Intellectual Property Programme • Volume 12 • Number 27 • 7th August 2008

Where Does TRIPS Go from Here?

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Disagreement over intellectual property issues did not cause the collapse of July’s mini-ministerial summit at the WTO. Because the talks foundered for other reasons, we do not know what might have happened on the IP front had delegates successfully agreed package deals on liberalising trade in the agricultural and industrial sectors. Continuing strong disagreement on substance channeled mini-ministerial talks on IP-related issues toward the “process” through which an agreement might be reached.

At issue are three topics on which talks have largely stalled since the launching of the Doha Round in 2001, namely: extending to all products the stronger protection currently accorded to geographical indications of wines and spirits (GI extension); making it mandatory for patent applicants to disclose the origin of any genetic resources and/or associated traditional knowledge involved in their inventions; and the establishment of a register for geographical indications (GIs) of wines and spirits.

Each of these issues has been on the table for quite some time. Indeed, the GIs question is a holdover from the Uruguay Round, and discussions of the relationship between the TRIPS Agreement and the Convention on Biological Diversity (CBD) was underway during and after the Rio Earth Summit negotiations in 1992. These are not new issues, and the proposals and parameters for solutions are not new either.

At the mini-ministerial conference in Geneva last month, WTO Director-General Pascal Lamy entrusted the disentanglement of these issues to Norwegian Foreign Minister Jonas Gahr Støre. Støre’s aim was to help construct a compromise under which Members would agree, as part of a modalities deal, to intensify discussions on the TRIPS questions. Over the course of the 10-day summit, Minister Støre held a number of informal meetings in which specific elements of a larger deal were discussed and apparent movement was made.

In the weeks and months leading up to the meeting, the TRIPS issues saw substantial movement. On 26 May, an unprecedented coalition of developed and developing countries announced their agreement to include the IP issues “as part of the horizontal process” of the Doha Round, advocating that the three controversial intellectual property issues be included in the ’single undertaking’ negotiations. This coalition, joined by a few new members, subsequently submitted in mid July a ‘draft modalities text’ that detailed “the key parameters for negotiating final draft legal texts with respect to each of these issues.”

The coalition included more than one hundred WTO Members, and was led by Brazil, the EU, India, and Switzerland. But the group’s proposal did not generate support from all quarters: it was strongly rebuffed by Australia, Canada, Chile, Mexico, New Zealand, South Korea, Taiwan and the US. Those countries rejected “the artificial parallelism” among the three intellectual property matters. “Each of the TRIPS issues…has its own terms of reference, and particular subject matter,” they argued. “The extent and interest of Members in the content and potential outcomes for each issue varies considerably.” As an example, they pointed out that, on the issue of GI extension, “even basic objectives are far apart, discussions have revealed no consensus, and the suggested draft modalities text presented by the demandeurs prejudges an outcome.”

Moreover, the 8-country group maintained that including intellectual property issues in the horizontal negotiations on modalities in the industrial and agricultural sectors would substantially set back efforts to arrive at a viable way forward for the Doha negotiations.

Støre’s attempt to untangle the issues

As trade ministers set about the task of hammering out modalities deals on agricultural and industrial goods trade, Norwegian Minister Støre held intensive consultations with Members on both sides of the TRIPS issues. While Støre did not make a formal report of his work, elements of his plan have emerged. As it has been reported (see BRIDGES Daily Update, Issue 8, http://ictsd.net/i/wto/englishupdates/14789/), a proposed deal put forward by the Norwegian minister included bargain elements that were unrelated to TRIPS, such as a ‘peace clause’ insulating US farm subsidies from legal challenge at the WTO. Here we focus on the IP-related elements of the plan advanced by Støre.

The Register

Out of the three issues, the registry for wines and spirits proved to be the easiest for Støre to handle, thanks to the general understanding that, under the TRIPS Agreement, there is a mandate to negotiate the establishment of a multilateral system of notification and registration of GIs for wines eligible for protection in those Members participating in the system. Indeed, that mandate was reaffirmed in 2001 in the Doha Ministerial Declaration. This distinction between the registry issue and the other two IP issues — GI extension and the TRIPS-CBD relationship — prevailed in the informal discussions.

The grand coalition’s ‘draft modality text’ presented in mid July stated that Members “shall provide that” their domestic authorities “consult the register and take its information into account.” Importantly, the text also stated that, “in the absence of proof to the contrary,” the very fact that a product is listed on the register will be considered “prima facie evidence that it meets the definition of ‘geographical indication.’”

Historically, the main points of disagreement have been over the participation in the register, and over the consequences and legal effects of registration. Members such as the EU want all WTO Members to participate in the register; indeed, Brussels has fought for a requirement that countries must consult the register “when making decisions on registration and protection of trademarks and GIs in accordance with national laws.”

Others, including Argentina, Australia, Canada, and the US, propose that participation in the system should be voluntary and that the participating Members should be obligated “to ensure that its procedures include the provision to consult the Database when making decisions regarding registration and protection of trademarks and geographical indications for wines and spirits in accordance with its domestic law.”

