Feb 6, 1990

CHILE FOR COMPLIMENTARY WIPO AND GATT ROLES IN TRIPS.

GENEVA, FEBRUARY 5 (BY CHAKRAVARTHI RAGHAVAN) The setting of international standards an Intellectual Property Rights (IPRs) and establishment of a dispute settlement mechanism should be dealt with in the World Intellectual Property Organisation and GATT should confine itself to determining trade consequences of non-application of internationally accepted IPR standards and authorising trade retaliation.

This view has been put forward by Chile in a proposal before the Uruguay Round negotiating group on "Trade-related Intellectual Property Rights" (TRIPs) which begins Monday.

The proposal by Chile would enable an injured GATT contracting party to apply "trade sanctions" when a GATT panel finds some trade consequences arising out of a WIPO determination that another contracting party had not applied internationally recognised intellectual property standards, and the trade sanctions are authorised by the GATT Contracting Parties.

A Mexican paper before the group, on the other hand, appears to envisage a GATT agreement on standards to complement specific aspects negotiated in WIPO, for application of GATT dispute settlement mechanisms, application of some GATT principles such as "national treatment", MFN and non-discrimination, and "transparency", as well as for "transitional arrangements".

Under transparency Mexico would provide for publication of laws and regulations relating to IPRs as well as provide for powers and responsibilities of agents enjoying IPR protection.

Under transitional arrangements Mexico envisages application of "special and more favourable treatment" to Third World countries including shorter term for patents and improvements in conditions of access for use of IPRs.

The objective of the negotiation, Chile has argued, is not to legislate on intellectual property or intellectual property rights but an their "trade-related" aspects. The relationship between IPRs and trade formed the basis of the negotiating mandate.

Expressing its concern that many of the proposals "succumb to the temptation to legislate an IPRs", Chile has argued that, from the standpoint of trade, intellectual property and their standby themselves are neutral. Whether or not the standards related to trade would depend on specific circumstances.

"It is therefore inappropriate", the Chilean communication said, "to draw up international standards whose non-application would automatically be interpreted as an infringement of free and hence subject to some kind of trade sanction ... The approach of trade standpoint must guide the negotiations should we seek to introduce changes in the GATT legal system".

GATT dealt only tangentially with IPRs, and its few provisions clearly showed that the purpose was not to foster "an abundance of regulations, but rather to ensure that intellectual property laws do not become a barrier to trade".

The proper sphere for intellectual property standards was not GATT but WIPO, and the various proposals before the negotiating group on standards should be forwarded to the WIPO with a view to its creating a new international treaty or additional protocol to other conventions in this area, Chile suggested.

The terms "standards", in Chile's view, included such issues like "provision of standards", "adequate principles", "applicability of basic principles of GATT", "provision of effective and appropriate means" for enforcement, and "transitional arrangements".

However, Chile noted, for a large group of countries, merely forwarding the standards to WIPO would not resolve the problem of trade sanctions that they would like to apply to countries that did not apply "internationally-accepted" standards since, "in the final analysis only trade sanctions appear effective".

But WIPO did not have trade responsibilities and could not impose such sanctions. Solutions should hence be sought by establishing linkages between WIPO and GATT in this matter.

WIPO, Chile noted in this connection, was currently studying the creation of its own dispute-settlement system.

Countries participating in the TRIPs negotiating group should undertake to subscribe in WIPO to a convention setting out the dispute-settlement system for application of internationally recognised intellectual property standards.

If the panel set up ad ho in WIPO determined that an internationally-accepted IPR standard had not been applied, and if the injured party felt that this had trade consequences, it might request a GATT panel whose specific task would be confined to determining whether the non-application as found to exist by the WIPO panel had or had not any trade consequences.

If the GATT's consultation and conciliation procedures did not settle the dispute, and if the recommendations the Contracting Parties are not implemented, then the application of Article XXIII of the GATT, which enabling a contracting party affected to withdraw equivalent concessions, would be justified.

Such a procedure and provision would allay fears about unilateral and arbitrary application of trade sanctions, would fulfil the Punta del Este mandate an TRIPs, and would respect the essential functions of WIPO and GATT.

The Mexican paper envisages results from the Uruguay Round in TRIPs covering "general aspects" of standards and principles on availability, scope and use of IPRs, with such an agreement complementing the specific aspects negotiated in WIPO.

Mexico envisages Uruguay Round agreement on patents, applying both to process (procedures for manufacture, as Mexico terms it) as well as to products, but with "transitional arrangements for Third World countries to adjust to the agreed standards and modalities and, in exceptional cases, to restrict the scope of the obligation on grounds of domestic social objectives".