G8 Summit Strengthens IP Protection; May Undercut Compulsory Licensing

By Monika Ermert for Intellectual Property Watch, and Tove Gerhardsen
The strengthening of intellectual property rights protection in “a new dialogue” between Group of 8 and emerging economies moderated by the Organisation of Economic Cooperation and Development (OECD) and the possible establishment of an “IPR Task Force focussing on anti-counterfeiting and piracy” are among decisions to be taken at the G8 Summit in Heiligendamm, Germany.

Other decisions on IP according to the final declaration on “Growth and Responsibility in the World Economy” published this evening by the German G8 Presidency are “new guidelines for technical assistance on intellectual property rights protection” and “guidelines on customs and border enforcement cooperation designed to strengthen cooperation among national customs and law enforcement administration.”

Health care and funding in Africa joined IP protection on the agenda for the 6-8 June summit that started Wednesday with an informal dinner. US President George Bush and German Chancellor Angela Merkel after their first bilateral discussion referred to the fight against malaria and HIV/AIDS as a top priority.

Non-governmental organisations gathered in nearby Rostock and Kuehlungsborn are highly critical of the approach that is being taken, they told Intellectual Property Watch. They were concerned about the unilateral push for ever more “strengthening” of IP, said a spokesperson from the organisation Médecins Sans Frontières (MSF) in a first reaction to the final declaration. Intellectual property protection has not provided the innovation needed to address diseases in the developing world, MSF warned at the summit.

G8 leaders are holding up intellectual property protection as the only way to foster innovation, according to MSF. Tido von Schoen-Angerer, director of MSF’s Campaign for Access to Essential Medicines, told Intellectual Property Watch: “We know from our work in developing countries that more patent protection did not lead to more innovation.” Universal access to affordable drugs for diseases like tuberculosis and HIV/AIDS, leishmaniasis and sleeping sickness is still far from realised. For the G8 to be putting IP protection forward as solution for the future is “simply disingenuous.”

Schoen-Angerer instead pointed to the intergovernmental working group at the World Health Organization that is exploring alternatives to patent protection. It was unfortunate that these discussions did not find any reflection in G8 discussions, he said.

“It is also irritating that when you try to talk about alternatives you always end up in discussions about counterfeit medicines,” Schoen-Angerer said, though he acknowledged they are a danger to people’s health. “Counterfeit medicine is a crime,” he said. “But they are not hampering innovation.”

On the contrary, the lack of affordable and effective medicines could contribute to the counterfeit medicines, he said. The G8 must therefore also support mechanisms that increase access to medicines by stimulating competition and production of affordable, quality generic medicines, upon which the developing world can rely.

The organisation “Netzwerk Freies Wissen” this week sent letters to the five Outreach countries (O5) – China, India, South Africa, Mexico and Brazil – asking them not accept the G8 invitation to participate in talks on better IP protection on Friday, the last day of the summit. It is important that a fair dialogue about IP does not unilaterally address economic interests of the G8 summit, the group said.

“According to our information, the US delegation has presented a new proposal that would void proposals to encourage African countries to more rely on compulsory licenses to produce medicines,” said Julian Finn, spokesperson for Netzwerk Freies Wissen at Kuehlungsborn. Influencing developing countries to act against their own interests must be stopped, said Finn. “We do not want pressure on countries like Brazil and India where the life of many people is at risk because of ever-increasing IP protection of drugs.”

Schoen-Angerer described as “extremely counterproductive” the attempts to put pressure on developing countries not to use the flexibilities provided for in the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Some of the O5-countries have been pioneers in producing affordable generic drugs. “The flexibilities are there,” said Schoen-Angerer. “Every time there is an outcry when a developing country uses compulsory licenses, yet countries like the US or Italy certainly are using it” as well, Schoen-Angerer said.

A purported 1 June draft declaration on Growth and Responsibility in Africa called on international organisations and donors “to respond constructively to requests by African developing countries without manufacturing capacities with regard to the use of the flexibilities referenced in the WTO Doha declaration on TRIPS and Public Health, while respecting WTO obligations.”

There may be later drafts, sources said, and the declaration was expected to be discussed at the meeting on 7 June, a UK press person said.

The 1 June draft also recognised the challenge surrounding access to medicines, and says it wants to support African countries that request technical assistance and capacity building programmes to improve access to “high quality generic and innovative medicines in a manner consistent with the WTO.”

