Ensure more definitive rendering of TRIPS exceptions, say jurists

by Chakravarthi Raghavan

Geneva, 8 Aug 2001 - The WTO’s Trade-Related aspects of Intellectual Property Rights (TRIPS), ostensibly providing a balance between broader social and humanitarian goals and need to promote innovation and invention, has raised wide concerns, and there is a need to ensure a more definitive rendering of the exceptions in the TRIPS agreement, two Special Rapporteurs have recommended.

The Special Rapporteurs, Mr. Joseph Oloka-Onyango from Uganda and Ms Deepika Udagama note that few issues have more dramatically illustrated the tensions between international human rights law and international economic law than the relationship of IPRs and human rights, and the implications of the WTO agreement on TRIPS. The recognition and protection of Intellectual Property has been in existence for many years, and even the Universal Declaration (in Article 27.2) and the ICESCR (Article 15) make broad mention of such rights, although there is much debate over their status in relation to other rights in the instruments.

However, the connection of IPRs to trade is of more recent vintage. One perspective argues that TRIPS was the result of the growth in international trade, the explosion in information technology, concern over the erosion of competitiveness on account of inadequate IPR protections especially in technology-importing countries and the use of unilateral mechanisms for the resolution of IPR disputes.

Another sees TRIPS within the wider political economy of capitalist development and the quest by developed industrialized countries and transnational corporations to retain their monopoly on the global economic stage.

Whatever the case, IPRs in general, and the TRIPS agreement in particular, have significant implications for the full observation and protection of international human rights.

Specifically, questions arise whether TRIPS adequately balances the competing private and human interests involved in the IPR debate, whether the agreement achieved the necessary balance between notions of individual versus group/community rights, and environmental conservation within the context of the sustainable use of biological diversity and the recognition of non-western forms of knowledge generation, exploitation and protection.

“In the broadest sense, these issues are linked to discussions on the right to development... numerous other human rights such as those to health, food, culture, adequate living standards and a healthy and sustainable environment are also implicated in the debate.

While largely consolidating and strengthening previous international agreements on IPRs, the most important implications of TRIPS for globalization and the full observation of human rights lie in the universalization, harmonization and minimum-standards application of IPR protection and the method of enforceability through WTO dispute settlement mechanisms.

In contrast to the rest of the agenda in the Uruguay Round, the TRIPS negotiations were not about freeing trade, but about more protection and tighter control. Given the fact that TNCs are the largest percentage holders of IPRs, the main thrust of the negotiations favoured the enhancement of monopoly corporate power. Concerns expressed about TRIPS promoting the concentration of ownership of IPRs in developed countries and powerful non-state actors are thus quite understandable. This is particularly the case because prevailing definitions of IPR take more account of the interests of the producers (or owners) of knowledge than they do the users. In short, the protection of IPR under TRIPS presents a paradox for International Economic Law in that it runs against the basic tenets of liberalization and favours monopoly restriction and control. In respect of International Human Rights, since a patent holder can utilize the period of monopoly restriction to prevent competition, create dependencies or to simply make windfall profits at the appropriate moment, such protection can have serious consequences for basic human existence. The danger is that such monopoly control can be given higher priority than ensuring the progressive realization of the right to health, food, access to information, and even the right to education.

Focussing on various Articles of TRIPS - 27.1 on the subject-matter of a patent, 27.3 on plant varieties and biological resources, 33 on the term of a patent and 65, 66 and 67 on transitional periods, the situation of LDCs and technical cooperation, the report said that for developing and Least Developed countries, the major implication of TRIPS is the undertaking to substantially review, expand and strengthen their IPR legislation, within specified periods.

Thus, TRIPS considerably increased the burden shouldered by such countries in respect of enforcing IPRs because the standards adopted in the agreement are derived, in the main, from developed country contexts and notions.

This is despite the fact that the agreement contains several provisions such as Articles 6 (non-discriminatory ‘parallel importation’); 7 (promoting technological innovation and transfer), 8.1(protection of public health and nutrition as well as public interest), 8.2 (research exceptions/the “Bolar” provision); 30 (exceptions to patents), 31 (other use or ‘compulsory licensing’) and 40 (controlling anti-competitive practices) designed to allow countries to take measures shielding them from the adverse consequences of full IPR protection. But questions have been raised about whether these measures of protection are adequate, and whether the room for manoeuver does not leave some ambiguity that could have negative human rights repercussions.

Coupled with these concerns is the fact that subtle and overt pressures exerted for conformity may override any attempt at restriction or regulation. Indeed, the hope that TRIPS would end (or outlaw) unilateral pressures on countries to establish high levels of IPR protection, has largely proven ill founded.

Thus, TRIPS is as much about legal regimes, as it is about political and economic power. While it is quite obvious that the interpretation and implementation of the agreement vests in the hands of states parties to the WTO, differentials in power, influence and resources clearly place a limitation on the room for manoeuver actually stipulated within the agreement.

