Home » Publications » CAFTA and Intellectual Property Rights- as published in "AmCham's Business Costa Rica" , Volume 13, Number 1, January 2005

Jan 20, 2005
CAFTA and Intellectual Property Rights- as published in "AmCham's Business Costa Rica" , Volume 13, Number 1, January 2005

By José Paulo Brenes Lleras, M.I.P.

As is the norm in most modern trade agreements, the Central America-United States Free Trade Agreement (CAFTA) contains a chapter on Intellectual Property Rights that further regulates and enhances current IP legislation. Some of the provisions have stirred up controversy and generated healthy debate in Costa Rica.

The three main areas of contention are the adjustment of patent terms, the exclusive use of undisclosed data, and the accession to the UPOV Convention (International Convention for the Protection of New Varieties of Plants).

 

1. Adjustment of the Patent Term

In all cases, the term of patent protection is for 20 years from the date of filing. However, the exclusive right cannot be exercised until the patent is granted. Since the process for registering the patent normally lasts from 1 to 3 years, the patent owner is not able to enjoy the full term of protection.

The above is especially true in the case of pharmaceuticals and agrochemicals. In addition to the regular delays in the registration of a patent, commercialization of these inventions is subject to previous approval by the respective health agencies in each country.

To address this issue, Article 6 of CAFTA permits the patent owner to file for an adjustment of the patent term in those cases where unreasonable delays have occurred in the registration process. This is not an adjustment for regular delays, but only for those delays as stipulated in Article 6, described as follows:

• (a) delays of more than 5 years from the filing date or of 3 years from the date the technical examination is requested; and
• (b) delays not attributable to the applicant.

Article 6 (b) also provides for adjustments to pharmaceutical patents in cases where there have been unreasonable delays in the issuance of the respective health permits. In these instances, no other conditions are set forth to determine what should be considered an unreasonable delay, something which must be decided by each country.

In order to establish fair regulations governing patent terms, it is necessary to determine:

1. How long it normally takes to grant such permits
2. What are "reasonable" and "reasonable" delays; and
3. The effect of third party practices in unduly delaying registration.

 

2. Exclusive Use of Undisclosed Data

The second area of contention involves the exclusive use of undisclosed data. Both the Costa Rican Trade Secrets Law (Law No. 7975) and the TRIPS Agreement (Trade-Related Aspects of Intellectual Property Rights) provide for the exclusive right to use certain previously undisclosed data. This data is generated during a product's invention and testing stages and is necessary in order to obtain health permits for pharmaceutical and agrochemical products.The clause of exclusivity prevents others from also using such data to obtain a health permit for their own goods. Neither Costa Rican law nor the TRIPS Agreement establishes a time limit for the exclusive use of this data, which may therefore be exercised indefinitely.

Article 15.10 of CAFTA further regulates, elaborates and limits some of the conditions contained in the TRIPS Agreement. While CAFTA acknowledges the exclusive right on data information developed to obtain health permits for pharmaceutical and agrochemical products, it limits it to 5 and 10 years respectively from the date the permit was granted to the person who developed the data. In order to avoid foul play, a country may require the person who developed the data to file for the health permit in that country within 5 years of the date the permit was originally granted.

Critics of this provision argue that it constitutes a way of extending the patent term for an additional 5 or 10 years since nobody may commercialize the patented pharmaceutical or agrochemical product during that time.

This is inaccurate for two basic reasons:

• The 5 and 10 year terms of this provision would normally expire before the patent term expires. Once the latter occurs, third parties may reproduce the invention and rely on the data developed by the inventor.
• In some cases, the pharmaceutical and agrochemical products have not been patented and therefore third parties may reproduce the invention.

However, they would need authorization to use the data from the original inventor or else develop their own. Since manufacturers usually develop generic products several years after the original goods have been granted health permits, by the time they would need to obtain permits, the 5 and 10 year terms would have already expired.

It is noteworthy that CAFTA does not regulate what data may be required by government agencies to obtain the required health permits. Consequently, it would still be necessary to establish adequate legislation regarding the filing of bio-equivalence tests in Costa Rica. This would ensure that generic products are proven to contain not only the same active ingredient, but that their efficiency and safety, either therapeutic or chemical, would be equivalent to the original product.

CAFTA guarantees to the innovator the exclusive use of the proprietary efficacy and safety data and also guarantees that once the respective terms expire, the information may be used by anyone else.

 

3. New Plant Varieties Protection

The third area of contention involves the protection of new plant varieties. Although CAFTA does not provide substantive regulations for the protection of plant varieties, it does require countries to adhere to the 1991 UPOV Convention (the International Convention for the Protection of New Varieties of Plants). In the case of Costa Rica said adherence must be completed by June 2007.

Adherence to UPOV would fill an important gap in Costa Rican law, which currently does not give sufficient protection to plant breeders despite its being clearly established in the TRIPS agreement and in our country's Patent Law. While seeds and plant varieties are easy to reproduce, local and foreign breeders are in dire need of exclusivity rights similar to those provided by the UPOV Convention.

Critics have alleged that this provision breaches Costa Rica's right to have sui generis regulations on these matters, as provided by the TRIPS agreement. Nevertheless, critics fail to consider that UPOV is precisely a sui generis form of regulation. Special consideration must be taken in this case, particularly since Costa Rica has failed to regulate this matter adequately for the last 5 years.

Contrary to ordinary patent regulations (and due to the very nature of the subject matter), UPOV provides for special exceptions, limitations and expiration terms in the case of breeders' rights. It also allows adhering parties to further regulate or limit certain rights in specific cases. This complies with the Costa Rican requests and concerns with UPOV as expressed in Footnote 1 of Article 5(a) of CAFTA.

Adhering to UPOV will open the possibility for local farmers to acquire better and more efficient seeds. Till now the lack of adequate patent protection for new plant varieties has, in part, inhibited research and development in this area.