Techdirt. Stories filed under "trips"

Now US And EU Want To Apply Upward Ratchet To TRIPS Itself

Glyn Moody — Tue, 7 May 2013 00:01:32 PDT

Here on Techdirt we often talk about the copyright ratchet -- the fact that for three hundred years changes to copyright have always been in one direction: longer, wider and stronger. But there's a group of countries where the copyright ratchet isn't in place yet. These are the so-called LDCs -- the Least Developed Countries -- where many of the world's poorest citizens live. That's because the main Agreement on Trade Related Aspects of Intellectual Property Rights, better known as TRIPS, explicitly allows LDCs a transitional period of ten years, during which time they are not required to meet all the stringent requirements laid down there for granting intellectual monopolies. Moreover, the TRIPS agreement specifies:

The Council for TRIPS shall, upon duly motivated request by a least-developed country Member, accord extensions of this period.

And as an article on infojustice.org notes: Last November the LDCs exercised their legal rights under the TRIPS rules, and submitted a request to the TRIPS Council requesting an unconditional extension of the transition period for as long as a country remains an LDC. The current transition period expires on 1 July 2013.

Article 66.1 of the TRIPS Agreement grants LDCs a renewable exemption from TRIPS obligations. The rationale is that LDCs need maximum flexibility to develop a viable technological base and address their constraints, and that the standard of TRIPS IP protection may be an obstacle in achieving those objectives.
The US and EU routinely insist that countries follow TRIPS to the letter, but it seems they are only too happy to ignore their own obligations when it comes to granting a further exemption to LDCs: Developed countries, particularly the United States and the European Union, have offered a poor and impractical deal of an incredibly short extension of 5 years with restrictive conditions to least developed countries that are entitled to be exempted from implementing the WTO TRIPS Agreement.

Particularly problematic is their demand that the LDCs agree to a "no-roll-back" clause, a TRIPS plus condition that will prevent LDCs from rolling back (i.e. providing a reduced degree of IP protection) their current laws, even if they adversely impact their development concerns.
"No roll-back" is another way of saying upward ratchet. But the US and EU are trying to haggle over details of an agreement that was finalized and signed back in 1994. As infojustice.org puts it: The US and EU demand, if agreed to, would actually amount to an amendment to Article 66.1, but without following proper WTO procedures as required by Article X of the WTO Agreement
That is, the US and EU are not only trying to bully smaller countries into accepting unofficial changes to negotiated agreements, in this case to lock LDCs into a system with a built-in ratchet for intellectual monopolies, but they want the upward ratchet to operate on TRIPS itself.

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Senator Hatch Says Global Fund Advocating For Generic Drugs To Solve Healthcare Crises Is Abusing Funds

Mike Masnick — Wed, 13 Feb 2013 12:46:53 PST

We've written a few times about governments around the globe seeking to make use of lower-priced (and often more widely available) generic medicines for responding to serious diseases, rather than sticking with the more expensive name brand. Current international agreements, like TRIPs, allow countries to effectively "opt-out" of promises to respect other country's patent laws for the sake of supplying such medicine and, you know, saving lives. It's pretty clear that breaking the patent on these drugs is quite effective, driving costs down on a massive scale, making this part of healthcare much more cost-effective.

Of course, the pharma companies don't like this at all. So it should hardly be that big of a surprise that Senator Orrin Hatch directly tried to put pressure on Hillary Clinton and the Obama administration to stop efforts to promote more widespread use of generics in the developing world using these methods. The link above highlights that Hatch sent then Secretary of State Hillary Clinton a letter that suggested he's quite upset that the US-funded "Global Fund to Fight AIDS, Tuberculosis and Malaria" was training people in different countries to explore compulsory licenses of drugs or other ways to make use of generics.

