PHA-Exchange> LDC request on 15 year TRIPS extension - WTO TRIPS Council discussions

Tue Nov 1 09:38:59 PST 2005

Dear Colleagues,

I am forwarding you an extract from an article written by Sangeeta
Shashikant published in the South-North development monitor (SUNS) regarding
the response of WTO Members to the least developed countries’ (LDC) request
to the WTO TRIPS Council asking for an additional 15 years delay before
implementing the TRIPS Agreement. If this delay is not allowed LDCs should
implement TRIPS on 1st January 2006 unless they make individual requests.  

No decision has been taken yet by the TRIPS Council, as countries such as
the United States and Switzerland don’t want a blanket extension for all
LDCs. Countries such as the US and Switzerland (as part of EFTA) are
planning to negotiate Free Trade Agreements with a number of LDC countries
that would include TRIPS-plus rules.

This additional 15 year delay would be crucial in order to allow LDC
countries to undertake impact assessments of how proposed intellectual
property rules will affect the enjoyment of human rights. It would also give
them additional time to draft legislation taking into account human rights
obligations relating to the right to health, the right to food or the right
to education. 

Best wishes,

Davinia

Davinia Ovett

Programme Officer

3D -> Trade - Human Rights - Equitable Economy

15, Rue des Savoises

CH-1205 Genève

Switzerland

Tel: +41 22 320 21 21

Fax: +41 22 320 69 48

Email: dovett at 3dthree.org

Website: www.3dthree.org

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

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.”

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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