Referring to “the most contentious human rights issues” in TRIPS - the extension of the protection of patents to both products and processes, specified in Article 27.1, making it less easy for developing countries to produce generic versions of patented drugs locally, thus bringing down the cost of drugs and enhance the development of local capacity in technological innovation, the report focussed on the issues raised by the recently withdrawn US dispute against Brazil at the WTO, and notes that the issue remains a gray area since the suspension of the proceedings has meant that there is no authoritative interpretation of the provision. “... the fact that the US could seek recourse to the WTO for the enforcement of a measure that could have serious consequences for the progressive realization of human rights, illustrates that at a minimum the protections in TRIPS are not water-tight... and the settlement does not represent a shift in the US position on the issue.”

Drawing attention to the WHO’s view on need to guard against the potentially grave consequences that could occur in a health market that is not appropriately managed, or (the rapporteurs add), a market in which the motive of profit is paramount, and in a context where health policy in many developing countries has been increasingly forced to respond to the demands of globalization, “the consequences are several, including the increased cost of hospital and other forms of health care, ambulatory services, and the privatization of the care of aged persons.” Also, the payment of user fees for health care as well as medicine is related to the imposition of programs of structural adjustment (SAPs) in which government spending has been slashed or wholly eliminated.

All these measures of economic reform have substantially (and mostly negatively) impacted on the progressive realization of the enjoyment of the highest attainable standards of health as a fundamental human right, as stipulated in Article 25.1 of the Universal Declaration, and Article 12 of the ICESCR. Against such a background, IPRs have a particular relevance especially in developing and underdeveloped contexts. “Increasing the standards of IPR protection may not necessarily improve the observance of human rights, especially ... [when] only one percent of the new chemical entities marketed between 1975 and 1997 related to tropical diseases.”

A strict regime of patent protection could mean that effective medicines are patent protected and thereby rendered prohibitively expensive. Finally, if the primary objective of protection becomes playing to the interests of those who control the market (rather than broader social goals), then the incentives for pharmaceutical companies to develop new drugs targeting so-called ‘unprofitable diseases’ will be even more greatly reduced.

Referring to bilateral and other pressures (including in the context of the US AGOA) on countries to adopt a “TRIPS-plus” regime - which the WHO describes as attempts to enact national legislation that extends the life of a patent beyond the TRIPS minimum of 20 years, limiting compulsory licensing in manners not necessarily mandated under TRIPS, and imposing exceptions that may restrict the prompt introduction of generics - the Rapporteurs say that such measures may result in a worsening of the overall struggle to promote and protect human rights.

As a result, numerous countries have designed legislation are more restrictive than needed by the agreement. Many developing and Least Developed countries, using mechanisms such as compulsory licensing, and parallel (or ‘Gray’) Market importation which are not prohibited under TRIPS, but have resulted in contention between developing country governments and multinational pharmaceutical companies.

Most contention has focussed on the new life saving drugs intended for the treatment of HIV/AIDS. The most prominent of these pharma-battles have involved Kenya, India, Brazil, Ghana and South Africa but they are not the only ones.

The challenge mounted by resulting in worldwide attention and galvanizing civil society into action, and leading to its eventual withdrawal, The two rapporteurs view as a significant success and a victory for the progressive realization of the right to health, the withdrawal of the case by 39 pharma companies against the South African government, due to civil society action. However, these recent developments may be only a phyrric victory, since to many observers the withdrawal represents only a temporary respite, the decision to withdraw was a tactical move, rather than a sudden and joint discovery of social responsibilities. The rapporteurs note that while a number of European Union countries vocalized their support for the South African legislation, the USA and Britain were notably silent, with the US even giving tacit support to the companies “illustrating in bold relief the nexus between corporate and state interests in the arena of international trade.” That support, the jurists add, is not likely to taper, given the overall influence of corporate actors on these governments, and the fact that prior to the case, the US government attempted to exert bilateral pressure on the South African government until the issue threatened to become a public relations disaster. The same issue was at stake with respect to the action by the United States against Brazil, which itself was preceded by similar action against India.

The WTO, they note, has been grappling with the implications of TRIPS on the accessibility and affordability of essential life-saving drugs to combat diseases such as tuberculosis (TB), malaria and HIV/AIDS, within the overall context of the review of the Agreement underway.

The discussions within the TRIPS Council, the WHO/WTO workshop on differential pricing, according to the WTO Secretariat, are informed by the search for a ‘balance’ between the broader social and humanitarian goals of saving life (enshrined in Article 7 of TRIPS), and the need to ensure that pharmaceutical companies are not discouraged from invention and innovation. Although the need for balance is quite apparent, comment the Rapporteurs, “one could not help but notice that there is a degree to which the issue of cost recovery and the protection of innovation and invention is given much greater prominence than is otherwise warranted; the scale appears tilted to one side.”

There were also other dimensions. A good number of the tests and clinical trials for life-saving drugs are carried out on people who come from developing and least developed countries, or from among the less-privileged in developed countries. But such input in the R&D process is seldom recognized. Ironically, the very same sort of people who provided themselves for the testing trials, who are then eliminated from benefiting from the final drug on account of prohibitive costs and an iniquitous patents system.

