TWN Info Service on Climate Change (Jun13/02)
10 June 2013
Third World Network
Dear
friends and colleagues,
Ecuador submitted a formal proposal at the WTO on 27 February 2013
to review the TRIPS agreement in light of the need to transfer environmentally
sound technology (EST), especially to combat climate change.
The objectives of Ecuador's proposal are to:
a. reaffirm the existing flexibilities in the TRIPS Agreement
so that Members use them in connection with ESTs, for example through
a declaration addressing flexibilities in the TRIPS Agreement, climate
change and access to ESTs;
b. initiate a review of Article 31 of the TRIPS Agreement
to determine which of its provisions may excessively restrict access
to and dissemination of ESTs, and particularly its paragraph (f) and
the need to include provisions on, as the case may be, the transfer
of expertise or know-how to implement compulsory licences;
c. evaluate the regulation of voluntary licensing and
the conditions thereof from the standpoint of the most pressing needs
of the most vulnerable developing countries in relation to adaptation
to and mitigation of climate change;
d. recognise that adaptation to and/or mitigation of the
harmful effects of climate change should be assimilated to the concept
of "public interest", with the adoption of a provision authorizing
exemption from patentability, on a case-by-case basis, for inventions
whose exploitation is vital for the diffusion of ESTs needed for adaptation
and/or mitigation of climate change;
e. evaluate Article 33 of the TRIPS Agreement to
establish a special reduction in the term of protection for a patent
of [X] years in order to facilitate free access to specific patented
ESTs for adaptation and/or mitigation of the effects of climate change
because of urgent need in the public interest; and
f. inclusion of a mechanism in the TRIPS Agreement to
promote open and adaptable technology licensing for results obtained
from research into climate change and ESTs financed through public
funds.
The new flexibilities proposed above would apply to developing countries
and Least Developed Countries (LDCs).
Ecuador’s proposal also calls for recognition in the WTO of the need
for cooperation and consistency in the actions of both the UN Framework
Convention on CLimate Change (UNFCCC) and WTO, with a view to eliminating
or reducing restrictions or barriers to access to ESTs, and consequently
facilitating their use by the developing countries.
It also asks the WTO to consider adopting at the Bali WTO Ministerial
Conference at the end of this year a declaration in which Members
would enshrine the principle that "nothing in the TRIPS Agreement
can minimize or impair the flexibilities provided for in that Agreement,
nor prevent or limit Members taking measures they consider necessary
to protect their population from the effects of climate change and
to make use of "environmentally sound technologies".
Below is the full proposal. The official document with footnotes is
available at:
http://www.wtocenter.org.tw/SmartKMS/fileviewer?id=131645
With best wishes,
Third
World Network
(Submitted
by Ecuador to the World Trade Organisation TRIPS Council)
http://www.wtocenter.org.tw/SmartKMS/fileviewer?id=131645
27/02/2013
IP/C/W/585
CONTRIBUTION OF INTELLECTUAL PROPERTY TO FACILITATING THE
TRANSFER OF ENVIRONMENTALLY RATIONAL TECHNOLOGY
COMMUNICATION
FROM ECUADOR
1 BACKGROUND
1. The opening paragraph of the preamble to
Marrakesh Agreement Establishing the World Trade Organization (WTO)
lists among the guiding principles and objectives of the world trading
system the objective of sustainable development together with the
protection and preservation of the environment. It also recognizes
that the multilateral trading system should take into account the
Members' asymmetries and different levels of development. Members
reiterated their commitment to these principles at the WTO's Fourth
Ministerial Conference, in paragraph 6 of the Doha Ministerial Declaration.
Hence the Doha mandates also stress the importance of appropriate
coordination between the WTO Agreements and the multilateral environmental
agreements (MEAs), as well as the Members' right to promote and protect
the environment. The Doha Declaration provides, in paragraph 31(i),
for the opening of negotiations on the relationship between existing
WTO rules and specific trade obligations set out in multilateral environmental
agreements, while in paragraph 33 it recognizes the importance of
technical assistance and capacity building in the field of trade and
environment to developing countries.
