BackIndia warns of ‘endless’ legal challenges at WTO for pharma patent law regime
The norm which the US and Switzerland intend to bring enables WTO members to raise disputes against another member's actions, even if there is no violation of a WTO agreement
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The patent law regime for pharmaceutical products in India and other countries, including what constitutes an invention, will face a “chilling" effect and endless “legal challenges" at the World Trade Organization (WTO) if the US and Switzerland succeed in imposing a controversial norm, India has warned.
The norm which the US and Switzerland intend to bring into force in WTO’s trade-related aspects of intellectual property rights (TRIPS) agreement is called non-violation complaints (NVCs). It enables WTO members to raise disputes against another member’s actions or policies, even if there is no violation of a WTO agreement.
“The application of NVCs to the TRIPS agreement will have a chilling effect on members and the flexibilities (in the TRIPS agreement) will be severely curtailed," India said on Thursday.
“There is a strong potential that IP (intellectual property) regimes and practices in members countries will be opened to (legal) challenges," India argued.
The US, however, took issue with India’s statement of “chilling effect" from applying the NVCs to the TRIPS agreement at the meeting.
Without naming India, the US said it is opposed to the view expressed by one member that NVCs would have a chilling effect on members as it will not affect the use of exceptions in the TRIPS agreement, according to a participant at the meeting.
Until now, NVCs are not applied to the TRIPS agreement because of an existing moratorium since 2002. The NVCs are applied only to trade in goods and services.
But the US and Switzerland are determined to terminate the moratorium of applying NVCs to the TRIPS provisions at the WTO’s tenth ministerial conference in Nairobi starting on 15 December.
Because of unprecedented pressure from their pharmaceutical behemoths such as Pfizer Inc., Merck and Co. Inc, Eli Lilly and Co., Bristol-Meyers Squibb Co., Roche Holding AG and Novartis AG, among others, the US and Switzerland said categorically that they want to ensure that “NVCs have a place in the TRIPS agreement".
The US has also raised the bar in the latest Trans-Pacific Partnership Agreement that was concluded over 10 days ago. Washington has increased the number of years for data protection by five years after a patent on a pharmaceutical product comes to an end at the end of 20 years.
Effectively, the US has now embarked on TRIPS-plus commitments in regional and bilateral trade agreements which could come through the back door into the WTO because of NVC-type complaints, according to IP analysts.
The US and Swiss pharmaceutical companies could target provisions such as section 3(d) in the amended Indian Patent Act on the ground that it would deny market access to pharmaceutical products patented abroad.
On Thursday, over 90 developing and least-developed countries led by Peru formally presented their proposal at the TRIPS Council, calling for a permanent moratorium for applying NVCs to disputes under the agreement.
The proposal says: “After having examined the issue of the scope and modalities for complaints of the types provided for under subparagraphs 1(b) and 1(c) of Article XXIII of GATT 1994 (non-violation complaints), the 10th Ministerial Conference decides that those provisions of GATT 1994 shall not apply to the settlement of disputes under the TRIPS Agreement."
“There is a confluence of interests with many members including the African and LDC (least-developed countries) members who are not co-sponsors of the resolution," Peru said. “An overwhelming majority of countries now want that the NVCs should be made inapplicable," it said.
Many countries such as Brazil, India, China, the Philippines, Thailand, Russia, Chile, Norway, South Africa, Sri Lanka, Nepal, Korea, Cuba, Indonesia, Argentina, Colombia, Egypt and Ecuador, among others, sponsored the proposal tabled by Peru.
“The cycle of moratoriums must end and the draft ministerial decision (circulated by Peru) is the culmination of these efforts to end the moratorium," India maintained.
The European Union said it doesn’t see any relevance of applying NVCs to the TRIPS agreement. The EU maintained that if there is no consensus on Peru’s proposal, members must agree to extend the moratorium for not applying NVCs to the TRIPS context.
Norway said “applying non-violation and situation complaints to the TRIPS agreement would be particularly difficult and problematic in relation to the principle of legal certainty".
“We are therefore of the view that non-violation and situation complaints should be determined inapplicable to the TRIPS agreement," Norway said, adding that “while we are not a co-sponsor, we strongly support the content of the draft ministerial decision (proposed by Peru)." New Zealand also called for inapplicability of NVCs to the TRIPS agreement.
Despite overwhelming support from members for the draft ministerial decision against the NVCs, the US said categorically that it continues to believe that NVC have a place in the TRIPS agreement. “We will not support the ministerial decision as well as the moratorium," the US maintained, according to a participant present at the meeting.
“If there is no consensus on the continuation of moratorium (at the Nairobi meeting) then NVCs will automatically apply," the US warned.
Switzerland said the dispute settlement provisions provide sufficient guidance for members for applying NVCs to the TRIPS agreement.
In short, the battle lines are drawn on NVCs and it remains to be seen how the issue will pan out at the Nairobi meeting.
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