8th May 2001

US-Brazil War Of Words Over Pharmaceuticals and Intellectual Property

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An ongoing Brazil-US trade dispute at the WTO over Brazil’s intellectual property rights regime intensified on 30 April after the release of the US Trade Representative’s (USTR) annual Section 301 Report - a compilation of the USTR’s enforcement priorities. In its report, the USTR reiterated its concern over Article 68 of Brazil’s Industrial Property Law, a pending measure that imposes “local working”, i.e. local production, of a patented invention as a condition for enjoying exclusive patent rights over it. The report called the provision “a protectionist measure intended to create jobs for Brazilian nationals.”

Brazilian authorities maintain that Article 68 is an integral component of Brazil’s comprehensive anti-HIV/AIDS strategy, considered by many as a model programme among developing countries (see BRIDGES Weekly, 24 April 2001, http://www.ictsd.org/html/weekly/story3.06-02-01.htm). The law, once enabled, would require patented pharmaceuticals used in the treatment of people living with HIV/AIDS to be manufactured locally. Undoing the law, they argue, would jeopardise the future success of Brazil’s attempt to combat the spread of the disease.

For its part, US Trade Representative Robert Zoellick has said that the US challenge is not meant as an attack on Brazilian public health policy, but rather to ensure that the rights of all US patent holders — not simply pharmaceutical producers — are not violated. According to Zoellick, by conditioning the benefit of exclusive patent rights on local production, Brazil’s Article 68 discriminates against US patent holders with production capacity outside of Brazil and therefore violates Article 27.1 of the WTO’s Agreement on Trade Related-Aspects of Intellectual Property Rights (TRIPs).

As for the treatment of HIV/AIDS, the Section 301 report states that, “should Brazil choose to compulsory license anti-retroviral AIDS drugs, it could do so under Article 71 of its patent law, which authorises compulsory licensing to address a national health emergency, consistent with TRIPs, and which the US is not challenging.” Compulsory licensing is a WTO-compatible measure whereby governments can permit the domestic use of a patent without the consent of the patent holder in certain cases.

Brazil upbraids UNAIDS

At a recent UN conference, Dr. Paulo Teixeira, Director General of Brazil’s anti-HIV/AIDS programme, criticised UNAIDS, the UN Agency responsible for coordinating the fight against the virus, saying that not enough emphasis is placed on strategies to improve domestic access to antiretroviral HIV/AIDS medications. According to Teixiera, UNAIDS does not go far enough in specifying the types of treatment needed to address the HIV pandemic and instead chooses to emphasise policies such as disease prevention, a policy consistent with the USTR Section 301 report.

Of the Section 301 report, Teixiera said he was “very, very surprised” the Bush Administration was taking such a hard line with Brazil and added that in leaving the global AIDS strategy to the USTR, “we are lost on this issue.”

Brazil challenges US patents code

In what many consider a retaliation against the US case against Article 68, on 31 January the Brazilian government requested consultations with the US over aspects of the US Patents Code, which Brazil believes violates the WTO Agreement on Trade Related Investment Measures (TRIMS), TRIPs and Articles III and XI of GATT 1994 (see BRIDGES Weekly, 6 February 2001, http://www.ictsd.org/html/weekly/story3.06-02- 01.htm).

“Brazil Defends Policy On Anti-AIDS Drugs,” AFP, 2 May 2001; “Brazil Slams UN, US For Short Sighted AIDS Policies,” 2 May 2001; “US To Crack Down On Intellectual Property Rights,” REUTERS, 30 April 2001; “USTR Zoellick: US Won’t Hinder Brazil’s AIDS Program,” DOW JONES, 7 May 2001.