Info Service on Intellectual Property Issues (Oct12/03)
Dear friends and colleagues,
More than 150 NGOs have signed a letter calling on LDC Members of the WTO to act collectively to immediately submit a duly motivated request to the WTO TRIPS Council, for an indefinite extension (i.e. as long as a WTO member remains a LDC) of the soon-to-lapse LDC transition period.
66.1 of the TRIPS Agreement accorded LDC Members a renewable exemption
from most obligations under the TRIPS Agreement in view of their special
needs and requirements, their economic, financial and administrative
constraints and their need for flexibility to create a viable technological
base.This exemption was originally due to expire on 31 December 2005.
However, a TRIPS Council decision of 27 June 2002 (IP/C/25), extended
the 2005 transition period until 1 January 2016 in relation to pharmaceutical
patents and test data protection. Without prejudice to this extension,
the TRIPS Council, through its decision IP/C/40, extended the general
TRIPS compliance transition period for LDC Members for all obligations
under the TRIPS Agreement, other than Articles 3, 4 and 5, until 1
The NGO letter is reproduced below.
NGO Letter to Least-Developed Country Members of WTO Concerning a Further Extension of the 1 July 2013 LDC Transition Period Under Article 66.1 of the TRIPS Agreement
15th october 2012
Dear WTO LDC Members,
As civil society organizations concerned with access to medicines, to educational resources, to environmentally sound technologies (ESTs), and to other public goods and cultural creations and further concerned with farmers’ rights, food security, human flourishing, sustainable and equitable technological and industrial development in LDC countries, wewrite to least-developed country Members of the World Trade Organization (WTO) with respect to the pending request for a further extension of the 1 July 2013 LDC transition period under Article 66.1 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement). It is urgent that LDC Members of the WTO act collectively to immediately submit a duly motivated request to the WTO TRIPS Council for an indefinite extension (i.e. for as long as a WTO member remains a LDC) of the soon-to-lapse LDC transition period.
Article 66.1 of the TRIPS Agreement accorded LDC Members a renewable ten-year exemption from most obligations under the TRIPS Agreement in view of the special needs and requirements of the LDC Members, their economic, financial and administrative constraints and theirneed for flexibility to create a viable technological base.
This exemption was originally due to expire on 31 December 2005. However, a TRIPS Council decision of 27 June 2002 (IP/C/25), extended the 2005 transition period until 1 January 2016 in relation to pharmaceutical patents and test data protection. A separate 8 July 2002 General Council’s decision (WT/L/478) suspended the obligations of LDC Members under Article 70.9 of the TRIPS Agreement with respect to pharmaceutical productsuntil 1 January 2016. Without prejudice to this extension, the TRIPS Council, through its decision IP/C/40, extended the general TRIPS compliance transition period for LDC Members for all obligations under the TRIPS Agreement, other than Articles 3, 4 and 5, until 1 July 2013 or until such date on which a Member ceases to be an LDC, whichever date is earlier.
As the expiry of the exemption, I July 2013 is fast approaching, we believe it is urgent for all least-developed countries (LDC) to act collectively to submit a duly motivated request to the WTO TRIPS Council for an extension of the LDC transition period, until a Member ceases to be a LDC.
According to the United Nations Conference on Trade and Development Least Developed Country Report (2007), “The domestic knowledge systems in the LDCs are very weak and the level of technological capabilities of domestic enterprises is very low.” In general, LDCs are at an enormous technological disadvantage compared to other countries and have yet to reap the benefits of the knowledge/ technology economy. At the same time LDCs face enormous economic, financial, and administrative constraints as well as human and technological capacity shortfalls.
Failure to seek and obtain a further extension of the 2013 LDC transition period could be disastrous for LDC Members and their citizens. LDCs would immediately need to amend their intellectual property laws to become TRIPS-compliant and would be under extreme time pressures to do so. Much worse, they would be adopting highstandards of intellectual property protection and enforcement before they had any real domestic technological capacity and before a significant body of local inventors, authors, and creators could leverage a domestic intellectual property system to their advantage. It is a fact that in LDC countries foreign individuals and companies are the main beneficiaries of expanded IP protection and these foreign right holders tend to set high monopoly prices, which are unaffordable to most of the population.
Moreover, historically most technologicaldevelopment in developing and even in developed countries has come through a period of copying and adapting advanced technologies initially invented elsewhere. This trend is aptly captured by Ha-Joon Chang: “….when they were backwardthemselves in terms of knowledge, all of today’s rich countries blithely violated other people’s patents, trademarks and copyrights. The Swiss“borrowed” German chemical inventions, while the Germans “borrowed” English trademarks” and the Americans “borrowed” British copyrighted materials – all without paying what would today be considered “just” compensation”
Many LDC Members, pursuant to misguided advice, have been focusing on assessing their TRIPS compliance and their technical needs for TRIPS-compliant law reform. We are of the view that this is the wrong focus as generally LDCs are not in a position to benefit from full TRIPS compliance at this time.
Even if a LDC Member believes it can benefit from a certain form of intellectual property protection (e.g. trademarks for local traders), an extended transition period provides ample flexibility toallow LDCs to implement the level of intellectual property protection suitable for individual interests and needs. Thus LDCs should not prematurely tie their hands to full implementation of the TRIPS Agreement by focusing on needs assessment, when an extension is a right that LDCs have under Article 66.1.
In addition, to the extent that LDC Members do want to incentivize and protect their local innovators and creators, even with an extension of the transition period, this remains possible as local innovators and creators will still be able to benefit economically from theprotection of IPRs in non-LDC Members, a market much more robust than the domestic market alone.
