Israel Concedes Key US Demand on Patent Law Changes

Israeli media sources report that the government is studying a significant concession to US authorities on its proposed changes to intellectual property law. Authorities in the country, which is a major generics producer, had previously argued that planned amendments to its Patent Law would fully comply with WTO obligations.

The government had earlier argued that the five-year data exclusivity period on ethical drugs should expire as soon as production of a generic version begins in any third country. However, authorities have recently conceded the issue, and also allowed ethical drugmakers to extend exclusivity by a further year on new labels of existing drugs.

However, it appears that authorities are unlikely to give ground on the vexed issue of the start date of exclusivity. Israel continues to argue that the date of a product's registration in the seller country, rather than registration in Israel, should determine five-year exclusivity. This stipulation can reportedly shorten exclusivity periods by up to 12 months.

During fractious negotiations in December, US representatives insisted on five years' strict data exclusivity after a branded drug is filed for registration in Israel, retrospective to drugs marketed since 2000. At the time, the Israeli government proposed exclusivity from the date of registration in major countries, applicable only from January 2006.

While Israel's accommodation on the issue of third country production may go some way towards allaying US concerns, it is clear that a final consensus between the US, the EU and Israel is a distant prospect. EU representatives are especially concerned that existing rules only allow for marketing exclusivity on ethical drugs, and so for example do not protect clinical trial data on innovative drugs. These conditions allow Israel to grant early production licences for local companies such as Teva, provided the drugs are made only for the export market. Further, the EU also complains that the new law will restrict the Patents Office's power to extend the period of intellectual property protection. Representatives are now understood to be preparing to shortly issue a statement of the EU's position on Israeli patent law in general.