CANCÚN WTO MINISTERIAL 2003: BRIEFING NOTES
INTELLECTUAL PROPERTY (TRIPS) Negotiations, implementation and TRIPS Council work
> Director-General’s letter to journalists
> The Doha Development Agenda
> Market access, non-agricultural products
> Intellectual property (TRIPS)
> Trade and investment
> Trade and competition policy
> Transparency in government procurement
> Trade facilitation
> Rules: anti-dumping, subsidies
> Rules: regional agreements
> Dispute settlement
> Trade and environment
> Electronic commerce
> Small economies
> Trade, debt and finance
> Trade and technology transfer
> Technical cooperation
> Least-developed countries
> Special and differential treatment
> Members and accession
> Some facts and figures
> Jargon buster
The WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) has a wide ranging work programme covered by three mandates that ministers set at the Doha Ministerial Conference:
- The Doha Ministerial Declaration (Paragraphs 17—19)
- The separate Declaration on the TRIPS Agreement and Public Health
- The Decision on Implementation-Related Issues and Concerns
This briefing note contains an explanation of the following subjects in the TRIPS work programme:
- TRIPS and public health (see below)
- Geographical indications in general (see below)
- Geographical indications: the multilateral register for wines and spirits (see below)
- Geographical indications: extending the “higher level of protection” beyond wines and spirits (see below)
- Reviews of TRIPS provisions: particularly Art.27.3(b), biodiversity and traditional knowledge (see below)
- Non-violation complaints (Art.64.2) (see below)
- Technology transfer (see below)
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- Report to the General Council — solution on compulsory licensing and lack of pharmaceutical production capacity: by end of 2002
- Report to TNC — action on outstanding implementation issues under Paragraph 12: by end of 2002
- Deadline — negotiations on geographical indications registration system (wines and spirits): by 5th Ministerial Conference, 2003 (in Cancún, Mexico)
- Deadline — negotiations specifically mandated in Doha Declaration: by 1 January 2005
- Least-developed countries to apply pharmaceutical patent provisions: 2016
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TRIPS and public health
An issue that has arisen recently is how to ensure patent protection for pharmaceutical products does not prevent people in poor countries from having access to medicines — while at the same time maintaining the patent system’s role in providing incentives for research and development into new medicines.
Flexibilities such as “compulsory licensing” are written into the TRIPS Agreement — governments can issue compulsory licenses to allow a competitor to produce the product or use the process under licence, but only under certain conditions aimed at safeguarding the legitimate interests of the patent holder.
Parallel importing is also possible. This is where a product sold by the patent owner more cheaply in one country is imported into another without the patent holder’s permission. Countries’ laws differ on whether they allow parallel imports. The TRIPS Agreement simply states that governments cannot bring legal disputes to the WTO on this issue.
(These flexibilities do not have to be put into practice. They are sometimes used as a means of bargaining. For example the threat of a compulsory licence can encourage a patent holder to reduce the price.)
But some governments were unsure of how these flexibilities would be interpreted, and how far their right to use them would be respected. The African Group (all the African members of the WTO) were among the members pushing for clarification.
The Doha mandate back to top
A large part of this was settled when WTO ministers issued a special Declaration on TRIPS and Public Health at the Doha Ministerial Conference in November 2001.
In the main declaration, they stressed that it is important to implement and interpret the TRIPS Agreement in a way that supports public health — by promoting both access to existing medicines and the creation of new medicines.
In the separate declaration, they agreed that the TRIPS Agreement does not and should not prevent members from taking measures to protect public health.
They underscored countries’ ability to use the flexibilities that are built into the TRIPS Agreement, in particular compulsory licensing and parallel importing.
And they agreed to extend exemptions on pharmaceutical patent protection for least-developed countries until 2016. (The TRIPS Council completed the legal drafting task on this in mid—2002.)
