THE
INTERNATIONAL ARCHITECTURE
INTRODUCTION
The implication of our analysis is that the interests of developing countries are best served by tailoring their intellectual property regimes to their particular economic and social circumstances. Just as developed countries currently exhibit significant variations in how they apply IPRs, and did so to an even greater extent in the past, so should developing countries be free to proceed accordingly. Indeed, it is perhaps more important for developing countries because costly errors of policy will be harder to bear. A crucial question, however, is how this objective can be accommodated within the complex international architecture of multilateral, regional and bilateral IP rules and standards which impose unprecedented limits on the freedom of countries to act as they see fit in this field. (See Box 8.1 for an overview).
This question arises not only in the context of the existing regulations but may also be asked of the future regulations currently under discussion. As we discuss in Chapter 6, the current debate about more comprehensive international harmonisation of patent systems in WIPO raises in acute form the issue of how developing countries’ interests can appropriately be protected and furthered in the international system. More generally, our conclusions place a responsibility on the international community to assess whether the mechanisms in place for negotiating intellectual property standards, both multilaterally and bilaterally, take sufficient account of the interests of developing countries and poor people. We consider that the institutional framework is not optimally suited to this task and needs to display considerably greater sensitivity to these issues.
The central questions, which we address below, are as follows:
· Do the key international institutions, in particular WTO and WIPO, provide adequate advice and analysis based on an understanding of the particular needs of developing countries, and poor people?
· In their bilateral relations with developing countries, do developed countries take sufficient account of the impact of IPRs on developing countries and in particular poor people in them?
· Are developing countries themselves sufficiently aware of where their own interests lie, and do they have the capacity to secure those interests in bilateral and multilateral negotiations?
In order to answer these questions, it is necessary to gain some understanding of the international architecture for IP, how rules are formulated at that level and how the institutions help in embedding them into national law.
The architecture of the global
IPR regime has become increasingly complex, and includes a diversity of
multilateral agreements, international organizations, regional conventions and
bilateral arrangements.
Most of these agreements are
administered by WIPO, and are of three types:
i. Standard setting treaties, which define agreed basic standards of
protection. These include the Paris Convention, the Berne Convention and the
Rome Convention. Important non-WIPO treaties of this kind include the
International Convention for the Protection of New Varieties of Plants (UPOV)
and TRIPS.
ii. Global protection system treaties, which facilitate filing or
registering of IPRs in more than one country. These include the Patent
Cooperation Treaty (PCT), and the Madrid Agreement Concerning the International
Registration of Marks.
iii. Classification treaties,
which organise information concerning inventions, trademarks and industrial
designs into indexed, manageable structures for ease of retrieval. One example
is the Strasbourg Agreement Concerning the International Patent Classification.
Other international agreements with an IPR content include the
International Treaty on Plant Genetic Resources for Food and Agriculture and
the Convention on Biological Diversity.
Examples of these kinds of agreement include the European Patent
Convention, the Harare Protocol on Patent and Industrial Designs within the
Framework of ARIPO, and the Andean Community Common Regime on Industrial
Property.
Regional trade agreements
Regional trade agreements normally have sections governing IP
standards. For example, the North American Free Trade Association, the proposed
Free Trade Area of the Americas, the EU/ACP Cotonou Agreement.
Specifically, these include
those bilateral agreements that deal with IPRs as perhaps one of several issues
covered. A recent example is the 2000 Free Trade Agreement between the US and
Jordan, but there are many others (seeTable 8.1).
Source:
UNCTAD/ICTSD (2002)[1].
INTERNATIONAL
STANDARD SETTING: WIPO AND WTO
There are several international institutions involved in standard setting for intellectual property. WIPO is the principal international institution responsible for organising the negotiation of IP Treaties and their administration. With the inclusion of TRIPS in the Uruguay Round, intellectual property has also come under the aegis of the WTO, the successor to GATT, and some would argue that WIPO’s influence has thereby diminished. A special Council for TRIPS was created within the WTO structure to administer the TRIPS Agreement.
The secretariats of both WIPO and WTO serve organisations which are governed by members. National governments determine policy and decide the outcome of negotiations. In reality, as in any bureaucracy where governance has a dispersed structure, the secretariat and its leadership play a greater or lesser role in defining the important issues, and determining the range of possible solutions. WIPO and the WTO also respond to a range of external influences, outside the formal structure of governance, including from member states, some of which have greater influence than others, and external pressure groups including industry, industry associations and NGOs.