2. Likewise, in the preamble to the Agreement
on Trade-Related Aspects of Intellectual Property Rights, Members
refer twice to the promotion of technology transfer to developing
countries. Furthermore, the provisions on the basic objectives [1]
and principles [2] of the TRIPS Agreement recognize the need for the
development and transfer of technology in order to create sound and
viable technological foundations for protecting public health and
nutrition and to promote the public interest in sectors of vital importance
to their socio-economic and technological development. In addition,
in both letter and spirit these provisions seek to preserve a balance
of rights and obligations between intellectual property producers
and consumers, and recognize the Members' right to adopt multilateral
joint measures and mechanisms in order to "prevent the abuse
of intellectual property rights by right holders or the resort to
practices which unreasonably restrain trade or adversely affect the
international transfer of technology".[3]
2 JUSTIFICATION
3. The issue of technology and its transfer
is a fundamental aspect of the fight against climate change and adaptation
to and mitigation of its harmful effects. Hence the timely dissemination
and transfer of technology are essential for achieving that objective,
and consequently one of the major challenges facing the international
community in its response to this problem. [4]
4. The issue of intellectual property rights
and the debate over technological cooperation is becoming a fundamental
aspect of how best to adapt to and combat the harmful effects of climate
change, particularly for developing countries. Discussions in forums
concerned with environmental protection and preservation highlight
the fact that lack of information and excessive protection, inappropriate
enforcement and abuse of intellectual property rights, and particularly
patents, without any consideration for effectively fostering "…
social and economic welfare and … a balance of rights and obligations"
between producers and users,[5] can constitute a kind of barrier to
access to this kind of technology, particularly for developing countries.
[6]
5. This is because they create an exclusive
exploitation right for the holder of the invention (product or process)
within a specified territory and for a specific period of time, which
occasionally creates a monopolistic situation characterised by high
prices and a restriction of the dissemination of knowledge for adaptation
and use of environmentally-sound technology (EST) . There are therefore
grounds for arguing that the question of intellectual property rights
should also be included in the discussions on mechanisms for the transfer
of ESTs. [7]
6. We believe that this is a valid argument,
and therefore share some ideas on the options that could be considered
with regard to intellectual property rights and climate change in
the context of the international trading system, such as: automatic
granting of rights through voluntary licensing, use of the TRIPS flexibilities,
and regulating licensing costs, inter alia. It is unfortunately the
case that the increased difficulties of access to renewable energy
technologies, i.e. ESTs, are reflected in the restrictive conditions
and limitations imposed on acquiring and implementing them, as seen
in the imposition of linked clauses, retrocession provisions, export
prohibitions and so forth. [8]
7. When considering the principle of common
but differentiated responsibilities, development priorities, objectives
and circumstances, the countries parties to the United Nations Framework
Convention on Climate Change (UNFCCC), most of whom are WTO Members,
undertook, in Article 4.1 of the Convention, to promote and cooperate
in the development, application and diffusion, including transfer,
of technologies, practices and processes that control, reduce or prevent
emissions of greenhouse gases. It should be emphasized in this connection
that despite this affirmation and the recognition in this context
of the importance of promoting transfer of ESTs, in the preparatory
work for the Canc๚n Conference and the negotiations during the
Conference on Climate Change on 29 November 2010 participants were
unable to agree on a proposal submitted by a number of developing
countries, including Ecuador for the inclusion of intellectual property
provisions in the document. The thrust of the proposal was basically
that the countries parties to the Convention should agree on action
to exclude ESTs from intellectual property rights protection and fully
facilitate the implementation of the "flexibilities" in
the TRIPS Agreement, particularly in the case of the more vulnerable
developing countries. This failure was in particular the result of
strong opposition from the developed countries, led by the United
States.
8. Furthermore, in this context the United
Nations General Assembly has adopted several resolutions on "Protection
of Global Climate for Present and Future Generations of Mankind"
[9] and "Promotion of New and Renewable Sources of Energy"
[10] in which it both reaffirms the international community's commitment
to the UNFCCC objective of stabilising greenhouse gas concentrations
in the atmosphere at a level that would prevent dangerous anthropogenic
interference in the ecosystem, and also recognizes the fundamental
role played by innovative renewable energy technologies in combating
and alleviating climate change and its harmful effects. It therefore
calls on the international community and the United Nations system
to raise awareness with regard to greater support for such technologies,
and highlights the importance of continuing the consideration of this
major issue and the need to create at all levels the conditions for
their promotion and use, including measures to improve access to them.
