TWN Info Service on WTO and Trade Issues (May11/06)
18 May 2011
Third World Network

WTO DG reports divergent views on GI extension, TRIPS/CBD
Published in SUNS #7138 dated 28 April 2011

Geneva, 27 Apr (Kanaga Raja) -- Delegations at the World Trade Organization (WTO) have continued to voice divergent views on the issues of the extension of protection of geographical indications (GIs) to products other than wines and spirits, and the relationship between the TRIPS Agreement and the Convention on Biological Diversity (CBD).

This conclusion is highlighted by WTO Director-General Pascal Lamy in his report on the consultative process that he has been undertaking on both these issues.

The WTO head's report is part of a package of documents that was circulated on 21 April by the Chairs of all the negotiating groups in the Doha negotiations.

In a cover note to the compendium of documents, the Director-General, in his capacity as Chair of the Trade Negotiations Committee (TNC), had reported that the Chairs' documents had presented an impressive and realistic picture of significant progress achieved over the last ten years, but also of issues dividing the negotiators and some clear political gaps that he said are "unbridgeable today".

In his cover note, the Director-General had described the situation as "grave" and had urged delegations to use the next days to reflect on the current situation, as well as the next steps forward. In this context, an informal meeting of the TNC is scheduled to take place on 29 April.

In addition to the cover note, the Director-General had also provided a separate report on his consultations on the NAMA sectoral negotiations, in which he said that there was a fundamental gap in expectations in the sectorals, and that this political gap "is not bridgeable today" (see SUNS #7136 dated 26 April 2011).

According to the Director-General's report on the issues of GI extension and on TRIPS/CBD, paragraph 39 of the Hong Kong Ministerial Declaration of 2005 requested "the Director-General, without prejudice to the positions of Members, to intensify his consultative process on all outstanding implementation issues under paragraph 12(b)".

The implementation issues referred to are: (i) those related to the extension of the protection of geographical indications (GIs) provided for in Article 23 of the TRIPS Agreement to products other than wines and spirits; and (ii) those related to the relationship between the TRIPS Agreement and the Convention on Biological Diversity (CBD).

The Hong Kong Declaration had also required the Director-General "to report to each regular meeting of the Trade Negotiations Committee and the General Council".

The present report by Lamy summarizes his consultations from the resumption of the process in March 2009 up to the present date.

On the extension of GI protection, Lamy's report said that the structured discussions covered:

-- Factors for and against expanding the protection of Article 23 of the TRIPS Agreement to goods other than wines and spirits, including the comparative merits of the "misleading-the-consumer" and unfair competition tests under Article 22, and the Article 23 "correctness" test.

-- How the costs and burdens of GI protection and its enforcement should be managed, so as to balance legal certainty and predictability (which proponents claim for Article 23 protection), and case-by-case application of the consumer deception and unfair competition rule under Article 22.

-- The rationale for the current higher level protection for wines and spirits - contrasting a claim for a non-discriminatory, level playing field for all products and sectors, against the view that the current arrangement represents a balanced package in the Uruguay Round and that wine and spirits were subject to specific forms of labelling regulation in some national systems.

-- Broader trade issues, such as the impact of higher protection on continuing market access for food exports to third country markets and the relevance of GI protection to agricultural trade.

-- The development dimension of GI protection, some arguing that higher protection for wine and spirit GIs principally benefited industrialized countries, not those developing countries whose GI interests concerned textiles, handicrafts, agricultural products or foodstuffs; others argued that higher GI protection may impede certain valuable exports of developing countries.

The report said that the discussions went some way to clarifying some technical issues: The distinction between scope of protection accorded to a GI under Articles 22 and 23, recognition of a term as a protectable GI under Article 22.1, and the Article 24.6 exception permitting some generic use; Protection of GIs as trademarks, especially certification and collective marks, and how the trademark system can or should meet the expectations of the proponents of GI extension, and whether stronger GI protection was possible under the trademark system or would require sui generis means; 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 the Director-General's report, the exchanges on the substantive issues raised by Members' questions of one another covered a number of general themes grouped into five clusters:

-- Cluster 1, on differences between protection under Articles 22 and 23: whether and how a GI could be prevented from becoming generic in third markets without Article 23 protection; the scope of the proposal to extend GI protection, in terms of products covered, their link with their geographical origin, and the role of a GI identifying a product; whether Article 22 protection is costly and burdensome because of the need for evidence to prove that use of a GI is misleading or confusing to the consumer; and whether Article 22 or 23 protection was preferable for policy reasons.

