WIPO Development Agenda meeting Report 3

Geneva, 13 April 2005: By Martin Khor with contributions by Sangeeta Shashikant

Major developing-country proponents of a comprehensive 'Development Agenda' in the World Intellectual Property Organisation (WIPO) further elaborated on their positions and critically commented on alternative proposals put forward by other countries which they said had a restrictive view of the proposed Development Agenda.

On the second day of the WIPO meeting on a Development Agenda for WIPO, beingheld here on 11-13 April, Brazil and Argentina (which coordinate the 14-memberGroup of Friends of Development or FOD that have submitted two papers), madeextensive comments on the proposals of the United States, United Kingdom andMexico.

Another highlight was a presentation by India, another major proponent of theDevelopment Agenda. Several other developing countries also spoke in support ofthe FOD proposals. Also, several developed countries advocated a restrictive view(limiting a development agenda to a strengthened technical assistance programme)while a number of developing countries expressed support for the present work ofWIPO (indicating that there is no need for any significant change).

The inter-sessional intergovernmental meeting (IIM) had been mandated by the WIPOGeneral Assembly last October as a result of an initiative for a Development Agendalaunched by the 14 members of the FOD. After a series of IIMs, a report is to besubmitted to the next General Assembly for consideration of further action, if any.

India, which is not a member of the FOD, but seen by many as a major advocate ofthe Development Agenda, said this is a special day for WIPO as it is the first time thata Development Agenda had been taken up in the organization. India had highexpectations that the IIM meetings would lead to mainstreaming the developmentdimension into all areas of WIPO's work and activities.

Congratulating the FOD for their two proposals, India said it fully supported theproposals, in particular the establishment of a WIPO evaluation and research office.

India said the issues covered in the proposals cover the most important areas and theFOD paper is an excellent starting point for establishing a Development Agenda,which would strengthen WIPO and ensure that its governance structure is moreinclusive, transparent, democratic and that it is truly a member-driven organisation.

India said that much more needs to be done in WIPO to meet development challenges. In WIPO's terminology, 'development' means increasing a developing country'scapacity to provide protection to IPR owners. This is quite the opposite of whatdeveloping countries understand when they refer to the 'development dimension.' Itadded that the FOD paper corrects this misconception, that the developmentdimension means technical assistance.

India said that the real development imperative is ensuring that the interest of IPowners is not secured at the expense of the users of IP, of consumers at large and ofpublic policy in general. The proposal therefore seeks to incorporate intointernational IP law and practice what developing countries have been demandingsince the TRIPS agreement was foisted on them in 1994.

According to India, the primary rationale for IP protection is to promote societaldevelopment by encouraging technological innovation. The legal monopoly grantedto IP owners is an exceptional departure from the general principle of competitivemarkets as a guarantee to secure society's interest. The rationale for the exception isnot that monopoly profits by the innovator is good for society, but that properlycontrolled, such a monopoly, by providing incentives for innovation, might producesufficient benefits for society to compensate for the loss to consumers.

Monopoly rights then is a special incentive that needs to be carefully calibrated byeach country, in light if its own circumstances and taking into account the costs andbenefits of such protection.

Should the rationale for a monopoly be absent, as in the case of cross-border rightsinvolving developed and developing countries, the only justification for granting amonopoly is a contractual obligation, such as TRIPS, and nothing more, said India. In such a situation, it makes little sense for one party, especially the weaker party, toagree to assume greater obligations than he is contractually bound to accept.

This is what developed countries have sought to do so far in the context of WIPO,said India, adding: 'The message of the Development Agenda is clear: no longer aredeveloping countries prepared to accept this approach, or continuation of the statusquo.'

Even in developed countries, where monopoly profits of IP holders are recycledwithin the economy, there is debate on equity and fairness of such protection andquestions about its claimed social benefit, said India.

'Given the huge North-South asymmetry, absence of mandatory cross-border resourcetransfers or welfare payment, and absence of domestic recycling of monopoly profitsof foreign IP rights holders, the case for strong IP protection in developing countriesis without any economic basis. Harmonisation of IP laws across countries withasymmetric distribution of IP assets is clearly intended to serve the interest of rentseekers in developed countries rather than that of the public in developing countries.'

Neither IP protection nor harmonization of IP laws leading to higher protectionstandards in all countries can be an end in itself. For developing countries to benefitfrom providing IP protection to developed countries' IP holders, there should beobligations by developed countries to transfer technology to developing countries.Absent an obligation to transfer technology, asymmetric IP rent flows would be apermanent feature and benefits of IP protection would forever elude consumers indeveloping countries.

India said the FOD proposal had pointed out that technology transfer should be abasic objective of the global IP system and WIPO has the responsibility of takingmeasures for this as part of the development agenda.

It added that technical assistance (TA) should be directed towards impact assessmentand enabling developing counties to use the space within IP treaties. The currentemphasis of TA on implementation and enforcement issues is misplaced. It isunrealistic and undesirable that the enforcement of IP laws will be privileged overenforcement of other laws in the country. Therefore, WIPO's current focus in TA onenforcement should shift to other areas such as development impact assessment.

