US Proposed Lifting of “Moratorium” on Non-Violation Complaints on TRIPS at WTO

The US has proposed lifting a long-standing moratorium on “non-violation” complaints involving the WTO’s intellectual property rights agreement, in what would mark a significant shift for the global trade body if agreed.

The new proposal was one of several issues addressed during an 11 June meeting of the TRIPS Council, which is tasked with administering the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights.

Also on the docket was an Ecuadorian proposal on the contribution of intellectual property to facilitating the transfer of environmentally sound technologies, which has already been raised in past meetings.

US proposal on non-violation complaints

The moratorium on TRIPS non-violation complaints prevents WTO members from suing one other over damage arising from alleged violations of the spirit – but not the letter – of the organisation’s intellectual property rules.

Non-violation complaints, which are permitted in the areas of goods and services, are meant to help address equity-related concerns in international trade relations. Under these complaints, it is considered valid for one member to challenge another member’s domestic measure at the WTO, in the case that such policy deprives the former of a legitimately expected benefit.

Even though these complaints are available in other trade areas, whether such a remedy can be applied to intellectual property rights was heavily debated during the Uruguay Round negotiations that established the WTO.

As a result, the TRIPS Agreement established that non-violation complaints would not apply for a period of five years from the date of entry into force of the overall WTO Agreement – in other words, not until the year 2000.

Some members fear that lifting the moratorium could lead to disputes targeting controlled prices of pharmaceutical products, undermining market expectations of foreign patent holders. Furthermore, they argue, governments could also be challenged in their use of TRIPS flexibilities, such as in cases of compulsory licensing, packaging, and labelling requirements.