Intermediary Liability Out - Third Party Liability In Continuing Danger for Access to Medicines

Professor Brook K. Baker
Health GAP
October 6, 2010

Previous draft sections dealing with intermediary service provider liability[1] have been removed from the Anti-Counterfeiting Trade Agreement, but the October 2, 2010 near-final draft[2] still contains provisions concerning third party liability that might apply to entities that assist in the production and distribution of IP-infringing medicines.   Pursuant to the Civil Enforcement – Provision Measures Section:  "Each Party shall provide that its judicial authorities shall have the authority to order prompt and effective provisional measures:  against a party, or where appropriate, against a third party over whom the relevant judicial authority exercises jurisdiction, to prevent an infringement of any intellectual property rights from occurring, and in particular to prevent infringing goods from entering into the channels of commerce."  Art. 2.5:1(a) (emphasis added).  Likewise, with respect to its Civil Enforcement Injunctions Section:  “Each Party shall provide that, in civil judicial proceedings concerning the enforcement of intellectual property rights, its judicial authorities shall have the authority to issue an order against a party to desist from an infringement, and inter alia, an order to that party or, where appropriate, to a third party over whom the relevant judicial authority exercises jurisdiction, to prevent infringing goods from entering into the channels of commerce.”  Art. 2.X.1 (emphasis added).[3]

In addition there are provisions requiring production of information "regarding any person or persons involved in any aspect of the infringement and regarding the means of production or distribution channel of such goods and services."  Art. 2.4.  With respect to criminal enforcement, "Each party shall ensure that criminal liability for aiding and abetting is available under its law."  Art. 2.14:4.

As I read these provisions together, you can gather information about third parties with respect to means of production and distribution channels; you may seek temporary and permanent injunctions against third parties to prevent infringing goods from entering channels of commerce, and in the case of provisional measures also temporarily enjoin other alleged acts of infringement; and you may impose criminal sanctions against those who aid and abet criminal infringement activities.  There are many uncertainties in the meaning and scope of application of these provisions.  Distributors and transporters seem at particular risk as they may directly enable a territorial infringement by transporting the infringing product or content into the country of enforcement and thereby place infringing products into the channels of commerce.  In addition, suppliers might also be liable to provision measures since enjoining them could arguably prevent the offending product from being made in the first place.  Similarly, it is conceivable, though perhaps not likely that other enablers of commercialization, including procurement agents like Medicines San Frontiere and the International Dispensary Association, funders like PEPFAR, the Global Fund, and UNITAID, and regulators like drug regulatory authorities could also be temporarily enjoined to prevent the commercialization and distribution of alleged IP infringing products.  Whether criminal “aiding and abetting” extends to suppliers of subsidiary materials and other enablers as listed above, who thereby contribute either to the production or commercialization of the offending products, is perhaps less certain, but the possibility of doing so certainly troubling.

This risk to access to medicines might be reduced somewhat if the US is successful in eliminating patents from the Civil Enforcement Section as it proposes in footnote 2 of the text.  But, as others have noted, there are also possible enforcement measures against medicines over claims of trademark infringement (confusingly similar names or brands) and even of copyright (mandated text on labels etc.)  For example, last year German customs officials seized a shipment of amoxicillin, a generic antibiotic, on its way to Vanuatu, on suspicion of a trademark violation. They did not release until nearly a month later, when GlaxoSmithKline, maker of the Amoxil brand of the antibiotic, confirmed that there had in fact been no trademark violation with respect to a generic product displaying its mandatory international non-proprietary name (see BRIDGES Weekly, 10 June 2009).  

Eliminating the broad concept of intermediary service provider, which might have more obviously impacted funders, procurers, and regulators as well as ingredient/content providers and distributors/transporters, is a positive development and an improvement to the ACTA text.  However, the continued reach of ACTA provisional measures, injunctions, and even criminal sanctions to under-defined “third parties” and “aiders and abetters” remains a concern, especially in the medicines context.

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NOTES:

1.  For an analysis of the earlier ACTA draft containing intermediary liability provisions, see Brook K. Baker, ACTA:  Risks of Intermediary Liability for Access to Medicines, Program on Information Justice and Intellectual Property Research Papers Series (2010) available at http://digitalcommons.wcl.american.edu/cgi/viewcontent.cgi?article=1001&context=research.
2.  Consolidated Text Anti-Counterfeiting Trade Agreement, Informal Predecisional/Deliberative Draft, 2 October 2010, available at http://keionline.org/sites/default/files/actaoct2010.pdf.
3.  It is unclear why provisional measures can be used to address any infringement, of which preventing the infringing goods from entering the channels of commerce is but one example, and that final injunctions are limited solely to preventing infringing goods from entering into channels of commerce.  Paradoxically, provisional measures might be used to temporarily enjoin production, before commercialization, but final injunctions could not do so.
 

 

 

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