E-Commerce Returns to WTO TRIPS Council Agenda

16 June 2016

The WTO’s Trade Related Aspects of Intellectual Property Rights (TRIPS) Council discussed the topic of e-commerce last week for the first time since 2003, sources said, during a 7-8 June meeting in Geneva.

Other topics on the meeting’s agenda included sustainable resources and low emission technology strategies, and the perennial issues of non-violation complaints and the relationship between the TRIPS agreement and the Convention on Biological Diversity (CBD).

In addition, the EU presented its new Trade Mark Directive and Trade Mark Regulation, which raised concerns with some members over possible restrictions on the transport of generic medicines through the 28-nation bloc’s borders.

This TRIPS Council meeting was the second of the year, and took place under the direction of a new Chair, Ambassador Modest Jonathan Mero of Tanzania. In an attempt to move the Council away from simply restating positions, Mero reportedly suggested a greater use of informal discussions of issues, a methodology favoured in many other WTO venues.

Sources said this suggestion reportedly drew support, with both formal and informal discussions held on all topics. One delegate commented to Bridges that the approach proposed by the Chair is promising, and that they hope it will lead to progress in the work of the Council.

Canada tables e-commerce “communication”

At the WTO’s Tenth Ministerial Conference in December 2015, ministers agreed to continue the work programme on e-commerce, which was first adopted under the General Council in September 1998. (See Bridges Weekly, 26 November 2016 and Bridges Daily Update #1, 14 December 2015)

Discussions on this work programme are conducted under four WTO bodies – the Council for Trade in Services, the Council for Trade in Goods, the TRIPS Council, and the Committee on Trade and Development – with these then reporting back to the General Council.

Along with directing members to continue their work, ministers in Nairobi instructed the WTO General Council to hold periodic reviews of the work programme’s progress based on the updates from these bodies, with such reviews scheduled for July and December of this year, as well as July 2017.

In this context, Canada circulated a communication in May proposing that members be allowed “an opportunity to share national experiences and practices on intellectual property and e-commerce issues.”

These discussions, Canada indicated, could help at the national level as members develop policies in such areas, along with tracking broader global trends on the subject.

Pursuant to this idea, Canada reportedly described its experience implementing its “Project Chargeback” initiative, which fights the online sale of counterfeit goods by closing counterfeiters’ retail accounts in collaboration with credit card companies and banks.

Sources said many members spoke in favour of Canada’s suggestion, with Switzerland, the US, Chinese Taipei, and Brazil emphasising the importance of regulating e-commerce, especially given its growth since it was last considered by the TRIPS Council in 2003.

In particular, the intersection of intellectual property and e-commerce has greatly increased, with many goods and services – such as books, music, pictures, and software – protected by intellectual property rights now traded online. Furthermore, the mechanisms through which e-commerce takes place are often protected by intellectual property rights, such as patents, integrated circuit designs, and trade secrets, among others.

Brazil suggested that one key guideline underlies the overall policy discussion in this area – namely that rights usually protected outside the digital arena should also be protected within it. It was underscored by Brazil “that the territoriality of copyright and related rights, consumer protection, data protection, and the right to privacy must be incorporated in the digital environment.”

However, some members reportedly preferred that e-commerce be included on an ad hoc basis, rather than as a standing item, with India reportedly suggesting that the sharing of best practices in e-commerce be done on an exploratory basis.

According to one source, the EU stated that it had a great deal of information to share on the topic of e-commerce and that its own E-Commerce Directive, which was implemented in 2000, has many intellectual property provisions. The EU reportedly also said that it will make a number of proposals this year regarding online infringements of intellectual property rights.

Debate over EU Trade Mark Package’s impact on generics

During last week’s meeting, the EU also presented its new Trade Mark Directive and Trade Mark Regulation to WTO members.

“The main objectives of the trademark reform were to foster innovation and economic growth by making the trademark systems all over Europe more accessible, efficient, and effective for businesses and to ensure and develop coexistence and complementarity between the EU and national trademark systems,” the EU said, according to comments reported by IP-WATCH.

However, some members reportedly questioned the potential impact of the policy on the transit of generic medicines through EU borders. The provisions allow for the seizure of any counterfeit goods within the EU, even if they are merely in transit and not destined to be placed on the market within the 28-nation bloc.

Sources said that the spectre of the 2008 incident in which the Netherlands detained generic medicines on the way from India to Brazil loomed large over the discussion, with some members concerned that the EU Trade Mark Package would lead to similar seizures.

