India, Kenya papers and presentations on TRIPS
by Chakravarthi Raghavan
Geneva, 3 Oct 2000 - In a communication to the WTO on Trade-Related Intellectual Property Rights (TRIPS), India has called for some basic reviews and appraisals of the TRIPS agreement, differentiating its provisions from IPR agreements, in terms of whether TRIPS subserves the objectives of the WTO and expands or restricts trade. Kenya in an oral presentation in a summary form, and expanded in a text sent in for circulation, has called for review and changes in TRIPS to reconcile and ensure TRIPS subserves development.
The following is the text of the Indian paper
1. The scenes of Seattle, both inside and outside the negotiating rooms, brought out many lessons for the WTO Membership. One of these is that the long term health of the multilateral trading system would depend inter-alia on the extent of flexibility retained by Members in meeting their WTO obligations. Second is the expression of frustration in some quarters on the lack of empathy of the multilateral trading system with, inter-alia, the protection of public health and nutrition, and the promotion of public interest in sectors of vital importance to socio-economic and technological development of the Member countries.
2. In WTO these are times of introspection. Introspection to determine the extent of sovereign flexibility necessary to retain a balance between the right of peoples in Member countries to achieve their needs and aspirations, and the obligations of Member Governments to provide a predictable multilateral trading system. Introspection also to distinguish between what is the consensus of the membership on interpretation of what they have negotiated during the Uruguay Round and the ‘clarificatory’ interpretation evolving through the strengthened dispute settlement mechanism. TRIPS is perhaps the most intrusive of the WTO Agreements and therefore needs deeper introspection.
3. Article XVI.4 of the WTO Agreement obliges each Member to ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the TRIPS Agreement. To determine whether such conformity is being ensured, recourse is available either through discussions in the TRIPS Council or through the Dispute Settlement Understanding (DSU).
4. The objectives of the TRIPS Agreement are contained in Article 73. These objectives have two pillars; first, to promote inventions and second, the transfer and dissemination of technology embodied in such inventions. The principles of the Agreement are contained in Article 84.
5. The objectives and principles of the Agreement, and the fact that it is lodged in the WTO demonstrate two things. Firstly, TRIPS is a trade agreement with the overarching objective of promoting trade through international transfer of technology. That, in fact, is the only reason it could become a part of the WTO acquis. Although export of pharmaceuticals or active ingredients, of sound recordings, films, software packages etc. may have been the primary objective of the demandeurs of the Agreement, they sold it to the membership as a trade agreement and thus transfer of technology is necessarily an integral part of its objectives. Second, the agreement balances the private rights of inventors with the rights of the users of inventions. In any debate on the TRIPS Agreement, therefore, these objectives and principles need to be preserved. This being the intention of the negotiators, the TRIPS Council as well as the Dispute Settlement Body (DSB) of WTO need to reflect these objectives and principles in their discussions and decisions.
6. The preambular objective of the WTO Agreement is to raise standards of living, ensure full employment and a large and steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services. On a conventional economic analysis, raising intellectual property protection may actually reduce total domestic and even global economic welfare. It is important therefore that all discussions and decisions on interpretation of the TRIPS Agreement take account of the objectives of WTO and circumscribe intellectual property rights protection with competing public values embodied in Articles 7 and 8. Whether this has happened or not can be assessed from the discussions in the TRIPS Council and decisions of the DSB.
7. Discussions in TRIPS Council have focused on two aspects so far. First, practices of Members in implementing their obligations have been reviewed. Second, some mandated negotiations and reviews have been initiated. A survey of the numerous questions raised by Members, particularly developed country Members themselves, on the legislation reviewed in the last four years leads to an interesting conclusion. This is that the questions have all been based on obligations relating to minimum standards of protection provided for under the Agreement; no questions are asked on the extent to which the objective and principles of the Agreement are translated into the legislation. Rather, exercise of legislative or administrative flexibility by Members to accommodate competing public values such as the use of compulsory licences or Government use have been the subject of some repeated follow up questions, meant primarily to question the use of such flexibility. Clearly, the transfer and dissemination of technology and the consequential increase in trade have been of little concern to the questioning Members. It could thus be argued that the TRIPS Agreement instead of being a trade agreement that it is, has been sought to be converted into a means of enforcing private rights irrespective of their trade effects.
