ipr provisions in the eu-asean fta asian regional workshop on free trade agreements: towards...
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IPR provisions in the EU-ASEAN FTA
Asian Regional Workshop on Free Trade Agreements: Towards inclusive trade policies in
post-crisis Asia
Bangkok, Thailand 8-9 December 2009
Elpidio V. Peria
Third World Network
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OVERVIEW
Development and Intellectual Property EU's thrusts in the EPA Chapter The draft text and their impacts on ASEAN
- technology transfer, copyrights, . trademarks, geographic indications, patents, plant variety protection, enforcement
Confronting the Issue of IPRs in the EPA
Development and Intellectual Property (1)
Intellectual property as an issue with binding rules within a trade agreement was very controversial; even Joseph Stiglitz and free trader Jagdish Bhagwati decried the inclusion of IP issues in the WTO
Cost of implementing TRIPS obligations to developing countries – US$B 60 annually (Michael Finger, World Bank)
Developed countries seek FTAs to a) remove or reduce the flexibilities of the TRIPS
Agreement and b) establish higher standards of IP protection in developing
countries
Development and Intellectual Property (2)
Prior to TRIPS, countries were able to tailor their level of IP protection to their level of development
USA, Europe, Japan, S. Korea and Taiwan did not have high levels of IP protection until it suited them
Switzerland had no patents on chemicals until 1978
Italy, Sweden and Switzerland did not allow patents on medicines until 1978
Spain did not have patents in chemicals or medicines until 1992
EU's thrusts in the IPR Chapter(Article 1-Objectives)
Facilitate the production and commercialization of innovative and creative products between the Parties
Achieve an adequate and effective level of protection and enforcement of intellectual property rights
EU's thrusts in the IPR Chapter(Article 1-Objectives-INTERPRETATION)
All likely to lead to stronger IP protection
There is no corresponding mention of ensuring access to things protected by taking into account differing levels of development or the goals of devt (such as sustainable development, poverty reduction/alleviation)
Even the TRIPS Agreement objectives that balance the concerns of consumers are not even mentioned
Art. 7, TRIPS Objectives : The protection and enforcement of IPR should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge…”
EU's thrusts in the IPR Chapter - WHO ACTUALLY BENEFITS MORE?
Almost without exception, developing countries are net importers of technology, except the USA and European Union
- in Malaysia, 98% of patents granted are to foreigners (including in 2005)
- 1.1% of patents granted in Indonesia from 1993-2006 were to Indonesians.
- from 1998-2005, 0.6-1.4% of patent grants in Philippines were to Filipinos.
-Between 1991 and 2001, the net US surplus of royalties and fees (which mainly relate to IP transactions) increased from $14 billion to over $22 billion.
In 1999, World Bank figures indicate a deficit for developing countries of $7.5 billion on royalties and licence fees.’ report of the Commission on Intellectual Property Rights established by the British Government, http://www,iprcommission.org/graphic/documents/final_report.htm, page 21
TECHNOLOGY TRANSFER(Article 3)
Parties agree to exchange views and information on their domestic and international practices and policies affecting transfer of technology
Parties shall ensure that the legitimate interests of intellectual property rights holders are protected
TECHNOLOGY TRANSFER(Article 3-INTERPRETATION)
Parties agree to exchange views and information on their domestic and international practices and policies affecting transfer of technology. This, in particular, shall include measures… on a VOLUNTARY basis.
- this is not SPECIFIC ENOUGH and NOT even mandatory to
ensure technology transfer.
Parties shall ensure that the legitimate interests of intellectual property rights holders are protected
- this may limit the ability to achieve technology transfer via compulsory licensing or other exceptions to IPR
TECHNOLOGY TRANSFER - ASEAN at the RECEIVING END ?
National patenting patterns in ASEAN dominated by non-residents
fewer than one in five applications is by a resident of the country concerned, while in terms of patents granted, around one in four patents are granted to residents.
The ‘inventiveness coefficient’ (resident patent applications per 10,000 population) averages about 6.0 for the OECD countries. For the ASEAN, this coefficient is currently around 0.3.
☥ Based on this index, the ASEAN countries reporting are strongly dependent on foreign technology, suggesting that there are far more foreign companies trying to establish protection for their technology in the ASEAN market than there are ASEAN companies.
