116. The representative of Brazil said that his delegation had, once more, asked for the floor together with India to bring the issue of seizures of generic drugs in transit through Europe to the Council's attention. He expressed concern about the seizure of a consignment of generic drugs in transit to Vanuatu at the Frankfurt airport. The seizure of goods in transit, on grounds that they might be violating IPRs conferred by a patent registered in the country of transit, was a serious violation of WTO disciplines. The decision to impede the transit of cargos of generic medicines violated the freedom of transit, a right enshrined in GATT Article V. Only exceptional circumstances could warrant restrictions on that freedom. Brazil was not aware of any such circumstances in the concrete cases that it had brought to the Council's attention.
117. Brazil's inquiries had led to the identification of more than a dozen seizures of consignments of generic drugs in transit through the Dutch territory in 2008. The medicines were directed to at least seven different developing countries in South America and Africa. On top of this came a new seizure on the German territory. Contrary to EC assertions, the earlier case of the seizure of losartan was therefore not a "minor, exceptional and inconsequential" incident. He recalled that trade in generic medicines was perfectly legal from the intellectual property point of view. Generic medicines were not to be mistaken with counterfeit or pirated medicines, nor were they substandard or illegal.
118. In its response to Brazil and India at the Council's previous meeting, the European Communities had affirmed its commitment to "facilitating access to medicines for countries in need". However, the dozen consignments of generic drugs in transit through the Dutch territory and the recent seizure at the Frankfurt airport of a consignment of amoxicillin seemed to be a move in the opposite direction. The European Communities had also claimed to be "one of the main promoters of the Doha Declaration and the TRIPS flexibilities". Rather than TRIPS flexibilities, however, the European Communities was actively promoting TRIPS-plus standards in non-specialized multilateral agencies such as the World Health Organization (through the IMPACT initiative) and the World Customs Organization (within the SECURE Working Group), as well as in plurilateral contexts such as the Anti-Counterfeiting Trade Agreement (ACTA) and in bilateral agreements (Economic Partnership Agreements).
119. In an attempt to justify the seizure of generic medicines in transit, the European Communities had claimed that its customs actions had "saved lives in final destination countries – often developing countries". In reality, the EC customs authorities' apprehensions had hampered the access of developing countries to affordable life-saving generic medicines. In none of the cases mentioned was there any issue with the quality of the drugs. The EC customs authorities were only concerned about enforcing EC patents. Similarly, EC statistics about seizures of fake medicines could be questioned given the potential confusion by EC customs between legitimate generic medicines and fake products.
120. He said that the European Communities defended the compatibility of EC Regulation No 1383/2003 with the WTO disciplines and, in particular, with the TRIPS Agreement, arguing that TRIPS was only a minimum-standards agreement and, for that reason, the Regulation, which authorized ex officio seizure of goods in transit, was TRIPS-compliant. According to his delegation, the mere seizure of any good in transit on grounds that it might be violating IP rights registered in the country of transit was, in itself, a violation of GATT Article V and other GATT obligations.
121. As far as the TRIPS Agreement was concerned, a merely perfunctory examination would lead to the simple and straightforward conclusion that the Agreement did not allow the detention of goods in transit. The seizure of goods in transit on grounds that they might be violating IP rights in the country of transit violated the principle of territoriality, a keystone of the international IP system. Furthermore, it ran counter the objectives and purposes of the TRIPS Agreement. Article 7 stated that the "enforcement of intellectual property rights" must be done "in a manner conducive to social and economic welfare". Article 8 upheld Members' rights to ''protect public health and nutrition".
122. The case of losartan required further clarification. The European Communities argued that the consignment of losartan had been returned to India because that was the free and autonomous will of the Indian manufacturer. According to his delegation's information, the Indian manufacturer was given only two options: either to take the cargo back, or face the costs of litigation in the Netherlands. A third option – allowing the consignment to follow its path to Brazil – was not given to the Indian manufacturer.
123. He said that the seizures of in-transit medicines by EC customs were a major source of concern for developing countries because they essentially imperiled the public health dimension of the TRIPS Agreement. He reiterated his request for clarifying the following questions: (a) how could EC customs' actions be reconciled with WTO disciplines; (b) whether EC Regulation No 1383/2003 required or justified such actions from the customs authorities; and (c) how would the EC ensure that such actions would not reoccur.
124. In conclusion, he said that Brazil was fully committed to intellectual property protection. It was a founding Member of the Paris Convention, and Brazilian legislation provided fair and adequate protection to IP right holders. Brazil also believed that a functioning and effective international IP system could only be built on the solid basis of a fair balance between private and public interests. This was the very foundation of the TRIPS Agreement. The protection of intellectual property could not supersede the protection of more fundamental values, such as life and the right to promote public health.