Governments and others perceive that the WTO is particularly important as an institution for establishing trade rules which are binding. This is because of the generality of its scope and the fact that it has the power to impose sanctions that may significantly affect national policy. This is why the developed countries chose GATT/WTO, rather than WIPO, as the appropriate mechanism for the globalisation of IP protection through TRIPS. It is also why, for instance, so much attention was focused on the Doha Declaration on TRIPS and Public Health by industry, governments and NGOs. The importance of the WTO in the context of IP rule-making is not so much due to its particular competence in international standard setting for IP (although it has a high quality intellectual property division), but because its mechanism for dispute settlement is a potent tool, which members can use to enforce the TRIPS obligations of their trading partners, backed by the threat of trade sanctions. To date, there have been 24 cases of dispute settlement cases concerning TRIPS in the WTO, the vast majority having been brought by the US and the EU.[2]
In contrast, WIPO has a greater depth of expertise in the field of intellectual property. But it is a very different type of organisation for two reasons. First, about 90% of its funding comes not from member governments (as in WTO or other UN agencies) but from the private sector by way of fees paid by patent applicants under the PCT - effectively from the community of patentees.[3] Secondly WIPO is, by its founding charter, solely concerned with the promotion of IPRs. Its objectives and functions do not include a development objective.[4]
As might be expected from WIPO’s interpretation of its mission (see Box 8.2), the organisation is a firm advocate of stronger IP protection in developing countries. Indeed, the analyses in WIPO’s various published policy documents pay little attention to the possible adverse consequences of such protection. IP rights are, in the main, presented as unequivocally beneficial. For instance, a publication on WIPO’s website entitled “Intellectual Property – Power Tool for Economic Growth” states that ideas that:
“…patents are not relevant to developing nations, or
that they are incompatible with the economic objectives of the developing
nations - are pernicious myths. The reason why these notions are pernicious is
because they give the impression that it is possible to simply opt {out} of the
international patent system, and yet still achieve economic development. This
is an error as patents are an essential component of economic strategy,
regardless of whether the country is developed or in the process of economic
development.”[5]
We do not read too much into any individual statement such as this but it is, we believe, indicative of a particular perspective which prevails at WIPO. As is evident from this report, it is beyond question that there is a rather more complex link between intellectual property protection and development than such statements suggest. We recognise that WIPO has a role to play in promoting IPRs. However, we believe that it needs to do so in a much more nuanced way that is fully consistent with the economic and social goals to which the UN, and the international community are committed. A more balanced approach to the analysis of IPRs, and, in consequence WIPO programmes, would be beneficial to both the organisation and the developing world, which forms the majority of its membership.
Box 8.2 The World Intellectual
Property Organisation (WIPO)
WIPO
began life in 1893 as BIRPI (the French acronym for the United International
Bureaux for the Protection of Industrial Property). This was a body established
principally to administer service the Paris and Berne Conventions on industrial
property and copyright. It was only
restructured and reconstituted as a UN agency as recently as 1974.
WIPO’s
objectives, as set out in the Convention establishing it, are to “promote the
protection of intellectual property throughout the world”. In the light of that objective, its first
function is to “promote the development of measures designed to facilitate the
efficient protection of intellectual property throughout the world and to
harmonize national legislation in this field.” [6] It is “convinced of the need to ensure that
developing countries…are fully integrated into the international intellectual
property system.” It believes that “harmonization of national policies on the
establishment of intellectual property rights should be sought, with the aim of
protection at the global level.”[7] This is the perspective in which it manages
its cooperation and technical assistance activities with developing countries.
Today,
the main functions of WIPO are to serve as a forum for negotiation of
international IP treaties; to administer such treaties and operate the systems
of global protection such as the Patent Cooperation Treaty (PCT) and the Madrid
system; and to provide technical assistance and training to developing
countries and countries in transition.
The
PCT aims to simplify and reduce the cost of obtaining international patent
protection. By filing one international patent application under the PCT, an
applicant can simultaneously seek protection for an invention in over one
hundred countries. Recent PCT applications are published in the PCT Gazette to
facilitate public access to technical information.
WIPONET
is a global digital information network, providing network infrastructure and
services for improved information exchange, to enable the integration of IP
information resources, processes and systems of the worldwide IP communities,
particularly the IP offices of member States. WIPONET will also provide a
portal for other WIPO-provided systems, such as the Intellectual Property
Digital Libraries (IPDLs), and eventually to on-line filing under the PCT.
The
Internet Corporation for Assigned Names and Numbers (ICANN) administers a
system for resolving domain name disputes involving trademarks, and a system of
best practices for domain name registration authorities, designed to avoid such
conflicts.
The
WIPO Worldwide Academy is an institution which provides teaching, training,
advisory, and research services in intellectual property.
