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BB.review of the implementation of the agreement under article 71.1


1.The Chairperson recalled that, at the previous meeting, his predecessor as Chair had made efforts to see whether it would be possible to find a way of initiating this review by organizing the issues that had been raised under certain headings. It had seemed that this was considered somewhat premature, at least by some Members. At the informal meeting of the Council on 21 May 2001, he had urged more Members to come forward with their thinking, so that it would be possible to have a fuller and more representative picture of the issues that Members thought should be taken up in this review. However, only one new paper had been received, from Zambia (document IP/C/W/298).

2.The representative of Zambia agreed with India's statement at the previous meeting that the Article 71.1 review should be as comprehensive as possible and should not be limited to some articles. What was important was to assess somehow the impact of the TRIPS Agreement on development and, in particular, on the transfer of technology and capacity-building in developing countries in general and, in particular, LDCs. He listed some of the important questions and points to consider in the review: (i) the extent to which the transfer of technology had taken place; (ii) specifically, the impact of the Agreement on the creation of a sound and viable technological base as envisaged in Article 66.2. Indeed, if the Agreement was being implemented as many developed countries had indicated in their notifications, the review should reflect the impact to establish how LDCs were benefitting in terms of a sound and viable technological base; (iii) the costs of implementing the Agreement in developing countries and particularly LDCs; (iv) the implication for developing countries, particularly LDCs, of the 20-year patent rule; (v) whether increased protection of IPRs was jeopardizing developing countries' access to essential drugs; (vi) whether IPRs had been misused by the right holders, etc.; (vii) clarifying whether the implementation of Article 66.2 by developed countries was, in fact, not a pre-condition for LDCs' implementation of their TRIPS obligations. The review should also broaden the discussion to topics that were not clearly included in the Agreement, such as protection of traditional knowledge and folklore. The language in Article 8 (Principles) should be strengthened to ensure that nothing in the Agreement would prevent countries from taking the necessary measures for achieving public policy objectives, including public health protection.

3.The representative of Brazil expressed general support for the interventions at the previous meeting by India and by Malaysia, speaking on behalf of ASEAN Members. Brazil agreed with India that the Article 71 review was a review of the TRIPS Agreement itself, so that no subject-matter should be excluded from its scope. Brazil lent its general support to the approach expressed by ASEAN that the review should look at: how the provisions of the TRIPS Agreement were consistent with and promoted the objectives and principles of the Agreement; promotion and transfer of technology, which was very much in line with the objectives in Article 7, and also related to Article 66.2, referred to by Zambia (document IP/C/W/298); whether there was an appropriate balance between public interests and private rights in the various fields of intellectual property protection; and what were appropriate measures referred to in the context of Article 8 that could be used to prevent the abuse of intellectual property rights by right holders or the resort to practices that unreasonably restrained trade and/or adversely affected the transfer of technology. Brazil agreed with ASEAN that discussion of these issues in the review would be helpful in determining whether the TRIPS Agreement had met the objectives it was intended for and whether there was, indeed, a balance of benefits.

4.The representative of the United States thanked Zambia for making a contribution to the Council discussion's of Article 71.1. His delegation would examine the topics proposed for the review and react at the next meeting.

5.The representative of Malaysia, speaking on behalf of ASEAN Members, said that ASEAN agreed with a number of the points that had been raised by Zambia in its paper (document IP/C/W/298), specifically on issues of the transfer of technology. Like Brazil, she recalled that, at the previous meeting, ASEAN had raised the issues of whether the review should look at how the provisions of the TRIPS Agreement were consistent with and promoted the objectives and principles of the Agreement, particularly the promotion of technological innovation, transfer and dissemination of technology in the mutual interest of producers and users. Her delegation had noted a number of other issues that could be raised during the review and was interested to follow up on them at a later date and to hear reactions from other Members.

6.The Council took note of the statements made and agreed to revert to the matter at its next meeting.


CC.non-violation and situation complaints


1.The Chairperson recalled that this agenda item concerned both non-violation and situation complaints. He referred to a note that he had circulated suggesting, on the basis of informal consultations conducted by his predecessor, some headings that could be used as a way of organizing the further discussion on this matter (JOB(01)/70).

