DEMARCHE ON WIPO ISSUES: 2010-2011 BIENNIUM

UNCLAS STATE 092402


E.O. 12958: N/A
TAGS: ECON ETRD KIPR WIPO
SUBJECT: DEMARCHE ON WIPO ISSUES: 2010-2011 BIENNIUM
BUDGET AND IGC MANDATE RENEWAL


1. SUMMARY: The interventions made by Geneva-based
representatives from Algeria, Egypt, Pakistan, Nigeria and
South Africa concerning the 2010-2011 biennium Program and
Budget of the World Intellectual Property Organization (WIPO)
are of concern to the U.S. and may jeopardize a positive
consensus recommendation of the proposed budget at the
September 14-16, 2009, Program and Budget Committee meeting.
Such comments appear to micromanage internal policy issues,
alter the mandate of substantive committees, and violate WIPO
policy not to use reserves for recurring expenditures for
Development Agenda programs, as opposed to only using reserve
funds for capital investments. Washington agencies request
that these posts demarche appropriate officials from
Intellectual Property Offices and/or Foreign Affairs
Ministries using suggested Talking Points in Para 6. Post
should also use the opportunity to raise the importance of
renewing the mandate of the WIPO Intergovernmental Committee
(IGC) on Intellectual Property and Genetic Resources,
Traditional Knowledge and Folklore (GRTKF) by the WIPO
General Assembly at its September 22-October 1, 2009, meeting
using suggested Talking Points in Para 7. In addition, the
points in Paras 6 and 7 have been turned into a non-paper,
which is included in its entirety in Para 8. In addition to
delivering the verbal demarche, as nuanced appropriately for
your host country, it would be appropriate to provide this
non-paper to host country officials. Please provide
responses of the foreign government officials by September
10, 2009. END SUMMARY.

BACKGROUND


2. At the informal meetings of WIPO,s Program and Budget
Committee on July 20)22, 2009, certain Geneva- based
developing country representatives presented a hard-line
position that their comments must be reflected in the revised
Program and Budget of 2010-2011 biennium for the budget to
pass. WIPO has presented a balanced budget with expenditures
for 2010 and 2011 totaling over 618 million CHF and 203
million CHF in reserves (surplus income generated by WIPO,s
fee-based services for the private sector). A balanced
2010-2011 budget is a challenge, as WIPO,s income level
(which funds over 90% of WIPO,s budget) has been reduced due
to the economic crisis. The proposed program and budget for
2010-2011, nonetheless, has avoided going into deficit while
allocating sufficient resources to meet WIPO,s international
legal obligations in the processing of patent, trademark and
industrial design applications as well as allocating generous
resources to meet Member State expectations for program
delivery, including Development Agenda (DA) activities.


3. While it appears that the comments made by certain
Geneva-based representatives of developing countries largely
stem from a concern over the implementation of WIPO,s
Development Agenda programs, these concerns are unfounded.
The DA consists of 45 recommendations that require a wide
range of actions for implementation, from concrete
development-oriented projects and activities to the
application of certain principles and objectives that should
continue to guide the work of the Organization. The
Organization has embarked upon a structured approach to
mainstream and integrate the Development Agenda
recommendations into all its substantive programs. As a
result, the Development Agenda has brought significant change
to the institutional culture of WIPO, as it has put
development at the heart of the activities conducted by the
Organization. For example, DA resources are included in the
budget and program of WIPO, including as specific line items
in the budget for development activities implemented across
the Organization, and a new division (the Development Agenda
Coordination Division*DACD) has been created to ensure
coordination of the implementation of the Development Agenda,
which will report directly to the new Deputy Director General
for Development.


4. Nonetheless, certain countries have argued that: 1) the
Director General should directly oversee the implementation
and coordination of the DA, not the new division created for
that purpose; 2) Extra budgetary resources (Member State or
other outside contributions) should not be used to fund DA
activities and certain Member States seek to draft policy
guidelines on how WIPO should use extra-budgetary resources;
3) The description of programs concerning copyrights, patents
and traditional knowledge should include work that has not
been agreed to by the substantive committees related to these
issues; and 4) The budgets of programs and activities related
to development and the Development Agenda should be increased
using reserve funds (as there is an income projection of zero
growth during 2010 and 2011 because of the economic crisis),
even though such funds must only be used for one-time capital
expenditures, not operating expenditures.


