WTO: 2014 NEWS ITEMS

INTELLECTUAL PROPERTY: FORMAL COUNCIL MEETING


NOTE:
THIS NEWS STORY is designed to help the public understand developments in the WTO. While every effort has been made to ensure the contents are accurate, it does not prejudice member governments’ positions.

The official record is in the meeting’s minutes.

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MINUTES:

Updated 6 March 2014: Uruguay’s statement on plain packaging has been corrected

The discussions (details below) took place in the Council for Trade Related Aspects of Intellectual Property Rights (TRIPS), which, like almost all WTO committees, consists of all WTO members. One issue was a follow-up from the Bali Ministerial Conference in December 2013 — the apparently abstract legal question of “non-violation” disputes, which some believe may have real-world implications for trade and related issues.

 

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Plain packaging

A number of countries urged members to refrain from introducing plain packaging for cigarettes and other tobacco products — using standard colours and typefaces instead of brand logos, usually with large health warnings — until a ruling emerges from the WTO dispute settlement cases involving Australia’s law. However, New Zealand reported on the progress of its draft law, which is now in Parliament.

This was the seventh time the TRIPS Council had discussed the issue since June 2011, the most recent exchanges focusing on similar plans in Ireland. Plain packaging for tobacco products has also been discussed in the Technical Barriers to Trade Committee (which deals with labelling and packaging) and is the subject of five legal challenges against Australia, dispute cases DS434 (brought by Ukraine), DS435 (brought by Honduras), DS441 (brought by Dominican Republic), DS458 (brought by Cuba) and DS467 (brought by Indonesia).

Cuba, Dominican Republic, Honduras, Zimbabwe, Ukraine, Nicaragua, Indonesia repeated their support for health objectives, but remained concerned about possible violations of TRIPS by preventing producers from using trademarks and geographical indications.

They argued that plain packaging is too drastic to meet the objective of protecting health, and that it could be counter-productive by making counterfeiting easier and cheaper, and increasing smoking. They repeated their complaint about the impact on their poor producers. The Dominican Republic said it also fears that similar measures might be taken on other products such as those with high sugar, fat and alcohol contents

Australia declined to comment while the legal case was being heard.

New Zealand described the latest progress of its bill, which was introduced into Parliament on 17 December 2013, and passed its first reading on 11 February. The draft law still has to go through a parliamentary committee and two more stages in Parliament before it becomes law, New Zealand said. After that regulations would be drafted, which would include details of what the plain packaging should look like.

New Zealand said comments can still be received on the bill, up to 18 April 2014, and with further comments possible when the regulations are drafted. (See New Zealand notification G/TBT/N/NZL/62/Add.1.)

Uruguay supported Australia's view that the current legal challenges in the WTO should not prevent countries from adopting these types of measures. It added that any country can introduce laws to protect the public interest such as in health, and plain packaging cannot be considered a violation of the TRIPS Agreement

Nigeria said that measures to protect public health should not be used to impede legitimate trade, and also urged members to wait until the Australia dispute is concluded.

Switzerland said it supports health policies and anti-smoking campaigns, but also urged members to be consistent with the TRIPS Agreement, Paris Convention for the protection of industrial property, and adopt policies that are “proportionate” — appropriate for the circumstances and taking into account a balance of all interests at stake.

Some of the legal disputes against Australia’s legislation have reached the stage where WTO members (meeting as the Dispute Settlement Body) have agreed to set up panels (a group of adjudicators) to rule on the case, but so far no panellists have been appointed.

The Dominican Republic said its first request in December 2012 for a panel to be set up was blocked by Australia but that the agreement setting out the rules for disputes — the Dispute Settlement Understanding — would not allow a second request to be blocked (see article 6.1). In practice a second request can be lodged after about a month because the Dispute Settlement Body meets almost every month.

New Zealand reminded members that the rules for disputes require the cases to be settled promptly (see article 3.3)

  

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Intellectual property, Innovation and green technology

In the latest discussion on this subject, Ecuador suggested it could update its year-old proposal on easing patent terms and strengthening TRIPS flexibilities for environmentally sound technologies (document IP/C/W/585).

This was partly because the proposal related to the December 2013 Bali Ministerial Conference, with a call for a declaration highlighting the flexibilities available in the TRIPS Agreement — along the lines of the 2001 Doha Ministerial Declaration on TRIPS and Public Health. Ecuador also proposed reducing the length of time patents are protected for green technologies.

