INTELLECTUAL PROPERTY: FORMAL MEETING
Members Debate Way Forward on Non-violation
Complaints at TRIPS Council
WTO members could not agree on a way forward regarding non-violation
complaints at the meeting of the Council for Trade-Related Aspects of Intellectual
Property Rights (TRIPS) on 17-18 October. Following up on previous discussions,
WTO members also broadened their debate on the relation between IP and innovation,
and IP and the public interest. Also, for the first time, they discussed how best
to ensure an inclusive approach to transparency notification requirements in the
WTO.
The issue
of non-violation and situation complaints, mandated for discussion in the TRIPS
Council by successive Ministerial Conferences, concerns the longstanding issue of
whether members should have the right to bring dispute cases to the WTO if they
consider that another member's action or a specific situation has deprived them
of an expected benefit under the TRIPS Agreement, even if no specific TRIPS obligation
has been violated. At the 11th Ministerial Conference in Buenos Aires in December
2017, ministers agreed to once again
extend the moratorium on using TRIPS non-violation complaints until
the 12th Ministerial Conference (MC12), which was originally foreseen to take place
in 2019.
At the
General Council meeting in July 2018, the chair noted that the 2019 deadline would
be maintained, notwithstanding the decision to hold the 12th Ministerial Conference
in Nur-Sultan, Kazakhstan, in June 2020. The issue was
discussed again on 15 October this year at the General Council, where Chile, Colombia,
New Zealand and Panama submitted a recommendation to reconsider that deadline and
extend the moratorium until MC12. Several members backed this recommendation at
the TRIPS Council, while others reiterated their preference for the moratorium to
expire by the end of 2019 as initially envisaged.
In light
of this, the chair kept the agenda item open while he continues consultations to
facilitate an agreement. Once the possibility of reaching consensus is achieved,
he will reconvene the suspended Council meeting at short notice so that a recommendation
could be made in time for the last General Council meeting of the year, scheduled
for 9-11 December.
Following
up on past items on IP and innovation regularly added to the TRIPS Council agenda
since 2012, the co-sponsors (Australia, Canada, Chile, Chinese Taipei, the European
Union, Hong Kong China, Japan, Singapore, Switzerland and the United States) invited
members to share experiences and further examples of initiatives that support and
facilitate the commercialization of IP across a wide range of industries and sectors.
They highlighted that, through the commercialization of IP, inventors and creators,
academics, students and entrepreneurs can reap the benefits of their knowledge,
creativity and hard work, while ensuring that those providing financial support
in this process can gain returns on their investment.
A variety
of diverse public-private collaborations providing an opportunity for both parties
to leverage resources, capacities, skills and expertise in order to commercialize
IP and bring products to the market were discussed, as well as the various mechanisms
within the framework of these partnerships that can facilitate IP commercialization
— licensing, joint ventures, and public procurement for innovation.
The proponents
highlighted the example of academic spin-offs, which are becoming increasingly popular
vehicles for driving innovation and the direct commercialization of publicly funded
research and development (R&D) for the benefit of the public. These platforms
also allow students to move beyond the academic world towards becoming innovators
and entrepreneurs, converting their ideas into tangible products and services, they
added. At the same time,
strategic IP management can raise revenues for universities boosting
further R&D, attracting potential industry sponsors and investors and fostering
reputation and partnership opportunities.
In sum,
proponents said, IP commercialization not only allows for state-of-the-art technologies
and creations to be made available to the whole of society in the form of new products
and services to market, but also facilitates job creation, prosperity, and societal
progress.
China,
Brazil, Costa Rica, Norway, South Africa and Ukraine joined the co-sponsors in sharing
their experiences on what role governments and policy makers can play in linking
companies and universities on the one hand, and investors on the other hand, as
well as success stories of IP commercialization. Some IP-related measures were particularly
successful in supporting stakeholders who may have lacked necessary resources and
expertise in this field. Members also identified the severe shortage of human resources
for R&D as a fundamental constraint to economic growth and research and development.
They noted the existing gap in national innovation systems, where most of the research
outputs have not been translated into commercially viable products and services
or the creation of new industries.
At the
proposal of South Africa, the Council continued its debate on the intersection between
IP and the public interest. Underlining that the public interest is a central component
of the TRIPS Agreement, South Africa added that the protection and enforcement of
intellectual property rights (IPRs) should not be an end in itself but a means to
contribute to the promotion of technological innovation and the transfer and dissemination
of technology to the advantage of all stakeholders in a manner conducive to social
and economic welfare.
South
Africa called on WTO members to commit to the full use of the flexibilities in the
TRIPS Agreement to increase access to affordable, safe, effective and quality medicines,
noting that the current model of medical innovation is ill-equipped to respond to
the increasing emergence of infectious diseases, the unprecedented explosion of
non-communicable diseases (NCDs), and neglected tropical diseases. Developing and
least developed countries affected by inadequate funding for R&D and access
to health technologies and medicines continue to struggle to ensure access to affordable
medicine for their citizens, and developed countries are increasingly raising similar
concerns, it said.
South
Africa invited members to share experiences on how TRIPS flexibilities have been
used to address high prices and barriers to access to medical technologies and medicines
in order to achieve public health and related national objectives and considered
that competition policy remains a relevant tool to address abuse of IPRs, and to
ensure cheaper and more effective access.