5. In raising the upcoming Program and Budget Committee
(September 14-16) and General Assembly (September 22-October
1) meetings, Post should take the opportunity to ensure that
these same countries support renewal of the mandate of the
Intergovernmental Committee (IGC) on Intellectual Property
and Genetic Resources, Traditional Knowledge and Folklore
(GRTKF). Member States at the 14th session of the WIPO IGC,
held in Geneva from June 29 to July 3, 2009, failed to reach
an agreement on a recommendation to the 2009 WIPO General
Assembly (GA) to renew the mandate of the IGC. The
week-long, contentious deliberations were based on a proposal
submitted by the African Group, which called for "text-based
negotiations" in the period between 2009 and 2011, leading to
the submission of a text of an "internationally legally
binding instrument(s)" for the protection of GRTKF to the
2011 GA. The African Group proposal also set forth demands
for convening six "intersessional working groups" in the next
two-year period, which, according to the WIPO Secretariat,
would nearly triple the proposed 2010-11 budget for the IGC.
The United States, along with other developed countries,
supported the renewal of the IGC mandate and offered a number
of amendments to the African Group proposal. However, the
negotiations collapsed late in the week when it became clear
that the key elements of the African Group proposal were
non-negotiable. As a result, the question of the renewal of
the IGC's mandate has been left to the September 2009 WIPO
General Assembly. The U.S. seeks to avoid a repeat of IGC 14
at the GA, and hopes the IGC mandate can be renewed without a
call for a vote at the GA. The U.S. is concerned about the
hard-line position in seeking an internationally legally
binding instrument in 2011 given the lack of substantive
process on these issues. The U.S., other developed
countries, as well as South Korea and Singapore, believe that
it would be premature to agree upon the nature of the text to
be negotiated without an understanding of the contents. While
the U.S. and others also maintain that no outcome of the IGC
should be precluded, including the possibility of a legally
binding international instrument, we likewise believe that
the final outcome cannot, at this point, be prejudged to
mandatorily include an internationally legally binding
agreement.


6. SUGGESTED TALKING POINTS: PROGRAM AND BUDGET COMMITTEE

FOR Algeria, Egypt, Pakistan, Nigeria and South Africa:

Program and Budget Committee meetings at the World
Intellectual Property Organization (WIPO) are scheduled for
September 14-16, 2009. The focus will be to establish
WIPO,s budget for the 2010 and 2011 biennium. Based on
interventions made by your delegation and some other
countries during the July 20-22 informal budget meetings, the
U.S. is concerned about whether consensus will be reached in
September on a balanced and deficit-free budget.

The U.S. hopes for successful program and budget
meetings in September so that the budget can be passed and
WIPO can implement programs that are essential in fostering
innovation and economic development for all Member States,
including developing and least developed countries.

The U.S. hopes that your government will help ensure
that consensus is reached. In particular, the following
positions that will hamper consensus are those that seek to:


1. Micromanage the Director General,s role in
coordinating the Development Agenda and the use of
extra-budgetary resources;


2. Alter the mandate of the work of substantive committees,
which is not the responsibility of the Program and Budget
Committee but the responsibility of the General Assembly and
the actual committees themselves; and


3. Go against WIPO,s policy not to use reserve funds for any
recurring program expenditure, rather than capital
expenditure. The Development Agenda-related programs are
considered recurring expenditures as these programs are at
the heart of WIPO,s on-going activities and objectives.

On the Director General,s role in coordinating the
implementation of the 45 Development Agenda recommendations,
the DG has indicated that he will continue to remain actively
involved in WIPO,s implementation of the Development Agenda
even though a new structure has been created to ensure that
the 45 recommendations are mainstreamed and coordinated in
the Organization. The new structure, called the Development
Agenda Coordination Division (DACD),coordinates the
implementation of the Development Agenda recommendations
within WIPO, is the interface with external stakeholders, and
promotes better understanding of the Development Agenda and
its benefits. The DACD reports directly to the new Deputy
Director General for Development (Mr. Geoffrey Oneyama from
Nigeria) of the Organization.

