South's strategies for TRIPS reviews, negotiations
by Carlos Correa*
The agreements annexed to the Marrakesh Agreement for the establishment of the WTO have varying provisions, some for mandated reviews and further negotiations, and others generally for periodic reviews and/or review of implementation.
Besides the mandated review in 1999 of the provisions of Art. 27.3 (b), Article 71.1 of TRIPS provides for a review of the implementation of the TRIPS Agreement after year 2000, and for possible reviews "in the light of any relevant new developments which might warrant modification or amendment".
There are already several proposals, some formally submitted, to revise the TRIPS Agreement in a future Round. A preliminary question is, however, what should be the strategy of developing countries on this matter.
A first strategy may aim at a comprehensive revision, in order to effectively implement through specific provisions articles 7 and 8 of the Agreement and strike a balance between the interests of producers and users of technology. The rationale behind this strategy would be that the Agreement as it stands primarily reflects patterns of IPRs protection suitable for developed countries, but which largely disregard the "development dimension."
A component of this strategy may be to clarify various elements of flexibility which are present in the text, but which are or may be contested, such as the right to allow parallel imports (article 6) including when originating from a compulsory licensee, the non-patentability of uses of known products (interpretation of Articles 27.1 and 28), and the right to grant compulsory licenses on different grounds to be determined by each national law (Article 31). In addition, certain obligations may be clarified, such as obligations of developed countries under Article 66.2 with respect to LDCs and Article 67 relating to technical assistance.
This strategy may lead to the improvement of the present text from the perspective of developing countries. There is, of course, the risk that, depending on such countries' preparation and bargaining power, the revision of many provisions may lead to texts more restrictive than the existing ones. A careful political evaluation of possible scenarios is, therefore, needed.
A second strategy may, in contrast, be based on a de minimis approach, that is, opening for re-negotiation as few provisions as possible. The rationale for this position would be that the TRIPS Agreement is not a uniform law, and that it leaves developing countries some room for manoeuvre that may be lost if the text is broadly revised. This position also assumes that the chances for developing countries to obtain favourable amendments are slim, given the high sensitivity of IPRs issues and the pressures exerted on developed countries' governments by powerful industrial lobbies.
Under this approach, only few key provisions should be subject to re-examination, such as article 31 (g) - termination of a compulsory license - which seriously undermines the compulsory licensing system.
Finally, a third strategy may be based on a "policy" or "issues approach", that is on a systematic review of the Agreement in the light of a particular objective. This strategy would be most effective if the review systematically covers all WTO agreements that may affect the attainment of a certain objective, and not only the TRIPS Agreement. For instance, when dealing with technology transfer, in addition to particular provisions in the TRIPS Agreement, relevant provisions may be considered in the Agreements on the Application of Sanitary and Phytosanitary Measures (Article 9), Technical Barriers to Trade (e.g Articles 11 and 12), Subsidies and Countervailing Measures (SCM) (e.g. Article 8), and in the GATS (Articles IV and XIX).
It is possible to identify different approaches for a systematic review, as proposed:
1) Transfer of technology: Several developing countries have stressed the need to develop particular provisions in the TRIPS Agreement so as to ensure that the objective of fostering the transfer and dissemination of technology (Article 7) is effectively realized. In fact, developing countries and LDCs face growing constraints to get access to up-to-date technologies. Given that the issues at stake are complex, the development of a multifaceted and comprehensive approach is needed.
The enhancement of technology flows to developing countries may require the revision of several articles of the TRIPS Agreement, such as Article 27.1 (working obligations), Article 31. (b) (broader application of "refusal to deal" as an autonomous ground for compulsory licenses), Article 40 (specification of illegal restrictive business practices in voluntary licenses), and Article 66.2 (further specification of measures to be adopted to encourage the transfer of technology to LDCs).
This approach may be supplemented, as mentioned before, by an analysis of the amendments or new provisions that may be needed in other WTO agreements, such as the GATS and SCM. For instance, consideration could be given to the exemption under the SCM Agreement of subsidies related to the export of technology and associated equipment to developing countries.
