‘TRIPS Plus’ Provisions in US Free Trade Agreements
THE US BILATERAL Free Trade Agreements (FTAs) restore the standards of intellectual property protection that the US originally expected when concluding the TRIPS Agreement, bring precision to its ambiguous terms, raise the standards above those of TRIPS in certain fields, and introduce standards of protection in response to the situations created by new technologies such as the Internet. Raising the standards of IPR protection above the TRIPS Agreement is allowed under the second sentence of its Article 1.1, which provides that Members may implement more extensive legal protection than is required by the Agreement, provided that such protection does not contravene TRIPS provisions. This is an aspect of the flexibility that the TRIPS Agreement offers to Members. By the same token, these FTA provisions restrict the latitude of US FTA partners from invoking the standard-lowering flexibilities contained in the TRIPS Agreement. Thus, complex layers of TRIPS interpretations have emerged out of the positions taken by different industries and countries vis-à-vis the TRIPS Agreement. This chapter takes stock of US FTA provisions relating to IPRs and compares them with relevant TRIPS provisions. How and when these FTA provisions would impact socio-economic situations would depend on many factors outside the text of the agreements, including how they are implemented. Much, unfortunately, is in the realm of speculation.
I ‘TRIPS PLUS’ PROVISIONS IN THE US FTAS
A Beyond the Uruguay Round Results
The TRIPS Agreement incorporated many proposals from developed countries, but still insufficiently reflected the US demands both on substantive standards of protection for new technologies and regulated products such as pharmaceuticals as well as on enforcement provisions. We have seen in chapter 4 that, towards the end of the Uruguay Round negotiations, the US pharmaceutical industry was opposing the draft text of what would be the TRIPS Agreement. Their dissatisfaction concerned the 10-year transition periods given before introducing product patent protection to such countries as India, Thailand and Brazil where most copies of drugs were produced at that time, and the fact that the Agreement would not offer protection for drugs in the ‘pipeline’.1 The TRIPS Agreement incorporated many proposals from developed countries, but still insufficiently reflected the US demands both on substantive standards of protection for new technologies and regulated products such as pharmaceuticals as well as on enforcement provisions.
Following the entry into force of the TRIPS Agreement, the built-in agenda discussions within the WTO TRIPS Council on the subject matter of biotech inventions stipulated in TRIPS Article 27.3(b) revealed that it is extremely difficult to modify TRIPS Agreement provisions or to give further discipline in the multilateral rules relating to intellectual property rights (IPRs) within the WTO (see chapters 5 and 12).
The enforcement chapter of the TRIPS Agreement (Part III, Articles 41–61) where new rules concerning domestic enforcement producers and remedies were established for the first time in the history of public international law, did not seem to respond sufficiently to the expectations of US officials and industries who wished for clearer rules and a more effective enforcement system. Watal cites the examples of the language used in Part III of the TRIPS Agreement which disappointed US officials: it merely states that Members ‘shall make available to right holders’ certain procedures, or that judicial authorities ‘shall have the authority to . . .’ (chapter 5)2
The rift that had existed during the Uruguay Round negotiations between developed countries, such as the US and the EU, and developing countries, such as India and Brazil, about what intellectual property rules should be within the GATT-WTO during the UR negotiations did not change significantly. The TRIPS interpretation instead became a new battleground for the access to medicines debate. The massive support given to the uncertain concept of TRIPS ‘flexibilities’ introduced further doubts about how reliable the TRIPS Agreement would be. This seems to have given additional reasons for the US to resort to pushing IP provisions in its bilateral agreements for the pursuit of the protection of intellectual property world-wide, relying simultaneously on the TRIPS Agreement and bilateral agreements on IP issues, depending in each case on what suits its agenda. The Panel in China–Intellectual Property Rights indicated the limits of Member’s discretion,3 but no Appellate Body Report has yet dealt with the rules concerning the ‘flexibilities’ that the TRIPS Agreement offers.
