[Kictanet] WIPO treaty may remove South's ability to decide on patents

[Dorcas Muthoni]

<http://www.wipo.int/meetings/2006/scp_of_ge_06/en/scp_of_ge_06_inf1.html>

SUNS #5977 Thursday 2 March 2006

New WIPO treaty may remove South's ability to decide on patents

Geneva, 28 Feb (Martin Khor) -- Developing countries risk losing their
present flexibility to decide on the standards for granting patents if
developed countries' proposals for a new WIPO treaty on patents are adopted.

This warning was given by an expert on intellectual property law in a paper
distributed at the WIPO Open Forum on the draft Substantive Patent Law
Treaty (SPLT) which started in Geneva on Wednesday.

Professor Carlos Correa of the University of Buenos Aires, who is a renowned
authority on intellectual property and development issues, said the
developed countries had proposed a uniform definition to key aspects
determining the scope of patentability for the SPLT, which is being
negotiated in WIPO.

Under the TRIPS Agreement of the WTO, Members are allowed to adopt their own
definitions on all the concepts proposed for harmonization in the SPLT (i.
e. definition of prior art, grace period, novelty and inventive step). Thus,
TRIPS provides the WTO Members with flexibility to design their patent
regimes.

However, if the developed countries' proposals in the SPLT are adopted, the
harmonization of patent standards would eliminate the room that countries
have retained to decide what an 'invention' is and how the patentability
standards are determined.

Correa is a speaker on the opening day of the three-day WIPO open forum. His
paper, "An Agenda For Patent Reform And Harmonization For Developing
Countries" is available on the WIPO website, together with papers of other
speakers.

The forum was mandated by the WIPO General Assembly as part of an attempt to
break the impasse in the negotiations on the SPLT. The developed countries
are pushing for a new patent treaty that harmonises national patent laws in
order to have common treatment of aspects including prior art, grace period,
novelty, and inventive step.

Many developing countries are opposed to this narrow agenda and want the
treaty to address public interest flexibilities, anti-competitive practices
and disclosure in patent applications of the source of origin of genetic
resources and traditional knowledge.

An informal meeting of the WIPO's Standing Committee on Patents will be held
on 10-12 April to discuss how the work on the SPLT is to proceed, taking
into account the results of the forum.

Correa's paper gives an account of the patent harmonization process in WIPO
(of which the SPLT negotiations are a major part) and analyses its
implications for developing countries.

According to the paper, the patent system contains serious distortions and
there is need for a "deep re-examination" of how it operates in different
countries. Correa warned that the patent harmonization process under WIPO
overlooks the problems of the system, nor is it intended to adapt the system
to the needs of the developing countries.

"The harmonization process poses a significant challenge and creates a
number of risks for developing countries," said Correa, adding that there
are no convincing reasons for the developing countries to support the
process, if it proceeds further on the basis of the proposals of the major
developed countries.

Correa also warned that it would be a great disservice to developing
countries if they were induced through WIPO processes to import features of
a patent regime that is growingly seen as malfunctioning in developed
countries, and often stifling rather than promoting innovation.

The paper recalled that in 2001, WIPO's Director-General Dr Kamil Idris
launched a 'Patent Agenda' whose main emphasis has been to facilitate the
acquisition of patent protection in foreign countries by making the system
more user-friendly, cost effective and secure.

The main purpose of the Patent Agenda, as set out by the WIPO
Director-General is, therefore, to create mechanisms whereby inventors and
industry have access to national, regional and international patent
protection systems that enable them to obtain, maintain and enforce their
patents globally.

"Development objectives are completely absent from the initiative," said
Correa. "No assessment was provided about the benefits and costs of the
proposed harmonization, particularly as it would eliminate the room that
countries have retained to decide what an 'invention' is and how the
patentability standards are determined.

"The proposed Agenda failed to acknowledge the major problems that the
patent system currently face, as a result of the application of lax
patentability criteria, the asymmetries in the ability to use it due to high
enforcement costs, and the disadvantages of patent policy harmonization for
different levels of economic and technological development."

