Jul 14, 1988
NORTH-SOUTH POLARISATION IN TRIPS NEGOTIATIONS.
GENEVA, JULY 12 (IFDA/CHAKRAVARTHI RAGHAVAN)— A sharp polarisation of views between industrial and third world countries on the scope of the negotiations in the Uruguay round's GATT MTNS on " Trade-Related Intellectual Property Rights" (TRIPS) appears to have emerged at last week's meeting of the negotiating group. The TRIPS negotiating group concluded its meeting Friday and is due to meet again September 12-14. The chairman of the group, Amb. Lars Anell of Sweden, who through personal letters and other approaches has been trying to promote a consensus within the group, reportedly said at the end that while the positions had become very clear, he could not conclude that there was any kind of consensus. The sharp divergences reportedly came out over the radical proposals presented by the European Community for what it has called "negotiations on trade related aspects of substantive standards of Intellectual Property Rights (IPRS)". The EEC proposals amount in effect to an entirely new scheme of international rules and provisions in this area beyond any in the current treaties and conventions administered by the World Intellectual Property Organisation (WIPO) under the Paris Union Conventions on Industrial Property and the Berne Conventions on Copyright. The sweeping nature of the EEC proposals made some third world participants suspect that the EEC and other industrial countries (like the U.S. and Japan) are not looking for a consensus within the group on the mandate and establishment of a common negotiating basis. Rather, in this as in other areas (like investment and services), they are now pitching their demand very high in order to create a situation where the ministers meeting for mid-term review at Montreal could be "persuaded" to seek compromises that would in effect "reinterpret" the mandate and expand its scope. Discussions in the group this week would appear to have centered around two papers, one by Switzerland and the other by the European Communities, both in effect seeking sweeping changes in the GATT articles and system to secure increased protection for intellectually establishing higher norms than in WIPO and/or creating new norms where none exist, and for dispute settlement procedures. The Swiss proposal went even beyond the normal dispute settlement procedures, and sought provisions to prevent disputes from arising. This it sought to do by providing that any country planning to promulgate legislation or regulations affecting IPRS should notify the same to GATT, and give opportunity to others to make representations and/or hold "consultations". As a number of third world participants, and even some industrial country representatives, pointed out to Switzerland, such a procedure did not exist in GATT even for trade in goods. The Swiss proposal also sought to provide an indicative list of trade-distorting effects caused by existing or insufficient protection of IPRS, with the provision that any of these would constitute prima facie nullification or impairment of GATT rights - and thus subject to dispute settlement and retaliation. The Swiss also wanted a committee set up within GATT on TRIPS whose role would include setting new norms. But the major part of the criticisms and discussions would appear to have focussed on the EEC proposals. They were so sweeping and a radical departure from its past stand that a large number of third world countries were taken aback and spoke up in sharp criticism, even when they were offering only preliminary remarks. Some of them accused the industrial countries of ignoring the Punta del Este mandate, and behaving and tabling proposals on the basis of their own pre-Punta del Este stands and proposals. The Ministerial declaration has asked the negotiators to tackle two issues. In the area of IPRS, the negotiators have been asked to clarify GATT provisions and elaborate as appropriate new rules and disciplines so as to reduce the distortions and impediments to international trade. This is subject to two caveats: the need to promote effective and adequate protection of IPRS, and to ensure that measures and procedures to enforce IPRS do not themselves become barriers to legitimate trade. The second issue for negotiators is to develop a multilateral framework of principles and rules dealing with international trade in counterfeit goods. The work in the group on both these issues is made conditional on negotiations being "without prejudice" to other complementary initiatives in the World Intellectual Property Organisation (WIPO) and elsewhere to deal with these matters. In the presentations and discussions in the TRIPS group since it began work in February 1987, the industrialised countries have been consistently trying to blur the distinction between work on IPRS and work on counterfeit goods. They have also been generally proceeding on the basis that the group's mandate is to set norms and standards in the area of intellectual property, rather than reduce distortions and impediments to international trade, or to ensure that enforcement of IPRS themselves do not become a new barrier to trade. The third world countries have been challenging this, though at past meetings the opposition has come from a handful of countries, like Brazil, India and Egypt. At this week's meeting a number of third world countries appear to have reacted strongly to the EEC proposals. Those who sharply criticised the EEC proposal, and the general stand of the industrial countries, included Argentina, Brazil, Chile, Colombia, Egypt, Ghana, India, Mexico, Tanzania and Uruguay. South Korea, while not going as far as these countries on the issue of the mandate, nevertheless was reportedly critical of the Community proposals. The Asian countries, all of whom reportedly are under bilateral pressures from the U.S. on their IPR laws and regulations, did not however reportedly comment. Apart from the third world countries, Poland also reportedly spoke against the Community proposals, while New Zealand questioned the EEC effort to use the GATT instrument to require every country to accede to the latest revisions of the Paris Union Conventions on Industrial Property and the Berne Conventions on Copyright. The EEC in its paper has called for a new GATT agreement on IPRS, and said such an agreement should also encourage participants to agree to existing international conventions on intellectual property. GATT signatories would also commit themselves "to contribute positively" to expeditious elaboration of standards in other international fora, and envisage initiatives in GATT if such efforts did not succeed. Also, a GATT agreement should allow for incorporation of results of the work undertaken in other fora. The agreement should also provide for substantive standards, as an integral part of the GATT agreement and covering enforcement issues. The range of IPRS to be covered, EEC said, should