8. During the discussions on the mandated negotiations and reviews in the TRIPS Council, while the developing countries have been emphasizing the flexibilities available under the Agreement to pursue public interest, some developed countries have been proposing further strengthening of the rights of inventors irrespective of public interest.
9. The developments in the dispute settlement body are no different. In an important dispute involving two public policy provisions in a Member’s Patent Act, the dispute settlement mechanism appears to have relegated the objectives and principles to secondary importance as compared to the minimum standards of protection. So much so, in order to focus on standards of IPR protection per se, and not on the larger context of TRIPS as a trade agreement, the particular Panel took pains to clarify in the beginning of its findings that in interpreting TRIPS they have taken into account the extended context, beyond the negotiating history, encompassing incorporated international instruments. These, of course, are IPR related instruments and not trade related instruments. In interpreting ‘limited’ in Article 30 of the Agreement, again, the Panel considered the expression solely from the perspective of the right holders, disregarding the policy goals or social purposes of the measure. It did not take guidance from the Appellate Body, which had earlier held that an exception provision does not ipso facto become ‘stricter’ or ‘narrower’. Instead it did not even take a clue of the negotiating intent of the membership when the majority of third parties found both the impugned policy provision as acceptable limited exceptions under Article 30. Another, perhaps more damaging, evolutionary interpretation of the dispute settlement mechanism in a particular case is its finding that the non-discrimination provisions in Article 27.1 of the Agreement apply to any exception granted under Article 30. Such an interpretation renders ineffective the otherwise legitimate and prescribed objectives and principles of the agreement including legitimate social and economic objectives, health concerns and creation of a balance between private interests and public interests. After all, Article 30 is not subject to Article 27 by any reading or interpretation of the plain words of the Agreement. This reduces the legal security of both right holders and those social interests seeking to limit intellectual property protection. Therefore, in its evolutionary interpretation, the WTO dispute settlement mechanism has interpreted Article 30, in a very limited way. The importance of Articles 7 and 8 was limited firstly, by counting them as two among many provisions which indicate the object and purpose of the Agreement and secondly, by referring mainly to the limitations of these Articles. Thus, Article 30 has to virtually stand on its own feet, and will not be read as subserving the objectives and principles of the Agreement.
10. Many developing country Members have sought the operationalisation of Article 7 and 8 of TRIPS in their proposals submitted during the preparations for the Seattle Ministerial Conference. Documents No. WT/GC/W/147, WT/GC/W/302, WT/GC/W/209 and Corr.1, WT/GC/W/225, WT/GC/W/233 and Job (99)/3169 and Add.1 refer in this regard. While lip service has been given to the objectives and principles in the discussions on these proposals, there has been little accommodation in terms of accepting these principles and objectives in actual legislative or administrative practice. The Developed country Members have shown little accommodation of the essence of these proposals in the preparations for the Seattle Ministerial Conference, or in considering related implementation issues during the Conference.
11. It is unfortunate that the WTO membership has handed over its primary responsibility of clarifying both the trade implications of intellectual property rights and the basic objectives and principles behind the TRIPS Agreement to the dispute settlement mechanism. The kind of rumblings heard in Seattle and reflected in a number of implementation issues proposed at and after Seattle will not die down if the membership refuses to take its responsibility and interpret the Agreement for itself rather than leaving it to the judgement of a few. There is more reason for such action in the TRIPS Council than elsewhere because the TRIPS Agreement is uncharted territory for WTO and would need revisiting to clarify the negotiating intent, wherever necessary. After all, the membership took firms steps in Uruguay Round to revisit some of the other Codes of the earlier rounds and evolved more appropriate guidance for Dispute Panels and the Appellate Body.
