“Overall, I would not say that the gaps are narrower, but that they certainly are better illuminated. I think we now have a better practical sense of what it could mean to bridge those gaps, if and when the decision comes to try to construct that bridge,” he said.

> Full text below

Mr Lamy said he had held three consultations since he last briefed members on 27 July 2009. The participating delegations were: Argentina, Australia, Brazil, Canada, Chile, China, Egypt and then Gabon for the African Group, the EU, Japan, Mauritius for the ACP Group, New Zealand, Norway, Peru, South Africa, Switzerland, Tanzania and then Zambia for the LDC Group, and the United States.

 

Geographical indications: ‘extension’

On geographical indications, he said the consultations covered:

• the differences between the two levels of protection: the standard level of TRIPS Article 22, and the higher level of TRIPS Article 23, which currently only applies to wines and spirits

• the possible effects of extending the higher protection to other products (“extension”)

• the experience of protecting geographical indications under present standards

• how protecting geographical indications compares to protecting other types of intellectual property

• how exceptions and limitations would apply under “extension”.

One way of distinguishing between the two levels of protection is how a term would be tested to see if it violated a protected geographical indication. For the standard (Art.22) level, a term would fail the test if it misled or confused consumers about the origin of the good. For the higher (Art.23) level if would fail if it was just incorrect (even if the true origin is inicated), ie, it did not come from the geographical location and have the required characteristics.

Mr Lamy described in some detail how all these issues were discussed. Members still disagree on whether “extension” could be useful but some issues are clearer, he said.

“Essentially, the differences concern whether it is desirable and beneficial to broaden the scope of enforceable rights that surround a GI once it is protected, whether through the trademark system or otherwise, and how to deal with the implications for third country markets, including continued access for current products considered as legitimate generics,” he concluded.

 

TRIPS and biodiversity

On proposals related to biodiversity and traditional knowledge, Mr Lamy said members agree on the objectives but differ on how to achieve it.

They clearly want to avoid patents being granted in error, to ensure inventors using genetic resources and any associated traditional knowledge comply with conditions for use (“prior informed consent” or PIC) and for sharing benefits (sometimes “access and [equitable] benefit sharing” or ABS), and to enable patent offices to have enough information to decide whether a patent can be granted correctly, he reported. (Together, these are sometimes described as avoiding “misappropriation” or “biopiracy”.)

Members disagree on whether the solution lies in amending the TRIPS Agreement to require patent applicants to disclose the origins of genetic material and any associated traditional knowledge used in their inventions (“disclosure”).

Mr Lamy said his consultations focused on the following topics:

• the legal character of misappropriation

• measures to avoid it

• the legal scope of an approach based on national systems

• costs, burdens and legal certainty of the proposal to require inventors to disclose.

Mr Lamy concluded that members understand that reforming the patent system alone would not be enough to ensure proper access and benefit sharing.

“In sum, there is general agreement on the public policy objectives, including ensuring equitable benefit sharing, but differences clearly remain on how to arrive at those goals in practice,” he concluded.

 

The discussion

In their comments, members continued to differ on the substance of the issues and whether these two issues and a third (the multilateral register for geographical indications for wines and spirits) should be linked (see “What’s this about” box).

Several delegations favouring the link also asked Mr Lamy to report to forthcoming meetings aimed at taking stock of the Doha Round negotiations. Some others said the stock taking should keep to the mandate of the Trade Negotiations Committee, the umbrella body overseeing the negotiations.

Speakers were: Argentina, the EU, India, Chinese Taipei, Cuba, Turkey, Australia, Switzerland, China, Japan, Brazil, the African-Caribbean-Pacific group (Mauritius speaking), the least developed countries (Angola speaking), Chile, Thailand, Peru, Canada, US, Pakistan, El Salvador, Sri Lanka, Indonesia, Venezuela, New Zealand, Barbados.

 

_______________________

Open-ended informal consultations
on GI extension and on TRIPS/CBD
as outstanding implementation issues

Friday, 12 March 2010 — 10:00
Speaking points for the director-general

I have convened this open-ended meeting on GI Extension and TRIPS/CBD as a part of the process which started in Hong Kong when Ministers requested me to conduct consultations on two TRIPS issues:

• first, the extension of the protection of geographical indications (GIs) provided for in Article 23 of the TRIPS Agreement to GIs for products other than wines and spirits, and

• second, the relationship between the TRIPS Agreement and the Convention on Biological Diversity (CBD).

At Hong Kong, I was mandated to intensify the existing consultative process on these issues and to report to the TNC and to the General Council. From March last year, I have undertaken these consultations personally, and I have regularly reported to the TNC and to the General Council.

