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TWN INFO SERVICE ON WTO ISSUES

Geneva: October 29, 2001

A COMMENT ON THE TREATMENT OF THE TRIPS AGREEMENT IN 2ND DRAFT OF DOHA MINISTERIAL DECLARATIONS

The second versions of the Ministerial Declaration texts were issued late October 27, 2001. 5 documents were sent to the WTO Members: 1) Draft Ministerial Declaration; 2) Draft Decision on Implementation-Related Issues and Concerns; 3) Draft Declaration on Intellectual Property and [Access to Medicines] [Public Health]; 4) Compilation of Outstanding Implementation Issues Raised by Members; and 5) Proposed Procedures for Extensions under Article 27.4 for Certain Developing Country Members.

Below is a brief commentary on some of the sections relating to TRIPS issues as they appear in the texts.  The commentary relates especially to the main Ministerial Declaration and the Ministerial Declaration on Intellectual Property and Medicines/Health.

Annex I is the section on TRIPS in the main Declaration;  Annex II is the Declaration on IP and Medicines/Health.

A COMMENT ON THE TREATMENT OF THE TRIPS AGREEMENT IN THE SECOND DRAFTS OF THE WTO’S DOHA MINISTERIAL DECLARATIONS

A.      BACKGROUND

The second versions of the Ministerial Declaration texts were issued late October 27, 2001. 5 documents were sent to the WTO Members: 1) Draft Ministerial Declaration; 2) Draft Decision on Implementation-Related Issues and Concerns; 3) Draft Declaration on Intellectual Property and [Access to Medicines] [Public Health]; 4) Compilation of Outstanding Implementation Issues Raised by Members; and 5) Proposed Procedures for Extensions under Article 27.4 for Certain Developing Country Members.

3 documents had initially been expected; i.e., the Ministerial Declaration, the Decision on Implementation Issues, and the Declaration on Intellectual Property and Access to Medicines/Public Health. It is understood that the 2 extra documents were the results of last-minute consultations.

The Compilation of Outstanding Implementation Issues (hereafter, the Compilation) is intended to be a listing of all other implementation issues (identified by developing countries in the draft Seattle Ministerial Declaration text of October19, 1999 and beyond), which are not included in the Implementation Decision.   A large number of developing countries had expressed dissatisfaction with the narrow coverage of the implementation issues in the first draft of the Implementation Decision, in which only the minimum and least controversial of the implementation issues had been included in the first draft. The compilation of outstanding issues is seen as an attempt to appease the developing countries. However, it is not clear how these outstanding issues will be dealt with at the Doha Ministerial Conference, or how these relate to the Implementation Decision itself. The concern is that these outstanding issues will not be addressed, and the document is only a window-dressing exercise, which will, in the end, be left out of the real negotiations at Doha.

Insofar as TRIPS issues are concerned, a number of the concerns and proposals of the developing countries have been relegated to the Compilation, including concrete proposals from the relating to the review of Article 27.3(b) and extension of transition periods for developing countries.

Below is a brief commentary on some of the sections relating to TRIPS issues as they appear in the texts.

B.      DRAFT MINISTERIAL DECLARATION

The draft Ministerial Declaration now has 3 paragraphs instead of 4; one on the public health and access to medicines aspect; the second, on the multilateral system for geographical indications for wines and spirits; and the third, on the TRIPS council’s work programme in relation to the reviews under Articles 27.3(b) and 71.1.

B1.  TRIPS AND PUBLIC HEALTH

The draft of the main Ministerial Declaration  makes reference to the separate Ministerial Declaration on TRIPS and public health, as has been called for by developing countries. However, the developing countries have demanded that the reference to the issue of TRIPS and public health in the Ministerial Declaration should set out the common understanding that ‘nothing in the TRIPS Agreement shall prevent WTO Members from taking measures to protect public health’, followed by an endorsement of the clarification and interpretation of the TRIPS Agreement, which was to be contained in a separate declaration. This has not been reflected in the Ministerial Declaration. The Africa Group and the Like-Minded Group of countries in the WTO have proposed the following formulation:

‘We affirm our understanding that nothing in the TRIPS Agreement prevents Members from taking measures to protect public health. In line with this understanding, we endorse a clarification and interpretation of the TRIPS Agreement, as contained in the Ministerial Declaration on TRIPS and Public Health, that will allow and encourage Members, particularly developing country and least-developed country Members, to avail themselves to the widest range of policy options for the protection and promotion of public health.’