12. India is itself the repository of immense intellectual property and there is no doubt in our minds that intellectual property needs to be protected. It is also true that protection of intellectual property coupled with liberal trade and investment policies are important for development, and India is autonomously pursuing this approach. However, the abjectly mercantilist use of intellectual property rights involving possible loss to health or achievement of other socio-economic objectives was neither intended by the negotiators nor should it be encouraged. Another worrying trend is the increased resort to the issuance of “bad patents”. Although numerous examples of such bad patents could be given, it may suffice to mention the latest one here. On 11.5.2000, the Opposition Division of the EPO at Munich adjudged that no inventive step was involved in a patent granted on “hydrophobic extracted neem oil - a novel fungicide”. Commenting on this action, Mr. Hiltrud Breyer, a Member of the European Parliament stated “This action illustrates how the patent system is being abused by multinational companies (MNCs). Genetic resources that are freely available in the South are being expropriated without reward or recognition for their traditional custodians. This is bio-piracy at its crudest”.
13. In this scenario it becomes even more important to check this trend through the objectives and principles of the TRIPS Agreement. The question of how to operationalise Article 7 & 8 is a larger question and it would be more appropriate to answer it in the Council itself. The following are some suggestions in this regard:
· A clarification could be made of the language in Articles 7 & 8 for the benefits of national governments pursuing public interest and for the dispute settlement mechanism. For example, it could be clarified that Article 7 contains the objectives of the Agreement and is not circumscribed by any other provisions of the Agreement.
· The phrase “provided that such measures are consistent with the provisions of this Agreement” in Article 8.1 could be clarified to emphasize that principles of the Agreement contained in this article can not be completely negated by this proviso.
· A number of ‘implementation’ proposals in paragraphs 21 and 22 of the Draft Ministerial Text (DMT) of the Seattle Ministerial Conference relate to objectives and principles contained in Articles 7 and 8. It would be a confidence building measure to agree to these proposals and would also help in operationalising these Articles.
14. Through this paper, India urges the TRIPS Council to examine the above issues in order to build the confidence of the weaker trading partners who may not otherwise be able to express their negotiating intent either through the existing agenda of the Council or through recourse to disputes. India also invites suggestions from other like-minded delegation for operationalisation of Articles 7 and 8 of the Agreement in such a way that our trade moorings are not uprooted and we are not subjected to protectionist objectives of commercially stronger companies and countries. This would be necessary also to preserve the democratic way of functioning of the GATT/WTO. It would also be guidance for the dispute settlement mechanism grappling with the balance between the principles and objectives of TRIPS on the one hand and minimum levels of protection required under the Agreement on the other hand. Most important, it would be a confidence building measure for those from whom greater accommodation is expected on some of the other proposals in the WTO aimed at further trade liberalisation.
Text of Kenya statement in the TRIPS Council (supporting the Africa paper for review of Art. 27.3(b)
The delegation of Kenya would wish to associate itself with the submission made by Mauritius on behalf of the African Group. The submission develops further the proposal made by the same group on the same subject in the run up to the Seattle Ministerial Conference.
The list of issues set out at the TRIPs Council meeting held on March 21,2000 addressed various concerns arising from Article 27.3(b). Whether the Agreement on TRIPs in its present state promotes the economic development of developing countries raises the question of whether the conditions of patentability have struck the correct balance between rights holders and society. And conditions of patentability include ethical considerations. Whether a right balance has been reached also depends on whether provisions promote or may undermine the conservation and sustainable use of biological diversity; as well as on whether essential domestic goals, such as ensuring food security and equity for local and farming communities, are properly reflected in the provisions. The question of which of these issues fall under article 27.3(b), therefore, will only lead to a collection of the various aspects under a limited number of issues, probably confounding the discussion, instead of keeping it under clear headings that facilitate the consideration of concrete proposals.
