Service on Intellectual Property Issues (Aug20/05)
Geneva, 10 Aug (D. Ravi Kanth) – South Africa and India have called for “reinvigorating” the World Trade Organization’s 1998 work program on electronic commerce in relation to the intellectual property provisions in the TRIPS Agreement for operationalizing technology transfer to developing countries to combat the Covid-19 pandemic.
At the WTO’s TRIPS Council meeting on 30 July, members discussed South Africa’s proposal (IP/C/W/665) on the need to mainstream the discussion on the impact that intellectual property provisions can have on development, particularly centering around the TRIPS provisions that are listed in paragraph 4 of the 1998 work program on electronic commerce.
Paragraph 4 of the 1998 e-commerce work program says that “the Council for TRIPS shall examine and report on the intellectual property issues arising in connection with electronic commerce.”
“The issues to be examined shall include:
* protection and enforcement of copyright and related rights;
* protection and enforcement of trademarks; and
* new technologies and access to technology.”
Against this backdrop, in its proposal, South Africa argued that “intellectual property can have an impact on development, so the link between intellectual property (IP) and development, as well as the relationship with the various Sustainable Development Goals (SDGs) need to be mainstreamed into the discussion of the TRIPS Council.”
The time has come for stepping up the discussion on this crucial issue, particularly against the backdrop of the raging Covid-19 pandemic, South Africa argued.
Even though the issue of electronic commerce was a standing item on the TRIPS Council agenda, members failed to have focussed discussions until now.
South Africa urged members to come up with their respective proposals, share information and national experiences, pointing out how the 2030 SDGs may be achieved through an effective framework for technology transfer.
Citing the UNCTAD Digital Economy Report of 2019, South Africa said “the world economy is transforming fast as a result of the rapid spread of new digital technologies, with major implications for Agenda 2030 on Sustainable Development.”
Further, “greater levels of digitalisation of both economies and societies are creating new means for tackling global development challenges; however, there are risks that digital disruptions will favour mainly those that are already well prepared to create and capture value in the digital era, rather than contribute to more inclusive development,” South Africa pointed out.
“At the cusp of this digital revolution are technologies such as key software-oriented technologies such as blockchain, data analytics and artificial intelligence,” South Africa said, emphasizing that “the rapid deployment of smart devices and digital interfaces to 3D printing, wearables, automation, robotics and cloud computing are all contributions to a notable digitisation of the world economy, a trend which has been accelerated by COVID-19.”
But developing countries are being left behind because of the digital divide, which is impeding their participation in digital value chains, while digital transformation is disrupting traditional sectors with severe socioeconomic consequences, South Africa argued.
In its Digital Economy Report of 2019, UNCTAD said that “the current trends of new technologies being concentrated in a few countries and controlled by relatively few companies have implications for the ability of both developing and developed countries to participate in the technological learning processes needed to catch up and thrive in the digital economy.”
South Africa drew attention to the preamble of the TRIPS Agreement, particularly read in conjunction with Articles 7 and 8 of the TRIPS Agreement.
According to Article 7 of the TRIPS Agreement, “the protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.”
In a similar vein, Article 8 of the TRIPS Agreement says that “members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of this Agreement.”
Further, according to paragraph two of Article 8, “appropriate measures, provided that they are consistent with the provisions of this Agreement, may be needed to prevent the abuse of intellectual property rights by right holders or the resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology.”
The WTO Secretariat has further clarified in its background note to the 1998 e-commerce work program that the traditional objectives of the system as reflected in the current international norms, including in the TRIPS Agreement, would appear to remain valid even in “cyberspace”.
South Africa emphasized “that the protection and enforcement of IPRs should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner that is conducive to social and economic welfare, and to balance rights and obligations.”
In order to industrialize, developing countries would need more access to technology so as to enable their industrialization policies, South Africa said.
But the international IP regime is more “constrained than it was in the 19th century,” South Africa argued, pointing out that “the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) establishes extensive standards of IP protection that are almost without exception legally binding on all WTO Members.”
Even Article 8 of the TRIPS Agreement allows members to adopt national measures to promote public interest “in sectors of vital importance to their socio-economic and technological development subject that such measures are “consistent” with the TRIPS Agreement.”
