TWN Info Service on Intellectual Property Issues (Mar14/06)
20 March 2014
Third World Network

WIPO: Divergences persist in proposed Industrial Designs Law Treaty
Published in SUNS #7766 dated 19 March 2014

Geneva, 18 Mar (Alexandra Bhattacharya) - The explicit inclusion of technical assistance and capacity-building in the proposed Industrial Designs Law Treaty continues to see North-South differences.

Developing countries, in their opening statements for the 31st session of the WIPO Standing Committee on the Law of Trademarks, Industrial Designs and Geographical Indications (SCT), reiterated their previous position on the need for adequate technical assistance and capacity-building provisions in the proposed treaty.

They argue that implementation of the treaty would require modification of national practice and laws and in this context, there was a need to develop national capacities in order for all countries to be able to benefit from the proposed treaty.

The WIPO SCT, chaired by Mr. Adil El Maliki (Morocco), is meeting here from 17 to 21 March.

The text of the Designs Law Treaty, which is being negotiated in the SCT, is apparently a formalities treaty, which aims to simplify and harmonise industrial designs registration standards.

The substantive work on the draft articles and regulations is nearing end game; however, the key issue of whether there should be a binding article on technical assistance and capacity-building remains unresolved.

Developing countries, particularly the African Group, have maintained that any positive decision on the convening of a Diplomatic Conference is conditional on the inclusion of an article on technical assistance (TA) and capacity-building.

However, some developed countries are opposed to a binding article on this issue and would prefer a resolution instead.

The SCT for its current session has been tasked by the Extraordinary Session of the WIPO General Assembly held in December 2013 to "finalise its work on the text of the basic proposal for a Design Law Treaty building upon the outcome of the thirtieth session of the SCT".

According to the WIPO General Assembly Decision, it is then expected that another Extraordinary session in May 2014 would "take stock of and consider the text, progress made, and decide on whether to convene a diplomatic conference in 2014 in Moscow".

The previous session of the SCT and both the 2012 and 2013 WIPO General Assembly sessions had also failed to reach a decision on the convening of such a Diplomatic Conference.

WIPO Director-General (DG) Francis Gurry, in opening this week's session, stated that the current discussions in the SCT underlined the growing importance of the concept of "branding" which was now an expansive concept which went well beyond trademarks.

He referred to the 2013 World Intellectual Property Report which attempted to measure global investments in branding and estimated that global branding investments by companies stood at US$466 billion in 2011.

The WIPO DG also noted the continuous growth of design protection around the world and that there was evidence that most of the applications stemmed from residents which was reflective of local innovation. He added that there was convincing evidence that a treaty to simplify procedures for the registration of industrial designs would produce benefits for all categories of countries.

He cautioned that the opportunity to "do this thing multilaterally only comes once" and that "when the opportunity does come we have to get it right".

Brazil, on behalf of the Development Agenda Group (DAG), proposed the insertion of a new agenda item, namely, the ‘Contribution of the SCT to the implementation of the Development Agenda (DA) Recommendations'.

Brazil said that this agenda item was consistent with best practices and would implement the 2010 WIPO General Assembly Decision on the Coordination mechanism for the implementation of the WIPO DA.

Japan, on behalf of Group B (developed countries), stated that it could agree to this new agenda item as long as it was understood that it was not to be a permanent standing agenda item.

OPENING STATEMENTS

Kenya, on behalf of the African Group, said that the Group believed in the development of a balanced IP system that meets the needs of all its members. The Group also recognised the critical role intellectual property (IP) could play in meeting its developmental challenges.

However, for this to become a reality, there was a need to balance the needs of right holders and societal interests and this has to be reflected in the norm-setting activities, Kenya said.

Kenya said that a balanced outcome in the proposed treaty was critical as it would make it attractive to both developing and developed countries alike making it possible for its early entry into force.

In this regard, the African Group "regretted to note that its humble request for inclusion of an article on technical assistance to implement the proposed Design Law Treaty had not borne fruit and had been the subject of intense negotiations in the last sessions of SCT and General Assembly".

