WIPO TO PREPARE IPR DISPUTE SETTLEMENT DRAFT TREATY.

Mar 1, 1990

WIPO TO PREPARE IPR DISPUTE SETTLEMENT DRAFT TREATY.

GENEVA, FEBRUARY 27 (BY CHAKRAVARTHI RAGHAVAN) -- The International Bureau (Secretariat) of the World Intellectual Property Organisation has been asked to prepare a document on the principles of a draft treaty for settlement of disputes between States in the field of intellectual property.

This mandate came out of the first session of the WIPO "Committee of Experts on the Settlement of Intellectual Property Disputes between States" held here from February 19 to 23.

The document is expected to be readied and will be in the hands of governments by about September, well in time for the consideration of the second session of the Committee to be held from 22 to 26 October 1990.

The mandate to the International Bureau to prepare a document on the "principles of a draft treaty" was the compromise between the position of the Third World countries who wanted a draft treaty to be prepared, and that of the U.S. and some other leading ICs who were opposed to such a draft at this stage when they are trying to ram through the Uruguay Round into GATT a dispute settlement mechanism in this area that would enable them to exercise coercive powers of trade retaliation against Third World countries.

According to some of the participants, it seemed that while the U.S. and some of the other leading ICs wish to secure their objectives in respect of enhanced international standards for Intellectual (Industrial) Property protection, and dispute settlement mechanism with trade retaliation as an instrument of enforcement, through the GATT and the Uruguay Round, they are also trying to keep their options open for a WIPO arrangement in case their efforts in the trade negotiations fail.

The idea of a WIPO mechanism for dispute settlement was adopted by the Governing Bodies of the WIPO at their last meeting in September-October 1989, and is on the WIPO work programme.

In accord with normal WIPO practice, as a preliminary to a conference to adopt any such instrument, a meeting of Committee of Experts open to all members was convened.

Some 64 countries were present at last week's session.

It is a normal WIPO practice too that for such meetings, the secretariat prepares a substantial document presenting its views and various options, and often even a draft treaty, as was done for the recent meeting on the harmonisation treaty on trade mark laws.

But given the sensitivity of the subject, and the views of the major ICs like the U.S., the WIPO bureau had prepared a draft document analysing the various issues, and posing a number of questions that the experts were called upon to answer as a preliminary step.

Apart from the document on the "principles" of a draft treaty, the secretariat was also asked to list the existing treaties in the area of intellectual property protection and the dispute settlement provisions in those treaties.

The discussions at the first session showed that Third World countries welcomed the WIPO initiative and supported the idea of evolving a dispute settlement mechanism within WIPO, given its technical knowledge and juridical competence within the UN system to deal with IPR issues.

The comments of the ICs, particularly the US, several of the EEC member-states and Japan showed that they were trying to keep all their options open as between the WIPO and the GATT. All of them spoke of the absence of mechanisms for dispute settlement as one of the weaknesses of the current system of IPR protection. Several of them also spoke in this connection of need of "adequate standards" and adherence by more countries of such "adequate standards".

While several of the ICs in their comments and answers to the various questions posed in the WIPO document spoke of the need for some kind of a "follow-up" to any dispute settlement mechanism (which would give a ruling and which would be adopted in the form of a recommendation), and envisaging some kind of a retaliation or sanctions, the U.S. was opposed to it.

Third World participants explained that this was essentially because the U.S. wanted to make sure that the WIPO process would not undercut its own efforts in GATT, where it is seeking to set new and enhanced international norms and standards and provide for a dispute settlement mechanism backed by the ultimate sanction of trade retaliation that would be effective against Third World countries.

On the other hand, Japan and some other ICs wanted retaliation or sanction for non-implementation of a recommendation to be provided for in the WIPO dispute settlement mechanism.

This is perhaps because of their feeling that this could be used to prevent unilateral coercive actions, as of the S. 301 type in the U.S. trade law, being used or threatened against them.

The U.S. made it explicitly clear that since international trade had been the source of much of the IPR disputes, its own preference was for dealing with the issue in the GATT and its dispute settlement mechanism, and that the U.S. reserved its position on whether such a treaty and provision was needed in the WIPO.

Other ICs, like Switzerland, Norway and UK wanted to ensure that the WIPO efforts would not undercut or delay the work in this area in the GATT.

A number of Third World countries including India, Chile, Uruguay, Brazil, Egypt, Mexico, Argentina and Ghana were however for expeditious work in the WIPO on the draft treaty.

Brazil, Mexico, Argentina and India also said that a dispute settlement mechanism on IPRs should also contribute to the reduction of inequalities and promotion of symmetry and balance of intellectual property rights and obligations. Such a mechanism should not only monitor compliance with the standards of IPR protection, but instances of "excessive or abusive protection".

Such a treaty apart from the principles of national treatment, non-discrimination, territoriality and independence of protection, should also take account of the principle of exhaustion of local remedies before invoking the international mechanism.

India and Chile underscored that the WIPO mechanism should not merely draw upon solutions in international law and practice but solutions related to special nature of the rights and obligations of IPR protection. The terms of reference of the committee of experts should be kept in mind and no sanctions or retaliatory actions of any kind should be envisaged, they added.

One of the questions posed in the WIPO bureau document related to whether or not the proposed treaty and mechanism should provide for compulsory arbitration. The overwhelming view was that there should be provision for arbitration but on the basis of agreement of the parties to the dispute.

While there was a broad measure of agreement that the proposed dispute settlement treaty should cover all WIPO administered IPR protection treaties, there was considerable difference of opinion about its covering other multilateral treaties or bilateral treaties, such as the Rome treaty (on the European Community) or the General Agreement. But there was a general support that the dispute settlement mechanism should provide mandatory for settlement of disputes arising out of the WIPO administered treaties.

While some (major ICs) wanted what they described as "recognised principles" of adequate protection to be the basis for settlement of disputes, many others underlined that the norms was a matter of treaty law rather than other sources of international law.

In this view a number of delegations were of the view that disputes should be settled in terms of the substantive treaty and its provisions.

A number of delegations favoured the idea of choice of the forum for settlement of disputes to be left to the party or parties concerned, while many others were of the view that Contracting Parties to the proposed treaty should be obliged to use and exhaust this procedure before resorting to others.

There was a general support for the view that "forum shopping" should not be allowed, nor should issues settled in one forum be agitated or raised in another forum.

The WIPO document before the first session suggested a two-stage approach to dispute settlement:

In the first stage, the dispute would be referred to a panel or expert commission to inquire into it and provide findings, and in the second stage the WIPO assembly concerned would adopt the findings and make recommendations.

The general view was that the assembly to make the recommendations must be of the assembly of the source treaty, while others suggested that it should be the assembly of the treaty on dispute settlement. Another idea was that the assembly of the dispute settlement treaty should be the one to adopt or make recommendations, but only members of the source treaty should participate.