Replying to questions asked in previous meetings, Ecuador defended its view that intellectual property protection can hamper the transfer of environmentally sound technologies, making it inaccessible and expensive for developing countries, at a time when all countries agree on the need to combat climate change. Cuba, El Salvador, India, China, South Africa, Brazil, and Benin supported discussing the Ecuadorian proposal.

Chile, the EU, Japan, Switzerland, the US, and Australia countered that intellectual property rights protection does not obstruct technology transfer. In addition, other factors are also necessary to support the transfer, they said, such as adequate regulatory regimes, proper infrastructure, and low patent fees.

 

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Non-violation Complaints

Members continued to disagree as to whether “non-violation” complaints could be allowed in intellectual property. They were prepared to tackle seriously a complex legal issue that has been unresolved for over 20 years, but one that some believe can have a bearing on real-world trade. Nevertheless, they still differed on how to do this.

One of the real-world implications, some developing countries say, could be to undermine flexibilities allowed under the WTO agreement, for example to bypass some patent rights so that the sick in poorer countries obtain cheaper medicines. However, some countries countered that WTO rules prevent that.

A non-violation case arises in the WTO when one country challenges the legality of another’s actions, if it feels it is deprived of an expected benefit, even if no actual agreement or commitment has been violated. Non-violation disputes are allowed for goods and services, but not in intellectual property under a temporary agreement (a “moratorium”) that has been extended several times. The most recent two-year extension was agreed at the Bali Ministerial Conference in December 2013.

Some of those opposing non-violation cases in intellectual property argue that the TRIPS agreement is different from those dealing with goods (the General Agreement on Tariffs and Trade, GATT, and related agreements) and services (the General Agreement on Trade in Services, GATS, and its subsidiary agreements). They say the TRIPS agreement is not about market access but establishing minimum standards for protecting Intellectual property.

Some opponents also argue that non-violation complaints would upset the balance of rights and obligations in the TRIPS agreement and will elevate private rights holders over the interests of the users of intellectual property, by tilting the balance in favour of those owning the patents, copyrights, and other intellectual property. They also fear that non-violation cases would put at risk the use of flexibilities such as compulsory licences, which governments can use to provide their people with cheaper generic versions of patented medicines.

The proponents of non-violation complaints in TRIPS believe that it does have a place. The US said and that WTO agreements ensure that “recommendations and rulings of the Dispute Settlement Body cannot add to or diminish the rights and obligations” provided in the TRIPS Agreement (article 3.2 of the Dispute Settlement Understanding).

Switzerland said that a non-violation complaint could not be brought against a measure benefiting from TRIPS flexibilities, including those confirmed in the Doha Declaration on TRIPS and Public Health, because these measures had already been foreseen at the time of negotiations.

The US said it is preparing a restructured moratorium for members to consider in the next meetings.

Countries speaking against non-violation cases in this meeting — some calling for non-violation to be dropped completely from TRIPS — were: Brazil, Venezuela, China, South Africa, Cuba, Canada, India, Ecuador, Pakistan, the EU, Bangladesh, Argentina, Mexico, Peru, and Rep. Korea.

Some, such as Brazil and South Africa, interpreted the TRIPS Agreement to require agreement on how non-violation cases will be treated (the “scope and modalities”), before the cases can be allowed. The US and Switzerland continued to support non-violation cases. Japan continued to call for the TRIPS Council to clarify the “scope and modalities”.

 

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Biodiversity

Members’ positions remained broadly unchanged, particularly on whether the TRIPS Agreement needs to be amended to require patent owners to disclose the source of the genetic resources and related traditional knowledge used in their inventions.

One of the main concerns is about unauthorized use (“misappropriation”) of genetic resources and any associated traditional knowledge in inventions that are then patented, sometimes called biopiracy. Also of concern is “bad patenting” when claimed inventions are protected even though they are not new.

All members agree that these need to be avoided. They disagree on how to do it. Those seeking an amendment to the TRIPS Agreement see it as a way to ensure that the agreement is compatible with the UN Convention on Biological Diversity (CBD). Those opposing it continue to argue that there a better ways of tackling the problem.

