This year, there were fireworks on both sides of the Atlantic for the 4th of July. Last week, the European Parliament (EP) made a landmark decision to reject the Anti-Counterfeiting Trade Agreement (ACTA), by a majority of 478 votes out of 682. The Agreement was negotiated between the EU, United States, Australia, Canada, Japan, Morocco, New Zealand, Singapore, and South Korea.
The stated aim of this controversial treaty is to fight counterfeiting, by requiring signatories to set up very strict standards of protection for certain intellectual property rights (IPR) in their national laws. For many members of the EP, together with broad swathes of the public and civil society groups, the regulations set out in ACTA are excessive and significantly curb public interests in favour of IP rights owners.
While media attention has mainly focused on concerns with how ACTA would restrict freedom of access to the Internet, there are other grave problems with ACTA. One is that ACTA poses a serious threat to access to generic medicines for millions of people living in poverty around the world. Even though the EP has voted down ACTA, the threat to public health still exists if other signatories ratify the treaty.
ACTA is dangerous because it is not strictly limited to countering trade in true “counterfeiting”, defined narrowly under the WTO TRIPS Agreement as the “deliberate, fraudulent use of a trademark in order to deceive consumers”. Instead, ACTA creates severe penalties in connection with a range of types of IP infringement and IPR disputes, most of which have nothing to do with counterfeiting. For instance, the TRIPS Agreement imposes rules regarding civil trademark infringement which in contrast to criminal activities, are purely commercial disputes between companies defending their respective brands/products. However, under ACTA, such disputes are conflated with intentional, criminal counterfeiting activities. This benefits brand owners by giving them powerful tools to chase down competitors with similar brands/products.
Calling civil trademark infringement “counterfeiting” is intellectually dishonest – and also very dangerous where medicines are involved. Legitimate generic medicines often have the same name, based on the active ingredient, as their branded counterparts. They may also have the same pill shape, color, or size as the branded product, which helps patients comply with their medicines regimens. Because ACTA defines counterfeits so broadly, quality generic medicines that are lawfully available could be removed from the market. This would hurt consumers in the countries implementing ACTA-style rules.
In addition, ACTA rules would harm patients and public health globally. This is because the Agreement applies also to products merely transiting through a signatory country. In other words, quality generic medicines that have been legally manufactured in one country, could be seized en route to another country in an ACTA signatory country as “counterfeits” just because they appear similar to branded products. Even if the products do not infringe any intellectual property rights in the place of manufacture or consumption, they could be targeted by ACTA countries as counterfeits and detained or even destroyed, thus depriving patients in the recipient countries of their medicines. Where such patients are located in developing countries, where access to affordable generic medicines is critical, this creates severe hardship.
This scenario is not a crazy legal hypothetical case drawn up by NGO lawyers with too much spare time. In 2008 and 2009 in particular, and also last year, at least 20 shipments of generic medicines, produced in India and China, and intended for low-income countries around the world, were seized by customs officials in the EU who were applying EU customs regulation 1383/2003, which includes many rules similar to ACTA. This EU regulation has been challenged for hampering lawful trade in generic medicines by India and Brazil at the World Trade Organization (WTO) and is currently being revised to comply with WTO trade rules and avoid further seizures.
Still another concern with ACTA are the civil and criminal punishments for third parties that participate in the production, trade, or distribution of goods identified as counterfeit, based on the broad concept of “counterfeit” in ACTA. In countries where ACTA is enacted, suppliers to producers of generic medicines would have to worry that legitimate sales of components of medicines could result in unfair criminal and civil liability in the future, if the end products are deemed counterfeits. Even well-known humanitarian organizations such as Médecins sans Frontières (MSF) that distribute and transport generic medicines for their health programs in developing countries could be liable for contributing to counterfeiting under ACTA rules.
The list of potential problems generated by ACTA goes on. Thankfully, by rejecting the Agreement, the EP ensures that – for now at least – Europe will not be part of the public health fall-out from ACTA, which would have global as well as domestic repercussions. Parliaments in other ACTA signatories should reject it as well, given the serious concerns raised about the Agreement’s likely impact on global public health. If the European Commission is serious about tackling production and trade in poor quality medicines, it should pursue measures other than IP enforcement, especially strengthening of drug regulatory agencies in developing countries.
European Trade Commissioner Karel De Gucht championed ACTA and advocated fiercely for its approval. He should refrain from re-introducing any new version of ACTA, and the EC should avoid re-submitting a new version of ACTA to the EP once the European Court of Justice (ECJ) responds to the question of the conformity of ACTA with the Lisbon Treaty and the European Charter of Human Rights. For good reason, ACTA provoked significant outcry throughout the world; it should not be resurrected from its ashes. Moreover, the EP democratically decided to reject ACTA and its decision should be respected.
Leila Bodeux is an Essential Services Policy Officer at Oxfam-Belgium.