Patent Law Issues in Recent FTAs Joshua D. Sarnoff Washington College of Law American University Washington, DC, USA IP, FTAs, and Sustainable Development February 27, 2006

Overview Background Patent-Related Issues in Recent FTAs Data Exclusivity Term Extension Patentable Subject Matter Patentability Criteria Rights and Exceptions Exhaustion and Relation to Other Laws GR/TK protection and disclosures of origin

Background Increasing recognition of costs of the patent system to competition and innovation Increasing efforts to revise restrictive and high levels of protection required by TRIPS Post-TRIPS efforts by US to extend IP protections through FTAs, particularly to promote industrial interests (e.g., pharma) Increasing recognition of the lack of reciprocal benefits from FTAs

Issues 1 – Data Exclusivity Additional market exclusivity for pharma and agriculture regulatory approvals for specific time, e.g., Australia Art (a)&(b) (pharma 5 years from date of original approval; ag 10 years); or during the patent term, e.g., Morocco FTA Art does not require affirmative action by the patentee similar to US Orange Book listing data exclusivity provisions may override ability to authorize third-party compulsory license Data compensation?

Issue 2 – Term Extension Pharma or Pharma/Agriculture specific regulatory approval delay extensions, e.g., Bahrain FTA 15.9(6)(b) Extension language does not reflect significant limitations on US pharma term extension laws (maximum 5 years, ½ testing phase, 14 years adjusted effective term) “Unreasonable” patent processing delays, e.g., CAFTA (a) (5 years from filing), Morocco FTA Art (4 years from filing, 2 years from examination request) Extension language does not reflect US limitations based on actions of the applicant, although US runs 3 years from filing

Issue 3 – Subject Matter Requirements to make available “in all fields of technology” without exclusion, CAFTA Art Requirements to issue patents for plants, e.g., Chile FTA Art , and animals, e.g., Morocco Art Requirement to limit exceptions to subject matter to “ordre public” grounds or for treatment of humans or animals, and to include business methods, Jordan FTA Art.4, ¶ 18 and Memo of Understanding ¶ 5 Peru FTA did not result in agreement to require “new use” patents for chemicals

Issue 4 – Patentability Criteria Limited grounds for revocation or cancellation, e.g., Chile FTA Art Deposits of microorganisms where required to practice, e.g., Jordan FTA ¶ 21 Prohibition on pre-grant opposition procedures, e.g., Singapore FTA Art

Issue 5 – Rights and Exceptions Requirements to prohibit compulsory licensing without patent holder approval of trade secrets (including “undisclosed information” for use of patents – Tamiflu – or submitted for regulatory approvals), e.g., Singapore FTA, iii Requirements to prohibit third party use (including export) to use solely for domestic regulatory approval, e.g., Morocco FTA Art , CAFTA, Art , Chile FTA Art may not reflect US experimental use and 271(e)(1) regulatory approval exceptions,

Issue 6 – Exhaustion and Relation to Other Laws Requirement to prohibit products sold abroad under import right, subject to authority to limit requirement to where sales are contractually conditioned, e.g., Morocco Reflects 2001 change to US law; previously did not exhaust where no contractual restriction Future FTA provisions on effects of patents on pricing and on competition laws? E.g., US DC pharma pricing law case; US law on patent misuse and antitrust immunity

Issue 7 – GR/TK and Disclosures Peru FTA separate “understanding” recognizing importance of ABS compliance, but that can be adequately addressed through contracts

Conclusion Caveat These are the views of a US academic. Fabiana Jorge will provide a different perspective. IP issues in FTAs will continue to be timely and important. Thanks to CIEL, SPDA, TWN, and TRALAC for co-sponsoring this program