Repeating their call for a “disclosure” amendment in this meeting were: the least developed countries (Angola speaking), India, Indonesia, Brazil, China, Ecuador, Bolivia, Bangladesh, Chile, Peru, South Africa, Cuba, Venezuela, Egypt, Colombia, and the African Group (Nigeria speaking). Opposing disclosure in this meeting were the United States and Japan.

This issue is linked to another, the review of provisions on patenting inventions from plants or animals — Article 27.3(b) of the TRIPS Agreement. Some countries also oppose patenting any life forms and want this article amended too. Taking this line in this meeting were: Bolivia, the least developed countries (Angola speaking), Ecuador and Bangladesh.

The US said there is a tension between the opposition to patenting all life forms and the push for a mandatory disclosure requirement through patents.

Meanwhile members also remained divided over whether the CBD Secretariat should brief the TRIPS Council on the Nagoya Protocol on Access and Benefit-sharing (a supplementary agreement to the CBD adopted in October 2010, which provides for the effective implementation of one of the three objectives of the CBD: the fair and equitable sharing of benefits arising out of the use of genetic resources). The US noted that the Protocol had not yet entered into force and that only a few of those who had spoken had acceded to it.

Some members  called for consultations chaired by the Director-General to resume soon: they were Egypt, China, India and the African Group (Nigeria speaking).

 

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Innovation and university technology partnerships

The discussion, proposed by the US, featured many examples of universities contributing to innovation and the development of technology, and the arrangements that countries have set up to make this work better. Sharing their experiences were the US, Australia, Canada, Hong Kong China, the EU, Japan, New Zealand, Chinese Taipei and Switzerland.

Developing countries had mixed views. Some, particularly India, were worried about the commercialization of universities, basic research and its free use by society at large being undermined in favour of commercial research, and conflicts of interest when academics have a commercial interest. (The US said Indian universities have contributed to Indian technological advance, for example information technology; and said universities have rules on avoiding conflict of interest.)

Brazil, Guatemala, El Salvador said this is a good topic to discuss. Brazil said public policy has to deal with market imperfections and monopoly (which comes with intellectual property protection) and to strike a balance in order to optimize the benefits. Brazil then described its own university partnerships.

 

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Others

Review of notified legislation: South Africa reported on its new act recognizing indigenous knowledge, which covers performance rights, copyright, trademarks, terms and expressions, geographical indications and designs. The law also sets up a national council on indigenous knowledge, South Africa said.

“Notification and review” is the core work of many WTO committees because it helps monitor how WTO agreements are being implemented. Currently, this is less the case in the TRIPS Council because it deals with whole laws rather than separate measures. The early years after developed and developing countries first applied the TRIPS Agreement saw intensive and sometimes lengthy reviews.

After a lull, notifications are increasing again as members report changes to their laws, the Secretariat reported. Around 600 notifications have been received since 2009, it said. The Secretariat is also working on methods to improving tools for accessing the information online

 

CHAIRPERSON: Ambassador Dacio Castillo of Honduras (acting, in the absence of Amb.Alfredo Suescum of Panama)

Next

TRIPS Council (regular) meetings (could change):

2014

  • 11–12 June
  • 28–29 October

Where is the plain packaging issue in the WTO?

Plain packaging for tobacco has been debated intensively in the WTO for almost three years. For the past two years it has been a full-blown legal dispute. It was first raised in the June 2011 meetings of the bodies dealing with intellectual property, and with standards and regulations, including on packaging and labelling — the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Council and the Technical Barriers to Trade (TBT) Committee. The discussions were first prompted by an Australian plain packaging bill, which subsequently became law. Later, a similar bill in New Zealand and policies announced in the EU and Ireland were also discussed.

Ukraine launched a legal challenge through the WTO Dispute Settlement Body (DSB) in March 2012, once the Australian bill became law. Honduras and Dominican Republic filed their complaints in 2012, and Cuba and Indonesia in 2013, bringing the total number of cases to five. They are dispute cases DS434 (brought by Ukraine), DS435 (brought by Honduras), DS441 (brought by Dominican Republic), DS458 (brought by Cuba) and DS467 (brought by Indonesia). It remains to be seen whether the cases will be merged. So far, the only panels set up are for the Ukraine and Honduras cases, and no panellists have been appointed. Among the many claims in these disputes, are complaints that the Australian law’s labelling and packaging requirements violate WTO rules by limiting or prohibiting the use of trademarks, geographical indications or both on tobacco product,s and by requiring these products only to be sold in standardized packaging.