Fwd: [Ip-health] Brazil to break US patents

[Pranesh Prakash]

The Brazilian government is planning a tit-for-tat against the U.S. by
openly allowing for the infringement of American company-held pharma
patents.

Interestingly, this report notes that the WTO is "expected to rule on
Monday that Brazil can contravene the drug patents".

-------- Original Message --------
Subject: [Ip-health] Brazil to break US patents
Date: Mon, 31 Aug 2009 17:48:17 -0400
From: Sean Flynn <[hidden email]>
To: <[hidden email]>

From: WTO-INTL [mailto:[hidden email]] On Behalf Of
Victor Menotti


Financial Times FT.com

Brazil ready to infringe US drug patents
By Jonathan Wheatley in São Paulo
Published: August 30 2009 17:41 | Last updated: August 30 2009 17:41

Brazil is preparing to infringe patents on US pharmaceutical products,
in retaliation against subsidies for US cotton farmers, according to the
Brazilian press.

The World Trade Organisation is expected to rule on Monday that Brazil
can contravene the drug patents, say the reports.

Brazil led a challenge against US cotton subsidies in 2002 and, two
years later, the WTO ruled that about $3bn paid to US cotton farmers
each year distorted global prices and violated trade rules.

The US has continued the subsidies, arguing that the measures were
consistent with its WTO obligations. But the WTO has supported Brazil¹s
case. It allowed Brazil to retaliate in 2005 but Brasília has instead
sought a negotiated settlement to avoid damaging relations with the US,
until recently its biggest trading partner.

However, Brazil has become increasingly frustrated by the US refusal to
remove its subsidies and, under pressure from its own cotton growers, is
reported to be preparing to retaliate.

One option would be to raise import tariffs against US goods. But Brazil
is a relatively small US market, taking $32bn out of $1,287bn of US
exports last year.

Instead it is preparing to take action over intellectual property, an
area of much greater significance to the US. The WTO is expected to
include this possibility in its ruling on Monday. According to a report
in a Brazilian newspaper the government has prepared a "provisional
measure"­ a presidential decree that takes immediate effect, although it
must later be ratified by Congress­ to allow Brazilian pharmaceuticals
companies to copy medicines protected by US patents.

In 2007 Brazil followed Thailand in overriding a patent on a pivotal HIV
medicine, allowing it to buy equivalents of Efavirenz, patented by
Merck, from rival generic suppliers under provisions permitted by WTO rules.

The move followed years of brinkmanship during which Brazil achieved
steep discounts on HIV drugs by threatening to break patents.

Its expected move on Monday comes in the context of growing frustration
in Brasília at the Obama administration¹s reluctance to act on farm
subsidies affecting cotton and other sectors of Brazilian agribusiness,
especially sugar and ethanol.

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Victor Menotti
Executive Director
International Forum on Globalization
1009 General Kennedy Avenue #2
San Francisco, CA 94129
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