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SpicyIP Tidbit: India, Brazil to file WTO complaint against the E.U over ‘seizures’ of pharma drug consignments


The Mint and the BS both recently reported that India has prepared a legal brief to challenge the ‘seizures’ of Indian drug consignments by the Customs Department in Netherlands. In pertinent part both reports have quoted a commerce official as stating that “India has compiled a legal brief to challenge the ad hoc decision taken by the Netherlands at the WTO. We have consulted Brazil on the matter and they will join in with us. Both will file the complaint against the European Commission in WTO,” a commerce ministry official said.” .

The ‘seizures’ in question are those of 16 Indian pharmaceutical drug consignments which were allegedly transiting through European territory while on their way to a number of South American and African Countries. These consignments were detained on the grounds of either patent or trademark infringement. The question that has arisen in this context is whether this action of seizing transiting drug consignments under the EC Directive 1383/2003 is TRIPs compatible especially since the drug consignments were not patent infringing in either the exporting or the importing country. (For a more detailed background please refer to the earlier posts on the issue).

A Freedom of Information request filed by a Dutch NGO – HAI and which can be accessed here, revealed the breakup of the 16 consignments seized in the year 2008 as follows:
Destination:
5 x Peru
4 x Colombia
2 x Ecuador
2 x Mexico
1 x Portugal
1 x Spain
1 x Brazil

1 x Nigeria
Its surprising to note that Brazil is ready to join India in a WTO action despite only one of its consignments being seized. It must also be noted that two of the consignments were headed to Spain and Portugal, both members of the E.C.

Type
The following types of goods were involved:
8 x cardiologic medicines (in total, 100,000 pills and 1850 kg)
5 x lifestyle medicines (in total, 400 kg)
2 x AIDS inhibitors (in total, 30,000 pills and 24 kg)
1 x medicines against dementia (94,000 pills)
1 x medicines against schizophrenia (500,000 pills)

The normal procedure under EC 1383/2003 after a seizure by the Customs Department is for the rights holder to initiate proceedings in a court of law to determine whether there has been infringement of any intellectual property rights. The EC directive mandates that the consignment be released in 10 days if no legal proceedings have been initiated in such a court. It must be noted that this procedure is in marked difference to the Indian law which requires the Customs Department itself to determine patent or trademark infringement. At this point it is unknown to me if any of these consignments that were ‘detained’ in E.U. territories were actually contested in the national courts of those jurisdictions by either the Indian generic companies or by the Indian Government. If any of our readers have information on this, please do pass it on us. It would be extremely surprising if the Indian Government went ahead with trying to challenge the E.U. at the W.T.O. without actually challenging the ‘seizures’ in the Dutch Courts especially since a crucial question in all 16 cases would be factual i.e. whether there was a serious risk of diversion of these consignments into the E.U. market.

The Freedom of Information Request notes that the action taken in the case 16 consignments is as follows:

Action
6 Presumed authorisation
4 No action
2 Waiver
1 Prejudgment attachment
1 Settlement
1 Pending
1 Summons by the trademark owner
1 No response by the trademark owner

I am completely clueless as to what ‘presumed authorization’, ‘no action’, ‘waiver’ actually imply. It would be great if one of our better placed readers could explain the same to the rest of us.

An equally pertinent question is whether the Indian Government should challenge the EC Directive as such or alternatively whether it should challenge only the Dutch interpretation of this Directive. This question has arisen in the context of an English judgment on the same point which held that EC 1383/2003 did not permit transit goods to be seized. For more on this please read Shamnad’s post over here.

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Prashant Reddy

Prashant Reddy

T. Prashant Reddy graduated from the National Law School of India University, Bangalore, with a B.A.LLB (Hons.) degree in 2008. He later graduated with a LLM degree (Law, Science & Technology) from the Stanford Law School in 2013. Prashant has worked with law firms in Delhi and in academia in India and Singapore. He is also co-author of the book Create, Copy, Disrupt: India's Intellectual Property Dilemmas (OUP).

2 comments.

  1. Avatarwackes seppi

    The WTO organised a public forum on 29 and 30 September 209 on “Global Problems, Global Solutions: Towards a Better World Governance”. Full programmes at http://www.wto.org/english/forums_e/public_forum09_e/programme_e.htm.

    Session 43 was devoted to the issue of border measures taken in the European Community. The presentations can be heard from http://www.wto.org/audio/forum09_session43.mp3.

    The main interventions are from Michelle Childs, Carlos Correa (at 1:43), Sunjay Sudhir (at 1:31), Luc Devigne (at 1:20), José Estanislau do Amaral Souza Neto (at 0:53) Arnoult Gieske (at 0:44) and Edwin de Voogd (at 0:15).

    Unfortunately, there is nothing really new on the cases around which there is, unfortunately again, too much posturing.

    A quote from Luc Devigne (European Commission): “We are probably talking of a nano-percentage of medicines transiting through the EU” and “of course those who do not want to be convinced will never be convinced”.

    Something to be watched is the contributions to the next AIPPI Convention in Buenos Aires, which has border measures on its agenda.

    And a quote from Arnoult Gieske, after a short review of answers to the AIPPI questionnaire: “That would conclude my overview of the European… confusion”.

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  2. AvatarManish Garg

    This morning in The Economic Times, Mumbai edition dated 3rd November, 2009, there is report of seizures of goods Clopidogrel tablets exported by McLeods Pharmaceuticals at Paris, destined to some other country. now is the time for India to act strongly against EU for illegal seizures of the drug when the drug is destined to some other country and in absence of patent protection in India.

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