In the February 2010 issue of this newsletter, an article entitled, “Israel to be Downgraded to US Special 301 Watch List” discussed the fact that Israel was to be downgraded from the US Special 301 Report blacklist of countries that fail to protect copyright adequately, and would appear only on the watch list. This change was the result of an agreement reached during talks in Washington, where the Israel delegation was headed by the Israel Ministry of Industry, Trade Director General Sharon Kedmi.
The proposed amendments to the Israel Patent Law have now published for public comment. Essentially, if the amendment passes into Law, it will be possible to apply for an extension of up to five years for major pharmaceutical patents prior to the patent issuing in Israel. It will, however, be required for patent extensions to have issued in two countries: the US and a main European country (Italy, UK, Germany, Spain or France).
The Proposed Amendment is Number 803-10-2010-000073.
This proposal is an attempt to amend an amendment of an amendment. In 2006, Israel re-amended a poorly written amendment to the Patent Law from 2004 providing patent term extensions that allow 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 list of countries on the basis of which one could request a patent term extension in Israel if one received a patent there, is largely scaled back. The original list included Austria, Holland, Ireland, Denmark, Belgium, Greece, Finland, Sweden and Portugal. It seems that the patent has to issue in the US and a European country, instead of one or the other. The proposed amendment may undergo further revisions before passing into law.
The present amendment appears designed to require that at least two countries of those providing patent term extensions have given regulatory approval for the drug before Israel can step in. This discriminates against Israeli manufacturers and does not appear to have any basis in anything other than protectionism of the US pharmaceutical industry.
What is very clear is that Israel is not being held to task for not fulfilling obligations defined in a multinational patent treaty managed by WIPO. Nor is the problem that Israel industries flaunt Israel Patent Law.
Rather, it seems that Israel generic manufacturers such as Teva, Unipharm, Perrigo and Rafa, are too effective at manufacturing generic pharmaceuticals and supplying global markets. This development strong arm tactics on the part of the US.
The section of the Law covering patent term extensions is highly contentious, due in large part to the lobbying powers of the pharmaceutical industry.
The original amendment to the Israel Patent Law 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 amendment was designed to clarify the Knesset’s intent. Axelrod was transferred to the Beersheva district court instead of becoming the Commissioner of Patents. This position that was empty for quite a while until the incumbent, Dr. Meir Noam, assumed the reins.
The current amendment appears to be designed to require that at least two countries of those providing patent term extensions, allow manufacturing of the drug before Israel can step in. This discriminates against Israeli manufacturers and does not appear to have any basis other than protectionism of the US pharmaceutical industry.
Arguably there is nothing wrong with the US using their political and financial muscle to prevent other countries from encroaching on their markets. The trouble is that the Special 301 Report does not merely indicate which countries have manufacturing capability that challenges US preeminence. Rather, the report takes the moral high ground and lists countries as not fulfilling their international duties.
The GATT round of the WTO was designed to remove artificial trade barriers. Patent term extensions per se may be considered artificial trade barriers since they are technology specific. Nevertheless the type of amendment under consideration due to US pressure seems to be an artificial trade barrier. It remains to be seen whether the Knesset will have the courage to stand up against US pressure, or will give in to US industrial interests.