[Ip-health] LDCs collectively request an indefinite extension of their TRIPS-compliance transition periods

Baker, Brook b.baker at neu.edu
Mon Nov 12 11:09:08 PST 2012

Professor Mercurio and his co-author, Arno Hold, have presented an interesting and detailed history of the LDC extension, but their policy recommendations are unfortunately problematic.  

Most fundamentally, Professor Mercurio and Research Fellow Hold seem convinced that the adoption of TRIPS-level IP protections is essential to the development of a viable technological base in LDCs and thus to their development and broader and more successful integration into the international economy.  Thus, they write:  "More generally, another unconditional extension would undermine the credibility of a multilateral system which is premised on the belief that the protection and enforcement of IPRs are beneficial for the growth and development of Members, including LDCs."  

However, the TRIPS Agreement Art. 66.1 clearly acknowledges that the entire international community understood in 1995 that IPRs actually might stand in the way of LDCs developing a technological base and of increasing capacity in key areas.  That conclusion is based on an implied recognition that most LDCs will have to undergo a period of copying and adapting technological advances in the same way that virtually all now developed (rich) countries did during their own historical development process.

More specifically, Art. 65 of TRIPS treated the TRIPS compliance of middle-income developing countries far differently than LDCs were treated in Art. 66.  First, developing countries were given a shorter transition period (5 years vs. 11 years); second, developing countries had a no roll-back rule and LDCs didn't, which meant LDCs could prior to 2006 have de-legislated all IP protections in their countries for the duration of original transition period; and third, LDCs were given unconditional rights to both request and receive further extensions of the transition period upon a properly motivated request.

At its most fundamental level, Art. 66.1 represents a shared understanding that IPRs and their enforcement can stand in the way of LDC's industrial and human development.  (Of course, IPRs also stand in the way of affordable access to IP-protected commodities because IP-based monopolies result in high prices typically aimed at scarce economic elites only.)  Accordingly, Art. 66.1 should not be read merely as a promise that LDCs will eventually adopt TRIPS, but rather as a recognition that premature TRIPS implementation can and will retard development.

Accordingly, the four policy recommendations that Mercurio and Hold develop and their argument against the desirability of a further unconditional and long-term extension of the LDC transition period is, in my opinion, plainly wrong.  Technological development has not yet occurred and the path to developing a minimum technological base let alone "catching up" is uncertain at best.  Moreover, IPRs and their enforcement stand in the way of the classical approach to technological development - copying and adapting to local needs.  

Rather than concentrating on assessing technical assistance needs for securing premature TRIPS compliance, LDCs should maintain their recent stand to win an unconditional and open-ended extension of the LDC transition period and thus be free to turn their attention to their real needs.  Those needs do not include ensuring monopoly protections for foreign IP innovators and creators, but rather to develop their own technological and capacity base and to develop a locally specific policy for encouraging innovation and cultural creation among their own people.

Professor Brook K. Baker
Health GAP (Global Access Project) &
Northeastern U. School of Law, Program on Human Rights and the Global Economy
Honorary Research Fellow, Faculty of Law, Univ. of KwaZulu Natal, SA
400 Huntington Ave.
Boston, MA 02115 USA
(w) 617-373-3217
(c) 617-259-0760
(f) 617-373-5056
b.baker at neu.edu
From: ip-health-bounces at lists.keionline.org [ip-health-bounces at lists.keionline.org] on behalf of Bryan MERCURIO (Faculty of Law) [b.mercurio at cuhk.edu.hk]
Sent: Friday, November 09, 2012 9:06 AM
To: Ip-health at lists.keionline.org
Subject: [Ip-health] LDCs collectively request an indefinite extension of       their TRIPS-compliance transition periods

Dear IP-health:

In light of Prof Baker's very useful post, I thought I would share a recent working paper of mine on this subject: 'Transitioning to Intellectual Property: How Can the WTO Integrate Least-Developed Countries into TRIPS?' (with Arno Hold), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2169352.

This is very much a working paper, completed in time for and in order to inform the current negotiations. Thus, the development Prof Baker referenced is not yet included. Arno and I welcome all comments, suggestions and feedback.