These two issues are obviously of interest to the broad Membership of this Organization and I have been asked, understandably, to ensure transparency in the consultative process, beyond the regular reports to the General Council. We had such a session last July, where I briefed the full Membership on the consultations I had undertaken in 2009 until that time. At that time I gave you an overview of the questions that were raised and the answers that different sides had given. Today’s briefing is intended to provide you with a further update on what has been done since July 2009, in particular in the three further sessions of consultations we have held since then.

Apologies for being a bit long, but I think I need to ensure that my report of today is comprehensive for the benefit of all Members.

These consultations are informal, and they are technical in character. They concentrate on helping Members to understand the interests and concerns that drive each other’s substantive positions, and they are intended to shed light on the technical, legal and policy issues which are at stake. They do not take up broader, systemic issues such as the question of how the Doha mandate is to be read or implemented, and in particular whether, and if so how, these issues should be linked to the broader negotiating agenda.

These consultations also remain distinct from the negotiations on the system for registration of GIs for wines and spirits, which are conducted in the Special Session of the TRIPS Council.

The meetings have been held at the level of heads of delegations plus one expert. The delegations I have invited for these consultations are from across the spectrum of views and interests, and represent all formal positions currently on the table. They comprise Argentina, Australia, Brazil, Canada, Chile, China, Egypt and then Gabon for the African Group, the EU, Japan, Mauritius for the ACP Group, New Zealand, Norway, Peru, South Africa, Switzerland, Tanzania and then Zambia for the LDC Group, and the United States.

For this latest round of consultations, we have adopted a revised working method. Participating Members submitted their questions on the two issues, first coordinating questions among like-minded delegations and we then organised these questions in several clusters according to their themes. Members worked through all these clusters of questions in the course of the three sessions I mentioned. Time was divided equally between the two issues and the sequence of work was reversed each time to ensure equal treatment. The approach taken was to use the questions as a springboard for a structured, but free-flowing general discussion about these issues, allowing Members to engage with one another on these issues in a way that is not possible in the more formal settings we are familiar with such as the one this morning. For the same reason, these consultations are entirely informal, to try to promote open discussion.

Overall, I saw very serious engagement by delegations, a willingness and capacity to enter into the details on these issues, mutual respect — which I feel goes beyond diplomatic politeness — for the perspectives of the two sides, even if clear divergences of interest are still apparent.

As I said, I focused these consultations on substance, on content, trying not to have a rehearsal of well-known and long-established formal positions. I do think that further to these working sessions, we know the landscape of issues much better now. I cannot report convergence, but certainly much clearer light on divergences. Overall, I would not say that the gaps are narrower, but that they certainly are better illuminated. I think we now have a better practical sense of what it could mean to bridge those gaps, if and when the decision comes to try to construct that bridge.

Going now to the substantive part of this report, I will give you my sense of what we have done and where we are on each of the two issues, without presenting or characterizing the views or the positions of any delegation or group of delegations, as that is not the purpose of my reporting, since you can do that by yourselves.

 

Geographical indications (GIs)

Starting with GI extension, discussions covered a number of general themes grouped into 5 clusters:

• Cluster 1: Differences between Article 22 and Article 23 protection

• Cluster 2: Effects of extending higher protection to additional products

• Cluster 3: Experience of GI protection under existing standards

• Cluster 4: GI protection compared with other forms of IP

• Cluster 5: Exceptions and limitations under extended GI protection

Under Cluster 1, delegations reviewed the differences between protection under Article 22 and Article 23. They dealt with the question of whether and how a GI could be prevented from becoming generic in third markets without Article 23 protection. They also sought to clarify the scope of the proposal to extend GI protection, in terms of the scope of products covered, their link with their geographical origin, and the role of a GI identifying a product.

Proponents of extension consider that Article 22-level of protection is costly and burdensome because of the difficulty in establishing the evidence necessary to prove that use of a GI is misleading or confusing to the consumer — which is the Article 22 test — as against the more objective test of “correctness” under Article 23, where the use of a geographical term must be prevented if it simply corresponds to a protected GI, without the additional test of proving deception or confusion. Other Members put the view that Article 22 protection is sufficient for policy reasons, and that the current status of the TRIPS text was the result of a deal in the Uruguay Round.

Under Cluster 2, which relates to the effects of extending higher protection to additional products, the participants discussed the effects of higher protection being extended to GIs for different products, including in third country markets, and whether increased market access had resulted from higher protection. Here, some of the concerns related to impact on existing trade with third country markets, and the possibility that higher protection might in some circumstances reduce market access for products with generic descriptions. Members put forward several concrete examples, touching especially on questions of generic uses and the territorial character of the recognition of GIs.

Cluster 3 was about Members’ experience so far with GI protection under the existing standards, including the implications of Article 23 protection in third country markets for trade in wines and spirits, and the nature of claimed problems arising from the current level of protection. Some participants considered the experience with the application of Article 23 to GIs for wines and spirits was positive, and augured well for other sectors; others disagreed and pointed to potential difficulties, and questioned the value of drawing an analogy between wines and spirits and other products.

