PhRMA Special 301 Submission



More than one year after its implementation deadline for WTO TRIPS commitments, Chile has failed to come into compliance with its minimum international intellectual property obligations. This issue takes on greater urgency given the possibility of a US/Chile Free Trade Agreement. PhRMA requests that until Chile brings its intellectual property regime into conformity with its TRIPS obligations that the U.S. Trade Representative include Chile on the 2001 “Special 301” Watch List.

Intellectual Property Protection

Chile implemented a flawed patent law (Number 10939) in 1991, which provides limited product patent protection for pharmaceuticals. This law offers an inadequate patent term (15 years from approval) and no transition (i.e., pipeline) protection for pharmaceuticals. Draft legislation designed to bring Chile into compliance with TRIPS obligations has not yet been adopted, over a year since the WTO-imposed January 1, 2000 deadline. Chile should take prompt steps to bring its legislation into conformity with its international legal obligations. The United States government should not conclude a Free Trade Agreement with Chile that lacks strong intellectual property provisions.

The draft legislation represents an improvement over the existing law in several ways, including:

  • extending the patent term to 20 years;

  • providing patent protection for processes and the products obtained by those processes;

  • increasing fines for infringement;

  • elimination of the burdensome and subjective requirement to prove that an infringer “acted in bad faith” (complainants must simply demonstrate that the infringing activities had a commercial purpose);

  • expanded protection for confidential data.

    The draft legislation could be improved in a number of ways, however. The research-based pharmaceutical industry advocates greater linkage between health authorities and patent officials. To that end, the new law should require so-called “second applicants” (i.e., applicants seeking to copy existing products) to demonstrate that the product for which they seek approval from health authorities is not the subject of valid patent or pending application. The 1991 law contained no mention of parallel imports; the new law does, which we regard as a step backward. The language of Article 51, which discusses compulsory licenses, should be modified to avoid ambiguity about when such licenses might be issued.

    Another way in which the intellectual property environment could be improved in Chile, until improved, adequate and effective de jure patent protection is in place, is for the government to implement and enforce provisions guarding against the unauthorized commercial use of company proprietary data, as per the principles outlined in TRIPS Article 39. As is described in several other country sections in this submission, allowing the registration of “generic” products that use, or incorporate by reference, the company proprietary data of the innovator is an unfair trade practice that severely if not completely undercuts intellectual property protection for pharmaceuticals. Chile should adopt a ten-year period standard against the use of proprietary data submitted for registration purposes, as is the case in several EU countries.

    Damage Estimate

    At this time it is estimated that if current barriers were removed, sales of PhRMA company affiliates could increase in the range of US$ 50 million to US$100 million.

    (Click here for PhRMA's full 301 Submission.)

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