‘Intellectual property’: Knowledge creation or protectionist agenda?

The move by the US to ‘globalise’ its dysfunctional intellectual property (IP) system may well serve the highly protectionist agenda of its corporations, but is inimical to the cause of knowledge creation and dissemination, human welfare and Third World development. In resisting these inroads into their right to frame IP laws appropriate to their own development needs, developing countries should forge international alliances with all those who seek to redirect the current IP system for the public good of their own societies and for common global concerns.

Chee Yoke Ling

A ‘dysfunctional system’

THE high-protectionist agenda of US corporations epitomised by the US’ own patent laws has been globalised through the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) administered by the World Trade Organisation (WTO). Without much public awareness and scrutiny, it has also been brewing in the World Intellectual Property Organisation (WIPO) where patent harmonisation and treaties in uncharted areas such as broadcasting and non-original databases are promoted.

All countries need to determine and design intellectual property (IP) policies and rules that are appropriate to their needs and level of development. IP is a means, not an end in itself. The one-size-fits-all approach is widely rejected, yet efforts continue by some transnational corporate sectors and developed countries to have one set of global rules enforced by a global system.

When the developed countries themselves were industrialising and developing, they had no constraints on their right and freedom to design their own regimes to suit their circumstances. The Paris (industrial property) and Berne (literary and artistic works) Conventions were the first international intellectual property right (IPR) instruments forged almost 120 years ago, and these maintained countries’ flexibilities. For example, the Paris Convention allows exemptions of fields of technologies, determination of the period of patent protection by each country and compulsory licensing, among many tools. Until the TRIPS Agreement came into being, there was no international law requiring the granting of IPRs over life forms. TRIPS also mandated patents on processes and products (with some time-bound exceptions) and for the first time prescribed minimum periods of protection in international law.

In assessing the impact of IPRs on development, there is a severe lack of data and analysis in developing countries. That which exists and is emerging show that many of the assertions and claims of proponents of strong IP systems are not grounded in reality. The net effect, in many cases, can be negative for the development interests of developing countries. Public interest in both developed and developing countries are already threatened, from access to affordable medicines to information that ought to be kept in the public domain.

Scholarly debate in the US and Europe has already been generated by this skewing of the IP system. The Commission on Intellectual Property Rights comprising international experts set up by the UK Government in 2001 produced a report that pointed to numerous flaws in the current IP regimes (see box on pp.20-21).

In a workshop on ‘The Future of WIPO’ on 13-14 September, held in Geneva before the recent WIPO General Assembly, Jerome Reichman of Duke University (US) spoke of fears that the high-protectionist agenda could harm investment and research-based innovation in the long run. If this is so, ‘then the last thing the developing countries should want to do is to emulate these policies’.

Reichman in a joint paper published in the Journal of International Economic Law this year stated that ‘the drive to further harmonise the international minimum standards of patent protection at WIPO has occurred at the very time when the domestic standards of the United States and the operation of its patent system are under critical assault’.

At the Geneva workshop, he warned that there is so little agreement in the US itself on how to rectify the domestic system that often seems out of control, that there should not be an export of that ‘dysfunctional system’. Reichman joined many others, including Nobel laureates Sir John Sulston and Medecins sans Frontieres, to call for abandoning efforts to adopt new treaties on substantive patent law, broadcasters’ rights and non-original databases.

Caution needed

Thus developing countries need to exercise extreme caution, and careful assessment is required in formulating (and changing, if necessary) national IP policies and laws.

One crucial issue in respect of IP is not whether it promotes trade or foreign investment, but how it helps or hinders developing countries to promote research and innovation, and to gain access to appropriate technologies that are required for their development.  Where there is a lack of domestic research, development and production capacity, the issue is whether an IP system can ensure affordable imported products for consumers, especially food and medicines.  The  area  of  information  technology  and  databases  for  the  public domain are also critical and under threat  by  ever-expanding  IPR  claims,  especially  in  patents  and copyrights.

The second crucial issue is a fundamental one of the patenting of life forms. The distinction between an ‘invention’ and a ‘discovery’ is currently at the heart of the controversial debate over whether life forms (including plants, animals, micro-organisms and human genes, and parts thereof) can or should be owned under patents or other forms of IPRs.

