Info Service on WTO and Trade Issues (Nov11/02)
8 November 2011
Third World Network
Review of "Para 6" system, ACTA feature at TRIPS Council
Published in SUNS #7252 dated 2 November 2011
Geneva, 1 Nov (Kanaga Raja) -- A formal meeting of the regular session
of the TRIPS Council last week took up, amongst others, the review of
the implementation of the "Paragraph 6" solution in respect
of the Doha Declaration on the TRIPS Agreement and Public Health.
The "Paragraph 6" solution is aimed at helping developing
countries with insufficient or no manufacturing capacities in the pharmaceutical
sector to import cheaper generic medicines produced under compulsory
licensing, and the Council annually reviews how well the Paragraph 6
system is working.
At its meeting on 24-25 October, the TRIPS Council also held discussions
on the Anti-Counterfeiting Trade Agreement (ACTA), Australia's plain
packaging bill for tobacco products, and on a "triplet" of
related issues -- review of the provisions of Article 27.3(b), the relationship
between the TRIPS Agreement and the Convention on Biological Diversity
(CBD), and protection of traditional knowledge and folklore.
The discussion on the "triplet" of related issues largely
followed that of previous Council meetings, said trade officials.
According to trade officials, at this TRIPS Council session, Members
agreed to extend the period for acceptance of the protocol amending
the TRIPS Agreement (of 2005) for a further two years - till 31 December
2013. This is the third such extension, and according to trade officials,
is needed in order to allow for two thirds of the WTO Members to accept
the amendment, which will then take effect.
Trade officials said that the General Council, in December, is expected
to approve the decision to extend the deadline till end December 2013.
Trade officials noted that the number of countries accepting the TRIPS
amendment is steadily rising. Argentina, Indonesia and New Zealand accepted
it just before this Council meeting, and Turkey, Costa Rica and Rwanda
said they will do so soon.
According to trade officials, both Ecuador and Cuba said that they are
not ready to accept the amendment - with Ecuador saying that it considers
the system to be not working, while Cuba was of the view that the TRIPS
Council still needs to study the situation more.
The WTO Secretariat clarified that accepting the TRIPS amendment is
completely independent from revising a country's own laws and regulations
to implement the Paragraph 6 system. When enough countries have accepted
the amendment, they will be allowing their fellow-members to use it,
and when they revise their laws and regulations, they allow themselves
to use it.
With respect to the annual review of the Paragraph 6 system, the TRIPS
Chair, Ambassador Federico A Gonzalez of Paraguay, had urged Members
not to repeat what they had said in last year's review (October 2010)
and in the follow-up in March 2011. The review lasted just over two
According to trade officials, the review was organized under six headings:
Members' experience in using or considering using the system (only used
once for Canadian exports to Rwanda); implementing the system in domestic
law and regulations; accepting the amendment; capacity-building on the
Paragraph 6 system and related flexibilities; alternatives to the system
for access to medicines, including procurement and other means; and
next steps and recommendations.
According to trade officials, Canada updated Members on Bill C-393 that
sought to amend Canada's Access to Medicines Regime. It said that this
bill died at the end of the last parliamentary session before the May
2011 general federal elections. Canada said it does not know whether
any member of Parliament will propose a new bill.
On the question of whether the Paragraph 6 system is working, trade
officials said that some developing countries (Ecuador and Venezuela)
continued to argue that since the system has only been used once, it
is too complicated to be effective.
Some other Members questioned whether it is working and said they need
more information. China, Cuba, India, Turkey and several others called
for a workshop, open to all Members and with other participants also
invited such as non-governmental organizations, and research-based and
generic pharmaceutical companies, said trade officials.
India and Ecuador asked questions about specific cases involving compulsory
licensing and injunctions on patent issues in Italy and the US. The
EU and US replied that these were not related to the Paragraph 6 system.
India said that the TRIPS Agreement handles the delicate balance between
the exclusive right of the patent holder and the public interest. One
of the public interest that is under current discussion is regarding
the issuance of the Compulsory License, a flexibility under the TRIPS
Agreement, for providing access to public health.
Articles 30 and 31 do provide such a mechanism. Article 30 is a substantive
exception, detailing three criteria for any exception to exclusivity.
