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10 Reasons Why Intellectual Property (IP) Should Be Kept Out of theTrans-Atlantic Free Trade Agreement (TAFTA or T-TIP)

The US and EU hold the worldslargest bilateral economic partnership. As recognized by theOECD,thisalignment of economic power is seen by industryandgovernment representatives as an opportunity toset what they consider a gold standardfor IP rules which, over time, developing countries will most likelybe pressed to adopt.

Consumers should not be excluded from secretive negotiations that can compromise access to health,cultural participation, and free expression. Because the inclusion of IP in TAFTA would likely result inpolitical compromises that fail to adequately account for consumer interests, 45 civil society organizationsfrom the US and EU have signed a Civil Society Declaration asking negotiators to keepIP Out of TAFTA.

Heres why :

1.The Europ ean Parl iament voted ov erwhelm ingly against th e ACTA in 2012.

TAFTA must not be used to increase criminal penalties for infringement.

ACTA (Anti-Counterfeiting Trade Agreement) sought to impose criminal penalties for actionsthat previously incurred only civil liability, while lowering the threshold for criminal behavior.Overreaching enforcement provisions can chill speech and inhibit generic competition.

2.Making genes patentable wo uld raise the cost o f diagnostic tests and c ancer research.

Patentable subject matter should not be expanded to allow monopolies on products of nature.

[US] The Supreme Court recently ruled inMyriadthat isolated DNA is not patentable subject matter.

[EU] The EU Biotechnology Directiveallows isolated DNA to be patented.

3.Making medical procedu res patentable wou ld raise the cost of healthcare services.

Patentable subject matter should not be expanded to allow monopolies on medical knowledge.

[US] Although medical procedures are patentable, physicians are granted limited immunity frominfringement liability for using methods that dont involve patented devices or biotechnology.

[EU] European Patent Convention Article 53 excludes medical procedures (including methods ofusing devices) performed on humans from patentable subject matter.

4.Harmoniz ing regulatory exclus iv i ty could resul t in longer ph armaceut ica l mon opol ies.

Data and market exclusivity regimes should remain flexible for future revisions.

[US] DRUGS:5 yrs. data exclusivity; BIOLOGICS:4 yrs. data exclusivity + 8 yrs. market exclusivity.Obamas proposed 2012 budget recommended reducing the exclusivity term for biologics.

[EU] DRUGS &BIOLOGICS:8yrs. data exclusivity + 2 yrs. market exclusivity.

5.Linking pharmaceut ical patents to regulatory approval would im pede generic com pet i t ion.

Patent linkage delays generic availability and keeps drug costs high.

[US] Patent linkage for pharmaceutical products is statutorily required by theHatch-Waxman Act.

[EU] EU Directive 01/83/ECtakes a strong position against patent linkage. The EC recently issued aReasoned Opinioncalling on Italy to eliminate patent linkage.

Patent linkage serves as an impetus to move payments for delay behind closed doors .

[US] Patent linkage has led toreverse payment settlements,in which brand name companies settlelegal challenges to their patents by paying generic competitors to delay market entry.

[EU] The EU Competition Commission recently fined nine pharmaceutical companies a total of 146million Euros for paying generic companies to delay entry.

