WTO TRIPS COUNCIL, MARCH 8-9, 2005

UNCLAS SECTION 01 OF 07 GENEVA 000837

SIPDIS

PASS USTR FOR MENDENHALL, ESPINEL, PECK
STATE FOR WILSON, FELT
USDA FOR FAS/ITP/SCHWARTZ, TTB/TOBIASSE
USPTO FOR LASHLEY, SALMON
USDOC FOR ITA/SCHLEGELMILCH

E.O. 12958: N/A
TAGS: EAGR ETRD WTRO
SUBJECT: WTO TRIPS COUNCIL, MARCH 8-9, 2005


1. SUMMARY: The TRIPS Council meeting took place on
Wednesday and Thursday, March 8-9, 2005. Mr. Tony Miller of
Hong Kong, China chaired the meeting. There was an informal
session held on the morning of March 8, with the formal
session beginning on the afternoon of the first and
continuing to the next day. Most discussion took place with
regard to two agenda items. With respect to the Decision on
the implementation of paragraph 6 of the Doha Declaration on
the TRIPS Agreement and Public Health, the African Group
tabled a paper clarifying some of their reasons for their
proposal from the previous meeting and the United States
tabled a paper clarifying views on the amendment process.
As to the relationship of TRIPS and the CBD, new documents
were tabled by Peru and the delegations of Brazil, India and
a number of co-sponsors. END OF SUMMARY


2. INFORMAL SESSION


3. The TRIPS Council met in informal session on the
morning of December 1. The Chair raised three issues for
discussion: (1) the decision on the implementation of
paragraph 6 of the Doha Declaration on the TRIPS Agreement
and Public Health, (2) structure of discussions under the
agenda items relating to Article 27(3)(b),the relationship
of TRIPS and CBD and protection of traditional knowledge
(TK) and folklore, and (3) implementation issues.


4. The Nigerian delegation made a brief statement under
item one that its delegation would make a submission at the
formal session. The Chair then asked whether any delegation
had (1) any additional flexibility on the matter in order to
meet the deadline, and (2) if meeting the deadline was not
possible, any ideas on further work. No delegation took the
floor.


5. On the second item, the Chair noted that he had
undertaken consultations on this issue and noted widespread
view that current discussions were fruitful and allowing all
views. He would present no new proposal on how to pursue
work and suggested that we take up the three agenda items
together, as in past meetings, based on the contribution of
Members. No delegation commented on this issue.


6. On implementation, the Chair noted that a progress
report would be prepared and recalled the five options: (1)
resolve issue, (2) no further action, (3) refer issue to a
negotiating body, (4) work under subsidiary body under the
TNC, (5) undertake further work at the TNC. The Chair noted
that his consultations included a wide variety of responses.
For example, some delegations wanted issues to move to a
negotiating body, others saw that the Ministerial
declaration did not include negotiations on these issues and
that a negotiating body or the TNC would not be acceptable.
He noted some delegations identified tirets 88 and 95, both
relating to the relationship of the TRIPS Agreement and the
Convention on Biological Diversity (CBD),as priorities.


7. India gave a statement noting the importance of issues
relating to the relationship of the TRIPS Agreement and the
CBD. The Indian delegation asked the Chair to conduct
dedicated consultations on the issue in his role as Friend
of the DG. Brazil quickly supported the suggestion for
consultations. The delegations of Ecuador, Peru, Thailand,
Dominican Republic, Turkey, Bolivia all supported the
request for consultations. Japan initially objected to the
consultations citing potential duplication of work and
noting WIPO as the appropriate forum for discussion of these
issues. The US noted that we were satisfied with the work
of TRIPS Council on these issues, but we did not object to
consultations.


8. In response, the Chair asked whether delegations were
ready to hold such consultations at that moment. India and
Brazil took the floor to welcome consultations and noted
that the TRIPS Council should focus on finding the contours
of a solution in its work, with India in particular stating
that a disclosure requirement had overwhelming support and
the Council should start work on an amendment of the TRIPS
Agreement. Brazil also requested a work program on the
issue. Ecuador, Uganda, Malaysia, Peru, Zimbabwe, and India
all took the floor to support new patent disclosure
requirements. Uganda cited the need for more input from
Africa as this region was a subject for "plunder."


