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Global pact to fight fakes

By Anna Lewcock , 24-Oct-2007

A major new trade agreement aiming to combat counterfeiting has been proposed by representatives of a number of key markets, including the US, EU and several other countries worldwide.

The European Commission (EC) is seeking a mandate from EU member states to negotiate the new Anti Counterfeiting Trade Agreement (ACTA) with major trading partners including the US, Japan, Korea, Mexico and New Zealand. The EC and the Office of the US Trade Representative both announced plans for the new pact yesterday, seeing it as a way to strengthen efforts to protect intellectual property rights (IPR) worldwide, and protect consumers from shoddy and potentially harmful fakes. While the new agreement is set to cover all aspects of intellectual property infringement, from counterfeit cosmetics to fake plane parts, the EC has voiced particular concern regarding the growing incidence of fake pharmaceutical products filtering onto the market. EU figures released in June revealed a stark five-fold increase in counterfeit medicines over 2006, sourced primarily from India, China and the United Arab Emirates.


This sharp rise in fake drugs over the year has led the EC to place particular emphasis on dealing with counterfeit medicines and the harmful, potentially fatal, effects they can have on consumers. As such the Commission recently demanded a study be initiated to get a clearer idea of the counterfeiting problem specific to pharmaceuticals, EC spokesperson Ton van Lierop told in-PharmaTechnologist.com. The European study kicked off a few months ago, seeking to identify where fake drugs come from, what kind of products they are and what outlets are used in their illegal distribution. "We want to get a full view of the extent of counterfeit medicines," van Lierop said.


Results from the study are expected during the first half of next year, and will hopefully provide some insight into what is becoming an increasingly pressing problem worldwide. The ACTA agreement hopes to pull the international community together to create a united front to fight the scourge of counterfeits affecting all industries, and enforce global intellectual property rights. EU Trade Commissioner Peter Mandelson called the proposed international treaty an opportunity to "strengthen global cooperation and establish new international norms, helping to create a new global gold standard on IPR enforcement." These sentiments were echoed by the Office of the US Trade Representative, which referred to the ACTA as "a bold leadership effort among countries that support high standards of enforcement against piracy and counterfeiting."


The key features of the pact focus on international cooperation to harmonise standards and improve communication, establishing common enforcement practices to promote strong IP protection, and the creation of a robust, 'modern' legal framework that reflects the changing nature of IP theft in the global economy. Estimates put the annual value of international physical trade in counterfeits goods at a staggering $200bn (€141bn) - that's 2 per cent of world trade and higher than the GDP of 150 countries. However, this figure doesn't include internet-based counterfeiting, business-to-business transactions or domestic production and consumption, so the true figure could conceivably be several hundred billion dollars more than the $200bn estimate. New challenges, including the increasingly sophisticated resources of counterfeiters, are exacerbating the already serious situation, making the problem even more pervasive and difficult to tackle, says the EC.


However, while highlighting the fact that "the EU is consistently pushing countries like China to enforce anti-counterfeiting legislation and toughen the legal penalties for intellectual property theft," the Commission is quick to point out that it is not 'ganging up' on China or other countries currently not part of the ACTA pact. "ACTA is not intended to isolate countries or point the finger at their enforcement efforts," a document regarding the new proposals states. "This is an inclusive vision which we hope more countries will embrace when they feel the time is right." The agreement is being set up independently rather than through formal frameworks such as G8, WTO or WIPO, which the parties believe will provide the most flexibility for the scheme. The membership and priorities of the aforementioned organisations are not seen as the "most conducive to this kind of path breaking project."


While no precise timescale has been agreed as to conclusions of negotiations for the treaty, the essential concepts have been vetted with multiple countries and the US Government has said it is "eager to move ahead as quickly as possible."

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