Commissioner Malmström’s response to Civil Society concerns over the Third Country Report on the Protection of IPRs

On 16 April 2018, KEI Europe and 32 groups wrote a letter to the European Commission’s Trade Commissioner, Cecilia Malmström, expressing concerns over the Commission’s plans to create an EU Watch List. In the letter, we noted that although the European Union has publicly reiterated its commitment to support the right of third countries to use the public health safeguards of the WTO TRIPS Agreement, the “Third Country Report on the protection and enforcement of intellectual property rights in third countries” challenged these very safeguards by targeting third countries for enacting policies on: 1) strict patentability criteria (Argentina, Brazil, India, Indonesia, and Russia), 2) local working provisions (Ecuador and Indonesia), and 3) compulsory licensing (Ecuador, India and Ukraine). On 17 April 2018, the European Commission’s Directorate-General for Trade responded to our request and indicate that they would be willing meeting with civil society representatives on 15 May 2018.

On Tuesday, 15 May 2018, a small group of civil society representatives (KEI Europe, Health Action International, and European Alliance for Responsible R&D and Affordable Medicines) met with two members of Cecilia Malmström’s cabinet -Maria Åsenius, Head of Cabinet and Pedro Velasco Martins – Member of Cabinet – to discuss the concerns expressed in our letter. At this meeting, Commissioner Malmström’s Cabinet handed over Commissioner Malmström’s official response.

Commissioner Malmström’s letter made it clear that the Watch List (to be published in the second half of 2018) intended to “identify concrete physical and online marketplaces, located outside the EU, which engage in or facilitate IP infringements, in particular counterfeiting and piracy” would not list countries and was to be was to be distinguished from the Third Country Report (published in February 2018).

As you know, the Watch List initiative is part of the Commission’s Strategy announced in the 2017 Communication “A balanced intellectual property enforcement system responding to today’s societal challenges”, which was designed to step up efforts to combat counterfeiting and piracy. With the planned Watch List the Commission intends to identify concrete physical and online marketplaces,located outside the EU,which engage in or facilitate IP infringements,in particular counterfeiting and piracy. The Watch List will not list countries, but only concrete online and physical marketplaces(websites,market halls,street markets). (Source: Official Response of Cecilia Malmström to Civil Society Letter Expressing Concerns Over the EU Watch List, 15 May 2018).

DG Trade spelled out that the objective of the Third Country report was to identify countries outside the European Union where the “level of intellectual property protection and enforcement gives rise to the greatest level of concern.” The Third Country Report was informed by a variety of sources including customs authorities in the EU, statistical data collected from the OECD and EUIPO, WTO Trade Policy Reviews, IPR dialogues, and “data on actions against IPR infringements published by third country governments.” (Source: Ibid).

In the letter, Commissioner Malmström asserted the following:

We would like to underline that nothing in the Third Country Report can be interpreted as restricting the TRIPS flexibilities or limiting access to medicines. On the contrary, the Commission points at measures introduced by third countries, undermining the current international legal framework,which safeguards access to genuine medicines. (Source: Ibid).

However, this was followed by a blistering attack on practices including local working requirements, patentability criteria, and applying “criteria for the issuance of compulsory licences which seem not to respect the international legal framework on access to medicines and public health.”

For instance, some of the listed countries apply a controversial local working requirement, which requires all foreign pharmaceutical companies to manufacture the patented medicines or use the patented process in their territory. These rules appear to discriminate imported patented products against domestically produced goods under patent protection. Also, some of the listed countries exclude from patentability certain classes of medicinal products or apply additional patentability criteria, which are questionable under the TRIPS Agreement. These legislative practices undermine incremental innovation and research in, inter alia, new uses of already known medicines (follow-up) pharmaceuticals, new uses, new combinations), which can provide benefits to patients. Finally, a number of the listed countries apply criteria for the issuance of compulsory licences which seem not to respect the international legal framework on access to medicines and public health. These controversial legal practices applied by the countries mentioned in the Third Country Report seriously undermines incentives for innovation and research, or even to place the products on the respective markets, with detrimental effects for patients in need. We believe that the Third Country Report can be used as a tool to address these practices. (Source: Ibid).

The full contents of Commissioner Malmström’s letter can be found here: