American University Washington Colleague of Law October 2010 Judit Rius Sanjuan Knowledge Ecology International (KEI) ACTA: a threat to exceptions and limitations as limits to remedies

What’s ACTA? Why it matters? Protecting Pharmaceutical Monopolistic Power through secret negotiations Limitations & exceptions to IPR (flexibilities) can be done as limits on rights OR limits on remedies to infringement  Differences between Part II & Part III WTO TRIPS Agreement  Some L&E are easier to implement as limits on Remedies, than on Rights  ACTA deals with Remedies, without balance

WTO TRIPS Agreement Art 44 of TRIPS: Right to issue injunctions: The judicial authorities shall have the authority to order a party to desist from infringement… Limitations: a) Innocent third parties are protected: members are not obliged to to grant injunctions in respect of protected subject matter acquired or ordered by a person prior to knowing or having reasonable grounds to know that dealing in such subject matter would entail the infringement of an intellectual property right; and b) Members can limit rights holders to a remedy in damages: under Art 44.2, where an injunction would be inconsistent with a Member's law, declaratory judgments and adequate compensation must be available and enough. Art 45 of TRIPS

Limitations and Exceptions to Remedies Some examples I Judicially ordered compulsory licenses  U.S SC eBay v. MercExchange Jurisprudence  If a court finds injunctive relief inappropriate (4 factors/ “the public interest would not be disserved by a permanent injunction”), it can instead choose to issue a “reasonable royalty”.  2006: Cordis J&J on medical devices for performing angioplasty/ 2008: Abbott on Hepatitis C virus genotyping test kits/ 2009: Globus Medical on devices and methods used by spinal surgeons to stabilize bony structures/ India Jurisprudence

Limitations and Exceptions to Remedies Some examples II Statutory exceptions and limitations to remedies:  No injunctions available if compensation E.g. 28 USC 1498 automatic compulsory licenses for uses "by or for the government”.  No Injunctions neither compensation available E.g. US Health Care Reform bill – new regulatory pathways for generic/biosimilar biologic drugs. When patents are not disclosed timely to potential competitors, no injunction or damages available. Caps on Damages

Injunctions, Damages & Access to Medicines ACTA will affect both Access and Innovation to Medicines =  Limitations & Exceptions have a positive effect by accelerating the availability of generics to patients  They also have the potential to change business model in drug development. Exceptions sometimes transform patents in rights to remuneration, without allowing the exclusion of competition & the limitation of technology transfer WHA 61.21: Incentive mechanisms that de-link cost of R&D from price of products Liability Rules (only remedy for certain infringements would be an administrative just compensation) or no remedies at all available (nor injunctions or damages)

Injunctions (Leaked: January 18, 2010) Option 1: In civil judicial proceedings concerning the enforcement of [Can/NZ: copyright or related rights and trademarks] [US/J: intellectual property rights], each Party shall provide that its [US/J: judicial authorities] [NZ: competent authorities] shall have the authority to issue an order to a party to desist from an infringement, including an order to prevent infringing goods from entering into the channels of commerce [US/Aus/Kor/Mor/NZ: and to prevent their exportation]. Option 2: [EU: Each Party shall ensure that, where a judicial decision is taken finding an infringement of an intellectual property right, the judicial authorities may issue against the infringer an injunction aimed at prohibiting the continuation of the infringement. The Parties shall also ensure that right holders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe an intellectual property right.] [NZ: Does not support the inclusion of this provision] [CAN: Need to address statutory limitations]

Injunctions (Leaked: July 1, 2010) [EU/Sing: 1.] In civil judicial proceedings concerning the enforcement of [Can/NZ/Aus/US/Sing/Mex: copyright or related rights and trademarks] [J/EU: intellectual property rights], each Party shall provide that its judicial authorities shall have the authority [Can/AUS: subject to any statutory limitations under its domestic law] [US/Kor/J/EU/CH/Mex: subject to any statutory limitations under its domestic law] to issue an order to a party to desist from an infringement, including an order to prevent infringing goods from entering into the channels of commerce. [EU/CH: 2.The Parties [NZ/Mor/Mex: may] shall also ensure that right holders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe an intellectual property right].

