Intellectual Property Protection

Following several years of intensive industry and diplomatic efforts, the Cyprus Government approved a new industrial property and patent law conforming to WTO/TRIPS and EU member state legislation. The law was passed by unanimous vote in Parliament on April 4, 1998. The new law represents a refreshing breakthrough for intellectual property rights in the Eastern Mediterranean and Middle East region.

The U.S. Embassy, led by the Ambassador, played a pivotal role in securing the legislation and coordinating a multilateral effort with European diplomatic missions and industry. To industry observers, the cooperation between diplomats, local research company representatives and industry represents a model for coordinated action in other countries in the region where intellectual property protection falls short of international standards.

In many ways, the new law represents the best new patent legislation in the region. The Government of Cyprus overcame local industry demands for expanded, onerous Compulsory Licensing provisions, and added necessary provisions for Supplementary Protection Certificates (to conform to current practice in the European Union, to which Cyprus aspires to join). The new law also prohibits registration of generic products prior to patent expiration, a key international industry requirement.

The only outstanding issues relating to the patent law concern the publication of new enabling regulations, which were due last summer, and Ministry of Health cancellation of existing generic copy product marketing registrations for proprietary products under valid patent. For reasons that are not clear, the publication of the regulations has been delayed, and this has led to some confusion among companies seeking guidance on certain procedures, such as applying for Supplemental Protection Certificates. Industry requests that some diplomatic follow up be initiated to ensure publication in the shortest possible time.

There is also some concern that the Ministry of Health apparently has not yet taken action to cancel the marketing registrations of pharmaceutical products that were granted under the old law prior to patent expiration. Under previous practice, generic companies could register generic copies of U.S. and other pharmaceuticals prior to patent expiration, on the largely unenforceable condition that they not be sold in Cyprus or elsewhere. The U.S. industry believes that there is a backlog of product registrations completed under the old regime that should be revoked in accordance with the new legislation.

Other Barriers

Cyprus has so far refused to sign the WTO Government Procurement Amendment (GPA). Cyprus maintains a protectionist public sector procurement policy which allows local companies an unfair pricing advantage over foreign suppliers. The policy permits local suppliers to benefit from a discriminatory 20 percent price advantage over imported goods (including pharmaceuticals) when competing for government business. This clear discrimination violates WTO and international standards for "national treatment," and its provisions, requiring local companies to meet a minimum of 25% "local content," are difficult to enforce.

The U.S. Government has urged Cyprus to sign the GPA, and the European Federation of Pharmaceutical Industry Associations (EFPIA) has raised the issue to EU authorities as an obstacle to EU accession. To date, industry is not aware of any Government plans to change the existing legislation or sign the GPA.

Potential Exports/Foreign Sales

The passage of the new patent law represents a major step forward and should enhance prospects for greater U.S. pharmaceutical exports to Cyprus.

Despite progress on intellectual property, American companies still face unfair, discriminatory, and protectionist public procurement policies. PhRMA urges that the U.S. Government raise this issue as an obstacle to free and efficient trade, and seek Cypriot agreement to sign the WTO Government Procurement Amendments. Signing the GPA will eliminate the wasteful diversion of public revenues to uncompetitive suppliers, and open new trade benefits to both American and Cypriot companies providing goods and services to the public sector.