Consequently, the U.S. has become increasingly involved in FTA negotiations. The remainder of this iBrief will focus on the FTA negotiations between Thailand and the U.S. More specifically, this iBrief will use the precedent set by previous U.S. FTAs to demonstrate that the IP provisions that will be included in the U.S.-Thai agreement will likely be very similar to those previously negotiated agreements.

FTA negotiations between the U.S. and Thailand began in July 2004 and are expected to conclude sometime this year. [FN26] Thus far, six rounds of negotiations have occurred, [FN27] and IPRs, especially relating to the pharmaceutical industry, have already been dubbed "a sensitive issue" by negotiators on both sides. [FN28]

II. A Snapshot of Thai IP Law

Thailand has numerous laws in place to protect IP. [FN29] However, enforcement of those laws remains an issue. Enforcement of IPRs in Thailand is slowly meeting foreign investors' objectives in policing the marketplace to suppress fakes and pirated goods. [FN30] "A key factor to improvement of enforcement efforts is having IP owners work in close cooperation with Thai law enforcement and government agencies." [FN31] Such cooperation is slowly happening throughout the country, but Thailand still has a significant way to go before IP infringement will be under control.

While enforcement is of utmost priority in improving the IP regime in Thailand, the new IP provisions of the Thai FTA provisions are also extremely important. These new provisions will have a significant impact on the IP marketplace as Thai IP law is brought more in line with U.S. law.

III. Predictions for the U.S.-Thai Agreement

Due to the strength of the U.S. as compared to the majority of its trading partners, the bilateral agreements to which it is a party are typically very similar. Drahos notes that:
In bilateral trade negotiations between states involving a strong and weak state, generally speaking the strong state comes along with a prepared draft text which acts as a starting point for the negotiations ... In order to lower the transaction costs of bilateralism the [U.S.] has developed models or prototypes of the kind of bilateral treaties it wishes to have with other countries ... So, for example, ... the Free Trade Agreement that the [U.S.] has negotiated with Jordan will serve as a model for other FTAs being negotiated with Chile and Singapore." [FN32]

A central aspect of the most recent series of FTAs entered into by the U.S. is the establishment of IP protections that exceed the TRIPS minimum standards. This section of the iBrief predicts the IP provisions of the Thai-US FTA based on an examination of the IP chapters in the following U.S. FTAs: [FN33]
1. The Singaporean FTA, signed in January 2003, is the first FTA between the U.S. and a Southeast Asian State; [FN34]
2. The Chilean FTA, signed in June 2003, is the first FTA between the U.S. and a South American country; [FN35] and
3. The Australian FTA, signed in May 2004, is the first FTA signed in the 21st century between the U.S. and a developed country. [FN36]

A. Patent Law: Pharmaceuticals

1. Patent Term Extension

Much of the controversy surrounding IP protection involves issues affecting the pharmaceutical industry. [FN37] One such protection, which is strongly advocated by the pharmaceutical industry, is patent term extension. Extension for a patent term is sought when an abnormal delay in the regulatory approval process reduces the effective life of a patent. The Singaporean, Chilean, and Australian FTAs all contain provisions granting patent term extensions when a delay in the granting of a patent exceeds a certain amount of time (four to five years). [FN38] In addition, each of the agreements grants extensions to compensate for "unreasonable delay" in the granting of regulatory marketing approval. [FN39]

Because patent term extension provisions have been included in the most recent U.S. FTAs, it is highly likely that similar provisions will also be included in the final text of the Thai agreement. As the Thai drug regulatory office frequently delays approval of drugs, [FN40] it is expected that patent term extension provisions will be heavily relied on by the foreign pharmaceutical industry in Thailand to lengthen the effective life [FN41] of its drug patents.

