The Trans Pacific Partnership gets new life – minus the IP clauses

Alongside the recent APEC Summit in Vietnam last week, trade ministers from 11 countries, including Australia and New Zealand, announced their commitment to proceeding with the newly-named Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The CPTPP incorporates the Trans Pacific Partnership (TPP), but a number of draft provisions have been suspended, most notably from the chapter regarding intellectual property.

The expected exclusion from the continuing negotiations is the United States after Donald Trump abandoned the deal in January. While Canadian Prime Minister Justin Trudeau missed the formal proceedings, sparking concern about Canada’s commitment, this was apparently only a scheduling issue and not reflective of Canada’s actual diplomatic intention.

IP clauses suspended

The suspended provisions are primarily directed to subject matter that was originally included in the TPP to satisfy the US.  A number of countries, including Australia, were reportedly unhappy about the inclusion of particular IP clauses, so their removal appears necessary for a new agreement to be reached.

The suspended IP provisions relate to:

Copyright
  • specific detail regarding payment for works (including licensing fees and  royalties).
  • defining the expiry of protection for copyrighted works as 70 years after the author’s death.  Currently, copyright protection in New Zealand expires 50 years after the death of the author.
  • technological protection measures that provide for legal remedies against those who circumvent technology that restricts unauthorised use or duplication of copyrighted works (for example, DVD player region hacking devices).
  • rights management information providing legal remedies against those who remove identification or terms and conditions for use from copyrighted works.
  • defining the exploitation (including manufacture and sale) of devices and systems that decode encrypted satellite and cable signals as a criminal offence.
  • allowing copyright holders to take action against Internet Services Providers for copyright infringement by their customers.
Patents
  • confirmation that patents may be granted in respect of inventions that are new uses of known products; or inventions derived from plants.  Parties are still able exclude plants (not microorganisms) from patentability.
  • providing patent term adjustment for delays.  Article 18.46 allowed for adjustment of the patent term due to delays caused by the Patent Office.  This applied to patents granted more than five years after filing or three years after examination was requested, whichever was later.  Article 18.48 provided patent term adjustment due to delays incurred during the marketing approval process of pharmaceuticals.
  • data protection in respect of information on pharmaceuticals or biologics submitted as a requirement for marketing approval.  These articles provided at least a five year exclusive marketing period for the same or similar products (articles 18.50 and 18.51).
Impact on rights holders

The Australian Minister for Trade is quoted as saying that the CPTPP ensures ‘the commercial and other interests of all participants’.  It has previously been strongly put by the Australian Government that the suspended sections are not to the detriment of IP rights holders: that Australian laws still exist to protect the rights of copyright and patent owners.

In asserting this, Australia relies heavily on pharmaceutical patent term extension legislation under which the 20 year patent term can be extended by up to 5 years to account for time taken to obtain TGA marketing approval.  Further, Australian patent law already provides protection for new uses of known substances, provided that a previously unknown property is exploited.

Intriguingly, since the substantive aspects of the TPP were agreed earlier in 2016, the Australian Productivity Commission has recommended removing the pharmaceutical extension of term provisions from the Patents Act. In the Government’s response to the Commission’s recommendations however, it indicated that it did not intend to proceed with the recommended changes.

The suspension of the provisions directed to data exclusivity periods for patented pharmaceuticals and biologics is a blow to innovators in this sector especially as growth in biologics as first line treatments for a number of medical disorders escalates quickly.

It will be particularly galling to US originator drug companies who regard Australia’s government subsidised Pharmaceutical Benefits Scheme as a barrier to free trade.  However the Australian Federal Government will undoubtedly be pleased after data revealed that the estimated cost of the deleted provisions to the PBS would be over $500 million a year.

With reference to the suspended copyright provisions, online piracy in Australia has not grown over the last year.  It is not unreasonable to attribute this to the improvement in fairly priced and easily accessible content for users.  The increased availability of legitimate streaming services and pay TV price reductions have played a huge part in reducing or preventing blatant copyright infringement.  Accordingly, we can be somewhat confident that suspending these provisions will not discourage users from accessing non-infringing content.

Next steps

Like Australia and New Zealand, the other countries party to the agreement have their own national IP laws, as well as international IP obligations.  Many IP provisions remain within the CPTPP.  The purpose of the CPTPP is to allow for open markets, combat protectionism, and advance regional economic integration.

Opening the trans-Pacific marketplace while maintaining and reaffirming the rights of IP owners will hopefully benefit those owners and contribute to the successful commercial exploitation of their inventions and works.

If you would like to know more about the suspended provisions, as well as what remains and how you might be affected, please contact us.

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