The decision (text below) was agreed by consensus on the first day of a formal meeting of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Council. The two-day meeting also discussed the relationship between intellectual property and green technologies, cost effective innovation, a proposed revised EU directive on tobacco products, “non-violation” complaints (an issue for the December Bali Ministerial Conference), and a number of other subjects (some details below).
The decision on the 8-year extension is the product of intensive consultations over several months involving least developed countries and a number of other members, including several informal meetings of the full membership (informal TRIPS Council meetings). All members favoured the extension; the differences were about the terms.
It had been presented at an informal council meeting on 7 June, where it received support from all speakers. The present deadline, already extended once, is 1 July 2013.
“The agreement reached by members makes very clear that we can come together and get things done” said WTO Director-General Pascal Lamy. “This is the spirit we will need to see in full display over the coming months in order to produce a meaningful outcome to the Bali Ministerial Conference in December.”
Least developed countries, speaking individually and through their coordinator, Nepal, welcomed the decision. They said it would allow an important group of WTO members to integrate better into the multilateral trading system.
Nepal praised the support that the group had received, and welcomed the decision itself, which it said was a compromise. The group had negotiated directly with a group of countries, worked through consultations led by the TRIPS Council chairperson, and had consulted others in order to reach this compromise, it said.
The extension will contribute to efforts to meet the target set at the UN conference on least developed countries in May 2011 — for half of these countries to reach the threshold level of development that would allow them to “graduate” from the category by 2020 — Nepal added.
Most speakers on all sides of the discussion also welcomed the decision as a means of allowing least developed countries more time to be in a position to implement the TRIPS Agreement, including the use of flexibilities in the agreement. And they praised the TRIPS Council chairperson, Ambassador Alfredo Suescum of Panama for his role in helping to broker the compromise.
Some said the flexibility and compromise shown should be adopted in other subjects under negotiation in the WTO. Some (Lesotho) said they hoped the next extension would see similar flexibility.
Some developing countries (but not least developed countries) said they had reservations about the process even though they were willing to join the consensus to accept the transition. India said the decision should have adopted the original request to extend the transition for each country until it “graduates” from being least developed, instead of extending by 8 years (or until “graduation” if earlier). It also argued that the negotiation should have included more countries from the broader membership.
South Africa also had reservations. Brazil and China welcomed the decision but said future talks should have broader participation.
However, many speakers praised the way the talks had been handled. El Salvador said the process showed a “high degree of transparency”. Norway said it had been transparent “throughout”.
The speakers were: Nepal, Haiti, Dominican Rep, India, the African Group (Morocco speaking), El Salvador, Lesotho, Brazil, South Africa, China, Australia, Norway, Mexico, Argentina, Uruguay, New Zealand, Chile, Japan, US, Canada, EU, Hong Kong China, Rep Korea, Switzerland, Tanzania, Rwanda, Holy See (ie, the Vatican, an observer).
The consultations that had produced the draft had initially been handled by the two sides, with Nepal and Australia coordinating. On 14 May they then asked chairperson Suescum to chair the talks.
Ambassador Suescum also met other delegations, and he kept the full membership informed in informal sessions of the TRIPS Council on 22 and 31 May and 7 June, which were also opportunities for them to comment. The draft presented on 7 June had been agreed by the least developed countries and their interlocutors.
Currently, 34 countries categorized as “least developed” are WTO member. The decision was agreed by consensus among all members, as is standard practice in the WTO.
The transition period
The transition period for least developed countries has been extended until 1 July 2021.
It does NOT exempt least developed countries entirely from applying the TRIPS Agreement. It does give them the freedom to choose whether or not to protect trademarks, patents, copyright, industrial designs, geographical indications or any other form of intellectual property covered by the agreement.
If they do protect it — and several do have some intellectual property laws — then they have to apply provisions on non-discrimination. (Technically, the provisions on national treatment and most-favoured nation treatment in Articles 3, 4 and 5 of the TRIPS Agreement always apply; see Art.66.1).
The present transition period has already been extended from the original expiry date of 2005 until 1 July this year. The least developed countries had called for the new extension to last until each “graduates” from this category. Some other countries felt that an unlimited extension would change the nature of the original TRIPS Agreement provision (Art.66.1) from a transition into a total exemption from protecting intellectual property. The compromise agreement is for an 8-year extension with the ability to extend beyond that.
