Bridges Weekly Trade News Digest • Volume 9 • Number 41 • 23rd November 2005

LDCs Granted Limited Extension For Implementing TRIPS Commitments

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WTO Members agreed on 29 November to give least-developed countries (LDCs) a seven-and-a-half year extension to apply rules protecting patents, copyrights, and other intellectual property under the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS). Critics have cautioned that the extension is limited since it prohibits LDCs from loosening existing intellectual property laws unless they already go beyond TRIPS requirements.

At the TRIPS Council meeting, Members were unable to reach an agreement on the other two items on the agenda: how to formally amend WTO rules in order to facilitate the export of generic versions of drugs that are still under patent, and how to spell out the relationship between the TRIPS Agreement, the Convention on Biological Diversity (CBD), and the protection of traditional knowledge and folklore. They had previously failed to do so in October (see BRIDGES Weekly, 26 October 2005).

Extending the deadline for TRIPS implementation

Article 66.1 of the TRIPS Agreement allows LDCs to ask for an extension of the transitional period after which they have to apply WTO intellectual property rules, originally set to expire on 1 January 2006. On 21 October, Zambia submitted a request (IP/C/W/457, available at http://docsonline.wto.org) for a 15 year extension on behalf of the WTO’s 32 LDC Members, citing "…serious economic, financial and administrative constraints as well as a need for flexibility to create a viable technological base."

Informal discussions between the LDCs and the US led to a compromise that would prolong the transitional period to 1 July 2013, an extension half the duration of the 15 years the LDCs had originally been seeking. This decision does not apply to pharmaceutical products, which LDCs are not required to fully protect until 2016 as a result of an extension granted to them in 2002.

The draft decision specifies that LDCs are to "…ensure that any changes in their laws, regulations and practice made during the additional transition period do not result in a lesser degree of consistency with the provisions of the TRIPS Agreement." This so-called ’stand still clause’ will freeze intellectual property-related laws that LDCs have already implemented, and prevents them from reducing their scope or level of protection. For instance, if a country already permits patents on fertilizer or other agricultural inputs, it would be prohibited from repealing that patent law, transitional period notwithstanding.

The provision would, however, allow LDCs to roll back intellectual property provisions that go beyond TRIPS requirements (albeit only back to the level of protection demanded by the TRIPS Agreement), unless they are otherwise prevented from doing so, for instance by bilateral agreements.

WTO Director-General Pascal Lamy described the agreement as "good news" just ahead of the Hong Kong Ministerial Conference. "Members have shown that they are ready to ensure that the world’s poorest countries have the flexibility that they need in order to meet their WTO obligations in a way that serves their development needs," he said. In contrast, James Love, director of the Consumer Project on Technology, a non-governmental organisation that works on intellectual property issues, described the deal as "very minimalist." "Many of these countries have already brought their laws into compliance with the TRIPS Agreement," he pointed out. "This provides them with no way to backtrack."

The extension agreement also calls on LDCs to provide the TRIPS Council with an outline of the specific technical and financial assistance that they need in order to implement the TRIPS Agreement, "preferably by 1 January 2008." This information will then be used to assist them in implementating the Agreement. Love said that this stipulation effectively puts LDCs on a "fast-track to compliance" within two years. He noted that the deal focused on helping LDCs comply with TRIPS obligations, and did not even begin to address the broader question of whether a patent system actually is the best way for LDCs to stimulate investment and innovation.

Love also expressed concern that LDCs might end up making concessions of far more significant value in other areas in return for the limited deadline extension.

No decisions in health, biodiversity

Members made no progress on how to turn the ‘30 August 2003 Decision’ — an interim waiver of certain TRIPS obligations that allows countries to export drugs produced under compulsory licence, subject to a large number of conditions in both the exporting and importing country — into a permanent amendment to the TRIPS Agreement. They have been unable to decide whether to amend the actual body of the agreement or to include the amendment as an annex or footnote to it. Disagreements persist on the legal status of the General Council Chair’s statement that accompanied the adoption of the Decision (it promised that the waiver would not be misused), as well as issues put forward in a previous African proposal for amending the agreement (see BRIDGES Weekly, 26 October 2005).

Since the 25-26 October TRIPS Council session, the African Group, the US, and the EU held informal consultations attended by Chair Hyuck. At the recent meeting, Members that did not participate in these consultations, including Brazil, India, the Philippines, Turkey and Israel, expressed the need for time to react to any outcomes of the consultations.

Members also made little progress with regard to the Doha-mandated review of Article 27.3 (b) of the TRIPS Agreement (which allows Members to exclude certain plant and animal varieties from patentability), as well as the relationship between the agreement, the CBD, and traditional knowledge. In the session Members agreed to recommend that the General Council ask ministers in Hong Kong to simply call for the continuation of ongoing work on this matter as per the Doha mandate.

Like the October session of the TRIPS Council, the recent meeting was suspended without agreement. Further consultations will likely be held with the aim of resolving the issue of the public health related amendment before the Hong Kong Ministerial Conference, which starts on 13 December. The outcome of these gatherings are likely to affect some of the gaps and bracketed provisions present in the draft Ministerial Declaration text that WTO Director-General Pascal Lamy and General Council Chair Ambassador Amina Mohamed of Kenya submitted to Members on 26 November.

The draft Ministerial Declaration text is available online at http://www.wto.org/english/thewto_e/minist_e/min05_e/draft_text_e.htm.

ICTSD reporting; "TRIPS Council To Resume Talks on 29 November," INTELLECTUAL PROPERTY WATCH, 25 November 2005; "Poorest countries given more time to apply intellectual property rules," WTO PRESS RELEASE, 29 November 2005.