[Ip-health] IUT: New Zealand IPR Stance In TPP At Odds With Past U.S. FTA Provisions

Peter Maybarduk pmaybarduk at citizen.org
Fri Dec 10 09:59:21 PST 2010

Inside U.S. Trade - 12/10/2010 
New Zealand IPR Stance In TPP At Odds With Past U.S. FTA Provisions 
Posted: December 9, 2010 

An early concept paper drafted by the New Zealand government on the
protection of intellectual property rights (IPR) in the context of the
Trans-Pacific Partnership (TPP) talks reveals that New Zealand's opening
position is at odds with both IPR obligations included in past U.S. free
trade agreements and U.S. business demands on IPR in the TPP context.
In the paper, which was leaked this week by Public Citizen, New Zealand
argues in favor of an IPR chapter that does not go beyond international
standards already found in the World Trade Organization Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPS).
U.S. business groups have rejected such a "TRIPS-aligned" position,
arguing that the U.S. should push for IPR protections that go beyond
TRIPS to secure stronger protections for patents, copyrights and
trademarks, as was the case in the U.S.-Korea free trade agreement.
Business groups see that FTA as the "baseline" for TPP negotiations.
The New Zealand paper does not get into specifics of which specific IPR
provisions it favors or which specific provisions it would reject in the
TPP negotiations. Instead, it sets out the country's general views on
the overall structure of the IPR chapter in an eventual TPP agreement.
Overall, New Zealand argues against an IPR chapter that would provide
what it views as overly strong protections, for two reasons. First, it
argues that overly strong protections that go beyond TRIPS could impede
the innovative process. "IP rights that are too strong will detract from
innovation rather than promote it," it states.
Innovations are occurring rapidly by innovators "clustering" their work
or by one person building on the work of another, the paper states. "In
this environment, more people are arguing that overly strong IP rights
can act as an inhibitor rather than as a promoter of innovation," it
Second, New Zealand explains that it is supporting a "TRIPS-aligned"
approach in the TPP talks due to the fact that the TPP talks involve a
wide range of countries at different stages of economic development.
While a stricter IPR regime can be effective in industrialized
countries, where many innovations originate, that same regime could
stunt the development of a country that is dependent on importing
technology, the paper argues.
Developing countries that adopt strict IPR standards may find it more
difficult to transition to a "knowledge rich economy" because domestic
innovation will be suppressed by "TRIPS-plus" IPR provisions, it adds.
"Technology exporting countries have in most cases evolved from being
technology importing countries and these same countries pursued quite
different IP policies in those circumstances," the paper states.
Developing countries participating in the TPP talks include Malaysia,
Vietnam and Brunei.
A coalition paper submitted by leading U.S. business groups last week
takes the opposite view, arguing that strong patent protections promote
innovation because right holders, such as software developers, need to
protect their market share from diminishing or be able to receive
reasonable compensation for innovations.
Without these protections, companies will have no incentive to pursue
innovations because there will be an erosion of prices and investments,
according to the coalition paper, which was written by the
Pharmaceutical Research and Manufacturers of America (PhRMA), the U.S.
Chamber of Commerce, and the Motion Picture Association of America
New Zealand in its paper argues that IP rights in many countries are
diminishing in quality because "legislators, the courts and IP offices
have sought to extend IP rights such as patents to new areas." This has
created an increase in the number of IP rights granted but no evidence
that such rights are leading to a rise in innovative or creative
activity, New Zealand argues.
Further, such a system of lower quality IPR is only increasing
"disputed rights, litigation and backlogs raising the cost of IP rights
for both users and innovators," it adds.
This approach again appears to reflect TRIPS, which only says patents
must be granted if they are "new, involve an inventive step and are
capable of industrial application." The Korea FTA goes further than
TRIPS by allowing patents to be available for "any new uses or methods
of using a known product."
One source said this can lead to companies seeking patents that would
not apply under TRIPS. In the area of medicines, this could suppress the
innovative use of pharmaceuticals or the manufacture of generic drugs
for alternative uses other than what the drug was originally invented
for, this source argued.
New Zealand's resistance to extending new protections in new areas also
differs from the business coalition paper submitted last week. For
instance, business groups in that paper urge the Obama administration to
go beyond the Korea FTA in order to specifically require countries to
provide patent protection for computer implemented inventions.
India and other developing countries argue that the TRIPS agreement
does not require protections for these inventions, although U.S.
business groups disagree (Inside U.S. Trade, Dec. 3).
New Zealand states that "high quality" IPR can be granted on a
consistent basis across TPP countries by improving operational
efficiency, such as by streamlining the patent and trademark systems
between countries.
The paper highlights the Patent Cooperation Treaty (PCT) as an example
where TPP countries can participate so that patents will not be
duplicated. The PCT is an agreement in which some countries agree to
recognize patents registered in other countries. Additionally, New
Zealand states that such coordination efforts should promote high
quality rights.
In yet another area that puts New Zealand at odds with the views of
U.S. business groups, New Zealand cautions against "international"
solutions on IPR, such as through the World Intellectual Property
Organization's (WIPO) Copyright Treaty and the WIPO Performances and
Phonograms Treaty.
U.S. business groups have urged the administration to argue that all
TPP countries should sign up to these treaties. New Zealand has not
signed up to either treaty, which in part require a country to provide
"legal remedies" for circumventing technological protection measures
(TPM), such as digital locks that prevent the copying of DVDs.
"While there may be good arguments for an early and more rapid
development of international solutions, such approach bears the risk of
being premature, lacking evidence at the national level that would
suggest a desirable international norm," New Zealand states in its
"The WIPO Copyright Treaty and the WIPO Performances and Phonograms
Treaty are examples of such approach," it continues. New Zealand argues
that these treaties do not recognize the emerging new business models
that seek to monetize Internet user behavior rather than restricting it
through digital rights management.
"[B]y providing stricter digital enforcement measures that are based on
traditional concepts of copyright protection, the treaties have limited
ability to recognize the reality of emerging new business models and new
ways of consuming creative works via the internet," it states.
"Given the considerable level of uncertainty regarding the benefits of
the WIPO Internet Treaties for the TPP region, New Zealand considers
that TPP countries should retain their flexibility to legislate on
technological measures," it states.

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