EU FTA, TRIPS plus could hit Indian generic drug makers

Live Mint | Mon, Mar 25 2013

EU FTA, TRIPS plus could hit Indian generic drug makers

The FTA might enable seizure of property of generic drug makers on suspicion of IP rights infringement

Vidya Krishnan

New Delhi: Leaked documents from the final round of negotiations between India and the European Union (EU) indicate that the free trade agreement (FTA) between them, if endorsed in its current state, will lean heavily in favour of European drug makers by demanding stricter implementation of intellectual property (IP) rights.

The draft of the leaked chapter relating to IP has been put up on the website of Knowledge Ecology International, a non-governmental organization that claims it is “focused on social justice, particularly for the most vulnerable populations, including low-income persons and marginalized groups”. It said it was provided the draft chapter by “informed sources”.

If adopted, the FTA would enable freezing of bank accounts and seizure of property of generic drug makers in cases involving infringement of IP rights. The move will hit several Indian generic drug makers and compromise access to life-saving drugs in low- and middle-income countries to which these companies export their products.

India expects to conclude negotiations on the long-pending FTA at a ministerial meeting with EU trade commissioner Karel De Gucht scheduled for 14-15 April, trade minister Anand Sharma said on Friday. The two sides have missed four deadlines to complete the negotiations, which started in 2007.

The EU has been insisting on India signing the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Plus agreement and accept conditions that go beyond the accord administered by the World Trade Organization (WTO).

The so-called TRIPS Plus agreement would make it difficult for any generic manufacturer to challenge patents. The chapter on IPR in the leaked text states that “an interlocutory injunction may also be issued to order the seizure or delivery up of the goods suspected of infringing an intellectual property right so as to prevent their entry into or movement within the channels of commerce.”

Further, “the judicial authorities may order the precautionary seizure of the movable and immovable property of the alleged infringer, including the blocking of his/her bank accounts and other assets”.

This, according to industry experts, will discourage Indian drug makers from challenging patents.

“This would not only deny access to new medicines to people of India, but will also adversely impact our ability to export medicines of doubtful patent validity,” said D.G. Shah, secretary general of the Indian Pharmaceutical Alliance (IPA), a lobby group that represents generic drug manufacturers.

“The leaked text is indicative of the aggressive pursuit of its objectives by the EU. The EU has sensed an opportunity in the outgoing government’s anxiety to showcase its achievement by concluding the FTA. In the process, provisions such as injuncting a generic drug manufacturer on suspicion of infringement, pending a decision on the validity of the patent, completely negates the doctrine of ‘unjust enrichment’,” Shah said.

Anand Grover, a leading expert on patent litigation, maintained that the move to include copyrights and trademarks was irrelevant with regards to drugs. “Trademarks and copyrights cannot be applicable to drugs. One cannot prove a tablet it copied. With regards to patents, this move is just to strike fear in the hearts of the generic drug industry. So far, prima facie, infringement has to be established in court before any action is taken against the infringer. It is drastic to allow seizure on suspicion,” said Grover.

Aid organizations maintain that the United Progressive Alliance government, in trying to seal the FTA with Europe before next year’s general election, risks creating a public health crisis in developing countries.

“Indian government does not have to agree to TRIPS plus. People will suffer as a consequence of this action. This will have very negative public health implications across the developing world. We hope India will take a strong stand,” said Mira Shiva, convenor of All India Drug Action Network.

The EU as an economic bloc is India’s largest trade partner. In 2010, it imported goods worth €33.2 billion (around Rs.2.34 trillion today) from India and exported goods worth €34.7 billion. Services exports to India stood at €9.8 billion and imports at €8.1 billion, according to EU figures. Bilateral trade in goods alone rose by 20% between 2010 and 2011.

source: Live Mint