2. Compulsory Licensing

A second issue is the compulsory licensing of patents, which is currently allowed (though never exercised) by the government under Thai law. [FN42] This issue has been addressed by the U.S. FTAs in two different manners. [FN43] The first approach, used in the Chilean agreement, applies the TRIPS standards. [FN44] TRIPS states that governments may issue compulsory licenses for any reason so long as a certain number of conditions are met (e.g. prior negotiations for a voluntary license, and royalty payments). [FN45] Additionally, TRIPS allows for the waiver of the conditions in certain situations. [FN46] A second approach, used in the Singaporean and Australian agreements,limits the use of compulsory licenses to antitrust remedies, public non-commercial use, or national emergencies. [FN47]

In the Thai agreement, the provision for compulsory licenses could follow either of the manners described above--TRIPS standard or limitation to certain situations. Because the majority of pharmaceutical innovators in Thailand are foreign-owned, the TRIPS standard will be sought by the Thai negotiators, because it arguably allows greater opportunity for generic companies to make patented drugs via compulsory licenses granted by the Thai government. [FN48] However, even if the more stringent standard for issuing compulsory licenses found in the Singapore and Australian FTAs was used, the Thai government would still be able to issue compulsory licenses under the conditions of a national emergency or for public, non-commercial use. [FN49]

3. Linkage Between Patent Status and Generic Drug Approval

A third issue involves the linkage between a patent's status and generic drug marketing approval. In other words, the issue is whether a generic drug can be given marketing approval during the life of the patent from which the generic drug is derived. For this particular issue, the Singaporean agreement has been the gold-standard, its wording adopted almost verbatim by all subsequent U.S. FTAs. [FN50] The Singaporean agreement states that the regulatory authority may not grant marketing approval to a generic drug while the brand name drug is under patent (unless authorized by the patent owner), and, in addition, the patent owner must be notified of the name of the generic company requesting marketing approval. [FN51]

It is highly probable that the Thai agreement will also proscribe Thailand from granting marketing approval for generic drugs while the brand name drug is under patent (unless authorized by the patent holder). This provision effectively renders compulsory licenses ineffectual since it is unlikely that a pharmaceutical patent owner will grant permission for a generic company to market its patented drug, effectively undercutting the patent holder in the marketplace. [FN52] Additionally, even once the drug goes off patent, this provision will still delay the availability of generic drugs since they may no longer be approved and prepared for market distribution while the brand name drug is under patent.

4. Data Exclusivity

A fourth issue is data exclusivity. To obtain marketing approval, pharmaceutical manufacturers must submit a significant amount of clinical data to regulatory bodies--data that typically costs hundreds of millions of dollars to produce. [FN53] Generic drug manufacturers can later use that data to develop and approve their own generic versions of the drugs, thus bypassing a significant cost of pharmaceutical manufacturing. Data exclusivity provisions essentially grant patent-like protection of the clinical data to their creator for a certain amount of time and for many of the same reasons that an actual patent is given to the pharmaceutical innovators. Again, the Singapore FTA has set the standard for all subsequent agreements, providing five years of data exclusivity for the creators of clinical data. [FN54] Additionally, under the Australian agreement's provisions, once marketing approval has been granted in another territory based on clinical data, that clinical data gains exclusivity in the territories of the Parties to the agreement. [FN55]

[FN26]. Thailand, US Agree to Wrap Up FTA Talks in 2006, Thai Press Rep., Sept. 23, 2005.

[FN27]. As of January 13, 2006. See USTR--Statement of Barbara Weisel (Jan. 13, 2006), http://www.ustr.gov/Document_Library/Press_ Releases/2006/January/Statement_of_Barbara_Weisel_Assistant_US_Trade_ Representative_Regarding_the_6th_Round_of_the_US-Thail_FTA_Negotiations.html.

[FN28]. See, e.g., Thailand, US Agree to Wrap Up FTA Talks in 2006, supra note 26.

[FN29]. Legal protection of intellectual property is based on the provisions of the Trademark Act B.E. 2534 (A.D. 1991), the Trademark Act (No. 2) B.E. 2543 (A.D. 2000), the Patent Act B.E. 2522 (A.D. 1979), the Patent Act (No. 2) B.E. 2535 (A.D. 1992), the Patent Act (No. 3) B.E. 2542 22 (A.D. 1999), the Copyright Act B.E. 2521 (A.D. 1978), the Copyright Act B.E. 2537 (A.D. 1994), as well as other laws such as the Civil and Commercial Code, Penal Code, and Consumer Protection Act.

[FN30]. Arnold and Kelly, supra note 6, at 2.

[FN31]. Id.

[FN32]. Drahos, supra note 9, at 794.

[FN33]. These particular agreements were chosen because their intellectual property provisions are representative of the intellectual property chapters in all the most recent U.S. FTAs. For a more in-depth discussion involving all of the most recent FTAs, see Home Page of Consumer Project on Technology, http:// www.cptech.org/ (last visited Jan. 4, 2006).