Source:
http://www.wipo.int
WIPO should give more explicit recognition to the fact that IP protection has both benefits and costs, and give greater emphasis to the need for IP regimes to be appropriately tailored to the individual circumstances of developing countries. This would, we believe, certainly involve greater sensitivity in providing assistance to developing countries in implementing TRIPS and appropriate other measures to ensure that IP rights operate in the public interest.
As a means to this end, we also believe that WIPO would benefit from drawing a wider group of constituencies with an interest in the IP system into its policy-making process, such as consumer organisations. WIPO has always been responsive to the needs of the industrial sectors which make intensive use of IP. We are less persuaded that it is as responsive to the interests of consumers or users of IP-protected products. It is of crucial importance in this respect that WIPO is not perceived as being receptive primarily to those organisations which have an interest in stronger IP protection.[8]
Quite recently, WIPO set up two advisory bodies: a Policy Advisory Commission (PAC) and an Industry Advisory Commission (IAC). We welcome the establishment of these groups whose role is to provide expert advice to WIPO. We also welcome the recognition, noted below, of the need for a wider range of views to be represented in policy making. But we think that the membership of these bodies should reflect more systematically those diverse interests in society that have an interest in IP, both as producers of it or users. Thus representatives from industry, scientists, consumer groups and other civil society organisations, as well as IP experts and government representatives would enable WIPO to play a more effective role in facilitating dialogue with its broad constituency of stakeholders. This greater involvement with a wider representation of users and interest groups could usefully be complemented by closer co-operation with other relevant international organisations, such as the WHO (particularly for implementing the Doha Declaration), FAO, UNCTAD and the World Bank.[9]
WIPO should act to integrate development objectives into its
approach to the promotion of IP protection in developing
countries. It should give explicit
recognition to both the benefits and costs of IP protection and the
corresponding need to adjust domestic regimes in developing countries to ensure
that the costs do not outweigh the benefits.
It is for WIPO to determine what substantive steps are necessary to achieve
this aim but it should as a minimum ensure that its advisory committees include
representatives from a wide range of constituencies and, in addition, seek
closer cooperation with other relevant international organisations.
If WIPO adopts the approach we suggest, a question arises as to whether its current articles will permit it to do so legitimately. The objectives laid down for many international organisations are broad and multi-faceted, and allow for considerable flexibility in interpretation if member states wish to change the activities of the organisation in response to changing circumstances. Unlike many of these organisations, WIPO has a very specific mandate in its constitution - to promote the protection of intellectual property throughout the world, including the harmonisation of national legislation. We are not sure that this mandate can be interpreted to allow WIPO to adjust its approach in developing countries to reflect the economic need to balance the benefits and costs of IP protection.
Unless they are clearly able to integrate the required balance into
their operations by means of appropriate reinterpretation of their articles,
WIPO member states should revise the WIPO articles to allow them to do so.
THE
TRIPS AGREEMENT
There has been much debate about whether the subject matter of the TRIPS agreement belongs in WTO. Some commentators have taken the view that the WTO is essentially a free trade organisation and the global enforcement of IP standards, among nations at very different levels of social and economic development, should not fall within its terms of reference. They argue that intellectual property is not a matter concerned with trade, and further, that as TRIPS will principally benefit the developed countries, the credibility of the WTO as an instrument to promote free trade in the interests of all countries is weakened. A leading exponent of this view is Jagdish Bhagwati:
“TRIPS does not involve mutual gain; rather, it
positions the WTO primarily as a collector of intellectual property-related
rents on behalf of multinational corporations (MNCs). This is a bad
image for the WTO and in the view of many, especially the non-governmental
organizations, reflects the "capture" of the WTO by the MNCs.”[10]
Others counter this argument by stating that IP protection has always been integral to trade and commercial diplomacy. On this view, TRIPS was produced as a result of bargaining between sovereign states as part of a larger package of trade-offs in which there were supposed to be gains for all. Whilst not all developing countries participated in the TRIPS negotiations, they were free to do so and leading developing countries, most notably India and Brazil, did participate actively.
It appears to us that, despite the history of the Uruguay Round negotiations and the asymmetries in negotiating capacity and power between the developed and developing countries, TRIPS is likely to remain an integral part of the WTO framework. While we have reservations about the extension of TRIPS standards to all developing countries, we recognise that it is most unlikely that any WTO members would be keen to renegotiate the agreement. Many members fear that in seeking particular amendments they would be obliged to compromise elsewhere in ways that may not bring a net benefit to them. The TRIPS Agreement, like others in the WTO, is subject to periodic review and genuine proposals for improving TRIPS provisions to benefit developing countries must be given proper consideration. But beyond these general points, we wish to draw two other specific conclusions from the evidence and our consultations about TRIPS.