Kenya added that formalities/procedural treaties had a harmonizing effect, which implied that for parties to benefit from the treaties and ensure uniform application of formalities, they needed to upgrade their systems and capacities to more or less the same level of other parties.

Furthermore, procedural treaties reduced the policy space for developing countries and the flexibilities available under the IP system to tailor their national IP systems including the registration procedures according to their national needs and level of development.

The costs therefore associated with the implementation of procedural treaties are significant and this was particularly so for member states who did not have the systems in place already or those who have to make substantial adjustments to their systems to enable the seamless implementation of the treaties.

In this regard, Kenya said it was important for developing countries, particularly those in Africa, to be assured of adequate and appropriate technical assistance to implement the treaties.

Kenya also noted that developing countries acceding to the World Trade Organisation (WTO) have in the process of negotiation been required to accede to some treaties in WIPO which are of interest to some WTO members as part of the concessions on their part. In the same vein, developing countries in the process of negotiating Free Trade Agreements or Economic Partnership Agreements with developed countries are sometimes compelled to ratify WIPO treaties of interest to the developed countries involved.

Furthermore, there has been a rise in procedural treaties including the recently concluded Trade Facilitation Agreement under the WTO.

Kenya underlined that these treaties when taken in totality pose a big burden, particularly on developing countries since they not only have to meet their treaty obligations under WIPO agreements but also in all other treaties that they enter into.

In conclusion, Kenya said that the adoption of this treaty would require significant changes in the national IP systems of developing countries which are likely to go beyond the capacity and ability of individual countries to implement the treaty.

This is why the African Group was of the strong opinion that an article on technical assistance which was part of the substantive provisions of the proposed treaty was more appropriate as it would introduce balance in the treaty thereby guaranteeing members who accede to it the assistance to implement it.

Bangladesh, on behalf of the Asia Pacific Group, emphasised the need for appropriate provisions on TA and capacity-building to be included in the proposed treaty. It added that the absence of "clear-cut TA" would prevent developing countries from effectively implementing the treaty. It expressed its preference for a "clear Article on TA" to be included in the treaty. Bangladesh also added that national legal flexibilities should be allowed to some extent in the proposed treaty.

Brazil said that the work of the SCT should be guided by the DA Recommendations, particularly 15 and 22 which includes criteria that should drive WIPO's norm-setting activities.

Brazil noted the need to ensure that the final draft of the treaty was "inclusive and transparent" and stated that the provision of an effective technical assistance provision in the text was the best way to "confer legal certainty".

Japan, on behalf of Group B, said that the text of the designs law treaty aimed to streamline and enhance design law formalities and would benefit all countries irrespective of their status of development. It stated that substantial amount of work had already been accomplished and it hoped that "this would allow us to move to the next phase in a timely manner".

It reiterated that the time was right to move towards convening a Diplomatic Conference on the proposed Designs Law Treaty. It added that the issue of technical assistance "should not prevent us from bringing the text to the Diplomatic Conference".

Belarus, on behalf of the Group of Central Asian, Caucasus and Eastern European states, said that there must be efforts to agree on the covering of a Diplomatic Conference and was willing to work productively and willingly to this end.

Czech Republic, on behalf of the Group of Central European and Baltic States (CEBS), said that it firmly believed that the SCT should finalise work on the DLT and that the draft articles and regulations were technically mature.

Uruguay, on behalf of GRULAC, said that the Group recognised the potential benefits of the prosed treaty on industrial designs but also of the need to take into account the different levels of development in countries. It stated that the text must contain provisions on TA and capacity-building "irrespective of how this is set up".

China said that on Articles of the text where consensus had not been reached, there was need for more "flexible approaches".

The European Union said the recommendation to the WIPO General Assembly to convene a Diplomatic Conference should be the priority outcome for the SCT. It noted the great advantages to be gained by the simplification of industrial design registration particularly for SMEs.

It added that the draft articles and regulations were "technically mature" and the framework of the treaty was flexible and dynamic which would also keep up with socioeconomic and cultural changes in countries.