One component of the Patent Agenda is the development of an SPLT. As
originally conceived in 2000, the SPLT was to have a wide agenda of issues.
But due to resistance from developing countries and disagreement among
developed countries on some provisions, the developed countries opted for a
more gradual approach.

The US, Japan and the EU suggested (in what is known as the trilateral
approach) to limit immediate discussions to a narrow but important set of
four issues: definition of prior art; grace period; novelty; and
non-obviousness/Inventive Step.

"The issues suggested for this initial phase of harmonization are crucial.
If agreed upon, they would provide a uniform definition to key aspects
determining the scope of patentability," said Correa.

In order to push forward this proposal, WIPO's Director-General convened
'informal consultations' concerning future sessions of the Standing
Committee on Patents in Casablanca, in February 2005. Widely criticized for
lack of transparency and the attempt to give undue weight to the outcome of
the meeting, this process was unable to move the negotiations further. At
the WIPO Assemblies held in September 2005, a compromise was reached to
continue work at the SCP.

Correa said that the 'Trilateral proposal' aims at addressing key issues
concerning the patentability standards. These concepts determine the extent
of knowledge that may be detracted from the public domain and subject to
exclusive rights for a minimum twenty years' period. The TRIPS Agreement
does allow Members to adopt their own definitions on all these concepts,
thereby providing Members flexibility to design their patent regimes.

The paper examines the proposals on the four issues. On the first issue of
prior art, the eventual harmonization of this concept would require
agreement on a number of issues on which national laws differ, notably:
Non-written disclosures; Secret prior commercial use or the offer for sale
without disclosure; Disclosures in prior patent applications; Determination
of the date of availability to the public; Availability to the public; and
Indigenous/traditional knowledge.

On the issue of grace period, the application of a grace period (admitted in
the US and in many other countries) has raised a significant controversy
between the US and European countries, where such period is not provided
for.

"It expands the scope for patenting, as inventions disclosed during that
period would be eligible for protection, notwithstanding that they would
have been deemed in the prior art in accordance with the general rule on
novelty."

On the third issue of novelty, Correa said that the definition of 'novelty'
is crucial. Since the TRIPS Agreement allows Members to adopt their own
concept, the US, for instance, has been able to maintain its relative
novelty standard with regard to the place where disclosures have taken
place.

Novelty results from the comparison between the existing prior art at the
date of filing (or the date of priority) and the claimed invention. In
practice, the concept of novelty is narrowly construed by patent offices,
requiring in some cases an almost 'photographic' disclosure of the invention
in a single prior document in order to consider that novelty does not exist.

On the fourth issue of non-obviousness/inventive step, Correa said defining
this is one of the most critical aspects of a patent regime, as it
determines the level of technical contribution required to obtain
protection. As the TRIPS Agreement does not define this concept, Member
countries are free to determine whether they want a system under which a
myriad of minor, incremental, developments are patentable, or one aimed at
rewarding substantive departures from the prior art.

The draft SPLT Regulations proposed a low standard for determining inventive
step. The claimed invention would be assessed against the general knowledge
of an ordinary skilled person, and not against specialized knowledge in a
particular field of technology.

"Developing countries will be made a great disservice if they were induced,
through the WIPO patent harmonization process, technical assistance or other
means, to import features of a patent regime that is growingly seen as
malfunctioning in developed countries, and often stifling rather than
promoting innovation," said Correa.

The decline in the patentability standards is one of the factors behind what
has been described as the 'intense pathology of the current [patent] system'
in the US.

"The best policy for developing countries would rather be to establish high
standards of inventive step, in order to avoid 'ever-greening' and other
patenting strategies aimed at blocking genuine competition and follow-on
innovation," said Correa.

['Ever-greening' consists of the patenting of minor changes to or versions
of existing products (e. g. formulations, dosage forms, polymorphs, salts,
etc.) in order to extend the life of the original patent over an active
ingredient.]

For instance, the recent reform (2005) of the Indian Patent Law has
incorporated an anti-ever-greening provision, which tightens the inventive
step requirement as applied to new forms or modifications of existing
pharmaceutical products.

Correa said that developed countries are likely to pursue negotiations on a
'light' SPLT on the basis of the trilateral proposal.

