Some developed and advanced developing countries said they consider counterfeiting to be one of the most serious problems to be discussed by the Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS) because of the economic loss and because the products can be dangerously sub-standard.

They cited the scale of the problem and the changing nature of counterfeit trade, which includes the growth of Internet-based trade leading to a larger number of smaller shipments marked as “personal goods”.

Some developing countries said intellectual property rights violations should not be confused with sub-standard products. They argued that the discussion should take place in agencies such as the World Customs Organization (WCO), because customs officers are responsible for tackling internationally traded counterfeit goods, and the World Health Organization (WHO), whose work includes tackling sub-standard medicines.

They were also concerned that a discussion with a broad scope could jeopardize the legitimate use of products such as generic medicines (more details below).

 Meanwhile, a number of countries supported Cuba’s complaint about the US’s failure to comply with a 10-year-old dispute ruling against a US law that — in its view — does not protect a Cuban brandname, Havana Club, giving it instead to an American company. Cuba said it intends to put the issue on the agenda of the next meeting for a substantive discussion.

Members also began reviewing the intellectual property laws of the Maldives, which has “graduated” from being a least developed country and now has to protect intellectual property under the TRIPS Agreement as an ordinary developing country. They prepared for a similar review of Montenegro, which became a WTO member on 29 April and agreed to implement the TRIPS Agreement from that date. (Samoa, the WTO’s newest member joined on 10 May but does not have to implement the agreement until 1 July 2013.)

These reviews are an important part of the TRIPS Council’s work. The council, like most other WTO councils and committees, is partly responsible for monitoring how members are implementing the agreement it handles, through shared information (“notification”) and an opportunity for members to comment or ask questions (“review”).

Delegates also discussed plans for a workshop later in the year on least developed countries’ priority needs for assistance in intellectual property. The least developed country group told the council that is developing a related work plan to follow up to the decision of the Geneva Ministerial Conference in 2011 on the deadline for them to protect intellectual property, now postponed from 2005 to July 2013.

And they heard briefings from Brazil and the US on negotiations in the World Intellectual Property Organization (WIPO) to help the visually impaired by relaxing copyright protection on materials prepared for them, an issue that has the support of a number of countries, particularly in Latin America.

 The council also debated briefly two on-going issues that continue to divide them. On the relationship between intellectual property and biodiversity they largely repeated their existing positions and continued to disagree on whether the Secretariat of the UN Convention on Biological Diversity (CBD) should be allowed to brief them on the October 2010 CBD meeting in Nagoya, Japan.

Positions remained unchanged. Those developing countries that want to amend the TRIPS Agreement so that patent applicants have to disclose the origin of genetic material and any associated traditional knowledge, also called for consultations chaired by Director-General Pascal Lamy to resume. Bolivia repeated its call for the TRIPS Agreement to be amended in order to ban patents on life forms, proposed in documents IP/C/W/545 and IP/C/W/554. Some other countries explained why they believed that patent protection encourages biotechnological inventions.

On the technical question of “non-violation” complaints — the possibility of countries challenging each other in the WTO dispute settlement procedure on intellectual property issues even if no agreement has been violated, only an expected right — they agreed that the WTO Secretariat should update a paper summarizing the debate so that they can move forward on the issue.

Some details

Counterfeit trademarked products

Two new papers from the US and Japan were the focus of the discussions on counterfeit trademarked goods. The US paper (IP/C/W/570) deals with securing supply chains against counterfeit goods.

It cites figures from a number of sources estimating the economic cost of counterfeiting through loss of earnings for rights owners and loss of tax revenue. It reports on customs seizures, outlines US, bilateral and international initiatives to secure supply chains and describes the tools used to prevent trade in counterfeits. It says counterfeit goods such as vehicle parts pose a serious threat to health and safety.

Japan’s paper (IP/C/W/571) describes latest trends in seized (“suspended”) counterfeit or pirated goods and notes an increase in small-lot shipments described as for personal use.

Countries supporting the US and Japan, shared the view that counterfeiting and piracy are serious. They described their own recent experiences, including the increasing use of sales of small shipments via the Internet. Some also argued that there is a clear link with health and safety risks because counterfeit products are often also sub-standard. These speakers included the EU, Rep of Korea, Canada, Switzerland and Mexico.

Some developing countries said they are happy to discuss intellectual property rights enforcement in the TRIPS Council because it is part of the TRIPS Agreement, but only within the definitions used in the agreement, which are “counterfeit trademark goods” and “pirated copyright goods” (Article 51, footnote 14).

Brazil, China and India also said that infringing intellectual property rights should not be confused with sub-standard products, that the protection of supply chains should be the foremost responsibility of the private sector in the supply chain, and that tackling counterfeits is a lower priority for developing countries in the TRIPS Council than issues such as access to medicines. They also emphasized the delicate balance between different objectives that is in TRIPS enforcement provisions.

Developing countries’ objection to the US paper on these and other grounds also triggered a debate before the agenda was agreed at the start of the meeting. This was resolved by clarifying that counterfeits are goods that infringe trademarks, not other forms of intellectual property.

Other issues

Havana Club trademark: Cuba noted that the US still has not implemented a 10-year old dispute ruling (case DS176) It complained in particular that the US has failed to protect the Havana Club trademark for Cuban rum, giving it instead to a US company, Bacardi. Cuba argued that it is complying with its own TRIPS obligations and protects over 5,000 US patents and trademarks.

Even though Cuba raised this under “other business”, which normally is not for lengthy discussions, a number of countries echoed Cuba’s call for the US to comply: Ecuador, Viet Nam, Bolivia, China, Argentina, Paraguay, Nicaragua, Dominican Rep, Chile and Venezuela. The EU thanked Cuba for raising the issue because a European company is also involved.

The US noted these comments came under “other business” and that Cuba had said it intends to put the issue on the agenda for the next meeting. It said it looks forward to discussing it then.

The issue was first raised in the TRIPS Council in the late 1990s for example in April 1999 (see minutes, document IP/C/M/23, pages 3–6). It became a dispute DS176 in 1999, with a ruling in 2002. Almost every month since then, the US has notified the Dispute Settlement Body that it is working on implementing the ruling (documents WT/DS176/11 and additions).

Information from members: the Maldives has only notified one law so far, on copyright. Further legislation is being prepared and the government has public-awareness programmes to discourage buying counterfeit and pirated goods and training for officials, the delegation said. The US submitted some written questions on the copyright law.

Australia reported on its new free trade agreement with Malaysia, which includes provisions on geographical indications (place names or words associated with a place used to identify products and their quality of characteristics). The provisions reflect the balance between protection and recognizing words that have become common, Australia said. Colombia and Japan also reported on new laws.

Accepting the TRIPS amendment: since the last meeting, Togo and Saudi Arabia have accepted the TRIPS Agreement amendment to remove an intellectual property obstacle preventing countries from using compulsory licences to manufacture generic medicines exclusively for export to countries unable to make them themselves. Viet Nam announced that it is about to do so. (In practice the amendment is already in force through a “waiver”.) See www.wto.org/tripshealth.

Next

TRIPS Council (regular) meeting (could change):

2012

Tuesday-Wednesday 6–7 November