Of course, if you just read Hatch's letter (embedded below), you'd be forgiven for being confused. In it, he claims to be outraged that the Global Fund is encouraging various countries to buy more expensive generics of "cheaper" brand name drugs. Huh? In what environment do generic drugs cost more than the brand name? Also, he appears to just be wrong. Part of the data that he based his complaint on comes from a presentation (embedded with the letter) from the Global Fund, in which they have a few graphs showing that (as you would expect if you were anyone but Orrin Hatch) the generic versions are, in fact, cheaper, which is obviously why they were recommending making use of the option.

So, even as Hatch's letter is full of bluster about misspending money, the details actually seem to suggest that they saved money.

In the letter, Hatch also claims that the presentation directly calls on countries to "disregard" the TRIPS Agreement. But, again, the attached presentation appears to tell the opposite story, with a specific call to seek solutions that comply with TRIPs.

Recipients must procure their products in accordance with national and international laws. The Global Fund encourages recipients to apply the flexibilities provided within national laws and in the World Trade Organization's Agreement on Trade-related Aspects of Intellectual Property rights (TRIPS)...

In other words, directly contrasting Hatch's claims, the Global Fund appeared to tell countries to comply with TRIPs, but (correctly) noted that there were some exceptions built within the law that allowed them to seek compulsory licensing and the use of much cheaper generics. Still, there may have been some behind-the-scenes maneuvering as well. As the IP-Watch report notes, soon after all of this, the executive director of the Global Fund, Michel Kazatchkine, resigned. The report suggests this was due to US pressure over Global Fund's daring effort to tell developing countries what their international agreements actually allow. Also: the replacement, Mark Dybul, is a US official, likely to make sure that the Global Fund works in the same manner as Hatch would like -- artificially keeping the big drug makers happily without competition and with artificially high profits, even as healthcare in the developing world might suffer.

Incredibly, Hatch actually seems to be arguing that by suggesting developing countries explore generics, it's putting people at risk because... well, there's a gap in the explanation, but it appears to be due to big pharma companies feeling they need such subsidies to make the drugs in the first place. From the letter:

By advocating for developing countries to disregard the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) through issuing compulsory licenses to gain access to Global Fund grants, we are abusing the system. Access to these products is vital to our success in fighting the war on HIV/AIDS and actions inconsistent with patent law such as these will only hinder our ability to work in partnership with the companies that have provided the intellectual property rights to develop generic versions of their products.

Got it? If you're a developing nation seeking to stem the AIDS epidemic by making AIDS drugs actually available to those with the disease, you are are actually decreasing the success of the war on AIDS because [something, something, something] big pharma will take their ball and go home. Of course, there's no actual evidence to support this, and tons of evidence that shows that developing countries who actually set a compulsory license on drugs related to critical diseases, actually do help deal with serious problems. There is no evidence that this suddenly scares companies into not making the drugs at all. They still make plenty of money in the developed world off of those drugs.

Just to summarize, though, an actual US Senator, Orrin Hatch argued that, by having the Global Fund advocate for better, cheaper generic medicines, as clearly allowed under international agreements, that the Global Fund is somehow paying more for medicines (they're not) and convincing big pharma to fail in the war against these diseases (they're not). It's no secret that politicians aren't always in sync with the truth, but this is significantly more blatant a misrepresentation than is normal.

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Copyright Alliance Invents New History (And New Meanings For 'Big' And 'Little') To Condemn Antigua

Mike Masnick — Fri, 1 Feb 2013 10:46:39 PST

We recently wrote about how, after a decade-long dispute, Antigua appeared to really be moving ahead with its plan to set up an online site that purposely offered infringing works, violating US copyright law -- and doing so with the authorization from the WTO as a response to the US breaking an existing trade agreement that helped collapse the online gambling industry that was based in Antigua. We've already noted that the US government (as it's been doing for years) has threatened retaliation if Antigua goes forward with the plan, even though the WTO has given it the stamp of approval (and ruled against the US multiple times in this dispute, almost all of which have been ignored by the US, with the US flat out lying at one point and pretending it won).

