SOUTH ADVISED TO RAISE ITS OWN TECHNOLOGY ISSUES IN TRIPS.

Apr 28, 1989

SOUTH ADVISED TO RAISE ITS OWN TECHNOLOGY ISSUES IN TRIPS.

GENEVA, APRIL (BY CHAKRAVARTHI RAGHAVAN)— If the industrialised countries continue to insist on elaboration of substantive norms and standards in the Uruguay round, third world countries should use the negotiations to focus on issues they have raised in other fora.

This one of the suggestions in the UNCTAD publication, "Uruguay round: papers on selected issues", a collection of papers prepared as part of the secretariat's technical assistance to third world countries participating in the Uruguay round.

Two papers relate to the negotiations on "trade-related intellectual property rights" (TRIPS). They were written and published before the recent agreements at the April meeting of the TNC on the TRIPS issue.

At the April meeting, the third world countries have agreed that the TRIPS negotiations over the next 20 months "shall encompass" a number of listed issues including:

-Applicability of basic principles of the GATT and of relevant international intellectual property agreements or conventions, and

--"Provision of adequate standards and principles concerning the availability, scope and use of trade-related intellectual property rights".

In some of the major third world countries, there is already some controversy on what has been agreed to by their negotiators from commerce or foreign offices in an area where domestically other substantive ministries or involved.

The negotiators concerned have put forward their own explanations in their countries.

But with more fundamental issues than mere foreign trade now being involved, the substantive departments and ministries will now be more directly involved in the negotiations, and it remains to be seen how these interests are going to interpret the texts when they meet in the TRIPS group, far the first time after the meeting, an may 11-12.

Some of the ideas in the UNCTAD publication, which has already been in the hands of third world governments as technical assistance project papers have now become clearly relevant.

In their paper on services, two UNCTAD staff members, Murray Gibbs and Mina Mashayeki have underscored the inter-relationship among the new issues - TRIPS, TRIMS and services - and point out the important links between them.

"Taken together," they argue, "they make up a single global issue, namely that of creation of comparative advantage and achievement of international competitiveness".

In his paper dealing with substantive technology issues, Paolo Bifari, an UNCTAD consultant, has pointed to the complex, questions of domestic mechanisms and policies and their international aspects involved in the negotiations and has said:

"It is thus important that the negotiating teams of developing countries be of the highest calibre".

"The subjects are highly technical, with pervasive economic effects, and developing countries need to approach them on the basis of well-defined strategies covering the legal, economic, scientific and technical aspects of the negotiations, if they are to face up to their counterparts in developed countries".

In another paper, Abdulqawi Yusuf, a staff member in UNCTAD’s technology division argues that looking at intellectual property rights (IPRS), exclusively from the point of view of trade ignores their paramount role in technological innovation and transfer of technology.

The predominant consideration in grant of IPRS has been the furtherance of public interest. This implies that the rights of IPR owners have to be counterbalanced by certain obligations towards the society granting them.

Such obligations are enshrined in national legislation as well as in international conventions. But the proposals of industrial countries in the negotiating group on TRIPS have ignored the issue of "abusive use" of IPRS.

"Adoption of minimum standards and norms implies that the discretion of governments to lay down the terms of IPRS they grant and the conditions under which they should be exercised, will be curtailed without any countervailing limitations on the discretion of IPR owners as to how they may use or abuse such rights in the territory of the granting state".

Referring to restrictive practices in licensing and other transfer of technology agreements that sometimes give rise to such abusive practices, Yusuf points that in the developed market economy countries, competition laws are generally used to check abusive practices arising from exercise of exclusive rights under intellectual property protection laws.

"At the international level, there are no standards limiting the use of such abusive practices. While the draft international, code on the transfer of technology attempts to establish disciplines in these areas, negotiations on the code have not yet been successfully completed."

Yusuf also points out that adherence by the third world countries to the proposed substantive norms and standards (in the GATT through the Uruguay round negotiations) would imply "the abandonment of the efforts they have deployed since the mid-1970's to revise the Paris convention for the protection of industrial property in their favour".

"Many elements of the proposed TRIPS agreement in fact constitute a reverse movement which not only could nullify the progress achieved in the process of revision of the Paris Convention, but also might stack up the system against the basic objectives of the developing countries."

Yusuf also points out that at present there is no international consensus on the most appropriate methods for protection of new technologies such as information technologies, functional designs, semiconductors and biotechnologies.

The effect of the agreement to negotiate issues relating to substantive norms in the Uruguay round and the suggestions of industrialised countries in that negotiating group would be to extend automatically to all countries the same solutions that have been adopted by the most technologically advanced ones.

The insistence on precise equivalence in legal standards and norms to those prevailing in the most technologically advanced countries would introduce material reciprocity in the international intellectual property system.

The existing conventions are based on the principle of national treatment, with certain internationally agreed minimum standards applicable as under article five of the Paris convention.

The proposed enforcement measures, Yusuf warns, would imply substantial administrative and financial burden for third world countries, would necessitate introduction of new judicial. And administrative structures, and would give rise to "hitherto unknown social tensions and conflicts in some economic and commercial sectors".

Yusuf suggests that if developed countries continue to insist or elaboration of substantive norms and standards, developing countries should consider using the Uruguay round as a forum and an opportunity for discussion of the issues they had already raised in other forums with respect to intellectual property protection and access to, and transfer of technology and to propose ideas and suggestions reflecting their own concerns and aspirations in these areas.

This would imply recognition of the complementarity between granting IPRS and access to and transfer of technology, and thus have the merit of taking into account interests of the third world countries.

Such an approach would reed to address issues of particular interest to technology-importing countries such as:

--Remedies for insufficient disclosure of the invention,

--Local working requirements and remedies for lack of use or inadequate use of patented inventions,

--Allowance of parallel imports and question of exhaustion of rights,

--Import of products manufactured by a process patented in the importing country and need for special treatment of third world countries in this domain,

--Exemption from patentability of certain subject matters - plant varieties and animal breeds, foods and drugs and processes relating to their manufacture,

--Avoidance of unjustifiable or abusive restrictive practices in licensing agreements,

--Limits an scope of protection of computer programmes under copyright law or their protection under a sui generis approach, and

--Provision for facilitation and promotion of transfer of technology to developing countries.

Some of these issues are being considered in the WIPO in regard to revision of the Paris Union Conventions and in UNCTAD in regard to the technology code.

Neither of these have been concluded and the prospects of a favourable outcome in these negotiations for third world countries would be affected by a TRIPS agreement, unless a clear link is establisher between discussions in all these forums.

Such a link could be in the form of a comprehensive consideration of all the issues in a single forum or of an explicit recognition of inter-relationship of the issues, even if they are discussed in separate forums, and with some form of parallelism among the various negotiating exercises.

Yusuf's views were formulated before the midterm accord on TRIPS, which would appear to indicate that all the issues would be in the Uruguay round.

However, there are some observers who doubt whether the GATT secretarial, servicing the negotiations, has the technical competence in this area, and whether the already overloaded and creaking GATT machinery will be able to cope with it.

Also, in identifying itself with and promoting the mercantilist interests of the advanced industrial nations in this area, the GATT and its free trade system may have receiver a serious blow.