Cluster 4 contrasted GI protection with other forms of IP. Questions concerned whether GIs were different from other forms of IP, and whether any possible trade benefits following GI extension could be equally available through alternative branding and marketing strategies. Members discussed the relative costs of achieving GI protection in third markets compared with the cost of using alternative branding and marketing strategies. This discussion highlighted that marketing and GI protection were complementary rather than alternative means of achieving commercial success of a product. In other words, legal protection was of limited value without effective promotion, and investing in promotion without legal backing was also ineffective. Once again, delegations discussed the potential uses of the trademark system in relation to GI protection. Continuing market access for products legitimately presented with generic terms or other TRIPS exceptions to GI protection was a particular issue, and Members discussed the implications of extension in relation to such exceptions.

Finally, on Cluster 5 the last question was: How would exceptions under Article 24 apply under an extension system? For instance, there is a specific exception for the names of grape varieties. How could such a sector-specific exception be adapted and applied for other products, such as cheese and other processed foods? On this point, Members explored some ideas, but at this stage reached no conclusion.

So, overall, on GIs, delegations continued to voice the divergent views that have long characterised this debate. But even so, there were clarifications that trademark systems were legitimate forms of protecting GIs, in line with the general principle that Members are entitled to choose their own means of implementing their TRIPS obligations. Extension proponents sought guarantees that the trademark system could and would protect their GIs at the higher level for all goods. And discussions clarified that GI extension did not mean that existing TRIPS exceptions for generic terms and other exceptions would cease to apply. However, the full practical implications of this “mutatis mutandis” application of exceptions have not yet been fully explored.

 

TRIPS and CBD

On the second issue covered by our mandate, TRIPS/CBD, the discussions built further on the strong foundation of understanding that I identified in my report last July, resulting from the earlier round of consultations — i.e. agreement on the avoidance of erroneous patents, securing compliance with national agreements on benefit-sharing regimes and ensuring that patent offices have the available information needed to make proper decisions on patent grant.

On this issue, the following clusters were covered:

• Cluster 1: Legal character of misappropriation.

• Cluster 2: Measures, other than the disclosure requirement, to address misappropriation and benefit sharing

• Cluster 3: Legal scope of the national-based approach

• Cluster 4: Administrative costs and burdens, and legal certainty, of a mandatory disclosure requirement

On Cluster 1, delegations discussed the character of misappropriation, and whether access to genetic resources through channels that are consistent with national laws be considered misappropriation in particular cases. They considered whether access to a genetic resource or biological resource can give rise to a claim of misappropriation based on the laws of the country of origin if the resource was obtained from another country.

By one view, “misappropriation” refers to illegal or illegitimate acts with respect to the acquisition and use of genetic resources and traditional knowledge. But it was argued that the definition of the term “misappropriation” should not be a precondition for establishing a disclosure obligation. The disclosure obligation, as one element of the solution, would only cover disclosure of “the country providing genetic resources” and “source of genetic resource”, and the national law of the country of source would apply.

Another view was that national access and benefit sharing (ABS) legislation would enable Members to exercise their sovereign rights over genetic resources and authorize access and benefit-sharing, including through the use of contracts. Since most genetic resources could be accessed from a number of countries, a disclosure obligation in patent law may be ineffective in addressing this misappropriation problem.

On Cluster 2, delegations weighed the costs and benefits of measures, other than the disclosure requirement, to address misappropriation and benefit sharing. One question concerned what provisions, other than disclosure requirements, could ensure that patents are not issued in cases where inventions are based on genetic resources or associated traditional knowledge which have been obtained without proper and legitimate authorization and without equitable benefit sharing. They considered whether mechanisms to prevent misappropriation of genetic resources should differ for commercialized products that are patented as against commercialized products that are not patented. And they debated whether and how databases of traditional knowledge and genetic resources would achieve the shared objective of authorized and legitimate access to genetic resources and associated traditional knowledge, prevent misappropriation and ensure equitable sharing of benefits.

There was a degree of common ground, in that all seemed to agree that none of the proposals — whether disclosure requirements, databases, or the use of contracts — was a stand-alone response or solution, that they were complementary to other mechanisms in a composite package that would overall guard against misappropriation and ensure prior informed consent and equitable benefit sharing. For instance, the database approach principally addresses erroneously granted patents and does not directly ensure compliance with CBD objectives. There were also continuing significant differences on whether or not the disclosure approach, the use of databases or the use of contracts would be sufficient or appropriate or not essential to address this problem of misappropriation.