The separate declaration on Intellectual Property and [Access to Medicines] [Public Health] is discussed below.

B2. REVIEW OF ARTICLE 27.3(B)

References to Articles 27.3(b) and 71.1 reviews are contained in paragraph 19 of the Ministerial Declaration. This paragraph is very similar, in terms of its lack of political intent and direction, to the corresponding paragraph in first draft of the declaration. What is new is the explicit references to the mandated reviews under Articles 27.3(b) and 71.1. The new paragraph instructs the TRIPS Council, in pursuing its work programme (which includes the Article 27.3(b) and 71.1 reviews) to examine the relationship between TRIPS and the CBD, protection of traditional knowledge and folklore, and other relevant new developments raised by Members pursuant to Article 71.1.

It does not however, reflect the concerns of developing countries over the implications of Article 27.3(b). It also fails to provide much-needed guidance and direction to push forward the review process, which has been effectively stalled for the past 2 years. The oft-cited proposal of the Africa Group prior to the Seattle Ministerial Conference appears to have been relegated or downgraded onto the Compilation document.

The revised paragraph also ignores the most recent proposals of the Africa Group and the Like-Minded Group, which set out the modalities for the conduct of the review under Articles 27.3(b). The Africa Group proposal submitted to the General Council Chairman, and circulated to the WTO Members on October 7, 2001 is as follows:

“We note with concern the lack of progress in the review of Article 27.3(b). We instruct the TRIPS Council to complete the review process by 2002. In the review process, Article 27.3(b) shall be clarified to eliminate the artificial distinctions made between plants and animals, and micro-organisms; and between essentially biological processes, and microbiological processes. The review process shall therefore clarify that plants and animals, as well as micro-organisms and all other living organisms and their parts, cannot be patented, and that natural processes that produce plants, animals and other living organisms shall also not be patentable.

With regard to the protection of plant varieties, the TRIPS Council shall clarify that Members have the right to determine the appropriate sui generis system for the protection of plant varieties that is best suited to their interests. The implementation of this provision shall not prevent developing country Members from implementing sui generis sytems that accord due recognition to farmers and local communities for their traditional knowledge, ensure food security and safeguard farmers’ livelihoods. Such sui generis systems shall also not undermine traditional farming practices, including the right of farmers to save, use, exchange and sell seeds, as well as, to sell their harvest. We further agree that the transition period for the implementation of Article 27.3(b) shall be extended for a further five years from the date its review is satisfactorily completed.”

The least-developed countries (LDCs) had also made proposals with regard to the review of Article 27.3(b) to the effect that its review process should clarify that ‘all living organisms, including plants, animals, and parts of plants and animals, including gene sequences, and biological and other natural processes for the production of plants, animals and their parts shall not be granted patents’. Yet again, this was not reflected in the text of the Ministerial Declaration, but mentioned in the Compilation document.

B3.  REVIEW UNDER ARTICLE 71.1

While there is an explicit mention of Article 71.1 (absent in the first draft), the declaration again does not make mention of the detailed proposals submitted by the Africa Group and the LMG. The Africa Group and the LMG submitted the same proposal relating to the review process under Article 71.1. The proposal instructs the TRIPS Council to identify amendments to TRIPS so as to allow its objectives and principles to be met, including amendments to exclude certain medicines from patentability; as follows:

“In view of serious concerns expressed by Members and the general public regarding the imbalances of the TRIPS Agreement, we agree that, in the review of the TRIPS Agreement under Article 71.1, it shall be appropriate for the TRIPS Council to take into account new developments that warrant modification and amendment of the Agreement. In so doing, the TRIPS Council shall work out the necessary amendments that ensure the ability of developing country Members to fully meet the objectives and principles of the TRIPS Agreement, as contained in Articles 7 & 8. This includes amendments to enable developing country Members to balance public policy objectives with the interests of rights holders, as appropriate to their national needs and conditions, and to allow developing country Members maximum flexibility in their implementation of the TRIPS Agreement. Among others, the TRIPS Council shall examine the effects of the TRIPS Agreement on public health, with particular emphasis on access to medicines, and research and development on medicines for the prevention and treatment of diseases predominantly affecting people in developing and least developed countries, with a view to excluding such medicines from patentability in order to ensure their accessibility and affordability.”

