Amend ACTA: Defining terms by country of importation

Sean Flynn
September 9, 2010

Amendment:

In the definitions of "counterfeit trademark goods" and "pirated copyright goods," strike the last phrase reading "under the law of the country in which the procedures set out in [Section X are invoked]" and replace that phrase with "under the law of the country of importation."

As necessary, make similar amendments to any definition included in the Border Measures chapter.

Justification:

This amendment is necessary to avoid facial conflict with the WTO TRIPS agreement. This is also a key issue for access to medicines advocates concerned about the use of ACTA to globalize EU legal standards that have been used to seize legitimate generic medicines in transit between countries where introduction of the good would have otherwise been lawful.

The relevant TRIPS language is found in article 51. That article requires members to have procedures "to enable a right holder, who has valid grounds for suspecting that the importation of counterfeit 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 release into free circulation of such goods." The footnotes in the article state that countries may, but are not required to, apply these procedures to goods in transit between countries. Article 51 requires countries to define "counterfeit trademark goods" and "pirated copyright goods" - "under the law of the country of importation."

This is incredibly important because intellectual property rights are national in scope. A good that is lawfully imported into one country may be unlawful to import into another. If in transit countries where the good would be unlawfully consumed can apply their own standards to goods destined for countries where the good would be lawfully consumed, then intellectual property would be being used to erect barriers to legitimate trade. In effect, the in transit country would be altering the intellectual property law of a foreign country, preventing consumers from enjoying a good that they could otherwise lawfully consume.

The issue was painfully highlighted in the case of in transit seizures of medicines in Europe over the past several years. As KEI explained in a recent note:

"In the EU seizures cases, drugs were seized based upon either a complaint from a patent owner, or by a customs authority operating under ex officio authority, where there were allegations of infringements of patents or trademarks. In a number of high profile cases, the drugs seized were legitimate generic products in India and in the detestation countries, but were subject to patent protection in the Netherlands or Germany. In one case, shipments of an important AIDS drugs for persons with resistance to other drugs was seized in the Netherlands before it could be delivered to the U.S. Embassy in Nigeria, for use by the Clinton Foundation."

In all the cases, EU countries were applying their own law under various legal fictions that assumed that the good was destined for a local market even though it was known not to be. It at least one case, an in transit country was applying an erroneous interpretation of trademark law, banning a shipment of amoxicillin because the drug accurately identified itself with that generic name, which border officials found confusingly similar to a GSK brand Amoxil.

The current border provisions chapter of ACTA permits or requires border officials to suspend goods in transit and goods destined for export. In this respect, the agreement is clearly TRIPS-plus. But the alteration of the definition of "counterfeit" and "copyright piracy" is more than TRIPS plus - it is TRIPS conflicting. Requiring export and in transit suspensions based on application of the intellectual property violation standard "of the country in which the procedures" are instigated conflicts with the TRIPS Art. 51 mandate that such goods be assessed based on the law of country of importation. In cases where the law of the country of importation and the law of the in transit or exporting country are different, it will be impossible to comply with both the ACTA and TRIPS definition.

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