On one remaining question, they assigned further work to the TRIPS Council — to sort out how to provide extra flexibility, so that countries unable to produce pharmaceuticals domestically can import patented drugs made under compulsory licensing. (This is sometimes called the “Paragraph 6” issue, because it comes under that paragraph in the separate Doha declaration on TRIPS and health.)
The issue arises because Article 31(f) of the TRIPS Agreement says products made under compulsory licensing must be “predominantly for the supply of the domestic market”. This applies directly to countries that can manufacture drugs — it limits the amount they can export when the drug is made under compulsory licence. And it has an indirect impact on countries unable to make medicines and therefore wanting to import generics. They would find it difficult to find countries that can to supply them with drugs made under compulsory licensing.
The TRIPS Council had to find a solution and report to the General Council on this by the end of 2002.
Since then … back to top
After almost a year of discussion and negotiation, the TRIPS Council considered a draft decision at the end of December 2002. The draft received very wide support. But there was no consensus and at the time of writing the issue remains unresolved.
The 16 December 2002 draft takes the form of a waiver. It would allow countries that can make drugs to export drugs made under compulsory licence to countries that cannot manufacture them.
The waiver would last until the TRIPS Agreement is amended. It would include provisions on transparency (which would give a patent-owner some opportunity to react by offering a lower price), and special packaging and other methods to avoid the medicines being diverted to rich-country markets. An annex would describe what a country needs to do in order to declare itself unable to make the pharmaceuticals domestically. And over 20 developed countries would announce that they would not import under this decision.
Almost all members said that in the spirit of compromise they could join a consensus supporting the 16 December 2002 draft, even though most of them felt the text was far from ideal.
Developing countries had various concerns, mainly about what they considered to be burdensome conditions, such as on transparency and preventing the medicines being diverted to the wrong markets. Developed countries were concerned that the decision did not go far enough in preventing the medicines being diverted to the wrong markets. Some said they would have preferred a different legal route.
At least one country, the United States, said the draft was too open-ended on the range of diseases the decision would cover.
The draft decision refers to drugs needed to address the public health problems recognized in Paragraph 1 of the original declaration that ministers issued in Doha. This says: “We recognize the gravity of the public health problems afflicting many developing and least-developed countries, especially those resulting from HIV/AIDS, tuberculosis, malaria and other epidemics.”
Further attempts to break the deadlock took place in January and February 2003, but they failed. Since then, discussions have taken place outside the WTO.
The issue remained on the TRIPS Council’s agenda, and at the 4—5 June 2003 meeting, the chairperson concluded that he intended to remain in close contact with delegations, with a view to resuming consultations as soon as developments show that this would be useful. He urged delegations to continue to dialogue with each other, and to look for ways of resolving the final problems in the text of 16 December 2002. He stressed the desirability of finding a multilateral solution before the Cancún Ministerial Conference, preferably in time for the 24 July General Council meeting, when the TRIPS Council, like other subsidiary bodies, was expected to report, before the Ministerial Conference.
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Geographical indications in general
Geographical indications are place names (in some countries also words associated with a place) used to identify the origin and quality, reputation or other characteristics of products (for example, “Champagne”, “Tequila” or “Roquefort”). Protection required under the TRIPS Agreement is defined in two articles.
All products are covered by Article 22, which defines a standard level of protection. This says geographical indications have to be protected in order to avoid misleading the public and to prevent unfair competition.
Article 23 provides a higher or enhanced level of protection for geographical indications for wines and spirits (subject to a number of exceptions, they have to be protected even if misuse would not cause the public to be misled). A number of countries want to extend this level of protection to a wide range of other products, including food and handicrafts. Among the exceptions that the agreement allows are: when a name has become a common (or “generic”) term (for example, “cheddar” now refers to a particular type of cheese not necessarily made in Cheddar, in the UK), and when a term has already been registered as a trademark (for example, in Italy “Parma” is a type of ham from the region of the city of Parma, but in Canada it is a registered trademark for ham made by a Canadian company).
