New WTO Draft Modalities Text On IP Issues Gathers Wider Support

[Note: IP issues may be the subject of meetings between ministers and WTO DG Lamy over this weekend, according to sources.]

By Kaitlin Mara and William New
A new draft of proposed modalities for negotiating three intellectual property issues at next week’s World Trade Organization ministerial shows that proponents have gathered the support of the majority of developing country members. The addition of regional groupings such as African, Caribbean and Pacific developing nations in league with Brazil, China, India and Europe creates a formidable bloc calling for the issues to be on the table.

The new draft, dated 17 July, reflects changes over the previous version that address developing country concerns. There is a new opening paragraph calling for the issues to be included in the ministerial in order to pave the way for negotiations. New language also appeared on the process of negotiating the protection from misappropriation of their genetic resources and the necessity of special treatment for poorer nations.

The new text is available here. The mini-ministerial begins on 21 July at WTO headquarters in Geneva.

At issue are: creation of a mandated register on geographical indications – product names associated with a place and characteristics – for wines and spirits; extension to other products of the higher-level GI protections currently enjoyed by wines and spirits; and an amendment to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) to require the disclosure of origin of traditional knowledge and genetic material in patent applications, intended to bring TRIPS in line with the UN Convention on Biological Diversity.

The new document was submitted for consideration by ministers “in order to have modality texts that reflect ministerial agreement on the key parameters for negotiating final draft legal texts” on the three IP issues as a part of the all-inclusive negotiating process, called “the single undertaking.” The text has garnered significant support since the last draft, adding eleven new developing countries plus the Africa, Caribbean and Pacific Group (with some 70 WTO members) and the African Group as supporters.

The new text comes at a particularly delicate time, as high-level officials begin arriving in Geneva for next week’s ministerial, and the fate of the round of trade liberalisation negotiations launched at Doha, Qatar in 2001 hanging in the balance. While rules on agricultural and non-agricultural market access will continue to be the primary focus of the negotiations, there are indications that IP issues could tip the scales one way or the other.

The GI extension and CBD issues do not have a clear mandate to be included in these negotiations, and opponents have signalled a firm unwillingness to consider them. WTO Director General Pascal Lamy has made cautionary remarks in recent weeks over the ability to ask ministers to negotiate on issues with such deep differences.

Opponents include Argentina, Australia, Canada, Chile, Japan, New Zealand, and the United States. Senior officials of key members from both sides of the issues met briefly on 16 July with little progress, according to sources. Meanwhile, efforts to gain support have continued informally day and night.

Changes in New Draft

The new text may signal that agreement by ministers to negotiate on GI extension and the TRIPS amendment in the future may satisfy proponents.

In addition to the opening paragraph, there are two changes from the prior draft, dated 30 June (IPW, WTO/TRIPS, 15 July 2008) that represent key conciliations on issues dear to developing and least developed countries, and which may explain why the new proponents were enticed to join.

The original draft modalities were led by the European Union, India, Brazil, and Switzerland, according to the original draft. There were indications of some internal disagreement on the draft modalities among EU members. India and Brazil have traditionally been strong proponents of the CBD amendment, and India has acknowledged that it could benefit from geographical indications. Europe has been a major driver of the push for a GI register with legal consequences of registration, and of the push for GI extension. Europe has indicated in the past a willingness to discuss certain provisions related to the CBD.

Access and Benefits as Integral

The first significant change is under the so-called CBD amendment, which now proposes negotiating prior informed consent and access and benefit-sharing (ABS) “as an integral part of the disclosure requirement and post-grant sanctions.” The prior draft modalities had required definitions on “the nature and extent of a reference” to prior informed consent and ABS, and had allowed “additional elements” to be negotiated, but had not specifically named prior informed consent and ABS as points of negotiation.

Details of a CBD amendment have been debated, but the most widely accepted provision is on disclosure of origin, which would require patent applications to detail the origins of genetic resources and traditional knowledge used in innovations. This set of draft modalities specifies that disclosure of origin means “country,” though at least one member had suggested that the ‘country’ specification should be removed from the document.

The strongest proponents of the CBD amendment, such as India and Peru, have called for two additional provisions to be added: one to ensure the prior informed consent of communities where genetic resources or traditional knowledge are found, and one to ensure access and benefit sharing with the communities. These provisions are most strongly supported by developing countries, where assurance of fairly sharing in any benefits in particular is often viewed as a key trade-off for the use of their genetic resources.

Post-grant sanctions likely would allow a granted patent to be overturned for failing to adequately or accurately disclose origin, or ensure consent and benefit-sharing.

Special Treatment

The second major change is an additional article applying to all three TRIPS issues that allows for “special and differential treatment” under the eventual amendments. Special and differential treatment is a common provision under WTO rules that acknowledges the differing economic and institutional capacities in developing and least developed nations. Generally, such countries are given more time to implement agreements, or offered technical assistance or technology transfer in order to aid in the implementation process.

The new draft modalities indicate that special and differential treatment “shall be an integral part of negotiations in the three areas above, as well as special measures in favour of developing countries and in particular least developed countries.”

This clause might ease some of the concerns of developing nations that have supported the CBD amendment, but been more hesitant about GI extension and a mandatory GI register.

A view often expressed by such nations is that Europe has the vast majority of globally recognised GIs. As such, developing nations with few GIs of their own – are often concerned that such protection will mandate they give extra protection to imported products that could compete with their home-grown industries, without getting an equal benefit in return.

Signers to the document are: Albania, Brazil, China, Ecuador, European Union, India, Indonesia, the Kyrgyz Republic, Macedonia, Pakistan, Peru, Sri Lanka, Switzerland, Thailand, Turkey, the ACP Group and the African Group.

Kaitlin Mara may be reached at kmara@ip-watch.ch.
William New may be reached at wnew@ip-watch.ch.