[Ip-health] No Blanket Extension of Transition Period for LDCs says some Developed countries

[Sangeeta]

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Least Developed Countries have submitted a "duly motivated" request for a 15
year extension of transition period to apply the TRIPS Agreement.

Their argument among others is that as LDCs they have economic, financial
and administrative constraints and there is need for flexibility to create a
technological base.



However, a number of developed countries indicated that they were not in
favour of granting an extension to LDC members en bloc, but instead wanted
requests to be considered on an individual basis.



The US said it understood the concern of LDCs...and said that strong IP
protection can be complementary and necessary for creating a viable
technological base. It said that there are recent studies that have shown
that there is a link between the TRIPS Agreement and transfer of technology.



It expressed concern about a blanket extension to LDCs, saying that
different LDCs are at different levels of implementation. It indicated that
the decision

would need to be based on national experiences and more information was
needed from individual countries over particular areas where support was
required.



Switzerland said that it is the legitimate right of LDCs to deposit a
request and such a request is timely, but added that the state of play in
each country should be

looked at.



The EU and Norway said they need more time to study the LDC proposal. The EU
said it would take account of all concerns, including those of Japan and
others.



Below is the latest news from the SUNS on developments that took place in
the TRIPS Council last Friday on this issue.



------------------

SUNS #5906 Tuesday 1 November 2005



south-north development monitor SUNS



Trade: TRIPS Council discusses LDC request on TRIPS extension



Geneva, 30 Oct (Sangeeta Shashikant) -- The TRIPS Council at its meeting on
28

October could not agree to grant the least developed countries (LDCs) a
15-year

extension of the transition period to apply the TRIPS obligations as
requested by

the LDCs in their paper dated 13 October (IP/C/W/457).



The Chairman of the Council, Ambassador Choi Hyuck of Korea, will hold

informal consultations on this issue and on TRIPS and public health and

TRIPS/CBD relations, and could re-convene the Council in the next weeks for

decisions or further discussion.



The LDCs have proposed that the extension be granted to all LDC members when

the present transition period ends at the end of this year. At the meeting,
many

developing countries supported the proposal, but Japan, the US and
Switzerland

indicated that while they were willing to consider the extension, they would
like to

assess the situation in each country individually as conditions differ from
country

to country. The EU and Norway said they needed more time to study the
proposal.



The LDC members under Article 66.1 of the TRIPS Agreement were given a

10-year transition period to not apply the TRIPS obligations, which expires
on 31

December.



This initial transition period was granted in view of the "special needs and

requirements of least-developed country Members, their economic, financial
and

administrative constraints, and their need for flexibility to create a
viable

technological base".



Article 66.1 allows LDCs the option of making a "duly motivated request" for

further extension of the transition period, following which the TRIPS
Council

"shall accord extensions of this period".



Ambassador Choi suspended the meeting for informal consultations on the LDC

request as well as on TRIPS and health (to find a "permanent solution" to
ensuring

supply of medicines for countries with no or insufficient drug manufacturing

capacity) and the proposal of some developing countries to amend the TRIPS

Agreement so that countries' laws would require patent applicants to
disclose the

source of origin of biological material and related traditional knowledge.



The Zambian Ambassador Love Mtesa, on behalf of the LDC members,

introduced the LDC request for extension of the transitional period.



He said the exemption set out in TRIPS Article 66.1 was granted in
recognition of

the economic, financial, and administrative constraints faced by LDCs that

prevented them from observing immediately all the obligations set out in the

TRIPS Agreement. It also reflects the fact that LDC Members have special
needs

and requirements, including the need for flexibility to create a viable
technological

base.



He outlined reasons why the LDCs are making the request. The socioeconomic

situation of LDCs have changed very little over the past ten years to enable
them

to comply with their TRIPS obligations. LDCs have competing needs against

grave financial inadequacies which have made it difficult for them to meet
several

obligations including compliance with TRIPS; for example, they require

immediate attention to health, education and food security.



Mtesa said a viable technological base is a fundamental requisite to
implementing

an effective IP system. LDCs have an inadequate technological base that
would

support an effective system of IPR protection and have barely developed

institutional linkages that would support implementation of obligations
under the

TRIPS Agreement. These countries therefore require additional time to
formulate

and implement IP laws and policies in appropriate ways to achieve national

priorities and needs.



Compliance with TRIPS provisions also requires alignment of national laws
with

various fields, such as civil and criminal procedures in courts,
administrative

procedures, intervention of police and customs authorities. Most LDC
economies

are faced with human resource constraints to administer, implement and
enforce IP

legislation. Upgrading the existing institutional framework would require

extensive financial resources, "an issue beyond our current national
budgets," he

added.



He said that several studies including by the World Bank have shown that the

process of becoming TRIPS compliant, i.e. drafting legislation, setting

up/upgrading appropriate institutions and providing sufficient human
resources

and enforcement mechanisms all involves substantial costs. The 2002 World

Economic Prospects report of the World Bank states that if training costs
were

included, a comprehensive upgrade of the intellectual property rights regime
in the

poorest countries would require an expenditure of $1.5 to $2 million plus
recurrent

costs. Other studies have estimated even higher costs.



These weaknesses and vulnerabilities constitute special circumstances that
require

LDCs to have "maximum flexibility in the domestic implementation of laws"
(as

stated in the TRIPS preamble).



