AIPPI CONGRESS
Melbourne, March 24 to 30, 2001
Workshop IV
New developments in the application of TRIPS
Monday, 26 March 2001
Chair:Professor Esmé Du Plessis (South Africa)
Speakers:Dr Martin Lutz (Switzerland)
Dr Mihaly Ficsor (Hungary)
Mr Tony Taubman (Australia)
Reporter:Wayne Condon (Australia)
-The TRIPS Agreement after Seattle, December 1999:
- review of national laws and regulations
- geographical indications
- patent protection
- incentives to least developed countries
- parallel imports
- e-commerce
-The WTO dispute settlement mechanism.
-The inter-operation of WIPO Conventions and the TRIPS Agreement.
-WIPO Internet treaties.
-TRIPS Council debate on geographical indications.
Summary Report
by Wayne Condon
The eminent speakers covered a wide range of topical issues such as indigenous rights, human rights versus IP rights, WTO dispute resolution mechanisms and geographical indications all within the context of the application of the TRIPS Agreement and its surrounding political context.
The workshop was chaired and introduced by Professor Esmé Du Plessis (Adams & Adams). Professor Du Plessis gave an excellent overview of TRIPS, placing it an historical context. The TRIPS Agreement is, of course, part of an on-going dynamic and, as such, it will remain a critical impetus to the future development of global intellectual property laws. Obviously, these developments will be of special relevance to developing countries and it is, perhaps, here that one can see great capacity for controversy. Professor Du Plessis, in this regard, touched on the issue of protection of indigenous knowledge - a topic of considerable importance and not just in the area of bio-prospecting. These rights will have an impact on a wide range of countries. Professor Du Plessis specifically referred to recent developments in Peru and Brazil but I would mention that developments in this area may also have profound impact in countries as diverse as the Indian sub-continent, New Zealand, and, of course, in Australia.
Professor Du Plessis then touched upon the fine balance between providing sufficient incentive for medical research and development and providing access to new and existing drugs to the populous - particularly in the developing countries.
The first speaker was Dr Martin Lutz of Lenz & Staehelin in Zurich who spoke about the TRIPS Agreement after Seattle. The second speaker was Dr Mikaly Ficsor, the President of the Hungarian Copyright Council and former Assistant Director General of WIPO. Dr Ficsor spoke about the TRIPS Agreement and the application of the dispute settlement mechanism for IP cases from his highly qualified perspective. The final speaker was Mr Tony Taubman from the Australian Department of Foreign Affairs and Trade. He spoke about the ongoing debate relating to the protection of geographical indications within the context of TRIPS.
The speakers papers which follow are highly recommended reading. A summary of each speaker's presentation is set out below.
Dr Martin Lutz
Dr Lutz gave a particularly useful overview of discussions taking place in accordance with the ongoing agenda of the TRIPS Agreement from the Seattle meeting in December 1999 to date.
Dr Lutz reflected on the fact that TRIPS was on the offensive until the Seattle meeting but has been on the defensive since then. He predicted that at the next Ministerial conference in November 2001 there will be a low-key profile adopted with the intention of consolidating ground already gained.
Dr Lutz then summarised the issues addressed by the WTO/TRIPS Council during 2000. Dr Lutz categorised those issues as falling into three groups:
1.those relating to the implementation of the provisions of TRIPS as presently in force;
2.those forming part of the built-in agenda of TRIPS; and
3.some additional issues that do not come under a common heading.
Review of national laws and regulations - Article 63, paragraph 2 of TRIPS
The TRIPS Council is required to carry out a systematic review of the legislation of each member nation pertaining to the implementation of the TRIPS Agreement. A grace period for developing countries expired on December 31 1999 and some 42 member countries notified new legislation in the Year 2000 which the TRIPS Council is required to review. Dr Lutz observed that, as very few developing countries appeared on the list of dispute settlement preliminaries or dispute resolution proceedings, this suggested that the developing countries are living up to their obligations in implementing the TRIPS Agreement.
Geographic indications
Dr Lutz referred to two areas of controversy in relation to geographical indications. The first was whether registration of a geographical indication for wines or spirits should create binding obligations on member nations to protect those registered indications even if, in the territory of that member nation, the indication concerned is not considered to be a distinctive geographic indication. Secondly, the issue has arisen as to whether geographical indications should be extended beyond simply wine and spirits. This debate has the European Union, Eastern European and several Asian countries lining up in favour of extending protection with the United States, Canada, Australia and New Zealand and some South American countries opposing any extension to the protection of geographical indications. Dr Lutz observed that the initiative at this stage rests mainly with the European Union.