9. During the United Nations Conference on
Sustainable Development in June 2012, the international community
evaluated the progress made in development and use of new and renewable
sources of energy and related technologies. The Conference addressed
two fundamental issues that have a bearing on the subject of this
Communication: (a) the green economy in the context of sustainable
development and poverty eradication, and (b) the institutional framework
for sustainable development. Thus, Member States affirmed that green
economy policies should reduce the technological dependence of developing
countries and contribute to closing the current technological gap
between developed and developing countries; [11] and recognized the
fundamental role played by the transfer of renewable energy technologies
for sustainable development, poverty eradication, as well as the major
challenges and obstacles facing developing countries in accessing,
adopting and using such technologies, particularly in combating, adapting
to and mitigating the harmful effects of climate change. [12]
10. Accordingly, Ecuador submits this Communication
as a contribution by the multilateral trading system to global strategies
to enhance access to clean energy, increase energy efficiency and
accelerate worldwide implementation of renewable energy technologies
from the standpoint of intellectual property. It puts forward considerations
for Members to assess the benefits of eliminating or reducing the
existing restrictions or barriers and facilitating access to and use
of ESTs in the WTO, and specifically in the Council for Trade-Related
Intellectual Property Rights.
11. By way of example, according to World
Bank data the cost of royalties and licences for the use of intellectual
property rights is increasing rapidly: world flows rose from US$135
billion in 2005 to reach US$245 billion in 2010. The bulk of these
royalties went to the United States (42%), the European Union (36%),
Japan (10%) and Switzerland (7%), while most developing countries
are net importers, that is to say payers, of royalties and licences.
[3]
12. Thus, if the OECD countries represent
78% of total research and development spending while Asia (excluding
Japan) accounts for 19%, Latin America 2.4%, the Near and Middle East
1.2%, and Africa 0.7%, then, as Correa puts it, [14] "the world
distribution of research and development budgets is indicative of
one of the most dramatic asymmetries" existing between developed
countries and developing countries in the sphere of technological
development in general and ESTs in particular. Moreover, specifically
with regard to ESTs, the available information indicates that most
patents granted for such technologies belong to firms based in North
America, Western Europe and Japan. [15] All in all, OECD data indicates
that in 2005 the European Union accounted for 36.7% of renewable energy
patents, the United States 20.2% and Japan 19.8%, compared with 2.9%
for China and 2.3% for Korea. [16]
13. As a Communication from China and India
[17] to the WTO Committee on Trade and Environment (CTE) has already
highlighted, intellectual property rights must not become a barrier
for transfer of technology to developing countries. There must also
be coordination and cooperation between developed countries and the
private sector linked with the creation and diffusion of ESTs to facilitate
and assist in combating climate change and adaptation and/or mitigation
of its harmful effects, particularly as regards technologies designed
to reduce and/or eliminate the harmful accumulation of CO2.
14. To this end, there must be genuine, real
international cooperation that takes the form of fair and balanced
trade between countries leading to the creation of fair and reasonable
patterns of use and trade of new technologies in the context of a
successful green-economy revolution to which we aspire. [18] It is
therefore essential to reorient the world intellectual property regime
in the context of adaptation and/or mitigation of the harmful effects
of climate change, assuming that there is a real intention to support
the efforts of the most vulnerable developing countries to adapt and
to mitigate those effects. [19] The WTO Agreement on Trade-Related
Aspects of Intellectual Property Rights is the cornerstone of multilateral
intellectual property standards and therefore the most important of
the international instruments in this field.
15. Finally, in the case of environmentally
sound technologies linked to adaptation and/or mitigation of climate
change caused by CO2, we consider that these must be considered a
"public good" [20] since by their nature and purpose they
seek to promote global social welfare through adaptation and/or mitigation
of the effects of climate change. This welfare is reflected in the
adoption of government "public policies" designed to establish
remedies and solutions for reducing and/or eliminating the causes
of climate change in the context of promoting public and environmental
health. [21] Such public policy elements were endorsed in the Doha
Declaration on the TRIPS Agreement and Public Health, which states
that the TRIPS Agreement "… does not and should not prevent Members
from taking measures to protect public health". [22]
3 SCOPE OF THE PROPOSAL TO EVALUATE THE TRIPS AGREEMENT
FROM THE STANDPOINT OF MITIGATION OF ENVIRONMENTAL PROBLEMS
16. The evaluation and possible revision of
the framework for the protection of intellectual property rights for
technological applications would be one of the most important options
for developing countries with regard to climate change. The aim is,
firstly, to reaffirm the existing flexibilities in the TRIPS Agreement
in connection with ESTs, and secondly, to initiate a process of evaluation
to enhance the flexibility of disciplines on patentability of ESTs,
whose use could produce considerable environmental benefits, thus
constituting efficient tools for effective adaptation and/or mitigation
as part of developing countries' climate change strategies.
