Ambassador Kirk’s responses to Senate Finance Committee suggests enforcement of TRIPS-plus data exclusivity measures

Recently, Ambassador Ron Kirk, the United States Trade Representative (USTR) responded to follow up questions from the U.S. Senate Finance Committee regarding the 2011 Trade Agenda. In addition to asserting that the U.S. Congress is not bound by ACTA, the responses suggest USTR desire to establish requirements for the implementation of data exclusivity provisions.

Several senators questioned Ambassador Kirk regarding compelling other countries to establish high levels of intellectual property standards, including, for example, through data exclusivity rights. Each of Ambassador Kirk’s responses–discussing the Trans-Pacific Partnership Agreement (TPP), and efforts to bring China and Russia into the World Trade Organization (WTO)–suggest a push toward enforcing data protection provisions that exceed the requirements set forth in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

For example in response to questions posed by Senators Hatch (R-Utah), Cantwell (D-Washington), Carper (D-Delaware) and Crapo (R-Idaho) regarding the TPP, Ambassador Kirk emphasized the intention of USTR to build off the Korea-US Free Trade Agreement (KORUS). In response to each of the four senators’ questions, Ambassador Kirk stated:

Let me assure you that achieving strong standards of intellectual property protection and enforcement and creating a climate for enhancing innovation, is a top priority for the Administration in our TPP negotiations. In that connection, our goal in TPP is to achieve high standards of IP protection and enforcement in the Asia Pacific region that will stand alongside previous U.S. FTAs in the Asia-Pacific region, including KORUS.

To date, the United States has put forward proposed text covering many aspects of copyrights, trademarks, patents and enforcement that would achieve this goal. We have not yet tabled text on some IP issues where we are still developing positions, such as provisions relating to pharmaceutical IP protection. We have, and continue to, work on our proposals in consultation with the Congress and all relevant stakeholders.

It should be noted that KORUS contains TRIPS-plus measures. Article 18.9.1, for example, sets out “Measures Related to Certain Regulated Products” and grants five years of data exclusivity for new pharmaceutical products and ten years of exclusivity for new agricultural chemical products. Three years of data exclusivity is provided under Article 18.9.2 for non-new products that contain a chemical entity previously approved for use by a Party in a pharmaceutical product or agricultural product.

Yet under Article 39.3 of TRIPS, exclusive rights for data used to achieve marketing approval for pharmaceutical or agricultural chemical products are not provided. Rather, Member States are only required to provide protection against unfair commercial use:

Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use. In addition, Members shall protect such data against disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use.

This general provision does not require WTO Member States to provide exclusive rights nor does TRIPS require protection for any specified period of time for data used to attain marketing approval. Data exclusivity provisions, such as the five-year requirement for pharmaceutical products under KORUS, are a TRIPS-plus measure which delays entry of generic medicines into the market. Based on Ambassador Kirk’s responses to questions regarding the TPP in relation to the KORUS agreement, it is reasonable to expect that a similar regime for data exclusivity will be pushed for in the TPP negotiations, any claims that USTR is still developing positions on pharmaceutical IP protection notwithstanding.

In addition to Ambassador Kirk’s responses on the TPP negotiations, he also suggested that the U.S. places an emphasis on ensuring that China and Russia enforce data exclusivity measures within their borders. For example, responding to Chairman Baucus’ question on compelling China to apply data protection provisions consistent with WTO accession protocol, Ambassador Kirk stated:

We have urged [China’s State Food and Drug Administration (SFDA)] to improve its regulatory system to ensure that the test and other data submitted for purposes of marketing approval for new pharmaceutical products is effectively protected against unfair commercial use for the full six-year period that is established in China’s law. SFDA is currently conducting studies of possible amendments to its regulatory system that could, among other things, clarify concepts such as “new chemical ingredient.” We also discussed this issue further in the April 11-12 meeting of the JCCT Pharmaceutical and Medical Device Sub-Group. We are also working with industry to organize a program in cooperation with SFDA, other Chinese agencies, and innovative Chinese pharmaceutical firms, to discuss these studies, which are yet to be released, in an effort to ensure that any amendments to China’s regulatory system will in fact improve the predictability and consistency of China’s data protection regime.

Similarly, in response to Senator Hatch’s question regarding efforts to bring Russia into the WTO (“Considering Russia’s blatant disregard for intellectual property rights and your efforts to bring them into the World Trade Organization, can you give us an update on where things stand regarding this matter?”), Ambassador Kirk noted the importance of Russia taking steps to improve protection of intellectual property rights, including amendments to protect regulatory test data:

It is my understanding that the Vice-President raised intellectual property rights (IPR) issues with President Medvedev directly . . . The Vice-President emphasized the need for Russia to improve its protection of IPR; President Medvedev acknowledged that IPR protection and enforcement is a priority, and confirmed that his Government is working on this issue. In fact, the Russian Federation has taken important steps to improve the protection and enforcement of IPR as part of its process to implement the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) through adopting four important pieces of legislation as agreed at the June 2010 Obama-Medvedev summit: 1) legislation granting ex officio authority to Russia’s customs officials, 2) amendments to Part IV of the Civil Code (governing intellectual property rights); 3) amendments to the Law on Licensing to prevent infringers from renewing their licesnes and, 4) amendments to the Law on the Circulation of Medicines to protect undisclosed test and other data.