TWN Info Service on WTO and Trade Issues (Aug09/08)
5 August 2009
Third World Network

Lamy reports on GI extension, TRIPS/CBD consultations
Published in SUNS #6751dated 29 July 2009

Geneva, 28 Jul (Kanaga Raja) -- The Director-General of the World Trade Organization (WTO) on Monday reported on his consultations concerning the issues of extension of protection of Geographical Indications (GI) to products other than wines and spirits and the relationship between the TRIPS Agreement and the Convention on Biological Diversity (CBD).

At an informal meeting open to all Members, WTO chief Pascal Lamy told delegations that talks on GI extension and the TRIPS/CBD relationship need to continue to focus on technical issues in order for Members to better understand each others' concerns and seek any outcome that is "practically achievable".

According to trade officials, Members at the informal meeting said that they remain divided in their positions, even if they share a better understanding of some of the problems.

Lamy was reporting to the Membership on four rounds of consultations that he has held since March with a small group of Members -- Argentina, Australia, Brazil, Canada, Chile, India, Egypt (for the African Group), the EU, Japan, Mauritius (for the ACP group), New Zealand, Norway, Peru, South Africa, Switzerland, Tanzania (for the LDC group) and the United States.

The two issues that the Director-General consulted on are in relation to whether or not to extend the higher level of protection for GIs currently required only for wines and spirits to other products, and amending the TRIPS Agreement to require patent applicants to disclose the origin of genetic material and traditional knowledge (TK) used in their inventions. The proposal to amend the TRIPS Agreement comes under the heading of the relationship between the TRIPS Agreement and the CBD.

The Director-General's consultations are separate from the work being undertaken in the TRIPS Council. Both issues are "implementation-related" issues under the Doha Declaration (and thus part of the single undertaking); but according to trade officials, Members have differing views over whether they are actually mandated negotiations.

The Hong Kong Ministerial Conference of 2005 requested the Director-General to intensify his consultations on these issues.

In his report at the informal meeting, the Director-General said "I am convinced that a continuing focus on technical issues is essential for a better understanding of all Members' concerns. But this is not to fetishize the technical dimension, nor to pursue a kind of academic enquiry. We must focus on what Members believe is practically achievable."

"These consultations should illuminate the landscape more clearly, and thus help delegations identify pathways through this difficult terrain," he added.

On the issue of GI extension, the Director-General highlighted a number of general themes covered in the discussions:

* Factors for and against expanding the protection of Article 23 to goods other than wines and spirits: this included a discussion of the comparative merits of the "misleading-the-consumer" test under Article 22 and the Article 23 "correctness" test.

* How the costs and burdens of GI protection and its enforcement should be managed, with a particular focus on the needs of SMEs, and the best way of managing the trade-off between greater legal certainty and predictability (which proponents claim for Article 23 protection, describe it as "objective"), and the case-by-case application of the consumer deception and unfair competition rule (as applies under Article 22, described as "subjective").

* The rationale for the current higher level protection for wines and spirits - the idea of creating a level playing field for all products and to avoid discrimination between sectors is contrasted with the view that this is the outcome of a balanced package in the Uruguay Round.

* Broader questions with bearing on trade interests, such as the impact of higher protection on continuing market access for food exports to third country markets and the importance of GI protection in the context of the overall package on agriculture.

* The development dimension was stressed, including the view that higher protection for wine and spirit GIs principally benefitted industrialized countries, but not those developing countries whose GI interests concerned textiles, handicrafts, agricultural products or foodstuffs, as against the contrasting view that higher GI protection may impede certain valuable exports of developing countries.

The Director-General said that the discussions went some way to clarifying some technical issues:

* The distinction between scope of protection under Article 23, recognition of a term as a protectable GI under Article 22.1, and the Article 24.6 exception permitting some generic use.

* How GIs are protected as trademarks, especially as certification and collective marks, and the extent to which trademark protection can or should meet the expectations of the proponents of GI extension.

* The related question of whether it was possible to implement GI extension under the trademark system or whether it would require some sui generis type of legislation.

* Difficulties arising when GIs are used in translation, and whether GI significance in one country can or should influence the level of protection in another country.

