FAR-REACHING U.S. PROPOSALS ON INTELLECTUAL PROPERTY RIGHTS.

Mar 28, 1987

FAR-REACHING U.S. PROPOSALS ON INTELLECTUAL PROPERTY RIGHTS.

GENEVA MARCH 26 (IFDA/CHAKRAVARTHI RAGHAVAN) -- The United States is reported to have unveiled in GATT this week its far-reaching proposals to create new international obligations in patents, trade-marks and other intellectual property rights, and effectively transfer jurisdiction in these areas to GATT.

The U.S. reportedly put forward these proposals Wednesday at the first meeting of the Uruguay Round negotiating group on "Trade-related aspects of intellectual property rights". It is chaired by Sweden's Ambassador, Lars Anell.

One third world participant said that the U.S. ideas, supported in varying degrees by other industrial countries, appeared to confirm some of the worst fears of third world countries, who had seen the entire U.S. exercise in the new round as an effort "to hijack" the North-South dialogue into GATT, and create a new international order to sub-serve the rights of TNCS.

Another participant said the U.S. was merely seeking to provide itself "a cover in GATT", to enable it to use its own existing and proposed domestic laws to secure "competitivity", for U.S. manufactures, by retaliating against third world countries, by restricting imports from them, for their alleged failure to protect patents and trademark rights of U.S. TNCS - a kind of new trade barrier that the GATT provisions have been intended to prevent.

Participants said that the U.S. proposals sought to create new GATT obligations for enforcement of existing international conventions in this area, create new norms or conventions, change the enforcement procedures, from judicial to administrative, and cast the onus of proof not on the person claiming infringement but on the accused.

Though the Punta del Este declaration has related work in this area to existing GATT provisions, the U.S. remarks reportedly left little doubt that the U.S. viewed it as merely a device to get the issue on the negotiating agenda.

"The negotiating group", the U.S. reportedly said, "should not become preoccupied with examination of existing GATT articles".

The U.S. proposals were reportedly countered by Brazil, India and a number of other third world countries who insisted that the negotiating group had not been mandated to create new international norms or standards or to raise the levels of existing protection under existing multilateral agreements through strengthened enforcement procedures - matters which were within the ken of appropriate international organisations such as WIPO.

The negotiating group could only examine the operation of the relevant GATT articles, and in the light of this ascertain whether there was need for any clarification or additional disciplines relating to the effect on trade in goods of the exercise by individual contracting parties of their duty to protect intellectual property rights.

The U.S. and some other industrial countries in effect reportedly suggested examination by the group of national laws of countries in the matter of intellectual property rights in order to determine whether these were adequate - an idea summarily rejected by several third world countries.

Brazil, India and several others also called for the recognition of the special status in this matter of WIPO, the only organisation besides GATT mentioned by name in the Punta del Este declaration, and to invite the WIPO Secretariat alongside the GATT Secretariat, to provide technical support to the negotiating group.

The EEC and some other industrial countries reportedly suggested instead granting "observer status" to WIPO, with the EEC noting that such a status in GATT was not merely that of a "voyeur" (which in French could also mean mere spectator).

The U.S. delegate is reported to have remarked that his authorities were "not enamoured of WIPO and its role".

The chairman of the group is to hold further consultations on this. The GNG has to decide this at its next meeting on April 13.

The U.S. is reported to have listed what it considered to be deficiencies in protection of intellectual property rights, but did not at all explain why it had not taken these up in the institutions dealing with this matter.

The deficiencies in protection, according to the U.S. , was because of inadequacies in national laws: total lack of patent or copyright laws, narrow scope of protection with entire categories of products or works not being protected, too short a period of protection which gave innovator little time to test and market a product and achieve adequate returns on investment, and misuse of compulsory licensing programmes.

Third world participants noted that in effect the U.S. was objecting to the entire scheme of the Paris Convention, which balanced the rights of inventors with their obligations to the society protecting his rights by working the rights on the territory.

The Contracting Parties to the Paris Convention have the autonomy to decide which areas or fields they want to protect, the period of protection, rules to ensure working of the patents on its territory, etc. But they are obliged to treat equally their own nationals and nationals of countries parties to the Convention.

The U.S. also complained of "Lack of police enforcement" or access to "border enforcement" for imports or exports infringing patent and trade mark rights, and difficulties in gaining access to judicial or administrative bodies dealing with such problems, and rules of evidence placing the burden of establishing infringement of a process patent on the owner of the patent.

