Push For IP Deals Continues In Lead-Up To WTO Ministerial

Issues under negotiation at the World Trade Organization committee responsible for intellectual property issues are somewhat stalled, despite – or because of – their ties to broader issues being negotiated at the WTO, sources in Geneva say.

It remains to be seen which, if any, intellectual property-related issues end up being negotiated at the December WTO ministerial in Hong Kong, as the agenda is a subject of ongoing debate at the WTO. But some WTO members are pushing hard for the negotiation of intellectual property issues they see as having gained momentum during the summer.

The top intellectual property-related candidates for discussion in Hong Kong are a registry of geographical indications (which involve naming rights over items like some foods derived from place names), an extension of geographical indications beyond wines and spirits, and the requirement to disclose the origin of material or traditional knowledge in patent applications.

Those issues and others were last formally discussed at the 14-15 June Council on the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which did not achieve any major breakthroughs but saw progress on some issues, according to sources.

The TRIPS Council has a full plate of issues, all mandated by the declaration of the last WTO ministerial, held in Doha, Qatar in November 2001. They include: an amendment allowing developing countries to import generic drugs, and the extension of geographical indications. And the Doha ministerial declaration called for a registry for geographical indications to be negotiated. In addition, the TRIPS Council is debating three linked items: the relationship of TRIPS to the Convention on Biodiversity; a review of TRIPS Article 27.3(b) on patenting of plants, animals and microorganisms; and the protection of traditional knowledge and folklore. The disclosure of origin discussion relates to these items.

All of these issues have been discussed in two contexts, according to WTO sources, as part of the regular TRIPS Council process or in consultations on “outstanding implementation,” which are unresolved issues to be addressed possibly as part of the WTO Doha Development Agenda. The disclosure proposal and the geographical indications extension are considered outstanding implementation issues.

Also in the discussion is a European proposal to bring a list of products back under the geographical indications category, a notion referred to as “clawback.”

The disclosure of origin issue “is picking up a lot of momentum in the WTO, and developing countries expect a positive outcome in the Doha Round,” a developing country official said in July. “The fact of the matter is, however, that discussions on disclosure in the WTO today are far more advanced and mature than in any other international fora” (such as the World Intellectual Property Organisation [WIPO]).

Time For Horse-Trading?

For progress to be made on geographical indications (GIs), there is potentially a trade-off with agriculture, the sector which is considered the linchpin to success in Hong Kong. The European Union is seeking progress on geographical indications but is being asked to further liberalise its agricultural sector, and may force a trade-off.

But sources said horse-trading may also take place among WTO members who are seeking to get their issues into the ministerial mix. In this theory, a deal may be discussed between countries rich in biodiversity, such as the Andeans, Brazil, or India, who are seeking a system for requiring disclosure of origin in patent applications, and the European Union, which wants the extension of geographical indications to other products. Switzerland also wants the GI extension. And Europe wants a mandatory registry for GIs.

The United States has opposed the GI and disclosure of origin proposals and would stand to lose should such a deal be made, according to sources. “New world” countries such as Argentina, Australia, Canada, Chile, New Zealand and the United States have opposed the mandatory GI registry, suggesting a voluntary one instead. They also oppose the EU clawback proposal. Latin American countries generally view the GI extension as an additional cost rather than a benefit. Brazil has shown some opposition to the GI extension but perhaps could see it as a cost of obtaining progress on the disclosure of origin, a developing country official said.

In a 13 June consultation on the relationship between TRIPS and the Convention on Biological Diversity, Brazil, China, India, Peru and other developing countries pressed for the issue to be included in Hong Kong, according to a diplomatic source. The United States, along with Japan and Korea, repeated their opposition to a disclosure requirement but expressed willingness to substantively discuss it. The European Union and Switzerland cited their existing proposals at WIPO on disclosure but said they were willing to discuss it in the TRIPS Council.

Knowledgeable officials from the European Union and several biodiverse developing countries could not be reached for comment by press time.

What might be agreed on these areas, if anything, is also a point for speculation. The GI registry is already a negotiation. But the GI extension and disclosure issues are not. The GI extension enjoys a special status that falls between negotiation and implementation, and disclosure supporters might also want a special track. One developing country official said possible outcomes could include: no change, which is unlikely given the insistence of the demander countries; a deal is reached in Hong Kong to elevate the profile of the issues in some way, possibly to give them a negotiating mandate or a work programme; or an agreement is made to keep the current status until the end of the Doha Round, which is being targeted for the end of 2006.

The disclosure of origin issue has been extensively debated in recent months, with three new papers submitted to the TRIPS Council in June – one by the United States arguing that disclosing source material would introduce “significant uncertainties” into the patent system; one from Peru, which references its own and other experiences to show support for disclosure; and one from Switzerland, which raised a series of questions concerning other proposals.

The U.S. proposal also addresses proposals by Brazil and India point by point. In the June council meeting, Brazil and India gave extensive statements in support of disclosure requirements. India returned the point-by-point argument against the U.S. proposal. Brazil argued that, “It is the firm view of developing countries that disclosure of source and country of origin of biological resources and evidence of prior informed consent and fair and equitable benefit sharing in a patent application would play a significant role in preventing bio-piracy and misappropriation, apart from ensuring that all contributors to innovations are adequately rewarded.” It went on to list reasons why this would be advantageous. Brazil also argued that changes elsewhere such as in WIPO agreements would not be sufficient to address the WTO’s mandate or the problem itself.