(from www.astnet.org, Indicators of Science and Technology in ASEAN Countries)
COPYRIGHTS & NEIGHBORING RIGHTS(ARTICLE 5)
Article 5.1 –compels ASEAN member-states to comply with :
a) Arts. 1-22 of the ROME CONVENTION for the Protection of Performers, Producers of the Phonograms and Broadcasting Organizations (1961)
b) Arts. 1-18 of the BERNE CONVENTION for the Protection of Literary and Artistic Works (1886, last amended in 1979)
c) Arts. 1-14 of the WIPO COPYRIGHT TREATY [WCT] (1996)
d) Arts. 1-23 of the WIPO Performances and Phonograms Treaty [WPPT] (1996)
COPYRIGHTS & NEIGHBORING RIGHTS(ARTICLE 5.1-Interpretation)
a) ROME CONVENTION for the Protection of Performers, Producers of the Phonograms and Broadcasting Organizations (1961)
- compliance with this is NOT required by TRIPS
a) BERNE CONVENTION for the Protection of Literary and Artistic Works (1886, last amended in 1979)
- although required by TRIPS, Laos is not yet a WTO member and should not yet comply with this
a) WIPO COPYRIGHT TREATY [WCT] (1996) WIPO Performances and Phonograms Treaty [WPPT] (1996) (also known as WIPO Internet Treaties)
- strongly criticized; goes beyond TRIPS and BERNE Convention; provides copyright holders exclusive rights over material in the online environment and specifically calls on countries to provide effective legal remedies
against the circumvention of technological protection measures
COPYRIGHTS & NEIGHBORING RIGHTS(ARTICLE 5)
(Art. 5.2)DURATION of AUTHORS’ RIGHTS– lifetime of author plus 70 years
- TRIPS only provides for 50 years
(art. 5.4) COLLECTIVE MANAGEMENT of RIGHTS - to be established by ASEAN member-states to ensure
access and delivery of content and mutual transfer of royalties
- a new issue introduced by the EU in WIPO (art. 5.5) BROADCASTING - Parties to provide for exclusive rights by broadcasting organizations to prohibit the re-broadcasting of their broadcasts by any means
- very controversial; WIPO has suspended
consideration of this issue
COPYRIGHTS & NEIGHBORING RIGHTS(ARTICLE 5)
(art. 5.6) ARTISTS' RESALE RIGHTS – Parties to provide for an inalienable right to receive in advance a royalty based on any resale of the work, after the first transfer of the work by the author
- while this may provide needed income to struggling artists, it encourages them to commodify their artworks for money
(Art. 5.7)PROTECTION OF TECHNOLOGICAL MEASURES - Parties to provide for adequate legal protection against the circumvention of any effective technological measure, including the import, distribution, sale, rental, advertisement for sale or rental or possession for commercial purposes of such devices
- end users of a circumvention device may be liable even when they did not know they were circumventing a
TPM
(art. 5.8) PROTECTION OF RIGHTS MANAGEMENT INFORMATION – Parties to provide for adequate legal protection against the removal or alteration of any electronic rights management information
- may be used to provide mechanisms for tracking
document usage, which may affect privacy of users
TRADEMARKS(article 6)
Art. 6.1 - compels ASEAN member-states to accede to :
1) Madrid Protocol –only Singapore and Vietnam are members so far2) Singapore Treaty on the Law of Trademarks – has 16 members at present, with Singapore as a member from ASEAN3) Trademark Law Treaty – has 45 members, counting Indonesia from ASEAN
Art. 6.2 Registration Procedure – a TRIPS-plus provision
Art. 6.4 Exceptions to Rights Conferred on a Trademark – in TRIPS agreement, this is only an optional course of action, but now being made mandatory by the E another TRIPS-plus which is being made mandatory a
GEOGRAPHIC INDICATIONS(article 7)
- establishes a register for listing geographic indications protected in the territory including an administrative process verifying the geographic indications and identifying the good possessing such quality or reputation essentially attributable to its geographic origins
- ex officio enforcement of GIs are not required by TRIPS
塨 - will mainly affect upscale agricultural products such as wine, whisky, ready-to-serve meal, food for dogs and cats, malt and sugar.