"Quite clearly, it is not in the interest of developing countries to seek
either a 'light' SPLT or a more comprehensive SPLT, since they have little
to gain from a broader harmonization of substantive patent law," he said.
"Developing countries should resist any attempt to limit their capacity to
prevent the patenting of developments that do not constitute a real
technical contribution to the state of the art."

If such countries wished to promote 'minor' innovations, the appropriate
policy would not be to lower the patentability requirements, as it is often
argued, but to establish utility models (or 'petty patents') that confer
less extensive rights than patents or to explore other options, such as the
recognition of a remuneration right rather than exclusionary rights.

In brief, developing countries should endeavour to keep the existing policy
space to determine the level of the 'inventive step'.

If negotiations on the prior art and novelty concepts were pursued,
developing countries should aim at the recognition of a universal novelty
standard that does not discriminate on the basis of the place where
non-written disclosures took place. Such a standard could prevent a
significant part of the misappropriation of genetic resources and
indigenous/traditional knowledge that currently occurs.

However, the change of the novelty standard may not be sufficient to prevent
bio-piracy if the evidentiary requirements for non-written disclosures made
abroad are too complex or stringent, thus making the proof of the existence
of prior art too difficult or impossible . If this were the case, there
would be little gain for developing countries.

In addition, the circumstances under which traditional knowledge may be
deemed or not part of the prior art should be explored systematically and
incorporated into the discussion. Developing countries should also
incorporate into any possible negotiating text an obligation to disclose the
origin of genetic materials and associated indigenous/traditional knowledge
claimed in patent applications, as demanded by such countries within both
WTO and WIPO.

In addition to the disclosure of origin obligation, developing countries may
seek to incorporate safeguards and other provisions that ensure sufficient
flexibilities and a pro-development approach. In fact, those countries had
already suggested in the SPLT process some of such provisions, such as
exception, public interest exceptions, and compliance with applicable law on
other matters.

Correa suggested that other provisions may be worked on, including (i)
requirement of industrial applicability (as opposed to utility) based on a
distinct technical effect of the invention; (ii) best mode as a uniform
requirement; (iii) principles and objectives; (iv) transfer of technology;
and (v) measures against anti-competitive practices.

The paper concludes that "a deep re-examination of the patent system and how
it operates in different contexts is called for. The system presents a
number of serious distortions that affect its potential role in promoting
innovation, particularly in developing countries.

"The harmonization process conducted for almost two decades under WIPO's
auspices overlooks the problems and asymmetries of the system, and
essentially aims at reducing the operational costs for users at a global
scale. That process is certainly not intended to address the system's
current shortcomings, nor adapting it to the needs of developing countries."

Correa added that the harmonization process poses a significant challenge
and creates a number of risks for developing countries. While there are no
convincing reasons for such countries to support the process, if it proceeds
further on the basis of the trilateral or other proposals, three main issues
should be considered.

Firstly, what objectives developing countries should pursue in responding to
the harmonization demands of developed countries?

Developing countries should aim at the recognition of a universal novelty
requirement and of a disclosure of origin obligation. They should also seek,
inter alia, to clarify the treatment of indigenous/traditional knowledge as
part of prior art. The ability to determine the required level of inventive
step should not be negotiable; in particular, no proposals should be
admitted that allow for a low inventive step standard for the granting of
patents. Developing countries should consider means alternative to patents
to promote minor innovations, if suitable to their developments needs.

Secondly, how feasible and practical do these proposals have to be in order
to gain support from other stakeholders and to be successfully carried
forward in international fora? Although developing countries should seek the
elaboration of a scientifically-based development assessment on the general
implications of the proposed harmonization process, they should also
elaborate concrete proposals on the issues put on the table by developed
countries, as well as those that are of interest to developing countries,
such as those mentioned above.

Thirdly, which could be the areas of the respective reform processes where
coalitions could be built between developing and developed partners?

There are specific areas in which agreements with some developed countries
may be reached. Thus, European countries are likely to support demands for a
truly universal novelty requirement, while the US may support the
consideration of prior patent applications as part of the prior art for both
novelty and inventive step. Developing countries negotiating strategies
should try to ably capitalize on the divergences that exist between
developed countries in order to advance their own agenda in the process. +
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