WTO: Ending ban on IP cases is prescription for more disputes

The US and Switzerland have objected to another two-year extension of the current moratorium on cases that WTO members can bring against one another if they think their intellectual property benefits have been affected even if the TRIPS agreement has not been breached.

The extension to the moratorium, which lapses in December, has been recommended by a host of countries, led by India, China, Brazil, and Australia, as it helps them avoid unnecessary litigation at the WTO while ensuring supply of cheap generic drugs.

“The TRIPS council did not reach a compromise to issue a recommendation to the Buenos Aires 11th Ministerial Conference in December on the extension of the moratorium to initiate ‘non-violation and situations complaints’ under the TRIPS agreement,” an official privy to a recent meeting of the council told BusinessLine .

If the moratorium lapses, it will enable the US, the EU, Switzerland and others protect the interests of their multinational pharmaceutical companies by dragging other members to the WTO’s dispute-settlement panel every time a patent application is denied.

Over the past decade, India has denied patents to a number of pharmaceutical companies such as Swiss giant Novartis and US-based Pfizer, Abraxis BioSciences and Gilead Sciences on the basis of Section 3(d) of its Patents Act.

This section allows rejection of patent application if the improved chemical formulation is only cosmetically different from the original compound and does not flout TRIPS norms.

This is a big irritant for pharmaceutical companies as the patent life of many of their money-spinning drugs have either expired or will soon do so and unless the improved formulations are granted patents, they face losses.

In fact, Novartis had filed a case in the Supreme Court against its cancer drug Glivec being denied a patent; it lost the case in 2013.

“The US has been pushing India to drop Section 3(d) unilaterally for a long time as it cannot approach the WTO on the matter since it does not flout TRIPS norms.

“In case the WTO moratorium lapses, Washington can approach the WTO’s dispute-settlement panel with such matters,” a government official said.

The chair of the TRIPS council suggested keeping this agenda item open while she continues to consult members. She urged members to take a look at this issue again and see if there can be more flexibility.

If there is an indication that members are in a position to reach consensus on this issue, the council would be reconvened at a short notice so that a recommendation can be made to the General Council, and through it to the Ministerial Conference in Buenos Aires.

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