There is thus a need for developing countries to be vigilant and to have clear national positions and policies on the key issues relating to IP systems so that there can be a coordinated and consistent negotiation stand at the various international and regional fora, and at the domestic level when international commitments are implemented.

TRIPS

The TRIPS Agreement is currently the most comprehensive international treaty that sets global standards for IPRs. While the standards are minimum standards, they are in fact based on the level found in developed countries during the early 1990s, making them burdensome to developing countries, a fact that is acknowledged today.

However, the implementation of TRIPS is a matter for national law. There are rights and flexibilities in TRIPS that can still be development-friendly, requiring interpretation and implementation at the national level (see box on ‘Development obligations under TRIPS’). For developing countries to defend their laws and actions against challenges at the WTO, a collective effort to interpret TRIPS would be helpful.

Meanwhile, developing countries are seeking to use the ongoing review of the implementation of TRIPS and the review of TRIPS Article 27.3(b) on the patentability of living organisms (life forms) and processes to maximise opportunities and flexibilities that benefit their sustainable-development goal. Article 71.1 provides for a biennial review of TRIPS implementation by the WTO’s TRIPS Council. The Council may also undertake reviews in the light of any relevant new developments which might warrant modification or amendment of TRIPS. Therefore there is a continuous opportunity for developing countries to ensure that TRIPS is development-friendly.

A national process to examine and analyse the various aspects of IPRs as they affect developing countries would be useful and necessary if we are to minimise the negative impacts of TRIPS, and even to pursue changes to the Agreement. The national implementation of various international agreements as they impact on IPRs, natural resources management, community rights and national development can give rise to conflicts and confusion. A coordinated approach is necessary and urgent.

World Intellectual Property Organisation

Even as some developing-country governments are reacting and public awareness is growing on TRIPS-related problems, there are strong moves in WIPO to develop a far more stringent harmonised patent system and to initiate other new agreements. The flexibilities in WIPO-administered agreements (including the right of countries to choose which treaty to join) led to TRIPS, and it seems that the TRIPS flexibilities are bringing the matter back to WIPO.

WIPO was set up in 1970. One of its objectives, as stated in Article 3 of the WIPO Convention, is ‘to promote the protection of intellectual property throughout the world through cooperation amongst States and, where appropriate, in collaboration with any other international organisation’.

WIPO’s functions, listed in Article 4, include promoting ‘the development of measures designed to facilitate the efficient protection of intellectual property throughout the world and to harmonise national legislation in this field’.

The first major international treaty was the 1883 Paris Convention for the Protection of Industrial Property that covered inventions (patents), trademarks and industrial designs. It entered into force in 1884 with 14 Member States, which set up an International Bureau to carry out administrative tasks, such as organising meetings of the Member States.

The Berne Convention for the Protection of Literary and Artistic Works came into being in 1886 bringing with it copyrights to the international arena.  The Berne Convention also set up an International Bureau to carry out administrative tasks. In 1893, these two small bureaux united to form an international organisation called the United International Bureaux for the Protection of Intellectual Property (BIRPI in its French acronym), the predecessor of the WIPO of today. WIPO has 181 Member States today, with about 938 staff from 95 countries.

In 1960, BIRPI moved from Berne to Geneva where the UN and other international organisations are based. In 1967 the Convention Establishing the World Intellectual Property Organisation was signed, and when it entered into force in 1970 BIRPI became WIPO, and a secretariat was set up.

In 1974, WIPO signed an agreement to become a specialised organ of the United Nations and, with that move, its mission was broadened to ‘promoting creative intellectual activity and ... facilitating the transfer of technology related to industrial property to the developing countries in order to accelerate economic, social and cultural development’. 

From that time onwards until the early 1990s, WIPO model laws spread across the developing world. Many of those laws do not maximise the flexibilities that developing countries have under the existing WIPO treaties. This, according to critics, reflects the bias within WIPO which is still more attuned to its original mission rather than the wider UN objectives.

Two recent examples are the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT), popularly known as the Internet treaties, which came into force in 2002. These treaties contain rules on the international protection of copyright and related rights that critics say have put undue restrictions on innovation and access to information in the Internet age.

