TWN Info Service on WTO and Trade Issues (Apr05/7)

16 April 2005

WIPO Development Agenda meeting Report 3:
Developing countries elaborate on their WIPO development agenda

Below is a report of the second day (12 April) of the WIPO meeting on a Development Agenda for WIPO.

The day saw a significant statement by India in support of the Friends of Development proposals, and also a robust response by Brazil and Argentina (coordinators of the Friends of Development Group) to the proposals by US, UK and Mexico.

With best wishes
Martin Khor



Geneva, 13 April 2005:   By Martin Khor with contributions by Sangeeta Shashikant

Major developing-country proponents of a comprehensive "Development Agenda" in the World Intellectual Property Organisation (WIPO) further elaborated on their positions and critically commented on alternative proposals put forward by other countries which they said had a restrictive view of the proposed Development Agenda.

On the second day of the WIPO meeting on a Development Agenda for WIPO, being held here on 11-13 April, Brazil and Argentina (which coordinate the 14-member Group of Friends of Development or FOD that have submitted two papers), made extensive comments on the proposals of the United States, United Kingdom and Mexico.

Another highlight was a presentation by India, another major proponent of the Development Agenda. Several other developing countries also spoke in support of the FOD proposals. Also, several developed countries advocated a restrictive view

(limiting a development agenda to a strengthened technical assistance programme) while a number of developing countries expressed support for the present work of WIPO (indicating that there is no need for any significant change).

The inter-sessional intergovernmental meeting (IIM) had been mandated by the WIPO General Assembly last October as a result of an initiative for a Development Agenda launched by the 14 members of the FOD. After a series of IIMs, a report is to be submitted to the next General Assembly for consideration of further action, if any.

India, which is not a member of the FOD, but seen by many as a major advocate of the Development Agenda, said this is a special day for WIPO as it is the first time that a Development Agenda had been taken up in the organization. India had high expectations that the IIM meetings would lead to mainstreaming the development dimension into all areas of WIPO's work and activities.

Congratulating the FOD for their two proposals, India said it fully supported the proposals, in particular the establishment of a WIPO evaluation and research office.

India said the issues covered in the proposals cover the most important areas and the FOD paper is an excellent starting point for establishing a Development Agenda, which would strengthen WIPO and ensure that its governance structure is more inclusive, transparent, democratic and that it is truly a member-driven organisation.

India said that much more needs to be done in WIPO to meet development challenges. In WIPO's terminology, "development" means increasing a developing country's capacity to provide protection to IPR owners. This is quite the opposite of what developing countries understand when they refer to the 'development dimension.' It added that the FOD paper corrects this misconception, that the development dimension means technical assistance.

India said that the real development imperative is ensuring that the interest of IP owners is not secured at the expense of the users of IP, of consumers at large and of public policy in general. The proposal therefore seeks to incorporate into international IP law and practice what developing countries have been demanding since the TRIPS agreement was foisted on them in 1994.

According to India, the primary rationale for IP protection is to promote societal development by encouraging technological innovation. The legal monopoly granted to IP owners is an exceptional departure from the general principle of competitive markets as a guarantee to secure society's interest. The rationale for the exception is not that monopoly profits by the innovator is good for society, but that properly controlled, such a monopoly, by providing incentives for innovation, might produce sufficient benefits for society to compensate for the loss to consumers.

Monopoly rights then is a special incentive that needs to be carefully calibrated by each country, in light if its own circumstances and taking into account the costs and benefits of such protection.

Should the rationale for a monopoly be absent, as in the case of cross-border rights involving developed and developing countries, the only justification for granting a monopoly is a contractual obligation, such as TRIPS, and nothing more, said India. In such a situation, it makes little sense for one party, especially the weaker party, to agree to assume greater obligations than he is contractually bound to accept.

This is what developed countries have sought to do so far in the context of WIPO, said India, adding: "The message of the Development Agenda is clear: no longer are developing countries prepared to accept this approach, or continuation of the status quo."

Even in developed countries, where monopoly profits of IP holders are recycled within the economy, there is debate on equity and fairness of such protection and questions about its claimed social benefit, said India.

"Given the huge North-South asymmetry, absence of mandatory cross-border resource transfers or welfare payment, and absence of domestic recycling of monopoly profits of foreign IP rights holders, the case for strong IP protection in developing countries is without any economic basis. Harmonisation of IP laws across countries with asymmetric distribution of IP assets is clearly intended to serve the interest of rent seekers in developed countries rather than that of the public in developing countries."

Neither IP protection nor harmonization of IP laws leading to higher protection standards in all countries can be an end in itself. For developing countries to benefit from providing IP protection to developed countries' IP holders, there should be obligations by developed countries to transfer technology to developing countries. Absent an obligation to transfer technology, asymmetric IP rent flows would be a permanent feature and benefits of IP protection would forever elude consumers in developing countries.

India said the FOD proposal had pointed out that technology transfer should be a basic objective of the global IP system and WIPO has the responsibility of taking measures for this as part of the development agenda.