Demands for replacing the DACD with the DG to
coordinate the Development Agenda are unproductive, as this
is an internal-WIPO staff coordination issue, not an
intellectual property policy issue requiring Member State
approval. Further, such demands may hamper the broad,
multi-level coordination of the Development Agenda which is
sought by Member States, including developing countries, and
would be created under the new DACD structure.

When raising with Egypt, highlight this as an Egyptian
proposal: In addition, the US hopes to avoid debate on the
development of guidelines for the use of extra budgetary
resources. There appears to be some concern from certain
countries that such resources will be used to fund
development agenda projects, and that Member States should
therefore embark on developing specific guidelines for WIPO
concerning the use of these funds. The U.S. notes that the
income which WIPO generates through its fee-based
registration services largely funds Development Agenda
programs. As noted in the draft Program and Budget document,
extra-budgetary resources will only be used in the context of
a specific Development Agenda recommendation that seeks to
increase donor activity for LDCs in the IP and development
arena.

Demands that guidelines be developed on how WIPO uses
extra budgetary resources are unnecessary since the
Development Agenda is a recurring cost for WIPO and therefore
cannot rely on non-fixed, voluntary resources such as
donations. Further, such demands are unproductive, as the
manner in which extra budgetary resources are used are
established by WIPO,s Financial Division. Based on WIPO,s
Financial Rules and Regulations (Rule 103.1),only in the
case where the use of these funds would trigger a liability
issue for the Organization is Member State approval required.

On the use of reserve funds to increase the allotment
of resources for the Development Agenda, the US notes that
the proposed budget for the Development Agenda projects,
which includes the implementation of 8 recommendations that
have been approved by Member States, is over 11 million CHF.
Development activities that are occurring throughout the
various programs in WIPO are over 117 million CHF, which is
over 19 percent of the proposed budget. A significant level
of funding is already available for the Development Agenda.

Demands that the reserve funds be used for Development
Agenda projects are unnecessary as the project managers who
are appointed with responsibility to implement individual
projects have noted the human and financial resources
required to implement these projects. These budgets are then
approved throughout the Organization, including the
Development Agenda Coordination Division and the Director
General. Based on the financial data provided to the
Committee on IP and Development (the committee responsible
for overseeing implementation of the 45 recommendations) and
the Program and Budget Committee, the budgets for 8
recommendations have been allotted in the draft budget
without requesting the use of reserve funds.

Moreover, the use of reserve funds for non-capital
expenditures would not be fiscally responsible. To date,
WIPO is receiving less funding from fee paid services to the
private sector due to the economic crisis. In addition, WIPO
will have to fully implement new UN accounting
standards*International Public Sector Accounting Standards
(IPSAS) during the course of 2010. This implementation will
require a significant overhaul of WIPO,s accounting and
finance system, which will have significant budgetary
implications on WIPO,s reserves. These two additional
variables will impact the level of reserves and their
magnitude remains unclear at this time. As a result, the US
is concerned about requests for use of reserves for recurring
expenditures which may negatively affect WIPO,s financial
health.

When raising with Algeria, highlight this as an
Algerian proposal: With respect to proposed amendments to
program descriptions in the draft 2010-2011 Program and
Budget, amendments have been suggested in the program area
dealing with copyrights and related rights to include work on
access to educational materials. While the issue of access
to educational materials has been raised in the WIPO Standing
Committee on Copyrights and Related Rights (SCCR) and is
currently highlighted in the draft Program and Budget as an
issue under debate in the SCCR, Member States have not
reached consensus on the degree and scope of work on this
issue. Currently, the SCCR is examining a narrow issue
concerning improving the access of copyrighted works for
visually impaired persons and have not agreed to broaden the
scope to include increasing access to educational materials
for all people.

We are concerned that an amendment to include a new
focus on access to educational materials is prejudicial to
the on-going discussions that are occurring in the SCCR.

Relatedly, we are also concerned about suggested
amendments in the copyright program area for workshops and
additional studies on copyright limitation and exceptions
concerning distance education and trans-border distribution
of copyrighted materials. The distance education and
transborder issues have also been raised at the SCCR. While
a study has been approved by the SCCR, Member States have not
agreed to any workshops or further studies on these issues.