Traditionally, it was mainly the European Union (formerly the European Communities (EC)) that most often concluded a nexus of bilateral trade agreements, be it association agreements or other free trade agreements with countries in neighbouring regions. The agreements in the European region were aimed among other things at political and eventual market integration and at coping with immigration and security problems. In the 1980s, however, when it appeared that the Uruguay Round negotiations were not progressing well, the US started to negotiate bilateral free trade agreements (FTAs), first with Israel and secondly with Canada. The US-Israel FTA entered into effect on 1 September 1985, while the Canada-US Free Trade Agreement (CUSFTA) took effect on 1 January 1989. On 1 January 1994, the CUSFTA was expanded to include Mexico, through the North American Free Trade Agreement (NAFTA). At that time, the US resorted to bilateral relations only with countries with which it had pressing political and security or immigration issues. The US goal may be to create a global rule regarding commerce, but a single multilateral agreement is increasingly difficult to achieve.4 Bilateral agreements provide a means to supplement various difficulties in strengthening multilateral rules.5 Thus, there were three negotiating objectives regarding intellectual property stated in the Trade Promotion Authority (TPA).6 The Bush Administration obtained these objectives from Congress in 2002, and they expired in July 2007. They were:
- to promote adequate and effective protection through various means, including the accelerated and full implementation of the TRIPS Agreement, any multilateral or bilateral trade agreement reflecting a standard of protection similar to that found in US law, responding to new and emerging technologies of transmitting and distributing products embodying IP, preventing or eliminating discrimination with respect to the availability, acquisition, scope, maintenance, use, and enforcement of IPRs, ensuring that standards of protection and enforcement keep pace with technological developments and providing strong enforcement of IPRs;
- to secure fair, equitable, and non-discriminatory market access opportunities for US persons who rely upon IP protection; and
- to respect the Doha Declaration on the TRIPS Agreement and Public Health.
For the US, approximately the same draft text on IP protection served as the basis for the two parallel negotiations which started in 1986, one for the CUSFTA which entered into force on 1 January 1988, and the other for the TRIPS Agreement. In June 1991, Canada, Mexico and the US started negotiating the North American Free Trade Agreement (NAFTA), which was signed on 17 December 1992 and entered into force on 1 January 1994, one year before the entry into force of the TRIPS Agreement.
The end results of these parallel negotiations differed on several points in relation to TRIPS provisions. NAFTA is less ambiguous and more detailed, because it has fewer Parties with diverging interests. There are some NAFTA provisions which deal with IPRs which do not exist in the TRIPS Agreement, or those which provide tighter limitations to the scope of exceptions than the TRIPS Agreement. These provisions can be called ‘TRIPS plus’.
Concerning copyright, for example, NAFTA Chapter XVII contained certain provisions concerning rights which are not within the scope of the TRIPS Agreement, or which extend the protection or limit the scope of exceptions. For instance, Article 1705.6 restricts grounds for compulsory licensing by prohibiting the NAFTA Parties from granting translation and reproduction licences permitted under the Appendix to the Berne Convention,7 while Article 1707 provides protection of ‘encrypted program[s] carrying satellite signals’, something which is absent in the TRIPS Agreement.8
As for sound recording, Article 14.2 of the TRIPS Agreement provides merely that ‘producers of phonograms shall enjoy the right to authorize or prohibit the direct or indirect reproduction of their phonograms.’ Article 1706.1 recognises that the producer of a sound recording not only has this right, but also has extended rights over extended modes of distribution, namely, the right to prohibit ‘(b) the importation of copies of the sound recording made without the producer’s authorization, (c) the first public distribution of the original and each copy of the sound recording including by rental, and (d) the commercial rental of the original or a copy of the sound recording, except where expressly otherwise provided in a contract between the producer of the sound recording and the authors of the works fixed therein . . .’