South Africa said all “in-built TRIPS flexibilities need to be taken into account across the entire spectrum of the TRIPS Agreement,” including the “cross-cutting impact of proposals in other WTO bodies or plurilateral initiatives that may impact intellectual property rights. ”
More importantly, given the proliferation of disciplines to “prohibit national localization requirements and government’s access to data,” South Africa argued that such disciplines “may have unintended consequences for settled practices in Members’ IP regimes and affect exceptions and limitations that are well established under the TRIPS Agreement.”
“The link between (data) localization and IP is not clear and since it is silent on the implications for trade secrets on transparency of algorithms and access to copyright work in the digital economy, these issues should be approached with caution,” South Africa argued.
It cited the Geneva-based South Centre report that “… localization requirement policies, which are in full compliance with WTO provisions and which may also have national security implications, are seen as a trade barrier per se, they may substantially impede the development of certain data-intensive industries and also favour those who already hold large amounts of data.”
In short, while Article 7 of the TRIPS Agreement underscores the need for “balance between private property right and public interest in respect of socio-economic and technological development,” it “links the TRIPS Agreement directly with the 2030 SDG Goals and requires the promotion of technological innovation, transfer and dissemination in a manner that will achieve the SDG goals.”
Also, Article 8 and Article 66.2 of the TRIPS Agreement stress that “technology transfer is central to address development issues, including the digital divide.”
South Africa pointed out that, in both Article 8 and Article 66.2, “demand and supply side issues are covered in these provisions, with Article 66.2 imposing a mandatory obligation on developed Members to provide a favourable environment and incentives to their enterprises and institutions to promote transfer of technology to LDCs.”
“On the other hand,” South Africa said, “Article 8 recognizes demand side imperatives that allow Members to promote public interest in sectors of vital importance to their socio-economic and technological development.”
South Africa raised the following questions for a focused discussion on this vital issue:
1. How can exceptions and limitations, including compulsory licenses in the IP system, be used as tools to ensure that the patent system contributes to the promotion of innovation in a competitive environment and to the dissemination and transfer of technology, meeting the objectives of the system and responding to the public interest at large? What are Members’ experiences in this regard?
2. Article 40.1 of the TRIPS Agreement recognizes that some licensing practices or conditions pertaining to intellectual property rights, which restrain competition, may have adverse effects on trade and may impede the transfer and dissemination of technology. Read with Article 40.2, Members may address adverse effects of anti-competitive practices through appropriate measures. Such measures may also be applied to digital platforms that could potentially use their dominant position to restrain competition, including through the use of intellectual property rights.
How can more effective access to technologies especially in the digital economy be secured for developing and least developed countries in an inclusive way?
At the TRIPS Council meeting, India supported South Africa’s proposal, saying that e-commerce figured on the agenda of the TRIPS Council meetings from 1998 to 2003.
India said the “rapid deployment of digital technologies has increased substantially during the COVID-19 crisis, indicating that the ongoing digitalization possesses new means of tackling global development challenges.”
Given the uneven levels of digitalization among countries, India said that “it is imperative that the requisite technology is made available to the developing and least developed countries so as to create a level-playing field.”
India reminded the TRIPS Council that any discussion on “E-Commerce will lack meaning if the gaping digital divide, partly arising out of lack of access to technologies and furthered by the pandemic, continues to exist.”
Also, India said the flexibilities highlighted in Article 7 and Article 8 of the TRIPS Agreement are not limited to any one sector.
India said that “it remains open for Member Countries to utilize these flexibilities as per their socio-economic conditions,” suggesting that India has not invoked any such flexibilities in the case of e-commerce.
“The ongoing digitalization of the economy, however, is also throwing certain specific challenges in respect of the competition policy,” India said, arguing that “the paper from South Africa rightly points out that Article 40.1 of the TRIPS Agreement recognizes that some licensing practices or conditions pertaining to intellectual property rights, which restrain competition, may have adverse effects on trade and may impede the transfer and dissemination of technology, and read with the provisions of Article 40.2.”
India said that WTO members could address “the adverse effects of anti-competitive practices through the appropriate measures which may also be applied to digital platforms.”
In conclusion, India said that “it is of utmost importance for developing countries to adopt e-commerce and IP policies that are mutually supportive and in line with their developmental goals and policy specificities.”