Article 31, in contrast, is primarily procedural in nature, detailing
a list of requirements for a limitation to exclusivity. Taken together,
the Articles appear to define the universe of allowed unauthorized use
under TRIPS. Similarly, Article 44 of the TRIPS Agreement does provide
some flexibility as far as the State's right to provide permanent injunction
is concerned, added India.
In its question to the US, India said that the question is aimed at
accessing the State practices on the application of TRIPS Articles 30,
31 and 44 which may be of importance to the current discussion. Its
question relates to the application of Article 44 of the TRIPS Agreement
where the court decides about the injunction when a patent has been
India referred to a recent case between eBay, which owns and operates
an Internet website that allows buyers and sellers to do transaction
in goods, and the MercExchange. MercExchange alleged that eBay had violated
some of its patents and requested the Court to provide permanent injunction.
Noting that the US Supreme Court pronounced a landmark judgement, India
said that in this judgement, the Supreme Court held that principles
of equity required that the plaintiff in infringement cases satisfy
a four-factor test before a court may issue a permanent injunction:
(1) that it has suffered an irreparable injury; (2) that remedies available
at law, such as monetary damages, are inadequate to compensate for that
injury; (3) that, considering the balance of hardships between the plaintiff
and defendant, a remedy in equity is warranted; and (4) that the public
interest would not be dis-served by a permanent injunction.
Secondly, India noted that in the case of Edwards Lifesciences vs CoreValve,
a compulsory licence was granted for manufacturing a medical device
in the United States and meant exclusively for the export market.
It requested the US delegation to explain to the Members how these cases
are not bound by the restrictions on exports under a compulsory license
granted under Article 31 of the TRIPS. "In fact we feel that these
cases and practices in the US can shed light in addressing the present
problem of providing access to public health without the complicated
mechanism of Para 6," India added.
According to trade officials, some developed countries (Canada, the
EU, Japan, Switzerland, and the US) said that the number of times the
system has been used is not a good measure of its effectiveness because
it is only one among a wide range of policies for making medicines more
available and affordable.
Compulsory licensing under the Paragraph 6 system can also be used as
a bargaining chip to lower prices: when it is used it is working and
when it is not used it could well still be working, the EU said.
These developed countries also said that potential importers under the
Paragraph 6 system have not described their experience in using or considering
using the system. This was among their reasons for arguing that work
should continue among Members within the TRIPS Council, some adding
that delegations could seek information from outside organizations and
introduce that into the Council's discussions, said trade officials.
Regarding the proposal of some Members to hold a workshop including
non-governmental actors, the US said it does not support the idea of
the TRIPS Council organizing a seminar on the Paragraph 6 system.
Rwanda, an importing country, said that it supports the Paragraph 6
system and is about to accept the TRIPS amendment.
On Australia's plain packaging bill for tobacco products, Australia
reported that this bill, first discussed at the last TRIPS Council meeting,
has passed the lower house and is now in the Senate. It is part of Australia's
According to trade officials, Ukraine, and some developing countries
(the Dominican Republic, Mexico, Nigeria, Cuba, Nicaragua, Honduras,
and Zimbabwe) reiterated their concerns that the law will violate intellectual
property rights by preventing cigarette and cigar companies from using
their trademarks, ultimately hurting their poor farmers. Some argued
that the plain packaging will make counterfeiting easier, while some
said it will cut costs and lower prices, stimulating demand rather than
Brazil, Chile, El Salvador, China, Switzerland, India and the EU asserted
countries' right to use flexibilities in the TRIPS Agreement for public
health purposes, including tobacco control. They sought more information
and some of them urged Australia to ensure that its measures do not
conflict with the agreement, said trade officials.
Uruguay and New Zealand voiced support for Australia, which described
how serious a problem smoking is and assured Members that the policy
has been studied carefully to ensure that it does not violate TRIPS
provisions and that it will be effective in reducing smoking.
