TRIPS Council Debates: Tobacco Packaging, Non-Violation Disputes, Innovation, Health Waiver, UNCTAD

This week’s meeting of the World Trade Organization body governing intellectual property issues addressed a long agenda, reflecting continued divergence on regular items, such as complaints that do not involve breach of a WTO agreement, a health waiver, and sustained discussions on plain packaging for tobacco products.

The WTO Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS) was held from 28-29 October. Discussions revealed firmly unchanged positions even as decisions are needed, such as on the extension of the moratorium on non-violation disputes relating to TRIPS set to expire by the next WTO ministerial meeting in 2016.

Least-developed countries also requested a discussion at the next TRIPS Council of an extension of the transition period allowing them not to enforce IP rights on pharmaceutical products. The current extension runs until 1 January 2016.

In addition, this session included a discussion proposed by the European Union, Switzerland and the United States on innovation entitled, “Intellectual property and innovation: promoting awareness; case studies.” And it saw an item put forward by Ukraine on “concerns with respect to measures related to plain packaging of tobacco products and their compatibility with the TRIPS Agreement.”

Tobacco Producers Ask Others to Wait on Plain Packaging

Ukraine (DSB Case DS434), along with the Dominican Republic (DS441), Cuba (DS458), Honduras (DS435) and Indonesia (DS467) have challenged Australia’s legislation on plain packaging for tobacco products at the WTO Dispute Settlement Body (DSB). The case is ongoing (IPW, WTO, 26 April 2014). Here is a timeline [pdf] provided by the WTO.

According to sources, Ukraine and the other complainants asked that countries considering plain packaging legislation, such as New Zealand, Ireland, the United Kingdom and France (IPW, Public Health, 25 September 2014), wait until the WTO panels have decided on their case. Ukraine also cited Finland, according to sources. The five cases are being handled in a single process, although remaining separate, with five panels but with the same panellists (IPW, WTO/TRIPS, 26 April 2014).

According to a WTO official briefing journalists yesterday, the complaint under TRIPS against Australia is about the inability of companies to use brand logos or trademarks, and particular fonts. The five countries, he said, announced that the panels examining the disputes would not be able to publish their conclusions at least until the second half of 2016.

The five countries said that plain packaging is excessive and fails to reduce smoking, claiming new studies show that the plain packaging legislation in Australia has in fact encouraged smokers to switch to down-market or smuggled products rather than reducing smoking, the WTO official reported, adding that the five countries were supported in this session by Nicaragua and Zimbabwe.

Ukraine said that if individual trademarks had been assessed and found to be encouraging smoking that might have justified some action, but the blanket ban on logos and trademarks is a violation of IP rights, the WTO official reported.

Australia declined to comment on the dispute but defended plain packaging as legitimate, according to the official, and said plain packaging was supported by institutions such as the World Health Organization and a large body of peer-reviewed research. Canada, Norway, New Zealand, Uruguay, and the European Union supported plain packaging.

The WHO, in its statement [pdf], commented on the tobacco epidemic, in particular in developing countries, the economic cost of tobacco, and detailed relevant provisions in the WHO Framework Convention on Tobacco Control on the issue of standardised packaging of tobacco products, including plain packaging.

Innovation Cases Presented; India, Brazil Doubtful on IP Role

According to several sources, a number of developed and developing countries presented their national experiences in promoting innovation. The WTO official specified that the focus was on how “universities, other institutions, inventors and companies can work together to produce goods and services that are socially and environmentally useful, including for developing countries.”

This agenda item was linked to an innovation fair organised at the WTO by Switzerland, the EU, the United States and Mexico (IPW, WTO/TRIPS, 29 October 2014).

According to the official, “India and Brazil focused first on what they considered to be the cost of using patents, profit and monopoly rights as an incentive to innovate, before also describing their own promotion programmes.”

Non-Violation Complaints and TRIPS Flexibilities

According to several sources, the discussion on non-violation disputes was lengthy, with many countries contributing to the debate.

Non-violation complaints arise in the WTO “when one country challenges the legality of another’s actions, if it feels it is deprived of an expected benefit, even if no actual agreement or commitment has been violated,” said the WTO official. Such complaints are allowed for goods and services, but not intellectual property. Members have so far adopted a moratorium for intellectual property disputes, extended several times (IPW, WTO/TRIPS, 12 June 2014).

At the last meeting of the TRIPS Council, the US tabled a document detailing reasons why they think non-violation complaints should be allowed under TRIPS (IPW, WTO/TRIPS, 11 June 2014). Switzerland is the only other country sharing this view, according to several sources. According to the WTO official, both countries argue that a consensus is only needed to extend the moratorium, and it otherwise expires and such complaints are allowed.

Several countries commented on the US proposal, and reiterated their position that non-violation complaints are not applicable in the context of the TRIPS. In particular, in its statement, Brazil referred to a joint communication [pdf] dating back to 30 October 2002 in which Argentina, Bolivia, Brazil, Colombia, Cuba, Ecuador, Egypt, India, Kenya, Malaysia, Pakistan, Peru, Sri Lanka and Venezuela laid out several concerns about non-violation complaints under TRIPS.

The Brazilian delegate said that contrary to the view expressed in the US document, the TRIPS Agreement is different from a market access agreement. “Unlike the GATT and the GATS, the TRIPS Agreement does not involve an exchange of concessions, and it remains unclear how non-violation complaints would apply to minimum regulatory standards that protect private property rights,” he said, according to his statement.