I. Link Between Article 27.3(b) and development
The General Council agreed at its meeting on 7 and 8 February 2000, that the mandated reviews should address the impact of the agreements concerned on the trade and development prospects of developing countries (paragraph 39 of WTO document WT/GC/M/53). This decision or agreement provides the basis if any is required, for the first issue listed by the Chair. During the Uruguay Round negotiations, developing countries were led to accept the Agreement on TRIPs primarily on the grounds that the agreement would promote inward FDI [foreign direct investment] and the transfer of technology as well as innovation, and in this way promote their economic development.
Experience so far in the overwhelming majority of developing countries, shows that strong intellectual property regimes, on the scale required by the Agreement on TRIPs, do not by themselves lead to FDI, neither encourage technology transfer nor local innovation. The Human Development Report 2000 (p.84) shows that developed countries hold 97 per cent of intellectual property rights and that global corporations hold 90 per cent. Other studies also confirm that few top multinational enterprises hold patent portfolios far in excess of the number held by the developing world as a whole.
Besides, developed countries and to some extent the WTO, hold the view that the WTO is not a development agency and that provisions in the WTO Agreement for special and differential treatment for developing countries are not enforceable. This raises fundamental questions on whether the provisions of the Agreement on TRIPs are consistent with its objectives and principles, and with the negotiated deal among the Members.
According to Kenya, therefore, this review must be the occasion to redress this fundamental imbalance, and to firmly take on board the development concerns of developing countries.
II. Technical Issues Relating To Patent Protection Under Article 27.3(b)
In our view, Patentability has at least two aspects - the conditions and the exceptions. The agreement leaves Members to define many of the conditions for patentability, such as what amounts to an invention and what is novel. We welcome this as it affords members with some flexibility. Nonetheless, some Members have defined novelty in a manner that does not recognise information available to the public through use or oral traditions outside their domestic jurisdictions. This has induced or led to the piracy of this information for patents within these jurisdictions. Also, some Members have defined inventions to include discovery or isolation of naturally occurring matter. This has led to patents on life forms, and on research materials. Patents on life forms are unethical, and patents on research materials restrict further research thereby reducing welfare gains to humankind. These conditions must be revisited to deal with the wrongs they have facilitated.
Article 27 sets out the requirement of patentability for all technological inventions, and proceeds to deal with exceptions in a very limited manner that does not reflect the balance of rights and obligations reached in other WTO agreements such as the GATT [articles XX and XXI] and the GATS [articles XIV and XIV bis]. In these other agreements, the exceptions take the form of general and security exceptions. The language used in these other agreements - “Nothing in this agreement shall prevent any Member from taking measures to ...” - recognises and caters to important public policy concerns (the public interest and important domestic goals); and this has been a crucial means of ensuring balanced agreements. Such exceptions are even more vital in the Agreement on TRIPs, for it deals essentially with private rights unlike the other agreements; and traditionally, intellectual property laws have contained provisions for striking a balance between rights holders and society. But the Agreement on TRIPs circumscribes any limited exceptions it attempts, so exceedingly as to prevent the taking of measures of important public policy.
Kenya therefore proposes that the exceptions in article 27 be amended along the model of the general and security exceptions in the other WTO agreements, using similar language, in order to redress the imbalance between the private rights protected, on the one hand, and important public policy and development goals on the other. The current language used undermines the existing exceptions in paragraphs 2 and 3 of article 27. Further, the distinction made for micro-organisms and for non- and micro-biological processes for the production of plants or animals should be done away with, as unwarranted.
III. Technical Issues Related To Sui Generis Protection Of Plant Varieties
The obligation on Members under article 27.3(b), in respect of plant varieties, is to protect plant varieties. Unlike other provisions on protecting intellectual property rights (that set out the rights to be protected and the duration, for instance), the requirement to protect plant varieties leaves it to the Members to determine the suitable way to do so, that is according to an effective sui generis system. What is “effective” is left to the Members to determine. Indeed, the meaning of “sui generis” [of its own kind] is inconsistent with a prescription of rights and duration or even models to be imposed on all WTO Members.
