Competition and Data Protection In Terms Of International Obligations And Commitments Of Turkey
Professor Arif ESİN

As for data protection, countries are bound by international agreements and bilateral agreements. In this context, Turkey has given final commitments and assumed definite obligations on data protection in :



a) the Trade Related Intellectual Property Rights Agreement within the scope of the World Trade Organization Treaty, and

b) the Association Council Decisions 1/95 and 2/97 within the legal frame of the EU-Turkey Association.



A) As for the Trade Related Intellectual Property Rights Agreement:

By signing the World Trade Organization Treaty, Turkey has also adhered to the Trade Related Intellectual Property Rights Agreement, as a requirement of the basic principles of the Treaty. Article 39 of the said Agreement may be considered as having relevance to data protection. The article aims at protecting the undisclosed data, as quoted below :

 

 

SECTION 7

PROTECTION OF UNDISCLOSED DATA


Article 39

 

1. In the course of ensuring effective protection against unfair competition as provided in Article 10bis of the Paris Convention (1967), Members shall protect undisclosed information in accordance with paragraph 2 and data submitted to governments or governmental agencies in accordance with paragraph 3.



2. Natural and legal persons shall have the possibility of preventing information lawfully within their control from being disclosed to, acquired by, or used by others without their consent in a manner contrary to honest
commercial practices so long as such information:

(a) is secret in the sense that it is not, as a body or in the precise
configuration and assembly of its components, generally known among or readily
accessible to persons within the circles that normally deal with the kind of
information in question;

(b) has commercial value because it is secret; and

(c) has been subject to reasonable steps under the circumstances, by the person
lawfully in control of the information, to keep it secret.



3. Members, when requiring, as a condition of approving the marketing of
pharmaceutical or of agricultural chemical products which utilize new chemical
entities, the submission of undisclosed test or other data, the origination of
which involves a considerable effort, shall protect such data against unfair
commercial use. In addition, Members shall protect such data against disclosure,
except where necessary to protect the public, or unless steps are taken to
ensure that the data are protected against unfair commercial use.



The purpose of this article is to prevent unfair commercial practices. It is
obvious and unequivocal that unfair commercial practices distort competition.
The phrase in a manner contrary to honest commercial practices of the article
is meant to point out practices such as breach of contract, breach of trust and
incitement to breach. Furthermore, from the point of view of law, unfair
commercial practices also extend to practices intending to mislead the public
and create confusion on products or services or industrial or commercial
activities of a competitor.



Accordingly, practices intending to disparage a competitor's products or
services or industrial or commercial activities through unfair, untrue or
misleading advertising; or to gain unfair benefits and advantages by misleading
and deceiving the public on production process or quality or quantity or other
characteristics of a product; or to use trade secrets improperly for one's own
benefit; or to take other actions causing disrepute of or any damage on the
brand or trademark of a competitor are also defined and classified as unfair
commercial practices.



This means to say that data protection and protection against unfair competition
practices do not bear the same meaning. Data protection prevents any reference
to the original clinical data during the protection period while no
authorization can be given by the authorities with regard to the generic drugs.
For this reason, data protection provides market exclusivity in one meaning. In
fact, Article 39.3 of the Trade Related Intellectual Property Rights Agreement
refers to a data protection which only aims at preventing unfair commercial use
of data by third persons. In terms of its spirit, this article does not intend
to create a market protection.



As a matter of fact, some firms try to apply Article 39.3 as a base for data
exclusivity, with the intention of obtaining a market protection for the drugs
that are not protected by product patents. However, such practices will surely
create a major and substantial barrier to penetration into the drug market in
many countries. Given the fact that Article 39.3 of the Agreement does not bring
a time limitation, it is obvious that such practices, if permitted, will in fact
lead to an unlimited market protection against unpatented generic drugs, and
this is surely not the purpose of the Trade Related Intellectual Property Rights
Agreement. In any case, such an approach which would divide the markets and
prevent free trade cannot be made to dominate the World Trade Organization
Treaty.



Furthermore, Article 39.3 cannot be interpreted and applied separately either
from the whole of Article 39 pertaining to protection against unfair competition,
or from Article 10bis of the Paris Convention. Therefore, Article 39.3 of the
Agreement cannot be interpreted as arrangement of a special legal regulatory
regime for protection of confidential test results or determination of other
data required for registration of pharmaceutical products by the contract
parties.



In order for a complete and accurate interpretation of Article 39.3 of the Trade
Related Intellectual Property Rights Agreement, one must thoroughly review and
understand the difference between protection against unfair competition and
other types of protection relating to intellectual property rights. This
difference is clarified in WIPO as follows :



The protection of industrial property has as its object protecting inventions,
trademarks and industrial designs, and the repression of unfair competition.
Unfair competition is not interested in exclusive rights but any act of
competition contrary to honest in industrial or commercial matters constitutes
an act of unfair competition.



