SUBIR

NEWS

News for an ever-changing world

18/02/2016

AZ Alert l The debate and application of the TPP is not going to be easy

aznews-en

This past February 4th, the Minister of Foreign Affairs, Mr. Heraldo Muñoz, signed the Trans-Pacific Partnership Agreement (TPP). In signing the agreement, Chile is obliged to submit the treaty for its ratification before the National Congress.

The TPP represents a new generation of international treaties, which go beyond the label of a Free Trade Agreement. In total, there are 30 chapters covering various subjects which go beyond the setting of trade tariffs such as Environment, Cross-Border Trade, Labor Issues and Intellectual Property Services. There are 12 signatory countries and if the respective authorities ratify the treaty, the Trans-Pacific will become the largest free trade zone in the world.

Given the amount of issues that are addressed and the number of active parties involved, the following discussion at the Chilean Congress is expected to be challenging. In fact, critiques of the treaty have already surfaced not only in our country, but also in the United States, which is the main backer of the agreement.

Among the main objections, the one that stands out is the fact that it was negotiated with a certain degree of secrecy, as drafts were not available before the final version of the text was approved. Certain information from the treaty’s content was only available to the public through a leak on Wikileaks. The negotiating parties defend themselves from this accusation by indicating that some degree of privacy was necessary in order to protect the stance of each country. In addition, meetings between the authorities and various civil groups were routinely held to discuss the issues subject of the negotiations, albeit it to a certain extent.

The general public was only able to conduct a thorough analysis of the scope and consequences of the TPP once it was made available after all the parties to the negotiation had agreed on a final version of the text. Nonetheless, authorities claim that Chilean interests are well-protected and in most cases no significant amendments to the current legislation are needed in order to comply with the Agreement. However, there are certain passages of the text which are subject to interpretation and could lead to disputes.

Our country has experienced contradicting interpretations of international treaties before even after an agreement had already been ratified by the National Congress. For example, according to Chile’s interpretation of the Free Trade Agreement (FTA) with the United States, our country was not required to establish a linkage between a request for sanitary/marketing approval of a new drug and the corresponding patent registration procedure. The United States, however, made completely the contrary interpretation. These discrepancies in interpretation resulted in our country being included in the Priority Watch List issued by the United States Trade Representative Office in connection to Intellectual Property Rights issues. In order to avoid similar consequences, in addition to the obligatory detailed drafting of the necessary norms for the adequate implementation of the TPP agreement, we urgently need to clarify any possible issues arising from it, prior to its formal discussion before Congress.

One of the most controversial chapters of the Agreement is the section related to Intellectual Property Rights. There is an important discussion regarding the norms related to the Protection of Undisclosed Tests or Other Data provided to the Institute of Public Health, the administrative entity that issues the authorization to market new drugs in Chile. Furthermore, there is a debate regarding the norms that regulate Technological Protection Measures, among other issues.

Our country currently grants a 5-year protection period of non-disclosed data (referring to data provided to the administrative authorities for the obtaining of a sanitary authorization to market a new drug), counted from the date of the issuance of the authorization. The TPP coincides with our regulations on this point for chemical drugs. However, for biologics, the treaty establishes that the protection granted by the signatory countries must be for a period of at least 8 years, or alternatively 5 years if protection is guaranteed through other measures, recognizing that market circumstances also contribute to effective market protection to deliver a comparable outcome in the market. In this final point, the TPP norm is unclear; what does “a comparable outcome in the market” mean? What constitutes “other measures”? According to the Chilean authorities, the regulations are clear in establishing 5 years of protection. However, it has to be acknowledged that an alternative interpretation is also possible and could lead to extending the protection period of undisclosed data, thus making the entry of new biologics harder.

Regarding the Technological Protection Measures (TPMs), the treaty postulates that each signatory country shall provide that a TPM violation is independent of any infringement that might occur under the country’s legislation on copyright and related rights, establishing a separate penalty for it, even if no copyright or related rights are breached.  According to a footnote of the same treaty, a signatory country is not required to handle the criminal act of circumvention of a TPM as an independent violation, if the country criminalizes such acts through other means. Again, there is space for interpretation, as to the Chilean authorities’ understanding, we would comply with the TPP if the violation of a TPM is established as a criminal aggravating circumstance, without the need to proceed with a statutory description of a new crime. However, it is unclear if other parties to the TPP share this interpretation.

In conclusion, it is necessary to clarify these and other interpretative discrepancies in order to have certainty on the implementation of the Treaty. If the TPP is not implemented correctly, we could be exposed to various disputes on interpretation, not only among the different actors of civil society, but also among our major trading partners.

To obtain further Information on this subject, please contact:

arielaAgosin

Ariela Agosin   

Head IP Group

aagosin@az.cl

 

33 ok

Oscar Molina   

Senior Associate

omolina@az.cl