Data Protection in compliance with Article 39 of the TRIPS Agreement

1. Data Protection in compliance with Article 39 of the TRIPS Agreement Draft Amendment to the Drugs Act 1976 Humaira Mufti WIPO National Seminar on Flexibilities under the TRIPS Agreement 27-28th November, 2007

2. Protection of undisclosed information • The protection of undisclosed information first entered regional international law in Article 1711 of the North American Free Trade Agreement of 1992 (NAFTA). • Subsequently incorporated into the worldwide minimum standards of intellectual property law by Article 39 of TRIPS Agreement.

3. Article 39 of the TRIPS Agreement • Article 39.1. “In the course of ensuring effective protection against unfair competition as provided in Article 10 bis of the Paris Convention (1967), Members shall protect undisclosed information in accordance with para 2 and data submitted to governments or governmental agencies in accordance with paragraph 3.”

4. Article 39.3 • Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use. In addition, Members shall protect such data against disclosure,except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use.

5. Art. 39.3 leaves three major issues unresolved. • First, it does not specify the minimum period of data protection required by WTO members. • Second, Art. 39.3 is not clear-cut when referring to the use of such information by the authorities, particularly in cases of reliance, (via the so called bioequivalence tests). • Finally, it is not clear what type of activities are within the scope of "considerable efforts".

6. The TRIPS standard on data protection • Before the entry into force of the TRIPS Agreement, countries had full latitude to determine whether to confer or not protection on test data. • The Agreement introduced the first international standard on the subject, as contained in its Article 39.3. • But the Agreement only established broad parameters for national rules, thereby allowing WTO Member countries freedom to apply different models for such protection.

7. TRIPS Standard on Data Protection • Test data must be protected if national authorities require its submission. Thus, if they rely on an approval granted in a foreign country, the obligation does not apply • Article 39.3 does not require protection be given to data that are already publicly available. • protection is mandated only for new chemical entities. which excludes anyway second indications, new formulations or dosage forms. • Finally, national regulatory authorities may request the applicant to prove that the information for which protection is sought is the result of significant investment

8. TRIPS Standard on Data Protection • Article 39.3 requires countries to protect test data against "unfair commercial use". • Therefore, protection is to be conferred against dishonest commercial practices. • the Test data must be protected under the discipline of unfair competition, as established in the Paris Convention for the Protection of Industrial Property (article 10bis) and the TRIPS Agreement (article 39.1). • Under such discipline no exclusive rights are granted, but only the right to take legal action against whom has obtained a commercial advantage by means of a dishonest practice.

9. Definitions under Article 39 of the TRIPS Agreement The subject Article has not defined the following terms allowing members flexibilities. • “ new chemical entity” not defined. • “Unfair commercial use” not defined. • “Undisclosed test or other data” not defined.

10. Reliance by the regulatory authorities • One of the crucial interpretative issues in Article 39.3 is whether the reliance by a national authority on data submitted by one company (the "originator") to evaluate a subsequent application by another company (a "follower"), constitutes an "unfair commercial use" of the information. • The expression "unfair commercial use" is not defined in Article 39. • Pursuant to Article 31 (1) of the Vienna Convention, its interpretation should be based on the ordinary meaning of the terms of the treaty in their context and in the light of the agreement's object and purpose.

11. Controversies about interpretations: • some developed countries argue for a minimum period of exclusivity. • Exclusivity argument does not find support in article 39.3 of the TRIPS Agreement, since the discipline of unfair competition, applicable in accordance with article 39.1 of the Agreement, does not create exclusive rights. • the definition of what an “unfair” or “dishonest” commercial practice depends on social perceptions at a given time. • obtaining a commercial advantage, as such, is not condemnable under unfair competition rules

12. Despite the fact that a large number of WTO members do not provide for exclusive rights over data, there has been no WTO ruling on the meaning of article 39.3. • Those who do provide are either the developed countries or those which have signed bilateral FTAs or accepted in the accession process to the WTO.

13. US VS ARGENTINA AT THE WTO • The US government initiated a case under WTO rules complaining about Argentina’s alleged failure to appropriately protect test data. • The dispute was settled at the consultation stage after two years of discussions. • Argentina did not accept the US claim that exclusive rights should be granted for test data and maintained unchanged its law. • No further action in the framework of the WTO has been taken by USA against Argentina, or any other country that does not recognize data exclusivity.