Concerning trademarks, Article 1708.1 of NAFTA includes collective marks among trademarks and states that a Party may include certification marks. Article 1708.2 brings more clarifications to procedures for applying for the registration of trademarks, and Article 1708.6 of NAFTA clarifies the criteria in determining whether a trademark is ‘well known’, ie, that there is knowledge of the trademark in the relevant sector of the public, including knowledge in the Party’s territory obtained as a result of the promotion of the trademark. Article 1708.7 stipulates the term of trademark protection of 10 years, renewable for terms of not less than 10 years when conditions for renewal have been met, which is longer than the seven years stipulated in Article 18 of the TRIPS Agreement. Article 1708.8 of NAFTA provides an uninterrupted period of at least two years for non-use, unless valid reasons based on the existence of obstacles to such use are shown by the trademark owner, and examples are indicated justifying non-use which is independent of the right holder, such as import restrictions on, or other government requirements for, goods or services identified by the trademark. This period is shorter than the three years that is provided by TRIPS Article 19. Article 1708.14 of NAFTA provides what the TRIPS Agreement does not, ie, that ‘Each Party shall refuse to register trademarks that consist of or comprise immoral, deceptive or scandalous matter, or matter that may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs or any Party’s national symbols, or bring them into contempt or disrepute.’
Concerning patents, NAFTA introduces a tighter discipline in the grant and enjoyment of patents in Article 1709.8, which provides that a Party may revoke a patent only when: (a) grounds exist that would have justified a refusal to grant the patent; or, (b) the grant of a compulsory license has not remedied the lack of exploitation of the patent, whereas TRIPS Article 32 does not restrict the grounds for revocation or invalidity of patents. NAFTA also limits the scope of certain exceptions to the rights of patent holders. Article 34.1 of the TRIPS Agreement concerns the burden of proof for process patents, in the purposes of civil proceedings in respect of the infringement of the rights of the patent owner (referred to in paragraph 1(b) of Article 28). It states that the judicial authorities shall have the authority to order the defendant to prove that the process to obtain an identical product is different from the patented process and that any identical product when produced without the consent of the patent owner shall, in the absence of proof to the contrary, be deemed to have been obtained by the patented process: (a) if the product obtained by the patented process is new; or, (b) if there is a substantial likelihood that the identical product was made by the process and the owner of the patent has been unable through reasonable efforts to determine the process actually used.9 Article 1709.11 of NAFTA, by contrast, allows either (a) or (b) above to establish that the allegedly infringing product was made by a process other than the patented process.
Article 1709.3 of NAFTA offers the same options concerning the exceptions to patentable subject matter10 to the Parties, as do Articles 27.2 and 27.3(a)(b) of the TRIPS Agreement. As for the term of patent protection, however, Article 1709.12 of NAFTA, in the second sentence, provides for patent term extensions due to regulatory delays, which the TRIPS Agreement does not.
Regarding compulsory licensing, NAFTA provisions are similar to those in the TRIPS Agreement, with however, slightly more restrictive conditions with respect to the unauthorised use of the ‘first patent’ by the holders of second patents, which cannot be exploited without infringing ‘the first patent’ in Article 1709.10(l).11 Furthermore, Article 1710 of NAFTA concerning layout designs of semiconductor integrated circuits (in paragraph 5) prohibits compulsory licensing of layout designs of integrated circuits. In contrast, the TRIPS Agreement permits such licensing under the conditions delineated in Article 31. For semiconductor technology, Article 31(c) of the TRIPS Agreement limits the grounds for compulsory licences only for public non-commercial use or to remedy anticompetitive practices determined after judicial or administrative processes. NAFTA has a specific rule for public authorities regarding liability12 and Article 1715.7 provides for what is not in the TRIPS Agreement, ie, where: ‘a Party is sued with respect to an infringement of an intellectual property right as a result of its use of that right or use on its behalf, that Party may limit the remedies available against it to the payment to the right holder of adequate remuneration in the circumstances of each case, taking into account the economic value of the use.’
NAFTA clarifies the definition of trade secret, which in the TRIPS Agreement is referred to as ‘undisclosed information’. Article 1711.1 concerning trade secrets states the conditions on which they are protected, namely:
(a) the information is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons that normally deal with the kind of information in question;
(c) the person lawfully in control of the information has taken reasonable steps under the circumstances to keep it secret.