According to Lamy, delegations continued to voice the divergent views that have long characterised this debate. Even so, there were clarifications that trademark systems were legitimate forms of protecting GIs, in line with the general TRIPS principle that Members are entitled to choose their own means of implementing their obligations.

Extension proponents sought guarantees that trademark systems could and would protect their GIs at the higher level for all goods. And discussions clarified that GI extension did not mean existing TRIPS exceptions for generic terms would cease to apply, said the Director-General.

On the issue of the relationship between TRIPS and the CBD, the WTO chief said that discussions built on the common ground that he had already reported in June 2008, resulting from the earlier round of consultations - agreement on the avoidance of erroneous patents, securing compliance with national agreements on benefit-sharing regimes and ensuring patent offices have available the information needed to make proper decisions on patent grant.

Discussions reviewed the practical implications and comparative merits of current proposals - a disclosure requirement, database systems, nationally-based approaches to enforcing prior informed consent and equitable benefit sharing. The discussions turned around how each of these options could help achieve the widely shared objectives, and what form they could take to be effective in meeting those objectives while not creating undue burdens.

"We started on the avoidance of erroneous patents and explored how databases and disclosure requirements would operate in practice to reduce the risk of patents being incorrectly granted over genetic resources and related traditional knowledge," said Lamy.

Discussions covered how a mandatory disclosure requirement and how databases would help prevent erroneous patents. However, proponents of disclosure mechanisms stressed that their overall goal was to ensure that TRIPS provisions positively supported compliance with the essential objectives of the CBD, including prior informed consent and equitable sharing of benefits.

According to the Director-General, while there has been general acceptance of these CBD goals, it is fair to say that Members remain divided as to the best means to attain this end.

Lamy said that participants debated whether a disclosure requirement would:

* be the most effective or desirable way of supporting compliance with access and benefit sharing obligations in the source country of genetic resources and associated TK, and the prevention of trans-boundary misappropriation of genetic resources and TK;

* avoid the issuance of erroneous patents if patent applicants identified only the source country;

* be burdensome for patent applicants and the concerned information readily available in patent offices; and

* result in uncertainty and deter investment in innovation, thus undermining the role of the patent system.

Discussions also focussed on whether more precise definitions are needed on genetic resources and TK and if so, whether or not to wait for these to be worked out in other forums such as WIPO and the CBD.

While the general utility of databases was not disputed, participants discussed:

* whether or not databases could serve as the primary way to prevent erroneous patents on genetic resources and TK;

* the difficulty of having fully exhaustive databases of TK, especially since much TK is oral in character and there are concerns that recording TK in a database can itself lead to misappropriation;

* the difficulty of fully mapping out all the genetic resources potentially available in a mega-diverse country; and

* whether or not a mandatory disclosure requirement would be useful in helping point patent examiners towards the relevant databases.

During the discussions at the informal meeting, Members' positions remained apart both on the substance and on whether there is a mandate to tackle the issues within the Doha Round.

According to trade officials, on the TRIPS/CBD relationship, Members were in agreement that misappropriation of genetic material and traditional knowledge is a problem that needs to be tackled. But they remain divided on whether the solution lies in amending the TRIPS Agreement to require "disclosure" or through some other method.

On the issue of extending the higher level of GI protection beyond wines and spirits, trade officials said that Members remain divided on whether the standard level of protection is a problem, and therefore whether there is any need for GI "extension".

According to trade officials, some delegations asked for Lamy's report in writing. Lamy said he was happy to share the report provided that he can preserve its informality. What he said was nothing more than an unofficial snapshot that must not be seen as an official text, Lamy added.

Speakers at the informal meeting included Chinese Taipei, Argentina, Australia, the EU, the US, India, Canada, Peru, Switzerland, Brazil, Chile, Kenya, El Salvador, China, New Zealand, Japan, Pakistan, Tanzania, Colombia, Ecuador, Costa Rica, Nigeria, Jamaica, Thailand, and Nicaragua.

In his concluding remarks, the Director-General said that at least there is consensus that he should continue his consultations.

Lamy noted that some members wanted the discussions to be more political and less technical, while others wanted them to be the reverse. Therefore, the present set-up of one ambassador and one expert for each delegation strikes the right balance, he said.

The Director-General's next consultation with the small group is scheduled for 8 October. +