EU_Seizures

8/7/2019 EU_Seizures

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SEIZURE OF INDIAN GENERIC MEDICINESSEIZURE OF INDIAN GENERIC MEDICINESBY EUROPEAN CUSTOMS IN THE NAME OFBY EUROPEAN CUSTOMS IN THE NAME OF

COUNTERFEITCOUNTERFEIT

Dr. Alka Mehta

Cipla Limited


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INTELLECTUAL PROPERTYINTELLECTUAL PROPERTY

An intellectual property is any product or invention of

human intellect that is unique, novel, and non-obvious and

has some commercial value

Types of Intellectual Property

Patents

Copyrights; and

Trademarks


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Patent - DefinitionPatent - DefinitionA patent is a monopoly right granted to an inventor, giving the

inventor the right for a limited period of time to prevent others from

making, using or selling his invention without due permission from

the inventor.

A patent can be

a) bought,

b) sold,

c) rented; or

d) hired


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Infringement

whoever without authority makes, uses, offers to sell, sells, orimports any patented invention during the term of the patent,

infringes the patent.


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Many countries do not have manufacturing capacity to producemedicines and rely on the import of affordable generic medicines fromabroad in order to treat their populations. As such, the trade inlegitimate medicines between countries is fundamental to ensureaccess to medicines for millions of people in the developing world.

Ensuring access to medicines in developing countries, as enshrined inthe Doha Declaration and the WTO decision, cannot be implementedeffectively if, on key transit routes, the risk exists that supplies can beregularly subject to interception based on the assertion of patentinfringement in the transit country.

If patent protection is absent in the country of destination, there is nobasis for provisional holding actions to prevent possible foreigninfringement.

Introduction:Introduction:


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When drug X is patented in Netherlands, but not South America, and a

Company exports X from India to South America, and the flight

containing drug X makes a stopover in Netherlands on the way to

South America, the drug on board the flight does not infringe the

Netherlands patent.

However, if the Company has reason to suspect that the (possible)

Dutch patent holder will have formulated a request for notification for

that particular drug; an alternative routing can prevent delay by

customs/seizures. This would force exporters to look at alternativeroutes to send the medicines, which is likely to impact the cost

competitiveness of Indian generic drugs.


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Council Regulation (EC) No. 1383/2003, permits customs authorities to seize goods passing through customs of anEU member state when these goods are suspected of infringing patents granted and subsisting in these countries,

provided that the patent holder has registered in advance with the customs authorities.

The regulations permit customs to hold these goods for ten working days (or a further period provided for in theregulations) and inform the patent holder of the seizure. The patent holder then has to apply to a civil court, requesta civil seizure and initiate legal proceedings in order to prove that infringement has taken place.

This authority to seize goods not only applies to goods that are destined for the EU country to which theseregulations apply, but also to goods that are merely passing through these ports on their way to another countryoutside the EU. For example goods bound from India to South America, which are passing through an EU memberstate, are also liable to be seized.

Courts in different EU member states appear to have pronounced different views on the legality of these provisions,when the goods are not intended for an EU member country and the law is not completely settled in this regard.

These provisions may have a significant impact on Indian companies, most of which use the EU route to transportpharmaceutical products to markets where the patent is not recognized or the product is off patent. By forcingIndian companies to opt for a different route to transport the goods to the intended market, the cost of transport may

significantly add to the cost of producing the pharmaceutical product, thus adversely impacting the India's ability toremain competitive.

This is especially relevant in the case of bulk exports from India of the API (active pharmaceutical ingredient)because it is one of the largest exporters in the world of these products. India's cost advantage may be reduced ifcompanies are constrained to send pharmaceutical products such as the bulk drug used for formulating muchneeded medicines in the developing world through alternative routes. This will, obviously, also impact theavailability of much needed medicines in developing countries, to which India exports these goods.


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Three consignments of Indian-manufactured generic medicines seized last year while in transit in the EU have been earmarked fordestruction by EU authorities. These consignments of clopidogrel,rivastigmine and olanzapine were being exported from India to otherdeveloping countries to treat patients with serious and life-threateningconditions such as heart attacks, strokes, Alzheimer's disease,

Parkinson's disease and psychosis. Yet they were seized by Dutchcustoms authorities on the basis of alleged patent infringement.