It said that there was now a "clear window of opportunity" to make a recommendation to the WIPO GA in May to convene a Diplomatic Conference on the proposed treaty.

The Republic of Korea said that statistics showed that industrial design applications grew higher than trademarks and patents in 2012 and that the majority of the applications stemmed from middle income countries. It added that industrial designs had become an invaluable tool for promoting competition in countries irrespective of their level of economic development.

The United States, in a brief intervention, called for consensus on the proposed industrial designs law treaty.

The SCT then turned to the textual discussion on the Draft Articles of the Industrial Design Law and Practice (SCT/31/2), particularly focusing on articles where outstanding issues and brackets remained. The Committee concentrated on parts of the text where more than one proposal had been put forward either by individual countries or group of countries.

The Committee discussed Articles 4(2)(b),4(3),5,6,9,14,15,16,17 and 24. During the discussion, member states either withdrew or maintained their reservation to specific parts of the text.

WAY FORWARD ON THE ISSUE OF TECHNICAL ASSISTANCE

Member States briefly commented on the specific language of the text on technical assistance as currently found in [Article 21/[Resolution] of the text (SCT/31/2). The current text which emerged from the last session of the SCT consists of two preambular paragraphs and six provisions where a number of brackets remain.

The paragraphs of the provisions include the following: (1) Technical Assistance and Capacity Building, (2) Financing of Technical Assistance; (3) Participation in Assembly; (4) Fee Reduction; (5) Exchange of Information; (6) Monitoring.

Kenya, on behalf of the African Group, reiterated its preference for an article instead of a resolution for the simple reason that the treaty was aimed for " harmonization" and therefore different sets of rules within the treaty defeated that purpose. It also expressed the need for the issues of "fee reduction" and "exchange of information" to be separate stand-alone articles.

The EU said that although it had preference for a resolution on technical assistance, however, in the spirit of cooperation and as a public statement, it was prepared to accept an article "as long as it did not unduly burden the organisation or contracting parties".

It also added that "fee reductions" were an issue for each contracting party to decide and any mandatory fee reduction provisions for developing countries and LDCs should not be prescribed. It also noted that such provisions would not be compatible with the WTO Most Favoured Nation (MFN) Principle.

The Chair said that in order to effectively move forward the discussion of the technical assistance and capacity- building provision during the SCT, a working group would be set up. The group is expected to meet in the morning of the second day of the session and report back to the plenary in the afternoon regarding its progress.

PROPOSALS ON TRADEMARKS AND GEOGRAPHICAL INDICATIONS

The SCT during the next few days is also expected to discuss the topics of Trademarks and GIs which also fall within its mandate.

In the area of trademarks, the SCT will discuss two issues - protection of country names against registration and use as trademarks; and trademark-related aspects of the domain name system. For the current session of the SCT, Jamaica has submitted a proposal with a draft text of a Joint Recommendation on the protection of country names against registration and use as trademarks (SCT/31/4).

The Joint Recommendations are proposed as guidelines which trademark offices would be encouraged to use in processing trademark applications bearing trademarks derived from or using country names.

Some of the elements of the Jamaican proposal include that member States should protect country names against conflicting marks, business identifiers and domain names, as well as against use done in bad faith. It also outlines the circumstances under which the agency responsible for the registration of marks shall refuse, or accept the registration of a mark containing or consisting of a country name.

In the area of Geographical Indications (GIs), the SCT is expected to discuss a proposal submitted by the US (SCT/31/7) which requests that the Secretariat conduct a survey of existing national GI regimes.

The USA has also requested that the SCT discuss the work of the WIPO Working Group on the Development of the Lisbon System, which is discussing revision of the Lisbon Agreement for the Protection of Appellations of Origin (AO) and their International Registration to include GIs within its ambit.

This proposal is seen as an attempt by the US to kick-start a discussion on GIs in the SCT which for a number of years had been suspended as not to prejudice the discussion in other fora, particularly the on-going negotiations in the WTO.