consultations on the review of EU customs enforcement of intellectual
property rights (IPRs) legislation, which sought contributions from IPR
holders, economic operators providing services related to international
trade of goods and consumers.

 

The consultation included questions on the situations in which customs
authorities should be competent to take action and the range of
intellectual property rights under control - topics that have occupied
most of the recent debates on the enforcement of IPR and border
measures.

 

Several questions should be raised regarding the EU consultation and the
Council Regulation (EC) 1383/2003 on customs action against goods
suspect of infringing certain intellectual property rights.

 

One issue that should be raised is whether non-EU countries should also
be consulted in this process. Although the ultimate goal of the EU legal
framework and actions is the protection of intellectual property rights
granted in EU member states, the European legal system on intellectual
property and customs has effects on third countries. Therefore, it would
seem natural to take into account the views of those affected.

 

The trade implications of EU IP border measures The case for consulting
third countries arises mainly from the effects of Regulation 1383/2003
on international trade. Specifically, the EU Regulation provides the
basis for EU border officials to seize IP protected products in transit
through Europe. It thus permits the control of markets where IP holders
cannot exercise their ius prohibiendi on the same product. Moreover, EU
legislation on IPRs and border measures is being exported to developing
countries' legislation through the conclusion of free trade agreements
or association agreements, paving the way for similar measures outside
of the EU.

 

Essentially, Regulation 1383/2003 enables IPR holders to detain
IPprotected goods in transit (in fact, products entering in contact with
the EU soil), regardless of the IP status of the goods in the countries
of origin and destination. This is the legal basis that has permitted
the EU to detain generic drugs transiting the EU en route from a
developing country to another developing country. Indeed, as
demonstrated by the ongoing WTO dispute settlement between the EU, on
the one hand, and Brazil and India, on the other, all countries with
commerce transiting the EU can be affected by the EU border measures
regime.

 

Implications for the ACP-EU EPAs

 

EU Regulation 1383/2003 is the basis of the text (and frequently the
text itself) of the provisions on border measures and IP that the EU
proposes in trade agreement negotiations, including with the ACP
countries over Economic Partnership Agreements (EPAs). Draft texts
circulated and the final agreement between the EU and the CARIFORUM
reflect the transposition of the EU regulation on border measures to
countries in the ACP group of states. In fact, this is something that
the EU has already done in other contexts, such as the negotiations to
conclude association agreements and free trade agreements with non-ACP
Countries. For instance, the European legal regime has been
substantially transferred to the final text of the 2009 free trade
agreement between the EU and South Korea, and partially adopted in the
trade deals recently concluded in 2010 between the EU, Peru and
Colombia.

 

To appraise the changes implied by the EU legislation it is useful to
compare the TRIPS regime with the legal framework set up by EU
Regulation 1383/2003. TRIPS Article 51 lays down the obligation to
control the importation of goods protected by trademarks and copyrights.
By contrast, Regulation 1383/2003 permits the EU to control all goods
protected by almost any intellectual property right as long as these
goods pass through EU territory. This implies that both goods that have
been cleared by customs (imported, exported and reexported goods) and
goods that have not been cleared by customs (for instance, goods under
suspensive procedure or goods that merely transit the EU customs
territory) are subject to control.

 

CARIFORUM states have already accepted a text containing almost the same
wordingof the EU Regulation 1383/2003 in their EPA with the EU. In the
case of the ongoing EPA negotiations with the other ACP regions, some
draft texts that have been leaked suggest a similar intent by theEU.
Article 163 of the EU - CARIFORUM agreement establishes that states
shall adopt procedures to permit a right holdewho has grounds for
suspecting that the importation, exportation, re-exportation, entry or
exit of the customs territory, placement under a suspensive procedure or
placement under a customs-free zone or a customs-free warehouse of goods
infringing an intellectual property right may take place, to lodge an
application with competent authorities for the suspension by the customs
authorities of the release into free circulation or the retention of
such goods. This text, which is a major departure from the TRIPS
Agreement, is nearly identical to ERegulation 1383/2003, with the
exceptiof some wording (for instance, "retentiois replaced by
"detention") and the IP categories covered: it includes
trademarks,copyrights, geographical indications and designs, as well as
a compromise to collaborate to expand the scope of thi"definition to
cover goods infringing all intellectual property rights." Importantly,
patents are not included.

