!051694 International patenting news items: India, Argentina, Germany Two articles, one from the London Financial Times, the other from the New Delhi Hindustan Times, illustrate that patenting issues are global, and that American corporations had better start paying more attention to such issues. The stories concern Argentina and India, two of the larger non-PCT countries. Two other articles are about a US-European fight over telecommunications patents, while the other reviews German patent statistics. Greg Aharonian Internet Patent News Service ============================================================================== US DELAYS PATENT MOVE OVER ARGENTINA (Financial Times 5/10/94) Washington has postponed for 60 days its threat to start proceedings against Argentina for its failure to enact new laws for the protection of intellectual property. Mr. Mickey Kantor, US Trade Representative, said last month he would investigate damage to US companies in Argentina caused by inadequate patent law. The investigation could then have led to the imposition of trade sanctions. Pharmaceutical companies are said to be the most affected. Estimates of damage vary between $500 million and $900 million a year. The Argentinian drugs market has grown rapidly in the last three years, with annual sales of $3 billion. However, the US embassy in Buenos Aires has said the postponement was a "positive gesture which, the United States hopes, will give Argentina sufficient time to pass adequate and effective patent reform legislation". The US has been in the forefront of developed country pressure on Argentina to introduce new patent laws. The government introduced legislation into Congree three years ago to upgrade the current 1864 law, but the bill has made little progress. Local laboratories, together with the nationalist wings of both the government Peronist party and the opposition Radical party, have obstructed debate. US and European multinational companies complain that the government has been giving the bill a low priority. However, both President Carlos Menem and Mr. Domingo Cavallo, economy minister, have said they would press the Congress to pass the bill as soon as possible. Mr. Cavallo said this was "not due to US pressure, but because it is necessary to attract investments" to Argentina. ============================================================================== INDIAN PARLIMENT IN UPROAD OVER GATT DISCUSSIONS (Hindustan Times 4/18-19/94) Amid uproarious scenes, the Rajya Sabha was adjourned for the day today, as the Opposition stalled the proceeedings protesting against signing the GATT treaty at Marrakesh. As soon as the question hour concluded, majority of the Opposition members, particularly those belonging to the CPI, CPI-M and Janata Dal, rushed to the well of the House and started shouting slogans against the GATT treaty. While little was audible in the Press gallery, the Deputy Chairperson Najma Heptulla was seen pleading with the members to go back to their seats and maintain order. However, when the Opposition members refused to pay heed, Ms. Heptulla adjourned the House for 20 minutes to allow the tempers to cool off. When the House reassembled, the Opposition members were unrelenting in their fury, forcing the Deputy Chairperson to adjourn the House for the day. As soon as the House assembled, the Deputy Chairperson informed the members that leaders of the Opposition Sikander Bahkt had given a notice for the suspension of question hour to enable the House to hold discussions on the GATT treaty. She said that the members had, however, agreed that the issue would be taken up after the question hour. Immediately after the question hour, the Opposition members sought to raise the issue. They deplored the Government for signing the GATT treaty at Marrakesh describing it as a sellout of economic sovereignty of the country. They demanded forthwith withdrawal of the country from the GATT treaty which was detrimental to the national interest. Seeking to raise the issue, Mr. Sikander Bakht said that the Government had made the country an economic slave and failed to protect the economic interests of the country. However, much of what Mr. Bakht said was drowned in the slogan-shouting and din raised by the other Opposition members. The stress of the Opposition chorus was that the country's economic sovereignty had been bartered away by the Government by signing the GATT accord "without consulting either the people or political parties on the issue". ---------- While the ruling party has put forward the argument that GATT would open up vistas of international trade and provide good opportunities for marketing Indian goods, the CPI-M challenged the basic wisdom of joining the treaty. A party leader today pointed out that, according to a World Bank report, the major beneficiaries in trade would be the US, followed by the European Community, and India would