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Patent Law Issues in Recent FTAs
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  1. IP, FTAs, and Sustainable Development February 27, 2006 Patent Law Issues in Recent FTAs Joshua D. Sarnoff Washington College of Law American University Washington, DC, USA

  2. Overview • Background • Patent-Related Issues in Recent FTAs • Data Exclusivity • Term Extension • Patentable Subject Matter • Patentability Criteria • Rights and Exceptions • Exhaustion and Relation to Other Laws • GR/TK protection and disclosures of origin

  3. Background • Increasing recognition of costs of the patent system to competition and innovation • Increasing efforts to revise restrictive and high levels of protection required by TRIPS • Post-TRIPS efforts by US to extend IP protections through FTAs, particularly to promote industrial interests (e.g., pharma) • Increasing recognition of the lack of reciprocal benefits from FTAs

  4. Issues 1 – Data Exclusivity • Additional market exclusivity for pharma and agriculture regulatory approvals for specific time, e.g., Australia Art. 17.10.1(a)&(b) (pharma 5 years from date of original approval; ag 10 years); or during the patent term, e.g., Morocco FTA Art. 15.10 • does not require affirmative action by the patentee similar to US Orange Book listing • data exclusivity provisions may override ability to authorize third-party compulsory license • Data compensation?

  5. Issue 2 – Term Extension • Pharma or Pharma/Agriculture specific regulatory approval delay extensions, e.g., Bahrain FTA 15.9(6)(b) • Extension language does not reflect significant limitations on US pharma term extension laws (maximum 5 years, ½ testing phase, 14 years adjusted effective term) • “Unreasonable” patent processing delays, e.g., CAFTA 15.9.6(a) (5 years from filing), Morocco FTA Art. 15.9.7 (4 years from filing, 2 years from examination request) • Extension language does not reflect US limitations based on actions of the applicant, although US runs 3 years from filing

  6. Issue 3 – Subject Matter • Requirements to make available “in all fields of technology” without exclusion, CAFTA Art. 15.9.1 • Requirements to issue patents for plants, e.g., Chile FTA Art.17.9.2, and animals, e.g., Morocco Art. 15.9.2 • Requirement to limit exceptions to subject matter to “ordre public” grounds or for treatment of humans or animals, and to include business methods, Jordan FTA Art.4, ¶ 18 and Memo of Understanding ¶ 5 • Peru FTA did not result in agreement to require “new use” patents for chemicals

  7. Issue 4 – Patentability Criteria • Limited grounds for revocation or cancellation, e.g., Chile FTA Art.17.9.5 • Deposits of microorganisms where required to practice, e.g., Jordan FTA ¶ 21 • Prohibition on pre-grant opposition procedures, e.g., Singapore FTA Art.16.7.3

  8. Issue 5 – Rights and Exceptions • Requirements to prohibit compulsory licensing without patent holder approval of trade secrets (including “undisclosed information” for use of patents – Tamiflu – or submitted for regulatory approvals), e.g., Singapore FTA, 17.9.7.iii • Requirements to prohibit third party use (including export) to use solely for domestic regulatory approval, e.g., Morocco FTA Art. 15.9.6, CAFTA, Art. 15.9.5, Chile FTA Art.17.9.4 • may not reflect US experimental use and 271(e)(1) regulatory approval exceptions,

  9. Issue 6 – Exhaustion and Relation to Other Laws • Requirement to prohibit products sold abroad under import right, subject to authority to limit requirement to where sales are contractually conditioned, e.g., Morocco 15.9.4 • Reflects 2001 change to US law; previously did not exhaust where no contractual restriction • Future FTA provisions on effects of patents on pricing and on competition laws? E.g., US DC pharma pricing law case; US law on patent misuse and antitrust immunity

  10. Issue 7 – GR/TK and Disclosures • Peru FTA separate “understanding” recognizing importance of ABS compliance, but that can be adequately addressed through contracts

  11. Conclusion • Caveat • These are the views of a US academic. Fabiana Jorge will provide a different perspective. • IP issues in FTAs will continue to be timely and important. • Thanks to CIEL, SPDA, TWN, and TRALAC for co-sponsoring this program