And, of course, it's not just the US government upset by this: the big copyright players have started sputtering out angry screeds. Take, for example, this absolutely laughable historical revisionism from the Copyright Alliance, which talks about just how "unfair" this whole thing would be, since it impacts third parties. This may be the most tone deaf statement from copyright maximalists in a long time (and that's saying something, given who we're talking about):

First, it raises a question of fundamental fairness about the appropriateness of punishing an unrelated group for circumstances beyond their control. U.S. copyright owners have found themselves chips in a high-stakes international game with no recourse. In addition, TRIPs obligations implicate many downstream stakeholders -- distributors and licensees, for example -- who rely on stable IP rights to function, so suspension of these obligations would affect many individuals and companies in other sectors and even other countries.

Wait, so suddenly the copyright players are concerned about "fairness" and the "appropriateness of punishing an unrelated group for circumstances beyond their control"? Really? So, um, I guess that means they're now against copyright term extension, which did exactly that. Or how about the very fact that IP agreements are included in international trade agreements -- which imposed significant and severe punishments on citizens of countries around the globe "for circumstances beyond their control."

Oh, and now "US copyright owners have found themselves chips in a high-stakes international game with no recourse." Welcome to the club. How about the whole of the public of the US and many, many other countries, who have found themselves exactly that: chips in a high-stakes international game with no recourse. The Big Copyright players, including those who funded and created the Copyright Alliance, have engaged in this game for decades, using the whole international trade game to force copyright maximalism through international trade agreements and then forcing draconian, anti-public laws on countries around the globe.

So, pardon me if I find it laughable that they of all people suddenly are whining when the shoe is (just slightly) on the other foot.

As for those "downstream stakeholders" who rely on "stable IP rights to function"... So, that must mean that the Copyright Alliance is against changes to copyright law, such as pulling works out of the public domain, which totally screwed over "downstream" merchants who were making use of those works. Oh, wait, they liked that ruling. Huh.

The fact is that the copyright industry has had the run of international trade agreements for a few decades. For an enlightening exploration of just how the big copyright players completely inserted themselves into international trade agreements, and used them as a key (some would argue the key) strategy for ratcheting up copyright laws around the globe, check out the book Information Feudalism by Peter Drahos and John Braithwaite. It tells the somewhat horrifying story about how a few powerful corporate interests effectively hijacked the TRIPS and WTO processes to use them to spread ratcheting up copyright and patent laws around the globe. We've seen that play out over the past few decades, and there's something absolutely ridiculous to see them now complaining when a single tiny WTO ruling goes against their interests.

Have they no shame?

And, of course, these same copyright maximalists have been instrumental in a number of international agreements since then that have only served to ramp up copyright rules and enforcement. Most recently, for example, we've talked about ACTA and TPP -- both of which would punish the public and harm downstream stakeholders, using them as an uninvolved pawn in a high-stakes international trade game with no recourse. Yet, somehow, the Copyright Alliance and their backers like that... because they're the ones pulling the strings.

Second, application in this situation seems to run counter to the purpose of cross-retaliation. Since the 1990s, Antigua has set itself up as a safe haven for offshore gambling. Licensing of gambling services make up a significant portion of the country’s revenues. Cross-retaliation as a remedy is, in theory, supposed to provide leverage to smaller, less-developed countries in trade disputes against larger nations. But the Antigua gambling industry is composed of large, international corporations.

Okay, now this one also makes me laugh. Notice these two paragraphs quoted one after the other. In the first one, the Copyright Alliance tries to argue that it's these poor "downstream stakeholders" who are impacted by Antigua's WTO-approved plans. In other words, "think of the poor little guy." In the second paragraph, it argues that this is unfair because it really benefits "large, international corporations."

Uh, guess whose copyrighted works are likely to be sold in this store? You guess it. Those large international corporations who funded and created the Copyright Alliance. It's so incredible dishonest to pretend that this dispute is about big companies in Antigua somehow harming the little guy in the US.

Really, the copyright maximalists apparently have absolutely no shame in historical revisionism and blatantly dishonest and misleading statements about the situation at hand.

