Congress tries to get Israel off of US intellectual property blacklist

The USTR has so far agreed to a special review of Israel's case but little has changed on the ground since the 2007 Priority Watch List was released earlier this year.

By HILARY LEILA KRIEGER - WASHINGTON
US Congress 248.88 (photo credit: Courtesy)
US Congress 248.88
(photo credit: Courtesy)
Members of Congress are urging the Bush administration to remove Israel from an intellectual property watch list that harms its international standing and could make it harder for the country to join the Organization of Economic Cooperation and Development. Twenty-eight senators and representatives wrote letters that Israel has been more vigilant about copyright protection than many other countries with less serious listings and that it has passed laws in recent years addressing the concerns of the US Trade Representative, which drafts the list. "We firmly believe that this recommendation is unwarranted, and we therefore urge you to remove Israel from the Priority Watch List and the entire list altogether," wrote Rep. Allyson Schwartz (D-Pennsylvania) and Rep. Henry Waxman (D-California). They took the lead in drafting a recent letter to the office of the US Trade Representative, Susan Schwab. "This is a diplomatic black mark against Israel. As they're in negotiations with the United States [and others] it comes up and is used against them," said Hadar Susskind, Washington director for the Jewish Council For Public Affairs, whose organization has been pushing the US government to take Israel off the list and who welcomed the congressional letters. The USTR has so far agreed to a special review of Israel's case but little has changed on the ground since the 2007 Priority Watch List was released earlier this year, so it's not clear how much chance there is of Israel's status being changed. The report describes "significant concerns" about Israel, which finds itself in the same tier as Russia, China, India, Pakistan, Thailand and several South American countries. The issue for Israel, unlike many of the other countries, isn't pirated DVDs or trademark violations, but patent protection for pharmaceuticals. In its report, the US charges that Israel doesn't offer adequate protection of the data sets used to create new drugs and doesn't provide a full five years of patent protection for American companies to sell new drugs in Israel before facing local competition. Israel was moved from the lower-tier Watch List in 2005, but has passed more stringent patent protection laws in the meantime. The report noted that the US "is encouraged by recent progress" through this legislation, but indicated it wasn't sufficient to be taken off the list entirely. The members of Congress, however, pointed out that the new Israeli laws were modeled after the North American Free Trade agreement, and that "Israel's protections far exceed the current level of protection" for data exclusivity and patent term protection provided by many other countries on the 2007 Priority Watch List and even on the Watch List. Susskind called that situation "indefensible," and stressed, "Israel's not asking for any special treatment because it's friends with the US. It's asking for equal treatment." The USTR, though, said Israel is judged by different standards than others in its watch list tier which don't have as advanced economies. "Our expectations of those countries may not be as high as they are for Israel," said an official in the USTR, speaking on background. "We look at Israel relative to its very high level of development." Despite the legal improvements, he pointed to Israel's policies as the root of the issue. "The bottom line is that we're concerned that under current Israeli law and practices, a company that conducts testing for pharmaceutical products gets less than five years of effective protection," he said, referring to complicated formulas that can reduce the patent protection timeline. Aharon Schwartz, vice president of innovative ventures at Israeli drug giant Teva Pharmaceutical Industries, countered that what America demands is overly generous to US companies, to the detriment of the local market, since it can provide many years of additional protection before the five-year patent period begins. Beyond the specific intricacies of the legal arrangement, Schwartz described the demands toward Israel as "completely inequitable." He noted that Israel had a better position on the watch list before it enacted any of the additional protections of recent years. "Are we in a better position that we were in 2003? We are," Schwartz said of a time when Israel wasn't on the Priority Watch List. "What sense does [the downgrading] make?" The situation has lead Schwartz and several other advocates of Israel's position to believe that the issue is Israel's competitors rather than its own practices. "We are a pain in the back of the major US pharmaceutical industry [so] they're doing anything they can to apply pressure - and they're doing a very nice job," said Schwartz, referring to his company and its growing market presence. The USTR official denied that his office was acting to protect the interests of an American business from international competition. "This is not about any one company," he said. "This is about having a strong IPR regime that benefits countries across the board."