Going after patent pirates at Punta del Este

For every $1.80 of Pfizer Inc. pharmaceuticals sold in Mexico during 1984, another $3.10 worth of the same drugs had been illegally produced and sold by counterfeiters. In fact, Pfizer did not market its front-running products in Mexico, but ``pirates'' managed to fill that void by selling $2.1 million in copies. ``In many cases it is easy to produce the drugs, so companies in Mexico . . . will reproduce them in violation of patents and sell them for less'' than the original manufacturer, says a Pfizer spokesman in New York City.

Mexico's patent pirates are not alone in the counterfeiting business. In six Latin American countries, for example, Pfizer's sale of 12 patented drugs amounted to $24.6 million during 1984. Pirates, however, racked up $30.2 million in copycat sales.

``Latin America as a block of countries does not honor patent protection'' on pharmaceuticals, says Peter Keating, with Pfizer's International Division. ``It comes to one point, that US companies are not getting their fair shake in countries such as Mexico.''

The United States is calling for more- stringent enforcement of so-called ``intellectual property rights'' -- which includes patents, copyrights, and trademarks -- among nations during the week-long meeting of the General Agreement on Tariffs and Trade (GATT) under way in Punta del Este, Uruguay. The issue also includes patents and copyrights on videotaped movies, cosmetics, automotive parts, and clothing.

US Trade Representative Clayton K. Yeutter said patent protection is one of five key items the Reagan administration wants discussed by the 92 member nations -- particularly the developing countries.

Industrialized nations, including Japan and West Germany, have generally backed the US in its efforts to garner more patent protection. The Reagan administration hopes to use the Uruguay meeting, which will set the agenda for a new round of global trade talks, to push for the inclusion of intellectual property protection.

``These are our big-ticket priorities,'' Mr. Yeutter told reporters at the meeting. ``We will not abandon any of them and will be willing to walk away from a new round if we don't get satisfactory language'' in the agenda.

US officials are hoping GATT will adopt an anti-counterfeiting code, which would encourage member nations to develop and enforce domestic laws protecting intellectual property.

Developing nations in Latin America and Asia, where the pirating of US goods is allegedly rampant, are not hot on the idea of an anti-counterfeiting code for GATT. Brazil and Argentina have spearheaded a group that has blocked US attempts to include intellectual property protection in the new round of talks.

``Underlying all of these problems is the belief in many developing and newly industrialized countries that economic development will be hindered and infant industries endangered if counterfeiting is curbed,'' Ann Hughes, deputy assistant secretary for the Western Hemisphere at the US Commerce Department, told Congress recently.

``We get that argument thrown at us all the time,'' says Eileen Hill, who has worked extensively on this issue for the Commerce Department's International Policy Division.

US industries lose an estimated $20 billion to counterfeiters around the world, and Ms. Hill says that violating patents is on the rise. Industry officials complain that pirates are eroding their markets and keeping them from recouping their original investments.

A pharmaceutical company, for example, typically spends eight to 10 years and nearly $100 million before a new drug is put on the market. ``Most of the cost is in research and development,'' which a pirate does not need to invest in, says Tony Biesada, a Pfizer spokesman.

Hill says it is important for developing nations to start pursuing counterfeiters because US businesses are becoming irate over the lack of enforcement, and this could hinder the introduction of new technology into those countries.

Government officials say it will be difficult to get GATT members to agree on the five points the US has drawn up, including intellectual property rights. ``It's an uphill struggle,'' says Hill.