A Project of the American Enterprise Institute and the Federalist Society

WIPO Watch: Daily reports from the 2006 Development Agenda Meetings, June 25-30, 2006

NGOWatch Report

The World Intellectual Property Organization (WIPO) is an international organization dedicated to promoting the use and protection of works of the human spirit. These works -- intellectual property -- are expanding the bounds of science and technology and enriching the world of the arts. Through its work, WIPO plays an important role in enhancing the quality and enjoyment of life, as well as creating real wealth for nations. With headquarters in Geneva, Switzerland, WIPO is one of the 16 specialized agencies of the United Nations system of organizations. It administers 23 international treaties dealing with different aspects of intellectual property protection. The Organization counts 183 nations as member states.

Professor Mark Schultz from Southern Illinois University School of Law will be attending meetings on intellectual property and the developing world at the World Intellectual Property Organization ("WIPO") in Geneva this week, June 25 - 30, 2006, on behalf of the Federalist Society for Law and Public Policy Studies and reporting on them for NGO Watch. This first report below provides a bit of context and preview of the issues being considered this week.

Please click here for the agenda of the meetings.



Context


The "Development Agenda" being considered here seeks to fundamentally change WIPO's mandate of promoting intellectual property protection to a much more skeptical stance regarding intellectual property. WIPO has been considering the Development Agenda since 2004, when a coalition of WIPO member states led by Brazil and Argentina persuaded the WIPO General Assembly to consider their proposal. This week's meeting is currently slated to be the final meeting on the Development Agenda, and it is supposed to produce a report setting forth recommendations for the WIPO General Assembly meeting this September.

For more background on the Development Agenda and the arguments regarding it, see a piece previously written by me and my co-author David Walker and published by the Federalist Society.

Development Agenda proponents, who bill themselves as the "Friends of Development" ("FOD Group"), contend that intellectual property rights interfere with development by restricting free access to medicines, educational materials, and other materials essential to human development. While they concede that some intellectual property protection is needed, they believe that the current intellectual property system is too restrictive. They propose that there should be a presumption against increased international IP protection which could be overcome only when higher standards are "clearly necessary . . . and where the benefits outweigh the costs of protection."

Other member states strongly disagree with the asserted need to change WIPO's mandate, asserting that protecting the intellectual property rights of the people of developing nations is essential to development. These countries, including the United States and Japan, thus view WIPO's current mandate as already consistent with promoting development. In their view, many nations have yet to effectively protect their citizens' intellectual property rights since agreeing to TRIPS 10 years ago. Such a delay is natural, as building effective institutions takes time, training and money. WIPO provides a great deal of technical assistance to developing nations to assist with building such institutions, training judges how to adjudicate intellectual property cases and helping governments build their intellectual property administrative capabilities. More help is needed, however, so the United States and other nations, known collectively at WIPO as "Group B," have proposed increased technical assistance for developing countries.

The meeting is thus likely to prove contentious, as the disagreements between the Friends of Development group and Group B stem from a fundamental clash of visions regarding the value of intellectual property for developing countries. The members of the FOD Group and Group B have clashed in a number of forums, as the FOD Group frequently raises its challenge to intellectual property in one international organization meeting after another. Most recently, the FOD Group enjoyed some success at the World Health Organization ("WHO") when the World Health Assembly in May agreed to consider a new global health research and development framework for drug research and development. The FOD group proposals to be considered by WHO would prefer government-directed and funded public domain research to the current model of relying on private patent rights to encourage and compensate pharmaceutical research. Such proposals highlight a fundamental disagreement regarding the value of intellectual property: Should innovation and creativity be products of government policy and action, or should they be the products of private decision making controlled by private parties?

The disagreements between the FOD Group and Group B are not only fundamental, but wide-ranging. After the last meeting, the chair attempted to summarize all of the current proposals from all parties. The summary listed 111 proposals, a number of which contradict each other completely. The large number is mostly attributable to the FOD group and its allies, so any compromise that adopts a significant portion of the proposals is likely to result in a victory for the FOD group.

If successful, the FOD's version of the development agenda would transform WIPO into an organization more concerned with containing intellectual property than with promoting it. On Friday, the FOD attempted to give some coherence to the 111 proposals currently before the Development Agenda meetings by releasing a proposed final report. Far from a compromise proposal, it would institutionalize skepticism regarding intellectual property at WIPO. As a quick, rough measure of the gist of the FOD proposed final report, one might note that it contains 14 references to promoting "limits," "exceptions," or "flexibilities" in the international IP regime and several proposals for assessing the costs of intellectual property, but no direct reference to the benefits of intellectual property or enhancing the effectiveness of intellectual property institutions. Even technical assistance, like training for judges, would be required to promote a more skeptical view of intellectual property. In sum, under the FOD final proposal, the new WIPO would become like an environmental protection agency for intellectual property, designed to contain the putatively noxious effects of private rights.