We urge that the mandate of the SCCR remains within the
purview of the SCCR and not the Program and Budget Committee.

We are also deeply concerned about suggested amendments
in the patent program area and other areas to include a
specific focus on countries utilizing legislative
&flexibilities8 provided in the WTO Agreement on Trade
Related Aspects of Intellectual Property Rights (TRIPS),as
well as a specific reference in the traditional knowledge
program area to accelerate work through intersessional
meetings of the Intergovernmental Committee on Intellectual
Property and Genetic Resources, Traditional Knowledge and
Folklore (GRTKF). Both issues are currently being debated in
the relevant substantive committees at WIPO, and therefore no
agreement has been reached on whether or how the committees
will ultimately address these issues.

We note that specific &TRIPS flexibilities8 have been
identified in a non-exhaustive list of future work for
discussion in the Standing Committee of Patents. In
addition, the Committee on IP and Development has also
discussed on-going WIPO technical assistance activities
concerning legislative assistance on the use of legal options
and flexibilities, consistent with rights and obligations
under the international IP legal framework.

While the draft Program and Budget document references
the complexity in which &TRIPS flexibilities8 operate in
the patent system, there is no mandate created for specific
work or activity on &TRIPS flexibilities8.

We look forward to working with your government at the
September 14-16 Program and Budget Committee to ensure
approval of a balanced budget to be ultimately sent for
further approval to the General Assembly the week of
September 22, 2009.


7. SUGGESTED TALKING POINTS: RENEWAL OF IGC MANDATE

FOR Algeria, Egypt, Pakistan, Nigeria and South Africa:

The week of the General Assembly at WIPO will be very
busy, especially since the question of the renewal of the
IGC's (GRTKF committee) mandate has been left to General
Assembly.

The IGC recently completed its fourteenth session.
During the session, although there was general consensus
within the Committee that the mandate should be renewed, the
Committee was unable to agree upon the terms for renewal of
the mandate.

Specifically, the negotiations collapsed when it became
clear that the key elements of the African Group proposal
that call for a legally-binding international instrument for
the protection of GRTKF to be negotiated, concluded and
signed by Member States in 2012 were non-negotiable.

We note that the IGC has not reached agreement on the
scope and contents for such a text, yet the African Group
proposal sought to arrive at a conclusion on the
legally-binding nature of a text.

The United States came to the 14th session eager to
reach consensus on renewal of the Committee,s mandate so
that progress could be made on the preservation, promotion
and protection of traditional cultural expressions,
traditional knowledge and genetic resources.

We, like many other delegations, were deeply
disappointed that WIPO Member States were unable to arrive on
agreed text to renew the mandate of the IGC. The United
States continues to maintain that no outcome of the IGC
should be excluded, including the possible adoption of a
legally binding international instrument. Equally important,
we believe that no outcome should be prejudged.

The delegation of the United States will continue to
work with other delegations to ensure that the Assembly
considers renewing the mandate of the IGC, and we hope to
avoid a situation where renewal of the IGC mandate cannot be
agreed, thereby terminating its existence.

We hope to continue this dialogue with your
representatives in Geneva during the General Assemblies. We
encourage the participation of Heads of IP Offices and/or
Foreign Affairs Ministries of your government to ensure a
speedy and adequate resolution of the matter.


8. NON-PAPER: The following text can be placed into a
non-paper and provided to host country officials at the same
time as delivery of the demarche.

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START OF NON-PAPER:
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COMMENTS ON THE WIPO 2010-2011 PROGRAM AND BUDGET

Program and Budget Committee meetings at the World
Intellectual Property Organization (WIPO) are scheduled for
September 14-16, 2009. The focus will be to establish
WIPO,s budget for the 2010 and 2011 biennium. Based on
interventions made by delegations during the July 20-22
informal budget meetings, consensus could be difficult to
reach on adoption of a budget.

Agreement by Member States at the program and budget meetings
in September is necessary so that the budget can be passed
and WIPO can implement programs that are essential in
fostering innovation and economic development for all Member
States, including developing and least developed countries.

