Chamber Fears Climate Talks Could Set the Stage for TRIPS Changes

Global climate change negotiations could become the battleground to hammer out a second clarification of intellectual property protection rules in the World Trade Organization to strengthen developing countries rights to use patented technology without authorization of rights holders, according to the U.S. Chamber of Commerce.

The Chamber fears that these countries could take away clean energy technology from U.S. right holders by securing a modification of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) as part of negotiations for an international climate change pact.

Such use of technology could lead to a reduction in capital investment in research and development of such environmentally sound technologies (ESTs), Chamber sources said.

We think they want to take technology outright, said a Chamber source. To us, thats a nonstarter.

The Chamber points to comments by Indian, Chinese and Brazilian officials that they should be able to use compulsory licensing in order to get access to climate-friendly technology in order to meet mandatory greenhouse gas emission caps that they are likely to face under a post-2012 global climate change pact.

The Chamber will be joined by other industry, labor and environmental groups in seeking to protect the rights of U.S. EST patent right holders, as a way of preserving and creating U.S. jobs, sources said.

The coalition, which will be known as the Innovation, Development and Employment Alliance (IDEA), will be formally launched on May 20. Included in the IDEA Coalition are Microsoft, General Electric, Bendix Commercial Vehicle Systems and Sunrise Solar. The IDEA Coalition will also work on health care IPR issues, as well as renewable energy.

The Chamber would ideally like a climate pact to specify that countries retain all rights and obligations under TRIPS. This would ensure that IPR protections are not eroded by any language in a climate agreement meant to encourage the diffusion of green technologies, a Chamber source said.

The Chamber is pressing the State Department to clarify the developing countries exact positions, Chamber sources said.

A State Department official in a May 14 statement said Protecting intellectual property provides an essential foundation for the development and deployment of environmentally sound technologies. He added: It will be important that a future agreement be consistent with the protection of intellectual property.

According to the statement, State is consulting broadly with our negotiating partners on constructive ways to encourage the development and deployment of environmentally sound technologies.

Sources with the U.S. Chamber said it is still unclear what developing countries mean by the ambiguous term technology transfer. For example, a developing country could seek technology transfer language that allows it to dismantle a U.S.-made wind turbine and freely use the technology to produce generic versions without WTO repercussions, one source said.

By contrast, the Chamber wants to ensure that rights holders can transfer technology by selling it, and proposes increasing sales of ESTs by implementing a global sectoral duty-free pact such as the Environmental Goods and Services Agreement (EGSA).

Brazilian officials this week in an interview rejected the notion that the mere sale of goods on a duty-free basis constitutes technology transfer, which they see as involving the sharing of knowledge or capacity-building.

A Brazilian official insisted that developing countries have avoided compulsory licensing of drug patents allowed under the Doha Declaration on TRIPS and Health except as a last resort when a rights holder simply did not give ground in protracted negotiations. He said developing countries will treat EST patents in a similar fashion.

The Brazilian official also pointed out that Brazil has only once used compulsory licensing -- in the case of Efavirenz by Merck (Inside U.S. Trade, April 27, 2007). We really were trying to reach some kind of negotiated solution before resorting to this, he said. We favor dialogue every time.

Another Brazilian official said that Brazil would favor that the parties should consider new approaches that combine intellectual property rights protection and facilitated technological sharing, bearing in mind the example set by decisions in other relevant international fora related to intellectual property rights -- such as the Doha Declaration on the TRIPS Agreement and Public Health.

Brazil and India have both referenced the 2001 Doha declaration clarifying TRIPS provisions as they relate to public health, as part of their calls for an IPR-easing aspect to a global climate pact. China has specifically called for the use of compulsory licensing of ESTs.

Indian Special Envoy on Climate Change Shyam Saran last year recommended that [i]f climate change is an extraordinary issue like HIV/AIDS was, then it should be dealt with similarly, according to U.S. industry sources.

China in a Sept. 28 submission to the UNFCCC stated that [c]ompulsory licensing related [to] patented ESTs and specific legal and regulatory arrangement[s] to curb negative effects of monopoly powers shall be put in place as part of the efforts to implement the UNFCCC. China stated that [t]he existing IPR system does not match the increasing needs for accelerating [transfer and diffusion] of ESTs to meet challenges of climate change.

The issue of technology transfer is raised in the text of the U.N. Framework Convention on Climate Change (UNFCCC), which governs international efforts to fight climate change including the global talks. In Article 4 paragraph 7, the UNFCCC states that developing countries ability to implement their commitments under the convention will depend on the effective implementation by developed country Parties of their commitments under the Convention related to financial resources and transfer of technology . .

Countries are already allowed under the TRIPS to use compulsory licensing so long as they either negotiate with the right holder for a reasonable period of time or declare a national emergency or other circumstances of extreme urgency. But sources said even though they have legal grounds to use compulsory licensing, the developing countries still face political pressure that can be alleviated by clarifying the terms of the TRIPS Agreement.

While the law and practice of compulsory licensing is well established for pharmaceuticals, it remains scant for ESTs, and so developing countries want full assurance that they will not face repercussions from wealthy countries if they use compulsory licensing for ESTs, according to a non-governmental organization source.

TRIPS clarifications sought by developing countries include the definition of public interest, under which they can use compulsory licensing. They also want to clarify the definition of anticompetitive conduct, which allows for compulsory licensing. They seek to better define the scope of national emergencies related to climate change. -- Luke Engan