[Ip-health] IP-Watch: The South Strikes Back Against Overreaching IP Enforcement

[kaitlin mara]

Full Story: http://www.ip-watch.org/weblog/wp-trackback.php?p=3D1229

Intellectual Property Watch

17 September 2008: The South Strikes Back Against Overreaching IP Enforceme=
nt

By Catherine Saez, William New and Kaitlin Mara
Developed nations are overreaching in their broad push to escalate
enforcement of intellectual property rights and their efforts should
be reined in and centralised in the World Intellectual Property
Organization, say leading developing nations led by China. This
especially applies to a secret negotiation led by the United States,
Europe and Japan to create an Anti-Counterfeiting Trade Agreement
(ACTA), they said.

"We have got some concerns regarding the negotiation of ACTA," said
Yusong Chen of the Chinese mission, adding that "this could be the
most strange and most dangerous" international agreement on IP rights.
International consumer groups also are up in arms about ACTA.

Viviana Mu=F1oz Tellez of the South Centre said concerns about the
heightened enforcement initiative include a lack of agreement on
definitions, lack of robust and reliable data, and a lack of
understanding of the problem before rushing to solutions. Her comments
were echoed by numerous speakers throughout the day-long event on 16
September sponsored by the South Centre.

Mu=F1oz Tellez said the concern about forum shopping may be better
described as forum "capture," as it involves capturing the agenda of
various institutions and other fora.

Henrique Choer Moraes of the Brazilian mission in Brussels said that
while forum shopping itself is nothing new, what is new and
problematic is the process of forum shopping in bodies meant to be
strictly technical, where there are no experienced negotiators with
informed opinions on IP policy matters.

Mu=F1oz Tellez noted limits on enforcement under laws such as the World
Trade Organization Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS). For instance, IP rights are private rights,
making enforcement the primary responsibility of the rights holders,
not their governments. Also, TRIPS provides for exhaustion of IP
rights after sale, and it gives flexibility to nations as they provide
"effective action" against IPR infringement, plus requires that
enforcement not create trade barriers and contain safeguards against
abuse.

Chen and others suggested the ACTA might create such trade barriers
and harm consumers, domestically and outside the signatory nations.
The ACTA is being negotiated in secret, has a "lack of democracy," and
lack of balance as it relies overly on industry groups and rights
holders with no representation from the consumer side, Chen asserted.
And as the law enforcement side rises, individual legal rights may be
diminished, he and others said.

Speakers discussed the many fora in which developed nations are
pressing for new enforcement measures that would reach beyond TRIPS,
even though least-developed nations are not required to implement
TRIPS before 2013, and some larger developing countries have suggested
implementation has been harmful to their economies.

Fora in which stronger enforcement measures have been proposed
include: the WTO Council on TRIPS, the World Intellectual Property
Organization (WIPO), Anti-Counterfeiting Trade Agreement (ACTA), World
Health Organization (WHO), World Customs Organization (WCO), Interpol,
Universal Postal Union, bilateral free trade agreements, and others.

Moraes called the WCO a "safe haven for the TRIPS-plus agenda," where
IP enforcement efforts would "over-empower customs to the detriment"
of other agencies. This is particularly notable in a proposed standard
of the SECURE working group - which is drafting IP regulations for
customs officials - that would allow applications from private rights
holders directly to customs officials (bypassing judges and other
proper authorities).

Many of the proposals put forth at WCO would be "impossible" in more
political fora, Moraes said, such as model IP legislation that
explicitly states that only by surpassing TRIPS regulations can
adequate IP enforcement at the borders be achieved, or that tampering
with digital rights management constitutes an IP violation. WCO's
relative isolation from political fora, coupled with its
"unprecedented" policy of copyrighting its reports and proposed
legislation, and keeping original reports under password-protection,
has meant resistance to these enforcement mechanisms has been hard to
coordinate.

The UN Universal Postal Union Congress in August adopted a resolution
(number 40) that encouraged members to identify counterfeit and
pirated items in the postal network and to cooperate with the relevant
national and international authorities in awareness-raising
initiatives to prevent illegal circulation of counterfeit goods, the
Third World Network reported. But a number of countries were concerned
that the postal service did not have the scope or necessary legal and
other expertise to implement such a resolution, in particular the
expertise to determine whether a product is counterfeit or violates IP
laws. The resolution's adoption was appealed. The UPU did not respond
to repeated requests for comment.

WIPO Central

Developing countries seemed to reach consensus that all enforcement
efforts should be channelled through WIPO as the central United
Nations forum dealing with IP issues. But developed countries may be
reluctant to do so as developing countries have so far forcefully
restricted discussion of IP enforcement to an advisory committee with
no policy-making powers. The countries that initiated the ACTA
negotiations also have sought to gain ground through the TRIPS Council
and met with the same resistance.

But developing countries maintain the issue can be discussed at WIPO.
"It is very important to enhance WIPO to take advantage of the
principles consecrated by the WIPO Development Agenda," said Cristiano
Berbert of the Brazilian mission. "Wherever the issue of enforcement
comes outside =85 WIPO, it undermines balance." The Development Agenda
contains a provision requiring enforcement to be in line with
international agreements, he said. TRIPS Article 7 requires that
enforcement and protection contribute to innovation, technology
transfer and be conducive to social and economic welfare as well as to
a balance of rights and obligations, he noted.

A developed country official told Intellectual Property Watch that the
ACTA does not appear to be on track for completion this year, as
originally targeted. The official also said participating nations have
the general expectation that the final agreement will not require
significant changes to their national laws.