Article 1711.2 further elaborates on these conditions: ‘A Party may require that to qualify for protection a trade secret must be evidenced in documents, electronic or magnetic means, optical discs, microfilms, films or other similar instruments.’
Article 1711.3 explicitly mentions that there is no time limit to the protection of trade secrets.13 Article 1711.4 provides safeguards against abusive protection of trade secrets, and states: ‘No Party may discourage or impede the voluntary licensing of trade secrets by imposing excessive or discriminatory conditions on such licenses or conditions that dilute the value of the trade secrets.’
Concerning regulated pharmaceutical or agricultural chemicals products, NAFTA provides that if product patent protection is unavailable, administrative protection must be available for such products for the unexpired term of the patent (Article 1709.4). Articles 1711.5, 1711.6, and 1711.7 NAFTA concern the protection of test data submitted to regulatory authorities that the TRIPS Agreement refers to vaguely in Article 39.3. Article 39.3, defines the scope of data to be protected, merely as ‘undisclosed test or other data, the origination of which involves a considerable effort’. Article 1711.5 of NAFTA explains that the data in question is undisclosed test or other data ‘necessary to determine whether the use of such products is safe and effective’ and where ‘the origination of such data involves considerable effort’ except where ‘the disclosure is necessary to protect the public or unless steps are taken to ensure that the data is protected against unfair commercial use.’ Article 1711.5, together with Article 1711.6 of NAFTA, stipulate the obligation of Parties not only to protect against disclosure of the data of persons making such submissions, but ensure that ‘no person other than the person that submitted [the data] may, without the latter’s permission, rely on such data in support of an application for product approval during a reasonable period of time after their submission’ (ie, ‘non-reliance’, in the vocabulary of pharmaceutical companies – see chapters 4 and 13). The NAFTA, therefore, provides for the protection of ‘data exclusivity’. Further, in the first sentence of Article 1711.7, NAFTA, unlike the TRIPS Agreement, defines the reasonable period of protection to be ‘not less than five years from the date on which the Party granted approval to the person that produced the data for approval to market its product, taking account of the nature of the data and the person’s efforts and expenditures in producing them.’ Article 1711.7 of NAFTA states the starting point from which the protection of data exclusivity, the date of the first marketing approval relied on. Then, in the second sentence of Article 1711.7, NAFTA refers to the compatibility of its own provisions relating to data exclusivity and the abbreviated generic medicines’ entry conditions, on the basis of bioequivalence and bioavailability studies.
Concerning enforcement procedures, NAFTA provides the rules relating to evidence, in Articles 1714 (general provisions), 1715 (specific procedural and remedial aspects of civil and administrative procedures), 1716 (provisional measures), 1717 (criminal procedures and penalties), 1718 (enforcement of intellectual property rights at the border), in more detail than the TRIPS Agreement does. A notable difference between the two treaties is that Article 1716.2(c) of NAFTA enumerates the matters which must be considered by the judicial authorities in determining the kind of provisional measures to be taken.14
Thus, most NAFTA provisions are simply clearer or more detailed than the corresponding TRIPS provisions, but some of them set a relatively higher level of IP protection. In the cases where NAFTA provides for TRIPS-minus standards, for the three Members of the NAFTA, the TRIPS provisions prevail. Article 103 of NAFTA refers to the ‘existing rights’ and obligations with respect to the Parties under the General Agreement on Tariffs and Trade and other agreements to which Parties adhere. Paragraph 2 of the same Article adds that the NAFTA provisions prevail to the extent of the inconsistency, except as otherwise provided in the Agreement, in the event of any inconsistency between NAFTA and such other agreements. In paragraph 1(a) of Annex 1701.3 concerning intellectual property conventions, Mexico is held to make every effort to comply with the substantive provisions of the 1978 or 1991 International Convention for the Protection of New Varieties of Plants (UPOV) as soon as possible, and no later than two years after the date of signature of the NAFTA Agreement.
