Anti-counterfeits Campaign

The campaign to influence anti-counterfeiting legislation is aimed at raising awareness among the public and policy makers on the implications of the Counterfeit Goods Bill on access to essential medicines. The campaign has undertaken several activities, including radio talk shows, forums with members of parliament and media conferences, to raise awareness and influence the bill.

Uganda is in the process of enacting the first-ever anti-counterfeiting legislation, which in its current form threatens access to affordable medicines. The draft provisions of the bill seek to outlaw generic medicines, on which over 85% of Ugandans depend. The Ministry of Tourism, Trade and Industry has conducted some consultations, but several controversial proposals remain in the draft.

Issues arising from the draft Uganda Counterfeit Goods Bill, 2008: the Perspective of Access to Essential Medicines

Introduction

It is generally accepted that counterfeiting of goods not only denies governments revenue, but also threatens lives. This is so much the case when the subject matter of counterfeiting is medicines. Universally, there is no accepted definition of ‘counterfeiting’. However, according to Black's Law dictionary, the term "counterfeit drug" may be used to describe а drug made by someone other than the genuine manufacturer, by copying or imitating an original product without authority or right, with а view to deceive or defraud, and then marketing the copied or forged drug as the original. In reality, however, а counterfeit drug is defined differently in different countries.

Because of there being no universally accepted definition of ‘counterfeit medicine,’ cooperation between states in dealing with the problem is difficult as it among others, limits the ability to understand the true extent of the problem at global level. In its attempt to address this problem, the World Health Organization has developed the following definition of a counterfeit medicine:

“А counterfeit medicine is one which is deliberately and fraudulently mislabeled with respect to identity and/or source. Counterfeiting can apply to both branded and generic products and counterfeit products may include products with the correct ingredients or with the wrong ingredients, without active ingredients, with insufficient active ingredients or with fake packaging."

The above definition is useful in establishing the minimum standard measure for not only a counterfeit medicine, but for counterfeit products generally. Two basic elements are outlined in this definition: these are (a) deliberate and fraudulent mislabelling (b) with respect to identity and/or source. Without doubt, it is therefore imperative that any country that takes any effort to legislate against counterfeit goods should as a bare minimum bear the WHO definition in mind, perhaps as a minimum standard.

Counterfeiting is a trade issue. Lately, the perception of counterfeiting has been changing to the extent of it being seen as fuel for terrorism. This notwithstanding, it should be borne in mind that whereas recent attempts to legislate against counterfeiting has been extreme to the point of potentially eroding TRIPS flexibilities, it is imperative that it is recognized in the anti-counterfeiting legislations that a balance has to be struck between the rights IP holders and legitimate rights of third parties on goods protected by intellectual property rights. This is important particularly in the realm of access to essential medicines, as generic medicines are a prolific avenue of ensuring access to essential medicines all over the world. As observed by the WHO, counterfeiting can apply to branded medicines as well as generic medicines. This being the case, in the course of legislating against counterfeit goods, care must be taken to (a) not mislead the public that generics are counterfeits and (b) to ensure that the rights of generic manufacturers are preserved in the legislative process.

Medicines are agents, or drugs used to treat injury or disease. Without medicines, it is incomprehensible how life would be. Medicines are not like any other goods. They are special. The knowledge in the practice of medicine, the process of prescribing medicines, how medicines are made and registered; all this requires special skills and vigilant regulatory process. Therefore any process aimed at legislating against counterfeits must recognize the special nature of medicines as goods either in the definitional process, or in granting national drug regulatory authorities prominent role in the legislations to fight counterfeits.

The Uganda Counterfeit Goods Bill, 2008

This Bill has been published to among others “prohibit trade in counterfeit goods that infringe upon protected intellectual property rights” .This brief analysis raises concerns about this bill from an access to essential medicines point of view. From the outset, it must be stated that there is recognition that in it, there are numerous positive steps that have been suggested to fight counterfeits generally. However, at the same time, sight must not be lost of the balance that has to be in place between right holders and third parties. Sight must also not be lost of the special nature and character of medicines.

The following sections warrant comments as they impact on access to essential medicines in Uganda:

Ø In section 2,

‘Counterfeiting’ as defined does not recognize that there are instances when third parties do not require the authority of the owner of the IPR to exploit the IPR in the goods. These instances are the so called TRIPS flexibilities provided in the WTO TRIPS Agreement. Some of these flexibilities are already in the Uganda legislation or are contemplated by Bills before Parliament. International exhaustion, the principle of intellectual property law that facilitates parallel importation is contemplated in the draft intellectual property bill while the current Ugandan legislation allows for compulsory licensing, government use licenses, and, research and other exemptions. This definition must be revised to include these exemptions, otherwise counterfeits and generic medicines in the Ugandan market via any of these exemptions of flexibilities will remain undistinguished.


This definition also has a second short-coming: that it treats goods produced elsewhere as goods produced in Uganda, ignoring the fact that laws in other countries may exist that recognizes the TRIPS flexibilities or exemptions aforementioned. This has two potential implications: first, where goods have been put legitimately in the market in another country by was of these exemptions, they cannot be imported into Uganda under any circumstances, whether by parallel importation, or IP licences, compulsorily or otherwise. Secondly, a holder of an intellectual property right in a good does not have to have registered that right in Uganda to assert that right under this Bill. Thus, exploiting a patent that is not registered in Uganda is counterfeiting, not even infringing. This goes against the fundamental principles of intellectual property law but also fails to inspire innovation and technological development. In the context of access to essential medicines, it simply locks out generic medicines form the Uganda market unless where the patent holder gives express consent as to their importation or local manufacture.

