TWN Info Service on Health Issues (July10/02)
6 July 2010
Third World Network
ACTA comes in for criticism at TRIPS Council
Published in SUNS #6945 dated 16 June 2010
Geneva, 15 Jun (Kanaga Raja) -- The moves for the Anti-Counterfeiting
Trade Agreement (ACTA) came in for sharp criticism at the meeting of
the TRIPS Council last week, with China and India arguing that it went
beyond the obligations established under the TRIPS Agreement on enforcement,
as well as undermining the flexibilities contained in the TRIPS Agreement
and creating trade barriers.
The criticisms voiced by China and India at the regular TRIPS Council
meeting on 8-9 June was supported by a number of developing countries.
The Chinese and Indian concerns surfaced at the TRIPS Council meeting
under the agenda item of enforcement trends that was included on the
agenda at the request of China and India.
According to trade officials, China
called for the issue of enforcement trends to be discussed, as they
were concerned about provisions on enforcement going beyond the standards
of the TRIPS Agreement, and found in or sought to be incorporated in
bilateral, regional and plurilateral agreements, particularly ACTA.
ACTA is currently being negotiated by Australia,
Canada, the EU (and
its 27 Member States),
Japan, Korea, Mexico,
Morocco, New Zealand, Singapore,
the United States.
According to trade officials, China and India, in detailed statements,
argued that ACTA and other agreements could conflict with the TRIPS
Agreement (in reference to Article 1.1) and other WTO agreements, causing
legal uncertainty; distort trade or create trade barriers, and disrupt
goods in transit; undermine the flexibilities built into the TRIPS Agreement;
undermine governments' freedom to allocate resources on intellectual
property by forcing them to focus on enforcement; and set a precedent
that would require regional and other agreements to follow suit.
They also argued that the focus on enforcement did not take into account
a country's level of development.
Broadly supporting China
and India were Mauritius, Peru,
Cuba, Bolivia, Ecuador,
Egypt, South Africa, Brazil,
and the African Group (Nigeria
According to trade officials, China
said that there is a potential legal conflict and uncertainty as a result
of having tougher standards on enforcement than prescribed under the
TRIPS Agreement. It is concerned that these TRIPS-plus measures could
be barriers to legitimate trade, as well as that it will break the balance
that was carefully negotiated in the TRIPS Agreement, which is a balance
with the various agreements and within the TRIPS Agreement.
In the case of TRIPS, it is flexibilities as well as balance between
the TRIPS Agreement and the GATT and GATS, said China, expressing concern about the
effect it may have on the flexibilities contained in TRIPS.
In its statement, India
said that although the TRIPS Agreement is usually considered to be a
minimum levels agreement, enforcement levels cannot be raised to the
extent that they contravene the TRIPS Agreement. TRIPS-plus measures
cannot be justified on the basis of Art 1:1 since the same provision
also states that more extensive protection may only be granted "provided
that such protection does not contravene the provisions of this Agreement".
In addition to laying certain minimum standards, the TRIPS Agreement
also provides "ceilings", some of which are mandatory and
clearly specified in the TRIPS Agreement. Moreover, the TRIPS Agreement
has achieved a very careful balance of the interests of the right-holders
on the one hand, and societal interests, including development-oriented
concerns, on the other.
Enforcement measures cannot be viewed in isolation of the Objectives
contained in Art 7, which says "The protection and enforcement
of intellectual property rights should contribute to the promotion of
technological innovation and to the transfer and dissemination of technology,
to the mutual advantage of producers and users of technological knowledge
and in a manner conducive to social and economic welfare, and to a balance
of rights and obligations."
According to India,
TRIPS-plus enforcement measures can have a trade-distorting effect.
The chapeau provisions of the enforcement section of TRIPS in Art 41.1
states that "These procedures shall be applied in such a manner
as to avoid the creation of barriers to legitimate trade and to provide
for safeguards against their abuse." The TRIPS-plus standards envisaged
in RTAs (regional trade agreements) and plurilateral initiatives like
ACTA could short-change the legal process, impede legitimate competition
and shift the escalated costs of enforcing private commercial rights
to governments, consumers and taxpayers.
Referring to the issue of resource allocation in respect of the limited
resources of developing countries to enforce IPR laws relative to other
laws that might call for more urgent priority, India said that Art 41.5
is cognizant of the capacity constraints of Members, and therefore,
creates no obligation with respect to the distribution of resources
as between the enforcement of IPRs and the enforcement of law in general.
"We are clear that IPRs are private rights and it is not the responsibility
of governments to defend each right but rather to provide means for
individuals and firms to enforce such rights. TRIPS Agreement elaborates
such means which are necessary."
Another systemic concern highlighted by India is that IPR negotiations in
RTAs and plurilateral processes like ACTA completely bypass the existing
multilateral processes. While GATT and GATS provisions allow for further
liberalising trade in goods and services through RTAs, there are also
provisions to monitor regional and plurilateral initiatives by the WTO.
It is a lacuna in TRIPS that there are no similar systemic checks with
regard to IPR aspects of RTAs and plurilateral agreements. "Therefore,
it is even more important to discuss IPR dimensions of regional and
plurilateral initiatives in this Council so that they do not undermine
TRIPS Agreement," said India.
noted that a systemic impact Members should be aware of is that even
if some Members are not a party to plurilateral initiatives like ACTA,
they could still have to enforce ACTA provisions due to cross-referencing.
