US lifts intellectual property blacklist threat

The US Trade Representative nevertheless expressed serious concerns about data exclusivity for drug registration files.

The US announced last night that it would not include Israel in its new priority watch list of countries that violate intellectual property. The decision follows Israel's commitment to amend its laws on data exclusivity (drug registration files of international pharmaceutical companies).

The US will keep Israel on its watch list, "due to continuing serious U.S. concerns regarding its policies on data protection for proprietary test data and national treatment for U.S. rights holders in sound recordings."

The US Trade Representative (USTR) announcement goes on to state, "In 2003 Israel was moved from the Priority Watch List to the Watch List. Last year's move was based primarily on Israel's improvements in copyrights and trademark enforcement, as well as on senior-level assurances that OECD-level protection would be implemented for confidential test data submitted by innovator pharmaceutical and agricultural chemical producers…

"On the key issue of data exclusivity, Israel's actions have not met US expectations. In April 2004, the Israeli Government developed a set of recommendations on data exclusivity that recognized for the first time the need to provide a minimum five-year period of protection for confidential test data for innovator firms in Israel. However, several serious shortcomings in the recommendations would severely compromise the data protection afforded by Israel, keeping it far short of OECD-level standards for data exclusivity."

The USTR added, "The Israeli Government has postponed further action on its data exclusivity recommendations and provided written assurance that it will engage with the United States to address US concerns on data exclusivity… An out-of-cycle review will be held this summer to assess whether Israel has made sufficient progress in responding to US concerns on confidential test data, in ensuring that Israel will continue to provide national treatment for US rightholders in sound recordings, and to consider whether Israel's Special 301 status should be changed."

The review will decide whether to remove Israel from the Watch List altogether, or to put it back on the Priority Watch List. Besides Israel, the Watch List includes, among other countries, Azerbaijan, Bulgaria, Chile, Croatia, Malaysia, Peru, Saudi Arabia, and Vietnam. The Priority Watch List includes Argentina, Brazil, Egypt, Kuwait, Lebanon, Pakistan and Turkey.

Yoav Shechter, general secretary of Pharma Israel - The Association of the Research-Based Pharmaceutical Companies said in response, "Pharma Israel welcomes the USTR decision, and calls on the government to carry out all the measures included in the report, beginning with legislation to protect drug registration files.

"These measures will ensure that Israel will no longer be included in the Priority Watch List, and will make a substantial increase in R&D investment by international companies in Israel possible."

Minister of Industry Trade and Labor Ehud Olmert said, "Israel attaches great importance in preserving a suitable intellectual property environment." He said he hoped that upcoming talks between US and Israeli officials would resolve outstanding disputes and achieve understandings.

Teva Pharmaceuticals (Nasdaq: TEVA; TASE:TEVA) VP Israeli pharmaceutical sales Chaim Hurvitz, who also serves as chairman of the Manufacturers Association Chemical, Pharmaceutical & Environmental Society, said in response, "We have reservations about the present recommendations of the interministerial committee [for protecting intellectual property rights for pharmaceuticals]. The Americans' outrageous demands for data exclusivity for more than five years, longer than the period in the US, are driving us crazy. But I'm pleased that the matter has been settled for the moment, and I hope that Israeli pharmaceutical companies won't face new surprises."

Published by Globes [online] - - on May 4, 2004

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