The US is lobbying against Israel’s protection of intellectual property. Minister of Finance Ehud Olmert met his US counterpart at the Sixth World Trade Organization (WTO) Ministerial Conference in Hong Kong today, where the US criticized Israel’s patent extension policy.
US Trade Representative Rob Portman outlined the US position in its dispute with Israel, which heated up this year, after Israel prepared an amendment to the Patents Law (1967) (amended 1998), which the US opposes. As a result of Israel’s action, the Office of the US Trade Representative put Israel back on its priority watch list of countries violating intellectual property rights.
With the support of the Bush administration, US pharmaceutical companies allege that an amendment to Israel’s Patents Law to grant ethical drug companies marketing exclusivity only, instead of information exclusivity, seriously harmed their rights. The US companies also oppose an amendment to the Patents Law passed by the Knesset this week, under which Israel will not extend pharmaceutical patents beyond the period granted by other countries, even if the patent is registered late in Israel.
The US companies allege that in such cases, they lose on the full five years of patent protection granted to them under the previous practice. Patent extension, they claim, derives from the recognition of the importance of drug development, including development of life-saving drugs. Development of this kind costs $900 million and can take 10-15 years.
Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA), leader of Israel's generic pharmaceuticals sector, claimed that extending patents beyond their expiration in key countries would force it to transfer production to other countries, so as to gain the advantage of being the first generic manufacturer of a given drug in that market.
Olmert said in his meeting, "In recent years, Israel has improved its legislation and enforcement of intellectual property protection, including the issue of patent extension." He said the US should take Israel off the priority watch list.
Portman noted that he was due to visit Israel soon to celebrate the twentieth anniversary of the free trade agreement between the US and Israel. In light of this, he said, discussions on the matter were expected to continue.
Olmert met with his Egyptian counterpart to discuss the qualifying industrial zones (QIZs) and their contribution to expanding trade between the two countries. Exports to Egypt are expected to grow threefold, to $75 million, by the end of the agreement's first year.
In his meeting with China's trade minister, Olmert asked that China include Israeli companies in tender offers for infrastructure, water (desalination / reclamation / purification) and telecommunications. This, in light of Israel answering China's request to recognize it as a market economy, a measure required to aid China's integration into the global economy.
The two officials agreed there was great potential for trade between their countries. Olmert said that China must act to increase import from Israel, and close the trade gap.
Published by Globes [online], Israel business news - www.globes.co.il - on Thursday, December 15, 2005