Nov 1, 1989


GENEVA, OCTOBER 31 (BY CHAKRAVARTHI RAGHAVAN)ó The Uruguay Round negotiating group on "Trade-Related Intellectual Property Rights" (TRIPs) was presented Monday with proposals from Canada, Korea, New Zealand and Peru on the content and nature of any agreement to come out of the group.

The Peruvian proposal, unlike the Canadian and new Zealand papers, insists on the balance between protection of Intellectual Property Rights (IPRs) and objectives of development and transfer of technology, and a balance in each country between rights conferred on owners and interests of public welfare.

This view, which broadly follows the basic principles of the WIPO administered conventions (the Paris Union Conventions on industrial property rights and the Berne Convention on copyrights) would leave the areas of patentability, the duration of life for patents and issues like compulsory licensing and compensation to be determined by the state conferring such rights.

The Canadian and New Zealand proposals, on the other hand, in effect have sought to change the applicable international law in regard to industrial property protection - the Paris Union Conventions administered by WIPO, by backdoor amendments via the Uruguay Round GATT negotiations.

Both seek to prescribe enhanced patent and trade-marks protection as well as curb rights of sovereign states while granting these "monopolies" to prescribe conditions in public interest or for public policy.

Canada would have the TRIPs agreement to provide for uniform patent protection in all countries for 20 years and in stipulated areas, while New Zealand suggests 16 years.

Neither have chosen to explain the reasons for the particular period of protection favoured by them, excepting to assert that lack of uniform international standards is distorting trade.

Both these OECD countries would also reduce the scope for compulsory licensing, and ensure monopolies, either in form of exports of patented goods or through licensing conditions, for foreign patent holders.

The New Zealand paper claims that it is not suggesting that "GATT should be a standard-setting organisation" or that it was seeking in the GATT forum "a comprehensive framework of IPR standards".

Nevertheless, the paper goes on to seek changes in the WIPO convention on industrial property rights relating to the term of patents and reduce or eliminate rights reserved to states under the conventions, and for having the agreement situated in the GATT framework on the basis of the "trade aspects".

The Korean proposals, would stipulate the subject matters on which patents "should" be granted and to include chemical and pharmaceutical products and micro-organisms and suggests that the term of a patent "should not exceed 20 years from filing".

In comments on various proposals and questions addressed to sponsors, Brazil would appear to have questioned the thrust of the Canadian and other papers on the table, namely, using the TRIPs mandate to amend international conventions and create a "super-treaty" regime in GATT in these matters.

This, Brazil pointed out, was neither in the Punta del Este mandate nor in the April mid-term accord.

In other comments, Chile made clear its opposition to any eventual TRIPs agreement being put into the GATT framework.

India and Tanzania, among others supported this view, and also the approach in the Peruvian paper.

The Peruvian paper underscores the importance of patents for national development and the need for balance between rights conferred upon owners and interests of public welfare.

"Thus", the Peruvian paper says, "some sectors or products should be excluded from patentability, as being essential for the population, as in the case of pharmaceutical products produced under a generic name and intended to meet the needs of the poorest sectors of the population". "Likewise, it is necessary to ensure that patents are suitably worked, with the consequent transfer of knowledge".

Under the Peruvian scheme, patents shall not be granted where it is contrary to "order public" or morality; for plant or animal varieties or essentially biological processes for production of plants or animals; for pharmaceutical products, medicaments, active therapeutically substances, beverages or foods for human, animal or plant use; inventions which affect national development; or the processes, products or groups of products whose patentability is excluded by governments.

While the patent right will confer on the owner the exclusive right to exploit the invention on his own account or license its use to third parties, it "shall not grant the exclusive right to import the patented product or the product manufactured by the patented process".

The term of patent is to be for "a period considered suitable in accordance with national development interests".

The patent owner is to be required to notify "within a reasonable period" that he has been working the patent. After the expiry of the period any person might apply for grant of a compulsory licence to work the patent on several grounds.

These grounds include the fact the patented invention not having been exploited in the country; the exploitation does not satisfy local market demand on reasonable terms and conditions regarding quantity, quality or price; contractual licence has not been granted by patentee on reasonable terms and conditions to enable licences to satisfy local market demand on reasonable terms and conditions; or the exploitation of the patent in the country has been suspended for more than one year.