Information that members have supplied during a fact-finding exercise shows that countries employ a wide variety of legal means to protect geographical indications: ranging from specific geographical indications laws to trademark law, consumer protection law, or common law. The TRIPS Agreement and current TRIPS work in the WTO takes account of that diversity.
Two issues are debated under the Doha mandate: creating a multilateral register for wines and spirits; and extending the higher (Article 23) level of protection beyond wines and spirits. Both are as contentious as any other subject on the Doha agenda.
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Geographical indications 1:the multilateral register for wines and spirits
This negotiation, which takes place in dedicated “special sessions” of the TRIPS Council, deals with wines and spirits, which are given a higher level of protection for geographical indications (TRIPS Article 23) than other products (which are protected under Article 22). This means the wines’ and spirits’ names should, in principle, be protected even if there is no risk of misleading consumers or of unfair competition.
The negotiations for creating a multilateral register for geographical indications for wines and spirits are required under Article 23.4 of the TRIPS Agreement. Work began in July 1997, but the negotiations are now under the Doha Agenda (the Doha Declaration’s paragraph 18). They are separate from the question of whether the higher level of protection given to wines and spirits should be extended to other products, although some countries have said they want the higher level of protection to be extended to other products and the register to cover those other products.
The Doha mandate back to top
The WTO TRIPS Council had already started work on a multilateral registration system for geographical indications for wines and spirits over four years before the Doha meeting. The Doha Declaration sets a deadline for completing the negotiations: the Fifth Ministerial Conference in 2003.
Since then … back to top
Two sets of proposals have been submitted over the years, representing the two main lines of argument in the negotiations. The latest are (documents downloadable from Documents Online http://docsonline.wto.org on the WTO website):
- The “joint paper”, documents: TN/IP/W/5 from Argentina, Australia, Canada, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Japan, Namibia, New Zealand, the Philippines, Chinese Taipei and the US; and
TN/IP/W/6, a communication from Argentina, Australia, Canada, Chile, New Zealand and the US.
This group proposes a voluntary system where notified geographical indications would be registered in a database. Those governments choosing to participate would have to consult the database when taking decisions on protection in their countries. Non-participating members would be “encouraged” but “not obliged” to consult the database.
- The “EU proposal” (document IP/C/W/107/Rev.1) whose objectives have been supported in document
TN/IP/W/3 signed by Bulgaria, Cyprus, the Czech Republic, the EU, Georgia, Hungary, Iceland, Malta, Mauritius, Moldova, Nigeria, Romania, the Slovak Republic, Slovenia, Sri Lanka, Switzerland and Turkey.
This proposes that the registration would establish a “presumption” that the geographical indication is to be protected in all other countries — a presumption that can be challenged on certain grounds. The TRIPS Agreement allows some exceptions to the obligation to protect geographical indications, for example if a term has become generic or if it does not fit the definition of a geographical indication. Under the EU proposal, once a term has been registered, no country could refuse protection on these grounds, unless it had challenged the term within 18 months.
Hungary has a slightly modified proposal with an arbitration system to settle differences (document IP/C/W/255)
Hong Kong, China has recently proposed a compromise in which registering a term would enjoy a less limited “presumption” in participating countries than under the EU proposal (document TN/IP/W/8).
The Secretariat has produced a document compiling the various positions so far: TN/IP/W/7/Rev.1, dated 23 May 2003 (with a correction, TN/IP/W/7/Rev.1/Corr.1 dated 20 June), also available on Documents Online (http://docsonline.wto.org).
At the heart of the debate are a number of key questions. What legal effect, if any, would a registration system need to have within member countries, if the register is to serve the purpose of “facilitating protection” (the phrase used in Article 23.4)? And to what extent, if at all, should the effect apply to countries not participating in the system. There is also the question of the administrative and financial costs for individual governments and whether they would outweigh the possible benefits.
Opinions are strongly held on both sides of the debate, with some highly detailed arguments presented by both sides.
