Uncategorized

Kenyan Court holds Anti-Counterfeit Act unconstitutional


UNAIDS Executive Director welcoming the decision
A couple of years ago we had blogged about the controversial Kenyan Anti-Counterfeit Act that had been passed in 2008. At that time, I had written that its broad definition of counterfeits would include generics and would be severely problematic:
The problematic part of the legislation is that it recognises intellectual property rights of pharmaceutical products registered in any part of the world and not just in the country of export or import….  The legislation claims that copies or generic versions of all products having protection in Kenya or anywhere else will be considered ‘counterfeit’… By the year 2012, the global pharmaceutical market will see approximately $123 billion worth of products lose their patents. Given that the expiry time line for drug patents differs across countries, it’s really problematic that the Kenyan legislation protects the intellectual property rights of drugs that are registered even outside Kenya. This gives good reason to believe that the Kenyan legislation has been influenced by vested interests.


The legislation also lacks a differentiation between the definitions of spurious goods and counterfeit goods. While one implies a sub-standard product – a public health issue, and the other merely refers to alleged IPR violations and do not necessarily compromise on quality of the product and this is not reflected in the legislation. 

A few days ago, in a landmark decision, the High Court of Nairobi held the relevant three provisions of this Anti-Counterfeit Act, 2008 as unconstitutional – Section 2 (definition of counterfeiting), section 32 (offences) and Section 34 (Powers of the Commissioner to seize suspected counterfeit Goods). The Court held that the definition of counterfeits could unfairly include generic medicines and that this would violate the right to life, dignity and health. The conflagration of generics and counterfeits during in-transit seizures was also mentioned as the type of consequence that could occur by allowing this type of provision. In fact, the Court also said that in a legal regime that respects Intellectual Property Rights, “the danger that such generic drugs can be seized under section 32 and 34 of the Act is therefore manifest.” 
Importantly, the Court also discussed that even though counterfeiting is a current issue and requires addressing and even though it is important to protect IPR rights – this cannot be done at the cost of fundamental rights to life, dignity and health. Even though this may seem obvious to the casual observer, people who have been following IP trends of today will realise the unfortunate truth that it is becoming increasingly important to state this up front (see the end of my last post mentioning the rhetoric of IP ‘rights’). 
Finally, the Court pointed out that the intentions of the Act are clearly not to safeguard consumers from counterfeits, but rather just to protect IP rights of individuals – “It would be in violation of the state’s obligations to the petitioners with respect to their right to life and health  to  have included in legislation ambiguous provisions subject to the interpretation of intellectual property holders and customs  officials when such provisions relate to access to medicines essential for the petitioners’ survival.”
The implications of this decision are potentially quite large for Indian generics. Other countries in Africa which are contemplated / have already implemented legislation similar to the Anti-Counterfeiting Act will be taking note of this landmark judgement from Kenya – and India exported an estimated $1.58 billion worth of pharmaceutical products to Africa in 2010-2011, up from $1.19 billion in 2009-2010 (according to the HBL). 
Takeaways:
There is one important take away from this whole incident which Indian generics should take note of – and that is that substandard/spurious drugs are becoming an issue which may no longer be one that can be ignored. Earlier on the blog, Suchita had mentioned that batches of drugs in various African countries labelled “made in India” were found to be fakes coming from China
As drugs worth billions of dollars start going off patent, more and more generics are produced to penetrate those markets, resulting in millions of patients suddenly being able to afford drugs that they earlier weren’t able to. As generic companies are increasing access to these markets (and patients are more able to access drugs), it is important to maintain good quality in order to not further inflate the misconception that ‘counterfeits’ (which has a legal and hence slightly flexible definition) and substandard / bad quality drugs. 
As to the other important takeaway – it pertains how other countries react to the Kenyan decision. It would shock nobody if USTR’s next 301 report mentions their ‘disappointment’ in Kenya’s attitude towards IP rights. Hopefully other African countries though, view it through a more pragmatic lens – regarding the effect that such legislation can have on their people. Countries which produce generic drugs will of course hail the decision. And thus, the debate regarding the strength of IPRs regarding pharmaceutical products goes on. In the meantime though, no doubt, this decision will affect many many lives in Kenya quite positively, and hopefully also brings us closer to recognising our normative balance of priorities.  
Don’tTradeAwayOurLives provides the text of the judgement here for those interested. 

Leave a Reply

Your email address will not be published.