stand to gain only 2.5 per cent of the trade flow. ---------- An article in the May 23, 1994, Forbes on the Indian economy partially deals with Indian patent policy, and why the above arguments are taking place. If there is one industry that stands to benefit most from India's shift away from a protected and overegulated domestic market, it is pharmaceuticals. Thirty years ago the Indian government introduced price controls on drugs. This was followed, in 1970, by a decision to withdraw patent protection for drugs developed by Western pharmaceutical firms. This policy had both negative and positive effects. Most European and American pharmaceutical companies pulled out of India, while 16,000 Indian companies began producing drugs based on stolen patents. The profitability of the industry collapsed. But the price controls had one positive effect: They forced manufacturing costs to fall. Marvels Humayan Dhanrajgir, president of Glaxo Holdings PLC Indian subsidiary: "Indian drug manufacturers are quite probably the most efficient in the world". They are so efficient, in fact, that India is emerging as one of the world's leading suppliers of pharmaceutical intermediates and generic drugs. Now domestic price controls on drugs are on their way out, and India has agreed, under the terms of the recently completed GATT accord, to phase in full patent protection by 2004. Meanwhile, in the next few years many of the world's bestselling drugs will come off patent in the U.S. and Europe. Western drug companies are searching of efficient, low cost manufacturers to provide generic versions worldwide. ---------- Of course, things are even more complicated, as some Indian commentators have pointed out. As Western pharmaceutical companies receive patent protection in India for newer, more powerful, more expensive drugs, Indian doctors, like doctors everywhere else, will prescribe these drugs to their patents, leading to the same medical cost inflation plaguing the West. These economic twists and turns is what makes patenting so interesting. ============================================================================== A deadline of June 30 has been set for the latest efforts to settle a dispute over patents between US computer vendors and the European Telecommunications Standards Institute (ETSI). The long-running row concerns an ETSI policy that requires its members to charge "reasonable" royalties when licensing patented technologies used as the basis of ETSI standards. The US Computer and Business Equipment Manufacturers Association (CBEMA) and the American National Standards Institute (ANSI) oppose the regulation, saying US vendors can't be expected to sign away their patent rights in this way. They also claim the policy is way out of line with those used by all other major standards bodies. ETSI members had been given until March 25 to choose between putting up with the ruling or pulling out of the group, which ANSI says would shut them out of European markets. ETSI backed down at the last moment and set up a panel of mediators. The Commission of the European Communities has told ETSI that its policy goes against European competition law. And the US Justice Department has suggested privately that it could take action against ETSI under U.S. antitrust law, according to one source. [Data Communications 5/94, 18] ============================================================================== Some 123,224 patent rights (Schutzrechte) were registered in Germany last year, eight percent more than 1992, the German Patent Office reported recently. The office also reported that 45,380 patents were registered last year, 1,717 more than in 1992. A total of 34,841 of the registrations came from German firms and individuals, up 870 over 1992. Inventors from the new states registered 2,110 patents in 1993, surpassing the previous high of 1,998 in 1990. The categories "measuring and testing" and vehicles remain the most popular, although there have been increases in the category medicine, veterinary medicine and hygiene. The Munich-based office took in DM 249.774 million (US $150 million) last year, somewhat below the 1992 level of DM 250.741 million, while expenditures came to DM 269.123 million. The deficit of almost DM 20 million, after a deficit of DM six million in 1992, led the cabinet to introduce a bill calling for a 20-percent increase in patent fees. The proposed legislation is meeting with strong resistance, however. Patent Office President Erich Hausser attributed the deficit increase to investments for an electronic information system, the delay in the renovation of the building and integrating 370 employees from the East Berlin patent office. Over the last 18 years, the figures show, the office recorded revenues totaling DM 3.7 billion (about US $2.2 billion) and spent DM 3.1 billion, including costs for the Federal Patent Court. [The Week in Germany 5/4/94, page 5]