Assisting
Developing Countries to Implement TRIPS
First, it is of prime importance that WTO members complete their work in clarifying the flexibilities within TRIPS regarding public health and that developing countries are enabled to utilise these and other flexibilities in the Agreement. Much new IP legislation has been introduced in developing countries since 1995 and some commentators[11] have expressed concern that the flexibilities available under TRIPS have not been fully utilised to reflect local needs. Our investigations of the current or draft IP laws of about around 70 developing countries and LDCs found, for example, that only around a quarter of these countries specifically excluded plants and animals from patent protection, less than half provided for international exhaustion of patent rights and less than a fifth specifically provided a so-called “Bolar” exception to patent rights.[12] Of course, there may be good reasons why a developing country might not wish to make use of these flexibilities, having made an informed decision not to do so. Their freedom to manoeuvre may also be constrained by other commitments, such as bilateral agreements.
But it might also be because those in charge of the legislative process are unaware of the options available, or the full implications of these options. As we note in Chapter 7, developing countries receive technical assistance in the IP field from a wide range of national and international institutions, such as the EPO, the USPTO, and the IP authorities of developed countries. But WIPO, as the international institution responsible for the promotion of IP, has a pivotal role in the setting of standards in this area, through its model laws and the nature of the technical assistance it provides. Our comments on this subject are therefore appropriately directed at WIPO, but they apply as well to all the other bodies involved in advising developing countries on IP matters.
We found that while some, particularly in developing country IP offices, highly value WIPO’s technical assistance, substantial concerns have been raised by a number of individuals and organisations, about whether the assistance provided by WIPO has always been appropriately tailored to the circumstances of the developing country concerned.[13] Hitherto, the confidential nature of the consultations between WIPO officials and a developing country, together with the absence of a formal WIPO policy statement on the nature of its technical assistance made it difficult to assess whether there was substance to in these concerns. In addition, WIPO did not publicise its model IP laws and annotations which would have indicated the extent to which it was providing advice consistent with all the flexibilities under TRIPS. There is also evidence that, in cases where WIPO’s assistance has been acknowledged, the result has not incorporated all TRIPS flexibilities. For instance, the revised Bangui Agreement for the OAPI countries, where WIPO’s assistance is acknowledged, has been criticised in various quarters for going further than TRIPS. It obliges LDC members (the majority of OAPI members) who ratify it to apply TRIPS in advance of need; it restricts the issuance of compulsory licences to a greater extent than required by TRIPS; it does not explicitly allow parallel imports; it incorporates the elements of UPOV 1991 in the agreement and it provides for a copyright term of 70 years after the death of the author.
However, very recently WIPO has introduced a page on its website which describes the legislative assistance it provides in relation to TRIPS and the Doha Declaration. This serves to allay some of these concerns. In addition to making available the model IP laws it uses, WIPO also notes that:
“WIPO's advice takes into account all the flexibilities that are open to members under the TRIPS Agreement including those confirmed in the Doha Ministerial Declaration on the TRIPS Agreement and Public Health ("the Doha Ministerial Declaration"). WIPO's advice takes into account the unique situation of each country, given that Member States have different legal systems and different political and cultural structures. WIPO follows up its written legal advice with an interactive process between the Organization and major stakeholders in the Member State concerned. To strengthen the TRIPS implementation process during the last four years, WIPO has promoted the interaction among stakeholders at the national level to include, for example, officials of Law Reform Commissions, Chambers of Commerce and Federation of Industries, Research and Development institutions, Parliamentarians, high-level officials of Ministries of Trade, Agriculture, Health, Science and Technology, Culture, Justice, Environment, among others.”[14]
We welcome this statement of WIPO’s commitment to provide
advice to developing countries which takes account of the flexibilities in
TRIPS, and the particular circumstances of each country. In addition we attach importance, as we note
in the previous chapter, to a wide-ranging consultative process in the
development and evolution of each country’s IP legislation. Such consultation is essential if IP laws
are to be devised in line with development objectives in agriculture, health
and industry. Nevertheless, we think
that this is the beginning of the process required to make WIPO truly
responsive to the specific needs of developing countries. For example, WIPO’s current model law on
patents requires further work in our view if it is to provide the best guidance
on how developing countries can utilise the flexibilities in TRIPS.[15] Other organisational and procedural changes
may also be necessary to embed these new policies operationally. Other providers of IP technical assistance
need also to consider their policies in the same light.