II ‘TRIPS PLUS’ PROVISIONS IN THE POST-2000 US FTAS
The United States has 17 FTAs (including multilateral FTAs with a group of countries)15 as of 30 September 2010. Since 2000, the following FTAs have been negotiated and signed, most of which have entered into force: with Jordan (signed 24 October 2000; entry into force 17 December 2001), Singapore (6 May 2003; 1 January 2004), Chile (6 June 2003; 1 January 2004), Morocco (15 June 2004; 1 July 2005), Australia (18 May 2004; 1 January 2005), the Dominican Republic and Central America (CAFTA-DR, the Central American countries being Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua) (signed 5 August 2004), Bahrain (14 September 2004; 1 August 2006), Oman (19 January 2006; 1 January 2009), Peru (12 April 2006; 1 February 2009), Colombia (signed 22 November 2006), Panama (signed 28 June 2007), and the Republic of Korea (KORUS, signed 30 June 2007). In 2004, the US started negotiating FTAs with Thailand and the South African Customs Union (SACU). However, these negotiations stalled. Negotiations to create a Free Trade Areas of the Americas (FTAA), a single free trade area among 34 countries of the Americas, began in December 1994. These have also encountered obstacles.16
Among certain US industries, approaches to IPRs have undergone considerable changes since the Uruguay Round. First of all, not all the industries actively involved in the Uruguay Round negotiations maintained their interest in strengthened IPR protection. ‘Pro-patent’ companies such as IBM, HP and General Electric gradually employed more subtle approaches to the issue, as appropriate (see chapter 1).
The software industry’s concern with IPR enforcement against piracy seems to have increased. Business Software Alliance (BSA), for example, requested that Singapore provide administrative protection and the Republic of Korea implement the FTA provisions while the KORUS remains non-ratified.17 Meanwhile, BSA has intensified campaign activities in Asian countries to promote awareness of copyright protection.18
The motion picture and recording industries’ keen interest in strengthened global copyright protection occasionally conflicts with the interests of electronics hardware companies, since this could reduce sales of their hardware. Hardware industries also tend to oppose the levy system, which collects royalties from purchasers of recordable media such as CDs and DVDs. The levy system has developed to compensate private copies that are permitted by copyright laws, such as 17 USC § 1008. Since individual collection of royalties from such private use is practically impossible, intermediaries, such as the Alliance of Artists and Recording Companies for featured artists and copyright owners, and Harry Fox Agency for publishers, collect levies and distribute them among the right holders, normally through collecting societies. Whereas industries tend to oppose the levy system,19 right holders support it.
Research-based pharmaceutical companies and biotech ventures have continued to insist on incorporating, in the IP chapter of the US FTAs, the disciplines for global IPR protection that they did not succeed in including in the TRIPS Agreement, or TRIPS provisions which were not sufficiently detailed or clear.20
All US FTAs affirm at the outset, in general provisions, that these FTAs are consistent with the disciplines of FTAs in Article XXIV of GATT (1994) and Article V of the General Agreement on Trade in Services (GATS), and that the Parties reaffirm their existing rights and obligations under existing bilateral and multilateral agreements to which both countries are Party, including the WTO Agreement. The IP Chapters of these US FTAs reiterate national treatment21 and the transparency principle as part of the general provisions.22 The transparency principle for the IP Chapters of the US FTAs impose, on the Parties, the obligation that all laws, regulations, and procedures concerning the protection or enforcement of IPRs are in writing and published.23 Article 63.124 concerning transparency in Part V (Dispute Prevention and Settlement) of the TRIPS Agreement, in contrast, does not refer to the obligation for these national rules and procedures to be ‘written’.
