[Commons-Law] Can India, Brazil take on EU over regulation?

Wed Feb 11 04:41:16 IST 2009

Dear Daya Shanker & Michelle,

Thanks for your observations.

My quick reading of TRIPS is as follows:

Footnote 13 states "It is understood that there 
shall be no obligation to
apply such procedures 
to imports of goods put on the market in another

country by or with the consent of the right 
holder, or goods in transit.

It seems to suggest that while there is no obligation on member states to
apply procedures in Article 51 to transit in goods, members may do so.

Having said that I think it is important to read Article 51 and footnote 13
in light of the preamble, principles, objectives, Article 1 (1) and Article
41 of TRIPS. It is also important to interpret Article 51 in light of the
Doha Declaration on TRIPS and Public Health as well as the 30th August
Decision. 

Article 51 (first line) applies to importation of counterfeit trademark or
pirated goods. The second line extends it to other infringements of IP
rights. The third line states that corresponding measures may also apply to
exportation. 

Noting what is in Art. 51, there is a deliberate attempt to leave out goods
in transit, I imagine, the reason would be that applying similar provisions
to goods in transit would create trade barriers, which is definitely not the
intention of WTO. 

Any member that would like to incorporate goods in transit, can do so but
this would be subject to Art. 1(1) and Art 41 of TRIPs.

Article 1 (1) very clearly states that "Members may, but shall not be
obliged to, implement in their law more extensive protection than is
required by this Agreement, provided that such protection does not
contravene the provisions of this Agreement".

I would argue that the EU actions could be seen as violating Article 41 as
any enforcement measures should be applied in a manner as to avoid the
creation of barriers to legitimate trade and should be fair and equitable.

"1. Members shall ensure that enforcement procedures as specified in this
Part are available under their law so as to permit effective action against
any act of infringement of intellectual property rights covered by this
Agreement, including expeditious remedies to prevent infringements and
remedies which constitute a deterrent to further infringements.  These
procedures shall be applied in such a manner as to avoid the creation of
barriers to legitimate trade and to provide for safeguards against their
abuse.

2. Procedures concerning the enforcement of intellectual property rights
shall be fair and equitable.  They shall not be unnecessarily complicated or
costly, or entail unreasonable time-limits or unwarranted delays.

Brazil and India have also relied on the Doha Declaration and the 30th
August Decision to support their case.

I hope some of this helps. I do agree that in light of the numerous
anti-counterfeiting initiatives and provisions in FTAs and EPA that attack
goods in transit, it would be very useful for India and Brazil to take this
matter to WTO. 

Regards
Sangeeta

[1] <#_ftnref1>  It is understood that there shall be no obligation to apply
such procedures to imports of goods put on the market in another country by
or with the consent of the right holder, or to goods in transit.

[2] <#_ftnref2>  For the purposes of this Agreement:

(a) "counterfeit trademark goods" shall mean any goods, including packaging,
bearing without authorization a trademark which is identical to the
trademark validly registered in respect of such goods, or which cannot be
distinguished in its essential aspects from such a trademark, and which
thereby infringes the rights of the owner of the trademark in question under
the law of the country of importation;

(b) "pirated copyright goods" shall mean any goods which are copies made
without the consent of the right holder or person duly authorized by the
right holder in the country of production and which are made directly or
indirectly from an article where the making of that copy would have
constituted an infringement of a copyright or a related right under the law
of the country of importation.

On 2/7/09 5:36 PM, "Daya Shanker" <daya.shanker at deakin.edu.au> wrote:

> Dear Sangeeta
This note is in reference to the seizure or 
detention of
> Losarton by the Dutch Customs at the instance of DuPont and Merck.
Article 51
> of the TRIPS Agreement dealing with 
the Suspension of release by customs
> authorities says
Members, shall, in conformity with the provisions 
set out
> below, adopt procedures to enable a right 
holder, who has valid grounds for
> suspecting that 
the importation of counterfeit trademark or 
pirated
> copyright goods may take place, to lodge 
an application in writing with
> competent 
authorities, administrative or judicial, for the 
suspension by the
> customs authorities of the 
release into free circulation of such goods.
> 
Members may enable such an application to be made 
in respect of goods which
> involve other 
infringements of intellectual property rights, 
provided that
> the requirements of this Section 
are met. Member may also provide for
> 
corresponding procedures concerning the 
suspension by the customs
> authorities of the 
release of infringing goods destined for exportation from
> their territories.
There is a corresponding note in the TRIPS 
Agreement which
> says "It is understood that there 
shall be no obligation to apply such
> procedures 
to imports of goods put on the market in another 
country by or
> with the consent of the right 
holder, or goods in transit. (note 13).

