Brazil may break patents to force US to end subsidies

(BRASILIA) Brazil will break intellectual property rights on US-made prescription drugs, music, books, software and movies in a bid to force Washington to end cotton subsidies that violate global trade rules.

Brazil’s government submitted a list of products for which they may suspend royalties, copyrights and patents as part of US$829 million in retaliatory sanctions authorised by the World Trade Organization, according to a statement published in the country’s official gazette on Monday.

‘These measures don’t change policies or our commitment to protection of intellectual property,’ Carlos Marcio Cosendey, head of the Foreign Ministry’s economic department, told reporters in Brasilia. ‘These are temporary measures aimed to force a change in the US.’

The Geneva-based WTO in August ruled that Brazil may impose annual sanctions on US imports because the cotton subsidies violate trade regulations. Of the amount awarded, Brazil will adopt penalties on intellectual property rights totalling US$239 million this year; it also plans US$591 million in import tariffs.

Sanctions on copyrights ‘could make Brazil a less hospitable place for IP-based industries to do business in the long run,’ Mark Esper, executive vice- president of the US Chamber of Commerce’s Global Intellectual Property Center, said in a statement. ‘We urge the Brazilian government to suspend any cross-retaliation while both sides keep working on a solution to the underlying problem.’

Brazil and the US still have room to negotiate an agreement to avoid the sanctions, Foreign Minister Celso Amorim said last week. President Lula Inacio Lula da Silva blamed ‘fighting’ over agricultural subsidies on the US’s refusal to sign an accord during the Doha round of global trade talks.

‘We want to show the US that it doesn’t matter if you are big or small, or how much money you have as a nation,’ Mr Lula said on March 10. ‘We all want to be respected and to be treated fairly.’

No ‘concrete offer’ was made by US trade officials during meetings with their Brazilian counterpart, Mr Cosendey said.

The US government asked for more time before engaging in talks as coordination with lawmakers is needed on agricultural subsidies, he added.

If Brazil carries out its threat to infringe on intellectual property rights it will be the first country to retaliate in such a manner for practices that hurt trade of goods, Mr Cosendey said.

The list of sanctions published on Monday will be open to public consultation for 20 days before taking effect, according to the statement. Patents on veterinary and biotechnology products will also be affected by the measures announced.

In addition to breaking intellectual property rights, Brazil will impose higher tariffs worth US$591 million on 102 US-made goods, including ketchup, wheat, chewing gum, cars and boats, according to a list published last week. – Bloomberg

Subscribe for updates from GIPC