17. As mentioned above, the objectives of
this Communication are:
a. reaffirmation of the existing flexibilities in the
TRIPS Agreement so that Members use them in connection with ESTs,
for example through a declaration addressing flexibilities in the
TRIPS Agreement, climate change and access to ESTs;
b. initiation of a review of Article 31 of the TRIPS Agreement
to determine which of its provisions may excessively restrict access
to and dissemination of ESTs, and particularly its paragraph (f) and
the need to include provisions on, as the case may be, the transfer
of expertise or know-how to implement compulsory licences;
c. evaluation of the regulation of voluntary licensing
and the conditions thereof from the standpoint of the most pressing
needs of the most vulnerable developing countries in relation to adaptation
to and mitigation of climate change;
d. recognition that adaptation to and/or mitigation of
the harmful effects of climate change should be assimilated to the
concept of "public interest", with the adoption of a provision
authorizing exemption from patentability, on a case-by-case basis,
for inventions whose exploitation is vital for the diffusion of ESTs
needed for adaptation and/or mitigation of climate change;
e. evaluation of Article 33 of the TRIPS Agreement to
establish a special reduction in the term of protection for a patent
of [X] years in order to facilitate free access to specific patented
ESTs for adaptation and/or mitigation of the effects of climate change
because of urgent need in the public interest; and
f. inclusion of a mechanism in the TRIPS Agreement to
promote open and adaptable technology licensing for results obtained
from research into climate change and ESTs financed through public
funds.
In the light of the above points, the application of new flexibilities
included in the TRIPS Agreement would be understood to be only in
favour of the vulnerable developing countries and least developed
countries.
18. It is thus now a question of the WTO,
through the TRIPS Council, considering and discussing the concepts
outlined above in order to identify the most appropriate mechanisms
for effectively promoting and facilitating access by developing countries
to technologies applicable for combating climate change and environmental
harm. These flexibility criteria are directly related to the protection
of human, animal or plant life, [23] owing to the developing and least
developed countries' vulnerability to the adverse effects of climate
change.
19. For the assertion that "intellectual
property rights" guarantee the promotion of innovation and promote
the timely and widespread dissemination of the industrial applications
of such innovations is questionable. [24] What is clear, however,
is that for many countries, especially the most vulnerable countries
in which ESTs are most needed for adaptation and/or mitigation of
climate change, it may plausibly be asserted that the patent system
as currently designed can restrict the dissemination of such technologies
through monopolization or abuse of exploitation rights by right holders
or excessive additional costs resulting from payment of royalties
for voluntary licensing of ESTs.
4 FUTURE STEPS AND ACTIONS BY MEMBERS IN RELATION TO
INTELLECTUAL PROPERTY AND CLIMATE CHANGE
20. To summarize, the foregoing considerations
establish a reference framework for launching a discussion and provide
the opportunity for defining this issue in relation to the existing
"serious environmental harm" [25] that the world ecosystem
is currently suffering, in the light of scientific findings on the
planet's capacity to effectively reverse the effects which the accumulation
of CO2 could have on the atmosphere, through the use of ecologically
rational technologies by developing countries. While there is now
some degree of international regulation of global environmental damage,
as regards climate change, we do not yet have a binding and enforceable
normative reference framework to identify unauthorized atmospheric
emissions as environmental harm and sanction them accordingly.
21. It is important to recognize that although
the question of climate change falls within the purview of the United
Nations Framework Convention on Climate Change, it is closely linked
with the WTO through the trade-related effects of response measures.
Hence, it should be stressed that the crosscutting between technology
transfer and intellectual property rights falls under the TRIPS Agreement,
highlighting the need for cooperation and consistency in the actions
of both international forums. We should therefore consider the elements
outlined above with a view to eliminating or reducing restrictions
or barriers to access to ESTs, and consequently facilitating their
use by the vulnerable developing countries and least developed countries.