The
> first part of Article 51 of the TRIPS 
Agreement deals with issues of
> restricting import 
of counterfeit trademark goods and pirated 
copyright
> products and the second part apparently 
gives the members of the WTO the
> opportunity to 
restrict import of product covered by other 
intellectual
> property rights such as patents 
leading to free circulation of such goods in
> 
their territory.  However, note 13 specifically 
mention that there shall be
> no obligation to 
apply such provision to the goods in transit. The 
use of
> the term shall be does not leave any 
doubt that the provision of Section 51
> is not to 
be applied to the case of goods in transit. Read 
with note 13, it
> is clear that the last sentence 
of Article 51 of the TRIPS Agreement shall
> not be 
applicable in the case of losarton which was in transit in
> Amsterdam.
An examination of the European Council Regulation 
Number 3295/94
> of December 22, 1994, apparently 
in anticipation of the coming into force of
> the 
TRIPS Agreement on 1st January 1995 would help in 
interpretation of
> Article 51 of the TRIPS 
Agreement and the interpretation of Council
> 
Regulation (EC) No. 1383/2003 of 22 July 2003 and 
corresponding rules issued
> in 2007.
The 3295/94 regulation lays down measures to 
prohibit the release
> for free circulation, 
export, reexport or entry for a suspension 
procedure
> of counterfeit and pirated goods 
taking into account the terms of the GATT
> 
agreement on trade related intellectual property 
issues, including a trade
> in counterfeiting 
goods It had a specific stipulation that action 
by
> customs authorities to re-export was to take 
place only where the suspected
> counterfeit or 
pirated goods are discovered during a check i.e. 
not as per
> the complaint of some agents 
purportedly affected by such import or
> production.
Article 1(1) of this regulation says
This regulation shall lay
> down:
(1) the conditions under which the customs 
authorities shall take
> action where goods 
suspected of being counterfeit or pirated are:
- entered
> for free circulation, export or re-export,
-found when checks are made on
> goods placed under 
a suspensive procedure within the meaning of 
Article
> 84(1)(a) of Council Regulation (EEC) No 
2913/92 of 12th October 1992
> establishing the 
Community Customs Code (5), or re-exported subject to
> notification; and
(b) the measures which shall be taken by the 
competent
> authorities with regard to those goods 
where it has been established that
> they are indeed counterfeit or pirated.
The relevant part of Council
> Regulation (EC) No 
1383/2003 of 22 July 2003) which rplaced Council
> 
Regulation (EC) No 3295/94 of Dec. 22, 1994 as is 
the case in other
> regulations with the European 
Community, the office and the staff of which
> are 
totally controlled by multinational corporations 
and local industries,
> was amended to read as
(1) to improve the working of the system 
concerning
> the entry into the Community and the 
export and re-export from the Community
> of goods 
infringing certain intellectual property rights 
introduced by
> Council Regulation (EC) No 3295/94 
of 22 December 1994 laying down measures
> to 
prohibit the release for free circulation, 
export, re-export or entry for
> suspensive 
procedure of counterfeit and pirated goods. 
(2) The marketing of
> counterfeit and pirated 
goods, and indeed all goods infringing 
intellectual
> property rights, does considerable 
damage to law-abiding manufacturers and
> traders 
and or right-holders, as well as deceiving and in 
some cases
> endangering the health and safety of 
consumers. Such goods should, in so far
> as is 
possible, be kept off the market and measure 
adopted to deal
> effectively with this unlawful 
activity without impeding the freedom of
> 
legitimate trade. This objective is consistent 
with efforts under way at
> international level.
(3) In cases where counterfeit goods, pirated 
goods and
> more generally, goods infringing an 
intellectual property right originate in
> or come 
from third countries,  their introduction into 
the Community customs
> territory, including their 
transshipment, release for free circulation in
> 
the Community, placing under a suspensive 
procedure and placing in a free
> zone or 
warehouse, should be prohibited and a procedure 
set up to enable the
> customs authorities to 
enforce this prohibition as effectively as
> possible.