9. The US noted its previous paper on the issue, that it
did not believe there was a conflict between the TRIPS and
the CBD and that it does not support new patent disclosure
requirements to resolve this issue. The US noted its
proposals for alternative solutions to the widely shared
objectives of providing prior informed consent, equitable
benefit-sharing from the use of genetic resources and/or
traditional knowledge and preventing erroneously granted
patents.


10. AGENDA


11. Many agenda items passed without significant
discussion. These items included: notifications under
provisions of the TRIPS agreement, review of implementation
of the TRIPS Agreement under Article 71.1, review of the
provisions of the section on geographical indications under
Article 24.2, follow-up to the review under paragraph 2 of
the decision on the implementation of TRIPS Article 66.2,
technical cooperation and capacity-building, special and
differential treatment proposals referred to the council,
and observer status of intergovernmental organizations. A
read-out of the remaining agenda items follows below.


12. REVIEW OF NATIONAL IMPLEMENTING LEGISLATION


13. Upon receipt of outstanding answers, the follow-up to
the review of Armenia was deleted from the Council's Agenda.


14. review of the provisions of Article 27.3(b),the
relationship of the TRIPS Agreement and the CBD and the
protection of traditional knowledge and folklore


15. Peru first made a general statement that TRIPS Council
was the proper forum for this topic and that the discussion
was sufficiently mature and needed concrete action. Peru
wanted a solution by the end of the development round in
order to allow developing countries to solve the problems
they have. Peru then introduced its document IP/C/W/441,
noting that various offices in its government are
investigating 50 products of Peruvian to determine whether
country of origin receives. They stressed the large number
of resources needed to search and analyze patents of major
patent offices in the US, Japan and Europe, but they feel
the need to do so in order to combat bio-piracy.


16. Brazil, on behalf of Brazil, India and a number of co-
sponsors, introduced a paper (IP/C/W/442) explaining the
proposal for a new patent disclosure requirement to disclose
evidence of equitable benefit-sharing under a relevant
national regime consistent with an earlier unsuccessful
proposal by the co-sponsors to establish a checklist for
TRIPS Council work in this area. Then, only as the
delegation of Brazil, they expressed sympathy for Peru and
noted a number of examples in which others had attempted to
take out patent rights on genetic resources and traditional
knowledge from the Amazon regions of Brazil, but also
someone "stealing" the name of a fruit and using it as a
trademark.


17. India then intervened to support the introduction of
document IP/C/W/442 by Brazil and to emphasize its view that
a mandatory international patent disclosure requirement is
necessary to achieve our objectives. India then introduced,
on behalf of India and Brazil, the paper IP/C/W/443, which
provides "technical comments," point-by-point, on the
previous submission by the United States (IP/C/W/434).
Their general comments were that they agreed with the United
States that national laws are essential, but that they are
not enough as access and benefit-sharing was only effective
if requirements were mandatory and enforceable across
borders. While they agreed that patenting, per se, does not
constitute misappropriation, they stated that disclosure
requirements help identify "opportunity of
misappropriation." They believed that this discussion
showed that there is no alternative to mandatory patent
disclosure requirements to achieve the shared objectives of
the TRIPS Council and that action was needed to address the
mandate under paragraphs 12 and 19 of the Doha Ministerial
Declaration.


18. A large number of developing countries, including
China, Cuba, Ecuador, Indonesia, Thailand, Kenya expressed
support for document IP/C/W/442 and called for a
satisfactory solution for the Doha round on these issues.


19. New Zealand stated that it saw value in exploring how
IP can assist implementation of the CBD, but had no
definitive view, although it noted that disclosure, in
particular of source and/or country of origin, might support
CBD. They stated that, nonetheless, national systems were
to play a primary role and the answers to non-compliance
with prior informed consent and benefit-sharing were not in
the patent system, which was not the appropriate means to
ensure prior informed consent and benefit-sharing. New
Zealand noted that only a handful of countries have
implemented ABS systems, without which patent disclosure
cannot even play a supporting role. New Zealand further
stated that Members should be realistic and not overestimate
potential "green gold." They further noted that they
supported the Canadian proposal to see how systems would
work in practice.