It should be an interesting week here at WIPO, as such proposals will not serve to quell the controversy.



Monday June, 26th - Tuesday June 27th

Monday, June 26th was the first day of the latest round of meetings at the World Intellectual Property Organization ("WIPO") regarding the "Development Agenda," from June 26 - 30, 2006. For further background on the meetings see my preview report filed yesterday. This report covers the discussion that occurred on both the first day, June 26th and the second day, June 27th.

Wide divisions of opinion among member nations continue to exist. Everyone agrees that intellectual property plays some role in development, but there are wide departures of opinion beyond that point. As noted yesterday, the "Friends of Development" Group ("FOD Group") proposal would transform WIPO into an organization that promotes limitations on intellectual property. It would also expand WIPO's mandate to cover competition issues, industrial policy, and the promotion of innovation by means other than intellectual property. Other nations are opposed to the FOD proposal to varying degrees, some, like the United States and other nations in Group B, disagree with its very premise and believe that it would hurt more than help. Others may be more sympathetic, but object to expansions of WIPO's mandate beyond its core competencies. Another key issue is whether this discussion of the development agenda will extend into another year.

The Process


The meeting began with discussions regarding the procedure to be used for conducting the meetings and reaching a decision. As noted in my earlier report, the "Friends of Development" Group ("FOD Group") submitted a proposed final report that strongly advanced their point of view in opposition to other proposals. There was brief discussion as to whether the FOD Proposal would serve as a basis for the week's discussions. This approach was rejected.

The discussions have relied on the report of the chair regarding the previous proceedings, which summarized all 111 proposals received up to that point. The report is organized into 6 clusters: (A) Technical Assistance and Capacity Building; (B) Norm-Setting, Flexibilities, Public Policy and Public Domain; (C) Technology Transfer, Information and Communication Technology (ICT) and Access to Knowledge; (D) Assessments, Evaluation, and Impact Studies; (E) Institutional Matters including Mandate and Governance; and (F) Other Issues.

The meeting is addressing each cluster in turn, with member nations stating which proposals they can support within each cluster and noting some to which they particularly object. At this point, the end of the second day, the parties have finished their review of all 6 clusters. The next question is how the parties will proceed to reaching an agreement. A key to understanding the WIPO decisionmaking process is that it is a consensus-driven organization. Only proposals on which there is a consensus are likely to appear in the committee's final report to the WIPO General Assembly.

The Issues


Some potential areas of consensus and clear points of conflict have emerged. Member nations appear to agree that it would be helpful if WIPO enhanced its capabilities with respect to technical assistance and other forms of help to developing nations. Certain proposals to study WIPO's effectiveness and other minor reforms are also not controversial. However, strong disagreements appear to exist regarding norm-setting and technology transfer. I will describe what each of these issues entails in a bit more detail below.

One of WIPO's core activities is providing education regarding intellectual property and technical assistance to members' governments in implementing intellectual property laws. Countries at all levels of development can benefit from advice regarding their IP systems. Setting up and running a national intellectual property office is a complex process. Properly reviewing patent, trademark, and copyright filings also takes a great deal of resources and knowledge. Attorneys and judges also benefit from education and training in intellectual property law. WIPO helps with all of these tasks by collecting information on best practices, training personnel, and providing educational programs. Developing countries particularly need these services, so WIPO makes technical assistance to developing nations one of its priorities.

Many of the development agenda proposals focus on enhancing technical assistance. Enhancing WIPO's capabilities in this important area appears to be something that all participants support. Those who are otherwise skeptical of the development agenda, like the United States, enthusiastically support enhanced technical assistance. Those nations who would most benefit from technical assistance, like the African Group, also appear to want to ensure that if nothing else emerges from these meetings, they want WIPO to devote more resources to helping them implement their intellectual property systems.

Proposals that advocate setting norms for WIPO activities, such as protecting the public domain or balancing the rights of IP owners with the public interest, are far more controversial. Since these norms are not really controversial in domestic policy discussions, one may wonder why proposals concerning them are controversial in this context. In fact, the proposals that promote these norms as broad principles are not controversial. For example, the United States has expressed support here for proposals that advocate that WIPO should generally consider the public interest and the public domain in its activities. It has expressed the belief that such proposals are not objectionable because WIPO's mandate and activities already take these norms into account.