The changes are mischievous and their application 
was deliberate.
> A simple reading of the amendment 
of  3295/94 leading to 1383 of 2003 has
> been the 
extension of customs regulation dealing with 
counterfeit and
> pirated goods to indeed all 
goods infringing intellectual property rights
> 
which can be justified by the later part of 
Article 51 of the TRIPS
> Agreement. But the 
introduction of including their transshipment 
is in
> direct violation of the TRIPS Agreement. 
The European Community has tried to
> justify these 
modifications in terms of the objective 
consistent with
> efforts under way at 
international level mentioned in paragraph 3 of 
the
> Council Regulation 1383(2003). The 
transshipment through Community customs
> territory 
also brings in the issue whether ports and ships 
can be considered
> customs territory. Normally 
customs territory is the land mass of a country
> 
along with contiguous sea and the airspace above 
with the exception of goods
> on the ships and in 
the part area. The patent acts are not applicable 
to the
> goods in transit i.e. the goods which have 
temporarily entered into the
> customs area. This 
issue has been discussed in detail in Brown v 
Duchesne (
> 235 US 641 (1913)) by the US Supreme 
Court and confirmed in a series of later
> 
decisions as this judgment raised intellectual 
property rights to the level
> of property where a 
ship had entered into the US port, parts of which 
had
> been patented. The US supreme Court observed
But these acts of Congress do
> not, and were not 
intended to, operate beyond the limits of the 
United
> States: and as the patentees rights of 
property and exclusive use are
> derived from them, 
they cannot extend beyond the limits to which the 
law
> itself is confined. And the use of it outside 
of the jurisdiction of the
> United States is not 
an infringement of his rights and he has no claim 
to
> any compensation of the profit or advantage he may derive from it.
Basically a
> product must hurt the commercial 
interests of the patent holder in the
> territory 
of the patent and any goods in transit do not 
hurt the commercial
> interest of the patent holder 
in any way in the territory of the patent. I
> have 
discussed these aspects in the case of Paragraph 
6 amendment of the
> TRIPS Agreement in my articles 
The Paragraph 6 solution of the Doha Public
> 
Health Declaration and Export under the TRIPS 
Agreement (Journal of World
> Intellectual Property 
Rights, 2004, 7(3) pp. 365-400) and Access to
> 
Medicines, Paragraph 6 of the Doha Declaration on 
Public Health, and
> Developing Countries in 
International Treaty Negotiations (The Indian
> 
Journal of Law and Technology, 2006, 2, 8-64).

I do not know what
> international efforts are 
under consideration as claimed by the European
> 
Community unless the secret agreement on 
counterfeit products is the example
> of international efforts under way.
The seizure of losarton in transit is a
> case of 
direct and deliberate mischief by the European 
Union at the behest
> of DuPont and Merck and 
Brazil and India would fail in their duties by 
not
> taking the matter to the WTO dispute 
Settlement Organization. Pending the
> action at 
the WTO DSO, to withdraw transshipment facility 
to all the goods
> originating the European 
community and going to European community. The
> 
audacious reply of the Ambassador Eckart Guth of 
the European Community does
> not leave any choice 
to countries such as Brazil and India. Such 
obdurate
> talk always takes care of the after 
retirement job. Mr. Eckarat Guth appears
> to be 
from the Netherlands itself. Let the European 
Community approach the
> WTO for redress of its 
grievances. Such mischief must be dealt with
> 
instantly and thoroughly. Possibly I am expecting 
too much from these
> countries which on the sly 
went and signed the TRIPS Amendment on 30th
> 
August 2003 and are even ratifying it knowing 
fully well that each and every
> word in that amendment is a fraud.
Daya Shanker