Although these medicines are not under patent in India or in thedestination countries, EU customs legislation still permits the

destruction of these life-saving medicines. A humanitarianorganisation, Mdecins Sans Frontires (MSF), has highlighted severalother recent cases of generic medicines in transit in the EU that have

been detained, seized or destroyed.

FactsFacts


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The root of the current wave of seizures is the blurring of thedefinition between legitimate generic medicines and illegal counterfeit

medicines. It is vital to differentiate between illegal counterfeitmedicines which the World Health Organization defines asmedicines having a false representation of identity and/or source andlegitimate generic medicines, which are, in most cases, simplyunbranded versions of patented medicines.


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The current definition of counterfeit medicines by the World HealthOrganization (WHO) and the one proposed by the WHO-backed International

Medical Products Anti-Counterfeiting Taskforce (IMPACT) is leading to suchinterpretation of in-transit drug consignments from India.

Definition of Counterfeit Goods

1) Customs Legislation: Regulation (EC) 1383/2003 concerning customsaction against goods suspected of infringing certain IPR rights (); Art. 2Nr. 1a

i. goods, including packaging, bearing without authorization a trademarkidentical to the trademarkvalidly registered in respect of the same type ofgoods

ii. any trademark symbol (including a brochure) on the same conditions asthe goods referred to in point (i);

iii. packaging materials bearing the trademarks of counterfeit goods, presented

separately, on the same conditions as the goods referred to in point (i);

2) WHO Definition (2007):

A medicial product is counterfeit when there is a false representation inrelation to its identity, history or source.

does not include IPR violations!


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According to Pharmexcil, companies whose consignments also ran into similar trouble (otherthan as listed below) include JB Chemicals and Pharmaceuticals Ltd, Medico Remedies Pvt.Ltd, Titan Pharma India Pvt. Ltd, and Mission Pharmaceuticals Ltd, all based in Mumbai, andHyderabad-based Sainor Pharma Pvt. Ltd.

Listed below are the consignments of Indian companies that were seized on grounds of patentinfringement by the Dutch customs authorities.

1.15.10.08: Ind-Swift Laboratories Ltd (Clopidogrel Bilsulphate- API): Destined for Columbia

A consignment valued at some $100,000 (Rs 49 lakh) of Ind-Swift in transit for Venezuela wasseized in November by customs authorities in the Netherlands under suspicions of beingcounterfeit.

The product was the generic drug pantoprazole, used for treating ulcers, in the form of pelletsthat were to be filled in capsules and sold in Venezuela, where Ind-swift has marketing rights

for it.


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2. 27.11.08: Cipla Ltd, through Uni World Pharma Ltd, Dubai

(Olanzapine 10 mg Tabs): Destined for Peru.

3. 27.11.08: Cipla Ltd, through Uni World Pharma Ltd, Dubai

(Rivastigmine 3 mg Tabs): Peru.

4. 24.12.08: Dr Reddys Laboratories Ltd (Losartan - API): Destined for Brazil

A DRL shipment of the generic version of losartan was seized in transit in theNetherlands. This shipment, on its way to Brazil, was held by the customsauthority at Rotterdam, which said it infringed the patent of the original drugCozaar. Losartan is not patented in India or Brazil. The patent for Cozaar in the

Netherlands is held by DuPont, while US-based pharma multinational Merck andCo. holds the marketing rights."

5. A consignment of HIV/AIDS medicines by Aurobindo Pharma Ltd meant foruse in Nigeria was seized by Dutch officials. The grounds on which they wereallegedly seized again is that they contained counterfeit goods.

Contd..Contd..


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Background: A consignment of 500 Kg of Losartan potassium wasbound for Brazil. It was seized in transit by the Netherlands customsauthorities under the authority of an EC council regulation, permittingthe seizure of goods on suspicion of patent infringement in theNetherlands. Apparently, Losartan is protected in the Netherlands by a

product patent of Merck/Dupont which is valid until September 2009.The only issue was one of patent infringement in the Netherlands. Thevalue of the consignment seized is $ 55,000 and not $500,000 asmentioned in the media.

Subsequently Dr. Reddy's discussed the matter with the patent holders

and secured the release of the goods from the custody of the customsauthorities. Merck/Dupont agreed to release the goods to Dr. Reddy'son Thursday (8th Jan) and the goods are now back in India.