20. Australia stated that is saw no conflict between TRIPS
and the CBD, and that the role of patent system here is not
clear. Australia noted that the possible effects of
invalidating patents, incdlugin that there would be no way
to share benefits. They were also wary of ongoing burdens
on patent applications and patent offices.

21. The EC noted their new paper, submitted to the WIPO,
which proposes a disclosure requirement for origin, but not
for evidence of prior informed consent or benefit-sharing,
as these latter two proposals would seriously overburden
patent offices. They also noted that certificates of origin
may be a good idea, but not at this stage. The EC also did
not support any sanctions inside the patent system that, for
example, would include revocation of a patent.


22. The United States stated that it sees no conflict
between the TRIPS Agreement and the CBD. The US maintained
that the most effective means to achieve the objectives of
authorized access to genetic resources and the equitable
sharing of benefits of such resources is through tailored,
national solutions to meet practical concerns and actual
needs, while the proposed new patent disclosure requirement
will not achieve these important objectives and may have
significant negative consequences, such as undermining the
economic development incentives that patents provide as well
as undermining potential benefit-sharing from patents. On
this point, it was noted that the proposed remedy of some,
invalidating a patent based on inadequate disclosure, would
destroy the benefit sought, rather than ensuring such a
benefit accrues to the appropriate party. The US noted
growing recognition that new patent disclosure requirements,
in and of themselves, will not work to ensure the objectives
sought and that there is growing recognition of the
necessity of contract-based access and benefit-sharing
systems. The US also noted Peru's paper, and noted that the
US had reviewed certain patents granted on maca and
chancapiedra, mentioned in the paper, that appeared to
fulfill patentability criteria and did not represent
examples of biopiracy. The US then rebutted arguments that
new patent disclosure requirements may be necessary to
enforce ABS regimes, noting that such regimes can be
adequately enforced by criminal and civil provisions outside
the patent system.


23. Turkey noted that this issue was as important as GI
extension, they welcomed the EC proposal at WIPO and stated
that there is a need for the global problem of bio-piracy.
Norway noted that it is reviewing its policy, that it viewed
the EC proposal very positively, and continues to consider
WIPO very important.


24. Canada associated with the statements of Australia and
New Zealand, and stated that there is no conflict between
TRIPS and CBD. They remained unconvinced that patent law
was the best way to ensure prior informed consent or benefit-
sharing. Canada expressed that it was prepared to work with
an "open mind" and they thanked Peru and the United States
for an exchange based on real-life situations and would
invite others to do so.


25. Japan noted that there is no conflict between TRIPS and
CBD. As to proposals on patent disclosure, these needed to
be viewed from the perspective of the patent system. They
noted that disclosure of genetic resources should be
discussed at the IGC of WIPO and noted that the DG of WIPO
has stated that this should be done in an accelerated
manner. Japan stated that it shared the views of the United
States to tackle biopiracy in that the US proposal helps to
attack biopiracy without burdening the patent system.


26. Peru took the floor again to thank Brazil, India and
the EC for their submissions and to have some additional
comments to the statement of the US. They noted that the
searches they have cited are illustrative of their processes
and not evidence of biopiracy, but only where there could be
a problem. Peru stressed that they wanted to show that if a
disclosure requirement were to be implemented it would be
much simpler for developing countries to monitor bio-piracy.
Currently, having to search patent databases was time
consuming and expensive and all costs were on provider
countries.


27. Switzerland supported more discussions with respect to
ABS systems currently in force at the national level. They
then addressed questions to other delegations. To Brazil,
India and the co-sponsors of their documents, they asked
questions regarding definitions of "misappropriation" and
"biopiracy" as well as "country of origin." To the United
States, they asked about the applicability of the contract-
based approach to transboundary cases. They also asked some
technical questions to the EC.


