TRIPS COUNCIL MEETING SUSPENDED IN EFFORT TO MEET PUBLIC HEALTH DEADLINE

Public health and biodiversity issues were again the items sparking the most discussion at the meeting of the WTO Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS) on 8-9 March 2005. Members were unable to reach consensus on how to formally amend Article 31 of the TRIPS Agreement in order to facilitate the export of drugs produced under compulsory licence. They agreed to suspend the meeting while the Chair continues consultations in an attempt to meet the 31 March 2005 deadline for doing so (see below for details).

Biodiversity-related discussions focused on the issue of misappropriation of genetic resources through patents. A new developing country submission proposed mandatory rules for disclosing evidence of benefit-sharing under relevant national regimes.

Members split over African Group proposal on implementation of 30 August Decision

Discussions at the TRIPS Council are centred around a 30 August 2003 Decision by the General Council that spells out the circumstances under which countries without pharmaceutical manufacturing capacity can import generic versions of drugs still under patent. The Decision temporarily waives Members' obligations under TRIPS Article 31(f) by allowing them to export pharmaceuticals produced under compulsory licence -- subject to a large number of conditions in both the exporting and importing country. In the Decision -- the adoption of which was accompanied by a statement from the Chair of the General Council assuring that it would not be misused -- Members agreed that the waiver would last until the TRIPS Agreement is permanently amended. The already-extended deadline to do this is 31 March.

Public health-related discussions focused on a submission from Rwanda on behalf of the African Group (composed of African WTO Members) containing legal arguments supporting the group's December 2004 proposal for the amendment of Article 31 of the TRIPS Agreement (IP/C/W/437, see BRIDGES Weekly, 8 December 2004). The submission addresses the legal form of the amendment, justifications for the modification of the 30 August Decision, and the status of the Chair's statement. The communication contends that a footnote would not suffice for the amendment of TRIPS Article 31, because a footnote would not provide sufficient certainty and legal security with respect to the implementation of the amendment. Thus, the African Group argues, the amending text should be inserted into the body of the Agreement.

The African Group proposal also suggests eliminating a number of provisions in the 30 August Decision. The submission says that these modifications would simply remove provisions whose purpose had already been served or that would be redundant in the context of an amendment, as well as those whose purpose would otherwise be served by other provisions of the TRIPS Agreement. In regard to the Chair's statement, the African Group's proposal denies that it is an integral part of the 30 August Decision. Consequently, it should not be part of the amendment. However, as proposed by the African Group, Members could consider reading the Chairman's statement at the time of the adoption of the amendment.

Discussion and comments on the submission reaffirmed the positions taken by Members at the December TRIPS Council meeting. The EU concurred with the US, stating that the African Group's proposal did not reflect all the elements of the 30 August Decision and was, therefore, unacceptable. However, the EU did agree with the African Group's argument that the footnote approach was not the best solution to amend the TRIPS Agreement. It also supported the proposed option of reading the Chair's statement at the time of the adoption of the amendment. Other developed countries such as Switzerland, Japan, and Canada said that the Chair's summary was, in their opinion, an essential part of the Decision and a key element in their willingness to agree on the Decision. They stated their preference for the footnote approach, but showed some willingness to consider alternative solutions. On the other hand, several developing countries, including Argentina, Brazil, Hong Kong-China, India, Jamaica, Kenya, Malaysia, and the Philippines supported the African Group's proposal. They stressed that the Decision and the Chair's summary had different legal status and that including the latter in the amendment would unjustifiably upgrade its legal status. Some developing countries recalled that the main purpose of the 30 August Decision was to provide an answer to a humanitarian problem, and that its implementation should be carried out in that spirit. All developed and developing countries expressed their commitment to meet the agreed deadline of 31 March 2005 to amend the TRIPS Agreement.

Members accepted the proposal by TRIPS Council Chair Miller of Hong Kong, China to continue the consultations aimed at finding a solution within the agreed deadline. However, his proposal to discuss the text of the Decision paragraph-by-paragraph was rejected by the Unites States and Switzerland, which argued that this approach would de facto reopen negotiations on the Decision. Thus, countries agreed to suspend the session while the Chair continued consultations aimed at meeting the 30 March 2005 deadline.

Developing countries propose international rules on evidence of benefit-sharing

Bolivia, Brazil, Colombia, Dominican Republic, Ecuador, India, Peru, and Thailand tabled a new proposal (IP/C/W/442) at the meeting on the issue of evidence of benefit-sharing in patent applications. Their submission was in response to the Doha mandate on IPRs, which instructs Members to consider the relationship between the TRIPS Agreement and the Convention on Biological Diversity, the protection of traditional knowledge (TK) and folklore as part of their review of TRIPS Article 27.3 (b), which deals with the patentability of life forms. The submission focuses on the third major issue set out in the March 2004 'checklist' of topics for consideration in TRIPS Council discussions on biodiversity put forward by these and other developing countries -- i.e., evidence of equitable sharing of benefits that arise from the use of genetic resources. Prior submissions by the group dealt with the first two issues of the checklist, i.e. the disclosure of the source and country of origin of biological resources and/or TK used in an invention (IP/C/W/429, see BRIDGES Weekly, 22 September 2004) and providing evidence of prior informed consent for patents that involve the use of biological resources (IP/C/W/438, see BRIDGES Weekly, 8 December 2004).

The new proposal outlines a number of criteria for the determination of evidence of fair and equitable sharing of benefits arising from the use of genetic resources, such as the prior informed consent of the party providing the resources and mutually agreed terms for the sharing of benefits. As with the other checklist issues, the proponents of this submission favour amending the TRIPS Agreement to accommodate the obligations of disclosure of origin, prior informed consent and evidence of fair and equitable benefit sharing.

Members largely took the same positions as they had in discussions on the other checklist items. Developing country Members stressed the importance of a mandatory international system to address cross-border misappropriations of genetic resources. Developed countries contended that the TRIPS Agreement and the CBD are not in conflict with each other, making it unnecessary to amend the TRIPS Agreement.

Peru said that the current patent system was not conducive to preventing misappropriation, pointing to the enormous costs involved in examining whether patent applications in third countries involve domestic genetic resources. Such search costs could be avoided through internationally enforceable rules on disclosure of origin as part of the international patent system. Brazil reminded Members that the CBD contains a provision that states that intellectual property rights should support the CBD objectives of preservation of, access to and benefit sharing of the use of genetic resources -- not run counter to them.

Other Developments

The EU announced that it was submitting a paper on IPRs enforcement, and requested that counterfeiting be included in the agenda for the next TRIPS Council meeting. This request met with strong opposition from developing countries. Also, the EU stressed its intention to discuss the implementation of past TRIPS-related panel/AB reports at the next meeting.

The next meetings of the TRIPS Council are scheduled for 14-15 June and 25-26 October 2005.

Rising frustration in GIs extension debate

The TRIPS Council meeting was followed by the second session of the WTO Director-General's technical consultations on the issue of extending geographical indications (GI) protection to products other than wines and spirits (the consultations were mandated by the July Package). During the meetings, proponents of the GI extension displayed increasing frustration about the current deadlock of positions. However, some of them, such as Bulgaria, indicated their willingness to make concessions in other negotiating areas.

Opponents such as Australia, Canada, the US and Chile reiterated their concern about additional costs that would result from an extension, in particular with respect to GIs currently used as generic terms in these countries. They challenged the proponents of GI extension to illustrate what the consequences of extended protection would be for generic producers of, for example, feta cheese.

These discussions are scheduled to continue in April.

ICTSD reporting.