2.The representative of Canada said that the Chairperson's note (JOB(01)/70) provided an excellent and non exhaustive method for discussing the important issues raised by the non-violation nullification and impairment ("NVNI") remedy. A number of delegations within the TRIPS Council had raised questions about the application of NVNI. Canada continued to believe that it was an important matter for discussion. Members had voiced legitimate concerns that, without further guidance on the nature of this remedy, governments might find themselves genuinely constrained in the development of policy. Members had to be fully cognizant of the obligations that they assumed. Canada hoped that, through a detailed discussion of the NVNI remedy, the Council would have an opportunity to eliminate much of the uncertainty surrounding this item. At this stage, "non violation" complaints within the WTO had arisen in the context of trade in goods. A legitimate starting point for any analysis therefore was to examine the similarities, as well as differences, between the TRIPS Agreement and the GATT. For instance, the results of WTO market access negotiations were recorded in national schedules of concessions annexed to the Uruguay Round Protocol that formed an integral part of the Final Act. This was not the case with the TRIPS Agreement. It set out basic rules for intellectual property protection, was not principally concerned with questions of market access and provided no commitments in this regard. The Council needed to take this fact into account when evaluating the purpose of the TRIPS-related NVNI remedy. Questions such as these had been raised in papers tabled by Canada and other Members. If the Council were to make progress, it needed to examine each question carefully and come to some conclusions about the nature of the NVNI remedy. Canada therefore thanked Members for their efforts in moving discussions forward on this item. In addition to the items mentioned in the five headings suggested in the Chairperson's note, it would also be helpful to discuss Articles 7 and 8, and "exceptions".

3.The representative of Brazil agreed with Canada that the TRIPS Agreement set out basic rules which aimed to ensure that all Members would follow universal minimum standards for intellectual property protection. Although specific rights were transferred under contractual licences, there was no actual trade in intellectual property rights as there was trade in goods. It was certainly a sui generis agreement in the WTO in that respect. Brazil shared Canada's view that just as too little protection of intellectual property could impede innovation and trade so too could too much protection. Brazil generally agreed with Canada's remarks on determination of scope and modalities regarding non-violation measures and the other elements of the checklist suggested by the Chairperson. Brazil generally agreed with Mexico's remarks on that point at the previous meeting. Brazil believed that the task of assessing the scope and modalities for non-violation complaints should not be left in the hands of panels or the Appellate Body which, in accordance with the DSU, were not able either to increase nor diminish the obligations of Members. He agreed with India that it was not clear at all whether non-violation complaints should or should not apply to the TRIPS Agreement. Application of the remedy to the TRIPS Agreement could give rise to great legal uncertainty as regards the application of the Agreement itself. Therefore, Brazil generally agreed with the views expressed by Canada and Hungary in their communications (documents IP/C/W/249 and JOB(01)/43, respectively).

4.The representative of the European Communities recalled that, some time previously, his delegation, together with other Members, had proposed that the Council begin to discuss and examine the scope and modalities of possible non-violation complaints. His delegation was grateful for the papers which had been submitted and for the Chairperson's suggested headings (JOB(01)/70). Those headings were an illustrative list and not necessarily exhaustive.

5.The representative of Korea supported the views expressed by Canada in its paper (document IP/C/W/249) on issues including the exceptional nature of non-violation, the contrast between the GATT and the TRIPS Agreement and the need to take into account the objectives and principles of the TRIPS Agreement when applying non-violation. He appreciated Canada's reflections in the paper on the unique nature of the TRIPS Agreement and the emphasis it had placed on remedy issues. He agreed that judicial judgements or decisions could not be regarded as government measures subject to WTO dispute settlement, as they were made independently only in line with domestic laws. Therefore, judgements or decisions from the judiciary should not be understood to be the subject of dispute settlement unless governments followed them up with measures such as amendment of relevant laws and regulations. He agreed with Canada on the objective of preventing the abuse of non-violation complaints as much as possible. The DSU, as presently drafted, did require a high level of burden of proof in non-violation cases. However, dealing with non-violation by positive consensus seemed to call for an amendment of the DSU, as there was no specific provision in the present TRIPS Agreement on this issue.

