[Ip-health] India’s patent law may face legal hurdle at WTO

Tahir Amin tahir at i-mak.org
Fri Jun 12 07:11:05 PDT 2015


D. Ravi Kanth <http://www.livemint.com/Search/Link/Author/D.%20Ravi%20Kanth>

*Geneva:* India’s amended national patent law, particularly a provision
which defines what inventions are, could face a legal challenge arising
from an aggressive move by the US and Switzerland.

 The move, which could hurt India’s pharma companies, arises from efforts
by the US and Switzerland to terminate the existing moratorium on
non-violation complaints to the World Trade Organization’s trade-related
intellectual property rights (TRIPS) agreement.

Non-violation complaints refer to complaints by a WTO member that claims
another member’s actions or policies caused it a loss, even if there is no
violation of a WTO agreement. Developing countries such as India are
understandably wary of these complaints. Currently, there is a moratorium
on such complaints till later this year.

The US, which has always opposed the moratorium, has specifically raised
concerns about the section 3(d) in the amended Indian patent Act on the
ground that it “may have the effect of limiting the patentability of
potentially beneficial innovations” in its 2015 Special 301 Report.

In reality, the 3(d) provision prevented pharmaceutical companies from
continually extending their 20-year drug patents by tweaking with minor
changes or improvements, an “evergreening” process in the IPR jargon. The
provision led to the cancellation of the patent for Novartis AG
<http://www.livemint.com/Search/Link/Keyword/Novartis%20AG>’s cancer drug

India will have to forego these flexibilities and policy space if
non-violation complaints are allowed under the TRIPS agreement, analysts
On Wednesday, India and Brazil with support from a large majority of
countries, including Norway, asked the WTO’s TRIPS council to recommend to
the upcoming 10th ministerial conference in Nairobi, Kenya, later this year
that non-violation complaints “shall” not apply to the settlement of
disputes under the TRIPS agreement.

The majority of countries at WTO want a permanent moratorium in place, a
South American trade official said.

During the meeting, the US and Switzerland stood completely isolated in
their demand for terminating the moratorium, several participants said.

The US and Switzerland must “seriously reflect on the concerns expressed by
overwhelming number of delegations in this meeting and earlier and should
join the consensus that non-violation complaints as identified in Article
XXIII:1 (b) and (c) of the GATT 1994 be determined inapplicable to the
TRIPS agreement, in the interest of the stability and certainty of the
multilateral system,” an Indian official said at the meeting.

Ahead of the meeting, India and Brazil submitted a joint proposal, which
was co-sponsored by 17 other countries, including China, Bolivia, Colombia,
Cuba, Ecuador, Egypt, Indonesia, Kenya, Malaysia, Pakistan, Peru, Russia,
Sri Lanka and Venezuela, calling for continuing with the moratorium on
non-violating complaints under the TRIPS agreement.

“The TRIPS agreement, unlike other WTO agreements,” said India and Brazil,
“is a sui generis agreement which is not designed to protect market access
or the balance of tariff concessions but rather to establish minimum
standards of intellectual property protection, which, if abused, may even
undermine market access.”

Therefore, non-violation complaints are unnecessary as they raise “serious
concerns on the ambiguity, incoherence and limit on flexibilities” that
members currently avail in the TRIPS agreement, an Indian official told the
Moreover, such complaints affect the development of robust pharmaceutical
industry in developing and poorest countries due to the legal challenges
and enormous litigation costs, the official argued.

Currently, non-violation complaints are only allowed for trade in goods and
trade in service to ensure tariff and market access concessions are not
undermined because of opaque governmental actions. Effectively, they only
deal with market access in goods and services.

But the complaints are not permitted in the TRIPS agreement, which deals
only with minimum standards to be implemented by WTO members for protecting
intellectual property rights. The TRIPS agreement is not about the market
access and currently there is a moratorium in force for not allowing these
complaints to apply to TRIPS agreement since 2003.

On behalf of the big pharmaceutical companies such as Pfizer Inc.
<http://www.livemint.com/Search/Link/Keyword/Pfizer%20Inc.>, Merck & Co.
Inc. <http://www.livemint.com/Search/Link/Keyword/Merck%20&%20Co.%20Inc.>, Eli
Lily & Co.
Squibb Co.
Holdings Ltd
<http://www.livemint.com/Search/Link/Keyword/Roche%20Holdings%20Ltd>, and
Novartis <http://www.livemint.com/Search/Link/Keyword/Novartis>, the US and
Switzerland are mounting a warlike effort to end the moratorium at WTO’s
10th ministerial conference in Nairobi.

The US and Swiss companies which lost major IPR disputes in various
developing countries, including India, reckon that patent provisions such
as 3(d) in the amended Indian patent Act or compulsory licensing provisions
can only be stopped in their tracks by raising non-violation legal
complaints at WTO under the TRIPS provisions, said a pharma analyst in

Given the rising strength of the Indian generic companies in the
international market, the US and Switzerland can only regain their
dominance and market access in India and elsewhere through launching
disputes under non-violation complaints at WTO, the analyst added.

The US and Swiss IPR officials made a strong case that the time has come
for terminating the moratorium saying that if there is no consensus on
extension of moratorium at the 10 ministerial conference in Nairobi then
non-violation complaints will automatically apply, according to
participants at the meeting.

Tahir Amin
Co-Founder and Director of Intellectual Property
Initiative for Medicines, Access & Knowledge (I-MAK)
*Website:* www.i-mak.org
*Email:* tahir at i-mak.org
*Skype: *tahirmamin
*Tel:* +1 917 455 6601/+44 771 853 9472

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