22. For this purpose the TRIPS Council could
base its work on past experience that made it possible to achieve
a broad consensus on issues of common interest going beyond purely
economic considerations and focusing on world "public goods"
based on the needs of "public interest" and the policy spaces
for tackling situations of force majeure, as is the case of action
to adapt to and/or mitigate the effects of climate change.
23. Finally, in emulating these positive practices
we could consider adopting at the Bali Ministerial Conference a declaration
in which Members would enshrine the principle that "nothing in
the TRIPS Agreement can minimize or impair the flexibilities provided
for in that Agreement, nor prevent or limit Members taking measures
they consider necessary to protect their population from the effects
of climate change and to make use of "environmentally sound technologies".
[1]
Agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS), Art.7.
[2] Ibid., Art. 8.
[3] Ibid., Art. 8.
[4] Carlos M. Correa, “Mechanisms for International Cooperation
in Research and Development in the Area of Climate Change”, Technical
Cooperation and Climate Change: Issues and Perspectives, UNDP, p.
39.
[5] Agreement on Trade-Related Aspects of Intellectual Property
Rights (TRIPS), Art.7, "Objectives".
[6] Soni Preet, Technology Cooperation for Addressing Climate
Change, TECHNOLOGICAL COOPERATION AND CLIMATE CHANGE: Issues
and Perspectives, UNDP, p. 21. According to Soni, examples would be
the patent system, level of competition, selling prices and
reasonableness of licensing terms.
[7] Soni Preet points out that, since climate change is
a universal problem, it would be ideal to exclude priority technologies
relating to climate change from the right to be patented, while establishing
institutional mechanisms for information exchange concerning
them. Ibid.,p.24.
[8] Idem 4, p. 43.
[9] Resolutions 43/53 of 6 December 1998, 54/222 of 22 December
1999, 62/886 of 10 December 2007, 63/32 of 26 November 2008, 64/73
of 7 December 2009 and 65/159 of 21 December 2010.
[10] Resolutions 53/7 of 16 October 1998, 54/215 of 22 December 1999,
55/205 of 20 December 2000, 56/200 of 21 December 2001, 58/210
of 23 December 2003, 60/199 of 22 December 2005, 62/197 of 19
December 2007, 64/206 of 21 December 2009 and 65/151 of 20 December
2010.[11] Document A/CONF.216/L.1 of 19 June 2012, paragraph
58 (i), page 11.
[12] Ibid., paragraph 269 et seq., pages 56-57.
[13] World Bank, World Bank Development Indicators, royalty
and license fees, payments” and “royalty and license fees, receipts”,
http://data.worldbank.org/indicator.
[14] Idem 4, p.45.
[15] Martin Khor, “Climate Change, Technology and IPR” Technical
Cooperation and Climate Change: Issues and Perspectives, UNDP, p.80.
[16] Idem 13, p. 80.
[17] TN/TE/W/79 of 15 April 2011.
[18] Idem 4, p.51.
[19] Littleton Matthew, “The TRIPS Agreement and Transfer of Climate-Change-Related
Technologies to Developing Countries, p. 1.
[20] Over 100 non-governmental organizations and academics from developed
and developing countries back the need for access to environmentally-sound
technologies as ซ public goods ป, as stated in their open
letter on flexibilities for the least-developed countries under Article
66.1 of the TRIPS Agreement entitled : "NGO LETTER TO WTO MEMBERS
CONCERNING A FURTHER EXTENSION OF THE LCD TRANSITION PERIOD UNDER
ARTICLE 66.1 OF THE TRIPS AGREEMENT".
[21] Idem 4, p. 57.
[22] Ministerial Declaration on the TRIPS Agreement and Public
Health, adopted on 14 November 2001 at the Fourth WTO Ministerial
Conference in Doha, Qatar, document WT/MIN/(01)DEC/2.
[23] Agreement on Trade-Related Aspects of Intellectual Property
Rights, Art. 27.2.
[24] Bernice Lee, Ilian Iliev and Felix Preston (2009), Who
Owns Our Low Carbon Future? Intellectual Property and Energy
Technologies, Chatham House Report, available at
http://www.chathamhouse.org.uk/publications/papers/view/-/id/775/
(accessed March 2, 2011).