http://euobserver.com/economic/119066http://euobserver.com/economic/119066http://euobserver.com/economic/119066https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=0CD4QFjAA&url=http%3A%2F%2Finsidetrade.com%2F201306282439212%2FWTO-Documents%2FFile-Document%2Foecd-report-says-us-eu-trade-agreement-could-become-gold-standard%2Fmenu-id-174.html&https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=0CD4QFjAA&url=http%3A%2F%2Finsidetrade.com%2F201306282439212%2FWTO-Documents%2FFile-Document%2Foecd-report-says-us-eu-trade-agreement-could-become-gold-standard%2Fmenu-id-174.html&https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=0CD4QFjAA&url=http%3A%2F%2Finsidetrade.com%2F201306282439212%2FWTO-Documents%2FFile-Document%2Foecd-report-says-us-eu-trade-agreement-could-become-gold-standard%2Fmenu-id-174.html&http://blogs.the-american-interest.com/wrm/2013/01/09/us-eu-trade-deal-drives-stake-into-wto/http://blogs.the-american-interest.com/wrm/2013/01/09/us-eu-trade-deal-drives-stake-into-wto/http://trade.ec.europa.eu/doclib/docs/2013/march/tradoc_150734.pdfhttp://trade.ec.europa.eu/doclib/docs/2013/march/tradoc_150734.pdfhttp://trade.ec.europa.eu/doclib/docs/2013/march/tradoc_150734.pdfhttp://www.citizen.org/IP-out-of-TAFTAhttp://www.citizen.org/IP-out-of-TAFTAhttp://www.citizen.org/IP-out-of-TAFTAhttp://www.ustr.gov/webfm_send/2338http://www.ustr.gov/webfm_send/2338http://www.supremecourt.gov/opinions/12pdf/12-398_1b7d.pdfhttp://www.supremecourt.gov/opinions/12pdf/12-398_1b7d.pdfhttp://www.supremecourt.gov/opinions/12pdf/12-398_1b7d.pdfhttp://www.gpo.gov/fdsys/pkg/USCODE-2002-title35/html/USCODE-2002-title35-partIII-chap29-sec287.htmhttp://www.gpo.gov/fdsys/pkg/USCODE-2002-title35/html/USCODE-2002-title35-partIII-chap29-sec287.htmhttp://www.google.com/url?q=http%3A%2F%2Fwww.epo.org%2Flaw-practice%2Flegal-texts%2Fhtml%2Fepc%2F2010%2Fe%2Far53.html&sa=D&sntz=1&usg=AFQjCNFiOwD1k1d8nFY7U95c_M-xfffEtwhttp://www.google.com/url?q=http%3A%2F%2Fwww.epo.org%2Flaw-practice%2Flegal-texts%2Fhtml%2Fepc%2F2010%2Fe%2Far53.html&sa=D&sntz=1&usg=AFQjCNFiOwD1k1d8nFY7U95c_M-xfffEtwhttp://www.gpo.gov/fdsys/pkg/STATUTE-98/pdf/STATUTE-98-Pg1585.pdfhttp://www.gpo.gov/fdsys/pkg/STATUTE-98/pdf/STATUTE-98-Pg1585.pdfhttp://www.gpo.gov/fdsys/pkg/STATUTE-98/pdf/STATUTE-98-Pg1585.pdfhttp://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2001:311:0067:0128:EN:PDFhttp://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2001:311:0067:0128:EN:PDFhttp://www.egagenerics.com/pr-2012-01-27.htmlhttp://www.egagenerics.com/pr-2012-01-27.htmlhttp://www.google.com/url?q=http%3A%2F%2Fwww.scotusblog.com%2Fcase-files%2Fcases%2Ffederal-trade-commission-v-watson-pharmaceuticals-inc%2F&sa=D&sntz=1&usg=AFQjCNGrtfB_CF630CPjmsphEgK_DQJhKghttp://www.google.com/url?q=http%3A%2F%2Fwww.scotusblog.com%2Fcase-files%2Fcases%2Ffederal-trade-commission-v-watson-pharmaceuticals-inc%2F&sa=D&sntz=1&usg=AFQjCNGrtfB_CF630CPjmsphEgK_DQJhKghttp://www.google.com/url?q=http%3A%2F%2Fwww.scotusblog.com%2Fcase-files%2Fcases%2Ffederal-trade-commission-v-watson-pharmaceuticals-inc%2F&sa=D&sntz=1&usg=AFQjCNGrtfB_CF630CPjmsphEgK_DQJhKghttp://www.google.com/url?q=http%3A%2F%2Fwww.scotusblog.com%2Fcase-files%2Fcases%2Ffederal-trade-commission-v-watson-pharmaceuticals-inc%2F&sa=D&sntz=1&usg=AFQjCNGrtfB_CF630CPjmsphEgK_DQJhKghttp://www.egagenerics.com/pr-2012-01-27.htmlhttp://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2001:311:0067:0128:EN:PDFhttp://www.gpo.gov/fdsys/pkg/STATUTE-98/pdf/STATUTE-98-Pg1585.pdfhttp://www.google.com/url?q=http%3A%2F%2Fwww.epo.org%2Flaw-practice%2Flegal-texts%2Fhtml%2Fepc%2F2010%2Fe%2Far53.html&sa=D&sntz=1&usg=AFQjCNFiOwD1k1d8nFY7U95c_M-xfffEtwhttp://www.gpo.gov/fdsys/pkg/USCODE-2002-title35/html/USCODE-2002-title35-partIII-chap29-sec287.htmhttp://www.supremecourt.gov/opinions/12pdf/12-398_1b7d.pdfhttp://www.ustr.gov/webfm_send/2338http://www.citizen.org/IP-out-of-TAFTAhttp://trade.ec.europa.eu/doclib/docs/2013/march/tradoc_150734.pdfhttp://blogs.the-american-interest.com/wrm/2013/01/09/us-eu-trade-deal-drives-stake-into-wto/https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=0CD4QFjAA&url=http%3A%2F%2Finsidetrade.com%2F201306282439212%2FWTO-Documents%2FFile-Document%2Foecd-report-says-us-eu-trade-agreement-could-become-gold-standard%2Fmenu-id-174.html&http://euobserver.com/economic/119066

