WIPO Committee Narrows Definition Of Development Expenditure

After four years of talks, committee members at the World Intellectual Property Organization yesterday agreed on a definition for what constitutes an budget expenditure on development in the UN agency.

“The idea is to have more transparency in the way WIPO resources are directed toward development,” a developing country source told Intellectual Property Watch after the agreement. “With the new definition, we get more clarity in how activities are distributed in the budget of WIPO.”

The WIPO Program and Budget Committee (PBC) is meeting from 13-18 September. All meeting documents are available here.

The agreed definition [pdf], if approved by the October WIPO General Assemblies, is expected to take effect in the following biennium, 2018/2019.

But it was assessed that if it were applied now, it would reduce the secretariat’s proposed spending allocated for development in the 2016/2017 biennium budget by about 2 percent of the total budget.

According to a secretariat worksheet (see image), the total budget for the 2016/2017 biennium would be over CHF 700 million. Under the existing definition, WIPO would consider 21.4 percent of that, or CHF 151.5 million to be the “development share.”

Under the new definition, that amount would drop to 19.5 percent of the total, or CHF 137.8 million.

The worksheet shows areas currently counted as development expenditures that would not be in the future, such as spending for cooperation with other international organisations under the WIPO “Respect for IP” division, which works on IP rights enforcement. The worksheet goes through the various strategic goals of the proposed WIPO budget for the next biennium, based on document WO/PBC/24/11.

The development expenditure definition became an issue several years ago when some countries viewed WIPO as claiming large expenditures on development-related activities to a greater degree than it should have.

The definition clarifies that such expenditures should be for expenses for developing countries only, for which an equivalent amount does not go to developed countries. It should include activities that help developing countries benefit from the IP system and reduce the knowledge gap.

It also sets out a list of activities that can be considered to contribute toward achieving those ends. The list includes development of national IP strategies and policies; and of national legislative frameworks that promote a “balanced IP system”; support for engagement of developing countries in global and regional decision-making and dialogue on IP; support for IP users in developing countries; training and capacity-building; and promotion of innovation, creativity, technology transfer, and access to knowledge and technologies in developing countries.

Developed countries were satisfied, a source said, that a note was added stating that the definition does not include lost revenues from giving discounted fees to developing countries for using WIPO-managed treaties such as the Patent Cooperation Treaty (PCT).

Indian Ambassador Ajit Kumar, who signalled the importance of this PBC meeting to his country by being possibly the only ambassador to participate in the proceedings and not at the podium, stressed the importance of the development expenditure issue in his remarks, available here.

“As brought out in the last Audit report, the present definition of development expenditure is silent about the nature of development activities covered and their intended impact on the development of countries through IP tools,” Kumar said. “While assessing development shared under substantive programs, External Auditor has found that regular expenses, like traveling allowance and daily subsistence allowance, were also shown as development share.”

“My delegation reiterates that there should be a precise definition of development expenditure,” he added, “and WIPO management needs to formulate a method for determining the development share under each program and activity so that effectiveness of the mainstreaming exercise can be assessed objectively by Member states.”