It added that technical assistance (TA) should be directed towards impact assessment and enabling developing counties to use the space within IP treaties. The current emphasis of TA on implementation and enforcement issues is misplaced. It is unrealistic and undesirable that the enforcement of IP laws will be privileged over enforcement of other laws in the country. Therefore, WIPO's current focus in TA on enforcement should shift to other areas such as development impact assessment.

India said the developed countries and WIPO should acknowledge that IP protection is a policy instrument that needs to be used carefully in developing countries. While the claimed benefits of strong IP are a matter of debate, it entails substantial real and immediate costs for developing countries. Each country needs flexibility so that the cost of IP protection does not outweigh the benefits. WIPO should recognize this and formulate its work programme accordingly and not limit its activities to the blind promotion of increasingly higher levels of IP protection.

WIPO as a UN agency can make a major impact by incorporating the development dimension into its mission in letter and spirit so that it is reflected in all its instruments. This would revitalize WIPO as an organization sensitive to integrating developing countries' concerns in all areas of its work, concluded India.

Other developing countries speaking in support of the Development Agenda and broadly of the FOD proposal included Kenya, Trinidad and Tobago, Venezuela and Morocco.

Trinidad and Tobago said in recent years it had realized that a properly staffed IP office will not automatically guarantee that IP will succeed in encouraging technology transfer and serve as a general tool of economic transformation. It associated itself with many aspects of the FOD proposal, although it had reservations on a few specifics.

Kenya said, in support of the FOD proposal, that the initiative for establishment of the Development Agenda is long overdue. Of significance to Kenya is the protection of traditional knowledge and genetic resources, access to medicines, and expansion of national policy space and flexibility. The core of the Development Agenda is to ensure an inbuilt enhancing of national policy space, embodying the public interest. The need to treat countries with different economic levels differently is paramount.

Also supporting the FOD proposal, Venezuela said developed countries should undertake obligations to ensure that the companies who have protected IP carry out technology transfer. IP should be at the service of development and not be an end in itself. Development had to become a "fundamental pillar" of WIPO. The development dimension is not only about TA.

Some developing countries including Singapore and Sudan supported the present work of WIPO, implying that change was not needed. Singapore said the development dimension has always been part of WIPO's work. It did not see the need to change the WIPO Convention or integrate new procedures or bodies. It was open to suggestions for a development impact assessment of WIPO activities. It also saw merit in the US proposal.

Sudan said it valued a WIPO development programme to develop IP culture and raise standards in countries. The WIPO programs are not imposed but made on request. It did not support setting up other instruments and bodies under the Development Agenda.

Argentina noted that the other 3 proposals (from the US, UK and Mexico) share one specific feature - the intention to limit the Development Agenda (DA) to a single element, i. e. technical cooperation. As a proponent of the DA, Argentina did not share this view, which is very limited. It requested the countries that only focused on TA to also make proposals on the many other aspects of the FOD paper.

Argentina said that after the current meeting, it would like substantive work to be done based on the FOD proposal. The other proposals could contribute but could in no way replace the FOD proposal.

On the US proposal, Argentina said that it was based on strengthening IP protection, and it did not share the views of the paper. The development dimension is not adequately covered in the US paper, which focused only on technical assistance based on the use of IPs in developing countries. It also criticized the paper's limited approach to TA.

Argentina said the UK proposal had merit in that it was not limited to TA and contained some good points arising from the UK-organised Independent Commission on IPRs. However, the UK was only ready to seek solutions through TA and thus distances itself from the FOD solutions. Although the UK endorses the Commission's view that the WIPO mandate should be changed, the UK indicates that it is uncertain if the mandate should change.

Argentina added that the UK paper recognizes the weaknesses in WIPO's TA but only suggests that discussions be placed in WIPO's Permanent Committee on Cooperation for Development (PCIPD). It said the UK paper also dealt with harmonization of patent laws, which reiterated the trilateral position that is detrimental to developing countries. The patent treaty proposed is aimed at increasing protection levels and this is detrimental to national flexibilities and concerns. This proposal had been rejected twice last year at the patents committee and General Assembly. Argentina also did not agree with the UK point that technology transfer is not in the purview of WIPO.

On the Mexico proposal, Argentina said it deplored the paper's closed approach. It said the paper stated that IP is essential to development of humanity but many industrial countries had adopted patent protection quite recently and only after establishing their industrial base.

Referring to Mexico's positive reference to the Casablanca meeting (convened in February by the WIPO Director General), Argentina said that meeting is not the best example of how WIPO meetings should be held, as it did not have participation of all members. The meeting did not take up developing countries' issues but instead dealt with developed countries' issues in accordance with their needs in the patent treaty being negotiated. Not all countries were invited. It is incorrect to refer to such meetings which should not be held in future.

Argentina also criticised other aspects of the Mexican paper, including an assessment of levels of compliance of rules. Argentina concluded that IP is only a tool that can be beneficial depending on the use made of it. It thus did not agree with the dissemination of IP which only pointed to its benefit, as their costs should also be discussed.

