Amend ACTA: Safeguards in Preamble, Ch. 1

James Love
September 10, 2010


In the preamble, DELETE:

[CH/US/EU/Kor/Mor/Mex/J: Determined to implement this Agreement in a manner consistent with the objectives and principles set out in the TRIPS Agreement;]

In Chapter One, Section A. Article 1.X safeguards RESTORE


1. The enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.

2. Parties may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of this Agreement.

3. Appropriate measures, provided that they are consistent with the provisions of this Agreement, may be needed to prevent the abuse of intellectual property rights by right holders or the resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology.] [J/Mex/Kor/US: delete this provision]


Article 1.X, as paragraphs 4 and 5, or to Chapter Two, ADD


x. Members agree that some practices or conditions pertaining to intellectual property rights which restrain competition may have adverse effects on trade and may impede the transfer and dissemination of technology.

xx. Nothing in this Agreement shall prevent Members from specifying in their legislation practices or conditions that may in particular cases constitute an abuse of intellectual property rights, and may adopt appropriate measures to prevent or control such practices.


Article 1.X, proposed by Australia, New Zealand, Singapore and Canada, includes the language of Articles 7 and 8 of the TRIPS Agreement, as part of Chapter One.  The safeguard would be stronger if included as part of Chapter One, than as a reference in the preamble. 

Missing so far from the safeguards in the ACTA are the stronger statements found in Article 40 of the TRIPS, which go further in some areas than Article 8 of the TRIPS.  (Paragraphs 1.X.2 and 1.X.3 above).

At present, the U.S. does not provide for royalties or injunctions in certain cases of abuses of rights, including for example, in the case of biosimiliar drugs, when an incumbent seller of a biological product fails to disclosure relevant patents to a potential competitor.

Under the Part II of the TRIPS Agreement, non-voluntary authorizations to use patents can have a zero royalty, in cases involving a remedy to anticompetitive practices.  The logic behind this provision in Article 31 of the TRIPS, also applies to cases where the non-voluntary authorization is fashioned as limitation remedies to enforce rights.

Again, logically, this should also apply to all intellectual property rights, including pharmaceutical test data, copyrights, industrial designs, trademarks, etc.    The critical issue is, does the ACTA recognize and provide space for the cases where there are such abuses of rights.

The proposed text x and xx are very similar, but not identical to the language in TRIPS Article 40.  They refer to "practices or conditions" rather than "licensing practices or conditions," to make it clearer that they would cover such cases as the failure to disclose patents, which is addressed in the U.S. legislation on biosimiliars, or cases of non-disclosure related to certain standard making practices, such as Unocal's undisclosed patent on reformulated gas.*

There are also, of course, the many cases where government agencies and courts have sought to address a wide range of abuses of rights, ranging from refusals to license, various forms of patent misuse, tying, excessive pricing, etc.

By not specifically addressing these issues in the context of limitations on right-holder remedies, the ACTA negotiators are implicitly suggesting such abuses do not exist, or are not important. That is a mistake.

*See:  By Neela Banerjee, "Unocal Is Sued by F.T.C. Over California Gas Patent," New York Times, March 5, 2003.   "Dual Consent Orders Resolve Competitive Concerns About Chevron's $18 Billion Purchase of Unocal, FTC's 2003 Complaint Against Unocal. In Major Victory for Consumers, Unocal to Halt Enforcement of Reformulated Gasoline Patents; Will Release Relevant Patents to the Public," FTC Press Release, June 10, 2005.

See generally, CPTech resources on remedies to anticompetitive uses of patents.


Permalink :