As informed readers will know, Israel appears on the infamous U.S. blacklist of countries that fail to protect copyright adequately.

In an agreement reached last week in Washington in talks headed by Israel Ministry of Industry, Trade and Director General Sharon Kedmi, Israel is to be taken off the list of offenders and will merely appear on the Watch list.

Of course the list has little to do with copyright. What creates tensions with the US is Israel’s burgeoning generic drug industry. Teva is the world’s leading manufacturer of generic drugs but there are other Israeli generic players such as Unipharm, Rafa and others.

With a desire to add Israel to the OECD, the watch list rating is a political embarrassment - as much to the US as to Israel, since the list is largely the result of bullying tactics by lobbyists, rather than a reflection of morals or ethics, and informed observers are only too aware of this. Indeed, one of the results of re Bilski could be the US itself not fulfilling TRIPS obligations railroaded through the WTO that by-passed the more democratic WIPO.

Background

In 2006, Israel re-amended a poorly written amendment to the Patent Law from 2004 providing patent term extensions that allows local generic manufacturers to manufacture and export as soon as the main patent has expired in at least one of the other countries having patent term extensions.

The original amendment was poorly written and then Deputy Commissioner of Patents Israel Axelrod interpreted the amendment to allow the applicant for the patent term extension to choose which country to base their application for extension on. I believe that the preamble to the proposed amendment makes his interpretation untenable. The second ammendment was designed to clarify the Knesset’s intent. Axelrod was side-ways promoted to the Beer Sheva district court instead of his becoming the Commissioner of Patents; a position that was empty for quite a while until the present encumbent, Dr. Meir Noam, assumed the reins.

Kedmi and his delegation have now apparently come to an agreement to scale back the number of countries in the list that Israel can rely upon. the development requires backing of the Finance Ministry.

It is easy to see generic manufacturers as pirates, but we note that Teva has a good track-record of invalidating pharmaceutical patents in US courts. Such patents should never have issued, and not always merely because of later discovered prior art. In a number of cases, the applicants were found guilty of fraud or other misconduct.

Unipharm successfully attacked half a dozen pharmaceutical patents in Israeli Opposition proceedings last year. The pharma-generic debate is largely about business issues rather than ethical ones. Indeed some critics point out that the original five year extension terms for pharmaceutical patents was a gift from legistlators to pharma companies that the health funds, the sick and ill are paying for.

Backing down to bully-boy tactics is one way of dealing with adverse pressure. It is a little like the way Olmert solved the long-standing dispute with the International Red Cross by addopting a neutral diamond shape instead of Israel’s Red Star of David logo. I think that Groucho Marx’ attitude regarding joining clubs that would have him as a member has a lot to say for itself. What Israel lacks is some national pride. That said, joining the OECD would be nice…