As seen, Article 39.3 of the Agreement only sets down the protection of data
against unauthorized disclosure or unfair commercial use of data as defined
above. This means to say that Article 39.3 does not prevent the regulatory
authorities to use or give reference to the data about other registered products
in the course of review or registration of similar products if and to the extent
they are not closed to third persons (generic products). These may only extend
to general practices relating to unfair competition, such as particularly
protection of trade secrets. Such practices are referred to Article 39.1 of the
Agreement which constitutes Article 10bis of the Paris Convention.





The clinical data alleged to be protected by data protection rules and Article
39.3 are in fact not in conformity with the basic prerequisites envisaged in
Article 39. Here, it must be emphasized that Article 39.2 sets down and
regulates the required/declaratory conditions/criteria for classification of
certain information as confidential and proprietary. Paragraph (a) clearly
states that an information can be considered and treated as confidential only if
and to the extent it is not generally known or accessible by other persons.



It is evident that Article 39.3 of the Agreement does not intend to stipulate a
data protection of EU/USA type for the pharmaceutical products. Beyond the
interpretation of Article 39.3, which in fact only intends to protect data
against unfair competition practices, so as to create exclusive market rights
lies the intention and wish of extending the coverage also to the drugs which
are not protected by drug patents within the frame of the Trade Related
Intellectual Property Rights Agreement. Such practice is, however, far beyond
the agreed upon provisions of the Trade Related Intellectual Property Rights
Agreement, and if applied, will surely create a major and substantial barrier
for penetration into the healthcare sector and for growth of the local generic
drug companies in many countries.



Finally, Article 39.3 of the Trade Related Intellectual Property Rights
Agreement does not have any relevance to the data protection which allows the
data protection in EU Member States to go beyond the patent protection period or
grants exclusive market rights to the non-patentable products. And as the
Article does not refer to any time limitation, if such a protection is honored,
it will by nature be unlimited by time, and this in turn may pave the way for
protection of market exclusivity eternally. This is in contradiction with the
purpose of the Trade Related Intellectual Property Rights Agreement. As a result,
by signing the said Agreement, Turkey has not assumed any international
obligation or commitment relating to data protection.





B) As for the Association Council Decisions 1/95 and 2/97 :



1) The Association Council Decision 1/95, dated March 6, 1995:



Turkey's obligations and commitments on data protection may further be dealt
with and discussed in terms of the EU-Turkey Association Law.



Among the provisions, pertaining to the Final Stage of the Customs Union, of the
Association Council Decision 1/95, dated March 6, 1995, issued and signed in
accordance with the Ankara Treaty (1963) and the Additional Protocol (1971)
between Turkey and the European Union are included only a single article (Article
31) relating to protection of intellectual, industrial and commercial property
rights, and an Annex (Annex 8) referred to by the said article.

 

Protection of intellectual, industrial and commercial property



Article 31

 

1. The Parties confirm the importance they attach to ensuring adequate and
effective protection and enforcement of intellectual, industrial and commercial
property rights.

2. The Parties recognize that the Customs Union can function properly only if
equivalent levels of effective protection of intellectual property rights are
provided in both constituent parts of the Customs Union. Accordingly, they
undertake to meet the obligations set out in Annex 8.



As clearly specified in Article 31 of the Association Council Decision 1/95,
mutual obligations and commitments relating to protection of intellectual,
industrial and commercial property rights are dealt with in the light of a
simple approach. Accordingly, it is confirmed that the said property rights are
required to be protected, and that the parties are liable to abide by efficiency
and equivalency obligations in protection of the said rights.



However, the principles of implementation of the article are regulated by a
direct reference to Annex 8.



The first worth mentioning aspect of Annex 8 is that Turkey has put a
reservation on its obligations toward the European Union, with the intention of
protecting its status in the World Trade Organization. This is further confirmed
by second paragraph of first article of Annex 8.







ANNEX 8



Article 1



In that respect, Turkey undertakes to implement the TRIPS Agreement no
later than three years after the entry into force of this Decision.

 

According to that paragraph, Turkey has undertaken to put the Trade Related
Intellectual Property Rights Agreement into force within three years following
the effective date of the Decision. This just request of Turkey is also in
conformity with the 2nd paragraph of Article 65 of the Agreement.



As a result, 1.1.1999 is the date scheduled in the Decision 1/95, and Turkey has
thus created a full harmony between the date of harmonization with the World
Trade Organization (1.1.1995 + 4 = 1.1.1999) and the date of compliance with its
obligations relating to the Customs Union (1.1.1996 + 3 = 1.1.1999).



