TRIPS: ‘NON-VIOLATION’ COMPLAINTS (ARTICLE 64.2)
Background and the current situation
Is it possible to have intellectual property disputes in the WTO even if no agreement has been violated? If so, how could they be handled?
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Last updated: 7 February 2018
This backgrounder has been prepared by the Information and External Relations Division of the WTO Secretariat to help the public understand the main issues. It is not an official interpretation of the WTO agreements or members’ positions; and because of the need to simplify and summarize, it cannot cover all nuances or all points of the debate in detail. These can be found more precisely in the documents cited
In general, disputes in the WTO involve allegations that a country has violated an agreement or broken a commitment. But in some situations a government can go to the Dispute Settlement Body even when an agreement has not been violated. This is called a non-violation complaint. It is allowed if one government can show that it has been deprived of an expected benefit because of another government’s action, or because of any other situation that exists.
The aim is to help preserve the balance of benefits struck during multilateral negotiations. For example, a country may have agreed to reduce its tariff on a product as part of a market access deal, but later subsidized domestic production so that the effect on the conditions of competition are the same as the original tariff. A non-violation case against this country would be allowed to restore the conditions of competition implied in the original deal.
Non-violation complaints are possible for goods and services (under GATT for goods and market-opening commitments in services). However, for the time being, members have agreed not to use them under the TRIPS Agreement. Under Article 64.2 this “moratorium” (i.e. the agreement not to use TRIPS non-violation cases) was to last for the first five years of the WTO (i.e. 1995–99). It has been extended since then.
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 moratorium continued or made permanent. Some have suggested additional safeguards.
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The Doha mandate
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 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 as applies to goods and services cases, (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 reached at that time. Since then, the moratorium has been extended from one ministerial conference to the next, the latest being the extension from the 2017 Buenos Aires Ministerial Conference to the next meeting, which ministers agreed to hold in 2019.