It listed what parties should do, including African governments, the pharmaceutical industry and international organisations and donors. The latter should “respond constructively” to requests from African countries lacking manufacturing capacities, “with regard to the use of the flexibilities referenced in the WTO Doha Declaration on TRIPS and Public Health, while respecting WTO obligations.” Flexibilities are built into the TRIPS agreement.

As for the pharmaceutical industry, it was asked to continue to explore further initiatives that can boost access to affordable HIV/AIDS medicines and review its prices policies on second-line antiretroviral medicines. It was also asked to assist local production of medicines in Africa by issuing voluntary licenses and providing laboratory capacities. Such initiatives are already underway in parts of Africa involving the German development agency and the United Nations Conference on Trade and Development, sources said.

The New Role of OECD

The G8 includes the Canada, France, Germany, Italy, Japan, Russia, United Kingdom, and the United States.

Netzwerk Freies Wissen and over 20 other organisations warned in late May against a forum-shopping move by the G8 countries. Instead of shifting IP discussions to G8 or to the Organisation for Economic Cooperation and Development, where only northern countries have a voice, IP issues plus their developmental aspects should be discussed at more multilateral bodies like the World Intellectual Property Organisation (WIPO), they said. WIPO, while not ideal at least is struggling with a development agenda, argue NGO representatives. “The last time the North evaded WIPO resulted in getting TRIPS,” said one activist.

The new role of the 30-member OECD as a moderator of a dialogue on IP protection has seemed to be a hot issue in the lead-up the summit. An invitation to the OECD to organise the dialogue with emerging economies had been cut out of an April version of the draft final declaration of the summit, yet is back in the final declaration.

Wolfgang Huebner, counsellor in the OECD’s Directorate for Science, Technology and Industry, said the OECD would act as a platform and report back at the G8 Summit in two years time. OECD would look much more at the economic issues of intellectual property rights, contrary to the political debate in some other fora.

The final declaration also emphasises the “function and role of the competent multilateral organizations, in particular WTO and the WIPO,” which could serve to defuse tensions between organisations. Participants in the new dialogue could also “discuss initiatives aimed at strengthening intellectual property rights protection which should then be addressed in the appropriate international fora”, reads the text. The goal of the dialogue is a “positive exchange on topics critical for growth of successful knowledge economies and the promotion of an innovation-friendly business environment also taking into account the needs of small and medium sized enterprises.”

Important points in the OECD section, according to the declaration, are: a) the crucial role and economic value of intellectual property protection and implementation as a central framework condition for the development of a future-oriented economy based on technological progress and innovation; b) effective market incentives for innovation and the diffusion of knowledge at the national level taking into account recent developments in technology markets; and c) the crucial importance of efficient innovation value chains that promote business commercialization of patented research results and exploit licensing as a major driver for the international transfer of technology.

The declaration that has been worked on by the sherpas (high-level government negotiators) for months. Finn and Schoen-Angerer said that IP issues had somewhat been pushed aside by the high attention put on debates on climate change and also the Russia-US debate about the US defence system. For the IP and healthcare activists there was no possibility to further make input in the current discussions of the leaders. First and foremost, said one activist, “there is this big fence.”

Text of Declaration

The final version of the draft summit declaration includes five “undertakings” following the summit:

a) endorsing Guidelines for Customs and Border Enforcement cooperation designed to strengthen cooperation and coordination among our national customs and law enforcement (..),

b) endorsing a new framework for technical assistance on intellectual property rights protection to interested developing countries. As well as a mechanism to better coordinate and leverage existing G8 assistance to such countries with a view to building the capacity necessary to combat trade in counterfeited and pirated goods to strengthen IP enforcement,

c) endorsing recommendations aimed at improving G8 member countries cooperation of actions to combat serious and organized IP rights crimes (..)

d) while appreciating the information contained in the OECD report estimating the economic impacts of counterfeiting and piracy on national economies and right holders as well as public health and safety we will encourage the OECD to work with member state to further identify and target specific areas for concrete actions,

e) recognizing the need for continued study by national experts of the possibilities of strengthening the international legal framework pertaining to IPR enforcement.

f) considering the establishment of an IPR task force focusing on anti-counterfeiting and piracy to look together at how best to improve the working of the international IPR protection and enforcement, and produce recommendations for action including improved peer review.

Monika Ermert and Tove Gerhardsen may be reached at info@ip-watch.ch.