6.The representative of Hungary recalled that his delegation attached great importance to the in depth analysis of the applicability of the non violation remedy under the TRIPS Agreement. His delegation maintained the arguments it had put forward at previous meetings, and commented at the present meeting only on the benefits that Members can reasonably expect under the TRIPS Agreement. Hungary agreed with the Korean non paper (JOB(00)/6166) that, in order to ensure legal consistency and predictability, it was essential that there be a common understanding among the Members as to what the concept of "benefits" meant in the context of the TRIPS Agreement. Hungary agreed with the majority of delegations that, insofar as benefits and reasonable expectations were concerned, the TRIPS Agreement was completely different from the GATT and GATS. The TRIPS Agreement was not a market access agreement, but rather a minimum standards agreement, which provided for the minimum rights that may be acquired by nationals of all Members in all other Members to protect their intellectual property. The minimum standards set out by the TRIPS Agreement were not similar to tariff concessions under the GATT nor to specific commitments under the GATS. Therefore, benefits that Members could reasonably expect from the standards were different in nature from the benefits that could be expected under the GATT and the GATS. In that respect, he highlighted Section C of Australia's paper (document IP/C/W/212) which said that the benefits resulting from TRIPS standards should be those that accrue to Members and should not be mixed with the interests of individual private right holders in the exploitation of their intellectual property rights. He agreed with paragraph III(b) of Canada's paper (document IP/C/W/249) which said that the benefit conferred by the TRIPS Agreement was the ability of third parties to acquire, maintain and enforce intellectual property rights, but did not automatically extend to the exploitation of those rights. Although intellectual property rights could be transferred or licensed by contract, the transfer or licensing of exclusive rights could not be discussed on the same basis as trade in goods and services. He drew attention to the fact that GATS, which was obviously an agreement with more of a market access character, in its Article XXIII:3, limited non violation complaints to benefits accruing from specific commitments undertaken by Members.

7.The representative of Malaysia said that the TRIPS Agreement was a sui generis agreement. Non-violation complaints under the TRIPS Agreement had no precedent and were not comparable to non­-violation complaints in relation to trade in goods and services. She agreed with Hungary that the TRIPS Agreement was a minimum standards agreement regarding intellectual property protection, whilst the basis of the non violation provisions were market access provisions in GATT 1994. She agreed with Brazil and Canada that the Council should make progress on the issue so as not to leave it to panels to decide and to ensure greater certainty in the implementation of the TRIPS Agreement. The Chair's note (JOB(01)/70) listed several headings for discussion, namely "nature of the benefit", "measure", "causality", "burden of demonstration of nullification and impairment" and "remedy". Some of these had already been raised in the papers submitted by Australia, Canada and other delegations. These subheadings contributed to the discussion on non-­violation complaints although Malaysia agreed with the European Communities that work on this issue should not be confined to those subheadings alone, but rather discussed in the broader context of the scope and modalities of non violation. Turning to the definition of a "measure", he made some preliminary comments. Canada's paper (document IP/C/W/249) had raised the issue of whether measures should be limited to government measures or should also include court decisions or actions. She agreed with Korea that court decisions or actions should not be the object of non-violation complaints, although a court decision which resulted in measures taken by the government would be an issue for consideration. Malaysia was interested in whether measures taken in fulfilment of Articles 7 and 8 could be interpreted as causing non-violation nullification of benefits. Articles 7 and 8 should be the overarching objectives of the Agreement. In addition, measures taken under exceptions allowed in the context of certain TRIPS provisions should not be the object of non-violation complaints either.

8.The Chairperson said that delegations could raise issues that did not appear in the subheadings in his note and the Council would discuss the item in its totality.

9.The representative of the United States said that the Chairperson's note or illustrative list of issues (JOB(01)/70) would probably help to guide the discussion of the Council on scope and modalities of non-violation cases. Although he was prepared to continue this discussion on scope and modalities, he did not have more concrete comments, in part because he did not share the concerns and uncertainties others had expressed regarding the ability of panels and the Appellate Body to handle non-violation complaints involving the TRIPS Agreement. Both GATT and WTO practice under the provisions of Article 26 of the DSB seemed to provide ample guidance for those bodies, in fact, the same guidance that was available under other Uruguay Round agreements so that any uncertainty involving TRIPS non-violation complaints should be no greater than uncertainty regarding those complaints in other areas. Nevertheless, his delegation was committed to continuing this discussion with the hope of alleviating the concerns and uncertainties of Members in that area. Of course, he recognized that the moratorium on non-violation complaints under the TRIPS Agreement had expired on 1 January 2000.

10.The representative of India shared the views expressed by Canada in its paper (document IP/C/W/249) and agreed with Hungary that the TRIPS Agreement was different from the GATT and GATS. The Council could not leave interpretation of the non-violation measure to panels and the Appellate Body. India supported further discussion on this item and would submit a paper and comments before the next meeting.

11.The Council took note of the statements made and agreed to revert to this matter at its next meeting.

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