While the EU Trade Mark Package was praised for updating and clarifying existing laws regarding trademark rights, Brazil reportedly argued that WTO rules consider freedom of transit to be a “basic tenet,” and said that such goods should not face “unnecessary delays or restrictions” even when some members are trying to ensure that other rules are met.

Sources said that the EU emphasised that its policy only allows for the seizure of goods if they bear a trademark which is identical to an EU one, and that it was important not to confuse counterfeit and generic medicines. The purpose of the legislation is to prevent the trade in illegal counterfeit goods, and many members have similar legislation, including Brazil, the EU reportedly claimed.

Relationship between TRIPS, CBD

As at the previous session of the TRIPS Council, the discussion of the relationship between the TRIPS Agreement and the CBD reportedly consisted of members mainly repeating their long-established positions (See Bridges Weekly, 10 March 2016).

According to a source, many members reiterated their support of a 2011 proposal to amend the TRIPS agreement to include a mandatory requirement of the disclosure of the origin of genetic resources utilised in a patent application.

This suggestion once again failed to draw consensus among members, some of whom repeated that the World Intellectual Property Organisation (WIPO) Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge and Folklore (IGC) was a more appropriate venue for this discussion. However, the delegation from Peru reportedly expressed concern that given the lack of significant progress in the WIPO IGC negotiations, this would be an impractical alternative. (See Bridges Weekly, 9 June 2016)

Non-violation complaints

Similarly, the long-running stalemate on whether to end the moratorium on “non-violation and situation complaints” continued at last week’s meeting, according to a source.

Under the existing moratorium, WTO members are only allowed to file a complaint about an intellectual property issue if the letter of the TRIPS Agreement has allegedly been breached – basically preventing complaints that come from claims that the “spirit” of the organisation’s intellectual property rules has been violated.

The moratorium was initially set to last until the year 2000, but has been renewed regularly since, despite some members arguing that it is time to reconsider this policy.

In an attempt to break the deadlock, the US, which along with Switzerland supports the end of the moratorium, reportedly proposed considering what the effect in practice would be, and emphasised that only a small fraction of complaints under other WTO agreements – which do not have similar moratoriums – do not involve a violation.

However, most members reportedly held their positions, reiterating concerns that non-violation complaints would reduce the transparency, predictability, and flexibility of the TRIPS Agreement, as well as potentially harm access to medicine.

Sustainable resources, low emission technology

Also on the agenda was the relationship of intellectual property with sustainable resources and low emission technology, following a proposal from the EU, Japan, Switzerland, and the US which was co-sponsored by members such as Canada, Singapore, and Chinese Taipei. Many members emphasised the importance of innovation and intellectual property in addressing issues such as climate change, food security, and improvement of health.

The EU reportedly described various initiatives, such as its Science Policy Dialogue project and the 2020 Horizon Program, which increase collaboration with developing countries and open access to research. The EU also described its involvement in several projects aimed at improving water management and water and sanitation technologies.

The US noted that there has been an increase of 20 percent in the rate of patent applications for clean technologies since the TRIPS Agreement entered into force, sources said. In particular, Africa has made progress in clean technology innovation, with a significant increase in patent applications for green technology according to a study by the United Nations Environment Programme (UNEP) and the European Patent Office (EPO).

The US reportedly also described the “patent for humanity” programme of its Patent and Trademark Office, which awards accelerated patent-granting procedures to innovators of game-changing technology. One such innovator included a private firm that created a powder which made dirty water safe to drink, which was distributed in partnership with NGOs and provided five billion litres of clean drinking water.

Other members, including Australia, Canada, Chinese Taipei, South Korea, and Switzerland, also reportedly shared their intellectual property initiatives relating to sustainable resources and low emission technology. However, India said that protecting intellectual property is only one aspect of promoting innovation, and that a broad and balanced approach is necessary, according to sources familiar with the meeting.

“In over twenty years of work, the TRIPS Council has built a unique role as a multilateral forum for WTO member governments to explore current issues, to map the evolution of diverse national law and policy across the globe, and to promote cooperation and capacity building so IP systems can serve development goals,” said Antony Taubman, Director of the WTO’s Intellectual Property Division, in e-mailed comments to Bridges.

“Yet several major unresolved issues remain on its agenda. This latest session of the Council showed a willingness to look ahead, to consider how to resolve the established issues, but also to discuss emerging challenges, notably in the digital environment and in the innovation and dissemination of green technologies,” he continued.

ICTSD reporting; “New Ideas Coming For WTO TRIPS Council; But Also Old Debate Over EU Drug Seizures,” IP-WATCH, 9 June 2016; “Chair seeks to “revitalize” TRIPS Council discussions on intellectual property,” WTO, 7 June 2016.

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