Brazil also argued that “non-violation complaints would require one WTO Member to compensate another for measures that adversely affect foreign holders of intellectual property rights and that were not foreseen during the Uruguay Round.”

“Such an approach … may undermine the Agreement’s flexibilities, including in the area of public health, and could affect the enjoyment of WTO Members’ sovereign right to develop new laws to protect the public interest,” he said.

This was supported by India, which remarked that “non-violation complaints can upset the delicate balance of rights and obligations in the TRIPS Agreement.”

“This can also limit use of the flexibilities inherent in the TRIPS Agreement to secure objectives relating to public health, nutrition, transfer of technology and other issues of public interest in sectors of vital importance to socio-economic and technological development,” the Indian delegate said in his statement.

Non-violation complaints under TRIPS could “undermine regulatory authority and infringe sovereign rights by exposing to challenge any measure that affects intellectual property and that could not have been foreseen at the time of the Uruguay Round,” India said.

Bangladesh also said TRIPS is not a market access agreement, rather it was designed to provide a minimum level of territorial protection for IP by WTO members. The country said it supports a continued moratorium as non-violation complaints under TRIPS, in which the nature and scope of obligations allows members to determine the level of protection according to their legal system and practices, would create “huge legal uncertainty” in the system.

The US paper argues that the TRIPS agreement is indeed a market access agreement and details provisions of the WTO agreements relating to non-violation complaints, such as Article XXIII of GATT 1994 (Nullification or impairment), Article 64 of TRIPS (Dispute settlement) and articles 3.2 (General provisions) and 26 (Non-violation complaints) of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU).

Other countries taking the floor against non-violation cases under TRIPS included: Venezuela, Cuba, Ecuador, China, Argentina, Bolivia, Chile, the African Group, South Korea, Taiwan, Canada, New Zealand, Egypt and Nepal, the WTO official said.

TRIPS Health Waiver: a Perfunctory Review?

This session of the TRIPS Council also included the annual review of the so-called “paragraph 6” waiver of TRIPS rules, which is a mechanism through which governments can export more pharmaceuticals produced under compulsory licences, “bypassing some patent rights, for pharmaceuticals to be exported to countries that cannot make the medicines themselves,” according to the WTO official. Paragraph 6 refers to the 2001 Declaration on TRIPS and Public Health.

The mechanism has been only used once so far. The paragraph 6 mechanism has yet to be considered a permanent amendment to TRIPS since two-thirds of the WTO membership has to accept the amendment (WTO has 160 members). India said the fact that only 53 members have currently accepted the amendment “is not a positive signal.”

“The TRIPS Council has been reviewing the Paragraph 6 Mechanism for the last several years and my delegation feels that the review mechanism has become ritualistic in nature and it will not serve any purpose if we go on repeating the similar questions and get similar replies as summarized by the trilateral study done by the WTO, WIPO [World Intellectual Property Organization] & WHO,” the Indian delegate said in his statement. An IP-Watch story on that trilateral study is here (IPW, Public Health, 6 February 2013).

India called for the involvement of several stakeholders for a more effective discussion. The idea of a multi-stakeholders’ platform has been around for some years (IPW, WTO/TRIPS, 10 June 2010), and opposed ever since by some developed countries. Brazil supported India’s idea to “expand the discussion on the subject of the effectiveness of the paragraph 6 system to a broader public of stakeholders. A workshop would be a good initiative in this direction,” the Brazilian delegate said.

Taiwan in its statement remarked that “the TRIPS Agreement does not and should not prevent Members from taking measures to protect public health and, in particular, to promote access to medicines for all,” and encouraged member states to notify their acceptance of the paragraph 6 system.

According to sources, some developed countries said patents are only part of the access to medicines discussion. The WTO official said that those countries said they had asked countries complaining about the difficulty of applying the paragraph 6 mechanism to provide details about the problems they are facing, to no avail. According to the WTO official, countries opposing a workshop, such as the US, Canada and Japan, said the discussion should remain a matter for the TRIPS Council as long as this information is not available.

The WHO, according to its statement [pdf] on this item, presented a number of its technical cooperation activities [pdf] in the area of public health and intellectual property, in particular for hepatitis C and HIV treatments. The WHO remarked, “Countries should prioritize public health interests in the formulation of national policies and legislation on trade and intellectual property.”

Separately, Bangladesh, on behalf of the Least Developed Countries group, asked that the next meeting of the TRIPS Council, likely in February 2015, discuss the extension of their 2016 deadline on pharmaceutical patents. [corrected]

UNCTAD on Technical Cooperation

Separately, the United Nations Conference on Trade and Development (UNCTAD) presented its work in the area of IP rights and development during this session of the TRIPS Council.

The UNCTAD representative presented the organisation’s technical assistance to developing countries in the areas of investment, trade and IP. In particular, he said that since 2006, UNCTAD “has been implementing a programme on IPRs and local pharmaceutical production and supply capacity of essential medicines, with the financial support of Germany and originally the United Kingdom.”

“The overall objective of the programme is to assist developing countries and least-developed countries to establish domestic intellectual property regimes that facilitate increased access to affordable medicines; and, where feasible, create local or regional pharmaceutical production and supply capacities, in cooperation with investors,” he said in his statement.

UNCTAD also provides research and policy analysis, and in 2014 published a handbook on the interface between global access and benefit sharing rules and IP, entitled, The Convention on Biological Diversity and the Nagoya Protocol: Intellectual Property Implications [pdf], he said.

Image Credits: Wikia