WIPO’s clientele has always been primarily those who register industrial patents, industrial designs, trademarks and copyrights in the international system administered by WIPO. This system differs from TRIPS in that it actually develops a global system of IP registration and administration.

TRIPS leaves implementation to national laws, though these and related measures can be challenged at the WTO, thus reducing the policy space that countries enjoyed before TRIPS. The WTO enforcement machinery can also be used to retaliate against a Member State found to have violated its TRIPS obligations. In contrast, WIPO does not have a global enforcement system. It runs an Arbitration and Mediation Centre which provides, for a fee, a dispute resolution option to users of the IP system.

WIPO’s bias is not surprising as the ‘users’ of the WIPO system are essentially the private sector. This was explicitly stated by former Director General Arpad Bogsch in his Brief History of the First 25 Years of the World Intellectual Property Organisation published in 1992:

‘By users are meant, first of all, authors, inventors, owners of trademarks and creators of industrial designs. Also meant are their assignees and licensees, such as publishers, organisers of concerts and theatrical performances, phonogram producers, broadcasters, anyone incorporating an invention in articles or using them in processes, firms authorised to use someone else’s trademarks, including franchises, etc. Finally, also meant are their representatives, such as attorneys and patent and trademark agents, and any member of the public.

‘The vast majority of users are, from an economic point of view, in the private (as distinguished from the public or government) sector. They have hundreds of associations to protect and promote their interests. Since they are not representing government views, they are called non-governmental organisations (“NGOs”) representing the private sector.’

Bogsch proceeds to state that:

‘All this demonstrates that the contacts between WIPO and the private sector, or between the International Bureau [ed: the Secretariat] and non-governmental organisations, are very close. The private sector has a real and direct influence on the policy of WIPO, and the activities of the International Bureau are completely transparent for the interested circles. In these respects WIPO is probably the most advanced among the United Nations family of organisations.’

WIPO itself acknowledges on its website that its ‘financial well being’ relies on industry and ‘NGOs’. Fees collected for the services to IP holders constitute the bulk of WIPO’s funding. According to the latest WIPO Annual Report, about 86% of its total income in 2002 came from fees paid by private sector users of its global protection services, as well as from fees related to arbitration and mediation services. Only about 7% came from contributions from Member States. The remainder was from sale of publications and interest.

The WIPO website states that about 85% - approximately 540 million Swiss francs - of the Organisation’s budgeted expenditure for 2004-2005 will come from earnings from the registration systems under the Patent Cooperation Treaty (PCT) and other treaties. Contributions from Member States are small: the five largest contributing countries each give about 0.5% of WIPO’s budget.

Patent or development agenda?

Having been somewhat sidelined by TRIPS, WIPO moved quickly to collaborate with the WTO Secretariat in implementing TRIPS and providing technical assistance to developing countries. An agreement between the two was signed in January 1996 for this purpose. In 1998, a joint initiative was launched to help developing countries implement TRIPS by the 2000 deadline, and this continues for least developed countries which have the 2006 deadline.

Country experiences with these technical assistance programmes have raised many concerns. Both government and NGO critics at the Geneva workshop on ‘The Future of WIPO’ in September described these programmes as serving the interests of IPR holders and promoting legalistic implementation of treaties. In a number of documented cases, WIPO was actually prescribing ‘TRIPS-plus’ (i.e., with obligations extending beyond those in TRIPS) national laws instead of helping to identify and implement the flexibilities and rights of developing countries in the TRIPS Agreement.

In 2001 the Director General of WIPO, Kamil Idris, presented to the General Assembly of Member States a memorandum on the ‘Agenda for Development of the International Patent System’. This move is characteristic of WIPO where the Secretariat drives many initiatives and, according to some developing-country delegates, Member States are often marginalised.

It was largely the failure to obtain global rules at WIPO that resulted in the TRIPS Agreement in the first place. There was also the attraction of bringing IPRs within the enforcement system of the WTO. Ironically, the failure to get more out of TRIPS is also one reason for some developed countries to now try to accelerate work at WIPO for more IP treaties and patent harmonisation. At the same time, WIPO management seeks an ever-expanding role for the organisation by aligning with corporate interests and advocating an increasing scope and depth of IP coverage.