The decision does not affect from the separate transition period for least developed countries to protect patents on pharmaceuticals, which was agreed in 2002 as a result of the Doha Ministerial Declaration on TRIPS and public health (see also this press release); under that earlier decision, least developed countries are not required to protect these patents until 2016. The least developed countries did not refer to this in their proposal (document IP/C/W/583) for the general transition period.
The decision does refer to least developed countries’ need to “create a sound and viable technological base and to overcome their capacity constraints”, including benefiting from developed countries’ incentives for their companies and institutions to transfer technology (Art. 66.2 of the TRIPS Agreement).
Three points resolved
In the 7 June informal meeting, the chairperson explained how three major differences were resolved.
- Provisions on enhanced technical cooperation were dropped. These were in the previous extension, from 2005, but members agreed this time they were not needed. This topic will be handled in the Council’s other work on technical co-operation and capacity building, Ambassador Suescum said.
- The “non-rollback” commitment of 2005 (explained below) has been replaced with more “positive” wording, which addresses the concerns of all members, he said. It “provides engagement” from least developed countries — they “express their determination” — to preserve and continue the progress towards implementing the TRIPS Agreement with a view to preparing for the day they are no longer covered by the transition period, he said.
At the same time the wording also underlines least developed countries’ right to use the TRIPS Agreement’s flexibilities to address their needs. That includes creating a sound technological base and overcoming capacity constraints by various means including technology transfer.
- The 8-year transition period (until 1 July 2021) is also a compromise. The least developed countries’ original proposal was for the transition to last until they “graduate” from the category. Some other countries felt that an unlimited extension would change the nature of the original TRIPS Agreement provisions (Art.66.1) from a transition into a total waiver from protecting intellectual property.
The draft also states that least developed countries still have the right to seek further extensions, the chairperson stressed.
“Rollback” would be when a least developed country that already complies with intellectual property protection under the TRIPS Agreement in some form (for example protecting trademarks) reduces the level of compliance (for example no longer protecting trademarks). Use of flexibilities allowed under the TRIPS Agreement — such as introducing “compulsory licensing” to bypass some rights of patent holders — would not be “rollback”.
“Non-rollback” was included in the last extension in 2005, but least developed countries opposed continuing with it, calling it an unacceptable condition limiting their freedom to pursue policies.
Paragraph 5 of the 2005 text said: “Least-developed country Members will ensure that any changes in their laws, regulations and practice made during the additional transitional period do not result in a lesser degree of consistency with the provisions of the TRIPS Agreement.”
The new compromise says: “least developed country Members express their determination to preserve and continue the progress towards implementation of the TRIPS Agreement”.
The decision back to top
EXTENSION OF THE TRANSITION PERIOD UNDER ARTICLE 66.1
FOR LEAST DEVELOPED COUNTRY MEMBERS
DECISION OF THE COUNCIL FOR TRIPS OF 11 JUNE 2013
The Council for Trade-Related Aspects of Intellectual Property Rights (the “Council for TRIPS”),
Having regard to the transition period for least developed country Members provided for in paragraph 1 of Article 66 of the TRIPS Agreement (the “Agreement”);
Recalling that this transition period was extended by the Decision of the Council for TRIPS of 30 November 2005 (IP/C/40) until 1 July 2013;
Having regard to the request from least developed country Members, dated 5 November 2012, for a further extension of this transition period, contained in document IP/C/W/583;
Recognizing the special needs and requirements of least developed country Members, the economic, financial and administrative constraints that they continue to face, and their need for flexibility to create a viable technological base;
Recognizing the continuing needs of least developed country Members for technical and financial cooperation so as to enable them to realize the cultural, social, technological and other developmental objectives of intellectual property systems;
Decides as follows:
1. Least developed country Members shall not be required to apply the provisions of the Agreement, other than Articles 3, 4 and 5, until 1 July 2021, or until such a date on which they cease to be a least developed country Member, whichever date is earlier.
2. Recognizing the progress that least developed country Members have already made towards implementing the TRIPS Agreement, including in accordance with paragraph 5 of IP/C/40, least developed country Members express their determination to preserve and continue the progress towards implementation of the TRIPS Agreement. Nothing in this decision shall prevent least developed country Members from making full use of the flexibilities provided by the Agreement to address their needs, including to create a sound and viable technological base and to overcome their capacity constraints supported by, among other steps, implementation of Article 66.2 by developed country Members.
