The case against ACTA

*          While it is claimed that ACTA will protect against falsified medicines by allowing countries and companies to take strong measures in trademark disputes, this may in fact impede access to genuine generic medicines.

There are several issues here. First, not all trademark disputes amount to a public health problem. Only 'wilful trademark counterfeiting on a commercial scale' - a form of fraud with a deliberate intention to exactly copy a product's branding - presents a legitimate public health concern. The World Trade Organisation itself distinguishes between 'trademark counterfeiting' and 'trademark infringement'. This means that trademark infringement disputes that companies may have over similar names or packaging by competitors cannot be considered as trademark counterfeiting.

But ACTA blurs this distinction. This means it would require countries to impose stringent intellectual property enforcement measures for civil trademark confusion disputes. Worryingly, disputes over allegations of similar-sounding names or packaging are common in the medicines field, as companies will often choose brand names for medicines that sound inevitably similar, in that they are derived from the drug's international non-proprietary name (INN). Similar names and packaging are often even desirable to demonstrate medical equivalency, but they do not mean that the medicines are unsafe or indeed that there has been a trademark infringement.

ACTA even extends enforcement to patent challenges. These IP infringements are generally commercial disputes where no inherent public health concerns exist. While patents and protection of undisclosed information are explicitly excluded from the border measures and criminal enforcement sections of the agreement, significantly reducing the negative effects on access to medicines, a number of provisions apply to patents and data protection as the default position, although signatories to ACTA 'may exclude' them. As has been noted, this suggests that such exclusion should be the exception and not the norm, and it is highly likely that such distinctions will be blurred in the course of negotiations with developing countries.

Lastly, ACTA's civil enforcement section may also allow expanded enforcement efforts based on fictional patent claims. These efforts favour rights holders and contain few if any safeguards for defendants or third parties.

*    ACTA allows the border detention of in-transit medicines destined for developing countries, which will interfere with the trade in legitimate medicines, and leaves trade in generic medicines open to disruption.

While the border measures section of ACTA no longer includes patents, it still includes civil trademark infringement. This means a customs official could decide to detain and even destroy an allegedly infringing good - without any court oversight or even notification to the rights holder or the generic company alleged to have violated the trademark - on the basis of the customs official's own view on whether the goods in question infringe a commercial trademark.

The risks to access to medicines of such overbroad provisions have been recently highlighted when medicines were detained in Germany based on the wrong assumption that a generic medicine, using the required international non-proprietary name 'amoxicillin' to describe the contents, infringed GlaxoSmithKline's trademark on the brand name Amoxil (which besides is itself a use of the INN). At the core of this detention was an expansive EU customs regulation designed to expand the enforcement of IP rights that led to many other detentions of medicines in transit between developing countries which were not IP-protected in the source or destination countries.

Under ACTA, too, even legitimate medicines just transiting through an ACTA member country could be temporarily or permanently seized. Ex officio mechanisms without judicial review - and allowing the detention, seizure, and even destruction of goods - are susceptible to over-enforcement. Civil trademark infringement is a very grey area of fact and degree that requires judicial oversight to resolve. It is not appropriate for untrained border guards acting ex officio to make determinations that courts are best suited to make - particularly in cases where the result of these determinations would be the denial of medicines to patients.

Rights holders could also use border measures as a commercial tactic to delay or destroy rivals' goods on a mere allegation of similar names, without a health threat, before a court hearing to determine whether their claim is in fact valid.

ACTA expands also the TRIPS requirement on border measures for import to cover export as well. For countries which are exporters of generic medicines for the developing world, the application of border measures to exports threatens to disrupt the lifeline for patients.

*    ACTA acts as a deterrent to the production and trade in generic medicines, as it provides for excessive punishment, shifts the risks entirely on to the generic manufacturer, and grants few protections against abuse.

ACTA is imbalanced. On a mere allegation and not proof, including allegation brought by a competitor, generic suppliers allegedly infringing a trademark and potentially a patent may face the delay or destruction of goods, disproportionate damages, potential bankruptcy, and in some cases, even criminal proceedings.

The severe punishment for infringement obstructs and deters legitimate generic competition by dramatically altering the risks faced by generic medicines manufacturers, intermediaries and third parties. By generally focusing on harsh remedies before infringement has been proven, ACTA seeks to shift the risk on to the generic manufacturers rather than waiting until the IP holder has proved its case. The possibility of issuing injunctions and seizing medicines on a mere suspicion of infringement is extremely problematic and goes beyond what is required under the TRIPS Agreement. This will have a chilling effect on the manufacturers of generic medicines.

Further, ACTA provides great incentives for abuse because of the greater access to information and the potential for competitive advantage, coupled with limited liability for abuse. There are few penalties for false accusations, and few protections for the alleged infringer.               

This is extracted from 'A blank cheque for abuse: The Anti-Counterfeiting Trade Agreement (ACTA) and its impact on access to medicines', a briefing paper (updated February 2012) published by Medecins Sans Frontieres' Access Campaign.