The Commission on IPRs in its 2002 report also warned of the ongoing discussions on the further harmonisation of substantive patent law. It referred to the 1991 moves for a Substantive Patent Law Treaty (SPLT) that was ‘almost agreed in WIPO’ and that gave a ‘foretaste’ of what would happen in current discussions. Whilst developing countries made a number of proposals during the 1991 negotiations, the final draft treaty was essentially a hybrid of the laws prevailing in a number of developed countries, in particular the US and the EU.  As the delegate of one developing country noted then, there was a paradox that through a harmonisation process, the majority of the countries were being asked to align their law with the provisions of a minority.

Failure of those negotiations was, however, followed closely by agreement on the TRIPS Agreement that went a considerable distance in harmonising substantive patent law around the world. But even with TRIPS, differences remain between the patent laws in many countries, including between the US and EU.  The new discussions in WIPO, which commenced in early 2001, sought to remove these differences. 

Thus the SPLT could well set maximum standards, unlike the minimum-standards approach of TRIPS. At the last WIPO General Assembly (28 September to 5 October) there was no agreement on continued work on the SPLT. A Japan-US proposal was rejected by developing countries. The Secretariat will consult with Member States on dates for the next meeting of the Standing Committee on the Law of Patents which is responsible for this issue.

Developing countries should reject the current WIPO process on patent harmonisation and work instead to fundamentally change the direction of WIPO to meet its responsibilities as a UN organ.

The proposal by Brazil and Argentina to incorporate a ‘development agenda’ into WIPO, which was supported by a number of developing countries at the recent General Assembly, is a significant move. After extensive negotiations, a decision was adopted by the General Assembly to hold a series of meetings to discuss the issue. A report of proposals will be produced by July 2005.

The developing countries’ proposal also calls for a distinction to be made between public interest NGOs and the private sector users who currently comprise the majority of the WIPO ‘NGO’ observers at the General Assembly and other Committees.

The next 12 months will be challenging indeed, and it is hoped that the active participation of developing countries and public interest NGOs in WIPO will increase and become stronger.

The US strikes back

The failure to agree on a patent harmonisation work programme at the General Assembly reportedly displeased the US, whose joint proposal with Japan did not win support.

On 15 October, the US delegate to the WIPO General Assembly, Jonathan Dudas (Director of the US Patent and Trademark Office), made a speech to the American Intellectual Property Law Association, which is an influential 15,000-member body. Recounting his WIPO negotiations in Geneva, Dudas said that:

‘... there is a growing anti-IP sentiment ... and this sentiment has poured into WIPO in some instances. Even the simplest of harmonisation efforts have been met with obstruction and procedural tactics. ... Ideally, we should have every nation agree on the intellectual property reforms that we’d like to see go forward, but we cannot, we must not have a few nations obstructing the process for the rest of the world.’

Dudas’ notion of ‘the rest of the world’ was explained to be the US, Japan and Europe because ‘about 85% of the world’s patents’ come through three patent offices (USPTO, Japan Patent Office and the European Patent Office). He stressed that more than half of WIPO’s funding came from three countries: the US, Japan and Germany. 

He also promised those ‘who truly believe that diversion of fees is absolutely unacceptable in any form’ that fees paid to WIPO would only be used for operations related to the Patent Cooperation Treaty. The PCT sets up a global patent registration and recognition system which is favoured by patent claimants.

On the ‘development agenda’ proposal, Dudas had this to say:

‘Even worse, there were proposals on the table to fundamentally change the WIPO charter and philosophy from one that promotes intellectual property and its protection to a more amorphous charter of “balancing” intellectual property. We have no quarrels with balance. In fact, we believe our current system and international norms are properly balanced. But simply put, this new balancing act is a strategy to water down intellectual property protection, and the US will fight this as well, and I am certain that we will do so.’

Thus the drive to perpetuate and globalise the dysfunctional system in the US continues. The challenge, then, is for developing countries, independent innovators and artistes, scholars, NGOs and the public in developed and developing countries to keep working harder and together to reject that system.

