India`s Ministry of Commerce and Industry has announced an
agreement with the EU to setting their dispute over the seizure of Indian
generic drugs in transit. The EU has agreed to adopt guidelines for its
customs officials preventing them from seizing medicines in transit unless they
have evidence that the goods will enter the European market, and would
therefore infringe patent rights in the EU. In return, “India will not
request the establishment of a dispute settlement panel at the WTO” as long as
the understanding is upheld.
The dispute was
instigated by a series of incidents where generic medicines being shipped from
India to Latin America and Africa through European ports were siezed by EU
customs officers, even though the goods were not meant to enter into European
markets. In response, India initiated a request for consultations at the World
Trade Organization (the first step in the process of a formal WTO
dispute). India`s complaint alleged that the seizures violated many
Articles of both TRIPS and the General Agreement on Tariffs and Trade
(GATT). The seizures violated TRIPS
Articles 41 and 42 because they “create barriers to legitimate trade,
permit abuse of the rights conferred on the owner of a patent, are unfair and
inequitable, unnecessarily burdensome and complicated and create unwarranted
delays.” They violate GATT Articles
2,3,4,5 and 7 because they “are unreasonable, discriminatory and interfere
with, and impose unnecessary delays and restrictions on, the freedom of transit
of generic drugs lawfully manufactured within, and exported from, India by the
routes most convenient for international transit.”