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India Moves Even More Of Its Healthcare Away From Western Pharma

Glyn Moody — Wed, 11 Jul 2012 13:54:00 PDT

A few years back, Techdirt noted that India had 16,000 licensed drug manufacturers in the 1990s, and became a net exporter of pharmaceutical products. Things changed somewhat when India joined the WTO, which forced it to recognize pharmaceutical patents, but more recently it has started moving back towards generics, notably with the compulsory licensing of a kidney and liver cancer drug that was being sold by Bayer in the country for around $70,000 a year.

Now India has made another bold move in the field of healthcare:

From city hospitals to tiny rural clinics, India's public doctors will soon be able to prescribe free generic drugs to all comers, vastly expanding access to medicine in a country where public spending on health was just $4.50 per person last year.

The plan was quietly adopted last year but not publicized. Initial funding has been allocated in recent weeks, officials said.

Under the plan, doctors will be limited to a generics-only drug list and face punishment for prescribing branded medicines, a major disadvantage for pharmaceutical giants in one of the world's fastest-growing drug markets.

That's clearly going to have an immense effect on a country where 40% of the population live on $1.25 or less, meaning that paying for drugs is out of the question. The article quoted above estimates that 600 million people could take advantage of the scheme over the next five years.

But it will also have a major impact on the Western pharma companies, since it will effectively lock their products out of one of the two most important markets for the future. Combined with the compulsory licensing of more modern drugs, the latest move by India is deeply troubling for the world's main drug companies. That's reflected in both Bayer's attempt to contest the compulsory licensing order, and USPTO deputy director Teresa Stanek Rea's extraordinary claim that the move was in violation of TRIPS, clearly not the case.

India's decision to adopt generics across its entire healthcare system also stands in stark contrast to provisions in TPP that will make it much harder for local manufacturers in signatory countries to produce generics legally. As a result, TPP looks more and more like an attempt to lock emerging countries into old and one-sided business models that are stacked against them.

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The USPTO: Where Up Is Down, Expensive Medicine Saves Lives, And Cheap Alternatives Violate International Law

Mike Masnick — Tue, 3 Jul 2012 07:29:00 PDT

Well, this is unfortunate. We've written a few times about how various countries, under the TRIPS agreement are able to break patents on important medicines in the interest of public health. Most recently, we wrote about how India did this with a cancer drug made by Bayer called Nexavar. Despite the fact that Bayer has more than made back the money it spent bringing Nexavar to market, it's been pricing the drug at an unaffordable $70,000/year. After India allowed a small bit of competition, the price has dropped. We've seen that the USPTO doesn't like this at all and has tried to claim that high priced drugs are good for one's health, but that's beyond ridiculous to anyone who actually thinks.

Of course, "thinking" and "Congress" aren't words that often go together, so it appears that the USPTO is now trying to pull one over on Congress, with USPTO deputy director Teresa Stanek Rea misleading Congress by suggesting that these efforts violate international agreements like TRIPS. Unfortunately, TRIPS says exactly the opposite:

Rea told the committee, saying she believes the issuance of the Indian compulsory license was in violation of the Agreement on Trade Related Aspects of Intellectual Property Rights, an international pact administered by the World Trade Organization which sets minimum standards for intellectual property regulation. Rea said the USPTO is working to stem the tide of IP infringement in foreign countries by the use of a host of training programs and educational efforts aimed at foreign officials and judges along with the placement USPTO overseas IP attaches in Thailand, China, Russia, India, Brazil and Egypt.

Article 31 of the TRIPS Agreement expressly permits compulsory licenses as does the much earlier Paris Convention on the Protection of Industrial Property. The U.S. Itself routinely makes government use of patented inventions pursuant to Congressional authority under 28 U.S.C. Sec. 1498, but also has other laws allowing compulsory licenses in specific circumstances. Compulsory licenses have been allowed globally in the vast majority of intellectual property regimes since the 19th century. And, the patent on Nexavar in India had been granted under a 2005 Amended Patents Act that clearly articulated compulsory licensing rights at the time that Bayer prosecuted its patent and the patent was granted.