As a conclusion, the Association Council Decision 1/95 does not contain any
element pertaining to data protection. Only harmonization with the Trade Related
Intellectual Property Rights Agreement is aimed through some reservations in
respect of the drug sector. And this harmonization process has been completed
with success. Thus, Turkey has already fulfilled its obligations and commitments
to EU.





2) The Association Council Decision 2/97, dated June 4, 1997:



The first serious sign relating to data protection in the EU-Turkey Association
Law emerged in the Association Council Decision 2/97. This Decision relates to
the obligation of Turkey for harmonization of its technical legislation as
formulated in the Association Council Decision 1/95. This is reflected in the
first sentence of the Decision 2/97 as follows :



Having regard to Decision No 1/95 of the EC-Turkey Association Council of on
implementing the final phase of the Customs Union, and in particular Article 8
(2) thereof,



Whereas, in accordance with Article 8 (1) and (2) of Decision No 1/95 a list of
Community instruments relating to the removal of technical barriers to trade
should be incorporated by Turkey into its internal legal order and the
conditions and detailed arrangements governing their implementation should be
laid down



Section 13 of Annex 2 of the Association Council Decision 2/97 covers Medical
Products. Under this heading, Turkey has agreed and undertaken to harmonize its
national law with the EU regulations on data protection with effect from June 4,
1997.



At this point, a serious law mistake has been made, because the referred article
of the Association Council Decision 1/95 is only related to removal of technical
barriers in trade, as quoted below :

 

Article 8

 

1. Within five years from the date of entry into force of this Decision,
Turkey shall incorporate into its internal legal order the Community instruments
relating to the removal of technical barriers to trade.

2. The list of these instruments and the conditions and detailed arrangements
governing their implementation by Turkey shall be laid down by decision of the
Association Council within a period of one year from the date of entry into
force of this Decision.

3. This provision shall not preclude the application by Turkey, with effect from
the date of entry into force of this Decision, of Community instruments deemed
to be of particular importance.

4. The Parties stress the importance of effective cooperation between them in
the fields of standardization, metrology and calibration, quality, accreditation,
testing and certification.



As clearly understood from the wording of the article, the purpose of the
article is only to free the trade between the parties from all technical
barriers through harmonization of laws in the fields of standards, metrology,
calibration, etc. As a matter of fact, First Section of the Association Council
Decision 1/95 regulates Free Movement of Goods and Free Trade Policy. Second
part of this Section is about removal of quantity restrictions and similar
other measures having the same effects. The mentioned article 8 is also
included in this Second Part. The following Articles are also fully allocated to
the issues in respect of technical barriers of trade. Data protection have no
relevance with the technical barriers. It is understood that the Directive 65/65
of the European Union has been slipped in with the Decision 2/97.



Being in fact a matter of harmonization of legislation, had the data protection
been a matter of the Association Council Decision 1/95, it would have been
included in the Forth Section Harmonization of Legislation of the said
Decision. This Section contains articles pertaining to Protection of
Intellectual, Industrial and Commercial Property Rights, and articles pertaining
to Competition Law and State Aids. This Section neither contains any phrase
about or any reference to data protection, nor deals with incorporation of the
EU regulations into our national law.





C) Conclusion



Turkey has not assumed any international obligation or commitment on data
protection. Turkey has signed and fulfilled its obligations arising out of the
Trade Related Intellectual Property Rights Agreement within the frame of the
World Trade Organization Treaty. Article 39 of this Agreement is related to
unfair competition. Data protection mentioned therein does not contain any
proviso preventing the generic drug manufacturers.



Nor does Turkey have any obligations arising out of its association law with the
European Union. However, a data protection paragraph has been included and
harmonization with the EU regulations has been stipulated in the Association
Council Decision 2/97, in contravention with the law and the Association Council
Decision 1/95 referred to therein. Though being contrary to the law and the
Association Council Decision relating to the Customs Union, this has been signed
by Turkey and thus, has become an obligation of Turkey. Provided, however,
that performance of unlawful contract provisions may not be requested, and such
decisions are considered to be null and void.



Considering the fact that data protection system divides the markets and
eliminates the market penetration opportunities, neither the World Trade
Organization Treaty aiming at ensuring liberalization of trade, nor the EU
competition law may accept and defend such an approach. For this reason, in EU,
the data protection issue has not been dealt with in the form of a directly
enforceable By-laws which is mandatory to all member states, but has been
regulated only in the form of a Directive which leaves the implementation
thereof to the discretion of the member states.



On the other hand, an application may be made to ECCJ for correction of this
decision, and for cancellation of first paragraph of Section 13 of Annex 2 of
the Association Council Decision 2/97, and even, a new Association Council
Decision may be obtained. This is of course in the discretion of the political
authority. But both enterprises and persons are free to apply to ECCJ.



Professor Arif ESİN

University of İstanbul Yeditepe

Faculty of Law