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Report from WIPO: Patents, Anti-Counterfeiting and Biodiversity
Category: Global Regulation
Wednesday, July 30, 2008
Intellectual property (IP) is becoming ever-more important in international relations. IP issues have recently been the subject of contentious debate in several international organizations and they are appearing on the agenda of yet other international organizations. The World Intellectual Property Organization’s (WIPO) Committee on Development and Intellectual Property recently concluded its second series of meetings, which were held in Geneva from July 7-11. As the Federalist Society is an accredited non-governmental organization (NGO) with WIPO, it was authorized to have a seat in the meetings. Guest writer Mark Schultz served as the Federalist Society’s official representative to the Committee’s meetings. The conclusion of his two-part report follows.
WIPO has renewed its efforts to address international cooperation on substantive patent issues after a hiatus of three years, during which the Standing Committee on the Law of Patents (SCP) did not meet, though this is not to say that WIPO did not work at all on patents during this time). The SCP met again in late June, establishing a workplan for the future.
WIPO has stalled on patent issues in the past. These issues seem to bring out the greatest divisions among member nations, particularly along developed-developing country lines. In fact, it was the breakdown of patent harmonization efforts at WIPO in the late 1980s that led developed countries to move harmonization efforts out of WIPO into the General Agreement on Tariffs and Trade (GATT) negotiations, eventually resulting in the successful linkage of IP to trade issues, the Agreement on Trade Related Aspects of Intellectual Property (TRIPS), and the World Trade Organization’s (WTO) partial jurisdiction over IP issues.
Harmonization remains controversial—so much so, that it was widely referred to as the “h-word” during the latest SCP meetings. The long-pursued goal of further global patent harmonization (TRIPS was a partial step) will have to await another day or another forum. Disappointments regarding TRIPS and more recent controversies regarding international patent policy have reduced the appetite of many for patent harmonization.
Instead of pursuing the “h-word,” the SCP is now focusing on specific, narrow issues. The committee identified eighteen issues for future work, which are listed in the annex to the chair’s report. Four issues were assigned the most immediate priority for consideration in the next meeting:
- “Dissemination of patent information (inter alia the issue of a database on search and examination reports);
- Exceptions from patentable subject matter and limitations to the rights, inter alia research exemption and compulsory licenses;
- Patents and standards;
- Client-attorney privilege.”
In a further departure from past efforts at harmonization, the majority of the eighteen issues comprising the workplan arguably reflect concerns raised in recent years by those more skeptical of IP. In particular, the arguments of recent years regarding patents and public health clearly come to the fore in the items described as “alternative models for innovation; compulsory licenses; and patents and health (including exhaustion, the Doha Declaration and other WTO instruments, [and] patent landscaping).” This agenda appears to represent a new direction for WIPO.
One issue on which WIPO has already begun to move, and which may be of immediate concern to patent practitioners, is the issue of attorney-client privilege for patent counsel. WIPO held a conference on this issue in late May. While the U.S. position on this issue was recently clarified by the Federal Circuit in In re Seagate Technology, and is quite nuanced, in many countries attorney-client privilege is not available at all. In some countries, it is not recognized for foreign counsel. As patent litigation becomes more global, such discrepancies become ever-more significant. International Chamber of Commerce (ICC) representatives have said that the ICC (along with the International Association for the Protection of Intellectual Property) has made this issue a priority. It thus may bear watching by U.S. observers.
In the end, however, it is the broader policy issues being pursued at the SCP that warrant the most watching. IP policy has been transformed into a contentious international political issue, and wherever it comes up, the stakes are high. It looks like the SCP could be yet another forum where significant IP public policy issues are discussed.
In addition to WIPO’s patent policy agenda, there is also a new effort to increase international cooperation to combat intellectual property counterfeiting and piracy. This effort is taking place in two forums: First, the World Customs Organization (WCO) recently issued a new set of standards for intellectual property enforcement by customs authorities, known as “Standards to be Employed by Customs for Uniform Rights Enforcement” (SECURE) Second, there are negotiations for a new Anti-Counterfeiting Trade Agreement (ACTA) taking place among a group of nations including the United States, EU member nations, Japan, Australia, Switzerland, Jordan, Korea, New Zealand, Singapore, the United Arab Emirates, Morocco and Mexico.
The WCO framework is a voluntary set of standards that seeks greater cooperation among customs authorities around the world. It aims to combat piracy and to secure supply chains against security threats (i.e., terrorism) through greater information sharing among customs authorities. It also promotes information sharing with INTERPOL, WIPO, and other international organizations.
Fewer details are available regarding ACTA, as it is not being negotiated publicly. At the recent G8 summit, however, leaders declared finalization of ACTA to be a priority. The substance of the agreement is focused on three topics: international cooperation, enforcement practices, and legal framework. International cooperation would involve many of the same issues covered by the WCO’s new standards for cooperation, while enforcement and legal frameworks might involve new substantive law.