Nevertheless, many of the development agenda's norm-setting proposals are controversial because member states perceive them as interfering with their sovereign prerogatives. Balance and due consideration for the public domain may be acceptable as general principles, but many proposals call for norms that would direct how WIPO must advise and assist its member nations, require WIPO to promote particular development models, or give WIPO the authority to evaluate and promote member state compliance with particular norms. For example, one proposal would require that technical assistance "ensure[] a fair balance between IP protection and safeguarding public interest." Several nations expressed the belief that if they ask WIPO for technical assistance (e.g., how to best administer a patent examination system), then WIPO should respond to the specific request rather than promoting a particular point of view. Other proposals requiring WIPO to promote open source development to its members or "ensure that national regimes are set up to implement international obligations in an administratively sustainable way" were similarly viewed as promoting interference.

Other proposals were questioned because they appear to take WIPO beyond its core competencies into subject matter addressed by other international organizations such as the WTO or UNCTAD. In particular, there are a number of proposals that would have WIPO address competition policy or anti-competitive activity. Some members saw these as WTO issues beyond the scope of WIPO's mandate.

There were a number of proposals to have WIPO gather more data and perform more research on a number of topics. These were largely uncontroversial with a few interesting exceptions. In particular, one proposal sought to study the problem of piracy and counterfeiting in developing nations by gathering more information. China and Brazil were opposed to this proposal. China did not comment as to why, and Brazil uncharacteristically argued for a narrow view of the scope of the development agenda on this one point, saying that counterfeiting and piracy were not relevant to development.

At this point, it thus appears that consensus exists on making WIPO more capable of providing technical assistance to developing countries that need help with implementing intellectual property laws. There appears to be little agreement regarding the more controversial provisions that would change WIPO's mandate.

Positions and Tactics


At this point in the discussions, the member states have more or less made their positions clear. What happens next is very much in question. Will the parties agree to the modest set of proposals on which there appears to be consensus? Or will the process be prolonged?

The posture taken by the FOD group during this meeting contrasts curiously and perhaps significantly with the way in which others have discussed the proposals. Most member states are willing to plainly state by number the proposals with which they agree. For example, the United States has stated support for (A) 1 - 12, 14, 17, and 22 - 25; (B) 5, 6, 8, 12, 13, 15, and 16; (C) 6, 8, 9, and 11; and (D) 1, 3 - 9, and 14 - 15 (for those so inclined to review the positions, see the annex to the report on which the annex is based). By contrast, the FOD group seems largely unwilling to state its agreements and disagreements exactly. Instead, it spends a great deal of time defending its proposal submitted last week that was rejected as a basis for negotiations.

The FOD group's lack of clarity makes it difficult to determine where consensus exists. One can only speculate, but at this point it appears that the FOD group is particularly attached to its proposal and would rather have all or nothing than a modest, least common denominator outcome. Another possibility is that the FOD group wishes to continue the discussions, which are supposed to conclude with this meeting, in a future series of meetings. Some contend that the FOD group's posture is consistent with speculation that it wishes to gain leverage in trade negotiations by slowing the work of WIPO.

A number of nations have taken notably independent and constructive positions. Nigeria has made a number of constructive comments about the effectiveness of WIPO and has sought to make WIPO genuinely more effective in providing technical independence. Mexico has shown notable independence from any voting bloc, strongly and effectively advocating for WIPO to be a stronger institution within the clearly defined boundaries of its current mandate.

The United States has adopted a low key and relatively conciliatory position. It briefly states its positions clearly and without discussion or argument. It likely is sending a clear signal that it is time for these discussions to end, without further argument, as mandated by the WIPO General Assembly in September 2005. When I define the US position as relatively conciliatory, I should make clear that it maintains that WIPO should stay within its current mandate. Nevertheless, it appears willing, and fortunately able, to rely on allies like Japan and other nations who are skeptical of the development agenda to take some of the harder lines.

Further Impressions


Being here and talking to delegates from developing nations brings an appreciation of the challenges they face. While bright and capable, many do not arrive at WIPO as experts on intellectual property. They often need to represent their nations at several international organizations that cover widely divergent subjects. They lack information resources.

The information gap is where NGOs can play both a helpful but problematic role. NGOs supply information, but they have distinct points of view and their own goals. It is important that a variety of views are presented, as delegates truly benefit from the debate. The development agenda discussions, however, have largely been supported and attended by NGOs who are skeptical of intellectual property. A scan of the back two rows (where NGOs may sit) of this large room shows these seats filled with well meaning and thoughtful people who are almost all here to make the case that intellectual property harms development.

Conclusion


Tomorrow likely will see a battle over process. Will the development agenda produce a mild set of reforms or will the FOD group press for more? I will continue to report from Geneva.



Wednesday June, 28th - Thursday June 29th

I continue to report from the latest round of meetings at the World Intellectual Property Organization ("WIPO") regarding the "Development Agenda," from June 26 - 30, 2006. For further background on the meetings see my previous reports. This report covers the discussion that occurred on both the third day, June 27th and the fourth day, June 28th.

Brazil, India, and Argentina say "Non!"


