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Seizures of In Transit Generics at the EU Borders: India and Brazil v. the EU

Published online by Cambridge University Press:  20 January 2017

Enrico Bonadio  and
Carlo Maria Cantore
Enrico Bonadio
Affiliation:
City University London
Carlo Maria Cantore
Affiliation:
Scuola Superiore Sant’Anna, Pisa
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Abstract

This section is devoted to giving readers an inside view of the crossing point between intellectual property (IP) law and risk regulation. In addition to updating readers on the latest developments in IP law and policies in technological fields (including chemicals, pharmaceuticals, biotechnology, agriculture and foodstuffs), the section aims at verifying whether such laws and policies really stimulate scientific and technical progress and are capable of minimising the risks posed by on-going industrial developments to individuals’ health and safety, inter alia.

Type
Reports
Information
European Journal of Risk Regulation , Volume 1 , Issue 4 , December 2010 , pp. 404 - 408
Copyright
Copyright © Cambridge University Press 2010

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References

1 Two separate complaints have been filed on May and June 2010, respectively, by India (DS 408, EU – Seizure of Generic Drugs in Transit) and Brazil (DS 409, EU – Seizure of Generic Drugs in Transit) against the EU and one of its Member States (The Netherlands). Hereinafter, for ease of reference, when referring to the defendants we will mention just the EU. Summaries of the two complaints are available on the Internet (India – EU, at <http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds408_e.htm>; Brazil – EU, at <http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds409_e.htm>, both last accessed on 22 October 2010).

2 Regulation 1383/2003 (Council Regulation (EC) No. 1383/2003 concerning customs action against goods suspected of infringing certain intellectual property rights and the measures to be taken against goods found to have infringed such rights, OJ 2003, L 196/7). India and Brazil also objected to other EU legislative acts (i.e. Commission Regulation (EC) No. 1891/2004 laying down provisions for the implementation of Council Regulation (EC) No 1383/2003 concerning customs action against goods suspected of infringing certain intellectual property rights and the measures to be taken against goods found to have infringed such rights, OJ 2004 L 328/16; Council Regulation (EEC) No 2913/92 establishing the Community Customs Code, OJ 1992, L 302/1; Directive 2004/48 (EC) of the European Parliament and of the Council on the enforcement of intellectual property rights, OJ 2004, L 195/16; Regulation (EC) No 816/2006 of the European Parliament and of the Council on compulsory licensing of patents relating to the manufacture of pharmaceutical products for export to countries with public health problems, OJ 2006, L 157/1) and Dutch provisions (e.g., certain provisions of the Dutch Patents Act and the General Customs Act of the Netherlands) as well as other relevant Dutch regulations, guidelines and administrative practices.

3 Namely Articles V and X of the GATT 1994 and various provisions of the TRIPs Agreement, namely, Article 28 read together with Article 2, Articles 41 and 42, and Article 31 read together with the provisions of the August 2003 Decision on TRIPs and Public Health.

4 For example, the Indian company Dr Reddy's manufactures the generic drug Losartan.

5 Xavier Seuba, “Free Trade of Pharmaceutical Products: The Limits of Intellectual Property Enforcement at the Border”, ICTSD Programme on IPRs and Sustainable Development, Issue Paper No. 27, International Centre for Trade and Sustainable Development (2010), p. 2, available on the Internet at <http://ictsd.org/downloads/2010/04/seuba_web_10.pdf> (last accessed on 22 October 2010).

6 In addition, the EU minimizes the facts of the case and in particular notes that the generics blocked at its borders were later released.

7 Article 51 provides that “Members shall, in conformity with the provisions set out below, adopt procedures to enable a right holder, who has valid grounds for suspecting that the importation of counterfeit trademark or pirated copyright goods 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 intellectual property rights, provided that the requirements of this Section are met. Members may also provide for corresponding procedures concerning the suspension by the customs authorities of the release of infringing goods destined for exportation from their territories” (emphasis added).