28. Philippines supported Brazil, India and others and
stressed that national benefit-sharing schemes are not seen
as proving to be adequate.


29. Brazil and India took the floor again at the end of the
session to stress points made previously regarding the
discussion. In particular Brazil emphasized that it had
never suggested that patent disclosure requirements would
solve all the problems that developing countries face, but
that it can be a contribution. While many countries have
not set up ABS systems, yet, all CBD Members were expected
to implement prior informed consent and equitable benefit-
sharing and these principles must be respected even where
regimes have not yet been set up in that country. Brazil
then noted other forums, such as WIPO, cited by Members as
relevant. Brazil then noted that not only the IGC, but also
the PCT as well as the SPLT, where some were trying to
undermine flexibilities under TRIPS. India then emphasized
a number of general points, including their view that patent
disclosure requirements are necessary for an eventual
solution. They also rebutted the EC argument that only
disclosure of origin is mature, noting that disclosure of
evidence of prior informed consent and equitable benefit-
sharing is also necessary. They also looked forward to
consultations held by the Chair, as Friend of the DG, on
this issue.



30. Decision on the implementation of paragraph 6 of the
Doha Declaration on the TRIPS Agreement and public health



31. The Chair opened discussion by noting significant
differences among Members that were apparent from the
consultations that he had held. Further, he noted new
papers from the African Group, the Commonwealth Secretariat,
and the United States.


32. Nigeria, on behalf of the African Group, introduced the
African Group proposal (IP/C/W/440) regarding legal
arguments supporting its previous proposal for an amendment
to the TRIPS Agreement to implement paragraph 11 of the
August 30, 2003 solution (IP/C/W/437). They maintained that
their proposal is based, as appropriate, on the Decision as
instructed by paragraph 11 and that the proposal eliminates
a number of provisions that, in their view, are redundant or
where the purpose was served in other parts of the TRIPS
Agreement, and believed their approach to be a viable basis
for undertaking an amendment. With respect to the
Chairman's Statement, Nigeria stated that the purposes of
the Statement were already served or are redundant and
thereby no longer necessary or that the purposes were
already served by other parts of the TRIPS Agreement.


33. Nigeria, in lieu of Barbados, also introduced the
document regarding the meeting of the Commonwealth
Secretariat on implementing the Decision on Paragraph 6 of
the Doha Declaration on TRIPS and Public Health. They noted
the following points in particular: (1) the quality and
safety of medicines produced under compulsory license, (2)
concerns regarding Free Trade Agreement provisions regarding
undisclosed test data.


34. The United States introduced a new paper, IP/C/W/444.
The United States noted strong support for the August 20,
2003 solution, stated its support for Members' effective and
appropriate use of the solution and remained committed to
reaching an expeditious consensus on the amendment process.
The US maintained that the amendment must preserve the
entire agreement reached in August 30, 2003 and must
therefore include an express reference to both the General
Council decision and the Chairman's Statement. The US
reiterated that it viewed this as a technical exercise that
should not reopen substantive issues. The US also noted
several concerns regarding the African Group proposal,
including that it does not make any reference to the
Chairman's Statement and that it omits key safeguards from
the decision. The US reiterated that it prefers a footnote
approach that reference both the General Council decision
text and the Chairman's Statement as an optimum solution but
that it is willing to consider any other options for an
amendment that includes both the General Council decision
text and the Chairman's Statement.


35. The EC noted that it was committed to the March 2005
deadline and that it viewed this process as a purely
technical exercise without re-opening substance. They
stated that it was their impression that some delegations
were trying to get now what they were unable to achieve in
August 2003. The EC did not share the African Group view
that some provisions are redundant or already covered by the
TRIPS Agreement. They then listed changes made in a
paragraph-by-paragraph fashion. They also stated that the
interpretation of "where appropriate" in the African Group
paper was too broad.


36. Korea noted the long, difficult negotiations and stated
that substance of the August 30, 2003 solution should not be
reopened. They noted that some provisions, such as the
preamble and paragraph 11 may be OK, it did not believe
elimination or modification of other provisions was
justified. On the Chairman's Statement, they noted that it
was an integral part of the solution and that it contained
"key shared understandings" but that the legal status should
not be changed including the status of the voluntary opt-
outs.