The General Provisions section of US FTAs also enumerates previously enacted treaties,25 which the Parties should ratify or accede to, including those which the US has not ratified, such as the Patent Law Treaty of 2000.26
The Chile-US FTA (Article 17.2.1) and CAFTA-DR FTA (Article 15.2.1) integrate sound marks as a mandatory subject matter, and scent as an optional one. Many US FTAs prohibit the denial of trademark registration solely on the grounds that the sign of which it is composed is a sound or a scent.27 Protection of well-known marks is also provided for in all US FTAs.28
Internet-related IP referred to in the US FTAs includes domain names.29 In order to address the problems of trademark cyber-piracy, the US FTAs require that a Party’s country-code top level domain (ccTLD) provide a dispute procedure based on the uniform domain-name policy (UDP), and online public access to a database of contact information (see Singapore FTA Article 16.3(2); Chile Article 17.3.2; Morocco Article 15.4.2; Australia Article 17.3.2; CAFTA-DR Article 15.4.2; Bahrain Article 14.3.2; Oman Article 15.3.2; Peru Article 16.4.2; Colombia Article 16.4.2; Panama Article 15.4.2; and KORUS Article 18.3.2, except US-Jordan FTA).30
C Copyright and Related Rights
All the US FTAs (except US-Jordan FTA) prolong the term of protection for a literary and artistic work (including a photographic work), performance or phonogram,31 by the specified method to calculate the term.
In addition to those rights and enforcement means that are found in NAFTA or TRIPS, US FTAs introduce the obligations and responsibilities for a series of new or extended subjects of protection, restrain the scope of exceptions and strengthen enforcement measures, particularly in regard to Internet-related copyright or ‘related rights’. These probably reflect ongoing technological changes, but since agreement was reached in the US-Bahrain FTA in 2004, these enforcement measures have been either significantly extensive, or more detailed, particularly in US-Australia.
US FTAs, with the exception of the US-Jordan FTA, include provisions relating to the protection of encrypted satellite signals. The US FTAs with Singapore (Article 16.1.1), Morocco (Article 15.8.1), Bahrain (Article 14.7.1), Oman (Article 15.7.1) and Peru (Article 16.8.1) made it a criminal offence to manufacture and trade in these tools and to ‘receive or further distribute’ such signals. The Chile-US FTA (Article 17.8.1(b)) defines all these acts in terms of either civil or criminal liability and states that the right holder or person holding an interest in the encrypted signal must prove that the act was done wilfully, to subject the offender to civil liability.
Those US FTAs concluded after the year 2000 reflect the US software and copyright industries’ particular concerns about Internet piracy.32 These FTAs create liability and provide specific remedies for those who circumvent the technological measure33 that controls access to a protected work, performance, phonogram, or other subject matter, as well as for those who manufacture, provide, or sell devices, products, or components to do so (Jordan Article 4.13; Singapore, Article 16.4(7)(c); Chile, Article 17.7(5); Morocco Article 15.5.8(a); Australia Article 17.4.7(a); CAFTA-DR Article 15.5.7(a); Bahrain Article 14.4.7(a); Oman Article 15.4.7(a); Peru Article 16.7.4(ii); Panama Article 15.5.7(ii); and KORUS Article 18.4.7(a)).
The US attaches importance to anti-circumvention obligations which are incorporated in both the 1996 WIPO Copyright Treaty (WCT)34 and the Performances and Phonograms Treaties (WPPT).35 However, the obligation is expressed in general language, and protection details are left to be dealt with through national law. These obligations were enacted in the US in the 1998 Digital Millennium Copyright Act (DMCA).36 In the US FTA, the act of knowingly37 circumventing, without authorisation of the right holder or law, through any effective technological measure that controls access to a protected work, performance, or phonogram, is civilly liable and, in certain circumstances criminal. There is, however, a variation according to the specific partner country of each FTA on the elements constituting the act of anti-circumvention, for example, whether or not the act is wilful. The prohibition of technological circumvention is not without limits in US domestic case law. Non-DMCA public interests are considered by US courts.38
Civil remedies and criminal liabilities for the infringement of protection of rights management information are also mandated in Singapore (Article 16.4.8), Chile (Article 17.7.6), Morocco (Article 15.5.9), Australia (Article 17.4.8), CAFTA (Article 15.5.8), Bahrain (Article 14.4.8), Oman (Article 15.4.8), Peru (Article 16.7.5), Colombia (Article 16.7.5), Panama (Article 15.5.8) and KORUS (Article 18.4.8), but not found in the US-Jordan FTA.
