[Ip-health] Euractiv - ACTA: a flawed agreement

Sophie Bloemen Sophie at haieurope.org
Tue Mar 13 00:55:58 PDT 2012





Published 08 March 2012 - Updated 09 March 2012

The Anti-Counterfeiting Trade Agreement (ACTA) has been characterised by
a flawed process of negotiations based on a flawed rationale, which has
resulted in a flawed agreement, argue Sophie Bloemen and Tessel Mellema
from Health Action International Europe. One of the concerns now is that
- designed to be a global norm-setting instrument - ACTA could deter
generic competition of medicines around the world.

Sophie Bloemen is advisor and Tessel Mellema is project officer to
Health Action International Europe. Both work on HAI's trade, innovation
and access to medicines campaigns. The following is a summary of a
policy brief that can be found here
Policy-Brief-ACTA-and-Access-to-Medicines.pdf> .

ACTA's flawed process: a problem because ACTA strengthens substantive

Contrary to the claims of its proponents, ACTA not only enforces
existing Intellectual Property Rights (IPRs), it strengthens the
substantive rights of IP rights holders and goes well beyond the
European Union (EU) acquis and the TRIPS Agreement. This expansion of
rights makes ACTA's lack of transparency and accountability even more
urgent: ACTA negotiations have not only bypassed existing multilateral
institutions, like the WTO and WIPO, but also the European Parliament,
and the voice of broader public interest groups.

Further, the establishment of the 'ACTA Committee' - designed to
function as a new plurilateral institution and to operate behind closed
doors - gives rise to serious concerns for the future accountability and
transparency of global IPR enforcement norm-setting.

ACTA's flawed rationale: confusion between counterfeit and generic

The rationale behind ACTA, adopting the label 'anti-counterfeiting' and
linking it to public health, is frankly misleading. ACTA not only deals
with counterfeits and pirated products, but targets many other kinds of
IPR infringements. This contributes to a damaging confusion between
crucial legitimate generics and counterfeit medicines. Counterfeit
medicines are defined by the World Health Organisation (WHO) as
'medicines that are illegally and deceptively mislabeled with respect to
identity and/or source'. TRIPS limits its definition of what constitutes
counterfeit to clear cases of such fraud: the use of a sign that is
identical to the brand owner's trademark. It is only this specific type
of IPR infringement that can be directly linked to trade in dangerous
counterfeits, patent infringement and civil trademark infringement have
in principle nothing to do with this.

By conflating specific IPR enforcement measures to combat counterfeits
with other types of IPR enforcement, the risk of right-holders using
these measures to target legitimate generics is increased. This risk
should not be taken lightly: the lesson learned from the DG Competition
Pharmaceutical Sector inquiry in 2009 is that IPR enforcement provisions
have been abused to delay generic competition and hamper innovation.
This has cost European health budgets and consumers billions of extra
euros. The increase in global IPR enforcement proposed by ACTA does not
therefore serve public health or EU consumers by definition.

Flawed outcome: ACTA's implications for access to medicines by chilling
generic competition.

Although the exact impact of ACTA measures will depend on how signatory
States use the limited space awarded for implementation, it is certain
to have a chilling effect on generic trade. This happens especially when
the threat or risk of sanctions or litigation becomes too high for
generic companies or producers of active ingredients to engage in the
production or trade of legitimate generics. ACTA offers IP right-holders
several such far-reaching enforcement rights.

As mentioned, the scope of enforcement measures goes way beyond
counterfeiting - which is the willful use of an identical trademark. For
example, in ACTA's section on general civil IPR enforcement measures,
patents are still in by default. Moreover, civil trademark infringements
are included as a ground both for civil IPR enforcement measures and to
detain generics at the border - whether destined for export, import or
just passing in transit.

The lesson learned from Dutch & German seizure cases (2009) is that
customs authorities' capacity to stop generics should be limited to
cases of alleged counterfeiting. A broader scope strengthens IP
right-holders' substantive rights and increases the risk and threat of
right-holders abusing their right to request the detainment of goods at
the border to hamper trade in generics. 

Another problem is that ACTA's broad third party liability puts a large
group of third parties at risk of criminal and civil enforcement
measures: this group may even include suppliers of active ingredients
for generics or NGOs procuring legitimate generics for treatment. This
could act as a significant deterrent to anyone involved in the provision
of affordable generic medicines.

Both the broad scope of IP rights, and broad third party liability,
makes ACTA's bias in favour of IP right-holders of great concern.
Especially since this bias is mirrored by an absence of sufficient
abuse-deterrence mechanisms. Two biased enforcement provisions stand out
in their potential chilling effect on generic competition: Firstly, ACTA
puts parties involved in generic trade at risk of very high damages.

This risk may work as a disincentive for competitors to explore the
inherently grey area of IP infringement. Secondly, ACTA provides the
right-holder with the strong weapon of provisional measures - allowing
them to issue a prompt injunction or request seizure of generics,
without the other party being heard and without a full judicial review
by the court - while providing hardly any procedural guarantees for the

Future implementation: special concern for impact developing countries

Considering ACTA's new IPR enforcement standard is intended to become
the global norm, concerns become all the more immediate. It is likely
that developing countries will not use the available room for
implementation to adapt standards to local needs, as there will be
pressure not to do so from ACTA's main drivers. The risk of chilling
generic competition is even greater in the absence of proper competition
laws to punish abuse and the resulting higher prices will have an
unacceptable impact on the affordability of medicines.  Finally, the
costs of implementation of this new body of law will present a burden
for the limited public budgets of developing countries. 

Increasing IP right-holders' rights requires a transparent and
participatory approach with a clear view on the interests that the EU
wishes to protect by such expansion and the impact on society. Instead,
ACTA uses a blurred rationale and an undemocratic and opaque process to
establish a global new standard of IPR enforcement, which is already
reason for serious concern. In addition ACTA offers IP right-holders
several far-reaching enforcement rights that could have a chilling
effect on generic competition, crucial for ensuring access to affordable
medicines around the world. The conclusion can only be that ACTA is
unacceptable and the EU should not ratify it."


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