The draft text back to top
The chairperson circulated a “draft text” on 16 April 2003. This was discussed for the first time at the 29—30 April meeting and continued in June and July. Where members differ strongly, the text includes options, A, B, and B1 and B2.
“A” represents the “joint paper” (TN/IP/W/5) by the US, Canada, Australia, Chile, Argentina, Japan and others (full list above).
“B” represents the Europeans. This is further split into two variants:
“B1”: the EU version, where a challenge is handled by bilateral consultations. If the question remains unresolved, the challenging country does not have to protect the geographical indication.
“B2”: the Hungarian proposal (supported by Switzerland), which proposes settling unresolved challenges by arbitration.
As an idea of what the paper contains, its headings are:
- Notification (substantive conditions, contents, language, form, circulation and publication)
- Registration (with options A, B, B1 and B2 on challenge, etc)
- Legal effects in participating members (with options A, B, B1 and B2)
- Legal effects in non-participating members (with options A, B, B1 and B2)
- Legal effects in least-developed country members
- Modifications of notifications and registrations
- Fees and costs
- Contact point
Headings not yet containing draft text deal with: the committee or other body responsible for the system, the administering body (e.g. the WTO or WIPO Secretariat), how to withdraw from the system, reviews, and when the system would start to operate.
Since the June meeting, the chairperson has continued consultations. The deadline for agreement is the Cancún Ministerial Conference.
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Geographical indications 2:extending the “higher level of protection” beyond wines and spirits
A number of countries want to negotiate extending to other products the higher level of protection (Article 23) currently given to wines and spirits. Others oppose the move, and the debate in the TRIPS Council has included the question of whether the Doha Declaration provides a mandate for negotiations.
The issue is linked to the agriculture negotiations. Some countries have said that progress in this aspect of geographical indications would make it easier for them to agree to a significant deal in agriculture. Others reject the view that the Doha Declaration makes this part of the balance of the negotiations. At the same time, the European Union has also proposed negotiating the protection of specific names of specific agricultural products as part of the agriculture negotiations.
The Doha mandate back to top
The Doha Declaration notes that the TRIPS Council will handle this under the declaration’s paragraph 12 (which deals with implementation issues). Paragraph 12 says “negotiations on outstanding implementation issues shall be an integral part” of the Doha work programme. Where there is not a specific negotiating mandate in the Doha Declaration, implementation issues “shall be addressed as a matter of priority by the relevant WTO bodies, which shall report to the Trade Negotiations Committee [TNC], established under paragraph 46 below, by the end of 2002 for appropriate action.”
Delegations interpret Paragraph 12 differently. Many developing and European countries argue that the so-called outstanding implementation issues are already part of the negotiation and its package of results (the “single undertaking”). Others argue that these issues can only become negotiating subjects if the Trade Negotiations Committee decides to include them in the talks — and so far it has not done so.
Since then … back to top
This difference of opinion over the mandates means that the discussions have had to be organized carefully. At first they continued in the TRIPS Council. More recently (in 2003), they have been the subject of informal consultations chaired by Director-General Supachai Panitchpakdi.
Members remain deeply divided, with no conclusion in sight, although they are ready to continue discussing the issue.
Those advocating the extension (including Bulgaria, China, the Czech Republic, the EU, Hungary, Liech-tenstein, Kenya, Mauritius, Nigeria, Pakistan, the Slovak Republic, Slovenia, Sri Lanka, Switzerland, Thailand and Turkey) see the higher level of protection as a means of marketing their products, and they object to other countries “usurping” their terms.
Those opposing extension argue that the existing (Article 22) level of protection is adequate, and that providing enhanced protection would be expensive. They also reject the “usurping” accusation particularly when migrants have taken the methods of making the products and the names with them to their new homes. For this reason, the debate has been described as one between “old world” and “new world” countries. But the description is not entirely accurate since the countries opposing extension include Japan, Chinese Taipei, and some Southeast Asian countries as well as the US, Canada, Australia, New Zealand, Argentina and a number of other Latin American countries.
