WIPO Committee Unable To Agree Program And Budget After Proposal For Reform 18/09/2017 by Catherine Saez, Intellectual Property Watch Leave a Comment Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)Discussions last week at the World Intellectual Property Organization on how international IP systems managed by the UN organisation are financed have introduced broader questions about core functioning. The WIPO budget for 2018/2019 was not approved in committee during the week, despite efforts by a small group of countries to find common language on changes to the financing of WIPO systems. A number of countries found the proposed changes in the financing of those different systems require deeper analysis on potential consequences, and asked for more time to consult with their capitals. A list of decisions [pdf] was adopted by the 27th session of the WIPO Program and Budget Committee (PBC), which took place from 11-15 September. However, a decision on the proposed program and budget, first proposed by the chair, had to be amended so issues such as union budget allocation be tackled by the upcoming WIPO General Assembly taking place from 1-12 October. WIPO is an affluent organisation, its functioning costs almost entirely covered by the fees derived from the different IP systems that it manages, but mainly by the Patent Cooperation Treaty (PCT), which bring in some 75 percent of the organisation’s budget. The United States has been challenging the reliance on the PCT revenue of the other unions under WIPO, in particular since the 2015 adoption by a fraction of the WIPO membership of the Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications. If the Madrid System (Madrid Agreement Concerning the International Registration of Marks) brings some revenue, it is hardly the case for the Hague System (Hague Agreement Concerning the International Registration of Industrial Designs), and the Lisbon systems (Lisbon Agreement for the Protection of Appellations of Origin and their International Registration) is in chronic deficit. France, US Propose Budget Changes as WIPO Prepares for 10% Revenue Increase After the US tabled a discussion paper [pdf] on funding alternatives of WIPO at the beginning of the session, informal discussions were carried out between the US and some members of the Lisbon Union, led by France. The paper suggested a new methodology of budget allocation based on each of WIPO-administered systems direct expenses (IPW, WIPO, 11 September 2017). On 15 September, a paper [pdf] was presented by France and the US in the plenary session, much to the surprise of some delegations that had not been included in the discussions. The paper, said to be the result of several days of discussion, proposed language on several budget issues, addressing the US budget concerns, including the allocation of spending under the WIPO Capital Master Plan 2018/2027 [pdf], the US said. One of the suggestions of the paper was to decrease the participation of the PCT in the funding of projects, as presented by the secretariat in the Capital Master Plan. According to the paper, the cost allocated to the Madrid System (Madrid Agreement Concerning the International Registration of Marks) would be raised by CHF2 million (US$ 2.29million), and the costs allocated to the contributions-financed unions would be raised by CHF0.5million (US$0.57million). The cost allocated to the PCT would then be reduced by CHF 2.5million (US$2.6million). The expected WIPO revenue is estimated at CHF826 million (US$ 866 million) for the 2018/2019 biennium, a 10.4 percent increase compared to the current biennium 2016-2017. The US also proposed to increase the Madrid system fees, which was reflected in the paper. The paper also stated that starting from the 2018/2019 biennium, “as long as any union in any given biennium which does not have sufficient income to cover its expenses is in the process of examining any measures with a view to raising its incomes.” The paper also gives authority to the PCT to agree to draw on its biennial surplus to provide for unions that cannot cover their expenses. The paper also involved a proposal made by the US by which any potential diplomatic conference in 2018/2019, funded by the resources of the organisation, “will be convened by the Director General only upon a decision of the relevant committees and unions of WIPO in accordance with the usual longstanding practice of consensus.” A diplomatic conference is a high-level treaty negotiation. Some countries, such as Indonesia, and Costa Rica for the Group of Latin American and Caribbean countries, underlined that they had not been included in the discussion leading to this proposal, and time is needed to explore the implication of the proposed language, which have broad implications for the organisation. The African Group said it would be opposed to references to the convening of diplomatic conferences. Some countries spoke against lumping so many issues into a single paper. In the corridors of WIPO, some concerns were shared about the language of the paper, and in particular about the weight those new dispositions would give to the PCT in terms of decision. One source remarked to Intellectual Property Watch, “It is not the World Patent Organization. This is the World Intellectual Property Organization.” Chair’s Proposal Does Not Fly PBC Chair Maria Inés Rodríguez of Argentina On the final afternoon, PBC Chair Maria Inés Rodríguez of Argentina submitted her proposal [pdf] for a decision on the proposed budget for the 2018/2019 biennium (Item 9 of the agenda). She suggested that the PBC recommend to the WIPO General Assembly to approve the 2018/2019 budget. The chair’s proposal also mentioned that all WIPO-funded diplomatic conference should be opened to the full participation of all WIPO member states. The proposal foresaw that the discussion on the methodology for the allocation of income and expenditure would be continued in future sessions of the PBC. Most delegations taking the floor said they could go along with the chair’s proposal, such as Switzerland, the African Group, Brazil, Chile, China, and the Asia and Pacific Group. But the United States said the proposal does not reflect its concern about unions having budget deficits. Rodríguez presented an amended proposal for modifications after some further discussion, which was accepted. It notes that the unit contribution value (the financial contribution of WIPO member states) would be maintained at the same level as in the 2016/2017 biennium. The WIPO secretariat had suggested a decrease of 10 percent of that value. The decision also states that the outstanding issues left open at this session of the PBC will be addressed by the WIPO General Assembly due to start in a couple of weeks. In a separate decision [pdf], it was agreed that the discussion on the allocation of the proposed Capital Master Plan would continue at the General Assembly. External Offices at a Standstill As was foreseen by several sources at the beginning of the session, the politically charged issue of which countries will host the next WIPO field offices could not be solved, and has also been pushed onto the plate of the General Assembly (IPW, WIPO, 13 September 2017). Image Credits: WIPO Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window) Related Catherine Saez may be reached at csaez@ip-watch.ch."WIPO Committee Unable To Agree Program And Budget After Proposal For Reform" by Intellectual Property Watch is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.