India said the developed countries and WIPO should acknowledge that IP protectionis a policy instrument that needs to be used carefully in developing countries. Whilethe claimed benefits of strong IP are a matter of debate, it entails substantial real andimmediate costs for developing countries. Each country needs flexibility so that thecost of IP protection does not outweigh the benefits. WIPO should recognize this andformulate its work programme accordingly and not limit its activities to the blindpromotion of increasingly higher levels of IP protection.

WIPO as a UN agency can make a major impact by incorporating the developmentdimension into its mission in letter and spirit so that it is reflected in all itsinstruments. This would revitalize WIPO as an organization sensitive to integratingdeveloping countries' concerns in all areas of its work, concluded India.

Other developing countries speaking in support of the Development Agenda andbroadly of the FOD proposal included Kenya, Trinidad and Tobago, Venezuela andMorocco.

Trinidad and Tobago said in recent years it had realized that a properly staffed IPoffice will not automatically guarantee that IP will succeed in encouraging technologytransfer and serve as a general tool of economic transformation. It associated itselfwith many aspects of the FOD proposal, although it had reservations on a fewspecifics.

Kenya said, in support of the FOD proposal, that the initiative for establishment of theDevelopment Agenda is long overdue. Of significance to Kenya is the protection oftraditional knowledge and genetic resources, access to medicines, and expansion ofnational policy space and flexibility. The core of the Development Agenda is toensure an inbuilt enhancing of national policy space, embodying the public interest. The need to treat countries with different economic levels differently is paramount.

Also supporting the FOD proposal, Venezuela said developed countries shouldundertake obligations to ensure that the companies who have protected IP carry outtechnology transfer. IP should be at the service of development and not be an end initself. Development had to become a 'fundamental pillar' of WIPO. Thedevelopment dimension is not only about TA.

Some developing countries including Singapore and Sudan supported the presentwork of WIPO, implying that change was not needed. Singapore said thedevelopment dimension has always been part of WIPO's work. It did not see the needto change the WIPO Convention or integrate new procedures or bodies. It was opento suggestions for a development impact assessment of WIPO activities. It also sawmerit in the US proposal.

Sudan said it valued a WIPO development programme to develop IP culture and raisestandards in countries. The WIPO programs are not imposed but made on request. Itdid not support setting up other instruments and bodies under the DevelopmentAgenda.

Argentina noted that the other 3 proposals (from the US, UK and Mexico) share onespecific feature - the intention to limit the Development Agenda (DA) to a singleelement, i.e. technical cooperation. As a proponent of the DA, Argentina did notshare this view, which is very limited. It requested the countries that only focused onTA to also make proposals on the many other aspects of the FOD paper.

Argentina said that after the current meeting, it would like substantive work to bedone based on the FOD proposal. The other proposals could contribute but could inno way replace the FOD proposal.

On the US proposal, Argentina said that it was based on strengthening IP protection,and it did not share the views of the paper. The development dimension is notadequately covered in the US paper, which focused only on technical assistance basedon the use of IPs in developing countries. It also criticized the paper's limitedapproach to TA.

Argentina said the UK proposal had merit in that it was not limited to TA andcontained some good points arising from the UK-organised Independent Commissionon IPRs. However, the UK was only ready to seek solutions through TA and thusdistances itself from the FOD solutions. Although the UK endorses theCommission's view that the WIPO mandate should be changed, the UK indicates thatit is uncertain if the mandate should change.

Argentina added that the UK paper recognizes the weaknesses in WIPO's TA but onlysuggests that discussions be placed in WIPO's Permanent Committee on Cooperationfor Development (PCIPD). It said the UK paper also dealt with harmonization ofpatent laws, which reiterated the trilateral position that is detrimental to developingcountries. The patent treaty proposed is aimed at increasing protection levels and thisis detrimental to national flexibilities and concerns. This proposal had been rejectedtwice last year at the patents committee and General Assembly. Argentina also did notagree with the UK point that technology transfer is not in the purview of WIPO.

On the Mexico proposal, Argentina said it deplored the paper's closed approach. Itsaid the paper stated that IP is essential to development of humanity but manyindustrial countries had adopted patent protection quite recently and only afterestablishing their industrial base.

Referring to Mexico's positive reference to the Casablanca meeting (convened inFebruary by the WIPO Director General), Argentina said that meeting is not the bestexample of how WIPO meetings should be held, as it did not have participation of allmembers. The meeting did not take up developing countries' issues but instead dealtwith developed countries' issues in accordance with their needs in the patent treatybeing negotiated. Not all countries were invited. It is incorrect to refer to suchmeetings which should not be held in future.

Argentina also criticised other aspects of the Mexican paper, including an assessmentof levels of compliance of rules. Argentina concluded that IP is only a tool that canbe beneficial depending on the use made of it. It thus did not agree with thedissemination of IP which only pointed to its benefit, as their costs should also bediscussed.

Brazil welcomed the other proposals as it showed the countries' willingness toengage.