Conclusion

Developing countries, both governments and the public, need to urgently build up their knowledge of the state of debate on IP; review and assess their IP policies and laws; coordinate their negotiating positions and press for interpretations, clarifications and, where necessary, changes in existing agreements that would be pro-sustainable development and pro-public interest.

If the promotion of creativity and innovation is indeed the mission of any regime, then the principles and rules must allow for the flourishing of intellectual wealth and not the protectionist agenda of corporate interests. There are emerging allies in developed countries which also seek to redirect the current IP system for the public good of their own societies and for common global concerns. International alliances in this direction would be critical and timely. 

Chee Yoke Ling coordinates Third World Network’s environment programme.

COVER 1 (BOX 1)

The Commission on Intellectual Property Rights

THE Commission on Intellectual Property Rights (CIPR), chaired by Prof John Barton of the US, was set up by the UK Government and started its work in 2001, and released its report in September 2002, entitled Integrating Intellectual Property Rights and Development Policy. Literature survey, commissioned papers, consultations and country visits were undertaken to ‘incorporate voices from both developed and developing countries: from science, law, ethics and economics and from industry, government and academia’ (for the full report, see www.iprcommission.org).

This report generated mainstream headline coverage on the negative impact of inappropriate IP systems on developing countries, and questions many of the assumptions about the role of IPRs in promoting economic growth, trade, investment and technology transfer. It is an important contribution to the ongoing public discussions, inter-governmental negotiations and national implementation of international IPR commitments.

In its assessment of international rules, from TRIPS to the ongoing negotiations at WIPO, the CIPR concludes that there are many weaknesses and restrictions that will further curtail the right of developing countries to exercise flexibilities in designing appropriate IP policies and rules, to the detriment of these countries’ development objectives.

According to the CIPR, ‘Historically, now-developed countries used IP protection as a flexible instrument to help promote their industrialisation.’ Those countries have changed their regimes at different stages of economic development as that perception (and their economic status) has changed.  For instance between 1790 and 1836, as a net importer of technology, the US restricted the issue of patents to its own citizens and residents.  Even in 1836, patent fees for foreigners were fixed at 10 times the rate for US citizens (and two-thirds as much again if one was British!).  Only in 1861 were foreigners treated on an (almost wholly) non-discriminatory basis (CIPR: 20).

‘The general lesson history shows us is that countries have been able to adapt IPR regimes to facilitate technological learning and promote their own industrial policy objectives. Because policies in one country impinge on the interests of others, there has always been an international dimension to debates on IP.  The Paris and Berne Conventions recognised this dimension, and the desirability of reciprocity, but allowed considerable flexibility in the design of IP regimes. With the advent of TRIPS, a large part of this flexibility has been removed.  Countries can no longer follow the path adopted by Switzerland, Korea or Taiwan in their own development. The process of technological learning, and of progressing from imitation and reverse engineering to establishing a genuine indigenous innovative capacity, must now be done differently from in the past.’ (CIPR: 23)

‘It can safely be said that the effect of patent rights globally will be to benefit very considerably the holders of patent rights, mainly in developed countries, at the expense of the users of protected technologies and goods in developing countries. Between 1991 and 2001, the net US surplus of royalties and fees (which mainly relate to IP transactions) increased from $14 billion to over $22 billion. In 1999, figures from the World Bank indicate a deficit for developing countries for which figures are available of $7.5 billion on royalties and licence fees. That the extension of IPRs would tend to benefit the developed countries is not surprising and explains why pressure was applied by industry in developed countries for the adoption of TRIPS.’ (CIPR:24)  

On the relationship between IPRs and trade/investment, the CIPR concludes from the existing studies the following:

There is some evidence that trade flows into developing countries are influenced by the strength of IP protection, particularly for those industries (often high-technology) that are ‘IPR-sensitive’ (for example, chemicals and pharmaceuticals), but the evidence is far from clear.

These flows may contribute to productive capability.  But they may also be at the expense of domestic output and employment in local ‘copying’ and other industries.  Developing countries with no or weak technological infrastructure may be adversely affected by the higher prices of imported IP-protected goods.