37. Canada spoke with reference to the Commonwealth paper
and noted that it appeared that the August 30, 2003 decision
was already working as evidence confirms that price levels
have fall to as low as one-tenth the price prior to the
August solution.


38. Jamaica intervened first to note its participation in
the Commonwealth session and the emphasis on quality, safety
and effectiveness welcoming steps by exporters to ensure
that drugs produced under compulsory license meet safety
standards of exporting countries. Jamaica then stated that
they did not support the footnote approach and did not
support including the Chairman's Statement as that had been
a confidence building measure that has served its purpose.


39. The delegations of Argentina welcomed the African Group
Proposal as helping to allow an amendment within the time
limits. Brazil suggested that it was a good basis for work,
and noted that it reflected the decision to work "where
appropriate." India also stated that the African Group
proposal was a good basis for further contributions.


40. Japan stated that the Council should put what was
agreed into a TRIPS amendment not to interpret what was
agreed. The footnote is the simplest and surest way. They
then stated that the Council should not re-negotiate what
was agreed. Japan also noted a number of problems with
IP/C/W/437, including that it does not include certain
provisions and modifies others and further does not refer to
the Chairman's Statement.


41. Uganda noted that it considers the August 2003 solution
as an important step to ensure access. However, it noted
concerns regarding how free trade agreements might prevent a
member from taking steps to ensure public health and asked
the United States to clarify its statement made at the
Commonwealth workshop.


42. In response, the United States noted that the
provisions of its free trade agreements do not stand in the
way of the effective utilization of the August 30, 2003
solution. Indeed, a number of its free trade agreements
expressly state that nothing in the intellectual property
chapters of those agreement affect the relevant country's
ability to take measures necessary to protect public health.


43. Israel noted that it accepts the decision and statement
together. However, they stated that there should be no
changes in incorporation, including the voluntary opt-outs.
Chinese Taipei stated that they will not support any
suggestion to alter the legal status of opt-outs. Korea,
Hong Kong, China and Turkey also stated that the voluntary
nature of the opt-outs need to be preserved.


44. Switzerland stated that the amendment should be a
purely technical amendment that fairly translates what was
agreed. They stated the African Group proposal was
unacceptable as it would re-open negotiations. They noted
that many countries, including Switzerland, were revising
their laws to implement the solution. They added that a
footnote or an annex could be used without affecting the
structure of the TRIPS Agreement, but they are open to other
forms of the solution. Switzerland added that the
Chairman's Statement was part of the consensus and that,
otherwise, Switzlerand could not have shared the consensus.
There would have been no solution without the Chairman's
Statement.


45. Kenya began by noting that all Members were committed
to the March 2005 deadline. Kenya stated that the decision
was very clear that the amendment was to be based "where
appropriate" on the Decision and not the Decision and the
Chairman's Statement. They then went through a number of
provisions that they felt are not appropriate in the
amendment, including the preamble and certain other
paragraphs. Further, Kenya stated that a footnote was not
the most appropriate way to amend. He also noted that the
Chairman's Statement should not be reflected and raised the
issue, in the statement, regarding that the solution should
not be for commercial purposes. They asked, if not, how can
developing countries build capacity in these are


46. The Philippines added that we should go through the
African Group proposal paragraph-by-paragraph. With respect
to the Chairman's Statement, the Philippines stated that, at
most, this was interpretive context. They stated that the
Chairman's stated could be read out again at time of the
adoption of the amendment subject to the condition that any
Member be able to read out their own statement of
interpretation.


47. Switzerland noted that a paragraph-by-paragraph
approach would open a "pandora's box" and may lead to re-
starting negotiations. Instead, the Council should focus on
possibilities to integrated the decision as a whole into the
TRIPS Agreement. As to the Chairman's Statement, he
reiterated that it allowed all Member to join consensus and
represented in its own terms "key shared understandings of
members." Switzerland then stated that it was essential to
incorporate this.