WIPO should take action to make effective its stated policy of being more responsive to the need to adapt its IP advice to the specific circumstances of the particular developing country it is assisting. We also recommend that it, and the government concerned, involve a wider range of stakeholders in the preparation of IP laws both within government and outside, and both potential producers and users of IP. Other providers of technical assistance to developing countries should take equivalent steps.
Timetable
for Implementing TRIPS
Our second conclusion regarding TRIPS is that, consistent with the overall analysis of this report, we are not persuaded by the arguments that developing countries at very different stages of development should be required to adopt a specific date (January 2000 for developing countries, January 2006 for LDCs) when they will provide the TRIPS standards of protection within their domestic IP regimes, regardless of their progress in creating a viable technological base. On the contrary, we believe there are strong arguments for greater flexibility in setting an optimum time to strengthen IP protection, taking into account the nation’s level of economic, social and technological development.
In TRIPS there are provisions made for the extension of the transitional period for LDCs by the TRIPS Council, although the logic of our argument applies to a wider range of low income developing countries.[16] We think that TRIPS would be improved by utilising these provisions to take greater account of the special needs of LDCs. These countries need longer to devise appropriate IP regimes and to establish the necessary administrative and institutional infrastructure, as well as the required regulatory frameworks, including complementary legislation such as competition law. The challenges are formidable and developing countries will incur significant costs if they rush to establish an IP regime that is inappropriate to their level of development. And, quite obviously, the governments of many LDCs, particularly in sub-Saharan Africa are facing much more immediate demands in critically important areas such as health, education and food security.
We do not think that granting LDCs the option of a longer transition period for TRIPS will materially damage the interests of developed nations. The Doha Declaration began this process by agreeing on the extension of the transition period for LDCs to provide patent protection to pharmaceuticals to at least 2016. It seems logical that the extension of that transition period should now be broadened to cover the implementation of TRIPS as a whole. It could be readily implemented by the TRIPS Council in complete conformity with the existing provisions of Article 66.1 of the Agreement. Furthermore, we think the TRIPS Council should also consider introducing criteria to decide the basis on which LDCs should enforce TRIPS obligations after 2016. These criteria could include indicators of economic development and scientific and technological capability, related to the criterion specified in the Article of “the need for flexibility to create a viable technological base.”[17]
LDCs
should be granted an extended transition period for implementation of TRIPS
until at least 2016. The TRIPS Council
should consider introducing criteria based on indicators of economic and
technological development for deciding the basis of further extensions after
this deadline. LDCs that have already adopted TRIPS standards of IP protection
should be free to amend their legislation if they so desire within this
extended transition period.
IP
IN BILATERAL AND REGIONAL AGREEMENTS
Developed countries, the US and the EU in particular, have sought to encourage developing countries to comply with international IP treaties, or to adopt higher standards of IP protection. In the past, trade concessions have been withheld and trade sanctions implemented against certain developing countries whose IP regimes have not met the expectations of their trading partners in the developed world.[18] More recently, there has been a trend for developed countries to seek commitments on IP standards from an increasing number of developing countries in bilateral or regional trade and investment agreements that go beyond TRIPS.[19] Table 8.1 below, provides some examples.
We accept that to a degree, developed countries have a legitimate interest in the IP standards of their trading partners. In our judgement, regional and bilateral agreements are much less preferable to the setting of multilateral standards, where the negotiating capabilities of developed and developing countries although remaining asymmetrical, are counterbalanced by numerical advantage and the ability to build alliances. Moreover, there is a risk that regional/bilateral agreements could undermine the multilateral system by limiting more generally the use by developing countries of the flexibilities and exceptions in TRIPS. In particular the Most Favoured Nation Principle means that terms agreed bilaterally or regionally must be offered to all other WTO members on the same basis.
It is unrealistic to think that IP standard setting will disappear altogether from bilateral and regional commercial diplomacy. The imperative, then, is for developed countries to ensure that their policy objectives for IP standards in regional/bilateral trade agreements are demonstrably consistent with their broader objectives for promoting international development and poverty reduction. To that end we would encourage developed countries, rather like developing countries (see Chapter 7), to incorporate a wider range of stakeholders, within government and without, in their policymaking on IP. IP policy too must integrate development considerations and that should be done as much by developed countries as by developing. Developing countries should not have to accept IP rights imposed by the developed world, outside their existing commitments to international agreements. Negotiators for developed countries need to take account of the costs to developing countries of higher IP standards, as well as the benefits to their own industries.
Table
8.1. Examples of Bilateral Agreements Requiring TRIPS-plus Standards[20]
Agreement
|
Date |
Examples of
TRIPS-plus provisions |
|
US-Jordan Free Trade Agreement |