Finally, and most to the point, the US signed the Doha Declaration on the TRIPS Agreement and Public Health that pointedly grants countries the right to issue compulsory licenses, to define the terms upon which such licenses are granted – without restrictions, and to define the emergency circumstances that permit licenses to be granted without any prior notice to or negotiation with the patent holder (note: these expedited, no-negotiation procedures were not used in the Natco case). Under the Doha Declaration, countries are permitted to issue compulsory licenses in order to ensure “access to medicines for all” – something that India has attempted to do via the license granted.

It's a shame that the USPTO appears to be so in the tank for big pharma (they get lots of patents, which helps pay USPTO salaries...), that they're willing to mislead Congress on issues like this, even if it means that very sick people around the globe don't get the medicines they need.

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Putting Lives Before Patents: India Says Pricey Patented Cancer Drug Can Be Copied

Mike Masnick — Mon, 12 Mar 2012 13:48:00 PDT

India has an interesting relationship with pharmaceutical patents. In 1970, India did away with drug patents entirely, believing it would help create a domestic drug industry. And it worked. As we discussed in the past:

2,237 licensed drug manufacturers in 1969-1970 grew to 16,000 by 1991-1993, production of drugs grew at an average rate of 14.4% per year from 1980 to 1993, India became a net exporter of pharmaceutical products, and the market share of foreign multinational corporations (MNCs) dropped from 80-90% to 40% (Fink 2005). In 1995, six of the top ten pharmaceutical firms in India were domestic, and employment in the sector had reached half a million people

Now, remember how people say that without intellectual property, industries protected by those monopolies collapse? Yeah, the opposite happened in India. And yes, many were producing generic versions, but not all of them were. Either way, despite all of this success, the international community, pressured by the big pharmaceutical firms, cracked down on such practices, and demanded that if anyone wanted to join the WTO -- an important organization for large countries to be a part of -- they had to recognize pharmaceutical patents as per the TRIPS agreement. India finally did so in 2005.

However, one key point in TRIPS that developing countries such as India and Brazil have paid close attention to is the fact that they can force a compulsory license on a drug patent holder in the interest of public health.

For the first time since re-instating patents on pharmaceuticals, India has granted just such a compulsory license, covering a kidney and liver cancer drug marketed under the name Nexavar. Indian generic drug company Natco requested a license, noting that Nexavar was in short supply in India and exceptionally expensive. A typical dosage costs around $70,000 per year in India -- something Bayer says is necessary to recoup the drug's R&D costs. However, reports show that it cost less than $300 million to develop this drug (not to mention that the US government subsidized the process) and Bayer has already made billions selling the drug around the world. In a detailed ruling (pdf and embedded below), India's Controller of Patents (nice title) granted Natco the right to make the same drug, requiring it to sell it at a significantly lower price than Bayer sells Nexavar for, and then pay back to Bayer a 6% royalty rate (which is actually at the high end of what the UN recommends). Natco has to make the drug itself and can't name it Nexavar, make it look the same or even state that it's the same as Nexavar -- but it can make its own version of the drug and sell it, and the license lasts the life of the patent. Bayer can and almost certainly will appeal, but this is going to be interesting to watch for a few reasons.

The real question here is how the US will react to this. The Obama administration has been trying to exempt drugs that treat non-communicable diseases (such as cancer medication!) from such compulsory license rights. In the meantime, the big (non-Indian) drug companies have been working hard to lock up the Indian drug market with patents. Not surprisingly, the Obama administration and the big drug companies have a cozy relationship when it comes to dealing with patents in India.

