TWN Info Service on WTO and Trade Issues (Feb09/03)
Developing countries attack Dutch seizure of generic medicines
Geneva, 4 Feb (Sangeeta Shashikant) -- Developing countries at the WTO General Council on 3 February launched a scathing attack on the action by the Dutch government in seizing a cargo of generic medicines in transit in Rotterdam (en route from India to Brazil) for alleged patent infringement.
seizure of 500 kilos of Losartan Potassium, an active pharmaceutical
ingredient (API) used in the production of medicines for arterial hypertension
(a common and serious disease that often leads to death), was instigated
by an administrative request lodged by the corporation which holds the
patent of the API in
The Dutch action was taken in line with procedures set out in the EC Council Regulation 1383 of 22 July 2003 which empowers the EU member states' customs authorities to detain goods in transit on suspicion of an infringement of intellectual property rights.
This case is the latest in a recent spate of seizures of several consignments of generic drugs of Indian companies by the Dutch customs authorities on the ground of alleged IP violations.
strong criticisms at the WTO's General Council were made by
According to a diplomat, the EC response to the criticisms at the WTO was "defensive in an offensive way". The EC said that it was ready to engage bilaterally on the issue but also spoke of the need to enter into a "non-emotional" debate about it. The EC also said, jokingly, that if you get emotional, we have a non-generic medicine to treat that.
The heated discussion at the WTO's General Council follows an equally controversial session at the World Health Organization's Executive Board meeting last month wherein developing countries strongly criticized the WHO Secretariat for its report and draft resolution on "Counterfeit Medical Products".
The developing countries objected to the WHO's approach of attempting to deal with the quality and safety of medicines under the rubric of "Counterfeits" at the WHO's Executive Board meeting on 19-27 January. They feared that the real effect of the WHO documents would be to undermine the production and trade of good quality generic medicines, and consequently access to generic medicines.
The attempt by developed countries to make use of international agencies, standards and agreements to mandate the use of national customs, health, police, postal and other government agencies to enforce the rights of IP holders has become a controversial subject. This is especially since the effect may be to adversely affect the public's access to medicines as the actions proposed for IP enforcement is intended to protect the interests of multinational companies holding the patents while endangering the viability of generic drug producers.
The developed countries have been attempting to use various international forums such as the World Customs Organisation, World Health Organisation, the Universal Postal Union and WIPO to further their IP maximalist agenda.
On 3 February, the controversy surrounding this issue finally erupted at the WTO, the home of the TRIPS Agreement.
incident that sparked off the outrage felt on this issue was the seizing
by Dutch customs authority on 4 December 2008 of a cargo of 500 kilos
of Losartan Potassium in transit in
cargo was detained on request of a company which allegedly holds the
patent of Losartan Potassium in the
is not patented in
to reports, the cargo was held back by the Dutch authorities for 36
days after which it was released to return to
a result of the Dutch authorities' actions, the medicines critically
required by patients with hypertension (a common, serious disease that
often leads to death) never reached
This case is the latest in a recent spate of seizures of several consignments of generic drugs of Indian companies on the grounds of alleged IP violations.
the General Council meeting, the ambassadors of
He said that the decision to impede the transit of a cargo of generic medicines, which was not headed for the Dutch market, was "unacceptable" and "sets a dangerous precedent", adding that "whether or not the medicines were generic under the law of the country of transit is an irrelevant question".
concept of generic must not be mistaken with counterfeit or pirated
and that generic medicines are not substandard or illegal, said
Brazil also expressed grave concern with the setting of a precedent for extraterritorial enforcement of IP rights, adding that such attempts have "critical systemic implications" and "affront fundamental canons of the multilateral trade system, in particular the well-established principle of territoriality", a fundamental pillar of the international IP regime.