Also, the emphasis on R&D investment conveniently omits mention of the fact that some of the financing for this research comes from public sources; how then could it be justifiably argued that the benefits that derive from such investment should accrue primarily to private interests?

The focus on differential pricing between (rich and poor) countries also omits consideration of the fact that there are many people within developed countries who are also unable to afford the same drugs - either on account of an inaccessible or inhospitable health care system (in terms of cost or an absence of adequate social welfare mechanisms), or because of racial, gender, sexual orientation or other forms of discrimination.

Since the debate has been skewed mainly towards guaranteeing the protection of innovation and invention, it has yet to approach the issue in a holistic and human rights-sensitive manner.

“Given all the above, it is the considered opinion of the Special Rapporteurs that the argument for stringent patent protection as essential to the promotion of innovation and invention is one that over-privileges the owners of capital [who] invariably happen to be multinationals. Other incentives can be put in place to encourage the development of effective drugs for illnesses like HIV/AIDS that could be considered to negatively impact on global human security.”

The fact that many of the pharmaceutical companies that were extremely resistant to reducing their prices are now scrambling to match (and undersell) the prices of competing generics, is telling demonstration of the fact that the argument about R&D costs might not be as weighty as previously asserted. For these reasons, the discussion of price and market differentials, as pointed out by the African Group at the TRIPS Council meeting, should be considered only as “part of a broader set of initiatives to improve access to medicines.”

Dealing with the issues of indigenous people’s knowledge, gene-pirating and other problems and controversies, the special rapporteurs note that though most of these problems pre-date the enactment of TRIPS, within the context of globalization and the various substantive and processual frameworks created by TRIPS, these issues have gained in magnitude. Hence a great deal of attention has come to focus on Article 27.3(b) of the TRIPS agreement, which is basically concerned with the exclusion from patentability of plants and animals, and the protection of plant varieties either by patents, or through a sui generis (of its own kind) system. A host of questions relating to bio-diversity, the rights of farmers and farming communities, public health questions, and the recognition of the processes of knowledge-generation among traditional communities are also implicated in the debate over these issues.

On the question of either a system of patents for plant varieties or the design of a sui generis system, a major challenge faces countries (especially developing and least developed ones) at two levels. The first is one of conception, wherein issues of food security, sustainable agricultural management, and the development of environmentally-sustainable crops are duly taken into account, and the matter is not reduced to the protection of the rights of commercial breeders. The second challenge relates to the political pressures being brought to bear on such countries to adopt regimes of protection that do not substantially differ from that of patents. Thus, many such countries are being urged to adopt the regime created under the International Convention for the Protection of New Varieties of Plants (UPOV) which favours plant breeder’s rights. Such pressures could lead to the creation of monopoly rights in an area that will be of substantive importance to human well-being.

It is thus incumbent on such countries, as well as upon the TRIPS Council in its continuing review of the provisions of Article 27.3(b) to consistently retain a human rights-sensitive approach to this issue.

The discussions on this issue, taking place in numerous fora, and the issue of protecting plant varieties and the numerous ethical, political and human rights questions related to it, has attracted nearly as much attention and controversy as the contention over pharmaceuticals. There is no doubt that from a rights perspective, it is of equal importance and vitality to the overall discussion of the link between IPRs and human rights. In this respect, it will certainly be a major discussion-point at the fourth WTO Ministerial conference, scheduled to be held in November this year in Doha, Qatar. It is thus incumbent on the international community to actively monitor and contribute to the discussions on this issue in order to ensure that the human rights perspective is kept in sight.

On the WTO and its Dispute Settlement Understanding, Ms Udagama explained in her intervention, rather than engaging in an analysis of the substantive issues thrown up by the dispute settlement panels and the Appellate Body, they had focussed on the processual and systemic issues which was the essence of their mandate. The expectation was that the WTO, by introducing a mandatory dispute settlement system binding members of the WTO could effectively maintain international rule of law pertaining to the multilateral trading system.

However, the WTO regime has only benefited a thin stream of society in many parts of the globe, and there were serious concerns about its impact on human rights of economically vulnerable and marginalised, especially their economic and social rights. The dispute settlement system could thus play a pivotal role in striking a balance between the logic of the market and protection of human rights.

However, for this to be achieved in a sustained manner, the dispute system must command the confidence of all its members, strong or weak; be accessible; be representative, impartial, independent and transparent - characteristics that need to be present in any adjudicatory body.

One of the most serious concerns about the system was that the panels are not constituted from experts selected on a professional basis and paid for by the WTO, but chosen from government representatives and even WTO secretariat members, many happening to be representatives of countries in their Geneva missions.

“This has seriously eroded confidence in the system as its impartiality and independence are questionable.”

The panels need to be professionalised, and those hired remunerated by the WTO.  More often than not, panellists happen to be from developed countries who have large missions and pools of expertise that developing countries can ill afford.  Another element is the accessibility to the system and the costs of such access, the lack of transparency in the system.

There are also graver questions about the accountability of the system. – SUNS4953

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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