The World Health Organization described the serious global picture and
said plain packaging is part of its Framework Convention on Tobacco
With respect to the Anti-Counterfeiting Trade Agreement (ACTA), the
participants in these negotiations (Australia, Canada, the EU, Korea,
Japan, New Zealand, Singapore, Switzerland and the US) informed the
Membership about the agreement, which eight of them signed on 1 October
2011. The EU, Mexico and Switzerland are expected to sign soon.
According to trade officials, they described ACTA as a means of strengthening
the enforcement of intellectual property rights without altering the
obligations of the TRIPS Agreement. The Doha Declaration on TRIPS and
Public Health, which makes health a priority, is upheld (in the preamble),
they said, and generic medicines in transit or traded across borders
will not be affected because the agreement excludes patents from actions
at the border (footnote 6 of Article 13).
The US said that parties concluded the ACTA because counterfeiting and
piracy were spreading faster than governments could effectively react,
robbing individuals and businesses of billions of dollars. "We
realized that because this was a global problem it needed a global solution."
For example, said the US, today, counterfeiters and pirates move shipments
through multiple ports to hide the origin of the shipment, and to lower
the risk of detection by customs. The Internet has provided counterfeiters
and pirates with an extremely fast and efficient tool to distribute
their illicit products - with the ease of a click of a mouse, pirated
movies, music and games can be uploaded or downloaded; counterfeit foods
and medicines can be sold and sent. This was not the case when the TRIPS
Agreement was concluded.
The US went on to cite a variety of means through which ACTA promotes
the enforcement of intellectual property rights. Amongst others, it
said that ACTA will enhance the TRIPS Agreement framework on civil enforcement
provisions and deals with issues such as damages, provisional measures,
recovery of costs and attorneys' fees, and destruction of infringing
Canada said that ACTA represents an important initiative to more effectively
combat the growing and internationally recognized problems of large-scale
trademark counterfeiting and copyright piracy and achieve progress on
enhancing IP (intellectual property) enforcement.
According to Canada, ACTA sets new standards for the enforcement of
existing IP rights which are consistent with and complementary to those
provided in the TRIPS Agreement. "ACTA is also consistent with
the TRIPS Agreement and the Declaration on TRIPS and Public Health and
will not hinder the cross-border transit of legitimate generic medicines,"
According to trade officials, India, Angola, Ecuador, Brazil, China,
Chile, Venezuela and Zimbabwe reiterated a number of concerns raised
in previous meetings, including whether access to medicines would be
impeded or pressure would increase on countries to protect intellectual
property to a higher standard than required in the WTO, and the implications
for the WTO system of discussing an agreement negotiated outside the
India said that during the past several TRIPS Council meetings, it,
along with other countries, have consistently highlighted the systemic
implications of TRIPS+ initiatives launched by a few country members.
The ensuing discussions demonstrated the concerns echoed by a vast majority
of WTO Members about how ACTA through its TRIPS+ provisions can disturb
the fine balance of rights and obligations provided in the TRIPS Agreement
and negate the decisions like the Doha Declaration on Public Health.
India said that the scope of ACTA is broad and it felt that it would
target generic medicines, which have served as a lifeline by providing
access to medicines at an affordable cost in developing countries. ACTA
does not limit itself to counterfeits, a category of products defined
narrowly in the TRIPS Agreement as involving the deliberate or fraudulent
use of trademark in order to deceive consumers.
Instead, India added, ACTA targets all forms of intellectual property
infringement under the guise of targeting counterfeits. Goods that are
suspected of infringing IP, broadly defined, may be seized by customs
officials under ACTA. This is worrisome especially from a public health
point of view, as ACTA measures would target generic medicines.
India stressed that ACTA border measures, which are TRIPS+ on several
grounds, constitute a grave threat to trade in generics. The customs
detention of legitimate Indian generics through the European Union on
account of the EU border measures demonstrates the adverse impact that
such border measures can have on public health on a global scale including
life-saving medicines to treat HIV/AIDS , heart diseases etc. Under
ACTA, such seizures would continue. ACTA also provides for border measures
for the goods in transit through a signatory - even if they do not infringe
any IP in the place of production or where they will be consumed.
"Our apprehension is that ACTA will pose grave risks for international
trade in generics and thereby adversely affect public health initiatives
in developing countries," said India.
