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The World's Poorest Heave A Sigh of Relief

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By Jaya Ramachandran | IDN-InDepth NewsAnalysis

BERLIN (IDN) – Forty-nine of the world's poorest and most vulnerable courtiers spanning across Asia-Pacific, Sub-Saharan Africa and the Caribbean are no longer threatened by a modern-day Damocles' sword – not until July 1, 2021 at least. The group known as the least-developed countries (LDCs) can in fact request further extension of the waiver on abiding by the Trade-related Aspects of Intellectual Property Rights (TRIPS).

The decision of the TRIPS Council of WTO – the World Trade Organisation (WTO) – on June 11, 2013 to allow LDCs to delay implementation of the TRIPS Agreement has come as a great relief to the world's poorest countries. It is the result of the determination and skill of the LDC group, headed by Nepal, during protracted negotiations with the major developed country members of the WTO.

Better off developing countries whole-heartedly supported the LDC group request. So did many civil society groups around the world. However, the LDC group’s request was not acceptable to many of the developed country members of the WTO.

The TRIPS Agreement in Article 66.1 states that in view of the special needs and requirements of LDCs, their economic, financial and administrative constraints, and their need for flexibility to create a viable technological base, they shall not be required to apply the provisions of the agreement, for a period that can be extended by the TRIPS Council, upon duly motivated request by a least developed country.

Well done LDC group!

Welcoming the TRIPS Council's decision, the Geneva-based South Centre says the terms this time are better than those in the previous extension granted in 2005. The new extension period is for eight years, starting on July 1, 2013. This is longer than the seven and a half years transition period provided in the 2005 decision.

"It is thus an improvement, though very slight. It is also significantly below what the LDC Group had asked for in its formal proposal IP/C/W/583, in which the Group had requested that the transition period should last so long as the country remains an LDC," the South Centre said in a statement on June 11, adding: "This request was justified, especially since the relevant part of the TRIPS Agreement (Article 66.1) states that the TRIPS Council shall grant LDCs further extension of the transition period, upon due request."

In the view of the South Centre, LDCs have a low level of economic and social development and thus require time to develop a viable technological base and to experiment with domestic IPR (intellectual property rights) legislation before being obliged to implement the TRIPS Agreement. The economic condition of LDCs as a group has not improved in the past several years, especially because of the global financial crisis of 2007-2009 and the global economic slowdown.

According to the South Centre, the June 11 decision has also removed the condition introduced in the 2005 pronouncement that LDCs cannot roll-back the level of implementation of the TRIPS agreement that they have already undertaken in their national legislation. Under this condition, an LDC would not be able to experiment with IPR-legal reforms that are suitable to their development context.

For example, if a LDC introduces a TRIPS-compliant obligation on IPR-protection, it would no longer be able to reduce that scope of protection, regardless of the fact that the LDC is not required to implement the TRIPS Agreement. This binding condition actually denied the policy space given to LDCs in the TRIPS Agreement to refrain from implementing the Agreement during the transition period.

"This time, the LDC Group rightly insisted that any reference to a 'no roll-back' binding commitment could not be included in the new decision. The LDC Group position was fully justified," says the South Centre statement.

However, some developed country WTO members insisted on retaining the no roll-back commitment. As a compromise to the requests of developed countries, the new decision contains a sentence equivalent to a “best endeavour”, i.e. that LDCs express their determination to preserve and continue the progress towards implementation of the TRIPS Agreement.

"This is not a binding commitment on LDCs and in no way can this be understood, in accordance with the interpretation principles applied in WTO, as preventing LDCs from rolling back IPR legislation as required to meet their particular needs," the statement adds.

This gain in policy space is reinforced by the sentence immediately following, that “Nothing in this decision shall prevent least developed country Members from making full use of the flexibilities provided by the Agreement to address their needs....” In the view of the South Centre, this includes the flexibilities contained in Article 66.1 of the TRIPS Agreement (to not apply provisions of the TRIPS Agreement, other than Articles 3, 4 and 5), which has now been extended.

The South Centre adds:

"We also welcome paragraph 3 of the Decision, that LDCs have the right to seek further extensions of the transition period. This reaffirms the clause in Article 66.1 that the Council shall grant further extensions of the transition period upon due request by LDCs.

"The . . . decision provides assurance that LDCs retain their policy space and continue to have the full flexibilities intended by Article 66.1 to overcome their capacity constraints and develop a sound and viable technological base.

"The best outcome would have been that the LDC Group’s request had been fully agreed to by the TRIPS Council. Nonetheless, given the circumstances, the . . . decision to extend the transition period is to be welcomed as it is a gain for the LDCs.

"The . . . decision also states that this decision is without prejudice to the Council’s previous 27 June 2002 decision on "Extension of the Transition Period under Article 66.1 of the TRIPS Agreement for LDC Members for Certain Obligations with respect to Pharmaceutical Products" (IP/C/25). By way of the 2002 decision, LDCs are not required to provide protection to patents or test data in relation to pharmaceutical products, until 1 January 2016. Thus, LDCs should continue to make use of the policy space provided by the 2002 Decision."

The South Centre statement is jointly authored by Martin Khor (Executive Director), Carlos Correa (Special Advisor, Trade and Intellectual Property Issues), German Velasquez (Special Advisor, Health and Development), Viviana Munoz Tellez (Manager, Innovation and Access to Knowledge Programme-IAKP) and Nirmalya Syam (Programme Officer, IAKP).

As the South Centre rightly points out, LDCs should now receive full support from UN agencies, the WTO, WHO and WIPO, in the spirit of the Development Agenda, to make effective use of the transition period to build their technological base through technology transfer and capacity building, while making full use of the flexibilities afforded to the LDCs, including the further extension provided by the TRIPS Council on June 11, 2013.

Before the expiry of the transition periods, LDCs should again assess their situation and may request extension in 2016, with respect to pharmaceutical products, and in 2021 in respect to all provisions of the TRIPS Agreement.

EU greets too

Welcoming the decision, the 27-nation EU said on June 11 that "from the outset of discussions, the European Union has recognised the importance of flexibility for the least-developed countries and supported an extension to the transition period".

It added: "The agreement sends a strong signal of intent in light of the 2011 United Nations Conference on the Least-Developed Countries in Istanbul, Turkey. The Istanbul Programme of Action seeks to halve . . . the number of LDCs by 2020. It is also a positive result ahead of the ninth WTO Ministerial Conference in Bali in December this year."

The statement went on to say: "The decision does not affect the transition period for patents for pharmaceutical products, which was agreed in 2002; LDCs will not have to protect these patents until 2016. Where least-developed countries voluntarily provide some kinds of intellectual property protection even though they are not required to do so under the TRIPS Agreement, they have committed themselves not to reduce or withdraw the current protection that they give." [IDN-InDepthNews – June 13, 2013]

Related IDN article: TRIPS Hang Over LDC Like A Sword Of Damocles

2013 IDN-InDepthNews | Analysis That Matters

Photo: Demonstration in Sweden in support of file sharing, 2006. | Credit: Wikimedia Commons

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