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IP and innovation: the societal value of IP in today's economy – IP improving lives

As part of a series of items on IP and innovation regularly added to the Council's agenda since 2012, the co-sponsors (Australia, Canada, the European Union, Japan, Republic of Korea, Switzerland, Chinese Taipei and the United States) stressed in this item the importance of the IP system as an integral element of policy frameworks that support innovation. They also underlined IP's importance as a means to promote and protect the expression of new ideas and inventions, incentivise and foster ingenuity and follow-on innovation, and enable cross-border collaboration, trade and engagement in global value chains.

In supporting and incentivising innovation, the co-sponsors said, IP frameworks make a significant contribution to improving lives through social and economic growth and advancement, including in sectors such as education and training, creative works, health, the environment and transport. In the case of the education and the training sector, for example, students enjoy learning from a wide range of IP-protected materials, including innovative research, books and documentaries, and have access to new methods and tools of learning. Also in the creative sector, IP and innovation can increase employment opportunities and create new value chains.

The proponents highlighted that new technology is changing transportation, delivery and monitoring, with self-driving cars and buses, and business using drones to deliver goods and to monitor crops, animals or the impact of significant weather events. They invited other members to share examples of inventions or creations that are the result of IP systems and have benefited or improved lives.

One member noted that while policy makers increasingly see harnessing technological progress as a key priority to boost economic growth and improve living standards, the relationship between intellectual property rights (IPRs) and development is quite complex. Economic literature is inconclusive, and any attempt to quantify the contribution of IPR frameworks to improve lives through social and economic growth needs to appreciate the variable nature of the legal frameworks that support them and rely on models that enable developing countries to catch up, this member said.

The member also underscored that affordable access to information and communication technologies (ICTs) is essential for people and enterprises to take an active part in evolving digital economies and to reap development gains from it, particularly taking into account that more than half of the world's population remains offline and the broadband divide is wider than ever. It invited the co-sponsors to engage in a substantive discussion on a number of questions.

Another member said that the evolution of IP rules in developed countries suggest that the design of IP rules and policies should be adaptable to the changing needs of societies. This is reflected in the fact that IP protection in developed countries increased as their industrial and technological capacities improved over time. While IPRs may provide an incentive to innovate, they are neither a necessary nor a sufficient condition and could only be effective in certain contexts. IPRs cannot boost innovation if the required conditions, skills, information, capital, market prospects, etc. do not exist, this member said.

IP and the public interest: promoting public health through competition law and policy

This ad hoc item was submitted by China and South Africa and co-sponsored by Brazil and India. Members were invited to share their national experiences and examples of how competition law is used to achieve public health objectives. The debate focused on how to enhance understanding of various approaches in the use of competition law and policy to prevent or deter practices such as excessive pricing or abusive clauses in licensing agreements that unreasonably restrict access to new technology, prevent the entry of generic companies and may result in higher prices for medicines. In the co-sponsors' view, competition tools do not undermine IPRs, but rather reinforce them.

On behalf of the proponents, South Africa noted that competition law is one of the least discussed flexibilities within the WTO's Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) and stressed that the main objective of competition law is to protect the integrity of competitive markets against the abuse of IPRs and to protect consumers.

Even though the TRIPS Agreement sets minimum norms for standards for IP protection that significantly limit members discretion on a large number of IP rights issues, South Africa highlighted, it is not the case with competition law because members are free to design competition laws in such a way as to take account of their domestic interests and needs, including taking account of their respective levels of development. In this regard, various provisions of the TRIPS Agreement are relevant to competition law - Article 6, Article 31 (k) and Article 40 – leaving broad discretion to members in how they apply completion law in respect of the acquisition and exercise of IP rights as long as the measures taken were consistent with the TRIPS Agreement, as provided for by Article 8. 

Some members expressed their concern that this agenda item could bring about a discussion on public interest that fails to account fully for the benefits of protecting IP. One potential negative consequence of an insufficiently nuanced discussion could be discouraging members from striving towards and upholding robust domestic IP regimes, harming incentives for critical future innovations that would greatly benefit the public. In their view, IP enhances rather than prevents competition, and the two policy domains should be therefore seen as complementary.

Furthermore, it was pointed out by some members that IP and competition are distinct disciplines implemented and overseen by different administrative authorities. The TRIPS Council is therefore not the ideal venue to have a detailed discussion of competition law and policy concepts. The discussion in the TRIPS Council should be strictly limited to IP-related issues, these members said.

Technology transfer to LDCs

The Council continued the discussion of the Council's last meeting in February following a proposal by the LDC Group in which developed members are asked to fully implement their technology transfer requirements under WTO rules (Article 66.2 of the TRIPS Agreement).

As at the last Council meeting, the proposal triggered an engaged discussion with interventions of representatives of least-developed countries (LDCs) and their co-operation partners.

LDCs reiterated the need to know exactly what incentives developed countries are providing to their companies and institutions in their territories. They said that the notifications of developed countries make reference to technical assistance projects and programmes, but do not detail the incentives provided nor specify the purpose of the incentive that is to encourage the transfer of technology to LDCs. The proponents shared a document with some ideas to move forward and suggesting the adoption of an agreed illustrative list of what could constitute an "incentive to enterprises and institutions in the territories" of developed country members.

Developed countries said that they were not too convinced about the existence of a problem in need of a solution. Annual reports on this issue presented before the WTO clearly identify programmes benefiting LDC members, they said. The LDC proposal would undermine long-standing and beneficial reporting requirements, they went on, stressing also that technology transfer can proceed most effectively if it takes place on voluntary and mutually-agreed terms by the involved parties, and not on terms prescribed by the TRIPS Council. Some also questioned the need for an illustrative list of incentives.

TRIPS amendment

The chair, Walter Werner of Germany, informed that since the last meeting of the Council, Côte d'Ivoire has deposited its instrument of acceptance for the 2005 protocol amending the TRIPS Agreement, which applies now to 125 WTO members. The remaining 39 members are still operating under the 2003 waiver Decision, which is due to expire by the end of 2019.

The up-to-date list and map of members that have accepted the protocol are available here.

E-TRIPS online platform

The WTO Secretariat informed members that the Notification Submission System (NSS), an optional online tool for submitting TRIPS notifications, review materials and reports, is very close to completion and will be available for members by this summer.

As part of the project to improve the timeliness and completeness of notifications and other information flows, the e-TRIPS platform will also include in due time a TRIPS Information Gateway - an online tool for searching and consulting TRIPS documentation, including over 20 years of accumulated notifications.

New chair and next meeting

The Council appointed Dr Walter Werner of Germany as its new chairperson for the coming year. The next formal meeting of the TRIPS Council will be on 8-9 November 2018.

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