Under ACTA, India noted, third parties supplying inputs or services
in support of the manufacture or commercialization of allegedly IP infringing
products could be subject to civil and criminal sanctions. The imposition
of so-called third party liability will dissuade suppliers from selling
inputs and services to even genuine generic manufacturers.
In addition, ACTA also requires that the officials be authorized to
grant injunctions including for third parties contributing to alleged
infringement of IP, in order to prevent the infringing goods from entering
the channels of commerce. ACTA language on aiding and abetting could
affect providers of inputs including those that unknowingly supply labels,
materials or services to IP infringers. This would have an adverse impact
on the availability of affordable medicines globally.
As far as systemic concerns go, India said that ACTA bypasses the multilateral
processes of WTO or WIPO and goes way beyond the enforcement levels
laid down in the TRIPS Agreement. The MFN provisions of the TRIPS Agreement
mean that any TRIPS+ protection secured by any trading partner via an
RTA (Regional Trade Agreement) or a plurilateral agreement is ipso facto
applicable to all other WTO Members.
Thus, India added, this agreement will have a direct bearing even on
the members not involved in ACTA, but who will subsequently enter into
RTAs with ACTA signatories. ACTA has thus inalterably changed the balance
of rights and obligations of the parties to the TRIPS Agreement, without
their having had any say in the negotiation of ACTA.
India also drew attention to the Trans-Pacific Partnership (TPP) Agreement
currently under negotiation. This agreement could also end up seriously
hampering public health efforts in developing countries. As per some
reports, the stance of some parties at the TPP, if agreed upon, will
result in creating monopolies for the big Pharma companies and driving
out generic manufacturers from the global market, it added.
India said that as per reports, there are proposals that can undermine
the provisions and flexibilities in the TRIPS Agreement by requiring
patentability of new uses and minor variations of older known drugs.
This will result in indefinite lengthening of the patent life and undermine
the generics industry. There is also a proposal to lengthen the patent
period by taking into account the time required for getting marketing
approval. This will bring in subjectivity in the patent life and delay
the entry of generic drugs.
According to India, there are also provisions against pre-grant opposition
and compulsion to provide for patent linkage. Thus even a spurious drug
can act as barriers by bringing in patent linkage in the agreement.
There is also a proposal to dictate the pricing of drugs in the country
by big Pharma companies. Thus even the prices of essential drugs which
are kept low by the countries in public interest would be dictated by
the big Pharma, it added.
India said it is deeply concerned by ACTA and agreements under negotiations
like TPP, which aim at enforcing TRIPS+ measures directly or indirectly
on the WTO membership. "While India is committed to dealing with
IPR enforcement issues in line with its TRIPS obligations, the introduction
of intrusive IPR enforcement rules has indeed set up very high non-tariff
barriers in the multilateral trading system and we cannot remain oblivious
to such developments."
According to trade officials, the Council reviewed China's implementation
of its intellectual property obligations for the last time under Beijing's
2001 membership agreement, with some praise for the efforts the country
has made in protecting intellectual property but also concerns about
the amount of counterfeiting and piracy.
Japan, the US, the EU, Korea and Canada praised China for the efforts
it has put into protecting intellectual property rights, the information
it has supplied to the committee, in some cases the bilateral cooperation
that has taken place and the campaigns on protection.
According to trade officials, they and their companies however remain
seriously concerned about counterfeiting and piracy, particularly digital,
hi-tech and brand-name products. They commented on a range of issues,
such as the threshold set to determine whether a case is serious enough
to justify prosecution and other aspects of the enforcement process.
Some were also concerned about legislation involving compulsory technology
Trade officials said that China circulated a document (IP/C/W/564) before
the meeting, outlining latest developments in revising its copyright,
trademark and patent laws, enforcement, and other intellectual property
issues. In the meeting, China explained these at length in reply to
Trade officials added that China concluded by thanking Members for cooperation
over the 10 years of the review and pledged to continue to work with
them bilaterally and in the WTO. China said its government had shown
the political will to implement and enforce intellectual property protection
and highlighted the Chinese population's increasing awareness about
Also at the Council meeting, Members delayed a decision concerning TRIPS
non-violation complaints, which trade officials said could be taken
up at the upcoming Ministerial Conference in Geneva (15-17 December
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