In all such cases the owner of a compulsory licence shall pay the patent owner "suitable compensation". In other parts, the Peruvian paper would have the protection of integrated circuits to be governed by the terms of the recently concluded Washington treaty on this subject, copyrights to be governed by the Berne Convention.

As regards biotechnology, which the U.S. and some other industrial countries wish to bring under scope of patentability via GATT, the Peruvian paper argues that since this new science would have applications in various fields including agriculture and chemical and pharmaceutical products, "all essential sectors for mankind", thorough assessments would have to be carried out before granting protection in this field.

Under the Peruvian proposal, in order to limit the impact of restrictive business practices, the GATT agreement would also prohibit a patent or trade-mark owner from imposing any conditions on the licensee. It sets out in this regard a number of such restrictive practices associated with technology transfer agreements (and which have been listed in the UNCTAD draft code on international transfer of technology).

The Peruvian paper also rejects the concept of protecting "trade secrets" through a TRIPs agreement, pointing out that the basis of IPR is that the protected right should be "disclosed, published and registered, which by definition is not applicable to the notion of trade secrets".

The subject should best be left to be governed by relevant provisions civil law, in the Peruvian view.

In its paper, New Zealand would have parties to the TRIPs agreement committing themselves to accord IPR protection "at least as adequate and effective" as in principal international conventions, in particular the Paris and Berne Conventions, and the agreement itself stipulating that "where appropriate", the minimum standards and norms should be those in existing instruments.

It would also have the overall TRIPs agreement, oblige governments to incorporate common GATT principles and disciplines like transparency, national treatment and MFN treatment, a minimum set of standards and norms addressing the intellectual property area.

But it does not explain this contradiction with its earlier statement about applying standards of international conventions.

The Canadian paper in this regard is more straightforward, arguing that since the Paris Convention does not prescribe any uniform standards, the TRIPs agreement in GATT should. The New Zealand paper would also have the TRIPs agreement provide for "multilateral resolution" of any disputes between parties to the agreement, and modelled on the GATT procedures and for specific use of technical experts as in the GATT code on technical barriers to trade.

The New Zealand paper stipulates that a patent shall be granted for an "invention", but that some subject matters could be unpatentable and goes on to list four such categories as "an example": mere presentation of information, mere discoveries, schemes, etc., for performing a mental act, playing a game or doing business, and inventions contrary to public order or morality.

It is not clear whether New Zealandís use of the term "for example" implies by this other subject matters too could be made unpatentable.

Under New Zealandís scheme compulsory licences could be given only to address "a declared national emergency", or to remedy "an adjudicated anti-competitive practice" or where government exploitation of the patent is "essential". The Canadian paper says for Canada a "substantial result" on intellectual property standards is a "key element", of a Uruguay Round TRIPs agreement, and effective international rules for enforcement of such rights would "mean little if there are no or inadequate standards".

Canada also asserts that an "adequate level" of intellectual property protection is needed in each country to facilitate effective international transfer of technology and worldwide dissemination of goods and services, and "no country could afford to condone expropriation or theft of internationally traded technologies, goods and services". Another assertion in the Canadian paper is that sharp differences in such intellectual property standards and use provisions among countries distort trade and investment decisions.

For GATT to become a "central international institution" to regulate international trade problems, Canada further argues, it must adapt to such emerging trends.

A TRIPs agreement would facilitate trade in technology, through licensing agreements between private parties, and restrictions on ability of private parties to conclude "mutually advantageous agreements" would raise costs of technology, reduce international technology flows and distort trade and investment".

The Canadian paper sets out, on this basis, its views on various standards and principles in various fields of "intellectual property", and claims that protection for "trade and business secrets" is an important aspect of providing "a secure environment for transfer of technology". In the Canadian scheme patents should be available for 20 years from date of filing, for all products and processes in all fields of technology. But national laws could provide for unpatentability among others of multicellular life forms or processes for producing multicellular life forms.

The formulation could imply that manipulated "genes" could be patented.

The South Korean paper suggests that priority in the TRIPs negotiations should be to seek fullest possible participation, "considering the difficulties of harmonisation of all participantsí interests in an international agreement".

"If the agreement does not take into account each countryís different interests including different levels of development in the field of IPRs, it will be very hard to expect full participation and the trade distortion problems in this field would still remain", Korea adds.