WATCH COUNTRY
United Arab Emirates
Intellectual Property Protection
Despite Government statements to the press in June 1997 and reassurances to European and U.S. diplomats, chances are diminishing that the UAE will implement a new WTO/TRIPS consistent patent law before year 2000 and meet other WTO obligations.
In 1992, the United Arab Emirates (UAE) promulgated a new patent law. However, the new law specifically exempted medicines and pharmaceutical compounds from product patent protection. The only protection allowed for medicines and drugs are process patents. Additionally, there are onerous compulsory licensing provisions and a statement that importation does not meet local working requirements. This law is clearly not in conformance with the WTO/TRIPS. The lack of progress on patents contrasts with recent progress on trademarks and copyrights, where new legislation substantially reducing infringement is in place and there are encouraging developments relating to enforcement.
In June 1997, an official from the Ministry of Finance and Industry announced that the UAE would amend its patent law to provide pharmaceutical product protection by the year 2000. It has since been reported that the draft law has been sent to WIPO for review. While this is encouraging news, it is unclear if the patent law will include pipeline protection, as there has not yet been any opportunity for public comment and review. It is also unclear if the draft law will represent a true "world class" patent law, or meet only bare minimum standards. These are important benchmarks, as the UAE patent law may serve as a model for other GCC states.
Meanwhile, a local company, Julphar, continues to copy a number of European and American patented pharmaceuticals products. Moreover, there are new reports that subsequent to the Ministry of Finance and Industry announcement in 1997, Julphar and regional generic companies are accelerating submissions of pirate product marketing applications to the Ministry of Health. The purpose is to "grandfather" the marketing registration of these products in anticipation of the new patent law. There is also a report that a new pharmaceutical plant is being constructed in Abu Dhabi. While this may be encouraging economic news, it is a potentially worrisome development in the absence of adequate and effective patent protection, as the company could become a new domestic source of pirated pharmaceuticals-- as was the case with Julphar.
There is an ongoing legal case involving a multinational company which has been compelled to hire local legal counsel in order to lobby the MOH for the denial of a pirate product application on the grounds of trademark infringement. The attempt appears to have been partially successful, succeeding in "slow tracking," but not stopping, the pirate application. In such an environment, where urgent measures must be taken to lobby against pirate product bids, American pharmaceutical exports remain vulnerable to new pirate product marketing approvals.
An informal survey of companies in November 1998 has identified at least 8 pirate product applications that have recently been submitted to the MOH, and are pending approval.
Despite a lack of tangible progress, PhRMA notes that there appears to be genuine sympathy for the concerns of the research pharmaceutical industry, which has offered technical assistance many times to the UAE Government, and specifically to the ministry responsible for amending the 1992 Patent Law, the Ministry of Finance and Industry. PhRMA also recognizes that the UAE leads other GCC states in recognizing the commercial importance of good intellectual property rights. Finally, in recent weeks, the Minister of Finance and Industry has asked that industry submit an analysis of the current patent law, including recommendations for amendments to bring the law in line with TRIPS.
We must point out however, that as time passes, there is an increasing risk that the UAE will not be able to amend its patent law as originally stated in mid 1997. And there is no indication yet that amendments to the 1992 patent law will include "pipeline" protection of new products in the research and development cycle. American pharmaceutical companies remain vulnerable to recurring threats to register pirate copies of internationally patented products-- often requiring urgent action. The unresolved issue of pharmaceutical, biological and chemical patent protection deserves to be kept in focus as the "last frontier" of adequate and effective intellectual property protection in the UAE.
Potential Exports/Foreign Sales
While current U.S. losses due to piracy are low, the potential exists for substantial losses in this market (Estimated at CIF $220 million). The UAE represents the second largest of the GCC states after Saudi Arabia. PhRMA is concerned that in the absence of adequate and effective patent protection, the Ministry of Health may acquiesce to pressure from local and regional generic companies to register new pirate copies in advance of anticipated changes to the patent law. Moreover, a new patent law not including a "pipeline" provision would imply a tremendous risk to dozens of new products currently in the R&D cycle, but not yet available on the market in the UAE.
Progress on patents in the UAE will have a substantial impact on the IPR policies of neighboring "weak" patent states, especially Kuwait, Oman and Qatar.
Outlook
The UAE is considered a PhRMA priority country in the Middle East region. While there has been some progress toward tightening trademark and copyright protection, and an encouraging announcement that the UAE intends to revise its deficient patent law as well as recent assurances to industry that amendments will be made soon, PhRMA urges U.S. officials to prioritize the IPR issue on the bilateral agenda.
For all the aforementioned reasons, PhRMA believes that the United Arab Emirates should be listed as a Watch Country under Special 301 in 1999.