TITLE: North-South coalition sets out 'draft modalities' on TRIPS AUTHOR: International Centre for Trade and Sustainable Development PUBLICATION: Bridges Weekly Trade News Digest DATE: 16 July 2008 URL: http://www.ictsd.org NOTE: The excerpt on biodiversity and traditional knowledge from one version of the draft modalities text is reproduced below. The text is just one draft, which may have changed, and its proponents are not identified. NORTH-SOUTH COALITION SETS OUT 'DRAFT MODALITIES' ON TRIPS An unprecedented coalition of developed and developing countries has crafted a set of 'draft modalities' on three controversial intellectual property issues: the disclosure of the source of genetic information in patent applications, the extension of geographical indications (GIs) to all goods, and the establishment of a multilateral register for GIs for wines and spirits. The text, which was put forward by a coalition led by Brazil, the EU, India, and Switzerland, outlines how these long-controversial issues might be addressed in next week's mini-ministerial conference, which is widely considered a make-or-break meeting for the struggling Doha round of trade talks. WTO Director-General Pascal Lamy has repeatedly warned that a failure to resolve differences on intellectual property (IP) issues could potentially be a major roadblock to the successful conclusion of the Doha Round. One of the primary sources of disagreement is whether IP issues should even be discussed in conjunction with WTO negotiations on tariff-cutting deals on agricultural and industrial goods. The proponents of such a linkage -- which include a large number of both developed and developing countries -- have recently intensified their efforts to include discussions of IP rules in the formal Doha Round negotiations. At issue are three topics on which talks have largely stalled in the Council of Trade-Related Aspects of Intellectual Property Rights (TRIPs): extending to all products the strong protection currently accorded to geographical indications of wines and spirits (GI extension); making it mandatory for patent applicants to disclose the origin of any genetic resources and/or associated traditional knowledge involved in their inventions; and the establishment of a register for geographical indications (GIs) of wines and spirits. So far the three issues have been discussed separately. Only the register is officially part of the Doha Round 'single undertaking', but very little -- if any -- progress has occurred in the talks. Informal consultations on the GI extension and the disclosure requirement have revealed deep divisions on whether negotiations on either area are even necessary (see BRIDGES Weekly, 11 June 2008, http://www.ictsd.org/weekly/08-06-11/story5.htm ). Joint Modalities Draft Proposed On 26 May, the different groups calling for changes in these areas pooled their demands and requested the inclusion of the three issues in the 'single undertaking' negotiations "in order to have modality texts that reflect Ministerial agreement on the key parameters for negotiating final draft legal texts with respect to each of these issues." That proposal was firmly rejected by Australia, Canada, Chile, Mexico, New Zealand, South Korea, Taiwan and the US on 6 June. Those countries stated that including intellectual property issues in the horizontal negotiations on modalities in the industrial and agricultural sectors would "substantially set back efforts to arrive at a viable way forward for the Doha negotiations." Indeed, one developing country source described the proposal as untimely, saying that it only adds complexity to the negotiations -- which are already widely considered fragile. The eight-country coalition also objected to bundling the three issues together, arguing that "the extent and interest of Members in the content and potential outcomes for each issue varies considerably." As an example, they pointed out that, on the issue of GI-extension, "even basic objectives are far apart, discussions have revealed no consensus, and the suggested draft modalities text presented by the demandeurs prejudges an outcome." The 'draft modalities text' referenced by the opponent group was put forward by some one hundred developed and developing countries that have called for the launch of "text based negotiations [...] as an integral part of the single undertaking" on GI extension and the disclosure of origin, as well as an intensification of such negotiations on the wine and spirits register. Disclosure According to the 'draft modalities', Members would agree -- prior to official negotiations on the issue -- to amend the TRIPS Agreement such that all patent applications would be required to disclose the origin of "genetic resources and/or associated traditional knowledge" used in the product in question. Patent applicants would also have to provide proof of prior informed consent and benefit-sharing. Disclosure of origin has been pushed by about 100 developing countries -- India, Brazil and China among them. These countries