A few years ago, a series of in-transit drug seizures led to an outcry in the developing world. We have posted about this several times here. New developments have brought this issue into light once again.
A quick recap
In 2008, 17 seizures of generic drugs took place in EU on grounds of patent infringement as per EC Regulation 1383/2003. These drugs were in transit to and from developing countries. In 2010, India and Brazil started proceedings against the EU at the World Trade Organization (WTO). However, the EU agreed to amend its law in order to ensure that consignments of generic drugs transiting the EU are not seized under its law.
EU Regulation 2015/2424
An amendment to the existing EU Trademark law has Indian generic manufacturers on their guard again. On March 23rd, 2016, the European Union’s Regulation (EU) 2015/2424 came into force, amending the existing European Trade mark law. According to this law, EU members may be able to prevent the transit of goods which are suspected of infringing any mark registered in the any EU nation, even when such goods are not intended for the EU market.
According to Provisions 15 and 16 of this Regulation, as regards generic medicines, the proprietor of an EU trade mark should be entitled to prevent third parties from bringing goods to the EU in the course of trade, where such goods come from third countries and bear a trademark identical or essentially similar to the EU mark. To this effect, the EU trademark proprietors are allowed to prevent the entry of infringing goods, including transit, transhipment, warehousing, free zones, temporary storage, inward processing or temporary admission, also when such goods are not intended to be placed on the market of the Union.
However, Provision 19 provides, “Appropriate measures should be taken with a view to ensuring the smooth transit of generic medicines. With respect to international non-proprietary names (INN) as globally recognised generic names for active substances in pharmaceutical preparations, it is vital to take due account of the existing limitations on the effect of EU trade mark rights. Consequently, the proprietor of an EU trade mark should not have the right to prevent a third party from bringing goods into the Union without being released for free circulation there, based upon similarities between the INN for the active ingredient in the medicines and the trade mark.”
There is thus, a conflict between these provisions. On one hand, smooth transit of all generics is guaranteed, but on the other, only the INN for the active ingredient is protected by this Regulation, making all other marks vulnerable to seizures. The protection under Provision 19 is not enough since trademarks are territorial rights and Indian manufacturers are not always aware of EU trademark registrations. This law could thus spell trouble for third world nations dependent on cheap generic drugs for their survival. Any abuse of this procedure would mean harmful, and possibly fatal delays to people who need immediate access to these drugs.
India’s Response
The Regulation took India by surprise as it was passed without incorporating any of the changes India had suggested. Earlier, the Indian government had written to the EU, opposing this legislation as it could lead to trade restrictions on legitimate shipments of goods, especially generic drugs. It had further argued that the said legislation violates the TRIPS and allows seizures without sufficient evidence of infringement.
In an interview with the Hindu, a Commerce Minsitry official said, ““Trademark violation happens when the trademark holder’s rights are affected vis-à-vis a territory or its consumers. If an item is only in transit and has not been released in the EU market, it should not be seized for possible violation.” In an earlier interview, an official said, “The notification of the commission is not clear. We are protesting because trademarks can be confused with patents by customs officials which could lead to confiscation of generic medicines”. India thus fears that the European pharmaceutical companies shall use this law in order to crack down on cheap generics yet again.
According to reports, India was pursuing the matter bilaterally. However, this does not seem to gone well for India since it has since teamed up with Brazil, South Africa, China and Indonesia at the WTO to put pressure on the bloc and push for amendments.
(Image from here)