At 09:29 PM 4/02/2009,
> Sangeeta wrote:
>India, Brazil to take on EU over regulation
>The two
> countries have taken a strong stand against EU act of seizing Dr
>Reddyâs
> in-transit shipment
>Radhieka
> Pandeya
>http://www.livemint.com/2009/01/30002200/India-Brazil-to-take-on-EU-o
> v.html?
>d=1
>
>New Delhi: A ship loaded with medicine from India drops anchor
> at a European
>port from where it will sail for Brazil. European officials
> seize the cargo
>and later send it back to India. They say the drug is a
> generic version that
>violates a patent protected in Europe. A generic drug is
> cheaper than the
>patented version.
>
>The seizure has led to a full-blown war
> of words in three corners of the
>worldand put the spotlight back on
> contentious issues such as intellectual
>property (IP) laws, access to
> affordable medicines and the use of non-tariff
>barriers against exports from
> developing countries.
>
>Patent tussle: Indiaâs ministry of commerce and
> industry is working out a
>legal strategy to convince the European Union to
> drop the provision under
>which the shipment from Dr Reddyâs Laboratories
> was seized. Bharath Sai /
>Mint
>
>The governments of India and Brazil have
> taken a strong stand against the
>European Union (EU) for seizing an
> in-transit shipment of a drug
>manufactured by Dr Reddyâs Laboratories Ltd
> (DRL). Brazilâs ministry of
>external affairs has threatened to take the
> issue up with the World Trade
>Organization (WTO) that settles trade disputes
> between countries. And
>Brazil, with strong support from India and Bangladesh,
> at a recent executive
>board session of the World Health Organization (WHO) in
> Geneva, also
>succeeded in blocking a controversial resolution backed by the
> European
>Commission (EC) and WHO-funded International Medical
> Product
>Anti-Counterfeiting Taskforce, or IMPACT. The resolution had been
> widely
>criticized for mixing up issues of public health and private IP rights
> in
>the context of defining âcounterfeitâ drugs.
>
>The Indian ministry of
> commerce and industry is working out a legal strategy
>to convince the EU to
> drop the provision under which the DRL shipment was
>seized. âWe plan to
> approach the WTO if the EU fails to take suitable
>action,â said G.K.
> Pillai, secretary, department of commerce.
>
>On 15 January, Mint had reported
> that a DRL shipment of the generic version
>of losartan was seized in transit
> in the Netherlands. This shipment, on its
>way to Brazil, was held by the
> customs authority at Rotterdam, which said it
>infringed the patent of the
> original drugCozaar. Losartan is not patented
>in India or Brazil. The patent
> for Cozaar in the Netherlands is held by
>DuPont, while US-based pharma
> multinational Merck and Co. holds the
>marketing rights.
>
>âWe have taken
> up the issue with a national-level industry body. But we hope
>the Indian
> government will take it up at the government-to-government
>level...as it is
> an industry-wide problem,â said DRL chief executive
> G.V.
>Prasad.
>
>Referring to the EC regulation, a DRL spokesperson told Mint
> in an email
>response, â...These provisions may have a significant impact on
> Indian
>companies, most of which use the EU route to transport
> pharmaceutical
>products to markets where the patent is not recognized or the
> product is off
>patent. By forcing (them) to opt for a different route...the
> cost of
>transport may significantly add to the cost of producing...thus
> adversely
>impacting the Indiaâs ability to remain 
>competitive.â He
> added, âThis will,
>obviously, also impact the availability of much needed
> medicines in
>developing countries, to which India exports...â
>
>On its
> part, the Indian government will provide legal support to the
>industry.
> âIndian companies like DRL and IndSwift whose goods were seized in
>transit
> will get legal and financial help from us to file cases in the EU
>court of
> justice. They have shown interest in our offer,â said Pillai. (Mint
>first
> reported about Indswift on 12 December.)
>
>According to the EC regulation,
> the EU customs are empowered to detain goods
>in transit on suspicion of an
> infringement of IPR. âTherefore, customs have
>a right to stop goods of
> which they suspect that an intellectual property
>right (in this case a
> patent) is infringed,â Maria Assimakopoulou,
>spokesperson, taxation and
> customs union, EC, told Mint in an earlier email.
>The spokesperson has not
> responded to the newspaperâs email about India and