‘Counterfeit goods’ as defined fails in two ways: first, it does not distinguish medicines from other goods given their special nature and secondly, does not make firm the element of fraud enshrined in the WHO definition of counterfeit. The definition also departs from the view of TRIPS on this issue. Article 51 of TRIPS approaches the issue of counterfeiting (generally) from two perspectives: (a) of counterfeit trademark goods and (b) pirated copyright goods. Failure by this definition to recognize counterfeit trademark goods as separate from pirated copyright goods is therefore ‘TRIPS+’.

The definition of ‘Intellectual property rights’ does not explicitly include trade marks the subject matter of the Trademarks Act, 217. Counterfeiting usually deceives the origin or source of a product, which origin or source is mostly depicted by a trade mark. Express provisions must be made under this definition to recognize trademarks as intellectual property rights. In any event, disclosure of a trademark of a medicine is a prerequisite to registration during the drug registration process. 

‘Protected goods’ affirm that goods manufactured without the consent of the intellectual property owner, but within the established legitimate means are not legal. It simply offers no protection to generic medicines manufacturers and takes a step further in condemning generic innovators. This definition should either be revised to include rights of third parties to intellectual property that are governed by law in Uganda, or done away altogether. As it is, this definition seriously impedes access to essential medicines.

Ø In sections 3 and 4,

The recognition of the Uganda National Bureau of Standards as the administrator of the anticounterfeit legislation is probably useful. However, in the context of access to essential medicines, the legislation would need to be amended to give space to the national drug regulatory agency in Uganda to administer those aspects of the law dealing with counterfeit medicines. This is in recognition of the fact that the Uganda National Bureau of Standards would ordinarily not have the requisite knowledge of dealing with counterfeit medicines and establishment of this capability by the Bureau would be a waste of public funds. It is imperative therefore, for section 4 of the Bill be amended to vest the required functions of dealing with counterfeit medicines to the national drug regulatory authority.

Ø In section 6,

Inspectors appointed hereunder must include inspectors of the drug regulatory authority of Uganda. Who should be an inspector should not be left to the discretion of the Council, as it is. Part of the cited reasons as to why this law is necessary is due to systemic failure of the existing institutions and if this is the case, then these institutions, including the drug regulatory agency do need to be strengthened. One way of strengthening these institutions is by recognizing them explicitly and granting them direct responsibilities under this legislation.

Ø In section 7,

It is necessary for the inspectors to be bestowed with powers in a manner that does not lead to abuse. Thus in light of the definitional problems cited above, these powers should be checked.

Ø In section 18,

The reference to section 16 is perhaps wrong, as section 16 deals with impersonation of individuals as inspectors. The view is that it refers to section 15. Section 18 is drafted in a manner to extend rights to even those whose intellectual property rights are not registered in Uganda. Obviously in such a situation, section 18 potentially hinders innovation as a Ugandan agent of a product of an intellectual property rights holder in another country can rightfully claim under section 18(1) that a generic product is a counterfeit. Further, section 18(3) grants the Uganda National Bureau of Standards wide discretion capable of abuse, as it does not lay in specific detail how the Bureau should go about satisfying itself that the alleged goods are counterfeits. Besides, expert regulators in various industries such as the drug regulatory agencies are not given any space under this section to participate in determining the counterfeit. In any event, this section turns the Uganda National Bureau of Standards an agent of the aggrieved intellectual property owner. The Uganda National Bureau of Standards should only be furnished with evidence to go to court, not to make decisions like a court.

Ø In section 20,

the Commissioner of Customs is granted wide discretion in determining what is an alleged counterfeit product without giving room to expert regulatory agencies to participate in this determination. This should be corrected. In any event, if forces the alleged counterfeiter to initiate court action, rather than the person who is aggrieved. This is contrary to rules of natural justice for two reasons. In an adversarial system as Uganda is, in a civil action, it is aggrieved party that is supposed to move to court. Secondly, the Commissioner of Customs by taking this action bears the time and cost of enforcing private actions of behalf of patent holders. In this regard, the Commissioner of Customs is not the right institution to seize alleged counterfeit goods. This section should be amended be providing that the Commissioner of Customs should on the basis of the information provided by the aggrieved party, move to court seeking an order for seizure of the alleged counterfeit products.

Ø In section 23,

It is provided that where an alleged counterfeiter if found guilty and fined by a court, 10% of the fines paid by the counterfeiter should be received by the complainant, that is, the intellectual property rights owner. This is absurd to say the least. It makes nonsense of civil law, as criminal courts in Uganda will become agents for intellectual property owners. Fines paid in court are revenues earned by government and individuals are usually paid from government treasuries only for goods delivered or services rendered.

Key Action Issues

This Bill contains various ambiguities, which if misinterpreted or abused would be detrimental to the government’s ongoing efforts to ensure access to essential medicines for all Ugandans. This is because the Bill greatly undermines access to low-cost generic medicines by branding them as counterfeits. Thus the following actions need to be taken to remedy the situation:

Amend the Anti Counterfeit Bill, 2008 to protect the public interest in health. This can be done through:

* Amending section 2 definitions of ‘counterfeiting’ and ‘counterfeit goods’
* The Bill should have a provision distinguishing generic medicines from other counterfeit goods failure of which will lead to an absurdity of treating generics as counterfeit.

The Bill needs to be harmonized with the Patents Bill to recognis the TRIPS Flexibiities in regard to Public Health.