Dr. Reddy's CaseDr. Reddy's Case


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The Dutch government has asked the European Commission (EU) for

a review of the EU Customs regulations. The Dutch government has

taken up this damage control exercise after developing countries

strongly criticised the seizure of consignments of Losartan.

Subsequent to these seizures which prompted India and Brazil to issue

very strong statements against this action, DRL opted to back down

and have its consignment returned to India.


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In addition to Brazil and India, those voicing concerns about access toIn addition to Brazil and India, those voicing concerns about access to

medicines and customs were: Argentina, Bolivia, Burkina Faso, China, Costamedicines and customs were: Argentina, Bolivia, Burkina Faso, China, Costa

Rica, Cuba, Ecuador, Egypt, Indonesia, Israel, Nigeria, Pakistan, Paraguay,Rica, Cuba, Ecuador, Egypt, Indonesia, Israel, Nigeria, Pakistan, Paraguay,

Peru, South Africa, Thailand and Venezuela.Peru, South Africa, Thailand and Venezuela.


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The statement made by the European Commission, on behalf of the

European Union, at the WTO General Council on 3 February, stresses that

the seizure was allowed by TRIPS and that it was based on provisions in EU

customs law that allow customs to temporarily detain goods.

However, the EC Regulation No 1383/2003 goes beyond the obligations

required under the TRIPS Agreement, in which a footnote* clearly states

that goods in transit can be kept outside the field of application of the

general customs procedures.

*Footnote: It is understood that there shall be no obligation to apply such procedures to importsof goods put on the market in another country by or with the consent of the right holder, or to

goods in transit.


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Article 41 of the TRIPS Agreement also states that any intellectual enforcementmeasures should be applied in such a manner as to avoid the creation of barriers tolegitimate trade. Finally, the 2001 Doha Declaration on TRIPS and Public Health signed by the members of the European Union - underlines that the [TRIPS] Agreementcan and should be interpreted and implemented in a manner supportive of WTOMembers' right to protect public health and, in particular, to promote access to medicinesfor all.

Article 51Suspension of Release by Customs Authorities

Members shall, in conformity with the provisions set out below, adopt procedures toenable a right holder, who has valid grounds for suspecting that the importation ofcounterfeit 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 releaseinto free circulation of such goods. Members may enable such an application to be madein respect of goods which involve other infringements of intellectual property rights,provided that the requirements of this Section are met. Members may also provide forcorresponding procedures concerning the suspension by the customs authorities of therelease of infringing goods destined for exportation from their territories.


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As per Generics Bulletin dated March 11, 2009As per Generics Bulletin dated March 11, 2009

Dutch customs officials contradicted the World Trade Organizations (WTOs)agreement on trade-related aspects of intellectual-property rights (TRIPS) and broke theEuropean Unions commitments under the WTOs Doha Declaration, members of theEuropean Parliament (MEPs) have asserted in a letter to the EU Commissioners forTrade and for Taxation and Customs Union.

Highlighting recent Dutch seizures of losartan being shipped from India to Brazil and ofabacavir that was in transit from India to Nigeria, the MEPs insist seizures of genericdrugs within the EU are becoming an increasingly widespread problem. The EuropeanRegulation cited by the European Commission at the WTO General Council(Generics bulletin, 13 February 2009, page 11) goes beyond the obligations requiredunder the TRIPS agreement, in which a footnote clearly states that goods in transit canbe kept outside the field of application of the general customs procedures, the MEPsmaintain.

Latching onto a letter sent by Mdicins Sans Frontires (Generics bulletin, 6 March2009, page 13), the MEPs call on the Commission to clarify its position on ECRegulation 1383/2003 and its application to medicines.


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At the WTO TRIPS Council of 3 March the DG Trade official

justified the recent seizures of generic medicines on the basis of the

need to combat the entry of fake medicines into the EU. The cases that

we have outlined above involved legitimate generic medicines and not

fake, counterfeit or pirated medicines.

The original purpose of Regulation 1383/2003 was to combat

counterfeit and pirated goods and not to detain goods that infringe

IPRs.

The EC Regulation 1383/2003 must be changed in order that customsofficials have clear guidance on its implementation and thereforeavoid disrupting legitimate trade.


