Inside U.S. Trade
May 24, 2002

African nations last week led a push by least-developed countries (LDCs) in the World Trade Organization that would further delay patent protections on pharmaceuticals and agricultural chemicals, but the U.S. signaled its skepticism about the proposal, which would exempt these countries until 2016 from additional obligations under the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS).

The issue surfaced at an informal TRIPS council meeting May 17 in a discussion on implementing a decision reached by trade ministers in Doha last November to grant LDCs another 10 years -- until 2016 -- regarding their obligation to provide patent protection to pharmaceuticals, pesticides and other chemicals. Some African countries want to tack on an exemption until 2016 to the obligation to provide “mailbox” protections under TRIPS articles 70.8 and 70.9.

These articles require countries that do not yet have patent regimes to allow companies to file for patents, which would be granted once these countries enact patent protections. Absent such a provision, companies would have to delay filing for patent protection until 2016, which because of the length of time between filing for patents and bringing new products to markets, would effectively delay patent protection for another 10 years, industry and government sources said.

The mailbox protections would ensure that companies filing for patents on new products in the period between now and 2016 would benefit from patent protection starting in 2016. Otherwise, only products developed starting in 2016 would be eligible for patents, and older products would be ineligible, sources said.

The mailbox provisions also require granting of five years exclusive marketing rights for these products to the pharmaceutical companies until patents are granted, although this would not prevent the marketing of generic copies under a different name, according to trade officials.

The U.S. signaled its unwillingness to automatically accede to the African countries' request. But the U.S. and other countries like Switzerland with research based pharmaceutical industries did not come out and outright oppose the idea, which is a new element in the discussions on TRIPS and public health.

Instead the U.S. asked the WTO Secretariat to prepare two draft decisions on the LDC extension for adoption by the TRIPS council, one with and one without the additional exemptions from mailbox obligations. The secretariat is expected to present both versions of the draft decision at the June TRIPS council meeting.

At the meeting, Switzerland also repeated its request for a background paper from the secretariat on the pharmaceutical production capacity of developing countries and their levels of patent protection. The information is relevant to the TRIPS council's discussion of how countries without production capacity can take advantage of compulsory licensing provisions, for instance by licensing production in a third country. The TRIPS council is due to make a decision on the issue by the year's end.

Both the TRIPS Council informal meeting, and a special negotiating session of the council were dominated by procedural issues in the run-up to the June formal sessions of both bodies.

The special session, which is tasked with negotiations on the establishment of a multilateral registry of protected geographical indications for wines and spirits, saw an effort by the chairman to break the long-deadlocked discussion with a focus on getting agreement on the key terms. These definitions would be the focus of discussion at the June meeting.

On the question of broader protection for geographical indications for other agricultural products, which was under discussion in the regular TRIPS council, two key demandeurs on this issue, Bulgaria and India, asked the chairman to invite members to submit proposals on how to provide higher levels of protection, in order to fulfill the council's mandate to find a solution to the issue. But the U.S. and Argentina disagreed with this characterization of the mandate, which only requires a report on discussions by year's end. Australia, which is allied with the U.S. in opposing agreement on higher levels of protection, asked the secretariat to compile information on how members are currently protecting use of such geographic appellations on products.

Neither the special session nor the regular council could arrive at a solution to the question of which intergovernmental bodies should be allowed in on meetings as observers, which has vexed all the negotiating groups in the new round.

In the regular TRIPS council, the U.S. repeated its opposition to allowing the Convention on Biological Diversity to sit as an observer, saying the focus of the group was too narrow. India, the European Union, Peru and Brazil argued for granting the CBD observer status, since the Doha mandate calls for discussion of the interrelationship between TRIPS and the CBD with regard to issues concerning patents on living organisms.

In the special session, India and Egypt balked at a proposal by the chair to allow all observers in the regular TRIPS council to observe the negotiating sessions. Egypt said the question of observerships needed to be resolved at the Trade Negotiations Committee, a reference to the standoff between Arab countries and the U.S. and Israel over observer status for the Arab League (Inside U.S. Trade, April 26, p. 1).

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