-- Cluster 2, on the effects of extending higher protection to additional products: effects of higher protection being extended to GIs for different products, including in third country markets; whether increased market access had resulted from higher protection; and the impact of higher protection on market access for products with generic descriptions.

-- Cluster 3, on Members' experiences with GI protection under the existing standards: implications of Article 23 protection in third country markets for trade in wines and spirits; the nature of problems claimed to arise from current levels of protection; and whether a useful analogy could be drawn between wines and spirits and other products.

-- Cluster 4, on the contrasts between GI protection and other forms of IP: whether and if so how GIs differed from other forms of IP, whether any possible trade benefits from GI extension could be equally available through alternative branding and marketing strategies, and the relative costs involved; and the complementary character of marketing and GI protection; implications of extension of the scope of GI protection for continuing market access for products legitimately presented with generic terms or other TRIPS exceptions to GI protection.

-- Cluster 5, on how exceptions under Article 24 would apply under an extension system: for instance, whether the existing sector-specific exception for the names of grape varieties could be adapted and applied for other products, such as cheese and other processed foods.

The Director-General reported that delegations continued to voice the divergent views that have characterized this debate, with no convergence evident on the specific question of extension of Article 23 coverage: some Members continued to argue for extension of Article 23 protection to all products; others maintained that this was undesirable and created unreasonable burdens.

It was clarified that trademark systems were legitimate forms of protecting GIs, in line with the general principle that Members are entitled to choose their own means of implementing their TRIPS obligations, said Lamy.

Extension proponents sought guarantees that the trademark system could and would protect their GIs at the higher level for all goods. Discussions clarified that GI extension did not mean that existing exceptions under the TRIPS Agreement, such as for generic terms and prior trademark rights, would cease to apply, he added.

"This discussion underscored the benefits of understanding more fully the scope of protection that applies at a practical level under different national systems."

On TRIPS-CBD, Lamy reported that the discussions built on the common ground reported in 2008 - broad support for the general principles of prior informed consent and equitable sharing of benefits that are enshrined in the CBD; and agreement on the need to avoid erroneous patents, on securing compliance with national benefit-sharing regimes, and on ensuring patent offices have available the information needed to make proper decisions on patent grants for inventions linked to genetic resources and traditional knowledge (TK).

"Members voiced support for the CBD objectives, but remained divided as to the best means to fulfil them within the TRIPS framework," he said.

According to Lamy's report, the structured discussions therefore reviewed the practical implications and comparative merits of current proposals - a disclosure requirement, a database system, and national-based approaches to enforcing prior informed consent and equitable benefit sharing - considering how each of these options could effectively help achieve the agreed objectives, while not creating undue burdens.

The exchanges on substantive issues raised by Members' questions covered a number of general themes grouped into four clusters:

-- Cluster 1, on the legal character of misappropriation: whether access to genetic resources through channels that are consistent with national laws should be considered misappropriation in particular cases; whether access to a genetic or biological resource can give rise to a claim of misappropriation based on the laws of the country of origin if the resource was obtained from another country; whether "misappropriation" could refer to illegal or illegitimate acts with respect to the acquisition and use of genetic resources and associated TK; whether defining "misappropriation" should be a precondition for establishing a disclosure obligation; and the role of national access and benefit-sharing (ABS) legislation in enabling Members to exercise their sovereign rights over genetic resources and authorize access and benefit-sharing, including through the use of contracts.

-- Cluster 2, on costs and benefits of measures, other than the disclosure requirement, to address misappropriation and benefit-sharing: whether, and how, other measures could ensure that patents are not issued in cases where inventions are based on genetic resources or associated TK which have been obtained without proper and legitimate authorization and without equitable benefit-sharing; whether mechanisms to prevent misappropriation of genetic resources should differ depending on whether commercialized products are patented; whether TK/genetic resources databases would contribute to preventing misappropriation and ensuring equitable sharing of benefits.

-- Cluster 3, on the legal character and enforcement possibilities of national-based approaches, including a contract-based system, especially covering multiple jurisdictions: how to address transboundary aspects of access, benefit-sharing, and prior informed consent; how a contract-based approach would address the principles of ABS and prior informed consent, along with appropriate domestic legislation; issues relating to transboundary enforcement of contracts.

-- Cluster 4, on administrative costs and burdens, and the legal certainty and predictability, of a mandatory disclosure requirement within the patent system: relative additional costs and burden of incorporating the mandatory disclosure requirement as compared to existing obligations under Article 29.1 of the TRIPS Agreement; how these costs could be offset against benefits of improving patent examination, facilitating prior art search, promoting transparency, contributing to preventing misappropriation of genetic resources and associated TK, and ensuring equitable benefit-sharing and prior informed consent; whether, given the continuing relevant work in the WIPO and the CBD (including on definitions of key terms and elements of benefit-sharing), a disclosure requirement could be implemented in a consistent manner which would provide legal certainty.