consider a disclosure requirement necessary to prevent the granting of 'bad' patents that use biological resources or traditional knowledge without proper acknowledgement or compensation. Preventing such 'biopiracy' is important for ensuring a supportive relationship between the TRIPS Agreement and the Convention on Biological Diversity. The CBD, the most important international agreement on biodiversity, recognises the sovereign rights of states over their natural resources, and requires access to genetic resources to occur only on the basis of mutually agreed terms and the equitable sharing of benefits. Previously, the EU and Switzerland were sympathetic to the concept of disclosure, but not necessarily through a TRIPS amendment. Geographical Extension Under the 'draft modalities', Members would also agree to extend to all products -- not just wine and spirits -- an extra level of TRIPS protection for geographical indications. The EU and Switzerland, along with developing countries such as India, Jamaica, Kenya, Pakistan, Thailand and Turkey, have long pushed for securing this additional protection for products such as Gruyère cheese, Parma ham or Darjeeling tea. The EU and Switzerland have suggested that increased price premiums for GI-protected products could help compensate their farmers for subsidy and tariff cuts resulting from the Doha Round. Other countries, however -- including Argentina, Australia, Canada, and the US -- oppose this on the grounds that many GIs have become generic or semi-generic product names widely used around the world. GI Register With regard to the creation of a multilateral register for geographical indications for wines and spirits, the draft text further holds that Members "shall provide that" their domestic authorities "consult the register and take its information into account." Importantly, the text also states that, "in the absence of proof to the contrary," the very fact that a product is listed on the register will be considered "prima facie evidence that it meets the definition of 'geographical indication.'" This language represents a victory for the EU, which has been the main proponent of the creation of a register. Indeed, an ongoing point of disagreement has been over whether all Members should be required to participate. Members such as the EU want the protection of registered terms to be mandatory for all countries. Others, including Argentina, Australia, Canada, and the US, argue that the register should simply be a database containing information on different countries' GIs, and that participant governments should have to do little more than consult it when ruling on GIs in their domestic markets. The draft text on the GI register further holds that 'generic' or 'semi-generic' product names can be withheld from GI registration "only if substantiated." Lamy Seeks Compromise Ahead of Ministerial Failure to reach agreement on these issues could strike a harsh blow to the prospects for a successful conclusion to the Doha round. Indeed, in remarks to the WTO's Trade Negotiations Committee in April, Lamy reiterated his call for "continued efforts between the groups of Members concerned, so as to try to avoid a big clash during the modalities exercise." Lamy is currently conducting intensive negotiations to find a solution to the demands related to GI extension and disclosure of origin before ministers gather Geneva for next week's mini-ministerial. While the wines and spirits register is also part of the proposed 'package deal', negotiations on its establishment are already mandated under the single undertaking. ICTSD reporting. [excerpt] DRAFT MODALITIES TEXTS ON TRIPS June 30, 2008 An updated version of 17 July 2008 is available here: http://www.grain.org/rights/tripsreview.cfm?id=132 TRIPS/CBD disclosure: Members agree to the inclusion in the TRIPS Agreement of a mandatory requirement for the disclosure of the country providing/source of genetic resources, and/or associated traditional knowledge for which a definition will be agreed, in patent applications. Patent applications will not be processed without completion of the disclosure requirement. Members agree to define the nature and extent of a reference to Prior Informed Consent and Access and Benefit Sharing. Text based negotiations shall be undertaken, in Special Sessions of the TRIPS Council, and as an integral part of the Single Undertaking, to implement the above. Additional elements contained in Members' proposals may also be raised in these negotiations. [Source: Intellectual Property Watch, Geneva, 15 July 2008, http://ip-watch.org/weblog/index.php?p=1150 ] GOING FURTHER (compiled by GRAIN) Kaitlin Mara, "Modalities drafted for WTO geographical indications, biodiversity amendment", IP Watch, Geneva, 15 July 2008. http://www.ip-watch.org/weblog/index.php?p=1151 Amiti Sen, "India not ready for a 'trip' on bio-piracy issues", Economic Times, 19 June 2008. http://economictimes.indiatimes.com/Policy/India_not_ready_ for_a_trip_on_bio-piracy_issues/articleshow/3143805.cms