It would appear that this detailed proposal submitted by over 40 countries has been ignored.

C.      DRAFT DECLARATION ON INTELLECTUAL PROPERTY AND [ACCESS TO MEDICINES] [PUBLIC HEALTH]

This draft declaration is based on the ‘Elements’ documents, issued earlier by the Chairman of the General Council on October 21, 2001. Some analysis has already been done on the elements document (see TWN Info Service on WTO Issues, October 26, 2001). Much of the analysis still applies.

Of note, however, is the inclusion of 2 options for language relating to TRIPS and governments ability to take measures to protect public health. This has been the major sticking point in the negotiations thus far. The first option starts off with the developing country proposition that ‘[N]othing in the TRIPS Agreement shall prevent Members from taking measures to protect public health’. It goes on: ‘Accordingly, while reiterating our commitment to the TRIPS Agreement, we reaffirm that the Agreement shall be interpreted and implemented in a manner supportive of WTO Member’s right to protect public health, and in particular, to ensure access to medicines for all. In this connection, we reaffirm the right of WTO Members to use, to the full, the provisions in the TRIPS which provide flexibility for this purpose’.

Option 2 appears to reflect the position of countries like the US and Switzerland, which would like to see a declaration that is limited in scope (to access to medicines for HIV/AIDS and other pandemics) states: ‘We affirm a Member’s ability to use, to the full, the provisions in the TRIPS Agreement which provide flexibility to address public health crises such as HIV/AIDS and other pandemics, and to that end, that a Member is able to take measures necessary to address these public health crises, in particular to secure affordable access to medicines. Further, we agree that this Declaration does not add to or diminish the rights and obligations of Members provided in the TRIPS Agreement. ...’

Whilst there are square brackets around the 2 options, indicating disagreement, it is disconcerting to see that the US proposals on transition period and moratorium have been incorporated into the declaration without square brackets - as if it had already been accepted by the Members. This is not the case. Indeed, the proposal from the US is seen by developing country negotiators as a means of enticing the LDCs and African countries into accepting the proposal in exchange for a weakened declaration, and of breaking up the developing country coalition.

Another new paragraph (which had been left blank in the ‘Elements’ document) is that which deals with the issue of countries with limited domestic manufacturing capacity in the pharmaceutical sector. Discussions and consultations prior to the declaration being issued had been focused on how such countries could be allowed to issue compulsory licences to foreign manufacturers, since they do not have local manufacturers. By such means, a country without local manufacturing capacity would be able to effectively make use of compulsory licensing under the TRIPS Agreement.

In the joint proposal for the Declaration on TRIPS and Public Health submitted by 52 developing countries, developing countries had proposed that compulsory licences issued by a Member should be given effect by another Member, so that the manufacturers in the other Member could produce and export medicines to the Member granting the licence.

The declaration recognises that ‘WTO Members with insufficient or no manufacturing capacities in the pharmaceutical sector could face difficulties in making effective use of compulsory licensing ...’, but it merely instructs the TRIPS Council ‘to find an expeditious solution to this problem, and to report to the General Council before the end of 2002’. It does not make reference to the developing country proposal. And it is also understood that the US and Switzerland had objected to the proposal.

D.      CONCLUSION

As far as the treatment of TRIPS issues is concerned, the second version of the Ministerial texts are no real improvement over the first drafts. The criticism of developing countries directed at the first draft - that there did not appear to be a serious attempt to address issues of concern to developing countries - is still applicable. The issue of process and procedure is also of concern. With the second drafts being issued so close to the Ministerial Conference, the worry is that negotiators will not have sufficient time to consult the drafts and to make amendments. This is particularly serious, especially when proposals of developing countries have been blatantly ignored, as has been the case with the proposals of the Africa Group, the LMG and the LDCs. Yet, the draft Ministerial texts (with the exception of the 2 options in the declaration on access to medicines/public health) are presented as ‘clean’ texts - i.e., text on which there is agreement. But this is far from the truth.

ANNEX 1:   DRAFT MINITERAL DECLARATION (Dated 27 Oct 2001):  PARAS

17-19 DEALING WITH TRIPS

TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS

17. We stress the importance we attach to implementation and interpretation of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) in a manner supportive of public health, by promoting both access to existing medicines and research and development into new medicines and, in this connection, have adopted a separate Declaration.