As I write, the meeting is reaching a climax. The "Friends of Development" Group ("FOD Group") has indeed adopted an all-or-nothing approach, as I previously speculated it might do. Brazil, Argentina, and India have stated that they believe further discussions are unproductive, and wish to prepare a report that reaches no recommendations. This all-or-nothing approach may have a lot more to do with things going on elsewhere in Geneva at the WTO. More on that point below.

WIPO is a consensus-driven organization, so dramatic change is highly unlikely. Each delegation has been given the opportunity to state which of the 111 proposals before the meeting it supports. After discussing all proposals, about 40 of them appeared to engender a consensus or something close to a consensus. The chair of the meeting has proposed to work from the 40 proposals on which there appears to be consensus.

Brazil, Argentina, and other members of the FOD Group have rejected this consensus approach. In a statement during which the Brazilian delegate adopted an unusually emotional posture, he claimed that the chair had adopted a procedure that the parties had rejected and that his country was not willing to base further discussions on the limited number of consensus proposals. Other members of the FOD group, including Argentina, Iran, and Cuba, supported Brazil's position. Among other things, they asserted that other delegations were being inflexible because they were unwilling to discuss further proposals that they did not support. One response made by some was that this process has gone on for two years with much discussion and examination already.

At the moment the parties are consulting informally to determine whether they can reach any agreement. One possibility is that the countries who most need development assistance -particularly the African group- may broker a compromise so that they can receive the practical, helpful technical assistance that is the subject of the 40 proposals remaining on the table. What could happen in that case is that the parties reach agreement on the 40 or so proposals on which there is consensus and continue discussions into another year on additional proposals.

Motivations of the Parties


One might question why Brazil, Argentina, and India would prefer to accept nothing as opposed to some success. Experienced observers speculate that these countries have two motives that have little to do with the ideological tropes of Access to Knowledge and Access to Health frequently invoked in these proceedings. First, these countries have been greatly frustrated during the Doha Development Round of the WTO negotiations by the unwillingness of developed countries to make concessions regarding the massive subsidies that developed countries provide to their agricultural industries. Some believe that Brazil, Argentina, and India are willing to bring productive activity to a halt at WIPO in order to gain leverage in WTO negotiations. As the argument goes, the developed nations value what WIPO does, and by making WIPO less effective -as developing nations have done by blocking progress on patent harmonization -they may make developed nations more willing to cooperate at the WTO.

The second motive that some see in what Brazil and India do confirms the old aphorism that all politics are local. Brazil and India have large generic drug industries. By seeking exceptions to intellectual property protection, particularly with respect to health care, Brazil and India support their domestic drug industries. This kind of activity appears to represent a new kind of protectionism. After the WTO, nations find it difficult to promote industrial policy with trade barriers. They can, however, still engage in similar forms of industrial policy that protect particular domestic industries if they can limit intellectual property protection for foreign competition.

Some NGOs at the meeting have asserted that the secretary's approach to conducting this meeting shows that the secretary is carrying out the agenda of the United States Patent and Trademark Office. The accusation is puzzling and unfair. The 40 proposals represent the input of many countries. In fact the United States was willing to agree with about 10 additional proposals that were blocked by opposition from other countries. A few proposals not supported by the United States also made the list. The position of the United States has been relatively conciliatory, allowing for the large caveat that it is unwilling to dramatically change WIPO's mandate as proposed by the FOD Group. In fact, one prominent representative of a left leaning NGO skeptical of IP asserted that the U.S. position was to the left of what free market NGOs in attendance would want.

In fact, however, the United States appears simply to desire what many others want: The continuation and enhancement of WIPO's valuable technical assistance to developing nations -training judges, helping to build national IP offices, and the like. In the end, it is not really surprising that parties working within the mandate of a consensus-driven organization are unable to reach a consensus that the organization should radically alter its mandate.

What's Next for WIPO?


What happens next, both in this meeting and, more important, within other WIPO activities is likely to prove interesting. The last time that WIPO activities were stalled over development issues during the late '80s, developed nations became frustrated and moved IP discussions out of WIPO, tying them to trade issues. Eventually, this process resulted in the Agreement on Trade Related Aspects of Intellectual Property ("TRIPS"). Ironically, since the FOD Group has expressed great dissatisfaction with TRIPS, the FOD Group's actions may once again drive the developed nations to act outside of WIPO. Since the WIPO patent harmonization talks stalled, developed nations have begun to discuss a patent harmonization treaty outside of WIPO.

Stalling WIPO and moving major international IP functions outside of WIPO would prove harmful to the organization and the good work it does. Most of WIPO's budget comes from fees collected from private parties filing under the Patent Cooperation Treaty administered by WIPO. If a rival international mechanism came into being, it would potentially undermine WIPO and the useful technical assistance it provides to developing nations. This would be an odd outcome for the battle over the "development agenda."