Alarmed by a new European Union trademark law passed without incorporating any of the changes it had suggested, India is weighing its options, in the event the EU confiscates Indian pharmaceutical consignments in transit to third countries.

“We will not hesitate to approach the World Trade Organization,” a Commerce Ministry official told BusinessLine . “We are pursuing the matter bilaterally as we don’t want uncertainty.” The EU is ready to discuss the issue with India as part of a broader dialogue on Intellectual Property Rights, the official added.

Stringent provisions

The new trademark legislation has stringent enforcement provisions that allow customs officials to seize foreign consignments en route to third countries if they contain items with brand names or logos similar to those registered as trademarks in the 28-member bloc.

“We had told EU officials earlier this year that they should not bring goods in transit under the purview of the trademark legislation,” the official said.

India’s arguments are based on the fact that trademark laws are applied territorially. “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,” the official explained. Manufacturers in India may not be aware of the trademarks existing in the EU.

New Delhi also fears that as had happened in 2008, the new law could be used to seize cheap generics (copied versions of off-patent drugs) from India headed to markets in Latin America and Africa, as large pharma companies, many based in the EU, feel threatened by the cheap but high-quality medicines.

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