US To Seek 15 Percent Cut In WIPO Patent Fees; Idris Age Debated

By William New
The United States is proposing a patent fee cut at the World Intellectual Property Organization in light of a sizeable financial surplus at the United Nations organization. The proposal is included in materials for the 25-28 June WIPO Program and Budget Committee (PBC) meeting, which may also address an internal “desk-to-desk” review of WIPO jobs, an effort to resurrect a patent harmonisation debate, and possible improprieties at WIPO.

Also on the meeting agenda is WIPO’s proposed strategy and budget for 2008-2009, a major new construction project, and audits, among other things, according to the materials provided for the meeting.

The fee reduction proposal comes after WIPO’s preliminary financial report for 2006-2007 shows a surplus in the tens of millions of Swiss francs for 2006-2007, a turnaround from the deficit posted in the previous biennium. It also shows that WIPO has overspent its budget, which would consume some of the surplus, a government official said.

The final desk-to-desk assessment report is expected to be circulated just days after the PBC meeting, on 30 June, according to a WIPO progress report. The review was conducted by outside consulting firm PricewaterhouseCoopers, based on interviews mainly in December and January, and ongoing contacts with staff and management through the spring. The WIPO Audit Committee will meet to discuss the draft final report on 25 June. The desk-to-desk review itself cost approximately 880,000 Swiss francs (over $700,000), according to WIPO.

One government official said member states will watch to see if the report is altered internally before being released. The report was mandated by the WIPO General Assembly to analyse hiring practices in recent years, after a UN Joint Inspection Unit investigation raised questions (IPW, WIPO, 7 June 2005).

Concerns about misbehaviour or mismanagement are lingering at WIPO, and may come up at the PBC, which is preceded by an Audit Committee meeting. The issues may also be taken up at the next WIPO Coordination Committee meeting around the time of the annual General Assembly in late September, they said.

The PBC may hear about concerns when it receives the Internal Auditor’s report, though for some reason it appears this will only be given orally. The PBC also will consider the designation of a WIPO external auditor, which WIPO said the Swiss government has offered to fill.

Importantly, this week the “Geneva Group” of less than 20 countries that give at least one percent of the United Nations budget is expected to meet at the ambassador level to discuss how to proceed on an issue of concern, according to sources. An internal WIPO investigation revealed that Director General Kamil Idris had for more than two decades misreported his age, including on official documents and apparently when advantageous to him. (IPW, WIPO, 15 May 2007). But through UN procedures, the internal document did not have status for member states to take action on. An effort has been made to find a way to raise it at the General Assembly, one source said.

WIPO is mostly funded through fees for its services, making it different from other UN agencies, which typically are funded through donors, especially developed country governments. But it is believed the Geneva Group is addressing the Idris age issue because it typically has that role for those member states regarding such high-level matters at UN agencies.

New WIPO Building Construction On Track for 2008

Also on the PBC meeting agenda is a progress report on a major new WIPO building construction project, which is still expected to begin in February 2008, according to WIPO. Auditors’ reports on the proposed construction budget are being done, WIPO said.

WIPO’s Strategy: Renew Patent Harmonisation, Rethink DRMs

Another agenda item is to consider proposed programme and budget for 2008-2009. In the director general’s highlights of programme, it says the “ability to create, access and use knowledge effectively determines a country’s capacity to compete in globalised markets.” It also highlights a focus on innovation, technology transfer, and enhanced capacity of member states to develop, use and protect IP.

The document also includes a long list of strategic goals, including more policy-oriented research, outreach and partnerships, “mainstreaming the development dimension into all WIPO programme areas,” and exploring challenges and opportunities for copyright in the online environment.

The latter would include digital rights management, including “consideration of how new business models and rights management technologies can promote access to digital content, including information in the public domain, while promoting creativity and addressing the interests of owners and users of protected material.”

The strategy also includes developing a work plan for the Standing Committee on Patents, which has been moribund this year for lack of progress on its primary issue, harmonising patent laws. The secretariat is working to bring back the committee meetings next year, despite little sign of progress on harmonisation among developed countries who are pushing the issue. “

A consensus-based work plan for the Standing Committee on Patents (SCP) shall be aimed at, including by promoting in-depth discussions on issues that are perceived to be of importance to the policy and operation of the patent system,” WIPO said. WIPO members may consider asking the WIPO secretariat to study patent issues and use the report as the basis for the SCP work plan in 2008, sources said.

Reflecting the desk-to-desk review, it said an “area of major attention” in the next biennium will be “the establishment of appropriate policies on ethics-related issues and financial disclosure, as well as on inspection, investigation and evaluation.”

Another PBC is scheduled for 11-13 September.

Fee Cut Would Affect WIPO Revenues

On its fee reduction proposal, the US sought to assuage any concern that this might undercut technical cooperation efforts with least-developed countries. But the issue may be contested by WIPO and possibly some member states, one official said.

“The United States of America is proposing that the PCT [Patent Cooperation Treaty] Assembly adopt a revised fee schedule to reflect a 15% reduction in the PCT international filing fee and handling fee effective January 1, 2008,” US Ambassador to the UN Warren Tichenor said in a 23 May letter to Idris. “We believe that this reduction in PCT fees can be funded fully from surplus income generated by the PCT system, without any adverse effect on funding for other activities such as development cooperation activities.”

Tichenor also requested that the US review the draft WIPO financial disclosure requirements it has been mandated to develop, prior to their submission for approval.

PCT fees are said to represent more than three-quarters of WIPO’s income, so projections of PCT applications are essential for accurate planning. A 2005 JIU report found there was no study on the relation between workload increases and costs of services, no methodology to determine the cost of processing PCT applications, and that clients were charged approximately 1400 Swiss francs (roughly US$1100) “without either the client or the secretariat knowing what the amount represents.”

The countries that own the vast majority of the world’s intellectual property rights, North America, Europe and Japan, are responsible for the majority of the PCT fees. Several years ago they balked when WIPO proposed a fee increase to cover a deficit, one that led to a series of measures being taken to increase member state involvement in WIPO’s budget-making process.

PCT applications in 2008-2009 are expected to rise by 12 percent, WIPO said.

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