Separately, another IP issue that could come up in Hong Kong is whether to extend the current moratorium on so-called non-violation complaints in TRIPS. Countries are permitted to bring complaints to the WTO Dispute Settlement Body if they did not receive an expected benefit due to an action by another government or other reason, even if the action does not violate a WTO agreement. TRIPS previously banned such non-violation complaints by stating they could not be brought during the first five years of the agreement (until 1999). It was subsequently extended.

TRIPS and Public Health Amendment Sought By October

A simultaneous issue is an effort to amend TRIPS to make permanent a provision allowing poor countries to import drugs produced under compulsory licenses if they lack domestic production capability.

At its 27 July meeting in Geneva, the WTO General Council heard a report from TRIPS Council Chair Choi Hyuck, the Korean ambassador. He held private consultations with members during July but did not have any breakthroughs to report. Instead, he said there is hope for an agreement by October. The next TRIPS Council meeting is 25-26 October.

Currently countries that declare their need to break patents for public health reasons but cannot produce their own generic versions may import them under a waiver agreed to on 30 August, 2003. But the waiver also mandated that WTO members try to make a permanent change to TRIPS within six months, and many members, led by some developing countries, are still pushing to get it done. The 2003 waiver also stated that the issue would not be formally included in the Doha Round negotiations.

The 2003 agreement also contained a statement by the General Council chairperson that has proven to be a sticking point in finalising the amendment. The statement was intended to appease governments concerned that the decision might be abused (for instance, for commercial purposes instead of public health) and undermine patent protection. The statement highlights limitations of the provision, and restates the list of developed countries that agreed to opt out of using the system as importers, and those who agreed to use it only for “extreme urgency.” The statement also includes best practices used by business to minimise diversion of cheaper products.

Earlier this year, the African Group put forward a proposal that would make “technical” changes to the waiver and make it a permanent amendment. At the March TRIPS Council meeting, the African Group argued that chair’s statement should not be part of the amendment nor a footnote, but suggested it could be read out at the time of the amendment. According to a WTO official, Kenya said in the late July General Council that it was “deeply disappointed” at the inability to agree on the amendment so far. Cuba supported Kenya and called for a multilateral solution.

EU Issues Proposal On Public Health Amendment

A long-awaited EU proposal on the amendment was circulated in late July. In June, EU officials said it would be a “technical conversion” into an amendment of the 2003 waiver and therefore would differ from the African proposal, which some have argued goes beyond technical changes. The EU proposal argues that “the link, including the legal relationship, between the decision [of 30 August] and the [chairperson’s] statement should be preserved. It therefore calls for the chairperson to reiterate the statement at the time of the amendment’s adoption. It also calls for confirmation, upon the amendment’s adoption, that the chairperson’s statement is a “shared agreement.”

Despite efforts by some governments to reach an agreement to amend TRIPS before the summer break, a WTO official said Choi told the General Council “some more time is still necessary before the (TRIPS) council will be in a position to make a recommendation” (to the General Council).

“I am hopeful that we might be able to make progress soon after the summer break,” Choi said. “The TRIPS Council will revert to this matter at its meeting in October.”

At the June TRIPS Council meeting, Canada and India joined Norway in announcing they have completed changes to their national laws to implement the 30 August waiver.

EU Enforcement Proposal Raises Concerns

Meanwhile, while it may not factor directly into the pre-ministerial deals, the European Union caused a stir in the Geneva intellectual property community with a proposal at the June TRIPS Council meeting calling for a review of compliance with WTO intellectual property rights enforcement provisions.

In its proposal (IP/C/W/448), the EU states that “noteworthy progress” on intellectual property rights (IPR) protection has been achieved worldwide since TRIPS was adopted in 1994. But it argues that while most WTO members have implemented or are implementing the TRIPS agreement – which contains enforcement provisions – the volume and value of IPR violations “has known a dramatic increase” over the last years. Violations, in particular counterfeiting and piracy, have reached “industrial proportions” and now represent a “considerable share” of the global economy, it said.

This “contradiction” led the EU to suggest that the TRIPS Council “carefully examine” the compliance of members with the TRIPS enforcement provisions. The EU proposal breaks out the types of involvement in violations by source countries, transit countries and target countries. This echoes the approach taken by the Office of the United States Trade Representative in its annual “Special 301” list of problem countries it deems not to be sufficiently protecting U.S. IPRs.

The EU proposal suggests the TRIPS Council complement the work of a committee of the World Intellectual Property Organisation by identifying where the problems are and recommending improvements. These might include benchmarks to evaluate progress by national governments, or suggesting best practices, and would allow better targeting of technical assistance in intellectual property. Issues suggested to receive “special attention” include procedures to preserve evidence, methods for calculating damages, civil and criminal sanctions, the right to information, customs measures and more.

The EU cited the TRIPS provision on enforcement under which governments are expected to ensure enforcement procedures are “available under their law so as to permit effective action” against violations. It added that under TRIPS, the council has the job of monitoring compliance with the agreement. The EU proposed the issue be addressed in the “forthcoming months” and asked that it be placed on the agenda of the council’s next meetings.

In the June TRIPS Council meeting, the proposal received support from Australia, Canada, Japan, Korea, Mexico, Switzerland and the United States. Opposition from countries who argued the proposal would overburden the council and exceed its mandate included: Argentina, Bolivia, Brazil, Cuba, India, Malaysia, Peru, the Philippines, and Venezuela.