It is up to individual Members to come up with what sui generis systems they consider effective for purposes of protecting plant varieties. And this they will determine on the basis of important domestic goals related to plant varieties. Plant varieties provide food and medicine for local and farming communities, and they are a tested means of conserving and sustainably using biological diversity. In protecting plant varieties, governments will seek to adopt laws and measures that promote food security of these communities and of the country at large, that ensure equity to these communities where the staple or medicinal knowledge in the plants is used as a basis for intellectual property rights to be protected say by patents abroad, and that ensure biodiversity.
Such laws and measures will provide for and protect farmers’ rights, as recognised in Annex II of the FAO International Undertaking on Plant Genetic Resources. These rights include the right to save, share, sell and re-use propagating material such as seeds. The laws and measures will also protect the breeders’ exemption, to freely innovate around protected varieties. The laws and measures may ensure biodiversity in accordance with the Convention on Biological Diversity. So, the obligation to protect plant varieties entails more than protecting the rights of commercial breeders. Intellectual property rights in the Agreement on TRIPs, now include geographical indications that are more or less regional rights rather than the traditionally individual rights.
The Organisation of African Unity has adopted a model law for the Member States, that duly takes all these various aspects in account: African Model Legislation for the Protection of the Rights of Local Communities, Farmers and Breeders, and for the Regulation of Access to Biological Resources. The Africa Group therefore very properly looks to this model law, for it was developed bearing in mind their public policy and development concerns as well as their international obligations.
IV. Ethical Issues Relating to Patentability of Life Forms
Kenya strongly supports the position of the Africa Group that the patenting of life forms is unethical and should be unconditionally prohibited.
Article 27.2 provides for a moral exception to patents. However, the exception is available only if the “prevention within their territory of the commercial exploitation of (the invention) is necessary to protect ordre public or morality” and “if such exclusion is not made merely because the exploitation is prohibited by (the Member’s) law”. Both these conditions are unnecessary and cumbersome. The protection of ordre public and morality extends to activities outside commercial exploitation. Laws serve purposes, and if they prohibit certain patents, that should suffice for the grounds. Ethical or moral matters are not always matters for commercial calculations, and their force or the conviction of people will not be affected by reasoned commercial concerns. The Universal Declaration of Human Rights, in recognising that the conscience of people is a legitimate concern to be protected, does so without qualifications of the kind imposed in article 27.2. The qualifications included in article 27.2 amount to redefining morality for the Members.
Cultural or social values of societies the world over cannot countenance the appropriation or marketing of life in any form or at any stage. The preponderance of such inherent values in particular countries are matters for the democratic or domestic law making processes to determine, and not for the WTO whose trade mandate is narrow and insufficient to make it arbiter over these matters. The compulsion to include micro-organisms as well as non- and micro-biological processes for the production of plants or animals is therefore overly inappropriate.
There can be no doubt that patents over life-forms will lead to horrendous abuses associated with cloning whether privately or commercially, and with the taking of resources away from public health needs especially the development and adequate production of essential drugs. Without departing from statements already made, it may be emphasised that any development and production of cures for human ailments, that arise from research related to life-forms, do not necessarily require patents or any form of intellectual property protection, as existing mechanisms under the auspices of the WHO and the FAO show.
V. Relationship To The Conservation And Sustainable Use Of Genetic Material
The conservation and sustainable use of biological diversity carries considerable moral and legal force at the entire global level, as humankind is acutely aware of the imperative to care for the environment; not only in self-interest but also for its intrinsic value.
Within the WTO, the first recital (preambular para) to the WTO Agreement recognises the need for sustainable resource use. The WTO Committee on Trade and Environment is mandated to develop the means of fully containing trade within environmental considerations. The WTO jurisprudence developed under the dispute settlement mechanism is out to systematically interpret the agreements consistently with environmental considerations, and envisages contributions from and participation by civil society. However, within the individual agreements, certain provisions touching on the environment may not explicitly address the concerns. One such provision is article 27.3(b) that requires protection of plant varieties without recognising the CBD (Convention on Biological Diversity), which, with at least 177 members, is the principal international instrument on conservation and sustainable use of biological diversity.