3. This Decision is without prejudice to the Decision of the Council for TRIPS of 27 June 2002 on “Extension of the Transition Period under Article 66.1 of the TRIPS Agreement for Least Developed Country Members for Certain Obligations with respect to Pharmaceutical Products” (IP/C/25), and to the right of least developed country Members to seek further extensions of the period provided for in paragraph 1 of Article 66 of the Agreement.
Other issues back to top
Intellectual property, climate change and green technology back to top
A paper from Ecuador sparked a lengthy discussion about whether intellectual property protection helps or hinders the development and use of environmentally-sound technologies, which Ecuador called “public goods” that would help the world tackle climate change.
The paper (document IP/C/W/585), circulated in February and introduced briefly at the last TRIPS Council meeting in March, calls on members to examine whether intellectual property protection could obstruct technology transfer and make green technologies more expensive. Among a list of proposals is the possibility of amending the TRIPS Agreement to reduce the length of time patents can be applied to green technologies.
Presenting the paper, Ecuador also suggested members might consider a declaration to be issued at the December Bali Ministerial Conference, highlighting the flexibilities available in the TRIPS Agreement — along the lines of the 2001 Doha Ministerial Declaration on TRIPS and Public Health. Ministers could also consider work after the Bali conference, Nicaragua added.
Support came from Cuba, Indonesia, China (which reserved its right to respond to Ecuador’s more specific proposals), Bolivia, India, Bangladesh, Nepal, Rwanda and Brazil.
Several of developed countries countered that intellectual property protection encourages the development of environmentally sound technologies, at accessible prices, and technology transfer. They cited numerous research findings to support the view. They included: the US, Japan, the EU, Canada, Switzerland, Australia and New Zealand.
Saudi Arabia said climate change should be discussed in organizations such as the UN Environment Programme, and within the WTO, in the Trade and Environment Committee, but not the TRIPS Council.
Intellectual property and cost-effective innovation back to top
This is the third time the TRIPS council has discussed innovation. This time the focus was on cost-effective technologies, at the request of Canada, Chile, the EU, Rep. Korea, Switzerland, Chinese Taipei and the US.
The seven described numerous cases where intellectual property protection has helped cost-effective or frugal innovation, for example to provide clean water or to solar energy to in locations where there is no other electricity supply. These can make major contributions to development, they said. Japan also provided additional examples.
New Zealand and Australia said they are cooperating on patent registrations partly to maintain or improve the quality of patents, because declining quality is a cause of increasing costs.
Brazil said intellectual property protection has a role to play but is only one contributor to innovation, and because of the monopoly involved it has to be balanced against other interests. Brazil asked: “How costly is a system that proliferates frivolous patents, and how costly is a system that proliferates litigation?”
India and Ecuador objected to the repeated inclusion of innovation on the TRIPS Council’s agenda and questioned whether this is part of the council’s role. India said the countries putting this on the agenda should explain their intentions and whether they want to turn the council into a talking shop on innovation success stories. It would be more useful for the council to examine evidence on whether WTO provisions on technology transfer least-developed countries (Art.66.2) are working, India said.
The EU’s proposed revised directive on tobacco back to top
EU institutions are considering a revised directive on tobacco products, which would include tougher labelling conditions, such as larger health warnings and the possibility of individual member states introducing plain packaging regulations.
Nicaragua and Cuba raised this under “other business” to express their objections, which were similar to those made in previous meetings against Australia and New Zealand on plain packaging. Joining in the criticism were the Dominican Republic, Honduras and Zimbabwe.
They said the regulations restrict trade unnecessarily (a violation of the Technical Barriers to Trade Agreement and depriving producers of the right to use intellectual property such as trademarks and geographical indications. They objected both to the proposed revision, and a draft report from the European Parliament’s tobacco products directive rapporteur Linda McAvan. They also criticized Ireland’s announced plan to introduce plain packaging.
Australia and New Zealand supported the EU, which said the proposal was prepared by the EU Commission, and has now moved to the European Council and Parliament, where it has over a thousand amendments under consideration. The EU said it therefore cannot comment further.
Non-violation cases back to top
The present “moratorium” on non-violation disputes in intellectual property (ie, WTO members agreeing not to bring dispute cases against each other on this), expires at the Bali Ministerial Conference in December. Members’ positions remain unchanged. The chairperson said he will hold more consultations aimed at enabling the TRIPS Council to agree on its recommendation to the Bali Ministerial Conference when it meets again in October. Details here.
TRIPS Council (regular) meetings (could change):
- Thursday-Friday 10–11 October