1. TRIPS-plus-plus Enforcement and Anti-Counterfeiting Agenda and Seizures of Medicines-in-Transit Prof. Brook K. Baker, Health GAP Northeastern U. School of Law Program on Human Rights and the Global Economy UKZN July 2010

2. Outline What does TRIPS require? What is the TRIPS-plus-plus enforcement agenda? How does the anti-counterfeiting agenda fit in? Is it o.k. to seize generic medicines in transit? Should African countries join the anti- counterfeiting bandwagon? What are the enforcement dangers in FTAs?

3. General Enforcement Obligations Art. 41.1: Members shall ensure that enforcement procedures … 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.

4. General Obligations cont’d Art. 41.2: “Procedures … shall be fair and equitable. They shall not be unnecessarily complicated or costly, or entail unreasonable time-limits or unwarranted delays.” Art. 41.3: Decisions … shall … be in writing and reasonable …. Art. 41.4: Parties … shall have an opportunity for review by a judicial authority…. Art. 41.5: “[No] obligation to put in place a [distinct] judicial system for the enforcement of IPR rights …. Nothing in this Part creates any obligation with respect to the distribution of resources as between enforcement of IPRs and the enforcement of law in general.”

5. Fair and Equitable Enforcement Procedures Art. 42: “Members shall make available to right holders civil judicial procedures concerning the enforcement of any intellectual property right covered by this Agreement.”

6. Art. V of the GATT Defines goods in transit, and provides that “There shall be freedom of transit through the territory of each contracting party, via the routes most convenient for international transit, for traffic in transit to or from the territory of other contracting parties.” “All charges and regulations imposed by the contracting parties on traffic in transit to or from the territories of other contracting parties shall be reasonable.”

7. Injunctions Art. 44.1: “The judicial authorities shall have the authority to order a party to desist from an infringement ….” Art. 44.2: “Notwithstanding the other provisions of this Part and provided that the provisions of Part II specifically addressing [compulsory licenses] are complied with, Members may limit the remedies available against such use to the payment of remuneration in accordance with [Art. 31(h)]. In other cases, the remedies under this Part shall apply or, where these remedies are inconsistent with a Member’s law, declaratory judgment and adequate compensation shall be available.”

8. Damages and other remedies Art. 45: “The judicial authorities shall have the authority to order the infringer to pay the right holder damages adequate to compensate for the injury the right holder has suffered because of an infringement ….” Art. 46: The judicial authorities shall have the authority to order that infringing products be disposed of or destroyed.

9. Border Measures Art. 51: “Members shall … adopt procedures[13] to enable a right holder, who has valid ground for suspecting that the importation of counterfeit trademark or pirated copyright 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 [IPRs] provided that the requirements of this Section are met.” [13. 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.]

10. Laws of the Country of Import Art. 52: “Any right holder initiating [border measures] shall be required to provide adequate evidence to satisfy the competent authorities that, under the laws of the country of importation, there is prima facie an infringement of the right holder’s intellectual property …” Is an in-transition country the “country of importation?”

11. Criminal Procedures Art. 61: “Members shall provide for criminal procedures and penalties to be applied at least in cases of wilful trademark counterfeiting or copyright piracy on a commercial scale. Remedies available shall include imprisonment and/or monetary fines sufficient to provide a deterrent…. In appropriate cases, remedies available shall also include the seizure, forfeiture and destruction of the infringing goods….”

12. Temporary suspension of non- violation complaints Strangely, it is possible to bring a non- violation complaint against a country that does not directly violate TRIPS but that nonetheless “nullifies” or “impairs” the exercise of IPRs. However, this right is temporarily suspended.

13. Summary: TRIPS Enforcement for Patent Violations Private enforcement and appeal. Injunctions not required in cases of lawful government use and compulsory licenses. Injunctions not required in cases where injunctions are contrary to national law, in which case adequate compensation – a royalty – must be available. Criminal measures and border control seizures are not require for alleged patent violations, including specifically for goods in transit.

14. What is a “counterfeit” under TRIPS  Art. 51“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.”  Thus the term counterfeit should be reserved for goods that violate trademark laws, those that misrepresent the branded source of the goods.

15. What is a Counterfeit? Misusing Trademark or Appearance Real 211943 FAFXG 9769 $850 http://www.gucci.com/us/us-english/us/fall- winter-09/web-exclusives/?redirect=true#0- 969396-211943FAFXG9769 Fake Gucci Chain G114900 Apricot Coffee Leather $117.63 http://www.bagsmerchant.com/gucci-130738f- apricot-fabric-coffee-leather-p-8396.html

16. What are generic medicines? Generic medicines are medicines that are therapeutically equivalent to the original medicine, regardless of patent status. –Equivalence is proven through bioequivalence tests or production via the Pharmacopoeia. –Generics must also have built-in quality (Good Manufacturing Practices) Generics are not counterfeits.

17. What is a Generic Medicine? A generic medicine is an identical twin.

18. What are “substandard” medicines? Substandard medicines are a health risk. –They may be contaminated or adulterated. –They may have the incorrect ingredients, incorrect quantities, or even no therapeutic ingredients. –Incorrect quantities – too much or too little – can create health risks for patients – overdose or non- therapeutic amounts leading to drug resistance. –Incorrect ingredients can actually kill patients.

19. What is a Sub-Standard Medicine?

20. The role of Drug Regulatory Authorities It is the drug regulatory authority’s job to guard against substandard medicines throughout the supply chain. In contrast, customs agents have no qualification to determine is medicines are substandard or not.