As indicated in the submission of the Africa Group, Africa is rich in biological diversity and this is a resource Africa and other developing countries would like to develop to their advantage and to the advantage of the entire humankind. The CBD duly recognises and protects this interest. Among other things, the CBD requires prior informed consent, benefit sharing, authorisation from the host government and technology transfer. But the obligations in article 27.3(b) of the Agreement on TRIPs do not recognise and protect these requirements. Article 27.3(b) therefore is a means of defeating the CBD if a Member were to merely protect the rights of commercial breeders as the way of implementing the requirement to protect plant varieties by a patent or a sui generis system or the combination. Indeed, some Members have intimated they would do precisely this, using the 1991 Act of UPOV.
It is vital that article 27 of the Agreement on TRIPs incorporates the requirements under the CBD, if not on the basis of the first recital of the WTO Agreement for sustainable resource use as well as of the WTO Decisions and jurisprudence, then on the basis of the objectives and authority of the CBD.
VI. Relationship With The Concepts Of Traditional Knowledge And Farmers’ Rights
The recognition and protection of farmers’ rights, especially to save, share, sell and re-use propagating material such as seeds, is affected by the manner plant varieties are protected.
For instance, under the 1991 Act of UPOV any exception to allow the exercise of the farmers’ rights is subject to “reasonable restrictions” and the “legitimate interests” of the breeder. The exception does not extend to sharing of propagating material. And it only applies to saved material from harvest on their holdings. The terminator technology and persistent poverty in developing countries render this exception meaningless for all practical purposes. And the dire consequences would be in terms of food insecurity and intolerable dependence of the country on probably unreliable foreign commercial breeders for seeds. Besides, the ravages of bio-patenting abroad, are that it becomes illegal to save and use certain seeds for staple foods long known and used by farming communities; and that traditional varieties may be killed off by genetically modified varieties, causing a depletion of biodiversity apart from the implications of food insecurity.
The identification and conservation of staple or medicinal plants, is traditional knowledge. The long usage and knowledge, however, does not qualify the plants as varieties for purposes of UPOV. The CBD on the other hand, recognises this knowledge and goes further to require benefit sharing and authorisation as conditions for access to genetic material (including these plants and the associated knowledge) of other countries.
The African model law recognises and protects farmers’ rights and traditional knowledge. If a model is needed for purposes of sui generis systems under article 27.3(b) of the Agreement on TRIPs, Members of the Africa Group have this model law. It would be the source for their domestic laws on protecting plant varieties by effective sui generis systems.
VII. Amendments to article 27.3(b) of the Agreement on TRIPs
Against this background, Kenya proposes that article 27.3(b) of the Agreement on TRIPs be amended to duly take into account the concerns raised in the submission of the Africa Group (including the proposals made in August 1999). The amendments should:
(a) Prohibit or exclude from patentability all biological and living organisms (these include plants, animals, micro-organisms and parts thereof such as cells, cell lines, genes and genomes) as well as any processes making use of, or relating to, such biological and living organisms. This prohibition or exclusion is justifiable on legal, scientific, developmental, moral and ethical grounds.
(b) The exclusion referred to Para (a) above would also do away with the artificial distinction that currently exists in Article 27.3(b) between plants and animals, on the one hand, and micro-organisms, on the other hand; as well as the artificial distinction between essentially biological processes for the production of plants and animals, on the one hand, and micro-biological and non-biological processes, on the other.
(c) The exclusion of plants from patentability means therefore that there would be no patents on plant varieties. Therefore the amendment may only require sui generic systems of protection for plant varieties. In this regard, it must also be clarified that such sui generis systems can, and indeed should, include the effective protection and promotion of the rights of farmers, indigenous and local communities over their genetic resources and their knowledge relating to the use of such resources. This would also be consistent with the CBD and the FAO International Undertaking on Plant Genetic Resources.-SUNS4753
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