18. With a view to completing the work started in the Council for Trade-Related Aspects of Intellectual Property Rights (Council for TRIPS) on the implementation of Article 23.4, we agree to negotiate the establishment of a multilateral system of notification and registration of geographical indications for wines and spirits by the Fifth Session of the Ministerial Conference.  We note that issues related to the extension of the protection of geographical indications provided for in Article 23 to products other than wines and spirits will be addressed in the Council for TRIPS pursuant to paragraph 12 of this Declaration.

19. We instruct the Council for TRIPS, in pursuing its work programme including under the review of Article 27.3(b), the review of the implementation of the TRIPS Agreement under Article 71.1 and the work foreseen pursuant to paragraph 12 of this Declaration, to examine, inter alia, the relationship between the TRIPS Agreement and the Convention on Biological Diversity, the protection of traditional knowledge and folklore, and other relevant new developments raised by Members pursuant to Article 71.1.  In undertaking this work, the TRIPS Council shall be guided by the objectives and principles set out in Articles 7 and 8 of the TRIPS Agreement and shall take fully into account the development dimension.

ANNEX 2:  THE DRAFT DECALARATION ON IP DATED 27 OCT 2001

General Council

Preparations for the Fourth Session of the Ministerial Conference

Draft Declaration on Intellectual Property and [Access to Medicines] [Public Health]

1.   We recognize the gravity of the public health crises afflicting many developing and least-developed countries, especially those resulting from HIV/AIDS and other pandemics.

2.   We stress the need for the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) to be part of the wider national and international action to address these problems.

3.   We recognize that intellectual property protection is important for the development of new medicines.  We also recognize the concerns about its effects on prices.

4.   Option 1

[Nothing in the TRIPS Agreement shall prevent Members from taking measures to protect public health.  Accordingly, while reiterating our commitment to the TRIPS Agreement, we affirm that the Agreement shall be interpreted and implemented in a manner supportive of WTO Members’ right to protect public health and, in particular, to ensure access to medicines for all.

In this connection, we reaffirm the right of WTO Members to use, to the full, the provisions in the TRIPS Agreement which provide flexibility for this purpose.]

Option 2

[We affirm a Member’s ability to use, to the full, the provisions in the TRIPS Agreement which provide flexibility to address public health crises such as HIV/AIDS and other pandemics, and to that end, that a Member is able to take measures necessary to address these public health crises, in particular to secure affordable access to medicines.  Further, we agree that this Declaration does not add to or diminish the rights and obligations of Members provided in the TRIPS Agreement.  With a view to facilitating the use of this flexibility by providing greater certainty, we agree on the following clarifications.]

5.   In applying the customary rules of interpretation of public international law, each provision of the TRIPS Agreement shall be read in the light of the object and purpose of the Agreement as expressed, in particular, in its objectives and principles.

6.   Each Member has the right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted.

7.   Each Member has the right to determine what constitutes a national emergency or other circumstances of extreme urgency, it being understood that public health crises, including those relating to HIV/AIDS and other epidemics, can represent a national emergency or other circumstances of extreme urgency.

8.   We recognize that WTO Members with insufficient or no manufacturing capacities in the pharmaceutical sector could face difficulties in making effective use of compulsory licensing under the TRIPS Agreement.  We instruct the Council for TRIPS to find an expeditious solution to this problem and to report to the General Council before the end of 2002.

9.   The effect of the provisions in the TRIPS Agreement that are relevant to the exhaustion of intellectual property rights is to leave each Member free to establish its own regime for such exhaustion, subject to the MFN and national treatment provisions of Articles 3 and 4.

10. We agree that least-developed country Members will not be obliged to implement or apply Sections 5 and 7 of Part II of the TRIPS Agreement or to enforce rights provided for under these Sections with respect to pharmaceutical products until 1 January 2016.  We instruct the Council for TRIPS to take the necessary action to give this effect pursuant to Article 66.1 of the TRIPS Agreement.

11. We agree that, for a period of five years from the date of this Declaration, the provisions of Articles XXII and XXIII of GATT 1994 as elaborated and applied by the Understanding on Rules and Procedures Governing the Settlement of Disputes and as incorporated in Article 64 of the TRIPS Agreement shall not be exercised with respect to any non-discriminatory intellectual property law, regulation or other measure of a developing country Member in sub-Saharan Africa that improves the access of affected populations in sub-Saharan Africa to patented pharmaceutical products used in the treatment of HIV/AIDS and other pandemics.

 

 


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