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WHO issues mild statement on transit of medicines, on March 13th,2009

The WHO has just issued a statement on the transit of medicines. It isshort and mild. The statement does not mention goods in transit in thetitle. It does not mention at all that medicines have been seized. The bestpart of the statement is the following quote:

Ensuring that the interests of trade and health are appropriatelymanaged, also means that the flow of legitimate medicines, includinggeneric medicines, is not impeded

The action part of the statement is weak, however:

In relation to this issue, WHO is continuing to follow developments and

consulting with Member States and relevant internationalintergovernmental organizations. WHO also understands that there isongoing dialogue among the parties concerned to resolve the matter.Given the public health impact of this issue, WHO remains ready toprovide, upon request, technical and policy support to Member States.


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Views of NGOsViews of NGOs

The following are the views of few NGOs on role of the WHO in addressing public

health concerns over goods in transit.

Buko Pharma-Kampagne, Christian Wagner-Ahlfs ([email protected]).

"Cheap generics are essential for developing countries. Each attempt to label legally

produced generics as counterfeit or product piracy, affects public health. We ask WHOto use its mandate for public health by encouraging European governments not to block

generic imports to developing countries.

HAI Global, Tim Reed, (+31 20 683 3684, [email protected]).

"As an NGO who has worked collaboratively with the World health Organisation

(WHO) for many years on delivering increased access to essential medicines and the

rational use of medicines in low and middle income countries, Health Action

International is dismayed that WHO has remained quiet for so long about the recent

spate of generic medicine seizures in Europe. This is an opportunity for WHO to show

strong leadership and promote its own principle of universal access to essential

medicines, with a clear message that the actions in European ports are unacceptable.

Instead, we have a deafening silence."
mailto:[email protected]:[email protected]


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Contd

HAI Europe, Teresa Alves, (+31 20 683 3684, [email protected]).

"The public health dimension of the European seizures of generics cannot be ignored.

Yet, the clock is ticking while the international health community awaits WHO's

reaction. WHO must act decisively to drive global health advocacy and represent the

interests of those who do not have access to the medicines they need.

Knowledge Ecology, James Love, (office +1 202-332-2670, mobile +1 202-361-3040,

[email protected]).

"The WHO should protect the poor, and champion access to medicine. There is a

campaign by a handful of giant pharmaceutical companies and trade associations to

undermine legitimate trade in generic medicines. As noted by the Director General of the

World Trade Organization (WTO), the seizures of medicines in transit to developing

country markets is a serious issue. There are many resolutions and declarations that

speak to the need to promote access to medicines, and the WHO clearly has a

mandate in this area. The WHO needs to find its voice, and act."


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Contd

TransAtlantic Consumer Dialogue, Anne-Catherine Lorrain (+32 473 99 97 92,[email protected]).

"The silence of the World Health Organisation (WHO) sends the wrong signal on thecrucial issue of the supply of legitimate generic medicines to developing countries.Consumers are looking to the WHO to provide leadership and expertise in resolving thisissue, which is critical for our life and health.

Third World Network, Sangeeta Shashikant (office: +41 22 908 3550,mobile: +4178 757 2331, [email protected]).

"The lack of a prompt response by WHO on an issue that affects access to medicines indeveloping countries is extremely disappointing.It suggest a lack of commitment andleadership in WHO. As an organisation tasked with the attainment by all peoples of thehighest possible level of health, WHO must without any further delay push the EU to

amend its Directive. WHO should also assess and speak out against the anti-counterfeiting initiatives such as IMPACT, WCO's SECURE, ACTA that could haveserious consequences for the availability of generics and access to medicines."


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Vote of thanks

My sincere thanks to Pharmaexil for Pharmaexil's efforts and toMy sincere thanks to Pharmaexil for Pharmaexil's efforts and to

Government of India to support the Indian companies, especially Cipla inGovernment of India to support the Indian companies, especially Cipla in

fighting this unjust seizure in the name of Intellectual property violationfighting this unjust seizure in the name of Intellectual property violation

when Netherlands was used merely as a transit for goods intended forwhen Netherlands was used merely as a transit for goods intended for

Peru.Peru.

My sincere thanks to my colleagues Ms. Patsy Jeffery and Ms. Bhakti Vajratkar in preparingMy sincere thanks to my colleagues Ms. Patsy Jeffery and Ms. Bhakti Vajratkar in preparing

this presentationthis presentation

My sincere thanks to Spicy IP colleagues for allowing me to reproduce the data.My sincere thanks to Spicy IP colleagues for allowing me to reproduce the data.


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THANK YOU FOR YOUR TIME AND PATIENCE

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