Referring to the US paper, Brazil agreed that WIPO is not a development agency likeUNDP and the FOD only aims at making WIPO cognizant of development issues andbroaden its perspective in a fashion that contributes to development.

While the US is concerned about the creation of new bodies, the FOD does notpropose new bodies but advocates that development should be in all existing bodiesand all discussions. The US paper understands that development is the most dauntingchallenge, which Brazil agreed with, but to meet this challenge, changes are neededin the IP system and to accommodate differences in development levels and contexts.

Brazil said the US's partnership proposal seems aimed at matchmaking donors andapplicants for TA. The FOD also touches on TA but the development dimensioncannot be dealt with only through TA. The FOD did not make suggestions on TA ina vacuum but in a wider context that includes changes in other areas.

It added that the rationale of the US proposal leads to a solution that runs counter tothe FOD proposals, as it would out-source WIPO's function and submit TA to greaterinfluence of rights holders who have most resources to fund TA on that basis. It didnot see how this could make TA more neutral and development friendly.

On the Mexican proposal, Brazil also criticised its reference to the Casablancameeting whose conclusions were not supported by Brazil. Countries in the FOD andothers had also questioned the legitimacy of the Casablanca meeting, said Brazil. 'This is not a basis to resume negotiations in WIPO. The way that meeting wasconducted is an example of how we do not want meetings to be conducted anymore'.

Brazil viewed with concern the Mexican position that WIPO's TA activities shouldinclude looking at the level of compliance and enforcement of rules by beneficiarycountries. This would raise standards and make life more difficult for developingcountries, which require flexibilities. Brazil also took issue with the Mexican paper'sreference to surcharge on patents on traditional knowledge, that developing countriesdon't see the benefits of IP, as the average person in developing countries is unawareand should be educated.

Brazil said the Mexican paper can agree to a development initiative only as long asthere is no interference with the existing framework of the international IP system. This seems to be a defense of the status quo and that is not what we intend to achieve. The Development Agenda would like to change the status quo and strengthen WIPOin a new direction, said Brazil. In contrast, the Mexico proposal defends the globalIP system as it exists or even a less flexible version of this system as WIPO would begiven a role to monitor countries' compliance and making compliance a condition forTA.

On the UK paper, Brazil said it shows an effort to sympathise with developmentconcerns and makes welcome use of the IPR Commission report, including statementssuch as that individual countries' circumstances have to be taken into account. However, while the analysis is solidly backed up, the solutions are narrow and Brazilwas frustrated by that. The UK reverts to the same solution as the US, with all theproblems to be taken up by the WIPO committee on development cooperation.

Brazil also took issue with the UK advocacy for global harmonization of IP standards,as it believed the harmonization process in WIPO will lead to higher standards andwill reduce existing flexibilities that are still there. This is not a development-friendlyposition. On the UK proposal that technology transfer not be dealt with by WIPO butinstead by the WTO working group on technology transfer, Brazil said that group'swork had not progressed very much and WIPO should take up this issue.

Several developed countries (including the US, Japan, Australia, France) spoke, allsupporting the position of Group B (comprising developed countries). The US saidthe FOD proposal was of concern as it implies that WIPO has disregardeddevelopment concerns and that strong IP protection is detrimental to globaldevelopment goals. It disagreed, saying the experiences of many developing countriesrepresented attest that IP has facilitated their development.

The US said the thought that weakening IP will further development appears to be asflawed as the idea that IP alone can bring about development. WIPO treaties includeflexibilities, the greatest being that the treaties are not mandatory. The US isinterested to learn what lack of flexibilities exist in WIPO treaties or how they limitpolicy space or hinder development and welcomed a factual dialogue on this point.

The US asserted that WIPO has made and should continue to make its most importantcontribution to development precisely by deepening and expanding, rather than bydiluting, its IP expertise.

Japan welcomed the US proposal on a database as it would enable an entire pictureto be built. It would be useful to listen to developing countries' evaluation of WIPOactivities. It also endorsed the UK paper's suggestion to proceed with harmonizationof patent laws in a small package.

Norway, while supporting the Group B position, took a more nuanced stance. Norway said the proposals are of great importance and a good basis, the MDGs areimportant for WIPO's broader work and it was happy to see a demand-drivenapproach. There is room for better performance by WIPO and in order to makeinformed choices on proper implementation of IP, assessments should be undertaken. Sweden said different levels of development should be taken into account in WIPO'snorm setting activities. It welcomed the US, UK and Mexican proposals.

Turkey said the proposals were useful, especially that of the FOD, although it wasvague in some parts. It suggested forming a working group to study the issue indetail.

Statements were also presented by international agencies (including the WHO andUNCTAD) and intergovernmental organizations (including the ACP Group and theAfrican Union).

The meeting continued on Wednesday, with statements presented by NGOs andindustry groups. A discussion on future work is scheduled to take place Wednesdayafternoon. A draft of the Chairman's summary of the meeting was being discussedinformally by member states. It is expected to be adopted late Wednesday afternoon.