>Brazilâs
> opposition.
>
>âThe shipment was seized on grounds that it infringed... the
> patent...
>However, it is made in India with full respect to international
> legislation
>concerning (IP) rights. In Brazil and in India, the product is
> not protected
>by a patent and can be imported freely,â said an official of
> the Brazilian
>ministry of external affairs in an email.
>
>The fear of more
> such episodes has been expressed earlier. âAfter the EU
>regulation was
> introduced, MSF (Medecins Sans Frontieres, an international
>medical and
> humanitarian aid organization) expressed concern about its
>potential to
> hamper the transit of perfectly legitimate medicines for use in
>developing
> countries. This concern remains,â said Michelle Childs, policy
>director of
> the non-profit, MSF Campaign for Access to Essential Medicines.
>Patent
> lawyers suggest a larger battle lies ahead. Rajeshwari Hariharan,
>partner,
> patents division of the law firm K&S Partners, said, â...if it is
>in
> transit...it is deemed to be in storage, and storage is one of the acts
>that
> fall under IPR... I would agree though that it is a non-tariff
>barrier...
> (I)t would still remain (an) infringement but the countries can
>take it up
> with WTO and ask forâamendment in the law.â
>
>âThe seizure of
> in-transit consignments not meant for the EU markets
>operates as a non-tariff
> barrier and is antithetical to the very spirit of
>free trade envisaged under
> the WTO. But the current wording of TRIPS leaves
>much to be desired and may
> provide enough flexibility to the EU to justify
>such seizures. It may be far
> more fruitful for India and Brazil to engage in
>a diplomatic dialogue with
> the EU to resolve this issue and amend the text
>of TRIPS to prohibit such
> seizures in the guise of IP enforcement,â said
>Shamnad Basheer, a professor
> in IP law at the National University of
>Juridical Sciences,
> Kolkata.
>
>TRIPS, or the agreement on aspects of intellectual property rights
> related
>to trade, provides for basic protection that each government has to
> give to
>the IP of fellow WTO members, while balancing the long-term benefits
> and
>possible short-term costs to society. Governments have certain
> flexibilities
>to be able to tackle, for instance, public health
> problems.
>
>This gives an option, argue others. Sangeeta Shashikant, a lawyer
> with the
>Third World Network, an international non-profit, says India and
> Brazil can
>and should explore legal options including approaching the WTO
> Dispute
>Resolution Body. âThe TRIPS agreement clearly states that any IP
> enforcement
>measures should be applied in such a manner as to avoid the
> creation of
>barriers to legitimate trade,â she said.
>
>Asked how Brazil
> would now deal with issues such as seizure of generic
>shipments in transit,
> the official said in an email, â...(A) motion to
>accept recommendations by
> IMPACT that could lead to confusions (between
>counterfeit and generic drugs)
> was stopped by countries such as Brazil and
>India. Other options, including
> (going) to the WTO, are still being
>considered.â
>
>India, Brazil and other
> countries from the South-East Asia region, been
>campaigning against the
> IMPACT resolution for its attempt to redefine
>counterfeit drugs to include
> generics. The losartan case led Brazil to take
>an aggressive and successful
> stance this time.
>
>But the battle between affordable generics and costly
> patented drugs is far
>from over. âThere is the Acta (anti counterfeiting
> trade agreement) being
>negotiated between certain countries as well as the
> SECURE (standards to be
>employed by customs for uniform rights enforcement)
> which promotes strict IP
>enforcement being developed by the World Customs
> Organization,â said Dilip
>G. Shah, secretary general of the Indian
> Pharmaceutical Alliance.
>Meanwhile, the EC regulation continues to provide
> ample scope for abuse, as
>customs authorities are unlikely to be able to
> gauge what constitutes IP
>violation. As Hariharan said, âThe customs
> officials arenât aware of
>patents. The patent owner traces the entire
> shipment and is aware of the
>route of the product and knows exactly which
> port they can seize the
>shipment at. Then they notify the customs authority
> of that port, and the
>product is
> seized.â
>
>radhieka.p at livemint.com
>
>
>___________________________________
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> list
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