In particular, the following positions that threaten to
hamper consensus are those that seek to:

Micromanage the Director General,s role in
coordinating the Development Agenda and the use of
extra-budgetary resources;

Alter the mandate of the work of substantive
committees, which is not the responsibility of the Program
and Budget Committee but the responsibility of the General
Assembly and the actual committees themselves; and

Go against the policy of not using reserve funds for
recurring program expenditures, rather than one-time capital
and other extraordinary expenditures. The Development
Agenda-related programs are considered recurring expenditures
as these programs are at the heart of WIPO,s on-going
activities and objectives, and should be funded through
regular organization appropriations.

Development Agenda

On the Director General,s role in coordinating the
implementation of the 45 Development Agenda recommendations,
the DG has indicated that he will continue to remain actively
involved in WIPO,s implementation of the Development Agenda
even though a new structure has been created to ensure that
the 45 recommendations are mainstreamed and coordinated in
the Organization. The new structure, called the Development
Agenda Coordination Division (DACD),coordinates the
implementation of the Development Agenda recommendations
within WIPO; is the interface with external stakeholders; and
promotes better understanding of the Development Agenda and
its benefits. The DACD reports directly to the new Deputy
Director General for Development (Mr. Geoffrey Oneyama) of
the Organization.

To replace the DACD with the DG to coordinate the Development
Agenda would be unproductive, as this is an internal WIPO
staff coordination issue, not an intellectual property policy
issue requiring Member State approval. Further, such demands
may hamper the broad, multi-level coordination of the
Development Agenda which is sought by Member States,
including developing countries, and would be created under
the new DACD structure.

In addition, Member States should seek to avoid debate on the
development of guidelines for the use of extra-budgetary
resources. There appears to be some concern from certain
countries that such resources will be used to fund
development agenda projects, and that Member States should
therefore embark on developing specific guidelines for WIPO
concerning the use of these funds. The income which WIPO
generates through its fee-based registration services largely
funds Development Agenda programs. As noted in the draft
Program and Budget document, extra-budgetary resources will
only be used in the context of a specific Development Agenda
recommendation that seeks to increase donor activity for LDCs
in the IP and development arena.

Demands that guidelines be developed on how WIPO uses extra
budgetary resources are unnecessary since the Development
Agenda is a recurring cost for WIPO and therefore cannot rely
on non-fixed, voluntary resources such as donations. Further,
such demands are unproductive, as the manner in which extra
budgetary resources are used are established by WIPO,s
Financial Division. Based on WIPO,s Financial Rules and
Regulations (Rule 103.1),only in the case where the use of
these funds would trigger a liability issue for the
Organization is Member State approval required.

On the use of reserve funds to increase the allotment of
resources for the Development Agenda, the proposed budget for
the Development Agenda projects, which includes the
implementation of eight recommendations that have been
approved by Member States, is over 11 million CHF.
Development activities that are occurring throughout the
various programs in WIPO are over 117 million CHF, which is
over 19 percent of the proposed budget. A significant level
of funding is already available for the Development Agenda.

Demands that the reserve funds be used for Development Agenda
projects are unnecessary as the project managers who are
appointed with responsibility to implement individual
projects have noted the human and financial resources
required to implement these projects. These budgets are then
approved throughout the Organization, including the
Development Agenda Coordination Division and the Director
General. Based on the financial data provided to the
Committee on IP and Development (the committee responsible
for overseeing implementation of the 45 recommendations) and
the Program and Budget Committee, the budgets for eight
recommendations have been allotted in the draft budget
without requesting the use of reserve funds.

Moreover, the use of reserve funds for non-capital
expenditures would not be fiscally responsible. To date,
WIPO is receiving less funding from fee paid services to the
private sector due to the economic crisis. In addition, WIPO
will have to fully implement new UN accounting
standards*International Public Sector Accounting Standards
(IPSAS) during the course of 2010. This implementation will
require a significant overhaul of WIPO,s accounting and
finance system, which will have significant budgetary
implications on WIPO,s reserves. These two additional
variables will impact the level of reserves and their
magnitude remains unclear at this time. As a result, WIPO,s
reserves should be preserved for these kinds of extraordinary
expenditures.