- content of EU agricultural exports to ASEAN;
the EU has the dominant market advantage here, though scattered products of the ASEAN may gain market share eventually
- will sidestep the issue of traditional knowledge protection in ASEAN
What an Effective TK Protection Should Be
Consists of ensuring the physical and economic well-being of the practitioners and generators of TK, including its underlying material and cultural bases and ensuring the transmission of TK between generations;
Recognizes the rights of indigenous and local communities in national legislation and policy
Gives them equal rights in natural resources management vis-à-vis government agencies and private land owners
With equal rights and equal power in negotiations, only then can we ensure that the goals of fair and equitable benefit-sharing are achieved
Customary law should play a key role in these mechanisms
PATENTS(ARTICLE 9)
Article 9.1 –compels ASEAN member-states to comply with
a) Arts. 1-52 of PATENT COOPERATION TREATY (1971, 2001)
b) Arts. 1-16 of the PATENT LAW TREATY (2000)
c) Arts. 2-9 of the BUDAPEST TREATY on the INTERNATIONAL RECOGNITION OF THE DEPOSIT OF MICRO-ORGANISMS FOR THE PURPOSES OF PATENT PROCEDURE (1997,
amended in 1980)
PATENTS(ARTICLE 9- Interpretation)
Article 9.1 – ASEAN member-states are to comply with
a) Arts. 1-52 of PATENT COOPERATION TREATY (1971, 2001) - not required by TRIPS; but it makes it easier for foreigners
to apply for patents in developing countries; expected to result in increased patent applications
- impact on access to affordable medicines - impact on ability to move up the value chain in
mfg.
a) Arts. 1-16 of the PATENT LAW TREATY (2000) - would limit the procedural requirements ASEAN
countries can demand of patent applicants, thus lowering the procedural barriers and costs to applying for a patent
in ASEAN countries
PATENTS(ARTICLE 9-Interpretation)
a) Arts. 2-9 of the BUDAPEST TREATY on the INTERNATIONAL RECOGNITION OF THE DEPOSIT OF MICRO-ORGANISMS FOR THE PURPOSES OF PATENT PROCEDURE (1997,
amended in 1980)
- results in more micro-organisms being patented
- greater foreign exchange losses
- increased risk of biopiracy
PROTECTION OF DATA SUBMITTED TO OBTAIN A MARKETING AUTHORIZATION
(article 10)
(Art. 10.1)Parties will implement a comprehensive system to guarantee the confidentiality, undisclosed and non-reliance of data submitted for registration purpose of medicinal products
(Art. 10.2) Parties will enact and implement legislation ensuring that any information submitted to obtain marketing approval will remain undisclosed to third parties and benefit from a period of (xxx) years of protection against unfair commercial use…
*Philippines may need to amend Cheap Medicines Law to
incorporate this obligation
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Data exclusivity (DE)
TRIPS: only requires data protection, so generic can be approved
based on the clinical trial results from the originator company
So generic does not have to repeat clinical trials So generic can be approved by the DRA immediately
TRIPS+ (‘data exclusivity’): for 5-11 years, the generic cannot rely on the originator’s
clinical trial results So the generic must repeat the clinical trials if it wants to
be approved in the DE period or wait for 5-11 years before it can be registered and reach patients.
WHO Commission on Data Protection
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WHO’s Commission on Intellectual Property Rights, Innovation and Public Health, 2006 A public health justification should be required for
data protection rules going beyond what is required by the TRIPS agreement. There is unlikely to be such a justification in markets with a limited ability to pay and little innovative capacity.
PLANT VARIETY PROTECTION(article 11)
Parties shall cooperate to promote and reinforce the protection of plant varieties based on UPOV 1991
- ASEAN member states may have to revise their existing PVP legislation and reexamine the exceptions it has given to farmers to strengthen the protection given to PVP holders
- Malaysia, Thailand, Philippines, Indonesia
ENFORCEMENT (article 13)
- Parties to provide for complementary measures, procedures and remedies necessary to ensure the enforcement of IPRs
- IPRs are private rights. But with this enforcement provision, the State will have to provide scarce public resources to protect private rights.
ENFORCEMENT (article 13)
- This direct cost of TRIPS enforcement includes: (a) Judicial cost; (b) Administrative cost; (c) Litigation cost; and (d) Cost of litigation error.
- The second category of costs is indirect cost, which may have deeper implications than the first category of costs. These costs are duly associated with static losses which developing countries have to face due to TRIPS or TRIPS-plus compliance and the ensuing static consumer welfare losses, impediments to informal and formal modes of anti-competitive effects, etc.’