The evidence that foreign investment is positively associated with IP protection in most developing countries is lacking.

For more technologically advanced developing countries, IPRs may be important to facilitate access to protected high technologies, by foreign investment or by licensing.

Achieving the right balance may be difficult for some countries such as India or China, where some industries have the potential to benefit from IP protection, but the associated costs for industries that were established under weak IP regimes as well as consumers are potentially high. 

Most of the evidence concerning the role of IP in trade and investment relates to those developing countries which are more technologically advanced.  For other developing countries, any beneficial trade and investment effects are unlikely to outweigh the costs at least in the short and medium term.  (CIPR:27-28)            

On technology transfer, the CIPR concludes that TRIPS has strengthened the global protection offered to suppliers of technology, but there is no international framework to ensure that the transfer of technology takes place within a competitive framework which minimises the restrictive technology licensing practices.

TRIPS recognises in Article 7 that IPRs should contribute to the ‘transfer and dissemination of technology’ but also, in Article 8, that measures may need to be taken to prevent the abuse of IPRs including practices that ‘adversely affect the international transfer of technology’.  Article 40 includes provisions to prevent anti-competitive practices in contractual licences. And Article 66.2 obliges developed countries to provide incentives to their enterprises and institutions to promote technology transfer to least developed countries (LDCs) in order to ‘enable them to create a sound and viable economic base’. 

The transfer of technology to developing countries does not have a good record. The dominant experience has been no transfer; transfer at high costs (thereby causing developing countries to pay high prices for products such as pharmaceuticals, and royalties for technology); transfer of obsolete or hazardous technologies and products.

Over the last decade, following commitments under various UN Summits and treaties, developed countries have been obliged to transfer environmentally sound technologies to developing countries. However, the reality has been a victory of IPRs over affordable access to technology for developing countries. Experiences with the Montreal Protocol on Ozone Depleting Substances and the Climate Change Convention, which are legally binding agreements, and some studies conducted by the UN Conference on Trade and Development (UNCTAD) and independent research institutions show that IPRs are an obstacle rather than a tool for technology transfer. Worse, strict IPR regimes can discourage research and innovation by locals in developing countries. This is largely due to the fact that most patents and other IPRs in developing countries are held by foreign inventors or firms. The CIPR report has also arrived at some similar conclusions.

Thus little or nothing has been done by developed countries to fulfil their TRIPS and other related commitments. The battle on this issue continues at the TRIPS Council and the WTO Working Group on Trade and Transfer of Technology as well as UN fora.                           

COVER 1 (BOX 2)

Development obligations under TRIPS

ARTICLE 1.1 of the TRIPS Agreement clearly states that: ‘Members shall be free to determine the appropriate method of implementing the provisions of this Agreement within their own legal system and practice.’

While IPRs have become private rights created by law, the underlying public policy and development objectives of IP systems are clearly recognised. Articles 7 and 8 of TRIPS on Objectives and Principles provide an important framework.

Article 7 on Objectives states that: ‘The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive  to  social and economic welfare, and to a balance of rights and obligations.’

Article 8 on Principles states that:

‘Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of [TRIPS].

‘Appropriate measures, provided that they are consistent with the provisions of [TRIPS], may be needed to prevent the abuse of intellectual property rights by right holders or the resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology.’

These are important provisions for formulating national IPRs laws that respond to public health and other public interests, and for interpreting all other parts of TRIPS. In this way, a country can put in place various measures that promote competition and balance, to some extent, the interests of IPR holders with those of the users of the technology/products.

It is thus important for developing countries to ensure that the Objectives and Principles of TRIPS are implemented so that their rights and flexibilities with regard to national development are safeguarded. At the WTO level, there is also a need to clarify and interpret provisions to ensure that developing countries’ interests are protected.

The achievement of the 2001 Doha Declaration on the TRIPS Agreement and Public Health in affirming the flexibilities in TRIPS for ensuring access to affordable medicines is a good precedent.

The impact of patents on prices of medicines hit the world with the exorbitant, even immoral costs of HIV/AIDS treatment. This led to global outcry and moves by determined governments, especially from the stricken African countries, to bring some balance back to the IP system. The Doha Declaration was forged after intense and acrimonious negotiations.