Standing Committee on Copyrights and Related Rights

With respect to proposed amendments to program descriptions
in the draft 2010-2011 Program and Budget, amendments have
been suggested in the program area dealing with copyrights
and related rights to include work on access to educational
materials. While the issue of access to educational
materials has been raised in the WIPO Standing Committee on
Copyrights and Related Rights (SCCR) and is currently
highlighted in the draft Program and Budget as an issue under
debate in the SCCR, Member States have not reached consensus
on the degree and scope of work on this issue. Currently,
the SCCR is examining a narrow issue concerning improving the
access of copyrighted works for visually impaired persons and
have not agreed to broaden the scope to include increasing
access to educational materials for all people.

An amendment to include a new focus on access to educational
materials is prejudicial to the on-going discussions that are
occurring in the SCCR.

Related to this, Member States have raised concerns about
suggested amendments in the copyright program area for
workshops and additional studies on copyright limitation and
exceptions concerning distance education and trans-border
distribution of copyrighted materials. The distance
education and trans-border issues have also been raised at
the SCCR. While a study has been approved by the SCCR,
Member States have not agreed to any workshops or further
studies on these issues.

The mandate of the SCCR should remain within the purview of
the SCCR and not the Program and Budget Committee.

Standing Committee on Patents

There are also concerns about suggested amendments in the
patent program area and other areas to include a specific
focus on countries utilizing legislative &flexibilities8
provided in the WTO Agreement on Trade Related Aspects of
Intellectual Property Rights (TRIPS),as well as a specific
reference in the traditional knowledge program area to
accelerate work through intercessional meetings of the
Intergovernmental Committee on Intellectual Property and
Genetic Resources, Traditional Knowledge and Folklore
(GRTKF). Both issues are currently being debated in the
relevant substantive committees at WIPO, and therefore no
agreement has been reached on whether or how the committees
will ultimately address these issues.

Specific "TRIPS flexibilities" have been identified in a
non-exhaustive list of future work for discussion in the
Standing Committee of Patents. In addition, the Committee on
IP and Development has also discussed on-going WIPO technical
assistance activities concerning legislative assistance on
the use of legal options and flexibilities, consistent with
rights and obligations under the international IP legal
framework.

While the draft Program and Budget document references the
complexity in which "TRIPS flexibilities" operate in the
patent system, there is no mandate created for specific work
or activity on "TRIPS flexibilities".

Successful agreement by Member States on these and other
issues at the September 14-16 Program and Budget Committee
will ensure approval of a balanced budget to be ultimately
sent for further approval to the General Assembly the week of
September 22, 2009.

COMMENTS ON THE RENEWAL OF IGC MANDATE

The week of the General Assembly at WIPO will be very busy,
especially since the question of the renewal of the IGC's
(GRTKF committee) mandate has been left to General Assembly.

The IGC recently completed its fourteenth session. During
the session, although there was general consensus within the
Committee that the mandate should be renewed, the Committee
was unable to agree upon the terms for renewal of the mandate.

Specifically, the negotiations collapsed when it became clear
that the key elements of the African Group proposal that call
for a legally-binding international instrument for the
protection of GRTKF to be negotiated, concluded and signed by
Member States in 2012 were non-negotiable.

Member States should recall that the IGC has not reached
agreement on the scope and contents for such a text, yet the
African Group proposal sought to arrive at a conclusion on
the legally-binding nature of a text.

Reaching consensus on renewal of the Committee,s mandate is
essential so that progress can be made on the preservation,
promotion and protection of traditional cultural expressions,
traditional knowledge and genetic resources.

Many delegations were deeply disappointed that WIPO Member
States were unable to arrive on agreed text to renew the
mandate of the IGC. No outcome of the IGC should be excluded,
including the possible adoption of a legally binding
international instrument. Equally important, no outcome
should be prejudged.

Member States should work together to ensure that the
Assembly considers renewing the mandate of the IGC, thereby
avoiding a situation where renewal of the IGC mandate cannot
be agreed, thereby terminating its existence.

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END OF NON-PAPER
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CLINTON