48. Malaysia noted differing views on the decision, but
cited the African Group paper that it was based "where
appropriate" on the decision. Malaysia stated that it was
unacceptable to upgrade the status of the Chairman's
Statement by incorporating it and that it was also
unacceptable to re-read the Chairman's Statement as some
have suggested.


49. The Chair then noted that, due to the fact that he
would be stepping down as Chair at the end of the meeting,
he proposed that he would suspend the meeting after this
session pending further consultations on this issue to see
if progress could be made by the end of March deadline.
There was no objection. At the time of this report, the
Chair has convened one set of further consultations on which
progress did not appear to be made.


50. REQUEST FROM MALDIVES FOR AN EXTENSION OF THE
TRANSITION PERIOD UNDER ARTICLE 66.1 OF THE TRIPS AGREEMENT


51. The Chair noted that, in light of the tsunami in the
region, the Maldives may withdraw its graduate status under
the UN system. The decision to graduate Maldives, in any
event, is not immediately effective and Maldives would
retain its least developed country status until December

2005. There would be no TRIPS Council issue until 2006. In
this light, the Chair suggested the TRIPS Council take up
the matter later this issue, and that consultations be
coordinated between the TRIPS Council Chair and the Chair of
the Committee on Trade and Development (CTD).


52. NON-VIOLATION AND SITUATION COMPLAINTS


53. Korea began by noting that it shares the view of the
vast majority that non-violation, nullification and
impairment (NVNI) complaints were designed primarily for
market access and would introduce uncertainties into the
TRIPS Agreement. Peru restated that it does not believe
that NVNI is appropriate in TRIPS and that it thought the
issue should be wrapped up in the Hong Kong ministerial at
the end of 2005. For various reasons, Ecuador, the EC, the
Philippines, Canada, Brazil, India, Malaysia, and Argentina
all spoke to oppose the application of these complaints in
TRIPS.


54. The United States noted the US continued to consider
that NVNI complaints are fully appropriate in the TRIPS
context and expect the moratorium to expire at the Sixth
Ministerial conference.


55. Japan supported continued discussion of the scope and
modalities and such complaints in the TRIPS context.


56. INFORMATION ON RELEVANT DEVELOPMENTS ELSEWHERE IN THE
WTO


57. The EC raised the issue of lack of compliance by the
United States with the WTO panel decision on the Section
110(5) dispute under TRIPS Article 68. They asked three
questions: (1) Are there any specific legislative
initiatives in the US to bring the Copyright Act into
compliance with TRIPS? In other words, during the past 4
years, has the US Congress discussed any piece of
legislation amending Section 110(5) of the Copyright Act?
(2) What specific steps is the US Administration taking to
ensure that the US brings its Copyright Act into conformity
with the TRIPS Agreement? Has there been any written
communication to Congress that the US could share? (3) When
does the US consider that it will finalize its work to
comply with the WTO ruling, which was adopted in July 2000?


58. The United States took the floor to respond that the
The U.S. Administration has been consulting on this matter
with the U.S. Congress, and we will continue to work with
the Congress and confer with the European Communities in
order to reach a mutually satisfactory resolution of this
matter, although it noted that the Dispute Settlement Body
was, in its view, the more appropriate forum for a
discussion of disputes, including compliance issues related
to those disputes.


59. OTHER BUSINESS


60. The EC raised the issue of enforcement and requested
that this item be added permanently to the agenda of the
TRIPS Council. They noted global problems of counterfeit
goods that threaten legimitate industries.


61. Brazil, Argentina, India, and the Philippines noted
that they did not have advance notice of this issue and did
not wish to agree to a permanent additional agenda item at
this time.


62. The Chair, noted that as long as Rules 3, 4 and 6 of
the General Council Rules of Procedure are followed, any
item can appear on the agenda. The Chair also noted that it
was not WTO practice to bar discussion of an item unless it
is outside the terms of reference of that body.


63. ELECTION OF CHAIRPERSON


64. The TRIPS Council unanimously elected Ambassador Choi
of the Republic of Korea as the next TRIPS Council Chair.

65.
DEILY