21. Safety, Efficacy, Quality Registration Marketing Approval Safety Few adverse side effects Efficacy Improves health Quality Good Manufacturing Practices Animal trials; Clinical trials: Phase I, II, & III Purity/Uniformity, Stability/shelf-life, Plant cleanliness, Record keeping

22. TRIPS-plus-plus enforcement measures What is TRIPS-plus-plus enforcement? –It is the utilization of stronger enforcement measures, e.g., criminal sanctions, enhanced damages, mandatory injunctions, and intermediary liability even where they are not required by TRIPS –It is the elimination of enforcement flexibilities allowed by TRIPS.

23. Examples of TRIPS-plus-plus enforcement efforts WHO IMPACT ACTA European seizures of medicines-in- transit Kenya Anti-Counterfeiting Act Trade Agreements

24. WHO IMPACT International Medical Products Anti- Counterfeiting Taskforce (IMPACT) (2006) –Initiated by WHO, Italy, and the Int’l Federation of Pharmaceutical Manufacturers Association –Disregards the impact of high prices of patented drugs as an incentive to counterfeiting –Seeks IP enforcement to counteract not only trademark infringing drugs, but also other substandard drugs, which it includes under the “counterfeit” umbrella.

25. IMPACT Definition “A medical product is counterfeit when there is a false representation in relation to its identity and/or source. This applies to the product, its container or other packaging or labeling information. Counterfeiting can apply to both branded and generic products. Counterfeits may include products with the correct ingredients/components, with the wrong ingredients/components, or without active ingredient, with incorrect amounts of active ingredients, or with fake packaging.”

26. IMPACT Enforcement Establish criminal, administrative, and civil enforcement frameworks Apply to transit/trans-shipments, bonded warehouses, free-zones – all situations of international trade. Regulate throughout the distribution chain including sanction against API manufacturers. Information exchange and cooperation in global enforcement. WHO is backing off from use of counterfeit language and now focusing again on substandard medicines.

27. Anti-Counterfeiting Trade Agreement ACTA (2008) Secret negotiation between a limited number of rich countries trying to establish a new, global standard for “counterfeit” enforcement. “Is intended to assist in the efforts of governments around the world to more effectively combat the proliferation of counterfeit and pirated goods, which undermines legitimate trade and sustainable development of the world economy, and in some cases contributes to organized crime and exposes American families to dangerous fake products.” US 2009.

28. ACTA May Apply to Patents The EU and Japan are still pushing for ACTA to apply to patents according to the law of the transit country, meaning that right holders will be able to stop generic medicines in transition that are alleged to violation the “manufacturing fiction” in the transit country.

29. Intermediary Liability There are still proposals to allow “injunctions against intermediaries whose services are used by a third party to infringe an intellectual property right.” Who are intermediaries? API suppliers? All suppliers? All transporters? Funders (Global Fund)? Intermediaries (MSF)? Drug Regulatory Authorities?

30. Enhanced damages and injunctions According to leaked text, ACTA requires that damages cover lost profits, the value of the infringed good or service, measured by the market price, the suggested retail price or some other legitimate measure of value submitted by the right holder. It also requires that injunctions be available for infringement, reversing flexibilities that exist under TRIPS not to require injunctions during challenges to government use or when the law provides other systems of adequate compensation.

31. Customs Seizures of Medicines No Patent in India No Patent in Brazil No Patent in Nigeria Manufacturing Fiction in the Netherlands

32. Dutch seizures of medicines in-transit Almost twenty incidents where Dutch authorities have confiscated generic medicines in transit through Dutch ports from India to Latin America and Africa. One shipment included WHO prequalified ARVs purchased by UNITAID and headed to Nigeria. Patent holders initiate the request for seizures which are thereafter undertaken by untrained customs officials using the “manufacturing fiction.” One seizures included a claim of a trademark infringement because the drug used the name Amoxicillin which is the International Nonproprietary Name, which was similar to GSK’s brandname “Amoxil”. India and Brazil have brought a WTO complaint on these seizures.

33. EC Reg. No. 1883/2003 The Dutch justified the seizures under a regulation that allows IP right holders to petition customs officials to act “when goods are suspected of infringing intellectual property rights.” It’s a widespread European problem, not just a Dutch problem, because there have been seizures in Germany as well.

34. Getting African countries to join the anti-counterfeiting bandwagon Kenya passed anti-counterfeiting legislation with provisions that confuses counterfeiting with violations of non-trademark intellectual property rights. Uganda is considering a similar bill that calls for the death penalty for drug “counterfeiters,” which might erroneously be interpreted to apply to generic manufacturers who use an international non- proprietary name that looks similar to the brand name or whose pills look similar to the branded pills. These bills were funded by the EU.

35. TRIPS-plus-plus enforcement demands in trade agreements Finally, both the US and Europe are asking for enhanced enforcement measures – higher damages, mandatory injunctions, border controls, intermediary liability, criminal sanctions, etc. – that could threaten trade in cheaper generic medicines. –See, e.g., proposed EU/Andean EPA, proposed US/Thailand FTA.

36. The Enforcement Agenda is the New Wild West The misguided Big Pharma enforcement agenda is a major emerging threat to access to affordable generic medicines and generic trade. Rhetoric about “counterfeit” medicines is designed to confuse governments, doctors, and consumers and to create suspicion about the quality of generic medicines.