EU India FTA -- Free Trade or Re-inventing Colonialism

The India EU Free Trade Agreement (FTA) talks have been on for some time, as have been some other FTA talks -- notably Japan and Israel. Newsclick last week had brought out the dangers from such FTAs (http://newsclick.in/economy/secretive-free-trade-agreements-implications-country)  and had also given the urls for the text of IP sections of the EU and Japan FTAs.

The difference between the FTAs and the earlier trade talks under the WTO regime is that while the multilateral talks under WTO are relatively open with texts in the public domain, the FTA talks are shrouded in secrecy. This is what happened with the FTA India had reached with ASEAN and it was only after the cheap imports of palm oil hit the Indian market, the people learnt the danger of such secret trade negotiations.

Right now India is negotiating on whole host of issues, the most important being agriculture and Intellectual Property Rights. The EU makes no bones about what it is asking – it wants Indian market to be opened for heavily subsidised EU farm products and wants the patent and copyright regime “strengthened” (read made more pro monopoly). The Intellectual Property part of the negotiations is scheduled to be held from 24th May, so we shall address that first. (A separate article on FTAs and Agriculture is also being put up in Newsclick).

Daniele Smadja, EU’s ambassador to India was very clear in what she said after the last round of discussions in Brussels. She stated that from the beginning of the negotiations “it was clear that any agreement needed to be TRIPS (Trade-Related Aspects of Intellectual Property Rights) plus.” (http://www.livemint.com/2010/05/03215548/India-EU-to-hold-more-discuss.html ) The question that needs to be asked is why has the Government of India agreed to get into any FTA discussions with EU or any other country for that matters on issues which it has always held not to be trade related?

It was India that had held out in GATT that Intellectual Property is not a trade issue and agreed this being brought in GATT only under duress.  It has already paid a heavy price in sacrificing the patent regime that existed earlier with agriculture and pharmaceuticals now being brought under product patents. The underlying premise of Indian patent regime even today is that patent monopolies are against public interest and should be granted only when they meet all patentability criteria as laid down in patent law – the onus of proving patentability of the “invention” is on the party filing the patent. That is why the Indian Parliament when passing the Patent Amendment crafted it in a way that makes minor changes not patentable or makes difficult ever-greening of patents.  The EU draft is an attempt to extend the duration of the monopoly under various pretexts.

The EU Draft states:

The provisions of this chapter shall complement and further specify the rights and obligations between parties beyond those under TRIPS and other international treaties in the field of intellectual property to which they are parties. [ Article 8, para 3]

It further states as subjects

“For the purpose of this Agreement, intellectual property rights embody copyright, including copyright in computer programs and in databases, and rights related to copyright, rights related to patents, trademarks, trade names in so far as these are protected as exclusive property rights in the domestic law concerned,… plant varieties, protection of undisclosed information…” [Article 8, para 3]

While India accepts copyright in computer programs, copyright in relation to databases has been provided by only EU. Not even the US, generally the most pro patent and pro copyright regime in the world, has accepted such rights in relation to databases.  

The key provisions that the EU wants to push in the area of medicines are the extension of patent protection by five years,  more barriers for  generic manufacturers using patent linkage and data exclusivity. All these measures are attempts to extend the sphere of patents and retain their monopoly well past the normal time period of 22 years granted under TRIPS. Let us look at each of these provisions.

For extension of patents, the EU argument is that patent life needs to be extended in India by another five years beyond TRIPS as Indian patent office takes time for approving patents [Article 17.3, para 1,2, 3]. We are not aware of any patent office that does not take time for processing patent applications. In any case law cannot be changed for procedural delays. In case EU feels its companies are losing money due to long delays in the patent office, the correct procedure would be to ask the Commerce Ministry to streamline this procedure and not ask the Indian Parliament to change the law! And not achieve this through secretive trade negotiation allegedly for “Free Trade”. Ironically, extension of monopoly is now freedom to trade!

Data exclusivity has been the subject matter of heated debates between big pharma on one hand and public health groups and generic drug manufacturers on the other. It is based on the claim of big pharma that the data it generates from clinical trials and submits to the regulatory authorities should be considered the exclusive property of the drug companies and cannot be used even by the regulatory authorities. If data exclusivity is accepted, the generic companies who want approval from the  drug regulator for their generic version – chemically identical to that of the earlier patent protected ones --they have to conduct new drug trials and generate the same data that is there already with the regulatory bodies.  This data monopoly is generally claimed for a further period of 5 years, effectively stopping cheaper generic versions of the patented products therefore for another  five years. The EU has not specified the number of years it wants data exclusivity, but given what we are seeing elsewhere, it will be for at least a five year period. In effect, the EU is asking for the patent protection of all medicines to be extended five years for delays in patenting and another undefined number of years on account of data exclusivity [article 18, para 2]

The EU draft asks also for what is known as “patent linkage”. Patent linkage is a system in which the Drug Controller refuses to grant or delays a marketing approval to a generic drug manufacturer if the drug is already patented. This ‘linkage system’ requires that the generic manufacturer prove to the drug regulator that the drug for which he seeks approval is not covered by a valid patent. The aim is to create a second tier of protection for patent monopoly.  In India, there is no patent linkage and the courts have rejected attempts by big pharma to create such linkages.  The patent system and the drug regulatory system in India are two separate and independent mechanisms created under different laws and this is the legislative intent. If introduced, the patent linkage system would seriously impact the early entry of generic drugs into the market.

The other most pernicious clause in the EU draft refers to what are now being called as Border Measures [Article 36]. The EU is concurrently changing its laws to effectively bar all generic medicines that do not conform to their patent law from being transported through EU countries. The IBSA summit recently took note of such measures and called them as violations of WTO provisions and international law. A number of seizures of Indian medical consignments to third countries passing through Europe have been confiscated as “counterfeit” by EU customs though they have no legal jurisdiction on the consignments. It is indeed strange that such border measures are sought to be introduced in the FTA and Indian side should even be sitting and discussing such issues.

This list of problems in the EU draft is by no means exhaustive. It just covers some of the more blatant examples where the EU FTSA seeks to subvert Indian law. There are many more instances, particularly in copyright portion where EU is asking for an extension of the rights of publishers and music/film companies. These also need careful examination to ensure that we are not giving away public’s rights to satisfy big EU copyright holding media companies.

Beyond what EU is asking India to provide, are also its diktats on how Indian courts must behave [Article 28]. They are to give “injunctive relief”, a course which has been held as extremely dangerous for all software companies. For example, if there is a dispute over a piece of software, this means that the company using this software can be stopped even before deciding the merits of the case. A case in example was the Blackberry case, where RIM, the owner of the Blackberry business was forced to pay $612 million on a claim which was widely held to be bad in law. Faced with threat of an injunction which would have shut down its entire business and sunk Blackberry, or paying out $612 million, it chose the lesser of the two evils. The key issue it shows the danger of “injunctive relief” in patent infringement cases – it allows patent trolls to sue companies and extort money with threats of closing down their business. It is well known that companies such as Phillips are no longer manufacturers of equipment – their primary income comes from their patent portfolio and threats of suing other companies. Not surprisingly, EU is on the side of patent trolls and against manufacturing companies! That is why a Free Trade Agreement needs to enter into what the courts must do.

The government should not proceed any further on the India-EU FTA and all other FTAs unless all current proposals, negotiating drafts are debated and discussed in parliament and with state governments. The Government has no right to negotiate away peoples’ rights to medicines and health.