According
to South Africa, pricing policies of private companies remain opaque in many cases
while the true cost of R&D for pharmaceuticals is often unknown and highly variable,
with a significant proportion of the expenditure dedicated to marketing and promotional
activities, rather than costs directly related to the development of the product. Companies in the health technology sector, South
Africa added, achieve market dominance through various means, including IP protection,
that keeps generic or biosimilar competitors out of the market for varying periods,
depending on the jurisdiction.
Other
members noted that international obligations such as those in the TRIPS Agreement
have sufficient flexibility to allow trading partners to address serious public
health problems that they may face. They highlighted the patent system’s vital role
in promoting the development and creation of new and innovative life-saving medicines
and urged other members to consider ways to address their public health challenges,
while also maintaining IP systems that promote innovation. While recognizing the
importance of medicine pricing, these members considered that it is not an appropriate
topic for TRIPS as there are many factors to be taken into consideration, such as
the existence of regulatory barriers, taxes, tariff policies, procurement mechanisms,
the increase in the production, sale and use of substandard fake counterfeit medicines
or a context of complex supply chains.
They
added that without patent protection, especially for pharmaceutical research into
new drugs, new uses for existing drugs and improvements to existing drugs would
dramatically decline, and that it is necessary to look at the whole picture in order
to improve the situation. According to these members, a narrow focus on patent rights
as ostensibly obstructing the availability of reasonably priced medicines would
distort a complex and multifaceted picture, leaving out many factors that are fundamental
in addressing pricing and access to medicines issues.
The African
Group, Cuba, India and Oman noted that transparency remains an important issue within
the operation and monitoring function of the WTO, and discussion of this in the
TRIPS Council complements similar discussions taking place in other WTO bodies.
These members argued that while developing countries often struggle to comply with
notification obligations due to capacity and resource constraints, developed countries
in many instances do not comply with such obligations or do so selectively. They
indicated that the capacity of developing members to comply with this obligation
is inextricably linked with their level of economic development and access to resources,
and urged developed members to not underestimate their capacity and resource constraints.
In their
view, any work in this area should be on supporting and incentivizing developing
countries to address these issues, especially as it relates to transparency obligations.
Existing notification obligations should be calibrated so that they are commensurate
with members' level of development, they added, and developing members, small and
vulnerable economies (SVEs) and least-developed countries (LDCs) should not be expected
to take on notification obligations which are beyond their capacities, or be subjected
to any transparency obligations which go beyond existing obligations.
Other
members took the floor to welcome this discussion at the TRIPS Council and to acknowledge
the challenge of keeping up-to-date with the resource-intensive obligation of notifications.
As stressed previously in the Council for Trade in Goods, developed members underlined
the urgent need to address deficiencies and gaps in notifications and transparency
that seriously undermine the proper functioning and operation of the WTO agreements.
They said it is time to move the debate from the meta level
to a more down-to-earth level that permits obtaining concrete commitments in this
regard.
Under
the regular agenda item on TRIPS notifications, the Council's chair, Ambassador
Lundeg Purevsuren of Mongolia,
said that notifications to the Council are not keeping up with the actual development
of laws and regulations relating to TRIPS. He emphasized that Article 63.2 of the
TRIPS Agreement is not a one-off requirement, but a core element of the TRIPS transparency
arrangements and a central part of the Council's substantive work, and that it obliges
members to notify any new or amended laws. Therefore, he urged members to complete
any outstanding initial notifications, and to keep up to date with notifications
on subsequent amendments. The same applies to the Checklist of Issues on Enforcement
which was established by the Council as an element of members' notification obligations.
He also
encouraged members to notify legislative changes made to implement the special compulsory
licensing system to export medicines covered by the new Article 31bis of the
TRIPS Agreement. More than 50 WTO members, including many of the world's major exporters
of medicines, have adopted implementing legislation that allows them to use the
system as exporters and/or importers, but only 19 members, including the European
Union, have formally notified such measures to the TRIPS Council.
The chair
underscored that the new e-TRIPS platform
now makes it much easier to fulfil transparency obligations. Members attended a
lunch-time briefing on the e-TRIPS gateway, the online database of the full range
of TRIPS-related information managed by the Secretariat that enables easy search
and analysis of TRIPS data.
The Council
reviewed updated reports from a number of members under Article 66.2, which calls
on developed countries to provide incentives to enterprises and institutions in
their territories for the purpose of promoting and encouraging technology transfer
to least-developed countries in order to enable them to create a sound and viable
technological base. Some members discussed how to improve the function of the mechanism,
including the proposal to designate focal points for technology transfer in both
developed country and LDC members.
The WTO
Secretariat is once again planning an Annual Workshop on Article 66.2, as a follow-up
to this year's event, to be held back-to-back with the next TRIPS Council meeting
in early February 2020. The workshop will comprise two days of sessions on 4-5 February
and a reporting and review session within the TRIPS Council on 6 February. Between
now and then, LDCs will have sufficient time to absorb the information provided
by developed countries and, as on previous occasions, the workshop will provide
members with the opportunity for concrete exchanges between cooperation partners,
and to deepen the dialogue on incentives for transfer of technology to respond to
the needs identified by least-developed countries.