By Leith van Onselen who has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs. You can follow him on Twitter at twitter.com/leithvo. Originally published at MacroBusiness
Wikileaks leaked the final draft of the Intellectual Property chapter of the Trans-Pacific Partnership (TPP) over the weekend, which has been panned by various “experts”.
Most notable of these is La Trobe Universtity lecturer in Public Health, Dr Deborah Gleeson, who has analysed the chapter and concluded that it “represents nothing less than a disaster for global health”:
Many harmful provisions still remain in the final chapter, bearing out the concerns of public health advocates. These include:
- Patents for new uses and new methods of using existing products (Article QQ.E.1.2, p. 17);
- A low inventiveness threshold – potentially preventing countries from tightening the criteria for granting patents (Footnote 33, p. 17);
- Patent term extensions to compensate for delays in granting patents (Article QQ.E.12, p. 20) and delays in marketing approval (Article QQ.E.14, p. 22);
- Data protection for small molecule drugs – at least 5 years for new pharmaceutical products plus 3 years for new indications, formulations or methods of administration (Article QQ.E.16, p. 23-24);
- Patent linkage provisions likely to result in delays in marketing approval for generic drugs (Article QQ.E.17); and
- Market exclusivity for biologics, provided through one of two options: at least 8 years of data protection, or at least 5 years of data protection and other measures to “deliver a comparable outcome in the market” (Article QQ.E.20, p. 25-26).
This is the first time a provision for market exclusivity for biologic products has ever appeared in a trade agreement – and this is a new obligation for many TPP countries.
The outcome of this suite of obligations will be delayed competition from follow-on generics and biosimilars – which means delayed access to affordable medicines, placing them out of reach altogether for many people in developing countries. Even countries like Australia, the TPP obligations will lock in current intellectual property standards, making it difficult or impossible to reform our system to improve access to affordable medicines in future…
If the TPP countries ratify the deal, Big Pharma will have succeeded in cementing intellectual property standards that will stymie access to medicines for up to 800 million people in the short term, and more if additional countries sign up in future. Furthermore, the TPP’s intellectual property chapter sets a new norm that is likely to become the template for future trade agreements: its implications are global as well as regional.
The governments of TPP countries have been complicit in a global health disaster of unimaginable proportions – a deal that will prevent untold numbers of people from obtaining medicines that those in many developed countries take for granted…
The Australian Government’s brief about the TPP outcomes for biologics says:
“In the TPP, Australia has negotiated protections that are consistent with Australian law and practice. Australia is not required to change any part of its current law, including data protection for biologics, or our patent regime. There will be no adverse impact on the Pharmaceutical Benefits Scheme and no price increase for medicines. But the final text of the TPP’s IP chapter contains some problematic language and troubling ambiguities”.
Article QQ.E.20.1 (p. 25-26) outlines two options that countries can implement to protect new biologics:
1) At least 8 years’ protection of clinical trial data (QQ.E.20.1(a)); or
2) At least 5 years’ protection of clinical trial data along with other measures to “provide effective market protection” and “deliver a comparable outcome in the market”.
Whatever the understanding reached between parties in the negotiating room, according to the agreed legal text, it appears that the TPP parties are obliged to ensure the same market exclusivity outcomes regardless of which option they choose.
The legal language provides room for the United States to continue to pressure the other TPP countries to ensure that they keep biosimilars (more affordable follow-on products) off the market for eight years, in order to provide equivalent “effective market protection” and a “comparable outcome” to eight years of data protection…
The provisions relating to biologics are problematic and ambiguous. They appear to commit countries to providing either eight years of clinical trial data protection, or five years of clinical trial data protection along with other measures to deliver comparable outcomes. While the Australian Government has said that the regime for biologics in Australia will not change, the language leaves room for continued pressure by the United States to ensure that TPP countries prevent biosimilars from entering the market for eight years. The definition of biologics is very broad and likely to limit countries’ flexibility in determining the scope of the obligation. A review by the TPP Commission of both the length and scope of protection after ten years provides a further mechanism for US pressure to expand and extend monopolies on expensive biologics.
Dr Gleeson’s full critique is well worth reading and can be viewed here.
Meanwhile, the Electronic Frontier Foundation (EFF), the leading nonprofit organisation defending civil liberties in the digital world, has criticised the final TPP text for extending copyright protections.
In addition to extending copyright terms to creator’s life plus 70 years, the TPP would ban the circumvention of Digital Rights Management (DRM), as well as permit disproportionate penalties on users that are deemed to have breached copyright:
The provisions in QQ.G.10 that prohibit the circumvention of DRM or the supply of devices for doing so are little changed from earlier drafts…
The odd effect of this is that someone tinkering with a file or device that contains a copyrighted work can be made liable (criminally so, if wilfullness and a commercial motive can be shown), for doing so even when no copyright infringement is committed. Although the TPP text does allow countries to pass exceptions that allow DRM circumvention for non-infringing uses, such exceptions are not mandatory, as they ought to be.
The parties’ flexibility to allow DRM circumvention also requires them to consider whether rightsholders have already taken measures to allow those non-infringing uses to be made…
Alongside the prohibition on circumvention of DRM is a similar prohibition (QQ.G.13) on the removal of rights management information, with equivalent civil and criminal penalties. Since this offense is, once again, independent of the infringement of copyright, it could implicate a user who crops out an identifying watermark from an image, even if they are using that image for fair use purposes and even if they otherwise provide attribution of the original author by some other means…
On damages, the text (QQ.H.4) remains as bad as ever: rightsholders can submit “any legitimate measure of value” to a judicial authority for determination of damages, including the suggested retail price of infringing goods. Additionally, judges must have the power to order pre-established damages (at the rightsholder’s election), or additional damages, each of which may go beyond compensating the rightsholder for its actual loss, and thereby create a disproportionate chilling effect for users and innovators…
One of the scariest parts of the TPP is that not only can you be made liable to fines and criminal penalties, but that any materials and implements used in the creation of infringing copies can also be destroyed (QQ.H.4(12)). The same applies to devices and products used for circumventing DRM or removing rights management information (QQ.H.4(17)). Because multi-use devices such as computers are used for a diverse range of purposes, this is once again a disproportionate penalty. This could lead to a family’s home computer becoming seized simply because of its use in sharing files online, or for ripping Blu-Ray movies to a media center.
The Intellectual Property Chapter also requires signatories to hand over details of people that are alleged to have breached copyright:
Without prejudice to its law governing privilege, the protection of confidentiality of information sources, or the processing of personal data, each Party shall provide that, in civil judicial proceedings concerning the enforcement of intellectual property rights, its judicial authorities have the authority, upon a justified request of the right holder, to order the infringer or, in the alternative, the alleged infringer, to provide to the right holder or to the judicial authorities, at least for the purpose of collecting evidence, relevant information as provided for in its applicable laws and regulations that the infringer or alleged infringer possesses or controls. Such information may include information regarding any person involved in any aspect of the infringement or alleged infringement and regarding the means of production or the channels of distribution of the infringing or allegedly infringing goods or services, including the identification of third persons alleged to be involved in the production and distribution of such goods or services and of their channels of distribution.
Overall, there’s no joy in Intellectual Property chapter of the TPP, which shifts power away from users/consumers towards the owners of IP, most of whom reside in the US.