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

Bryan MERCURIO (Faculty of Law) b.mercurio at cuhk.edu.hk
Mon Nov 12 17:19:41 PST 2012

I thank Prof. Baker for reading – and more importantly commented on – my paper. It is appreciated. His post makes it apparent to me that we need to refine the introduction so as to make the aims and conditions under which we are writing this piece more clearly stated. We start with the premise of attempting to find a workable, feasible and acceptable position to all parties. Quite simply, it is unrealistic to think that certain developed country members are going to accept indefinite deferral of TRIPS obligations. Second, and addressing Prof Baker’s concern, we also accept for the purposes of the paper the thinking of the WTO that IPRs and development to some degree go hand in hand. 

My main point of contention with Prof Baker is his statements that “Art. 66.1 represents a shared understanding that IPRs and their enforcement can stand in the way of LDC's industrial and human development” and “Art. 66.1 represents a shared understanding that IPRs and their enforcement can stand in the way of LDC's industrial and human development”. 

In fact, I do not think it is “clear” at all what Art 66 represents. If Prof Baker’s view is correct, then why did the drafters provide a 10 year time period for a transition to TRIPS? Prof Baker’s position seems to be that there was a recognition that LDCs should not have any obligation to protect IPRs. While the Uruguay Round negotiators can in many ways be accused of being naive, they certainly weren’t silly enough to believe that each and every LDC would graduate to developing country status within a 10 year period. Moreover, if Prof Baker’s position reflects the reality then why did the negotiators not simply Art 66 and simply provide that LDCs will not have any TRIPS obligations? Full stop/period. I cannot see how one can read “for a period of ten years” as stated in Art 66.1 as meaning a shared understanding that IPRs stymie development (and moreover that this is not a promise to eventually comply). What seems clear is that it says ten years! While some want to believe there was a shared understanding regarding LDC obligations, I do not believe this to be the case. I believe that everyone simply realised that LDCs were not in a position to protect IPRs and obligating them to do so would merely result in mass non-compliance. 

Going back to the focus of the paper, since the WTO and many of its Member States espouse the view that IPRs are development-friendly we have attempted to work within the existing perimeters to develop a model for a future agreement. In so doing, we have tied the often-neglected developed country obligation to provide technical cooperation to the extension so as to not only burden LDCs with obligations. This may or may not be the best way forward, and as negotiations continue an indefinite extension may indeed be seen as a feasible alternative. I am therefore equally as happy for proponents of an indefinite extension to use our paper to further their position. Where we all agree is that the mid-2013 deadline cannot be reached without some form of further extension.

Thank you again for your comments, which will indeed help improve the quality of the paper.

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

-----Original Message-----
From: Baker, Brook [mailto:b.baker at neu.edu]
Sent: Tue 2012/11/13 03:09
To: Bryan MERCURIO (Faculty of Law); Ip-health at lists.keionline.org
Subject: RE: [Ip-health] LDCs collectively request an indefinite extension of	their TRIPS-compliance transition periods
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

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