12th March 2002

DIVISIVE DEBATE OVER TRIPS AND PUBLIC HEALTH CONTINUES IN TRIPS COUNCIL

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Intellectual property rights (IPRs) and public health again divided Members at the Council for Trade-related Aspects of Intellectual Property Rights (TRIPs) during its first meeting after Doha on 5-7 March, leaving the US virtually isolated against the EU and developing countries. Members also debated the extension of geographical indications (GIs) to products other than wines and spirits, and reviews of TRIPs provisions. The meeting was followed by a Special Session of the Council on 8 March where Members agreed to a two-phase programme for negotiations on a multilateral system for the registration of GIs for wines and spirits.

Compulsory licenses and public health

As mandated by the Doha Declaration on the TRIPs Agreement and Public Health, the TRIPs Council began the process of finding an “expeditious solution” to the problem that Members with insufficient or no manufacturing capacities in the pharmaceutical sector could face in making effective use of compulsory licensing (CL; para.6). In a concept paper circulated on 4 March (IP/C/W/339; searchable at http://docsonline.wto.org), the EC proposed two options that would allow Members to export to a country with limited manufacturing capacity which had granted a CL for the importation of a specific pharmaceutical product: (i) amending the requirement under Art. 31(f) that production under CLs has to be primarily for domestic use by including an exception, or (ii) interpreting Article 30 (exceptions to patent rights). The EC indicated, however, that both options would need to include a number of safeguards to ensure that a product only goes to its destination and is not diverted to domestic use or third countries.

The US strongly resisted any amendments to the TRIPs Agreement, which they said might unhinge the balance of rights and obligations negotiated during the Uruguay Round. In a non-paper submitted to the Council, the US advocated a solution under Article 31 in the form of a moratorium on dispute settlement when a Member grants a compulsory license to export pharmaceuticals to a poor country lacking domestic production capacity. The US furthermore stressed that the solution should be applied “to address diseases referred to in the Declaration, such HIV/AIDS, malaria, tuberculosis and other epidemics” and should not apply to developed countries or countries that choose not to manufacture certain drugs.

Developing countries in principle supported the EC’s proposal, but expressed concern about the proposed safeguards which they thought might impose “too burdensome conditions that would render any solution unfeasible”, according to Kenya in a statement on behalf of the African Group and other developing countries. Also, rather than including an exception in Article 31, developing country Members favoured deleting the domestic-supply requirement in Article 31(f). They furthermore stressed that para. 6 should apply to all WTO Members, rather than be limited to a certain category of countries, and stressed the need for technology transfer to build up domestic production capacity. Developing countries strongly rejected the US proposal, which they said did not provide a permanent solution. “A moratorium is not a solution,” said one developing country delegate. “It’s a postponement of a problem that will have to be solved later.”

The latter point was echoed by non-governmental commentators, who said that a moratorium would reduce motivation for generic producers to act. “Instead of encouraging the development of this vital generic industry, the US is intent on protecting the interests of the patent pharmaceutical industry,” said Brook Baker from Health GAP. “The aggressive US position at the TRIPs Council this week is a big step backwards,” added James Love, Director of the Consumer Project on Technology. As stated in many non- governmental groups favour an interpretation of Article 30 without specific safeguards.

The cultural dimension of GIs

Discussions on extending the higher level of protection for GIs on wines and spirits to other products saw WTO Members roughly divided into “old world” and “new world” camps. The EU and Bulgaria, supported by others, continued their call for negotiations on GI extensions, claiming that talks in this area would benefit trade and development, in particular for the developing world, by allowing countries to market their products and obtain higher prices. Sri Lanka added that GIs would create a “level playing field” for those countries that did not produce wines and spirits. Others, however — notably Australia supported by Canada — highlighted the “cultural diversity dimension”, arguing that immigrants who had brought products and their associated names to other countries should be allowed to continue to use them. Some also highlighted the danger of GIs being used to block imports and warned that the their administrative cost would be too high.

The Council furthermore discussed reviews of TRIPs provisions, including Art. 27.3(b) on patentability of life forms, implementation of the Agreement under Art. 71.1, traditional knowledge (TK), and the relationship between the Convention on Biological Diversity (CBD) and the WTO. Members remained divided over whether to discuss these agenda items separately or together, with India and Brazil making single statements on the three issues of Art. 27.3(b), TK and biodiversity, which they say should be combined. This item will be reported on more fully in the forthcoming issues of the bi-weekly BRIDGES Trade BioRes.

Special Session establishes 2-phase process

In the Special (negotiating) Session on GIs on 8 March, Members agreed to a two-phase negotiating process on establishing a multilateral system for GIs on wines and spirits, to be completed by the Fifth Ministerial Conference in 2003. In the first phase, Members will continue the debate on this issue. During the second phase, the Council will aim to compile a single draft based on submitted proposals. Discussions in the past have been split into two approaches, one favouring protection of registered GIs in all Member States with registration of GIs being “voluntary” (EU and others), another advocating the multilateral system primarily as a database (Canada, Chile, Japan and the US).

The regular session of the TRIPs Council ended with Chair Ambassador Boniface Chidyausiku of Zimbabwe handing over his post to Ambassador Eduardo Perez Motta of Mexico. Meetings for regular sessions for 2002 are currently scheduled for 25-27 June, 17-19 September and 25-27 November.

“EU and US split over scope of TRIPs exceptions for public health,” INSIDE US TRADE, 8 March 2002; “US trade negotiators betray poor people without access to life-extending medicines,” HEALTH GAP, 8 March 2002; “Australia assails EU over WTO talks on geographical indications,” WTO REPORTER, 8 March 2002; ICTSD Internal Files.