Kind regards

Bryan Mercurio
Professor of Law and Associate Dean (Research)
The Chinese University of Hong Kong
Tel: +852 3943 1139
Email: b.mercurio at cuhk.edu.hk
Faculty webpage: http://www.law.cuhk.edu.hk/people/mercurio-bryan.php
SSRN author page: http://ssrn.com/author=346439


Message: 2
Date: Wed, 7 Nov 2012 20:54:37 +0000
From: "Baker, Brook" <b.baker at neu.edu>
To: "healthgap at lists.critpath.org" <healthgap at lists.critpath.org>,
        ITPC    <internationaltreatmentpreparedness at yahoogroups.com>,
        "Ip-health at lists.keionline.org" <Ip-health at lists.keionline.org>
Subject: [Ip-health] LDCs collectively request an indefinite extension
        of their TRIPS-compliance transition periods
        <859DB52ABF210445AD96A66E031BA30B2E489F at BOS8023.nunet.neu.edu>
Content-Type: text/plain; charset="iso-8859-1"

Led by Haiti, least developed country Members of the WTO have on November 5 filed a so-called "properly motivated" request under Art. 66.1 of the TRIPS Agreement for a collective extension of the transition period within which they must become TRIPS compliant.  See, WTO IP/C/W/583 http://www.wtocenter.org.tw/SmartKMS/do/www/readDoc?document_id=126260<http://www.wtocenter.org.tw/SmartKMS/do/www/readDoc?document_id=126260.> .   The request specifically averts that LDCs have not developed technologically and that they need continuing and future freedom from IP rules and the high prices associated with IP rights if they are to develop economically and technologically.

LDCs had previously been granted two pharmaceutical-related extensions of their original 11-year TRIPS transition period (1995-2006) following the adoption of the Doha Declaration on the TRIPS Agreement and Public Health. Those limited extensions are not set to expire until Jan. 1, 2016.  However, shortly before the original broader 2006 transition period was set to expire, LDCs also requested an extension of all of their TRIPS compliance obligations with respect to patents, copyright, industrial designs, and trademark more broadly, as they were permitted to do. Although a short 7 1/2 year extension was granted (set to expire June 30, 2013), it came with undesirable strings attached.  This main condition, not required by TRIPS, was that LDCs had to lock-in any existing IP legislation they had previously passed, at least with respect to its TRiPS-compliant terms.  Unfortunately, many LDCs by that point still had vestiges of colonial era IP rules and they had further enacted ne

 w IP legislation based on poor advice from the World Intellectual Property Office and other IP advisors.  Very few if any had actually repealed their IP laws, except with respect to pharmaceuticals and then often only informally.

The proposal from LDCs rejects earlier extension approaches and seeks an indefinite extension that would last until a particular member was no longer an LDC.  This would give each LDC member long-term flexibility to develop a technological base and other threshold capacities and infrastructure without being burdened by unaffordable monopoly protections.  Free of IP, new indigenous industries would have more opportunity to develop and expand and could do so through the traditional methods of industrial development that US and other countries had followed decades ago - copying technologies invented elsewhere and adapting them to local needs and conditions.  (This is the route that the Indian generic industry followed between 1972 and 2005 to become so powerful.)

In addition to seeking an indefinite extension, the LDC request will also renew the freedom LDCs had from 1995-2006 to actually repeal any existing IP legislation.  This is a very useful request because most LDC still have old IP legislation on the books, including some that is actually TRIPS-plus.

Finally, this extension is broadly enough to cover both pharmaceuticals and other fields of technology and thus, if granted, would alleviate the need to LDCs to seek a further extension of their 2016 pharmaceutical extensions.

LDCs will have a fight on their hands because developed countries that harbor IP-based industries will try to water down the LDC proposal.  Accordingly, other developing countries, especially those middle-income countries in Africa, Asia, and Latin America will have to come to the aid of the LDC neighbors.  In addition, health, environmental, and agricultural/food security activists should also rally in support of the LDC proposal since it will eliminate enforcement of costly monopolies on medicines/medical devices, green-and-climate control technologies, and on agricultural products like seeds and fertilizers.

This request did not just fall out of the sky.  Health and human rights activists had recently written to LDC country negotiators asking that they band together to write a formal request.  Those activists tried to divert LDCs from their focus on prematurely becoming TRIPS compliant to their collective interest in avoiding the false promise that enhanced IP spurs development.

LDCs have fallen behind developmentally and need policy space and time to catch up.  Instead of answering the false siren call that more IP cures all developmental ills, LDCs have awakened to the benefits of growing their technological bases strategically through the old-fashioned process of copying, adapting, and incrementally improving existing technologies, and developing skills and capacities in the process.

Professor Brook K. Baker
Health GAP (Global Access Project) &
Northeastern U. School of Law, Program on Human Rights and the Global Economy
Honorary Research Fellow, Faculty of Law, Univ. of KwaZulu Natal, SA
400 Huntington Ave.
Boston, MA 02115 USA
(w) 617-373-3217
(c) 617-259-0760
(f) 617-373-5056
b.baker at neu.edu


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