Panel set on US complaint against Brazil over patent law

by Chakravarthi Raghavan

Geneva, 1 Feb 2001  - The WTO’s Dispute Settlement Body established a panel Thursday on a complaint by the US against Brazil over its patent law requiring local working, with Brazil using unusually strong language in warning the US that it was seeking to upset the delicate balance in the TRIPS agreement, which “may prove politically disastrous”.

On a previous occasion, when the US request had come up for the first time, Brazil had said that the provisions in its law were similar to those in the US patent law, a view that was disputed by the US, saying that it was “incorrect and irrelevant.”

Brazil was due, when the DSB meets again Thursday afternoon, to announce that it was seeking consultations with the US, the pre-requisite to raise a dispute, over the US patent code.

In its complaint, the US contended that Art.68 of Brazil’s industrial property law providing for issue of compulsory licensing if there was no ‘local working’ of the patent   i.e. if the patented product is not manufactured in Brazil, but sought to be supplied only through imports, or if the patented process is not used in Brazil. Also, that the Brazilian law enables import of a patented product or products obtained from the patented process by persons other than patent-owners, if the patent is not worked in Brazil.

Being the second time around that the request for a panel came up before the DSB, it was thus automatically set - with Japan, India and Honduras reserving their third party rights. Others could also do so within ten days.

The Brazilian ambassador, Mr. Celso Amorim, in a statement to the DSB, disagreed with the US decision to seek a panel and resort to litigation, rather than as suggested by Brazil on the last occasion, in giving more emphasis to talks with Brazil to understand the consistency of that Brazilian law with the TRIPS agreement.

Brazil, Amorim said, believed that the US had not given sufficiently careful consideration to the political implications of its decision nor has it examined many technical aspects of the case.

The TRIPS agreement, Amorim said, “reflects a delicate balance that took developing countries to the limits of acceptability.”

“This delicate balance was reflected, in the case of Brazil, in internal legislation which is fully consistent with the letter and spirit of the Agreement. The United States is now seeking an interpretation of TRIPS that threatens to upset such balance.”

Amorim added: “Brazil is confident that a panel will only confirm that our legislation is fully consistent with the TRIPS agreement and that the US action amounts to a demand for commitments which go beyond the Agreement, through resort to dispute settlement procedures... This is not only legally unfounded, but it may prove politically disastrous.”

Under any other business, Amorim said, Brazil would be announcing its request for consultation with the US on its patent code. – SUNS4827