Brazil welcomed the other proposals as it showed the countries' willingness to engage.

Referring to the US paper, Brazil agreed that WIPO is not a development agency like UNDP and the FOD only aims at making WIPO cognizant of development issues and broaden its perspective in a fashion that contributes to development.

While the US is concerned about the creation of new bodies, the FOD does not propose new bodies but advocates that development should be in all existing bodies and all discussions. The US paper understands that development is the most daunting challenge, which Brazil agreed with, but to meet this challenge, changes are needed in the IP system and to accommodate differences in development levels and contexts.

Brazil said the US's partnership proposal seems aimed at matchmaking donors and applicants for TA. The FOD also touches on TA but the development dimension cannot be dealt with only through TA. The FOD did not make suggestions on TA in a vacuum but in a wider context that includes changes in other areas.

It added that the rationale of the US proposal leads to a solution that runs counter to the FOD proposals, as it would out-source WIPO's function and submit TA to greater influence of rights holders who have most resources to fund TA on that basis. It did not see how this could make TA more neutral and development friendly.

On the Mexican proposal, Brazil also criticised its reference to the Casablanca meeting whose conclusions were not supported by Brazil. Countries in the FOD and others had also questioned the legitimacy of the Casablanca meeting, said Brazil. "This is not a basis to resume negotiations in WIPO. The way that meeting was conducted is an example of how we do not want meetings to be conducted anymore".

Brazil viewed with concern the Mexican position that WIPO's TA activities should include looking at the level of compliance and enforcement of rules by beneficiary countries. This would raise standards and make life more difficult for developing countries, which require flexibilities. Brazil also took issue with the Mexican paper's reference to surcharge on patents on traditional knowledge, that developing countries don't see the benefits of IP, as the average person in developing countries is unaware and should be educated.

Brazil said the Mexican paper can agree to a development initiative only as long as there is no interference with the existing framework of the international IP system. This seems to be a defense of the status quo and that is not what we intend to achieve. The Development Agenda would like to change the status quo and strengthen WIPO in a new direction, said Brazil. In contrast, the Mexico proposal defends the global IP system as it exists or even a less flexible version of this system as WIPO would be given a role to monitor countries' compliance and making compliance a condition for TA.

On the UK paper, Brazil said it shows an effort to sympathise with development concerns and makes welcome use of the IPR Commission report, including statements such as that individual countries' circumstances have to be taken into account. However, while the analysis is solidly backed up, the solutions are narrow and Brazil was frustrated by that. The UK reverts to the same solution as the US, with all the problems to be taken up by the WIPO committee on development cooperation.

Brazil also took issue with the UK advocacy for global harmonization of IP standards, as it believed the harmonization process in WIPO will lead to higher standards and will reduce existing flexibilities that are still there. This is not a development-friendly position. On the UK proposal that technology transfer not be dealt with by WIPO but instead by the WTO working group on technology transfer, Brazil said that group's work had not progressed very much and WIPO should take up this issue.

Several developed countries (including the US, Japan, Australia, France) spoke, all supporting the position of Group B (comprising developed countries). The US said the FOD proposal was of concern as it implies that WIPO has disregarded development concerns and that strong IP protection is detrimental to global development goals. It disagreed, saying the experiences of many developing countries represented attest that IP has facilitated their development.

The US said the thought that weakening IP will further development appears to be as flawed as the idea that IP alone can bring about development. WIPO treaties include flexibilities, the greatest being that the treaties are not mandatory. The US is interested to learn what lack of flexibilities exist in WIPO treaties or how they limit policy space or hinder development and welcomed a factual dialogue on this point.

The US asserted that WIPO has made and should continue to make its most important contribution to development precisely by deepening and expanding, rather than by diluting, its IP expertise.

Japan welcomed the US proposal on a database as it would enable an entire picture to be built. It would be useful to listen to developing countries' evaluation of WIPO activities. It also endorsed the UK paper's suggestion to proceed with harmonization of patent laws in a small package.

Norway, while supporting the Group B position, took a more nuanced stance. Norway said the proposals are of great importance and a good basis, the MDGs are important for WIPO's broader work and it was happy to see a demand-driven approach. There is room for better performance by WIPO and in order to make informed choices on proper implementation of IP, assessments should be undertaken. Sweden said different levels of development should be taken into account in WIPO's norm setting activities. It welcomed the US, UK and Mexican proposals.

Turkey said the proposals were useful, especially that of the FOD, although it was vague in some parts. It suggested forming a working group to study the issue in detail.

Statements were also presented by international agencies (including the WHO and UNCTAD) and intergovernmental organizations (including the ACP Group and the African Union).

The meeting continued on Wednesday, with statements presented by NGOs and industry groups. A discussion on future work is scheduled to take place Wednesday afternoon. A draft of the Chairman's summary of the meeting was being discussed informally by member states. It is expected to be adopted late Wednesday afternoon.