Patent protection and the built in agenda of Article 27, paragraph 3 of TRIPS
Dr Lutz referred to the tension between the TRIPS Agreement and the Convention on Biological Diversity. Reference was made to the position of Brazil which has put forward the view that TRIPS should be reviewed so as to provide for a benefit sharing by both providers and users of genetic resource material. Dr Lutz described this as a "unresolved question" and undoubtedly much more dialogue will occur in relation to this topical but difficult issue.
Dr Lutz also took up the issue of the protection of indigenous knowledge referred to by the Chair in opening. Although it is debatable to what extent indigenous knowledge can be protected as a matter of patent law Dr Lutz acknowledged that there is a concern amongst some member nations that traditional or indigenous knowledge could be monopolised by outsiders under TRIPS to the detriment of the indigenous holders of that knowledge. The quest identified by Dr Lutz was to find a fair solution to the protection of indigenous knowledge without distorting the patent system.
Another cause of tension is the relationship between human rights and patent protection. That tension is brought into stark relief in connection with the human right to health. Dr Lutz referred to the possible contrast between the grant of intellectual property rights as protected by TRIPS and the more general human right "to enjoy the benefits of scientific progress and its application". Clearly a balancing process is required and in an international context, with so many agendas and political imperatives, the achieving of a global balance will not be easy. Dr Lutz made the observation that neither WIPO nor TRIPS has been successful in activating the creativity potential of developing countries and that all efforts must be centred on activating local creativity in developing countries so as to provide motivation to those countries to stand fully behind an IP system.
Black box patent applications in developing countries
Under Article 70 of TRIPS developing countries were required to accept patent applications for pharmaceutical and agricultural chemical products even though they had been granted a 4 year grace period under Article 65. The applications where therefore placed on hold for processing at the given time (so called black box patent applications).
As the grace period expired as of December 31 1999 patent offices in many of the developing countries were required to process the applications. Many countries have found however that "black box" applications have accumulated to such a degree that they can not reasonably cope within an inadequate time frame and, accordingly, the implementation of Article 70 of TRIPS is under examination.
Non-violation complaints under TRIPS
The "non-violation" complaint was created to deal with breaches of the spirit if not the wording of TRIPS. Dr Lutz confirmed that there have been no "non-violation" complaints in connection with TRIPS so far.
Semi-dormant issues
Dr Lutz was sceptical about whether new WIPO treaties will be incorporated into TRIPS. This can only be done by a Ministerial Conference. Nor did he think that there would readily be an extension of TRIPS to other intellectual property rights beyond the built in agenda items.
Dr Lutz observed that there were a vast array of differing practices relating to parallel imports amongst member nations and that it would be desirable to have uniform rules, perhaps with the backing of TRIPS. Again, however, Dr Lutz was not confident that this issue would be addressed by TRIPS in light of the fact that members seemed reluctant to sanction amendments beyond the built-in TRIPS agenda.
The final issue addressed by Dr Lutz in his presentation was the IP issues to which e-commerce gives rise. These issues are not part of the built-in agenda and could only be brought into discussion if there were to be agreement on the extension of TRIPS beyond the built-in agenda.
In conclusion, Dr Lutz sounded a timely warning that TRIPS may become bogged down in politics - obviously it will be incumbent on those directly involved with TRIPS to do their best to work past these political difficulties in the interests of developing a globally harmonised approach to the implementation and enforcement of intellectual property rights.
Dr Mihaly Ficsor
Dr Ficsor began his presentation by charting the development of the relationship between WIPO and WTO which had a rocky start at the time of the Uruguay Round of the GATT but which, since then, has warmed.
Next Dr Ficsor referred to three cases in which the WTO dispute settlement mechanism was applied.
The first was a dispute between the United States and the European Communities against Japan in relation to the protection of producers of phonograms and performers rights. Japan interpreted its TRIPS obligations under Article 14.6 as allowing it to grant only limited retroactive protection to the producers of phonograms and performers. This interpretation had previously been accepted in respect of the corresponding provision in Article 18 of the Berne Convention. However, in the context of the TRIPS Agreement a thorough analysis of the text and negotiations history of the treaty was undertaken and the conclusion reached that the Japanese legislation was not in harmony with the provisions of Article 18 of the Berne Convention as included by reference in Article 14.6 of the TRIPS. Japan subsequently amended its legislation accordingly.
The second dispute was between the European Communities and Canada in which the EC contended that Canada's patent legislation was not compatible with its obligations under the TRIPS Agreement because it did not provide for the full protection of patented pharmaceutical inventions for the entire duration of the term of protection envisaged by the TRIPS Agreement.
