CHILE'S FREE TRADE PARTNERS URGE IP COMPLIANCE

According to local media reports, Chile's government is coming under intense diplomatic pressure from the US and Switzerland to enforce data protection rules. A series of high-level meetings has followed a patent case allegedly involving Swiss-based Novartis and local generics maker Recalcine. Press sources claim that an illicit copy drug may have resulted from commercial collusion between the local company and Chile's health authorities.

The key concern, reiterated by the Office of the US Trade Representative (USTR) and other agencies, is the lack of linkage between Chile's health regulator, the ISP, and the patent office, the Industrial Property Department. The topic is reported to have been the subject of formal complaints on several occasions this year.

Nevertheless, it is now claimed that Chilean President Ricardo Lagos has explicitly refused to comply with US demands for action. The requirement for patent linkage is set out in Chile's WTO obligations, but the text of the US Free Trade Agreement (FTA) -- initiated in January 2004 -- makes no mention of this obligation. A FTA with the European Free Trade Area, which includes Switzerland and the European Union (EU), came into effect at the same time.