It further said that extraterritorial enforcement of patent rights cannot be reconciled with the terms of the Doha Declaration on TRIPS and Public Health. The protection of public health and the promotion of the public interest are still part of TRIPS fundamental principles.
undue interference of Dutch authorities with the transit of the generic
medicines may have other serious systemic consequences, particularly
that it could undermine countries' ability to address public health
needs by cross-licensing arrangements,
Brazil asked: "What would happen to the Doha Declaration on TRIPS and Public Health and, in particular, to the "paragraph 6 system if the denial of transit to generic medicines becomes a systematic and widespread practice and if countries commence to create impediments to the legitimate trade of generic medicines based on the wrongful allegation that it violates national patent rights? In such cases, trade in generic medicines would be rendered virtually impossible."
Brazil cautioned that "neither the WCO nor the WHO are adequate fora for discussing IP rights enforcement", adding that in WHO, the focus should be on the quality, safety and efficacy of medicines, as well as on the issues of access, while the WCO should concentrate on developing methodologies to enhancing customs' performance, rather than venturing into TRIPS-plus norm-setting.
It further added that the concept of "territoriality" is a key stone in the edifice of the TRIPS Agreement and that there are no indications that the drug consignment was meant for the markets of the EC. Thus, the seizure and initiating procedures for destruction of such consignments violates this key principle.
Ambassador Bhatia added that it was ironical that while on one hand, the WTO has taken steps to promote access to affordable medicines and remove obstacles to the proper use of TRIPS flexibilities, on the other hand, some Members seek to negate the same by seizing drug consignments in transit.
He emphasized the importance of generic drugs, adding that their essentiality may vary in inverse proportion to the level of development of a country. Barriers to legitimate trade of generic drugs will seriously impair the efforts of organizations like Medecins Sans Frontieres (MSF), Clinton Foundation, Bill and Melinda Gates Foundation and a whole lot of other organizations engaged in providing medicines and improving public health in the least developed parts of the world.
He also drew attention to the emerging trend of efforts "to implement the protection and enforcement of IPRs in a maximalist manner and thereby upset the delicate balance between rights of IPR holders and the public policy objectives under the TRIPS Agreement".
is an attempt to enlarge the definition of counterfeits beyond its definition
in the TRIPS Agreement, to set maximalist enforcement norms, and to
include TRIPS plus provisions in RTAs," said
It added that these are "subtle and concerted ways of circumscribing the flexibilities of the TRIPS Agreement", and that they not only "run counter to the spirit of the TRIPS Agreement which is a minimum standards agreement but is counter to the understanding given to developing countries when the TRIPS Agreement was being negotiated".
It called on the EC to "urgently review the relevant regulations and the actions of the national authorities based on such regulations, and bring them in conformity with the letter and spirit of the TRIPS Agreement and the rules based WTO system".
other developing countries spoke at the General Council in support of
urged countries "to ensure that the enforcement of IP rights is
not used to impede legitimate trade" and specifically "to
avoid taking measures that would adversely affect the freedom of transit
by the most convenient and economical routes". It also encouraged
It added that the action was against the spirit of the Doha Declaration on TRIPS and public health and called on members to respect TRIPS provisions and maintain a fair system devised through multilateral negotiations rather than defining their own standards and applying them at the cost of other members.
According IP Watch (3 February 2009), the EU Ambassador Eckart Guth responded that the Dutch seizure is allowed by the TRIPS agreement and is based on provisions in EU customs law that allow the customs authorities to temporarily detain any goods if they suspect that these goods infringe an intellectual property right. As soon as the goods were eventually determined not to be headed for the EU market, they were returned to the owner.
said it would have been preferable for
"Let me make it very clear that the EU has absolutely no intention to hamper any legitimate trade in generic medicines or to create legal barriers to prevent movement of drugs to developing countries, nor have our measures had this effect," Guth said. "We are absolutely committed to all the efforts that are being made to facilitate access to medicines."
In addition to Brazil and India, those voicing their concerns about how the customs authorities' actions could hamper access to medicines were Argentina, Bolivia, Burkina Faso, China, Costa Rica, Cuba, Ecuador, Egypt, Indonesia, Israel, Nigeria, Pakistan, Paraguay, Peru, South Africa, Thailand and Venezuela.
sources say that there is another unsavoury twist to the story. They
say that there was a possibility that the IP holders in the