On Cluster 3, delegations probed the legal character and enforcement possibilities of national-based approaches, including a contract-based system, especially when multiple jurisdictions may be involved. They considered how to address trans-boundary aspects of access, benefit sharing, and prior informed consent. While it was acknowledged that a contract-based approach may not be sufficient in itself, it was argued to be the single best way to address the ABS and prior inform consent, along with appropriate domestic legislation. Proponents of the disclosure approach accepted that contracts had a role, but were insufficient to deal with misappropriation, and pointed to difficulties in trans-boundary enforcement of contracts.

Cluster 4 covered a host of issues concerning administrative costs and burdens, and the legal certainty and predictability, of a mandatory disclosure requirement within the patent system. Questions concerned the relative additional costs and burden of incorporating the mandatory disclosure requirement as compared to existing obligations under Article 29.1 of TRIPS, and how these costs would be offset against benefits of improving patent examination, facilitating prior art search, promoting transparency, contributing to preventing misappropriation of genetic resources and traditional knowledge, and ensuring equitable benefit sharing and prior informed consent. Further questions considered whether, in the light of continuing technical discussions in the WIPO and the CBD, a disclosure requirement could be implemented in a consistent manner which would provide legal certainty.

One concern voiced was that, without details on the design of a new disclosure system, there was legal uncertainty and difficulty in weighing costs or burdens, and it would not necessarily bring the intended benefits: one outcome may be litigation between commercial competitors; if this resulted in a cancellation of patents, it may actually lead to wider commercial exploitation of genetic resources and traditional knowledge, still without any benefit sharing. In response to this point, proponents of the disclosure mechanism said that the subject of penalties for failure to disclose would have to be addressed at this stage of negotiations; they said there would hardly be any additional costs to implementing the proposed disclosure requirement and the benefit was more transparency about the invention, more harmonized disclosure requirements, more information on prior art for patent examiners and more legal certainty for applicants. Proponents argued that there would be no difficulty in maintaining coherence between the different forums dealing with this issue, as each was working within its mandate. One particular issue concerned how key terms, such as genetic resources and traditional knowledge, would be defined and interpreted, in the light of existing legal definitions and ongoing work in the various forums.

 

Key lessons

So, that’s about the four clusters on CBD-related discussions. Let me now try and conclude by summarising a few key lessons that I believe we have learnt in this process, on the substantive issues, in areas that might help us understand what it means to bridge the gaps that divide delegations, again on the assumption that there will be willingness to bridge these gaps:

• on GI extension, there seemed to be no expectations that trademark systems must be replaced or supplemented by sui generis protection of GIs. Proponents did not suggest that existing TRIPS exceptions on GI protection, such as for generic use, be eliminated. Potential technical issues concerned how the existing safeguards in the form of both permissible and mandatory exceptions under Article 24 can or should be applied under an “extension” scenario. Essentially, the differences concern whether it is desirable and beneficial to broaden the scope of enforceable rights that surround a GI once it is protected, whether through the trademark system or otherwise, and how to deal with the implications for third country markets, including continued access for current products considered as legitimate generics.

• on TRIPS/CBD, my feeling is that there is a common interest in ensuring there is no misappropriation of genetic resources and traditional knowledge, including through the patent system, and I think that there is a common understanding that reform of the patent system alone would not be sufficient to ensure equitable benefit sharing — at best, a disclosure mechanism would only be one element of a wider range of mechanisms, and for some it would still not achieve the objectives set for it. Differences concern whether a disclosure mechanism, if introduced more widely, would be useful and effective, whether the presumed benefits for the system and for the holders of the genetic resources and traditional knowledge would be experienced in practice, whether those benefits would outweigh administrative costs, and whether the disclosure requirement would enhance or undermine the predictability, clarity and public policy role of the patent system. In sum, there is general agreement on the public policy objectives, including ensuring equitable benefit sharing, but differences clearly remain on how to arrive at those goals in practice.

Now, I repeat that in giving you a gist of some of these extensive and vigorous discussions, I am not attempting to characterise any delegation’s position. As should be expected, my report is limited to giving you a sense of the content, of the substance. I think this kind of consultative process is most useful, also to the wider Membership, if it can continue in an informal mode, with freedom of debate, with an open exchange of views. And to maximise the value of this process to you, I will try to continue to provide a high degree of transparency through this kind of briefing and my reporting to the General Council, which inevitably is in a more condensed shape. To promote transparency, you requested us to upload my last report to you onto our website, which we did, and unless you have any concerns or objections, we should continue this practice with the present report.

With this report I am updating you on the most recent phase of this consultative process. The first round of questions took us from March to June last year. The second round of questions ran from then to our consultations earlier this month, last week to be precise. We therefore have to work out how best to take this work forward, at a suitable pace, responsive to the broader dynamics of this Organization and in line with your expectations and on this, as I said at the end of the last meeting of consultations, I will consult with Members with different sensitivities regarding the best way forward. What we do next will be undertaken only after I have had these consultations.

I now open the floor for your observations and questions.