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Reviews of TRIPS provisions:particularly Art.27.3(b), biodiversity and traditional knowledge
Two reviews have been taking place in the TRIPS Council, as required by the TRIPS Agreement: a review of Article 27.3(b) which deals with patentability or non-patentability of plant and animal inventions, and the protection of plant varieties, and a review of the entire TRIPS Agreement (required by Article 71.1).
Article 27 of the TRIPS Agreement defines the types of inventions which have to be eligible for patent protection and those which can be exempt. These include both products and processes, and they generally cover all fields of technology.
In general, inventions eligible for patenting must be new, involve an inventive step (or be non-obvious) and be capable of industrial application (or be useful). Article 27 also lists inventions which governments do not have to make eligible for patent protection.
Part (b) of paragraph 3 (i.e. Article 27.3(b)) covers biotechnological inventions. It is currently under review in the TRIPS Council, as required by the TRIPS Agreement. Some countries have broadened the discussion to cover biodiversity and traditional knowledge. The Doha Declaration has linked these issues.
Broadly speaking, Article 27.3(b) allows governments to exclude plants, animals and “essentially” biological processes (but micro-organisms, and non-biological and microbiological processes have to be eligible for patents). However, plant varieties have to be eligible either for patent protection or through a system created specifically for the purpose (“sui generis”), or a combination of the two. For example, many countries have enact a plant varieties protection law based on a model of the International Union for the Protection of New Varieties of Plants (UPOV).
Before Doha back to top
The review of Article 27.3(b) began in 1999 as required by the TRIPS Agreement. The topics raised in the TRIPS Council’s discussions include:
- how to apply the existing TRIPS provisions on whether or not to patent plants and animals, and whether they need to be modified
- the meaning of effective protection for new plant varieties (i.e. alternatives to patenting such as the 1978 and 1991 versions of UPOV). This includes the question of allowing traditional farmers to continue to save and exchange seeds that they have harvested, and preventing anti-competitive practices which threaten developing countries’ “food sovereignty”
- how to handle moral and ethical issues, e.g. to what extent invented life forms should be eligible for protection
- how to deal with traditional knowledge and genetic material, and the rights of the communities where these originate (including disclosing the source of genetic material, and benefit sharing when inventors in one country have rights to inventions based on material obtained from another country)
- whether there is a conflict between the TRIPS Agreement and the UN Convention on Biological Diversity (CBD)
The Doha mandate back to top
The Doha Declaration says that work in the TRIPS Council on the reviews (Article 27.3(b) or the whole of the TRIPS Agreement under Article 71.1) or any other implementation issue should also look at: the relationship between the TRIPS Agreement and the UN Convention on Biodiversity; the protection of traditional knowledge and folklore; and other relevant new developments that member governments raise in the review of the TRIPS Agreement. It adds that the TRIPS Council’s work on these topics is to be guided by the TRIPS Agreement’s objectives (Article 7) and principles (Article 8), and must take development fully into account.
Since then … back to top
The discussion in the TRIPS Council has gone into considerable detail with a number of ideas and proposals for dealing with these complex subjects. Among the newest papers are (documents available from Documents Online http://docsonline.wto.org on the WTO website):
- EU (IP/C/W/383): including a proposal to examine a requirement that patent applicants disclose the origin of genetic material, with legal consequences outside the scope of patent law.
- Switzerland (IP/C/W/400): proposing an amendment to WIPO’s Patent Cooperation Treaty (and, by reference, WIPO’s Patent Law Treaty) so that domestic laws ask patent applicants to disclose the origins of genetic resources and traditional knowledge. Failure to disclose could hold up a patent being granted, or affect its validity.
- Brazil, Cuba, Ecuador, India, Peru, Thailand, Venezuela (IP/C/W/403). This paper develops earlier proposals on disclosure of the origins of biological resources and traditional knowledge, “prior informed consent” for exploitation (a term used in the Biological Diversity Convention), and equitable benefit sharing. This group wants the TRIPS Agreement to be amended to make disclosure an obligation. The paper also looks at weaknesses of alternative methods such as contracts.
