Thursday, 13th December, 2012

Proposed IP changes under TPP agreement

Auckland has just hosted the 15th round of negotiations of the Trans-Pacific Partnership Agreement (TPP).  

The TPP is a free trade agreement between Asia-Pacific countries (currently New Zealand, Australia, the US, Canada, Singapore, Chile, Brunei, Vietnam, Peru, Mexico and Malaysia).

Critics have suggested that the TPP has provisions that interfere with areas unrelated to trade.  While much of the process has been carried out behind closed doors, the intellectual property provisions have been under scrutiny following publication of leaked drafts of the US proposal for the agreement.

Changes to the patent framework

For New Zealand proposals relating to pharmaceutical patent term extensions, patent linkage, data exclusivity and patentable subject matter have been of particular interest.

Pharmaceutical patent term extensions are common place internationally, but are not currently available in New Zealand.  These provisions extend the time in which the patentee can profit from the protection afforded by the patent, when delays in gaining regulatory approval have shortened its effective life.

Data exclusivity is the period of time in which generic drug manufacturers cannot rely on the data provided by the holder of regulatory approval, in order to have their own versions of the drug approved.  New Zealand currently provides 5 years of data exclusivity but the US proposal calls for increases to this, particularly for biological products.

Patent linkage is a process in which regulatory approval of generic drugs is delayed until patents covering the drug have expired.  New Zealand currently has no patent linkage provisions.

All of these provisions strengthen patent protection for innovative pharmaceutical companies at the expense of generic manufacturers.  While the practical effect of these provisions is not clear, there are concerns they will impact on the working of The Pharmaceutical Management Agency (Pharmac).

Pharmac decides which medicines are subsidised in New Zealand, favouring inexpensive, generic medicines where possible.  Pharmac is generally credited with achieving good health outcomes from the money the Government spends on medicines. 

Therefore, any provisions that reduce Pharmac's effectiveness will not be agreed to lightly.

Other provisions sought by the US are contrary to provisions in the pending New Zealand Patents Bill.  While the Bill limits the patentability of computer programs as such, the US proposal allows subject matter to be excluded from patentability only on the very narrow grounds that commercial exploitation of the invention must be prevented to protect "ordre public" or morality.

The US provisions also eliminate pre-grant patent opposition, a process originally omitted from the Patents Bill but later added in, following Select Committee recommendation.

Copyright extensions

Another key area of intellectual property of interest is copyright law.

The TPP proposes extending the period of copyright protection for copyright works. In New Zealand the Copyright Act protects copyright for the life of the author plus 50 years. For certain works - for example films - the period is 50 years from when those works are made or published.

The leaked draft of the TPP chapter on intellectual property proposes extending those periods of protection to the life of the author plus 70 years and to 95 years for works like films. These are significant extensions.

Opponents of these changes claim that they will do little to benefit New Zealand or its creative industries. Those opponents argue that there is no economic benefit in extending these terms. They also claim that the extensions are no more than an attempt by powerful commercially lobby groups in the USA to protect their music and film industries.

Other proposals include strengthening the 'three strikes' and digital technical protection measures provisions of the Copyright Act. There are even rumours that there may be an attempt to limit or remove the right to parallel import goods under the TPP. That would have a significant effect on consumers.

New Zealand's stance

The New Zealand government does not appear to support all of these proposals.  In addition, the proposals in the leaked document may have been superseded so may not necessarily reflect the current US position.

Whatever the actual provisions sought, the government has acknowledged that it is likely there will be 'horse trading' during the negotiations.  If one benefit of the TPP is getting free access to markets in the USA - including the lucrative dairy market - then the trade-off may be that the New Zealand government has to agree to stronger intellectual property protection.