Against this background, Minister Støre undertook his delicate mission. Working under Støre’s guidance, trade officials reportedly considered whether a register should be a factor in taking decisions on GIs by national authorities, as well as if further negotiations should address whether and to what extent domestic decisions should treat as prima facie evidence the information contained in the register and the possible generic nature of the product. Regarding participation, Members were also asked to consider whether wider participation in the register should be dependent on an understanding of the legal consequences of registration, and how domestic law should treat those legal consequences. The special and differential treatment to be extended to developing countries and least developed countries (LDCs) was also put forward.

The so-called Doha implementation issues

Informal deliberations on the other two outstanding issues simply redrew the dividing lines that have characterised the TRIPS discussions since the launch of the Doha Round. Minister Støre, aware of these complexities, approached the issues at a process level, hoping at least to get ministers to agree on how to go about trying to bridge the gaps between the two camps.

GIs extension

In line with the long-standing position of the EU, Switzerland and some developing countries, the ‘draft modalities’ submitted by the grand coalition in mid July would extend to all products the extra level of protection for geographical indications that the TRIPS Agreement currently gives to wines and spirits. This additional protection would require all Members to provide the legal means to prevent the use of a geographical indication on a product that does not originate from the place indicated by the GI in question. This requirement would even extend to food labels in which the geographical indication is used in translation or accompanied by expressions such as “kind,” “type,” “style,” “imitation” or the like.

The approach taken by the EU and its allies has persistently been opposed by countries such as Argentina, Australia, Canada, Chile, Korea and the US, on the grounds that many GIs have become generic or semi-generic product names that are widely used around the new world. As mentioned by Professor Frederick M. Abbott in his separate note (available at http://ictsd.net/i/publications/16949/), for the United States, extending a stronger form of protection to “other agricultural products” (and non-agricultural products) would be a challenging task. US restaurants, for example, commonly use and advertise foreign geographic designations for their products. This industry would find geographical extension a significant problem.

Against this complex background, Minister Støre approached the GI extension in a cautious manner. The primary component of Støre’s modality package reportedly included an acknowledgement of three factors: the economic and legal importance of the extension of protection beyond wine and spirits; the continuous need to better understand these implications; and the need to set up a work programme to take into account stakeholders’ different views. On this last point, potential matters to be addressed include the TRIPS coverage of GIs other than wine and spirits; the economic and legal implications of GIs extension on holders of trademarks (or other identification signs); the effects on products that do not come from the protected location in third-country markets; and the use of the existing exceptions for wine and spirits on products other than wine and spirits.

The disclosure requirement

The third IP issue concerns the relationship between TRIPS and the CBD. Støre’s approach to this topic was allegedly similar to that he took on GIs extension.

The notion of negotiations on a disclosure requirement in the Doha Round has been pushed by about 100 developing countries - India, Brazil and China among them. These countries consider a disclosure requirement necessary to prevent the granting of ‘bad’ patents that use biological resources or traditional knowledge without proper acknowledgement or compensation. Preventing such ‘biopiracy’ is important for ensuring a supportive relationship between the TRIPS Agreement and the Convention on Biodiversity, the most important international agreement on the subject. They argue that the amendment should recognise the sovereign rights of states over their natural resources; require patent applicants to disclose the source and origin of biological resources as a way to assure the proper application of patentability standards by the patent office; and provide evidence of compliance with access and benefit sharing requirements of host countries. The penalty for noncompliance would include forfeiture of patent rights.

During the long process of negotiations since the Doha Round was launched, the EU and Switzerland have been neutral, while remaining sympathetic to the concept of disclosure, although not necessarily through a TRIPS amendment. Switzerland, for example, has traditionally favoured finding a solution in the World Intellectual Property Organisation via amendments to the regulations of the Patent Cooperation Treaty (PCT).

The countries that have opposed the parallelism among the three IP issues do not share a common position on the relationship between TRIPS and CBD, and some have been more flexible than others in this respect. The US, for example, has refused to ratify the CBD because of specific concerns about the application of its intellectual property provisions. To this extent, as noted by Professor Abbott, the US’ refusal to seriously engage with the CBD-related proposals at the WTO has been at least “consistent” with its past practice.

Against this backdrop, Minister Støre sought to find some sliver of common ground. The modalities he put forward reportedly proposed that Members should first recognise some parameters to guide future work on the TRIPS-CBD relationship, and that Members should also establish a work programme for the talks.

Under these parameters, the two international instruments would need to be mutually supportive. Specific questions that would need to be worked out include how to avoid erroneous patents using genetic resources; how to bring national regimes into compliance on prior informed consent (PIC) and access and benefit sharing on mutually agreed terms (ABS); how patent offices could be equipped with the necessary information to deal with patentability issues in these areas; and whether the patent system should maintain its role as a provider of innovation incentives.

The suggested process and way forward

On the precise modalities for the continuation of the work, Støre reportedly suggested that the register negotiations should continue under the aegis of the Council for TRIPS in Special Session. He further proposed that the talks on GIs extension and TRIPS-CBD should be carried out in dedicated meetings under the responsibility of the Director-General, who will report on the agreed conclusions and recommendations.

The high-level TRIPS discussions at July’s ministerial summit represented the first serious attempt to attempt to tackle the three complex and contentious issues together in the Doha Round. If the Doha talks resume, the way forward on the TRIPS issues might follow the plan suggested by Minister Støre, but his proposal cannot guarantee that a solution is near at hand. Indeed, negotiations could still founder on GIs extension and the TRIPS-CBD relationship.

ICTSD reporting.