After two days of lively discussion, members of a World Trade Organization committee this week agreed to devote a day in October to an in-depth discussion on a little-used waiver to WTO intellectual property rules aimed at boosting access to medicines for poor countries. In addition, some member countries presented concerns about the possible effect of a global enforcement push by developed countries and the Anti-Counterfeiting Trade Agreement (ACTA) under negotiation outside WTO, while ACTA proponent countries sought to allay fears.

The WTO Council on Trade-Related Aspects of Intellectual Property Rights (TRIPS) met on 8-9 June. The TRIPS Council monitors the operation of the TRIPS agreement and specifically whether member countries are complying with their obligations associated with trade and intellectual property rights, according to the WTO website.

China and India requested the agenda item on enforcement issues for the Council session (IPW, WTO/TRIPS, 3 June 2010).

In the meeting, they voiced concerns about efforts by developed countries to introduce provisions into trade agreements that reach beyond the TRIPS agreement, referred to as “TRIPS-plus” measures.

India said in its statement, obtained by Intellectual Property Watch, that risks associated with TRIPS-plus measures include the possible disturbance of the balance of rights and obligations enshrined in TRIPS, and the possible trade-distorting effects of those measures. India also cited concern that plurilateral IPR negotiations like ACTA are bypassing the existing multilateral processes.

China, in its statement obtained by Intellectual Property Watch, also raised concern about the effect of TRIPS-plus measures. It called on members to ensure that measures and procedures to enforce IP rights do not become “barriers to legitimate trade,” and “shall also not inappropriately restrict the built-in flexibilities and exceptions” in TRIPS. Extensive protection also could lower the threshold for seizure of suspected pirated or counterfeit goods by custom authorities, it said.

Another concern of China was that the “delicate balance” in TRIPS resulting from “long-term arduous negotiations” would be at risk. TRIPS has sought to balance developed and developing countries, rights and obligations, technology innovation and transfer and dissemination of technology, it said.

Also of concern was the allocation of public resources when “many developing countries, including China, have put IP rights as a priority of their enforcement activities given the limited public resources available to them,” while “there are other social problems that may be more appalling than pirating and counterfeiting,” the statement said.

China’s Proposal

China asked that the TRIPS Council adopt several principles: that the IP chapter or provisions of plurilateral and multilateral agreements not be inconsistent with TRIPS, that the enforcement of IP rights shall not create distortive effects on legitimate international trade, and that “no WTO member … be restrained from the autonomy for utilising its public enforcement resource.”

From TRIPS-plus to Enforcement Trends

A developing country delegate said some developed economies, such as Switzerland, the EU and the US, opposed the agenda item as “TRIPS-plus” enforcement trends. TRIPS Council Chair Martin Glass of Hong Kong proposed to change the agenda item to “enforcement trends.” “The wording is broader, more neutral,” said a Swiss delegate, who insisted they did not oppose the original item.

The enforcement issue was discussed during the session but will not become a permanent agenda item, a WTO official said in a press briefing.

The Swiss delegate noted that developed countries raised the issue of enforcement for discussion within the TRIPS Council in recent years and it was opposed by some developing countries.

ACTA negotiating parties said ACTA would not conflict with TRIPS provisions, and no new trade barriers or change in the balance of rights and obligations would come from ACTA, according to the WTO official. The Swiss delegate told Intellectual Property Watch: “There is no reason for concern.”

The ACTA negotiating parties are: Australia, Canada, the European Union, Japan, Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland and the United States.

India was pleased with the ACTA discussion, a developing country official said afterward. It drew attention to the problem and put the ACTA proponents on the defensive, the official said.

US Industry: TRIPS a “Floor not a Ceiling”

Meanwhile, US industry sought this week to bring their view to the debate in the council after hearing India and China would raise doubts. ACTA is an effort by concerned countries to prevent counterfeiting and piracy that is “killing jobs, stifling innovation, harming consumers, and retarding their economic recovery,” a US Chamber of Commerce blog post said.

TRIPS is “a floor when it comes to IP protections,” not a ceiling, the post said, arguing that the TRIPS text states that TRIPS “establishes minimum levels of protection that each government has to give to the intellectual property of fellow WTO members.”

Developing countries are wary of being “pushed into” TRIPS-plus measures but “free trade agreements … are voluntary arrangements where each side gives and takes to improve its own net welfare; no one is ‘forced’ into an agreement that is detrimental to their interest,” it said.

TRIPS Public Health Waiver

Separately, Brazil, China, Cuba, Ecuador, India, Indonesia, Peru, and Venezuela asked that an agenda item be added on the implementation of the so-called paragraph 6 system.