Policy Brief 12, South Centre, January 2008
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TRIPS+ border measures
TRIPS (Article 51): only have to allow customs to seize counterfeit trademark or copyright goods
TRIPS+: may require customs to also be allowed to seize allegedly patent infringing goods such as generic medicines. This is problematic because: Deciding whether a generic medicine infringes a patent is difficult because
it is not visible on the surface of the product the way a trademark or copyright infringement may be and
It usually takes significant expert evidence to determine If supply of a generic medicine is interrupted because it has been seized by
customs, resistance can develop in patients (eg to antiretrovirals)
TRIPS (Article 51): only requires checking of imported products TRIPS+: may require customs to check imported,
exported and transiting products May make it difficult for remote countries to access generic medicines Increases cost and burden for customs
Possible effects of border measures
The effect of most of these TRIPS-plus provisions according to a World Health Organization model applied to Colombia is that : Colombia would require an extra US$1.5billion to be spent on medicines every year by 2030. If this were not spent, Colombians will have to reduce their medicine consumption by 44% by
2030. (‘Intellectual property in the FTA: impacts on pharmaceutical spending and access to
medicines in Colombia’, Mision Salud and Fundacion IFARMA, Miguel Ernesto Cortes Gamba, Bogota, 2006 available from http://www.ftamalaysia.org/article.php?aid=153).
A study of the impact thus far of the TRIPS-plus provisions of the Jordan-USFTA found that: one hospital alone has increased its medicine spending six-fold, medicine prices in Jordan have already increased 20% since 2001 when the FTA began, over 25% of the Ministry of Health’s budget is now spent on buying medicines, data exclusivity has delayed the introduction of cheaper generic versions of 79% of medicines
launched by 21 multinational companies between 2002 and mid-2006 and ultimately the higher medicine prices are threatening the financial sustainability of
government public health programs. (http://www.oxfam.org/en/files/bp102_jordan_us_fta.pdf/download).
It was recently estimated that eight years of data exclusivity alone in Canada would have added $600 million to prescription medicine costs alone in the last five years. ( http://www.canadiangenerics.ca/en/news/nov_14_06.shtml)
The extension of patent terms alone has been calculated by the Korean National Health Insurance Corporation to cost US$529 million for having to extend medicine patents for 3 years and US$757 million if it has to agree to a four year extension in its USFTA negotiations. (http://english.hani.co.kr/arti/english_edition/e_business/165065.html).
Concerns about impact of TRIPS+ provisions on affordability of medicines
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Special Rapporteur of the United Nations Commission on Human Rights on the right of everyone to the enjoyment of the highest attainable standard of physical and mental health "I am deeply concerned that the US-Peru trade agreement
will water-down internationally agreed health safeguards, leading to higher prices for essential drugs that millions of Peruvians will find unaffordable"
WHO Commission’s concerns
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WHO’s Commission on Intellectual Property Rights, Innovation and Public Health, 2006:
In bilateral trade negotiations, it is important that: governments ensure that ministries of health be
properly represented in the negotiation, and that the provisions in the texts respect the
principles of the Doha Declaration. Bilateral trade agreements should not seek to
incorporate TRIPS-plus protection in ways that may reduce access to medicines in developing countries.
Concerns about impact of TRIPS+ provisions continued
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Nobel Prize winning Doctors Without Borders: these USFTA provisions ‘will dramatically reduce the ability of
countries to provide low-cost quality medicines for their citizens.’ Ministers of Health from ten Latin American countries also
declared their commitment to avoid TRIPS+ provisions.[1] African Union[2] Ministers of Health called upon the countries
of Africa (except Morocco) not to agree to TRIPS+ provisions,[3]
African Union Ministers of Trade agreed with their health colleagues[4]
[1] Declaration of Ministers of South America over Intellectual Property, Access to Medicines and Public
Health, Geneva, 23 May 2006. The Ministers of Health were from Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay and Venezuela.
[2] The African Union represents all African countries except Morocco.
[3] Gaborone Declaration, 2nd Ordinary Session of the Conference of African Ministers of Health, Gaborone, Botswana, 10-14 October 2005, CAMH/Decl.1(II).
[4] AU’s Ministerial Declaration on EPA Negotiations, AU Conference of Ministers of Trade, 3rd Ordinary Session, 5-9 June 2005, Cairo, Egypt, AU/TI/MIN//DECL.(III).
WHAT TO DO?
- suppose ASEAN puts forward its minimum demands on the IPR Chapter, and the the EU accedes, do we then approve the entire EU-ASEAN EPA?
- ASEAN member-states should demand for transparency/release of the other chapters of the EPA
- analyze clearly the trade-offs, do we exchange our ability to develop as against short-term gains in jobs, market access and foreign direct investment ?