To ensure access to affordable medicines, and to promote the domestic pharmaceutical industry, developing countries now need to fully exercise their rights and flexibilities which have been reaffirmed in the Doha Declaration, in national laws and measures.                                           

COVER 1 (BOX 3)

WIPO Patent Agenda

THREE building blocks for a world patent system are under debate at WIPO:

A uniform set of procedures for administering patent applications was adopted in the Patent Law Treaty (PLT) in June 2000.  It is awaiting 10 ratifications to enter into force.  Critics are concerned that in the name of international harmonisation of patent formalities, this is a step towards an undesirable patent system with implications for substantive patent rules.

Reform of the Patent Cooperation Treaty (PCT) that was originally adopted in 1970 and provides a common facility to conduct international searches of prior art in patent applications. Currently all patents in the world are national documents granted under national rules and procedures. The PCT reform was to ‘streamline and simplify the procedures’ by creating a system for single international patent applications, including the provision for WIPO examiners to take the place of national examiners. The PCT system pays for more than 2/3 of WIPO’s expenditure.  However, there are concerns that this reform process could open the way for the PCT to adjust to new policy objectives and needs of WIPO’s overall harmonisation agenda.  The PCT system now has 123 Member States, and the number of international applications has grown from 2,600 in 1979 to about 110,065 in 2003. About 45,000 applications are from the US, with 1,000 being the largest number from a single developing country. Because each application extends to more than one country, the latter applications represent the equivalent of some 8.5 million national applications for inventions, according to WIPO estimates.

Substantive Patent Law Treaty (SPLT): Once the PLT was adopted, WIPO members moved to harmonise the basic rules of patenting, to be done through the SPLT.  The first attempt in 1991 failed due largely to differences between the US and EU. The SPLT goes further than TRIPS in seeking a fixed set of rules on what can be patented and under what conditions, thus paving the way for a world patent system. A first draft was tabled by WIPO in November 2001 and a revised one in May 2002. At the September 2003 meeting of the General Assembly almost all developing countries voiced their concerns, and even objections.

There was no agreement on further work at the 2004 General Assembly meeting.                             

COVER 1 (BOX 4)

Regional and bilateral agreements

A GROWING concern is the inclusion of TRIPS-plus provisions in bilateral and regional free trade agreements, especially those between developing countries and the US.

Studies on these bilateral and regional agreements show a trend towards more protectionist standards in favour of IP holders, which may undermine the flexibilities maintained at the WTO, FAO International Treaty and any alternative sui generis system to reward innovation under the Convention on Biological Diversity (CBD).

For example, a number of these agreements narrow the scope for compulsory licences, thus undermining the Doha Declaration on the TRIPS Agreement and Public Health. Data protection is set at five years for clinical test data and this is directly aimed at putting a major obstacle to generic drug production.

TRIPS does not refer to the International Convention for the Protection of New Varieties of Plants (UPOV) as the ‘effective sui generis system’ as an alternative to patents for new plant varieties.  But in bilateral agreements with different developed countries especially the US, countries such as Cambodia, Chile, Jordan, Morocco, Singapore, Tunisia and Vietnam are now obliged to join UPOV.

TRIPS allows Member States to exclude plants and animals from their patent laws. But under bilateral agreements with industrialised countries, Jordan, Mongolia, Nicaragua, Singapore, Sri Lanka and Vietnam are being required to provide patent protection on plants and animals. In all of these cases, there is no provision to exclude plants and animals from national patent law.

Another formulation as in South Africa and the 78 African, Caribbean and Pacific (ACP) countries is the obligation to grant patents on ‘biotechnological’ inventions. This could include plants and animals, in addition to the micro-organisms required by TRIPS.

Many of the agreements also call for implementation of IPRs in developing countries ‘in accordance with the highest international standards’. These standards are not defined, but they may relate to new standards being generated through a growing number of investment treaties that define ‘investment’ to include IPRs. There are policies from the US that specifically assess bilateral trade benefits in terms of developing countries’ willingness to provide IPR protection that is ‘greater than’ what TRIPS requires, or to the extent that the protection they offer is an ‘improvement’ on TRIPS.