include patents, trade marks, copyright, computer programmes, neighbouring rights, models and designs, semiconductor topography rights, geographical indications, and what it called "acts contrary to honest commercial practices". In the area of patents, the original Paris Union Conventions sought to establish a balance between protection of the monopoly rights of the owner of the IPR and the societal rights of the country granting protection to ensure that the patent is worked on its territory for social good and benefit. Later amendments to the Paris Convention have sought to whittle the societal rights in favour of the holders of the IPRS. Ten-year old efforts at revising the Paris Conventions to restore some of the societal rights, and build in the development focus, have been thwarted by the industrialised countries. The EEC proposals for the GATT agreement takes the issue further by totally abrogating the concepts in the Paris Convention about societal rights. The duration of patent protection in the Paris Union Convention, based on practices and provisions in the 17th and 18th century in the U.K. (where the industrial revolution began) was on the basis of the time required in an enterprise to train two journeymen. Which at that time was estimated at 14 years. But the Paris Conventions left the area of activities to be protected by patents and their duration to national laws and administrations, specifying only the same level of protection and applicability for nationals and foreigners belonging to the Paris Union Countries. The EEC’s sweeping proposals now call for 20-year life for a patent, covering both process and products, and giving the IPR holder exclusive rights. None of the EEC proposals would cover any duties or responsibilities on the IPR holders. And given that IPRS are now predominantly held by TNCS, the EEC proposals would in effect not only guarantee monopoly rentier incomes for the TNCS, but also prevent and block the third world nations from emerging as competitors in the future. In presenting its proposals, the EEC reportedly argued that the WIPO documents before the negotiating group showed the existence of a number of deficiencies in the present system. This showed that the WIPO was not able to accomplish its purpose of protecting IPRS, and the issue should therefore be taken up in GATT. The EEC proposals and approach were however reportedly welcomed by the U.S., Canada, Japan, while the Nordics found it well balanced. Brazil sharply criticised the EEC proposal for going far beyond the mandate, and said the negotiating group was losing time by discussing such ideas and straying beyond the scope of the mandate. Ghana in a comprehensive criticism of the EEC proposals, said the EEC had failed to explain the "inadequacies in IPRS" in the WIPO Conventions. The Ghanaian delegate reportedly sharply challenged the EEC view that disputes arose because of insufficient protection of IPRS, as it had claimed. The ideas in the EEC paper could not be reconciled with the mandate that the Uruguay round negotiations "shall be without prejudice" to complementary initiatives in WIPO. The substantive issues sought to be raised were not before the negotiators, and presumed that intellectual property and intellectual property rights were interchangeable. Distortions to trade, which the Punta del Este mandate has directed negotiators to reduce, were caused by the abuse of the IPRS concept by its owners through licensing agreements, the term of patents, scope of protection, and extension of scope of protection from process to products. Ghana also reportedly cited the U.S.-Japan agreement on semi-conductors as an instance where there was no trade liberalisation but a scarcity of products and jacking up of prices. The kind of enforcement that the EEC and others were seeking would not lead to expansion of trade but rather its reduction. The real purpose of the EEC and others would appear to be protection of the heavy investment of the TNCS, and not encouragement of individual initiative and inventiveness for economic and social benefits of the Community. Ghana also challenged the EEC to explain its rationale for 20-year protection. In same cases like TV, the actual use of an invention came long after the discovery, and a 20-year period would not even suffice. In the case of high technology, the life of the process or product was very short, and a 20-year protection was excessive. Ghana also questioned the EEC effort to protect "honest commercial practices", painting out that cases before the European court had brought out that "unfair competition" could not be dealt with under the Rome treaty. India was puzzled by the EEC references to national legislations not distorting international trade. If the idea was to cover cases like the section 337 of the U.S. 1934 trade and tariff act or S. 301 of the 1974 law, it could be understood. But the EEC was talking about substantive standards in national laws not creating obstacles. India could not also understand how GATT could be used to persuade or encourage states to adhere to specific conventions or to question the appropriateness of existing level or nature of IPR protection in existing national laws. This went far beyond the mandate. Nor could substantive national laws be questioned on the basis that they have some trade-related aspects. The criteria of "trade-related" were nowhere in the mandate of the group, only in the title of the negotiating group. The entire effort appeared to be force countries to accept modifications in IPR standards and norms that had not been acceptable or possible so far within the WIPO. A number of participants seemed intent on disregarding the mandate and agenda, and ignoring the jurisdiction and competence of other international organisations on the ground that their proposals were "trade-related". While draft formulations circulated by same before Punta del Este had sought the promotion of "a more effective and generalised application of existing international standards" in IPRS, this formulation was discarded in favour of the present mandate; those who now a comprehensive framework to deal with all aspects of IPRS were thus disregarding the mandate. Tanzania reportedly agreed that the EEC proposals strayed far beyond the mandate, and some of its proposals had dangerous implications. Egypt said that GATT was not the place to address IPRS, important though these be. A number of participants - Argentina, Brazil, Chile, Colombia, and Uruguay - were reportedly also sharply critical of the chairman’s proposals in a communication about the main points emerging from the discussions that could be a basis for future work. These delegations insisted on strict adherence to the mandate, and need first to establish the adverse effects on trade of existing IPRS. India felt that the points made by Ghana were relevant to any further consideration of trade-distorting or trade-restrictive effects of IPRS.