2) Environment: Within the WTO Committee on Trade and Environment, India has already indicated the need to amend the TRIPS Agreement in order to facilitate the access to and use of environmentally sound technologies. The proposal requires the amendment of Article 31 (compulsory licenses) and Article 33 (duration of patents), and suggests that patent holders should be subjected to an obligation of transferring environmentally sound technologies on fair terms and most favourable conditions. It also proposes a financial compensatory mechanism.
3) Biodiversity: The reconciliation of the TRIPS Agreement with the Convention of Biological Diversity (CBD) may be one of the main objectives of possible negotiations. This may include the amendment of Article 27.1 (requirement of universal novelty as a condition for patentability) and Article 29 (obligation to prove that prior informed consent has been obtained with regard to claimed biological materials). A new provision on "traditional knowledge" may also be considered, though the complexity of this issue would justify the establishment of a working group to study and clarify possible options.
4) Health: The implementation of public health policies may be restrained by the implementation of IPRs protection, if the latter is not designed in a manner that effectively takes into account the objectives of such policies. The TRIPS Agreement leaves some room for this.
Under an approach focused on public health, however, some articles may require revision, for instance, Article 27.1 in order to exclude the patentability of "essential medicines" listed by WHO; Article 30 so as to incorporate an explicit recognition of an "early working" exception for the approval of generic products before the expiration of a patent; and, Article 31 in order to clarify the right to grant and the scope of compulsory licenses for public health reasons.
5) Competition: The expansion and strengthening of IPRs in developed countries has taken place pari passu with an effective application of competition law. Illustrative of this linkage is the large number of compulsory licenses granted in the United States in order to remedy anti-competitive practices.
In developing countries, in contrast, IPRs protection is being enhanced consistent with the TRIPS Agreement, but competition law is non-existent or weak in many countries.
The revision of the Agreement could be made with a view to strengthening the competition-related provisions thereof (such as Article 40) and to incorporate new disciplines, for instance relating to measures to prevent and remedy abuses of IPRs. Specific work could be undertaken on vertical restraints, such as tying arrangements and restrictive practices in licensing agreements, as well as on horizontal restraints, such as pooling and cross-licensing and industry standardization.
Other issues: Some proposals have been made to revise the TRIPS Agreement in order to expand the special protection of geographical indications under Article 23 (now limited to wines and spirits) so as to cover other products of export interest, such as basmati rice. Such an increased protection, if admitted and not subject to special and differential treatment, could benefit all Members; therefore, its net impact in developing countries would depend on the number and economic importance of such countries' indications vis-a-vis those of other Members.
Other possible amendments that developing countries may consider include:
* clarifying Articles 70.8 and 70.9 in the sense that the 'exclusive marketing rights' should be conferred only in respect of new chemical entities and that only patents granted in another WTO Member with an examination system may be considered as a basis for granting those rights.
* incorporating the first to file principle for patent applications;
* developing rules for the protection of the works of folklore, as recommended by UNESCO Model Law of 1989, and to allow any Member country to recognize and protect traditional knowledge.
Both the United States and the European Union have suggested that a possible amendment to the TRIPS Agreement should incorporate the two conventions approved under the auspices of WIPO in 1996, that is, the WIPO Copyright Treaty and the WIPO Performance and Phonograms Treaty. The WIPO Copyright Treaty reconfirms the pertinent provisions of the TRIPS Agreement on copyright. It also contains provisions particularly relevant to the use of works in a digital environment, like the 'right of distribution' (Article 6) and the 'right of communication to the public', including when members of the public may access these works from a place and at a time individually chosen by them' (Article 8). (SUNS4498)
[This is the second and last part of a two-part article, abstracted from a forthcoming book by Dr.Carlos Correa, "Intellectual Property Rights, the WTO and Developing Countries: The TRIPS Agreement and Policy Options", published by the Third World Network, Penang. The first part appeared in SUNS 4497. Dr. Correa, lawyer and economist, is Director of the Masters Programme on Science and Technology at the University of Buenos Aires and of the Postgraduate Course on Intellectual Property. He was an Under-Secretary of State in Argentina, 1984-1989, and an Argentine negotiator in the Uruguay Round TRIPS negotiations and the Washington Treaty on integrated circuits.]
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