Cyprus amended its patent law in 1998. The parliament unanimously approved a new patent law conforming to WTO/TRIPS and European legislation. The new law represents a refreshing breakthrough for intellectual property rights in the Eastern Mediterranean and Middle East region.

Unfortunately, despite progress on intellectual property rights, the Government has so far refused to sign the WTO Government Procurement Amendment (GPA). Cyprus maintains a protectionist policy covering public sector procurement. The policy allows Cypriot companies an unfair pricing advantage vs. foreign suppliers. According to the regulations, local suppliers can claim up to a 20% price advantage over imported goods (including pharmaceuticals) when competing for Government business. The provisions of the policy call for local goods to meet a minimum 25% "local content" requirement, which is difficult to enforce.

Various European countries have asked Cyprus to rescind this discriminatory policy, which was first put in place in 1991 during the Gulf War, as an emergency regulation to help boost the economy. Despite the fact that the Gulf War ended 8 years ago and the economy has long since recovered, the 20% regulation remains in place.

EU representatives have pointed out that removing this policy is one of the pre-conditions for accession. The US Government also has urged Cyprus to repeal the "20% measure, and sign the GPA. In the meantime, at least one American pharmaceutical company reports that it recently lost a substantial tender to a local company, despite the fact that the US company was the lower bidder.

Potential Exports/Foreign Sales

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

Unfortunately, progress on copyright, trademark and patent laws has not been matched by a reduction of in the public sector. PhRMA urges the US Government raise this issue as an obstacle to free and fair trading. The US should encourage Cyprus to sign the GPA, and rescind the "20% price discrimination in public tenders. Although Cyprus is a small country, reducing protectionism could be viewed as a positive model for other countries in the Middle East and Eastern Mediterranean region.