On Tuesday, more than 100 international public interest organisations
issued a call to officials from the countries negotiating ACTA to
immediately publish the draft text of the agreement. Additional
countries in the talks are Australia, Canada, Mexico, New Zealand, and
South Korea. "Secrecy around the treaty negotiation has fuelled
concerns that its terms will undermine vital consumer interests," they
said. For instance, it may: require internet service providers to
monitor all internet communications; interfere with fair use of
copyrighted materials; criminalise peer-to-peer electronic file
sharing; and undermine access to low-cost generic medicines, they
said.

Positive steps suggested by speakers included focussing on
implementation of the WIPO Development Agenda, stepping up
negotiations at the WTO on strengthening protection of traditional
knowledge and biological diversity, improving technology transfer, and
focussing on the impact of intellectual property rights and standards.
"Unless we have a more balanced international regime on IP and
standards, the issue of enforcement should not be a priority for
developing countries," Chen said.

Enforcement of IP rights should be adapted to particular countries and
flexibilities should be used, said Carlos Correa from the University
of Buenos Aires. IP rights being private rights, part of the
enforcement should be borne by the beneficiaries, he said. A model for
enforcement measures should be set up that takes into account the
specific conditions of developing countries.

Private sector contributions to enforcement should be based on revenue
to avoid discrimination against smaller companies, according to
Christoph Spennemann from the UN Conference on Trade and Development
(UNCTAD).

Trade Woes

Separately, Hong Xue from the University of Hong Kong argued that a US
WTO challenge against China lacks merit because WTO members are free
to implement TRIPS as appropriate. On a US claim that foreign authors
are denied copyright prior to publication or distribution in China,
she referred to article 17 of the Berne Convention, which gives the
"possibility of control of circulation, presentation and exhibition of
works" to its member, adding that this article should be included into
TRIPS.

Another initiative that came under fire is the annual "Special 301"
report of the US Trade Representative's office, which singles out
trading partners USTR sees as providing inadequate protection for US
intellectual property rights. Sean Flynn of the American University
law school Program on Information Justice and Intellectual Property
argued that the Special 301 process could be in violation of WTO rules
as it sets WTO members up for trade sanctions even if they do not
violate WTO agreements, but rather for failing to meet TRIPS-plus
standards.

According to Flynn, the 301 process is an informal adjudication as the
inclusion of nations in special 301 reports is largely determined by
US businesses, whose data should be challenged. He suggested
challenges to arbitrary decisions under US law and political
processes, as well as a WTO challenge. There may be grounds to argue
the United States' unilateral enforcement is discriminatory and
arbitrary, he said, and US decisions regarding the Special 301 might
be appealed at the WTO as well.

Meanwhile, economist Carsten Fink suggested more evidence is needed to
confirm claims of involvement of organised crime in IP infringing
activities, as it is difficult to pin down. A 2007 study by the
Organisation for Economic Cooperation and Development (OECD), that
estimated global trade in IPR-infringing goods at US$200 billion in
2005, was just an "educated guess," he said.

It also showed that the majority of counterfeit products is in areas
such as fashion apparel, audiovisual recordings and software, which
cause no significant harm to consumers. In addition, he questioned
industry methodology in its assessments of lost revenues due to
piracy. For instance, he said, the Business Software Alliance, in its
annual analysis, assumes that all consumers of pirated software would
switch to legitimate copies at their current prices.

Fink concluded by suggesting that much of the lack of enforcement in
developing countries may be better attributed to institutional
deficiencies that "cannot be easily addressed through international
treaties and development aid." He found a very high correlation
between levels of piracy and the economic standing of countries, where
more piracy occurs in worse-off economies.

Counterfeit Medicines

Valerio Reggi, executive secretary of the WHO-led International
Medical Products Anti-Counterfeiting Taskforce (IMPACT), said he did
not understand the opposition from some member states at the May World
Health Assembly to a resolution aimed at strengthening the WHO's
assault on counterfeit medicines. He singled out India. The WHO is
continuing its efforts this year, a source said afterward.

Some opposing countries during the assembly said they wanted more time
to consider the issue, and were displeased at the effort to push the
issue through without full support from the WHO membership. Some
criticism also was levelled this week on IP rights holders for using
fear to thwart markets for infringing goods.

Counterfeit medicine is a public health problem, not an IP problem,
Correa said. The fight against counterfeit medicine should be
undertaken by legislation, like medicine approval and control of
production, he said.

Biotech and IP Abuse

Correa suggested that developing countries should develop their own
set of data and should start recording anti-infringement abuses. He
presented the case of Monsanto against Argentina concerning Roundup
Ready soybeans in which the company sought compensation for its
technology even though the modified bean technology is in the public
domain in Argentina. When such compensation was not forthcoming,
Monsanto tried to use patents obtained in the EU to stop Argentina's
imports of processed soy flour to Europe.

Soyflour is a derivative product of soybeans and the patents cover
genetic sequences within a living soy plant. According to EU
biotechnology directive (Art. 9) a gene "should perform its
functions," which is rendered impossible by the processing needed to
make the soy plant into flour. But some European countries complied
with Monsanto's claim and stopped imports based on the suspicion of
patent infringement. "Patent infringement is very hard do determine by
custom officers" who might not have the expertise, Correa said. "This
is why alleged patent infringement is so dangerous."

"We are moving toward a fragmented world" which can no longer face
global challenges Spennemann concluded. "There is a reduced
comprehension of the other side's position" and a much needed
collaboration needs to take place in order to instil a sense of
ownership in all.

The authors may be reached at info@ip-watch.ch.