An extension of the 2013 LDC transition period is further desirable because it will set the stage for a future extension of the 2016 LDC pharmaceutical extension period. This extension is vitally important to the continued ability of LDC to access affordable generic medicines of assured quality for HIV/AIDS, TB, malaria and other infectious, neglected, and non-communicable diseases and to allow LDCs to develop local pharmaceuticalcapacity. Indeed, LDC Members, could fill an important pharmaceutical niche by manufacturing newer medicines nowpatented in key producer countries like India, all of which were required to become TRIPS-compliant in 2000 or 2005.
In conclusion, we request urgently that:
The extension sought should be one that is indefinite – in other words, it should not end until a Member ceases to be an LDC. The arc of technological development is long, especially since LDC members have both to catch up andkeep pace with the rapid development and expansion of technological capacity in other developing and developed countries.
This issue is critical, as many LDC Members have prematurely provided for patents and other intellectual property rights and protections prior to the extension granted in 2005 of the Article 66.1 transition period, often as a legacy of colonial rule. Conditions such as paragraph 5 of IP/C/40 narrows the policy space available to LDCs by cementing colonial era IP rules and even more recent ill-advised IP reforms championed by WIPO, European and US Patent Offices and other technical advisors. Such conditions are aimed at preventing LDCs from fully enjoying the flexibility and policy space available during the transition period and which are crucial to enable LDCs to engage in technology catch-up and at the same time ensure access to more affordable commodities and public goods both for their citizens.
ATTACHMENT: PROPOSED CIVIL SOCIETY DRAFT REQUEST FOR AN EXTENSION OF THE TRANSITIONAL PERIOD UNDER ARTICLE 66.1 OF THE TRIPS AGREEMENT
Article 66.1 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) granted least-developed country (LDC) Members a ten-year transition period from most obligations under the TRIPS Agreement in view of their special needs and requirements, including their economic, financial and administrative constraints and their need for flexibility to create a viable technological base.
This LDC transition period was originally set to expire on 31 December 2005. However, a TRIPS Council decision of 27 June 2002 (IP/C/25) extended the 2005 transition period until 1 January 2016 in relation to pharmaceutical patents and test data protection. A separate 8 July 2002 General Council’s decision (WT/L/478) suspended the obligation of LDC Members under Article 70.9 of the TRIPS Agreement with respect to pharmaceutical products until 1 January 2016.
Without prejudice to this pharmaceutical related extension, the TRIPS Council, through its decision IP/C/40, extended the general TRIPS compliance transition period for LDC Members for all obligations under the TRIPS Agreement, other than Articles 3, 4 and 5, until 1 July 2013 or until such date on which a Member ceases to be an LDC, whichever date is earlier.
LDC Members of the WTO continue to face serious economic, financial and administrative constraints and for the most part have failed to create a viable technological base. Moreover, they lag in all indicators concerning concentrated poverty, illiteracy, poor health and a failure to realize sustainable and equitable human and economic development. LDC Members also have very low levels of innovative activity currently or commercial creative activity and are net importers of expensive IP-related commodities including medicines, information technology, educational resources, and environmentally sound technologies, most of which are not affordable tomost of the LDC population.
LDC Members therefore need to keep maximum flexibility to delay implementation of intellectual property right protections in accordance with Article 66.1 as long as they remain severely and comparatively disadvantaged in knowledge-based economic activity. A further extension of the TRIPS transition period would give LDCs an opportunity to imitate and translate existing technologies and informational resources for local use at the same time that they build their technological resources and human capacities.
Developing a viable technological base does not happen overnight, especially as LDC Members will not only have to catch up but then keep pacewith the global rate of technological development. Thus LDCs need a long-lasting transition period from TRIPS compliance in order to be able togrow economically viable industrial and technological sectors, to consolidate capacity, and to work their way up the technological value chain.
Article 66.1 provides that the Council for TRIPS “shall, upon duly motivated request by a least developed country Member, accord extensions of this period [emphasis added].” At the Eighth WTO Ministerial Conference of December 2011, the Ministers invited the TRIPS Council to give full consideration to a duly motivated request from LDCs for a further extension.
Since it is impossible to determine when individual LDCs will be able to overcome their economic, financial and administrative constraints and create a viable technological base, a further extension of the Article 66.1 transition period should not be limited to an artificial, pre-defined time period but instead should remain in force so long a particular LDC Member is considered a LDC as defined by the WTO. Moreover, an extension should be granted to LDCs as a group, given their common delays in development and should be granted with respect to all TRIPS intellectual property rights.
LDC Members of the WTO hereby submit this duly motivated request for an extension of the transitional period (that ends on 1 July 2013) for as long as any particular WTO Member remains an LDC. This extension should not have conditions such as thosecontained in paragraph 5 of IP/C/40.
This request shall not derogate from the rights of LDC Members available under Article 66.1 to request further extensions of transition period with respect to pharmaceutical products which is due to expire on 1 January 2016.
 Article 66.1 of the TRIPS Agreement states: “In view of the special needs andrequirements of least-developed country Members, their economic, financial and administrative constraints, and their need for flexibility to create a viable technological base, such Members shall not be required to apply the provisions of this Agreement, other than Article 3, 4, and 5, for a period of 10 yearsfrom the date of application as defined under paragraph 1 of Article 65. The Council for TRIPS shall, upon duly motivated request by a least-developed country Member, accord extensions ofthis period.”
 Ha-Joon Chang (2007), “Bad Samaritans The Guilty Secrets of Rich Nations & the Threat to Global Prosperity”
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