All these deficiencies in the U.S. view distorted trade in goods and reduced the value of concessions exchanged in past trade rounds. The concerned GATT articles did not adequately address these issues.

The standards provided in international conventions outside of GATT also did not provide adequate protection, and GATT should now use its "unique opportunity to build on and create effective disciplines in this area".

In areas where there was already an international consensus, GATT should recognise this and develop mechanisms "for enforcement of that consensus".

Where there were deficiencies in international norms and standards, the group should develop international consensus on "adequate norms and standards in those areas".

The EEC is reported to have said there were three categories of problems: inadequacies in availability and scope of rights, inadequate procedures and remedies for enforcement of such existing rights, and national rules which discriminated against imports in favour of domestic economic activity.

On the last, the EEC suggested clarification of existing GATT provisions through "more explicit disciplines".

Another priority area for the EEC was or an agreement on trade in counterfeit goods bearing trade marks, including adequate enforcement procedures and remedies, and extending this approach to cover other rights - like copyright, neighbouring rights, geographical denominations and designs.

In both these areas there should be new disciplines for better enforcement mechanisms, at the level of importation or elsewhere, but making sure that the new disciplines did not in themselves become unreasonable trade barriers.

In areas where there is international consensus for intellectual protection, but improvements are needed, or where international rules left considerable national discretion, the negotiating group should identify lacunae or weaknesses of a trade-related nature, "without prejudice to the nature or institutional venue of eventual remedial action".

Rejecting the U.S. proposals for using GATT to create new standards, raise levels of protection under existing ones through strengthened enforcement procedures, Brazil is reported to have insisted that the group's mandate was quite different.

Their mandate was solely to establish whether through national laws or international agreements countries had exercised their rights to regulate the intellectual property rights in a manner which might be detrimental to the expansion of trade in goods.

It was not the mandate of the group to condition the fulfilment of GATT obligations, like non-discrimination and liberalisation of trade, to observance of obligations to protect intellectual property rights, either already accepted or to be accepted in appropriate and specific international treaties.

"Such links would not simply be acceptable to many delegations, including mine", the Brazilian Delegate is reported to have declared.

On the issue of counterfeit goods too, the group should look at the matter in terms of the obligations of CPS under GATT to forestall the possibility of counterfeit goods being traded across borders.

Cuba insisted that intellectual property issues were primarily the concern of WIPO. The group could however carry forward the work already done in GATT in respect of counterfeit goods.

Norway, speaking for the Nordics, reportedly said the negotiations should not merely cover trade-mark questions but also others like patents and copyrights, and problems created by inadequate enforcement in countries or local vs. federal jurisdictions.

Colombia was concerned that work in GATT might prejudice ongoing work in WIPO, and stressed the need to avoid duplication of work.

South Korea reportedly noted that earlier work in the expert group on counterfeit goods had shown lack of a general consensus on the interpretation of the relevant GATT articles.

The problem was more complicated when references were made to trade-related aspects of intellectual property - "a rather new and ill-defined concept". There should hence be an attempt to define this concept and reach a consensus on it, on the basis of specific proposals from delegations. Also, any action on counterfeit goods should not result in distortions or restrictions on trade in genuine goods and creation of new trade barriers.

The specific needs of third world countries for industrial development and facilitating technology transfer should also be kept in mind. Work in GATT should be complementary to and in harmony with work in other international fora, the Korean delegate said.

Mexico said that the negotiations should be confined to trade in goods, and strongly objected to the idea that national legislation of countries should conform to some international criteria.

India reportedly underscored the strict limitations of the negotiating mandate and said efforts could not be directed to creating new standards in intellectual property rights - a task which rightfully belonged to the WIPO.

The Punta del Este mandate required, in the Indian view, a GATT role to ensure that measures and procedures to enforce intellectual property rights did not themselves become barriers to legitimate trade.

The initial phase called for examination of GATT articles and examination of their operation on the basis of specific suggestions from participants.

Canada supported the views of the U.S. and a number of other industrial countries, on the importance of negotiations dealing with all aspects of intellectual property rights and not merely trade-marks.

However, Canada reportedly noted that it was a major importer of technology and "there is a need to ensure a balance of interests between proprietors of intellectual property rights and those who sought to acquire products incorporating such rights".

This is endorsed by India and South Korea.

India reportedly said that arrangements relating to protection of intellectual property rights could also have the effect of becoming restrictive business practices and market sharing arrangements, and the aspects too should be examined by the group.