A case against enforcement of patent rights in transit: Resolving the unresolved controversy

Abstract

This paper delves into the complex legal landscape surrounding the enforcement of intellectual property (IP) rights on goods in transit, using the contentious EU–India–Brazil dispute as a case study. The dispute centers on the seizure of generic pharmaceutical shipments transiting through the Netherlands, leading to patent infringement complaints by Dutch patent holders. The heart of the matter lies in the interpretation of Trade Related Aspects of Intellectual Property Rights Agreement (TRIPS) Agreement provisions, specifically Articles 51, 52, and Footnote 13, in conjunction with General Agreement on Tariffs and Trade 1994 (GATT) Article V and XX(d), which addresses the freedom of transit. Since the dispute was never conclusively decided by World Trade Organisation Dispute Settlement Body, the concerns are still alive and merit discussion.

The author contends that enforcing patent rights on goods in transit contradicts the principles of territoriality and commerciality inherent in patent laws and infringes upon the freedom of transit articulated in the GATT. Drawing from the perspectives of scholars and legal experts, this paper presents a nuanced argument that seeks to reconcile the seemingly contradictory provisions. It proposes Footnote 13, of TRIPS be read down to allow enforcement only when there is a risk of diversion into the transit country's commercial channels.

Moreover, the paper argues normatively, emphasizing the adverse impact of transit enforcement on international trade, especially for developing and least developed countries. In conclusion, it underscores the urgency of addressing this issue to protect global trade interests while safeguarding the rights of developing nations and promoting equitable access to essential goods.