[FN34]. United States--Singapore Free Trade Agreement, U.S.-Sing., May 6, 2003 [hereinafter Singapore FTA], available at http://www.ustr.gov/Trade_ Agreements/Bilateral/Singapore_FTA/Final_Texts/Section_Index.html.

[FN35]. Chile--United States Free Trade Agreement, U.S.-Chile, June 6, 2003  [hereinafter Chile FTA], available at http://www.ustr.gov/Trade_ Agreements/Bilateral/Chile_FTA/Final_Texts/Section_Index.html.

[FN36]. Australia--United States Free Trade Agreement, U.S.-Austl., May 18, 2004 [hereinafter Australia FTA], available at http://www.ustr.gov/Trade_ Agreements/Bilateral/Australia_FTA/Final_Text/Section_Index.html.

[FN37]. See, e.g., Rahul Rajkumar, The Central American Free Trade Agreement: An End Run Around the Doha Declaration on TRIPS and Public Health, 15 Alb. L.J. Sci. & Tech. 433, 433 (2005); Hamed El-Said and Mohammed El-Said, TRIPS, Bilateralism, Multilateralism & Implications for Developing Countries: Jordan's Drug Sector, 2 Manchester J. Int'l Econ. L. 59, 59 (2005); Adam Graham-Silverman, Big Pharma's Free Ride, Salon.com, Aug. 12, 2005, http:// www.salon.com/news/feature/2005/08/12/cafta_drugs/index_np.html.

[FN38]. Singapore FTA, supra note 34, art. 16.7.7; Chile FTA, supra note 35, art. 17.9.6; Australia FTA, supra note 36, art. 17.9.8.a.

[FN39]. Singapore FTA, supra note 34, art. 18.8.4; Chile FTA, supra note 35, art. 17.10.2.a; Australia FTA, supra note 36, art. 17.9.8.b.

[FN40]. "The major obstacles to foreign companies lie in skirting the regulatory system's widespread corruption, which can manifest itself in everything from intentional delays in the approval process to weak IPR protection." Ames Gross, New Regulatory Trends In Thailand's Pharmaceutical Market, Pacific Bridge Medical--Thailand Medical Publications (1999), http:// www.pacificbridgemedical.com/publications/html/ThailandMar1999.htm.

[FN41]. The effective life of a patent is the patent term remaining once full regulatory approval has been granted. While the patent term in the U.S. is twenty years, the average effective patent life of a drug is ten to twelve years.

[FN42]. Thailand Legal Basics: Intellectual Property Rights Laws, a publication by Tilleke & Gibbins Int'l Ltd., at 18, http:// www.tillekeandgibbins.com/Publications/thailand_legal_basics/index.html.

[FN43]. A compulsory license gives permission to another producer to make the patented product without the patent holder's consent.

[FN44]. Chile FTA, supra note 35, art. 17.1.5.

[FN45]. TRIPS, supra note 18, art. 31.

[FN46]. Id.

[FN47]. Singapore FTA, supra note 34, art. 16.7.6; Australia FTA, supra note 36, art. 17.9.7.

[FN48]. See Carsten Fink and Patrick Reichenmiller, Tightening Trips: The Intellectual Property Provisions of Recent US Free Trade Agreements, (Int'l Trade Dep't of the World Bank Group) Feb. 7, 2005, at 2, http:// www.cptech.org/ip/health/trade/worldbank02072005.pdf.

[FN49]. The generic manufacturers, however, would need to become state-owned, or in some other manner, non-commercial.

[FN50]. See, e.g., Chile FTA, supra note 35, art. 17.10.2.b-c.; Australia FTA, supra note 36, art. 17.10.4.b-c.

[FN51]. Singapore FTA, supra note 34, art. 16.8.4.b-c.

[FN52]. Fink and Reichenmiller, supra note 48, at 2.

[FN53]. See Pharmaceutical Research and Manufacturers of America Website, What Goes Into the Cost of Prescription Drugs, June 2005, http:// www.phrma.org/files/Cost_of_Perscription_Drugs.pdf.

[FN54]. Singapore FTA, supra note 34, art. 16.8.1-3; See, e.g., Chile FTA, supra note 35, art. 17.10.1.

[FN55]. Australia FTA, supra note 36, art. 17.10.