Intellectual Property Rights in the WTO CARSTEN FINK The WTO and the Doha Development Agenda Washington, DC, April 26, 2005

Overview TRIPS Agreement Key elements Economic considerations DDA negotiations on IPRs TRIPS and public health Other issues

What is TRIPS? Agreement on Trade-Related Aspects of Intellectual Property Rights Multilateral WTO Agreement, applicable to all existing and newly acceding Members Sets multilateral standards for the protection of intellectual property rights (IPRs) Negotiated during Uruguay Round ( ), came into force 1996

Main provisions of TRIPS General obligations: national treatment and most-favored nation treatment Minimum standards of protection for all types of IPRs: Patents, copyright and related rights, trademarks, geographical indications, industrial designs, trade secrets, etc. Obligations on the enforcement of IPRs

Historical shift For international IPRs policymaking: First multilateral agreement to set minimum standards of IPRs protection Intergovernmental dispute settlement, with the possibility of trade sanctions For WTO: Departure from ‘border issues’ to ‘behind-the- border issues’

Economic function of IPRs IPRs that stimulate inventive and creative activities Patents, copyright, industrial designs, plant breeders’ rights, layout designs for integrated circuits, utility models, trade secrets IPRs that resolve information asymmetries Trademarks, geographical indications

IPRs in open economies Basic asymmetry: Developed countries are both producers and consumers of intellectual property Developing countries are mostly consumers of intellectual property IPRs affect international technology transfer through trade, foreign direct investment, and technology licensing

Economic effect of TRIPS Optimists Faster rates of innovation Accelerated international transfers of technology through trade, FDI and licensing Pessimists Higher prices Rent transfers from poor to rich countries Curtailed abilities to imitate foreign technologies High implementation costs

Things to keep in mind Optimists Technological capabilities vary significantly among developing countries Are strong IPRs alone sufficient to attract foreign technology? Pessimists TRIPS did not require ‘retro-active’ IPRs protection TRIPS implementation demands are minor TRIPS leaves important flexibilities (formerly known as wiggle room)

IPRs in the DDA TRIPS and public health Geographical indications* Patenting of biotechnology inventions* Non-violation disputes* Protection of traditional knowledge and folklore Relationship between TRIPS and Convention of Biological Diversity * In-built agenda

TRIPS and public health: key articles Article 27: Patents to be awarded without discrimination among fields of technology Patents to cover both processes and products Patents to be protected for 20 years from the date of filing Article 39: Protection of undisclosed test data against unfair commercial use, where such data is submitted to regulatory authorities

TRIPS transition periods Developing countries without product patent laws have until January 1, 2005 to comply, but must, nonetheless, grant market exclusivity to pharmaceutical products Least developed countries were given until January 1, 2006 to comply Concerns about high prices for new, patented medicines, once these medicines enter developing country markets (esp. after 2005)

Where TRIPS is flexible TRIPS allows the use of compulsory licenses In case of emergencies, compulsory licenses can be granted without an attempt to obtain voluntary license from patent holder No obligation on legality of parallel imports Members are free to impose price regulations

Doha Declaration Background: Spreading HIV/AIDS pandemic in large parts of the developing world General concern that there may be conflicts between TRIPS and public health objectives Content: Confirms TRIPS flexibilities (political endorsement) Extension of implementation deadlines for LDCs until 2016 Unresolved issue: compulsory licensing when manufacturing capacity is insufficient

August 2003 decision Problem: TRIPS Article 31(f): under a compulsory license, a “predominant share” of production has to be sold in the domestic market Solution (so far): Article 31(f) is waived if importing country has established that it has insufficient manufacturing capacities Safeguards and reporting requirements

Additional perspectives Increased use of compulsory licenses by developing countries in recent years: Brazil, Indonesia, Korea, Malaysia, Mozambique, South Africa, Zambia, Zimbabwe August 2003 Decision Makes economic sense Several exporting countries have initiated implementing legislation (Canada, EC, Norway, India) How effective will the mechanism be in practice?

IPRs in recent US bilateral FTAs New wave of US FTAs include IPRs provisions that effectively reduce TRIPS flexibilities: Concluded agreements: Jordan, Singapore, Chile, Dominican Republic-Central America, Morocco, Australia, Bahrain Currently under negotiation: Thailand, Southern African Customs Union (Botswana, Lesotho, South Africa, Swaziland, Namibia), Egypt, Andean countries (Colombia, Peru, Ecuador, Bolivia), Panama

Geographical indications In-built agenda: Establishment of multilateral registration system for wines and spirits Extension of higher level of protection currently available for wines and spirits to other products Restoration of protection for GIs that are used generically (“clawback” issue) EC has proposed a list of GIs in agricultural negotiations