Chairman Glass proposed that an in-depth review of the paragraph 6 be conducted during a one-day extended session during the next TRIPS Council in October, according to several diplomats. This proposal was agreed upon by members.

Paragraph 6 refers to the 2001 WTO Doha Declaration on TRIPS and Public Health. It provides a waiver allowing countries to avoid a WTO obligation stated in TRIPS Article 31(f) – reserving production of drugs under compulsory licensing to be predominantly for the domestic market – to facilitate access to cheaper generic medicines for countries without pharmaceutical production capacities.

The paragraph 6 mechanism has been used only once since it was agreed in August 2003 and adopted as a TRIPS amendment in December 2005 (IPW, WTO/TRIPS, 31 May 2010).

Developing countries have expressed doubts on the effectiveness of the paragraph 6 mechanism given its limited use so far, and have begun to seek a discussion on it, including outside experts such as a company that tried to use the system. Developed countries said that a single use did not prove the system was faulty as it was only one option in a range of possibilities to facilitate access to affordable medicines, according to the WTO report on the last TRIPS Council in March.

The one use involved Canada and Rwanda, which took years to implement and was said by the Canadian company involved to be very difficult. But at the last TRIPS Council meeting in March, Canada said that “any delays were not caused by the WTO system but, nor was much time taken up by Canada’s access to medicines regime,” according to the WTO website. “The total time needed to supply the medicines included a period when the Canadian company first had to search for a customer, and later Rwanda’s procurement procedure, which had to be respected,” the country said.

It is unclear how the paragraph 6 solution takes into account likely problems with least developed country procedures, such as procurement difficulties.

According to the WTO website, “if a country wants to be an ‘eligible importing member’ under the ‘Paragraph 6’ system it has to notify the TRIPS Council that it intends to use the system as an importer – unless it is a least-developed country, in which case no such notification is needed.” It has been raised in the past that this provision might discourage countries from using the mechanism (IPW, WTO/TRIPS, 1 October 2008).

Countries asking for an agenda item at this week’s Council were seeking a workshop to discuss the paragraph 6 mechanism before the annual review of the mechanism in the October TRIPS Council.

Some developed countries were reluctant to hold a workshop at this stage (though have not precluded it in future) in part because it would bring in outside experts – on an issue they felt is first the responsibility of governments. The European Union is not in favour of “subcontracting work to the outside that is the responsibility of members,” one diplomat told Intellectual Property Watch. There are cases of outside experts involved in WTO activity.

According to a developing country diplomat, an open workshop would allow all stakeholders to present their views: member states, generic companies, pharmaceutical companies, and NGOs working in the promotion of universal access to medicine, such as Médecins Sans Frontières.

The WTO said India said in the meeting that several countries have tried unsuccessfully to use paragraph 6. This assertion does not appear in the copy of India’s statement obtained by Intellectual Property Watch. But developed countries pressed proponents of a workshop for details and noted afterward that India did not take the floor to answer.

India told Intellectual Property Watch that it was misquoted as what was really said was that “there have been several efforts” made, not that several countries had tried the system. This also does not appear in the prepared statement of India.

The delegate said those efforts related mainly to the efforts of Médecins Sans Frontières (Doctors without Borders) trying to help the paragraph 6 implementation in its only use with Canada before getting weary of the process and deciding to bypass the mechanism and asking an Indian generic drug company to supply Rwanda with an AIDS medicine (IPW, WTO/TRIPS, 1 March 2010).

“We have heard some members, particularly Japan and Switzerland, saying that difficulties regarding the use of paragraph 6 system have not been demonstrated. That is precisely the reason why a dedicated workshop is being requested,” said India in its statement.

“It is important to know why it is not being used,” an EU delegate said, but “we are not in favour of a privatisation of the discussion.”

It is also essential to know why so many members have not ratified the amendment, if some countries have tried to use the mechanism, if it is true that even under compulsory licences some countries find drugs too expansive,” he said, adding that the last point was not an IP issue, although it should be addressed.

Another meeting prior to the next Council was considered, but members could not agree on the process or the inclusion of non-delegates, according to WTO. Glass as a compromise proposed to hold two meetings in September, during the WTO Public Forum, one with only delegates, and a public session during the public forum, but some developing countries, like India, did not agree, as they wanted the discussion to be held in the frame of the TRIPS Council, said the WTO.

“The WTO public forum is a public forum, we do not want this kind of exercise,” and Indian delegate told Intellectual Property Watch at the close of the meeting.

William New contributed to this report.