Indian pharma is a major generics producer and healthcare provider to poor and needy patients, not only in least developed countries (LDCs) but also in developing countries (DCs).

The developed countries, such as US and EU are under pressure from big pharmas, which are working overtime to reduce the enhancing impact of availability, accessibility and affordability of economically priced essential generic-life saving medicines from India.

Time and again, EU as well as US have seized Indian generic medicines labelling them as counterfeit. Even though the quality of the medicines have been fully compliant with global standards, they have been perceived or interpreted as IP infringement. Having faced severe criticism, such seizure activities have been kept on hold/withdrawn by EU & US authorities in the past. The recent EU directive passed by the EU Parliament authorising seizures of branded generics transiting EU ports, is too harsh and not equitable in law, especially, since these are not meant to be sold in EU or EU community.  EU Directive 2015/2436 of the European Parliament and of the Council of 16 December 2015 to approximate the laws of the Member States relating to trade marks is available on http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32015L2436

Para (21): In order to strengthen trade mark protection and combat counterfeiting more effectively, and in line with international obligations of the Member States under the World Trade Organisation (WTO) framework, in particular Article V of the General Agreement on Tariffs and Trade on freedom of transit and, as regards generic medicines, the Declaration on the TRIPS Agreement and public health adopted by the Doha WTO Ministerial Conference on 14 November 2001, the proprietor of a trade mark should be entitled to prevent third parties from bringing goods, in the course of trade, into the Member State where the trade mark is registered without being released for free circulation there, where such goods come from third countries and bear without authorisation a trade mark which is identical or essentially identical with the trade mark registered in respect of such goods.

Para (22): To this effect, it should be permissible for trade mark proprietors to prevent the entry of infringing goods and their placement in all customs situations, including, in particular transit, transhipment, warehousing, free zones, temporary storage, inward processing or temporary admission, also when such goods are not intended to be placed on the market of the Member State concerned. In performing customs controls, the customs authorities should make use of the powers and procedures laid down in Regulation (EU) No 608/2013 of the European Parliament and of the Council (6), also at the request of the right holders. In particular, the customs authorities should carry out the relevant controls on the basis of risk analysis criteria.

Article 10(4): Without prejudice to the rights of proprietors acquired before the filing date or the priority date of the registered trade mark, the proprietor of that registered trade mark shall also be entitled to prevent all third parties from bringing goods, in the course of trade, into the Member State where the trade mark is registered, without being released for free circulation there, where such goods, including the packaging thereof, come from third countries and bear without authorisation a trade mark which is identical with the trade mark registered in respect of such goods, or which cannot be distinguished in its essential aspects from that trade mark.

The entitlement of the trade mark proprietor pursuant to the first subparagraph shall lapse if, during the proceedings to determine whether the registered trade mark has been infringed, initiated in accordance with Regulation (EU) No 608/2013, evidence is provided by the declarant or the holder of the goods that the proprietor of the registered trade mark is not entitled to prohibit the placing of the goods on the market in the country of final destination.

Permanent & lasting solutions
Indian industry jointly with Government of India should consider and make it practical to consolidate their export consignments and effect the shipments directly to major client destination, such as Latin America, Africa, South East Asia and other least developed country and developing country destinations, by totally avoiding the ports where there is threat of seizure of goods.

India should build direct transportation network with major trading partners with local/regional transhipment facilities, to avoid new EU laws passed by the EU Parliament for enforcing seizure provisions for branded generics having trademarks allegedly similar to CTM (Community Trade Mark) of EU.

This will not only resolve the problem of unanticipated seizure enroute the destination, but will also impact the income of ports. The economic impact of reducing dependence on EU ports is the only way by which India will be able to convince them to review unreasonable, monopolistic, discretionary and discriminatory practises, such as seizures of in-transit goods.

In this context, it is relevant to recall and refer to plethora of NTBs (Non-Tariff Barriers) in violation of TBT (Technical Barriers to Trade) Treaty under WTO, being repeatedly attempted and being adopted by EU and US.  Among them, the attempted definition of “counterfeit medicines” as well as SSFFC (Substandard/ Spurious/ Falsely-labelled/ Falsified/Counterfeit) has been bone of contention in the past. Medicines in transit through US & EU (mainly EU) intended for least developed countries without Patent Law) and /or developing countries without patents were detained enroute.  This dispute was resolved through negotiations and a moderate level of threat of countermeasures.  Having failed to push through IP infringement potential as a measure of definition of “counterfeit medicines”, the EU Parliament has issued new Directive to seize trademark infringing medicines and/or branded generic medicines with similar “brand” trademarks to be seized including in transit.  The “similarity” in trademarks (as in patents) is a matter for judicial intervention, in absence of which there is strong discretionary powers with the customs authorities on cross boarder jurisdictions.  Such discretion and error of biased judgement on “similarity” of trademarks could lead to denial of affordable access to essential lifesaving medicines to suffering millions in poor nations.

WTO after 20 years is now in process of ratifying the TFA (Trade Facilitation Agreement) which will harmonize all FTAs (Free Trade Agreements) and Regional Trade Agreements.  The EU proposals are in contravention of the cross boarder measures and in transit provisions of TFA which has already been ratified by 70 out of 162 member countries.  India could challenge EU proposals as contravening WTO and TFA provisions, if EU goes ahead with the EU Seizure Legislation.