US FTAs also prohibit the re-transmission of television signals (whether terrestrial, cable, or satellite) on the Internet without the authorisation of the right holder of the content of the signal (see for example, Article 16.4.2 (b) of the US-Singapore FTA). This occurs except for traditional, free-to-air (ie, non-interactive) broadcasting and other limitations to this right for such broadcasting activity, as a result of each Party’s national laws.
Aside from agreeing on these provisions aimed at adapting IP protection to the era of digital technologies, the US FTAs oblige the Parties to accede to the WIPO Copyright Treaty (1996) and WIPO Performances and Phonographs Treaty (1996). The US FTAs also enumerate those earlier treaties,39 which the Parties should ratify or accede to, including those which the US has not ratified, such as the Patent Law Treaty of 2000.40
D ‘Certain Regulated Products’
The US FTAs contain those provisions relating specifically to patent protection and regulatory approval processes for the safety and efficacy of pharmaceutical or agricultural chemical products.
As does NAFTA, US FTAs (with the exception of the US-Jordan FTA) mandate the extension of patent terms, equal to delays caused by regulatory approval processes of up to five years. The US FTAs with Singapore, Morocco and Bahrain delimit the scope of experimental manufacturing and sales, and establish the ‘linkage’ between patent status and drug approval. They also link the status of patents and marketing approval in the original country to marketing approval in the FTA partner country where the drug approval is requested, and oblige regulatory authorities to make available to the patent-owner, the identity of any third party requesting marketing approval during the term of the patent (Jordan Article 4.23, Singapore Article 16.8.4, Chile Article 17.10.2, Morocco Article 15.10.4, Australia Article 17.10.4, CAFTA-DR Article 15.10.2, Bahrain Article 14.9.4, Oman Article 15.9.4, Peru Article 16.10.4, Colombia Article 16.10.4, Panama Article 15.10.4 and KORUS Article 18.9.5).
In Article 39.3 of TRIPS, as we have seen in chapters 4, 5 and 13, it can be interpreted to mean that: (i) the data submitted to regulatory authorities may not be considered as intellectual property over which the owner has exclusive rights; (ii) the obligation imposed on regulatory authorities to protect data against unfair commercial use may concern a narrow scope of data; and (iii) there is no obligation on the regulator not to rely on the originator’s data on efficacy and safety for examining the later third party submission of the same data for marketing approval of the same medicines. Against this interpretation of Article 39.3 of TRIPS, US FTAs clarify that the data in this context means ‘undisclosed test or other data necessary to determine whether the use of such products is safe and effective’; the origination of which involves considerable effort except where ‘the disclosure is necessary to protect the public or unless steps are taken to ensure that the data is protected against unfair commercial use’. In all US FTAs, the Parties have the obligation of non-disclosure as well as ‘non-reliance’ for a period of five years from the date of the marketing approval for pharmaceutical products, and 10 years for agricultural chemical products. The US seems to have attempted to overhaul the ambiguities and omissions of Article 39.3 of the TRIPS Agreement by re-instituting its own model of data exclusivity in its FTAs. Alternatively, some governments and academics argue that the requirements of Article 39.3 should be interpreted in a way that reduces the cost of medicines in developing countries.41
In mandating data exclusivity protection, the US FTAs define the term ‘new product’ from the point of view of the regulatory authorities that approve drugs, which is not the same as the ‘novelty’ requirement for patentability. The IPR Group of the Industry Trade Advisory Committee (ITAC-15)42 explains that the US interprets the term ‘new chemical entity’ in TRIPS Article 39.3 based on the regulatory definition of a ‘new product’, ie, a product that does not contain a chemical entity that had been previously approved in the country for use in a pharmaceutical or agricultural chemical product. Thus, for the US, the FTA provisions on data exclusivity only clarify the intent of the US negotiations during the Uruguay Round, and do not impose any additional obligations beyond those contained in TRIPS Article 39.3.