The Director-General reported that Members have consistently voiced support for the principles and objectives of the CBD, including the principle of prior informed consent and the principle of equitable sharing of benefits. They have agreed on the need to take steps to avoid erroneous patents, including through the use of databases, as appropriate, to avoid patents being granted on existing traditional knowledge or genetic resources subject-matter.

None of the proposals discussed - disclosure requirements, databases, or the use of contracts - was argued to be a stand-alone response or complete solution to all problems outlined.

"Members continue to differ on whether the formulation and application of a specific, tailored disclosure mechanism relating in particular to genetic resources and associated TK would be useful and effective in ensuring that the patent system promoted CBD objectives, or whether other mechanisms should be preferred."

This discussion underscored the benefits of understanding more fully the practical and operational context of the existing disclosure mechanisms that have been implemented in national systems, Lamy added.

Meanwhile, on the separate but related issue of the establishment of a multilateral system of notification and registration of GIs for wines and spirits, the Chair of the TRIPS Council in Special Session, where the negotiations on the proposed GI register are taking place, has also provided his report on the issue, as part of the compendium of documents by the Chairs of the negotiating groups.

The report, which includes a draft composite text on the proposed GI register for wines and spirits, albeit a heavily-bracketed one, says that the three main proposals that have been discussed remain on the table (document TN/IP/W/8, tabled by Hong Kong-China, document TN/IP/W/10 by the "joint proposal" group, and document TN/C/W/52 by over 100 co-sponsors) even while providing substantial input to the most recent textual negotiations.

The Special Session's most recent work could be described as a two stage process: (1) from March to October 2010; and (2) from November 2010 to the date of this report, it adds.

The Chair, Ambassador Darlington Mwape of Zambia, reported that while this phase (the first stage) was productive and informative, it did not resolve the two key issues that continue to divide Members, namely, legal effects/consequences of registration and participation, the former remaining, in the Chair's view, the major stumbling block.

The second stage, said the Chair, the preparations for which started in November/December 2010, was part of an overall process regarding the Doha Round with the objective of accelerating work in order to develop texts in all negotiating groups by the first quarter of 2011.

For this second stage, the Chair had suggested a list of the six "Possible Elements for Developing Texts" for the future Register, which were: Notification; Registration; Legal Effects/Consequences of Registration; Fees and Costs; Special and Differential Treatment; and Participation.

The work of the drafting group (to produce the single draft composite text) was confronted by a fundamental, systemic and mandate-related concern, relating to the product coverage of the register, namely, whether it would include GIs for products other than wines and spirits, said the Chair.

"As Chairman of a negotiating group with a clear mandate, I continued to stress the precise perimeter of the zone from which the final product had to emerge, any other matter having to be resolved at a different and higher level. In spite of my continuing emphasis on the mandate of the Special Session, this issue was debated repeatedly, with strong views being expressed on this point."

The Chair said that despite the fact that the draft composite text (circulated as JOB/IP/3/Rev. 1) does reflect the current state of negotiations in this negotiating group and represents significant progress since his last report in TN/IP/20, views differ on whether or not it could be forwarded to the TNC by Easter 2011, and on whether and how the negotiating mandate should be accurately reflected in the draft composite text.

He noted that Members have been unable to engage constructively on this question and have instead insisted that the purely bottom-up and Member-driven nature of the text be scrupulously respected at this time. Both sides, therefore, appear to prefer that the Draft Composite Text remain untouched at this point in time.

The Chair held the view - after having given careful consideration to the arguments on both sides - that it is not prejudicial to the outcome of this negotiation or to any delegation's position if this text is attached as the factual representation of the state-of-play in this negotiating group with all the caveats mentioned above and on the cover page of the attached JOB/IP/3/Rev. 1.

"I would like to thank all delegations for their co-operation and engagement. I sense that, beyond tactics and strategies, all delegations have made a genuine effort to find common language while defending their interests. The devil being in the details, I do believe that working on treaty-language formulations regarding the structure, operation and implications of the Register has - for the first time - helped all delegations to have a clearer view of each other's positions, proposals and wordings."

"While I am aware that there still is a long way to go, I do believe that the Draft Composite Text as reflected in JOB/IP/3/Rev. 1 provides a good basis on which to continue negotiations towards a multilateral system of notification and registration for geographical indications for wines and spirits," the TRIPS Chair concluded. +