The Trans-Pacific Partnership’s IP provisions: Biologics and biosimilars, copyright and privacy

The Trans-Pacific Partnership (TPP) was concluded on 5 October 2015, after 8 years of negotiations. Its twelve signatories, who together account for 40% of world GDP, are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States and Vietnam. The details of the agreement have yet to be released, but a number of drafts of the agreement have been leaked. You can read our comments on an early version here. Comments and media releases from signatory governments have provided an indication as to the TPP’s broad features.

This post will comment on a few of the key implications for intellectual property in partnership countries, the details of which will be confirmed when the 30 chapter report of revised and new trade agreements is released later this month. It is of course difficult to analyse the TPP in detail without the final text of the agreement.

Before turning to the IP chapter, it is worth noting the Investor State Dispute Settlement (ISDS) clause. You can read the King & Wood Mallesons summary of the ISDS clause in the TPP here.

Biologics, Biosimilars and Data Exclusivity

According to the negotiators, a final sticking point in negotiations was the length of the data exclusivity period for biologics. Given that the biopharmaceutical industry is the fastest growing in the health sector, it is easy to understand why. The end result for Australia appears to be that there is no change required to Australian law, because the minimum protection period under the TPP is five years, which is also that required for all medicines under Australian law.

What are biologics?

Biologics are a type of medicine that are made using certain types of protein-producing cells. They are produced from living organisms, whether they be human, animal or microorganism. Biologic products comprise allergenics, blood components, gene therapy products, living cells and tissues, recombinant therapeutic proteins, somatic cells and vaccines. There are approximately 300 biologics currently available and they are the fastest growing class of therapeutic compounds. Biologics are widely considered to be the most effective method of treating a wide range of diseases, including cancer.

What are biosimilars?

Biosimilars are generic versions of biologics. They are compounds that behave in the same or a similar way to biologics in the treatment of disease. Due to the complexity of the chemical structure of biologics, however, biologics are much more difficult to replicate, test and approve. For this reason, would be manufacturers of biosimilars may wish to draw on information submitted to a regulator by the manufacturer of a biologic. If they can do this, then they do not have to expend time and resources in replicating results to which the regulator already has access.

What is data exclusivity?

The data exclusivity period is the period in which a regulator cannot use the information submitted to it by the manufacturer of a biologic in order to approve the registration of any other compound, i.e. a biosimilar. This is why data exclusivity is a contested issue: the protection of the data required to register a biosimilar acts as a market barrier to protect the registrant of the original biologic product. It would generally be so expensive and time consuming for a second market entrant to replicate the clinical studies that it is not commercially viable to do so.

Data exclusivity under the TPP

The United States pushed for a twelve year data exclusivity period under the TPP, to mirror their domestic law. This would have been a significant increase for Australia (currently 5 years) and, for example, Japan (currently 8 years), but it would have been even more extreme for Peru, Vietnam, Malaysia and Mexico, which currently do not have a data exclusivity period that applies to biologics. Media sources suggest that the US eventually attempted to reach a compromise at 8 years’ protection, but Australia and Peru were reportedly particularly firm in their negotiations. As a result, the minimum period for data exclusivity has apparently been agreed at five years (with no maximum limit). There has been some speculation that the agreement includes an additional 3 year regulatory period, the details of which will only be known when the text of the agreement is released.

Copyright, Privacy and the Internet

It is worth first observing that the Coalition has stressed that changes to Australia’s data protection and copyright laws will not be required as a result of the agreement, although the precise provisions are not yet known.

A release from the New Zealand government indicates that copyright protections in partnership countries will be extended to mirror those of the United States: 70 years after the death of the creator. The release indicates that this TPP requirement will be subject to a transitional regime. This change may not impact Australian law, as our copyright term for works was changed to 70 years following the Australia-US Free Trade Agreement.

In addition to the length of copyright protection, commentators have focused on the possibility of requirements for ISPs to terminate accounts, which was included in a previous draft. It now appears that this will not be included in the suite of requirements under the TPP. A media release from the Canadian government, however, seems to suggest that the TPP will enforce breaches of copyright online in a manner similar to Canada’s “notice and notice” system, which involves ISPs and websites forwarding notices from copyright owners to users who have been identified as potentially infringing. Australia does not currently have a legislative notice scheme in place, however, ISPs and rights holders are currently in negotiations for a copyright notice scheme by way of an industry code.

Speculation continues over data storage requirements under the TPP. Currently, the privacy of certain personal data is protected in certain countries by requirements that data be hosted within the jurisdiction and subject to its privacy and data security regime. The TPP raises, according to some digital rights advocates, the spectre of offshore housing of personal data. The current official summary expressly rules out member nations forcing companies to comply with domestic data storage requirements. The privacy requirements under the agreement are not yet known. In this context, it is worth noting the recent decision of the European Court of Justice, which found that the US-EU privacy safe harbour regime was invalid (see our previous post here).

Where to from here?

The deal is controversial in some quarters and faces strong opposition domestically in number of signatory countries. The TPP countries are “finalising arrangements” for release of the text of the agreement, which is a necessary precursor to each signatory’s domestic approval, upon which the deal is conditional.

We look forward to seeing the final text of the TPP and we will, of course, keep you posted.