The dispute panel found that the provision in Canada's Patents Act allowing the exploitation of a patented pharmaceutical invention by a competitor of the patentee for the purpose of obtaining government marketing approval was not inconsistent with Article 27.1 of the TRIPS Agreement and was, in any event, covered by the exception in Article 30 of the TRIPS Agreement. However, the so-called stockpiling exception in Canada's Patents Act was found to be a violation of Article 28.1 of the TRIPS Agreement which was not covered by the exception in Article 30.
Dr Ficsor gave a fascinating insider view of the establishment and terms of reference of the dispute panel, the selection of panellists, the panel procedure and the role of the Secretariat in this dispute.
The third complaint to which Dr Ficsor made reference was that of the EC against the USA concerning the management of "performing rights" in musical rights by collecting societies. The US Copyright Act expressly permitted the royalty-free public performance of musical works by food service and drinking establishments and by retail establishments, provided that their size does not exceed a certain square footage limit. Further, musical broadcasts were permitted by establishments which had a larger square footage provided certain equipment limitations were met. There was also the so called "home style" exemption which allowed small restaurant and retail outlets to broadcast musical works without the payment of a fee, provided that only equipment of a kind commonly used in private homes was used for those broadcasts. The dispute panel found that the "business" exemption provided for in the US Copyright Act was not compliant with Article 13 of the TRIPS Agreement but that the "homestyle" exemption was compliant.
Dr Ficsor used these three disputes to make observations on how provisions of WIPO Conventions were applied within the context of TRIPS. Dr Ficsor had made some observations on the manner in which treaties and conventions should be interpreted and expressed concern at the seeming fixation of defining terms by reference to dictionary definition rather than, for example, by applying the provisions of the Vienna Convention on the Law of Treaties which allows special meaning to be given to a term if it is established that the parties so intended. He also observed that the Vienna Convention is to the effect that a treaty should be interpreted according to the ordinary meaning given to the terms of the treaty and that ordinary meaning must be discerned in good faith, according to the context and in light of the object and purpose of the treaty.
Dr Ficsor concluded his presentation by picking up the theme of the interaction between the WIPO Treaties and TRIPS System. He mentioned that there was pressure, after the last diplomatic conference, to include within the TRIPS context the WIPO "Internet Treaties". It is obviously still not clear how the relationship between WIPO and the WTO in the field of international global IP issues will be resolved. One thing seems to be certain, however, and that is that the TRIPS System offers more "teeth", through its dispute resolution mechanism than do the WIPO Treaties. It would therefore seem appropriate to include the WIPO Treaties within TRIPS System but there may be countervailing political pressures that would not be content with that result.
Mr Tony Taubman
Mr Tony Taubman from the Australian Department of Foreign Affairs and Trade gave a very thorough presentation on the TRIPS Council debate on geographical indications. He categorised the debate as having been confusing and divisive with there even being confusion as to what a geographical indication protects, how it achieves protection and what it is for.
Reference was made to the divergent camps in the debate with those in support of the protection of geographical indications referring to the trade and marketing advantage to be gained by their proper protection as against the view that geographical indications may give rise to unfair competition and monopoly positions that can be exploited to the disadvantage, particularly, of developing and less developed nations.
Article 22 of the TRIPS Agreement protection provides for the protection of geographical indications against the deceptive use by others of the actual source or origin of a product. Exceptions are available to allow existing trade mark rights to continue, where there has been prior use of geographical indications or where the use by others of an indication is non-deceptive.
Mr Taubman made reference to the fact that the wine and spirit lobby had been remarkably successful in respect to the protection of geographical indications and are advocating the absolute protection of GIs for wine and spirits which would prevent the use of a GI identifying a wine/spirit for products not originating in location even when the true origin is indicated. In these circumstances there would be no need to prove consumer deception or unfair competition of any kind. The TRIPS Agreement simply requires the availability of "legal means" for the protection of geographical indications. WTO members have notified a wide range of legal means for the protection of GIs - consumer protection laws, trade mark legislation, a separate registration system for GIs, industry specific regulatory systems, food labelling and standards regulations and non-legislative common law remedies such as passing-off. Mr Taubman observed that each of these means reflects a particular approach to reconciling differing interests but these legal means may not necessarily deliver identical outcomes and may not be compatible with an international registration system for geographical indications.
Under Article 24.1 of the TRIPS Agreement members agree to conduct negotiations "aimed at increasing the protection of individual GIs" It is not clear, however, whether those negotiations must be TRIPS Council negotiations or whether they can take the form of, for example, bilateral negotiations between member nations.
Pursuant to Article 24.2 of the TRIPS Agreement the TRIPS Council is required to review the application of the GI provisions including any matter affecting compliance and there must be action to facilitate the operation and further objectives of the GI provisions. It is not clear, however, what a review of the application of the TRIPS provisions really means - would it for example mean re-writing treaty obligations?