8 See emphasis added, supra note 7.

9 Kumar, Shashank P., “Border Enforcement of IP Rights Against In Transit Generic Pharmaceuticals: An Analysis of Character and Consistency”, 32 European Intellectual Property Review (2010), pp. 506 et sqq., at p. 512.Google Scholar

10 Kumar, Shashank P., “International Trade, Public Health, and Intellectual Property Maximalism: The Case of European Border Enforcement and Trade in Generic Pharmaceuticals”, 5 GT & CJ (2010), pp. 155 et sqq., at p. 160.Google Scholar

11 Article 4-bis Paris Convention for the Protection of Industrial Property states that “Patents applied for in the various countries of the Union by nationals of countries of the Union shall be independent of patents obtained for the same invention in other countries, whether members of the Union or not.” See also Article 2.1 TRIPS which incorporates said provision.

12 See, for example, Abbott, Frederick M., “Seizure of Generics Pharmaceuticals in Transit Based on Allegations of Patent Infringement: A Threat to International Trade, Development and Public Welfare”, 1 WIPOJ (2009), pp. 43 et sqq., at p. 44.Google Scholar

13 Court of Hague, Case 311378 Sisvel v. Sosecal. In this decision the court clarified that the Dutch customs authorities may suspend goods in transit on grounds of alleged infringement of a Dutch patent. In particular, it stressed that the “manufacturing fiction” principle could be inferred by Recital 8 Regulation 1383/2003.

14 Frederick M. Abbott, supra note 12, at p. 48.

15 Xavier Seuba, supra note 5, pp. 22 et sqq.

16 Bonadio, Enrico, “Protecting Intellectual Property Rights through EU Customs Procedures”, 14(4) International Trade Law & Regulation (2008), pp. 80 et sqq., at pp. 85–88.Google Scholar

17 Case C-383/98 See Polo/Lauren Co LP v. Dwidua Langgeng Pratama International Freight Forwarders [2000] ECR I-2519; Case C-60/02 Re Montres Rolex SA [2004] ECR I-651

18 See Case C-405/03 Class International BV v. Colgate – Palmolive Co [2005] ECR I – 8735; Case C-281/05 Montex Holdings v. Diesel SpA [2006] ECR I-108881.

19 The ECJ might soon give more certain guidelines on this issue when delivering its decision in Nokia v. Their Majesty's Commissioners of Revenue and Customs (Case C-495/09) which concerns an analogous matter.

20 See the Indian complaint with the WTO, supra note 1. See also Abbott, supra note 12, p. 49 (who seems to take such view).

21 The system takes its name from paragraph 6 Doha Declaration which provides that “[…] WTO members with insufficient or no manufacturing capacities in the pharmaceutical sector could face difficulties in making effective use of compulsory licensing under the TRIPS Agreement. We instruct the Council for TRIPS to find an expeditious solution to this problem and to report to the General Council before the end of 2002”. The mechanism was then devised by the WTO General Council Decision of 30 August 2003 and Protocol of amendment to Article 31 TRIPS of 6 December 2005. In particular, the 2003 Decision introduced a temporary waiver to TRIPS Agreement and the 2005 Protocol made that permanent.

22 Actually this system has not been successful; thus far it has been used just once (by Rwanda).

23 Under the paragraph 6 system states which need to import generics should preliminarily identify two licensees, one in their territory and another in the exporting country.

24 Yet the risk of re-importation is often considered theoretical. Also the European Commission recognized that drugs destined to developing and least developed countries are seldom channelled back into rich markets such as the EU; see Carlos M. Correa, “Implications of the Doha Declaration on the TRIPS Agreement and Public Health”, World Health Organization (2002), Geneva, p. 32 (note 99), available on the Internet at <http://archives.who.int/tbs/global/s2301e.pdf> (last accessed on 22 October 2010).