In recent years, anti-counterfeiting efforts have taken on a new urgency because of public health concerns and concerns about terrorism. Recent studies indicate that ineffective or dangerous counterfeit pharmaceuticals are a problem globally. In some developing countries, studies have found that counterfeits often represent a large portion of the drug supply. Meanwhile, some have argued that counterfeiting activities often are a lucrative source of revenue for terrorists and organized crime.
Nevertheless, ACTA, and, to a lesser extent, the WCO’s efforts, have engendered controversy. One criticism of ACTA is that negotiation is taking place “behind closed doors,” thus not allowing public scrutiny and accountability. This criticism echoes a refrain heard much in recent years as globalization skeptics have complained of the “democracy deficit” at international organizations like the WTO. Some critics contend that international IP agreements such as TRIPS and later agreements have pushed a pro-industry agenda that would have been unlikely to pass as domestic legislation.
Critics’ fears were exacerbated by the alleged leak of a document purporting to be a strategy memo summarizing ACTA. Based on this document, some popular internet sites leaped to conclusions (followed by some mainstream media sources) that ACTA would empower customs authorities to seize and search the laptops and iPods of individual travelers at the border for pirated MP3s. This understanding seems quite overblown.
The allegedly leaked ACTA memo did, however, address issues outside of the purview of ordinary customs activity. It advocated provisions that would affect “internet distribution and information technology,” including a legal regime requiring Internet Service Providers (ISP) to cooperate with IP owners (which already exists in the U.S.); procedures allowing IP owners to obtain the identity of infringers expeditiously; and remedies against anti-circumvention technology or trafficking in anti-circumvention technologies. These sorts of laws are already a familiar, if not uncontroversial, part of U.S. cyberlaw, but critics were concerned that a new international agreement might expand U.S. protections or impose U.S.-style laws in other countries. In any event, such internet regulations would likely make any anti-counterfeiting treaty far more controversial than it otherwise would be.
In recent months, some of the NGOs that are more skeptical of IP have been taking a harder line on counterfeiting. Some NGOs have expressed concern that the counterfeit label is being unfairly applied to drugs produced by generic manufacturers in countries where a patent is not recognized or a compulsory license has been issued. In some instances, however, the argument has been taken further. Several observers at a recent WIPO forum on counterfeiting independently stated that one prominent activist rose to speak in defense of counterfeit brake pads for automobiles, arguing that counterfeit brakes are worthwhile if one cannot afford regular brakes. If this position strikes one as remarkable, it should be noted that many anti-globalization activists (e.g., Adbusters) argue that branding tends to mislead consumers and adds little or nothing of value to products.
A final topic discussed at the meetings concerned biodiversity and the disclosure of origin. The United States chose not to join the Convention on Biological Diversity (CBD), but that hardly means that the CBD does not affect international law and policy-making. Indeed, both the WTO and WIPO have been considering how to harmonize their activities with the CBD. Many view the CBD as embodying a “grand bargain” between developed and developing countries: In exchange for responding to the ecological concerns of developed countries, developing countries would receive “benefit-sharing”—compensation for use of their biological resources (e.g., plants, genetic material, flu viruses) and access to any products created from those resources.
Benefit-sharing intersects with intellectual property policy in two ways. First, developing countries have advocated a disclosure of origin requirement for patents. Patentees would be required to disclose the origin of any biological resource that was used in an invention. Failure to disclose would be grounds for invalidity. Second, developing countries wish to create some sort of international obligation to be compensated for the use of such resources (the CBD currently merely affirms the sovereign right of nations to regulate the use of biological resources).
For the first time in many years, the CBD appears to be moving toward an agreement on benefit-sharing. Essentially, members have agreed to agree, setting up a two-year time frame for agreement and framework for a negotiating process. If they succeed, the world is likely to see some sort of benefit-sharing requirement for the first time, including a disclosure requirement for patents.
At a recent forum on the CBD held in Geneva by the U.S.-based Institute for Policy Innovation, key negotiators said that a patent disclosure requirement was one of the aspects of benefit sharing most likely to come to pass in the near future. Indeed, the Brazilian delegate opined that he saw a disclosure requirement as something that would come to pass and a satisfactory result for the short term.
A disclosure of origin requirement is also being pursued at the WTO as part of the Doha Round, and the proposal is under serious consideration. At the time of this writing, the topic is being actively negotiated at a “mini-ministerial” being held in Geneva at the end of July. At the moment, news reports say that those who support greater protection for geographic indicators (e.g., chardonnay, champagne, cheddar) have formed a strategic alliance with those who seek to amend TRIPS to require disclosure of origin. Whether these proposals go anywhere remains to be seen, as the fate of the Doha Round hinges on much greater issues.
Mark Schultz is a professor at Southern Illinois University School of Law, where he teaches intellectual property law, copyright law, trademarks and unfair competition, and legal ethics. He also writes and speaks frequently on these topics. Professor Schultz serves as Chair of the Federalist Society’s Intellectual Property Practice Group. He can be contacted with any questions or comments at mschultz@siu.edu.
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