 

WTO compatible?

 

In response to possible criticism to the EU-CARIFORUM text on border
measures, it could be pointed out thatthe signatory parties of the
ACP-EC Partnership Agreement are working to strengthen their cooperation
in the IP field. The preparation of laws and regulations for the
protection and enforcement of intellectual property rights was among the
areas that they agreed to extend cooperation pursuanthe Cotonou
Agreement.

 

It has also been noted that the TRIPS article 1.1 establishes that
Members "may, but shnot be obliged to, implement in their law more
extensive protection than is required by this Agreement." Therefore, a
possible conclusion would be that CARIFORUM Members and the EU, in
fulfillment of the Cotonou Agreement, have made use of this powerto
adopt a more extensive protection.

 

Nevertheless, an extension of TRIPS is conditional upon not contravening
the TRIPS provisions. The expansion of thetitle holders' rights to
include the powto control the transit of products not affecting the
market where the rights have been granted conflicts with the TRIPS and
the GATT. Indeed, the EU Regulation 1383 compromises numerous articles
and important principles enshrined or recognised both in the TRIPS and
in the GATT: the territoriality of IPR, the freedom of transit principle
and the rights conferred by a patent, to name a few. Moreover, leaving
aside legal considerations, it is difficult to see why ACP countries
should incur the costs of the enforcement and assume the welfare effects
that a regulation copying the EU Regulation 1383 would imply.

 

Both the legality and the convenience of the EU border measures regime
should be carefully evaluated by ACP countries. In principle, there is
nothing justifying a major departure from the TRIPS text. In fact, the
model upon which the EU proposals are based is under scrutiny at the WTO
and an internal EU process for reviewing it is ongoing. Given the
present controversies surrounding the acceptable extent of the
regulation on border measures concerning goods allegedly infringing IP
rights, and given the trade disrupting effects of the EU regime, ACP
countries negotiating EPAs with the EU should refuse substantial changes
to the TRIPS regime. Nevertheless, if they accept introducing relevant
changes, attention should be paid to the implications of the different
customs situations and to the nature of each one of the different IP
categories.

 

Xavier Seuba is Senior Lecturer of International Public Law at the
Pompeu Fabra University, Barcelona. This article is partially based on a
recent report entitled "Border Measures Concerning Goods Allegedly
Infringing Intellectual Property Rights: The Seizures of Generic
Medicines in Transit", commissioned by the ICTSD, available at:
http://ictsd.org/i/publications/53747/

 

Notes

 

1 Review of customs legislation on enforcement of intellectual property
rights,
http://ec.europa.eu/taxation_customs/common/consultations/customs/
ipr_2010_03_en.htm (accessed June 2010).

 

2 Council Regulation (EC) No 1383/2003, of 22 July 2003, concerning
customs action against goods suspected of infringing certain
intellectual property rights and the measures to be taken against goods
found to have infringed such rights, OJ (2003) No L 196/7.

 

3 Vid., European Union and a Member State - Seizure of Generic Drugs in
Transit, DS40,

 

http://www.wto.org/english/tratop_e/dispu_e/cases_e/ ds408_e.htm (August
2010).

 

4 See last phrase of article 163 footnote 2(c). 5 Article 46 of the
Partnership Agreement ACP-EC, signed in Cotonou on 23 June 2000, Revised
in Luxembourg on 25 June 2005, and Revised for Second Time in Brussels
on 10 March 2010.

 

http://ictsd.org/i/news/tni/85168/




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