Officials Prepare For TRIPS Council As China Blocks US Dispute Panel

By William New
The World Trade Organization committee on intellectual property rights issues this week is expected to discuss biodiversity and traditional knowledge, enforcement, geographical indications, and public health, according to participants. While no significant breakthroughs are predicted, the issues to be discussed are potentially highly charged.

There will be at least two new documents circulated at the 23-24 October meeting of the Council on Trade-Related Aspects of Intellectual Property Rights (TRIPS), one on biopiracy and one on enforcement.

One developed country official expected “a low key affair, in keeping with recent meetings.”

A developing country official said, “I wouldn’t expect any breakthrough on any of the contentious issues on the agenda, particularly on genetic resources and GIs [geographical indications, products named for places], but the ball will keep rolling.”

As has been the case in last few TRIPS Council sessions, a disagreement may break out over enforcement, as developed countries continue to take turns raising the issue in an apparent effort to make it a permanent item on the Council’s agenda, sources said. Developing countries argue that enforcement matters belong in dispute settlement, which is not a TRIPS Council issue.

For this meeting, Japan has introduced a document on enforcement, IP/C/W/501, dated 11 October, in which it discusses recent trends in customs seizures of IP rights infringing goods. It states that the number of import suspensions related to allegedly infringing products rose from about 7,000 in 2002 to nearly 20,000 in 2006. Most cases involve international postal shipments, Japan said.

Meanwhile, Peru is expected to introduce a new paper, IP/C/W/493, dated 19 September, describing the Peruvian experience in combating piracy. Peru’s nine-page submission, originally a 13 August communication, said there are thought to be about 20,000 higher plant species in Peru, which is about 10 percent of the world’s total, making it fifth in the world for number of species. Peru also is a multiethnic and multicultural country, with a rich traditional knowledge base related to the use of those plant species. The paper describes Peru’s efforts in establishing systems to manage intellectual property as it relates to biological resources, particularly fighting biopiracy, including specific cases where patents should not have been granted. It concludes that an international system of protection is necessary.

“There is an urgent need to rethink the patent system and to consider how to make it more balanced,” Peru said. “The current intellectual property system does little to ensure fair and equitable compensation for benefits derived from the use of genetic resources and traditional knowledge.”

Peru is among the countries that have proposed an amendment to the TRIPS Agreement to require disclosure of origin in patent applications. There may be possible additional support shown for the proposed amendment at this meeting, a developing country official said. At the last meeting, the African Group announced its support.

The issue of the relationship between TRIPS and the UN Convention on Biological Diversity is once again on the agenda, as is protection of traditional knowledge and folklore, and an overdue review of TRIPS Article 27.3(b) on the patenting of inventions involving plant and animals.

Also on the agenda for this meeting is a review of the implementation of paragraph 6 of the Doha Declaration on TRIPS and Public Health. At least one official predicted a decision to extend the period for member states to ratify the 2005 TRIPS amendment allowing countries lacking production capabilities to import drugs produced under compulsory license. The deadline for ratification is the end of 2007, but so far only a handful of countries have done so. According to the WTO website, Australia, Israel, Japan, Singapore have accepted the amendment since the last TRIPS Council meeting in June, bringing the total to 11, or 7.3 percent of the 151 WTO members. The target is 67 percent, or 100 members for the waiver to TRIPS to take permanent effect.

Other agenda items include a review of the TRIPS Agreement under Article 71.1 of the agreement, a review of the application of TRIPS provisions on GIs under Article 24.2 (which relate to elevating protection for wines and spirits named for regions), a review related to TRIPS Article 66.2 on developed countries providing incentives for technology transfer, and a long-standing proposal on “non-violation and situation complaints,” which would allow members to bring disputes even if not WTO agreement or commitment is violated. It also is the time of year when China is subjected to an annual review of its accession to the WTO.

Some countries planned to hold coordinating meetings as the meeting drew near, they said.

China Rejects WTO Dispute Panel on IP Case

Separately, at Monday’s WTO Dispute Settlement Understanding (DSB) meeting, China rejected the US request to form a WTO dispute panel on an IP-related case, WT/DS363/5, arguing that it remains open to consultations. A country may decline a panel the first time it comes up at the DSB. The United States requested the panel on 11 October in the case alleging that laws and regulations in China hinder American firms from selling films, books, newspapers, magazines and CDs there and that this constitutes discrimination (IPW, US Policy, 11 October 2007).

In its statement to the DSB meeting, China defended its actions. “Since its accession, China has been sincerely and faithfully fulfilling its WTO commitments, including those pertinent to this case,” it said. “Currently, China annually imports and distributes dozens of revenue-sharing films as committed, half a million publications of different types and countless audiovisual products of various sources. Thus, a good access into the marketplace of China for such products of other members has already been provided.”

But the US countered at the DSB that it “has discussed all of these issues extensively with China, including in the consultations that we held in June and July. While those consultations did provide some helpful clarifications, regrettably, they did not resolve this dispute.”

At the DSB, the US restated the details of its case alleging that Chinese measures block market access for films, audiovisual products, books and other publications, and sound recordings. The US argued that China “only permits certain Chinese state-designated enterprises to import these products into the customs territory of China. This restriction acts as a bottleneck for these products at the border.”

It also said that China restricts the rights of foreign entities to engage in the business of distributing publications, audiovisual home entertainment products and sound recordings within China.” For some industries, it charged, distribution is limited to Chinese government-owned enterprises, tougher restrictions are placed on foreign firms than domestic ones, or joint ventures are required.

The US said the measures appear to violate several agreements. It added that the measures in question may also be contributing to piracy as legitimate products cannot enter the market.

The United States in August requested a separate panel in another IP case, WT/DS362/7, in which it alleges China has failed to provide “criminal procedures and penalties to be applied in cases of wilful trademark counterfeiting or copyright piracy on a commercial scale that fail to meet certain thresholds.” That panel was formed on 25 September (IPW, WTO/TRIPS, 27 September 2007).

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