The Ambassador expressed hope that during the 15-year transitional period,

developed countries would undertake more commitments to provide incentives
to

enterprises and institutions in their territories to promote technology
transfer to

LDCs, in line with Article 66.2 of the TRIPS.



Brazil said it believed that the request by the LDCs is entirely justified.
There are

indeed concerns that the TRIPS Agreement may not be a development-friendly

agreement. It said that Brazil had to cope with numerous social, economic
and

administrative costs and balance of payments problems. It encouraged all

Members to agree to the request.



Argentina said that recent studies show that IP does not seem to have played
an

important role in underdeveloped countries and there is no guarantee of
transfer of

technology. It said that more needs to be done to create a proper balance of
transfer

of technology to meet the developmental objectives. It also said that
national IP

policies must be consistent with national public, cultural and social
requirements.



Also speaking in support of the LDC request were India, Venezuela, Colombia,

Senegal, Uganda, Lesotho, Cambodia.



However, a number of developed countries indicated that they were not in
favour

of granting an extension to LDC members en bloc, but instead wanted requests
to

be considered on an individual basis.



The US said it understood the concern of LDCs in making the request. It
disagreed

with Argentina and Brazil and said that strong IP protection can be
complementary

and necessary for creating a viable technological base. It said that there
are recent

studies that have shown that there is a link between the TRIPS Agreement and

transfer of technology.



It expressed concern about a blanket extension to LDCs, saying that
different

LDCs are at different levels of implementation. It indicated that the
decision

would need to be based on national experiences and more information was
needed

from individual countries over particular areas where support was required.



Switzerland said that it is the legitimate right of LDCs to deposit a
request and

such a request is timely, but added that the state of play in each country
should be

looked at.



Also discussed by the Council on 28 October were non-violation complaints
and

the EC proposal on enforcement of IPRs.



On the applicability of 'Non-Violation' Complaints to the TRIPS agreement,

positions have remained unchanged. The US and Switzerland want the
moratorium

to lapse in Hong Kong. Some would like to have further discussion.



Other Member states including Canada, Ecuador, Cuba, the EC, Chile, India,
and

Argentina are in favour of declaring that non-violation complaints are not

applicable to the TRIPS Agreement.



Non-violation complaints allow countries to bring a complaint to the Dispute

Settlement Body, even if there is no breach of any obligation under the
Agreement

by another party to the agreement, so long as the country bringing the
complaint is

able to prove it has been deprived of an expected benefit because of the
existence

of a particular circumstance in the other Member state.



Article 64.2 of the TRIPS Agreement put a moratorium on the application of

non-violation complaints to the WTO dispute settlement procedure for the
first

five years of the WTO (from 1995 to 1999).



The Doha Decision on Implementation-Related Issues and Concerns (Paragraph

11.1) instructed the TRIPS Council to continue its examination of the scope
and

modalities for non-violation complaints and to make a recommendation to the

Cancun Ministerial Conference. Until then, members agreed not to file

non-violation complaints under TRIPS.



Whether non-violation complaints should be allowed in intellectual property
issues

and if so, to what extent and how ("scope and modalities") they could be
brought

to the WTO's dispute settlement procedures has been discussed at the past
TRIPS

Council meetings but without any agreement. At this meeting as well, the
Chair

indicated that he will not be in a position to make a recommendation.



The EC's proposal on Enforcement of IPRs (IP/C/W/448, dated 9 June 2005),

wants the TRIPS Council "to carefully examine compliance of Members with the

enforcement provisions of the TRIPS Agreement, pursuant to Article 68 of the

TRIPS Agreement."



The EC wants the TRIPS Council to take on the role of a "watch dog", in
ensuring

that Members provide for "effective action" against any act of IPR
infringement

under Article 41.  The Council should also set the minimum norms to be

implemented to ensure higher levels of IP enforcement.



The proposal was supported by several developed countries, but many
developing

countries opposed it, saying the proposed measures went beyond the
competence

of the TRIPS Council and would overburden the Council. Countries including

Brazil, Argentina, India, Egypt and China were not in favour of discussing
this

matter in the TRIPS Council.



Brazil said that while it recognized that piracy and counterfeit constitute
severe

problems, it disagreed with the EC approach on what the TRIPS Council should

undertake. It said that the implementation of TRIPS is still on-going as
transition

periods have only recently expired. LDCs still enjoy the transition period
and there

is a request by the LDCs for further extension of that transition period.



It called the EC approach unbalanced and unfair and indicated that it was

premature to engage in a discussion on the effective implementation of IP.
It asked

that the discussion on the proposal be removed from the TRIPS Council
Agenda.



Egypt also said that the EC proposal would be burdensome for developing

countries to include it on the agenda and could complicate enforcement

procedures.



China indicated that the issue of IP enforcement is already being discussed
in

WIPO and the TRIPS Council should concentrate on discussing matters
pertaining

to public health and the relationship between TRIPS and CBD.



Tentatively, the TRIPS Council meeting dates for 2006 are: 14-15 March,
14-15

June, and 24-25 October.

+



Sangeeta Shashikant

Third World Network

36 Rue de Lausanne

2nd Floor

1201 Geneva

Tel (O): 41 (0) 22 908 3550

Fax: (O): 41 (0) 22 908 3551

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