Canada and the Anti-Counterfeiting Trade Agreement (ACTA) Joel Lexchin MD School of Health Policy and Management York University Toronto Canada

Presenter Disclosures Joel Lexchin (1) The following personal financial relationships with commercial interests relevant to this presentation existed during the past 12 months: No relationships to disclose

What Gets Counterfeited Money, documents (passports) Consumer goods Art, toys, clothing, software, drugs, watches, electronics, handbags, shoes Parts in military planes

Counterfeit Goods Market value for counterfeit goods worldwide $200-600 billion per year but source of this figure is murky Job losses 750,000 US jobs but source of this figure is murky Counterfeiting in Canada $20-30 billion according to Canadian Manufacturers and Exporters but no source given for figure

Anti-Counterfeiting Trade Agreement (ACTA) Multinational treaty for purpose of establishing international standards for intellectual property rights enforcement Targets of agreement are counterfeit goods, copyright infringement on Internet Creates a new governing body outside existing forums, e.g., WTO, WIPO (World Intellectual Property Organization), UN

ACTA Development First developed by Japan and US in 2006 Canada, EU and Switzerland joined preliminary talks through 2006 and 2007 Official negotiations started in June 2008 with Australia, Mexico, Morocco, New Zealand, Korea and Singapore joining Negotiations done in secret No formal public input

ACTA and Counterfeit Drugs The main public health concern is drugs that are deliberately made with poor quality No active ingredient Wrong active ingredient Dangerous ingredients ACTA however would target products that violate intellectual property rights Disputes over validity of patents Disputes over trademarks Would allow seizure of goods in transit through a third country

What Happened In Europe December 2008 Dutch customs authorities seized a cargo of 500 kilos of Losartan (blood pressure medication) that was in transit in Rotterdam while on route from India to Brazil, held it for 34 days and then sent it back to India Not under patent in either India or Brazil so lawful to make in India and lawful to sell in Brazil Stopped because of EU regulation allowing companies to make claims that products in transit ”might” violate intellectual property rights Total of 19 such incidents in Europe

ACTA Enforcement Measures Damages (ACTA art. 9.1) Can exceed any real economic loss suffered by the right holder Can work as a constraint for generic competitors to explore the inherently grey area of IPR infringement. Provisional measures (ACTA art. 12) Allows rights holders to issue an injunction or request seizure of generics at short notice, without the other party being heard and without a full juridical review by the court Insufficient abuse deterrence (ACTA art. 12.5, 18) Does not provide sufficient mechanisms to adequately deter abuse of enforcement provisions by rights-holders

ACTA and Developing Countries Although only negotiated by a small number of countries ACTA’s IPR enforcement standards designed to be expanded and become global norm Developing countries will not use the available room for implementation to adapt standards to local needs Risk of chilling generic competition is even greater in the absence of proper competition laws to punish abuse Resulting higher prices will have an unacceptable impact on access and affordability of life-saving medicines Costs associated with the implementation are substantive and present a burden and opportunity cost on the limited public budgets of developing countries

Canadian Government & Secret Negotiations “It is accepted practice during trade negotiations among sovereign states to not share negotiating texts with the public at large, particularly at earlier stages of the negotiation. This allows delegations to exchange views in confidence facilitating the negotiation and compromise that are necessary in order to reach agreement on complex issues”

Canada & ACTA April 2009 Roundtable Consultation Some participants suggesting that the ACTA was not the appropriate venue for addressing issue of counterfeit pharmaceuticals and expressing concern that it could detract from efforts in other multilateral organizations, such as the World Health Organization Canadian officials highlighted Canada’s demonstrated commitment to the issue of public health Work on falsified medications could continue in other fora BUY no other fora identified

Canada & ACTA June 2009 stakeholder consultation Concern about seizures as in Europe Canadian Border Services Agency confirmed the unlikely occurrence of a similar situation within the Canadian jurisdiction Canada’s position is that the key ACTA obligations should be limited to trademark counterfeiting and copyright piracy Other government positions ACTA can make contribution to the fight against counterfeit medicines by establishing international standards for trademark enforcement, but only as a part of Canada’s broader approach (ACTA won’t deal with issue of quality of drugs) Not in favour of removing pharmaceuticals since ACTA is a non-sectoral agreement, and removing pharmaceuticals would result in lower sectoral enforcement standards

Rx&D (Canada’s Research-Based Pharmaceutical Companies) and ACTA “Counterfeit pharmaceutical products are a serious public health and safety concern with potentially life threatening consequences…The life-threatening phenomenon created by counterfeit pharmaceuticals…underscores the importance of this issue within these consultations” Doesn’t define what Rx&D considers to be counterfeit medications

Current Status of ACTA Oct. 2011 signed by Australia, Canada, Japan, Morocco, New Zealand, Singapore, South Korea and United States Switzerland has not signed 2012 signed by Mexico, EU and 22 Member States in EU also signed July 4, 2012 European Parliament rejected treaty by 478 to 39 with 165 abstentions so neither EU nor Member States will join Japan only country so far to ratify Six countries need to ratify treaty for it to take effect Four of the remaining 7 countries need to ratify (assumes that the US will ratify)

Canadian Position on Signing Ed Fast, Minister of International Trade and Minister for the Asia-Pacific Gateway “We all have an interest in combatting counterfeiting and piracy because these activities cost billions of dollars each year in revenue and trade losses, which translates into higher prices, lost income and lost jobs for people employed in a range of industries—from film and pharmaceuticals to electronics. Counterfeit goods also pose a real threat to the health and safety of people because the producers of goods such as drugs and auto parts evade the rigorous rules, standards and guidelines that are in place to protect consumers.”

ACTA Ratification March 1, 2013 Canadian government introduced Combating Counterfeit Products Act that would allow Canada to ratify ACTA March 1, 2013 US released 2013 Trade Policy Agenda report “The United States continues to encourage Canada to provide for deterrent level sentences to be imposed for IPR violations, as well as meet its Anti-Counterfeit Trade Agreement (ACTA) obligations” Currently Canadian legislation is being reviewed by Industry Committee

ACTA in Context Canada & South Africa Canada & Doha Canada & Canada’s Access to Medicines Regime Canada & Noncommunicable diseases Canada & TRIPS exemption extension

Conclusions ACTA will do nothing to combat drugs that are deliberately falsified or substandard ACTA might have a chilling effect on the production of generics ACTA could result in seizure of generic drugs that are in transit (although not in transit through Canada) Canada seems to be following US lead on ACTA ACTA is in line with Canada’s position around stronger IP versus better access