Controversy at customs: The detention of medicines in transit (WTO Public Forum 2009)

Starting in 2008, Dutch customs authorities have detained legitimate generic medicines transiting through the Netherlands on grounds of suspected patent or trademark infringements, based on EC Regulation 1383/2003. The detainments have attracted criticism of civil society and have led to WTO complaints being filed by India and Brazil. A working session was organised by MSF in Geneva at the WTO Public Forum 2009 to examine the matter.

Below is a summary of the contribution by Arnout Gieske, who has handled several detainment cases for generic manufacturers, as invited panel member.

A session abstract and summaries of other contributions (by Prof. Carlos Correa, Luc Devigne, Antony Taubman and others) can be found here (see page 115 et seq.).

Summary

Cost uncertainty

• Cost is a major dilemma or a generic manufacturer, when confronted with a border detention of its consignment of pharmaceuticals. Such a manufacturer will receive a warning letter with an attached waiver of rights (or declaration of abandonment) to be signed and returned. This letter typically informs the manufacturer that he will forfeit the consignment either by not reacting within a certain time-frame (this is if the simplified procedure applies), or by signing the waiver. Alternatively, by protesting against detainment, he will be sued. Even in the Netherlands, which is a relatively cost-friendly country when it comes to court action, it is likely that the cost of litigation will, in typical cases, (far) exceed the value of the detained consignment. These are after all generic medicines, and not their branded high-priced equivalents.

Legal certainty is lacking

• EC law, and Regulation 1383/2003 (colloquially: the Anti-Piracy Regulation or “APR”) in particular, fail to offer the required legal certainty for parties involved.

• Dutch courts (rightly or wrongly) have assumed infringement of a Dutch patent by goods detained in transit on the basis of the EC legal framework.

Uncertainty in other EU member states?

• As mentioned, border measures were the subject of a questionnaire at this year’s AIPPI convention (Q208). It was interesting to see what the European working groups stated on this subject in their national reports. These demonstrated that an EU-wide confusion reigns regarding the subject. In practice, it is still an open question whether EU law allows detainment, seizure and even destruction of medicines transiting through a particular country merely on the basis of patent rights in that country. This uncertainty can and should be remedied, for instance by scrapping patents from the APR, or by creating a more restrictive regime for detentions based on patent rights.