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6.Imposing ind i rect in fr ingement l iab i l ity on ISPs wou ld sign i f icant ly ra ise the costs of provid inginternet services that faci l i tate freedom of speech and access to inform ation.

Internet Serve Providers (ISPs) should not be liable for infringing content.

[US] FTAs include provisions that call for incentives for ISPs to cooperate with copyright owners.

[EU] FTAs include provisions that safeguard ISPs from unlimited liability.

7.Str ic t compl iance wi th the copyr ight three-step test wou ld ra ise costs for con sumers.

As formulas and rigid rules are foreign to the common law tradition and statutory formulation of fairuse,the U.S. should not agree to the three-step test despite being noncompliant with it.

[US] In 2000, the EU challenged the USs exemption of small businesses from pub lic transmissionlicensing requirements under theFairness in Music Licensing Act.AWTO Dispute SettlementBody found the US to be noncompliant with the three-step test. Many US FTAs subject fairuse to the three step test. If narrowly interpreted, these provisions could contradict certainuser-friendly applications of fair use, such as the Supreme CourtsSony ruling regarding time-shifting (recording) of TV programs for personal use.

[EU] All member states, except for the UK, Ireland and Cyprus, strictly adhere to the three-step test.

8.Protect ing facts in databases w ould inh ib i t access to know ledge.

Compilations of facts should remain in the public domain.

[EU] TheDatabase Directivegrants sui generis copyright protections to compilations of facts.

[US] The Supreme CourtsFeistruling found the copyrighting of databases to be unconstitutional.

9.Requi r ing l ibrar ies to pay lending roy al ties would inh ib i t access to cu l ture and knowledge.

Public libraries should not have to pay royalties to lend books.

[US] Libraries are permitted to lend books for free under thefirst sale doctrine.

[EU] TheEU Rental Directiverequires libraries to pay royalties to authors.

10.Harmoniz ing approaches to geographica l ind icat ions (GIs) would be near impo ssib le .

In 2005, the US challengedthe EU before a WTO Dispute Settlement Body claiming that the EUslaws impermissibly discriminated against foreign products and provided insufficient protection toforeign trademark owners.

[US] A first in time,first in right principle protects GIs through the trademark system in the absenceof any special registration or certification requirements. The USs anti-counterfeiting policiestreat GIs within the framework of trademark law, without any criminal penalties.

[EU] A more restrictive GI regime seeks increased protection through a mandatory multilateralsystem of registration and enforcement. The EU enforces a strict anti-counterfeiting regime thatseparately applies to GIs and trademarks.

The US and EU have conf l ic t ing po l ic ies in many realms of IP. Each p arty supports more str ingentpol icies in certain realms . There is a con siderable risk that su bstantiv e IP negotiations may lead

to worse ant i -consum er standards in both the US and EU. An IP chapter in TAFTA wo uld

essent ial ly serve as a forum for pow erfu l lobbies in the US and EU to c ont inue pushing for

maxim al ist global IP standards that fai l to accoun t for the publ ic interest.

For a version of this document with linked sources, visit http://www.citizen.org/US-EU-TAFTA.

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