Non-Violation Complaint Moratorium Extended In Latest Hong Kong Draft

Hong Kong–The 17 December draft of the ministerial text at the ongoing World Trade Organization (WTO) meeting extends a freeze preventing WTO members from complaining about other members’ intellectual property rights practices even when they are not violating WTO rules.

There were no other significant changes to the draft text related to intellectual property rights. The final draft ministerial text is expected to be published later on 18 December.

The non-violation issue is linked to the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and has been on the WTO agenda since 1995 when TRIPS came into force.

At the time TRIPS negotiations were completed, most WTO members argued that they were not ready to make apply non-violation complaints as the laws were so new at that point. This led to a moratorium of five years which has subsequently been extended.

The latest draft published at the ministerial on 17 December re-states the words in paragraph 43 from the 7 December draft, only with some brackets removed. It means that the TRIPS Council will examine the scope and modalities for such complaints and make recommendations to the next ministerial session within two years. It also states that “in the meantime, members will not initiate such complaints under the TRIPS Agreement.”

The United States and Switzerland have pushed for ending the moratorium. A source noted that the United States probably had not wanted to push the issue at this ministerial, which has heard a lot of talk about development, as it was a “walk-away issue for developing countries.” The US was not expected to push it, the source said.

Rather, the US wanted to keep the issue as a bargaining chip, and “hold it inside their sleeves,” the source said. Another source indicated that the longer the issue would be left on the agenda, the harder it would be to get it off.

No Upgrade For CBD Issues

The US could, however, have traded a deal on non-violation complaints with a deal related to the discussion of the relationship of TRIPS to the Convention on Biological Diversity (CBD), as these issues had the “same character,” the source said.

Brazil and India took the lead at the ministerial for including language on the relationship between the TRIPS agreement and CBD, with particular focus on disclosure. However, the revised draft has exactly the same language on this issue (paragraph 37 on “implementation”) as the 7 December draft.

The provision requests the director general “to continue with his consultative process,” and report to each regular meeting of the Trade Negotiations Committee and the General Council, with no specific deadline for when the council shall review progress. There is thus not a more specific negotiating mandate than before, a source said.

The source noted, however, that the fact that neither the non-violation complaints issue nor the CBD issue has moved in the latest draft could indicate that a deal had been struck on these issues.

There is also a new sentence under paragraph 42 of the draft relating to paragraph 19 of the Doha Declaration, which was adopted at the 2001 WTO ministerial in Doha, Qatar. The sentence could be problematic as it could pave the way for issues related to TRIPS and CBD, traditional knowledge and folklore to be “taken out of the single undertaking,” a source said. The reason is that the General Council is requested to report to the next ministerial, which may not necessarily take place before the conclusion of the round.

However, the fact that paragraph 37 mandates further consultations on the CBD issues with firm reporting requirements and suggests a deadline for action, “may be looked at as a positive accomplishment for countries requesting new rules,” Frederick Abbott, professor of international law at the Florida State University College of Law, said. “At the very least, the issue is placed on the same process level as negotiations on GIs,” he said.

Abbott told Intellectual Property Watch that the move was a “positive development for developing countries” because non-violation complaints in TRIPS would add uncertainty and the potential for expanded dispute settlement threats.

But he said that the US had probably agreed to extend the moratorium, at least in the revised draft, in return for concessions in other areas. In particular, he referred to the extension of a moratorium keeping members from imposing customs duties on electronic transmissions, referred to in paragraph 44 of the draft.

Abbott noted that this had been part of the bargain the US had agreed to in the past couple of ministerials.

The issue had not moved forward since the moratorium was imposed as the countries opposing it were not interested in engaging in substantive discussions since they reject non-violation complaints in principle, and there was no reason to believe that it would move forward now either, Abbott said.

He said that Article 64.2 of the TRIPS agreement provided that a moratorium on application of non-violation complaints to TRIPS-related issues would remain in effect for the five years commencing 1 January, 1995. Article 64.3 said that during this time countries would examine scope and modalities and make recommendations or extend the moratorium, he added.

Any recommendations or extension could only be adopted by consensus. However, the relationship between the two paragraphs was deliberately ambiguous (as the non-violation issue was highly contentious during the Uruguay Round), and the provisions do not say anything about what would happen if there was no agreement on scope and modalities, Abbott said. “If there was no express agreement to extend the moratorium, the Appellate Body might need to sort out the result, but a dispute settlement proceeding might raise serious WTO constitutional issues regarding which body has authority to make rules,” he added.

Industry and Benefit Sharing

The American BioIndustry Alliance (ABIA) says the issue of access and benefit sharing (ABS) is an important industry priority.

“The American biotechnology industry seeks to develop positive alternatives, outside the area of IP, to ensure greater technology transfer, capacity building, and front-loaded benefits to WTO members and indigenous communities,” Susan Finston, executive director of ABIA, told Intellectual Property Watch.

“We will continue to work towards this result in the ongoing CBD talks resuming in January 2006 in Granada, Spain, under the broader CBD mandate to develop an international ABS regime.”

In the meantime, ABIA supports the language in the current ministerial draft declaration, which continues discussion of the relationship between TRIPS and the CBD in the WTO, Finston said.

GIs Must Be Part Of Agriculture Result, EU Requests

Before the ministerial, there was some hope that there could be some movement on the issue of geographical indications (GIs) in terms of a register for wines and spirits, mandated in article 23.4 of the TRIPS Agreement and paragraph 18 of the Doha Declaration. The register is noted in paragraph 27 of the ministerial draft under “TRIPS negotiations.”

Another GI issue is the extension of GI protection to products beyond wines and spirits provided for in Article 23 of the TRIPS agreement. This is referred to in paragraph 37 of the ministerial draft under “implementation” and is listed as a “outstanding implementation issue” under paragraph 12(b) in the Doha Declaration.

Neither of these issues were moved forward in the revised draft from the 7 December draft. The consultative process on the issue of GI extensions is to continue and on the register, members agree to intensify negotiations, according to the draft.

In a speech on 17 December, however, after the revised draft had been published and before the last night of negotiations, the European Commissioner for Trade Peter Mandelson made a strong statement on GIs. “All we see on this important issue for Europe is treading water or backtracking. If we are to arrive at a result in agriculture, this must be part of the package. This is indispensable to the EU,” Mandelson said.

On the issue of TRIPS and public health (paragraph 38 of the draft), the draft welcomes the amendment agreed to on 6 December, which made permanent a 30 August 2003 waiver under which countries can export cheaper generic medicines to countries without or with inadequate production capacity (IPW, WTO/TRIPS, 6 December).

On 17 December, coinciding with the end of the ministerial, the US became the first WTO member that officially accepted the amendment, encouraging other members to do the same.

On the same day, a coalition of non-governmental organisations, including the Consumer Project on Technology, called for a WTO moratorium on regional and bilateral trade agreements and policies undermining access to health.