Current: Injunctions (October 6, 2010) Each Party shall provide that, in civil judicial proceedings concerning the enforcement of intellectual property rights, its judicial authorities shall have the authority to issue an order against a party to desist from an infringement, and inter alia, an order to that party or, where appropriate, to a third party over whom the relevant judicial authority exercises jurisdiction, to prevent infringing goods from entering into the channels of commerce. Notwithstanding the other provisions of this Section, a Party may limit the remedies available against use by government, or by third parties authorized by a government, without the authorization of the right holders to the payment of remuneration provided that the Party complies with the provisions of Part II of the TRIPS Agreement specifically addressing such use. In other cases, the remedies under this Section shall apply or, where these remedies are inconsistent with a Party’s law, declaratory judgments and adequate compensation shall be available.

ACTA & Damages Cap on damages are good both for access and for innovation Current ACTA wording require courts to consider “any legitimate measure of value submitted by the right holder,” including “the value of the infringed good or service, measured by... the suggested retail price.” ACTA text seems to suggest the courts be required to consider use of the entire market value rule for patents (EMVR) The proposed high levels for damages will affect current law and jurisprudence and the possibility of future legislative reforms.

Damages (Leaked: January 18, 2010) 1. Each Party shall provide that: (a) in civil judicial proceedings, [US/J; its judicial authorities] [Mex/NZ: or competent authorities] [EU/NZ: on application of the{EU: injured party}{NZ:right holder}] shall have the authority to order the infringer [EU/NZ: who knowingly or with reasonable grounds to know engaged in infringing activity] of [Can/Sing/NZ: copyright or related rights and trademarks] [US/J: intellectual property rights] to pay the right holder (i) damages adequate to compensate for the [EU: actual] injury the right holder has suffered as a result of the infringement 3 ; or [EU: or] (ii) [US/Mor/Aus/Kor/Sing: at least in the case of copyright or related rights infringement and trademark counterfeiting,][MX: in the case of IPR infringements] the profits of the infringer that are attributable to the infringement, which may be presumed to be the amount of damages referred to in clause (i)[Aus/Sing/NZ/EU: which may be presumed to be the amount of damages referred to in clause (i)]; and [EU: Delete (ii){as originally proposed?} and move (ii) into paragraph 2.2.1(b)--please clarify]

Damages (Leaked: January 18, 2010) 1. Each Party shall provide that: [(iii) Can/NZ: For greater certainty, a Party may limit or exclude damages in certain special cases.] (b) in determining the amount of damages for [Can/Sing/NZ: copyright or related rights infringement][MX: IPR] infringement [US/J: of intellectual property rights] [Can/Sing: and trademark counterfeiting], its [US/J:judicial][NZ: competent] authorities [US/J: shall][Aus/Can/NZ: may] consider, inter alia, [Can/NZ: any legitimate measure of value that may be submitted by the right holder, including] [EU/Can/NZ: the lost profits], the value of the infringed good or service, measured by the market price, [Can: or] the suggested retail price [NZ: suggested retail price], or other legitimate measure of value submitted by the right holder [Can/NZ: or other legitimate measure of value submitted by the right holder], [EU: the profits of the infringer that are attributable to the infringement]

Current: Damages (October 6, 2010) 1. Each Party shall provide that in civil judicial proceedings, its judicial authorities shall have the authority to order the infringer who knowingly or with reasonable grounds to know, engaged in infringing activity of intellectual property rights, to pay the right holder damages adequate to compensate for the injury the right holder has suffered as a result of the infringement. In determining the amount of damages for infringement of intellectual property rights, its judicial authorities shall have the authority to consider, inter alia, any legitimate measure of value submitted by the right holder, which may include the lost profits, the value of the infringed good or service, measured by the market price, the suggested retail price.

ACTA Now October 2010 version is a significant improvement over previous versions of the texts. Example:  Important safeguards have been added (privacy, public health, objectives and purposes)  The border measures have been significantly improved  Footnote 2 / possibility of patents excluded  Improvements on the injunctions section Success based on leaked text and global activism However, there are outstanding issues that are important. E.g. Data Exclusivity/ Limits on injunctions without compensation/ Damages…

Future, ACTA PLUS for all Bitter victory - ACTA is a blank check – Creation of a new institution/process with the mandate to amend ACTA & extend to developing countries Not clear rules of civil society, developing countries and other experts participation and legislative power scrutiny  Direct attack on WTO/WIPO as norm setting forums with developing countries & civil society participation Double standard: Article 1.2 ACTA?

More Information Knowledge Ecology International Subscribe to: IP-health Mailing list Judit Rius Sanjuan