14. Negotiating History of Article 39 • the United States sought to include NAFTA (1711.5, 1711.6, 1711.7) analogous provisions into the TRIPS Agreement. • Position papers submitted by both the United States and Switzerland in the late 1980s advocated the imposition of express limiting conditions on the release of proprietary information submitted to governments for regulatory purposes.

15. The U.S. draft proposed the followinglanguage: • Contracting parties which require that trade secrets be submitted to carry out governmental functions, shall not use the trade secrets for the commercial or competitive benefit of the government or of any person other than the right-holder except with the right-holders consent, on payment of the reasonable value of the use, or if a reasonable period of exclusive use is given the right-holder.

16. Brussels Draft • the European Commission “favored less limiting conditions” and did not specifically address governmental functions. • These proposals, however, met with strenuous resistance from the outset. • This conflict appeared in the Brussels Draft TRIPS Agreement of 1990. • While Article 1A of this version essentially anticipates article 39.1 as adopted in 1994, Article 4A contains a bracketed provision that marks off the U.S. (and E.U.) positions from that of other countries opposed to this new form of protection for regulatory data.

17. 4A Bracketed text in Brussels Draft • 4A. PARTIES, when requiring, as a condition of approving the marketing of new pharmaceutical products or of a new agricultural product, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall [protect such data against unfair commercial use. Unless the person submitting the information agrees, the data may not be relied upon for the approval of competing products for a reasonable time, generally no less than five years, commensurate with the efforts involved in the origination of the data, their nature, and the expenditure involved in their preparation. In addition, PARTIES shall] protect such data against disclosure, except where necessary to protect the public.

18. The bracket and exclusivity approach • the bracketed provision essentially required “protection against unfair commercial use and disclosure, as well as nonuse of the information for the approval of competing products, for no less than five years, unless the person submitting the information agrees.”

19. The “Dunkel Draft” of 1991 • One year later, article 39.3 of the Chairman’s Draft Final Act of 20 December 1991, known as the “Dunkel Draft of 1991," which became the influential compromise draft largely adopted in the end, had discarded the bracketed text altogether.

20. Dunkel Draft Agreed text now reflected in 39.3 3. PARTIES, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use. In addition, PARTIES shall protect such data against disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use.

21. article 39.3 of the Dunkel Draft 1991 tracks the final version of article 39.3 as adopted in 1994 word for word. • The sole exception is that the term “Parties” used in 1991 was changed to “Members” in 1994. • whatever else article 39.3 means it cannot possibly mean what it would have meant had the bracketed obligations of the Brussels Draft of 1990 been carried over into either the Dunkel Draft or the Final Act of 1994. • the clear evolution of the text cannot be ignored in favor of quasi-exclusive rights in regulatory data

22. Such an interpretation would violate both article 31 of the Vienna Convention on the Law of Treaties and the clear teaching of the Appellate Body in the India Mail Box Case. • With the deletion of the bracketed version of the Brussels Final Draft of 1990 from both the Dunkel Draft of 1991 and the Final Act of 1994, there is no room for any interpretation that would graft a de facto exclusive property right • Acknowledge work of Carlos Correa and Jerome H. REICHMAN on the subject.

23. Doha Declaration on TRIPS and Public Health • access to medicine is an acknowledged right under the Doha Declaration on TRIPS and Public Health, 2001. • The Declaration affirmed the right of member states to interpret and implement TRIPS in a manner supporting the protection of public health and, in particular, access to medicine. • Reaffirmed member countries right to grant CL and the right to determine what constitutes national emergency and circumstances of extreme urgency • freedom to establish own regime as regard to the rules on exhaustion of IPRs

24. Contd: • the decision of WTO General Council adopted on 30th August 2003 and the decision on the Amendment of the TRIPS agreement adopted by the WTO General Council on 6th December, 2005. • Does granting of Compulsory License by the government in these circumstance constitute unfair commercial use? • ACWL is of the view that the issuance of CL on the account of extreme urgency, public emergency or to remedy anti competitive behaviour does not constitute unfair commercial use.

25. Draft amendment to the Drugs Act 1976 to provide Data Protection • Definition of New Chemical Entity • Definition of undisclosed test data. • Clarification as to certain uses as not constitute unfair commercial use such as • Use with consent of person lawfully in control of the data. • Public emergency and situations of extreme urgency. • When making use of para 6 system. • Expiry of patent.