Intellectual Property Protection
On September 1999 an industrial property bill was introduced to Congress. The purpose of the bill is to bring the Dominican Republic into conformity with the minimum standards of protection established under the TRIPS agreement. The bill has already been approved by the Senate and is now before the Chamber of Deputies. Approval of the same is regarded as imminent.
Unfortunately, the bill in its present form, includes a number of elements of questionable consistency with TRIPS compliant, namely:
- Compulsory licensing: The industrial property bill contemplates the grant of automatic licenses on the sole basis of the denial of a contractual license. 180-days after the contractual license is requested, the administrative authorities must grant a compulsory license to the third party requesting the same, without having to prove any fault by the patent holder or without requiring the third party to have any technical capabilities for the exploitation the patent.
This automatic license is in addition to compulsory licenses, which would be granted in cases of lack of exploitation, abuse due to non-competitive practices, public interest and cases of dependent patents.
Article 39 of TRIPS contemplates the protection of undisclosed tests or other data filed before sanitary authorities as a precondition of approving the marketing of a pharmaceutical, agricultural or chemical product. This provision is not only absent in the bill, but to the contrary, the bill includes an authorization of all uses of a patent which are necessary to obtain health registration or approval for commercialization of a product.
The bill discriminates between foreigners and nationals by requiring foreigners to place a bond in an amount sufficient to cover court costs and legal fees in cases where they appear as plaintiffs in a lawsuit. This goes against the National Treatment stipulated by Article 3 of TRIPS. The intellectual property bill (copyright) also before Congress, expressly states that the aforementioned bond will not be required.
The bill excludes patenting of second uses, does not include protection for vegetable obtentions, business or economic plans or non-biological methods and processes connected with living materials.
Additionally, the Department of Health continues its practice to issue health registrations (equivalent to a permission to commercialize) to products that violate locally registered patents in spite of legal requests to the contrary.
Law 173 of 1966 condemns unilateral termination of distribution agreements. Termination of distribution agreements are only possible by mutual consent or through the award of unreasonable indemnification rights due to the subjective criteria specified by the law. Local distributors have no incentive to pursue aggressive distribution of the goods they represent, since a poor performance on their part does not invalidate the indemnification considered in the law.
Potential Exports/Foreign Sales
PhRMA member companies in the Dominican Republic estimate that, if trade barriers were removed, exports to that country could increase from US$50 to US$100 million.