It's likely that you'll start to hear some rumblings from the US government about how this kind of ruling is a "problem" and how India isn't "respecting" international patent law. Expect to see diplomatic pressure placed on India to put limits on its compulsory licensing program, and potentially even noises about how India has to change its patent laws to "update" them and "harmonize" them with the world. Also don't be surprised if stuff like this leads India to jump up the charts on next year's Special 301 reports from the USTR, which list "naughty" countries. It's probably too late to make it into this year's list for this particular move. Is it really any wonder that India is so worried about ACTA? It knows that ACTA is entirely about ratcheting up enforcement, without any exceptions for things like this where something as important as saving lives comes into play.

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India And China Claim That ACTA Violates Earlier IP Agreements

Mike Masnick — Fri, 18 Jun 2010 03:11:33 PDT

Recently, we noted that India and some other countries were gearing up to oppose ACTA, as it presents a huge problem for a variety of developing countries. India should know. It's still getting over the troubles created by TRIPS, which forced it to make some massive changes to its IP laws, which multiple studies have shown to have caused trouble for India. So it doesn't seem to keen to sign up for yet another, even more draconian, set of IP rules. Michael Geist points us to some notes from the recent WTO meeting where India (along with China, and some other developing nations) expressed their serious concerns with ACTA, including that it appears to violate the TRIPS agreement that they've already signed onto:

Briefly, China's and India's lengthy statements argued that ACTA and other agreements could:

Conflict with TRIPS Agreement (a reference to TRIPS Art.1.1) and other WTO agreements, and cause legal uncertainty
Undermine the balance of rights, obligations and flexibilities that were carefully negotiated in the various WTO agreements
Distort trade or create trade barriers, and disrupt goods in transit or transhipment
Undermine flexibilities built into TRIPS (such as for public health, and trade in generic medicines)
Undermine governments' freedom to allocate resources on intellectual property by forcing them to focus on enforcement
Set a precedent that would require regional and other agreements to follow suit. (One example cited was negotiations involving CARIFORUM, the group of Caribbean states. However, a delegation representing CARIFORUM said it understood the concerns but denied that CARIFORUM would have to apply ACTA's provisions.)
They also argued that the focus on enforcement did not take into account a country's level of development.

A number of developing countries broadly supported the concern.

Not too surprisingly, ACTA supporters hit back, but note how they avoid some of the bigger issues here:

ACTA participants voiced their concerns about what they saw as a steadily increasing level of counterfeiting and piracy. They countered that the draft ACTA agreement will not conflict with TRIPS and other WTO provisions. They denied it would upset the negotiated balance, distort legitimate trade or undermine TRIPS flexibilities. One said generic medicines would not be affected since ACTA does not deal with patents.

They said that ACTA was necessary because counterfeiting is no longer a question of products such as fake luxury watches, but involves commercial scale production of fake medicines, car and aircraft parts and other products, which are dangerous to health and safety, and that developing countries are particularly vulnerable.

Some of them also said they had to get together outside the WTO because countries had opposed discussing enforcement substantively in the TRIPS Council.

That claim about ACTA not dealing with patents is news to us. Both the leaked and the released draft still had language suggesting that at least some negotiators used language such that ACTA applied broadly to all intellectual property. If they're really dropping patents from ACTA, that would certainly be news. Jamie Love noted at a recent meeting that Steve Metalitz, who is a lawyer representing the entertainment industry, has said that patents are being dropped from ACTA. Hopefully it's true, but until we actually see that, who knows whether it's really happening.

As for the claims that ACTA is "necessary," that's clearly bogus. Also, it's amusing to note that the "necessary" part focuses on the typical fear mongering points of fake medicines. If they want to stop fake medicines and fake aircraft parts, fine. Then create a document that does that. The problem is that ACTA supporters hide under those claims to lump in a ton of unrelated stuff, which is where many of the concerns come from.

Separately, Love also notes that Metalitz claims that it's "not appropriate" for trading partners to discuss fair use in ACTA. Huh? This is an argument we've seen before, and it makes absolutely no sense. ACTA's copyright provisions include all sorts of aggressive enforcement requirements, and without clear fair use exceptions, those enforcement rules strip copyright of most of its key balancing points. The whole ACTA process continues to be a sham.

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