As an example, in accordance with commitments under the EU-CARIFORUM
EPA, the CARIFORUM members might be obliged to enforce ACTA provisions
which may require additional resource allocation and may be incompatible
with the level of economic development of CARIFORUM Members.
Turning to ACTA provisions relating to transit, India said that it is aware that several
provisions are still in square brackets, which actually means that their
inclusion is well within the realm of possibility. The ACTA text requires
that countries provide procedures for the customs seizure of goods "suspected"
of infringing trademarks, copyrights and other IPRs against goods "in-transit".
According to the ACTA text, "In-transit" includes "customs
transit" and "transhipment". Seizures would be allowed
even where there is a mere "prima facie" case of IPR infringement.
In view of the recent seizures of generic drug consignments, provisions
relating to "in-transit" in all likelihood would create barriers
to access to essential generic medicines, as well as access to critical
climate change technologies, said India, adding that these provisions
could concretise the legal framework the European Union has already
instituted through its Council Regulation 1383/2003, which has been
responsible for empowering customs and border officials to seize legitimate
generic medicines exported by India to several developing countries,
On how the draft ACTA provisions can constrain TRIPS flexibilities,
India gave an example, saying that its right to exercise flexibilities,
such as granting compulsory licenses, would be interfered with by the
mandatory application of border measures to goods in transit. Indian
exporters could be constrained from shipping goods produced under its
own exception to countries where there is no applicable IPRs protection
because transit may be blocked by an intervening transit country's application
of domestic IPRs.
Similarly, under the draft ACTA, data exclusivity could be invoked by
a transit country's customs authorities as a basis for seizing pharmaceutical
products in transit, even if there is no data exclusivity in the exporting
and importing countries. This would obviously act as a significant constraint
on exporting countries such as India.
stressed that benefits intended by the Doha Declaration on Public Health
could also be effectively negated by transit provisions. The Para
6 system is aimed at making effective use of Compulsory License for
countries with insufficient or no manufacturing capacities. Mandatory
application of border measures to such drugs in transit could deny the
potential beneficiaries access to much needed medicines.
further argued that the released ACTA text shows a general shift in
the locus of enforcement, which enhances the power of IPRs holders beyond
reasonable measure. One ACTA option would mandate that each Party provide
enforcement for the full range of IPRs infringement actions "at
the border" of an importing country. This would permit IPRs holders
to assert infringement and demand seizure of goods before customs administrative
authorities, instead of initiating their claims in domestic courts.
Under present WTO TRIPS Agreement rules, except with respect to trademark
counterfeiting and copyright piracy, a Member may require that infringement
claims be pursued in the courts, including for obtaining preliminary
The draft ACTA limits the protections otherwise due to accused infringers
under the TRIPS Agreement, potentially lowering knowledge thresholds,
limiting due process requirements (e. g., requirements to act within
particular time frames), limiting evidentiary requirements, and it does
not specify the type of authority empowered to make critical decisions.
"This shift to summary administrative action may dramatically curtail
the rights of accused infringers to defend patent infringement claims,
ordinary trademark and copyright infringement claims, actions alleging
violation of marketing exclusivity rights, and so forth. The draft ACTA
therefore, will shift the negotiated balance of the TRIPS Agreement
in favour of IPRs holders by shifting the enforcement forum towards
customs administrative authorities and away from the civil courts."
According to India, IPR experts are increasingly challenging the concept
of minimum standards concept and calling for setting maximum standards
or ceilings so that there is (i) legal security and predictability about
the boundaries of IP protection, (ii) protection of user's rights, and
(iii) free movement of goods, services and information.
While India said that it is committed to dealing with IPR enforcement
issues in line with its TRIPS obligations, the introduction of intrusive
IPRs enforcement rules applicable to goods and services in international
trade does not represent a reasonable or realistic response. "A
response, if required, has to emerge from a multilateral and transparent
process, as is available in the WTO TRIPS Council, and should fully
conform to the objectives and principles (Art 7, 8 ) of TRIPS agreement
and the balance of rights and obligations enshrined in the Agreement."
As goods and services of developing countries are becoming competitive
with those of developed country producers, TRIPS-plus measures, like
the ACTA, seek to introduce a new set of "non-tariff" barriers
to trade that will preponderantly hinder developing country exporters.
"We urge developed country Members to keep these concerns in mind
while dealing with IPR enforcement issues. Agreements such as ACTA have
the portents to completely upset the balance of rights and obligations
of the TRIPS Agreement. WTO cannot remain a silent observer to such
a development. It is important that the issue is deliberated in this
Council in detail," India concluded.
According to trade officials, the participants in the ACTA negotiations
said that ACTA would not conflict with TRIPS and other WTO provisions.
There would be no new trade barriers and distortions, as well as no
change in the balance that has been struck, as they are not raising
the level of protection.
Arguing that counterfeiting is a serious problem, they said that ACTA
was necessary because counterfeiting is no longer a question of products
such as fake luxury watches, but involves commercial-scale production
of fake medicines, car and aircraft parts and other products, which
are dangerous to health and safety.
According to trade officials, some of them also said they had to get
together outside the WTO because countries had opposed discussing enforcement
substantively in the TRIPS Council.
The European Union said that Members want to use the flexibilities in
the TRIPS Agreement. What ACTA is doing is making use of flexibilities
in TRIPS on enforcement in the interest of health and safety, and that
the countries that are most vulnerable to these issues are the developing
The TRIPS Council took note of the statements. +
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