- The African Group (IP/C/W/404). This looks at possible areas of agreement and areas of divergence and includes a draft decision on traditional knowledge designed to prevent “misappropriation”. The African Group wants to outlaw patenting of all life forms (plants, animals, micro-organisms) and wants sui generis protection for plant varieties to preserve farmers rights to use and share harvested seeds. It proposes requirements on disclosure similar to those in IP/C/W/403 (above).
Some developed countries oppose additional requirements to disclose the source of genetic material or traditional knowledge, and information on prior informed consent and benefit sharing. They say contractual agreements between researchers and the communities owning the traditional knowledge or genetic materials are enough.
A key question that has emerged is whether discussions on these subjects have developed far enough for them to be handled immediately in the WTO — a view many developing countries support — or whether they should wait for technical discussions in WIPO to be sorted out — the view of several developed countries such as Canada and the US.
The review of the TRIPS Agreement (under Article 71.1) back to top
There has been very little discussion and no proposals on this under the Doha agenda.
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Non-violation complaints (Article 64.2)
In principle, disputes in the WTO involve allegations that a country has violated an agreement or broken a commitment.
Under the goods agreement (GATT) and the services (GATS) specific commitments, countries can complain to the Dispute Settlement Body if they can show that they have been deprived of an expected benefit because of some governmental action (for example a new production subsidy on an item on which a tariff concession has been made), or because of any other situation — even if these do not violate an agreement. The purpose of allowing these “non-violation” cases is to preserve the balance of benefits (such as market-access opportunities) struck during multilateral negotiations.
The TRIPS Agreement (Article 64.2) temporarily banned non-violation disputes. It says non-violation complaints cannot be brought to the WTO dispute settlement procedure during the first five years of the WTO Agreement (i.e. 1995—99). (This was extended in Doha.)
At the same time, the TRIPS Council has discussed whether non-violation complaints should be allowed in intellectual property, and if so, to what extent and how (“scope and modalities”) they could be brought to the WTO’s dispute settlement procedures.
At least two countries (the US and Switzerland) say non-violation cases should be allowed in order to discourage members from engaging in “creative legislative activity” that would allow them to get around their TRIPS commitments. Most would like to see the ban continued or made permanent. Some have suggested additional safeguards.
The Doha mandate back to top
The Doha Decision on Implementation-Related Issues and Concerns (in Paragraph 11.1) instructs the TRIPS Council to make a recommendation to the Cancún Ministerial Conference. Until then, members have agreed not to file non-violation complaints under TRIPS.
In May 2003, the TRIPS Council chairperson listed four possibilities for a recommendation: (1) banning non-violation complaints in TRIPS completely, (2) allowing the complaints to be handled under the WTO’s dispute settlement rules, (3) allowing non-violation complaints but subject to special “modalities” (i.e. ways of dealing with them), and (4) extending the moratorium.
In response, most members favoured banning non-violation complaints completely (option 1), or extending the moratorium (option 4).
However, no consensus was possible, and further work is need to prepare for a decision in Cancún.
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Developing countries, in particular, see technology transfer as part of the bargain in which they have agreed to protect intellectual property rights. The TRIPS Agreement includes a number of provisions on this. For example, it requires developed countries’ governments to provide incentives for their companies to transfer technology to least-developed countries (Article 66.2).
Least-developed countries want this requirement to be made more effective. In Doha, ministers agreed that the TRIPS Council would “put in place a mechanism for ensuring the monitoring and full implementation of the obligations”. The council adopted a decision setting up this mechanism in February 2003. It details the information developed countries are to supply by the end of the year, on how their incentives are functioning in practice.
This is now being implemented, and will be reviewed in full when the TRIPS Council meets in November 2003. At the same time, the question of technology transfer continues to be raised under various TRIPS headings such as TRIPS and Public Health.