Bridges Weekly Trade News Digest • Volume 8 • Number 42 • 8th December 2004

TRIPS Council Considers Public Health, Biodiversity

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Public health and biodiversity-related concerns emerged as major issues at the year’s final meeting of the WTO Council for Trade-related Aspects of Intellectual Property Rights (TRIPS) on 1-2 December.

At the meeting, Nigeria submitted a proposal (IP/C/W/437) on behalf of the African Group — which includes all African WTO Members — for converting the waiver provided for in the 30 August 2003 Decision on pharmaceutical patents into a formal amendment of the TRIPS agreement. Many developed countries criticised the Nigeria-led proposal, arguing that it sought to re-open the debate on the substance of the Decision and would only complicate current discussions. The supporters of the proposal countered that the suggested text was only an attempt to simplify the complex nature of the waiver.

In the session on biodiversity, traditional knowledge (TK) and folklore an attempt was made to move the substantive debate forward on the relationship between the TRIPS Agreement, biodiversity issues and TK with a new proposal (IP/C/W/438) submitted by Bolivia, Brazil, Cuba, Ecuador, India, Pakistan, Peru, Thailand and Venezuela.

Nigeria stirs up debate on 30 August Decision

The ‘30 August Decision’ by the General Council spells out the circumstances under which countries without pharmaceutical manufacturing capacity can import generic versions of drugs still under patent. (see BRIDGES Monthly, July-August 2003). The Decision temporarily waives Members’ obligations under TRIPS Article 31(f) by allowing them to export pharmaceuticals produced under compulsory licence, albeit subject to a large number of conditions in both the exporting and importing country. In the Decision — the adoption of which was accompanied by a statement from the Chair of the General Council assuring that it would not be misused — Members agreed that the waiver would last until the TRIPS Agreement is permanently amended; the already-extended deadline to do this is 31 March 2005.

The African Group submission proposed a text for amending TRIPS Article 31, and marked the first substantial contribution to the debate since the Decision itself. Prior discussions had been limited to technical questions about how to include the waiver in the Agreement.

Some developed country Members disagreed with the proposed text. The US in particular criticised it for not including several provisions of the 30 August Decision. Countries including the US, the EU, Japan, Canada, and Switzerland argued that the omissions amounted to an attempt by the African Group to re-open the agreement struck in 2003. They see the amendment as a strictly technical exercise involving the incorporation of the waiver into the TRIPS Agreement. They said that the negotiations leading up to the 30 August Decision were very difficult and that the current text represents a fragile balance that should not be renegotiated; new debates on the amendment would be counterproductive.

The proposal’s co-signatories, with the support of the Philippines, countered that though their proposed amendment goes beyond the mere introduction of the waiver’s text into Article 31, it does not make any substantive changes to it. They argue that at most, it only simplifies the text of the waiver by leaving out the parts that are redundant in view of other provisions in the TRIPS Agreement, including its preamble.

In addition, the US demanded that the General Council Chair’s Statement of 30 August be included in any amendment to the TRIPS Agreement. Most developing countries generally resist this, due to the limiting language of the statement and its direct reference to specific pharmaceutical corporations.

In the end, due to the late presentation of the African proposal, most countries decided not to comment. With the 31 March 2005 fast approaching, great expectations now lie on the TRIPS Council meeting in March 2005, where Members would have to agree on an amendment if the General Council meeting at the end of that month is to be able to decide on how to proceed with amending the TRIPS Agreement.

Debate on genetic resources moves from Disclosure of Origin to Prior Informed Consent

A new proposal (IP/C/W/438) submitted by Bolivia, Brazil, Cuba, Ecuador, India, Pakistan, Peru, Thailand and Venezuela focused on Prior Informed Consent (PIC), the second of the three elements identified in the ‘checklist’ (IP/C/W/420) presented in March 2004 by a number of developing countries as the basis for future negotiations on biodiversity concerns in the TRIPS Council. The proposal paid particular attention to Article 15 of the Convention on Biological Diversity (CBD), according to which the Contracting Party is obliged to disclose prior informed consent for patents that involve the use of biological resources, unless otherwise determined by the country that provides those resources.

This recent submission follows a proposal (IP/C/W/429) by the same group of countries made during the last TRIPS Council meeting in September, which focused on the first of the checklist’s elements, namely disclosure of origin (see BRIDGES Trade BioRes, 23 September 2004). The third item is disclosure of benefit sharing under the relevant national-level regime.

Most other Members remained unchanged in their positions on this issue. The US maintains its belief that there is no inherent conflict between TRIPS and the CBD, and that mandatory disclosure mechanisms are inappropriate as they are likely to lead to uncertainties in the international patent system. They thus favour a contract-based approach (IP/C/W/434) through national laws outside the patent system.

Switzerland in a new proposal (IP/C/W/433) reaffirmed its support for a voluntary patent disclosure system on the source of genetic resources and traditional knowledge. However, it believes that WIPO’s Patent Cooperation Treaty (PCT) would be a more appropriate forum for this than the WTO, and informed the TRIPS Council that it was pursuing the matter in WIPO.

The EU, on the other hand, has suggested that a mandatory system of disclosure would be suitable in principle. However, it has not yet decided on how to best implement this in practice.

While also remaining undecided on how to best resolve potential conflicts between TRIPS and biodiversity related concerns, Canada intervened to challenge the proponents of the three dominant positions in the Council to examine how ‘bad patents’ such as neem, turmeric or basmati rice would have been resolved under their respective mandatory, contract-based, and voluntary approaches. This challenge was supported by Australia and New Zealand, confirming the demand for assessments of the potential impact of each of the three methodologies on actual cases.

Other Developments

While substantive debate did take place in the fields of health and biodiversity, positions remain deadlocked on the issue of non-violation complaints. Members are technically allowed to take ‘non-violation complaints’ to dispute settlement based on the loss of an expected benefit caused by another Member’s actions — even if the actions do not actually violate WTO law.

The US and to a lesser extent Switzerland remain the only countries that support the end of the moratorium (provided for in TRIPS Article 64.2 and extended by the July Package until July 2005) on submitting TRIPS-related non-violation complaints to the WTO Dispute Settlement Body. Most other countries heavily opposed this position, arguing that the nature of TRIPS, which simply sets minimum standards for the protection of intellectual property, is not appropriate for the use of non-violation complaints. Furthermore, they fear that the introduction of non-violation complaints would threaten the countries’ freedom to regulate IPR issues at the national level. They also argue that allowing TRIPS-related non-violation complaints could alter the very delicate equilibrium between rights and obligations in the Agreement.

Finally, China, in response to a set of questions posed by Japan (IP/C/W/430), the EU and the US (IP/C/W/432) in November 2004 on how it was confronting piracy and counterfeiting within its borders, gave a one hour and 45 minute-long speech explaining primarily its enforcement policies. While other Members applauded China’s initiatives to address piracy, they expressed lingering concerns about the amount of counterfeit products ending up in their markets.

While no real agreement was reached during this session, the debate was characterised by a constructive attitude towards substantive issues.

The next TRIPS Council meeting is scheduled for 8-10 March 2005.

For the 30 August Decision see: http://www.wto.org/english/tratop_e/trips_e/implem_para6_e.htm

For the General Council Chair’s Statement see: http://www.wto.org/english/news_e/news03_e/trips_stat_28aug03_e.htm

ICTSD reporting; "U.S., Other Rich Countries Slam African Bid for Incorporating Medicines in TRIPs Accord," WTO REPORTER, 2 December 2004.