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An analysis of the EC non-paper on the objectives and possible elements of an IP section in the EC-Pacific EPA

ICTSD Programme on IPRs and Sustainable Development

An Analysis of the EC Non-Paper on the Objectives and Possible Elements of an IP Section in the EC-Pacific EPA

By Sisule F. Musungu

A study commissioned by the Catholic Agency for Overseas Development (CAFOD) and co-sponsored by the International Centre for Trade and Sustainable Development (ICTSD)

August 2007

EXECUTIVE SUMMARY

The European Communities (the EC) has proposed in a Non-Paper a set of
objectives and possible elements for an intellectual property (IP) section of the
proposed Economic Partnership Agreement (EPA) between the EC and the Pacific
countries. The EC is now seeking the Pacific countries views on these objectives
and possible elements. Specifically, the EC is seeking an indication on whether
the Pacific countries consider the non-paper “as a reasonable starting point” on
the basis of which textual proposals can be developed. In terms of why the
Pacific countries have to accept substantive provisions on IP in the EPA, the EC
argues that the only way to give effect to Article 46 of the Cotonou Agreement
is to ensure that the EPA will “include both substantive IP rules, including on
enforcement, and co-operation aspects.” This interpretation, if accepted by the
Pacific countries has important consequences on the outcomes of the EPA
negotiations on IP.

The analysis in this paper concludes that the EC’s interpretation of Article 46 of
the Cotonou Agreement is not only over-ambitious but largely incorrect. In this
regard, it is submitted that to give effect to Article 46 of the Cotonou
Agreement does not require substantive IP rules in the EC-Pacific EPA or the
EPAs in other regions. At the best, general provisions on whether and how those
Pacific countries that are not WTO Members would adhere to the TRIPS
Agreement in terms of Article 46.2 of the Cotonou Agreement would suffice.

There is no other mandatory requirement under Article 46 of Cotonou. Other
matters to consider would include whether:
- On the basis of empirical evidence the Pacific countries levels of
development are consistent with joining the four conventions mentioned
in Part I of the TRIPS Agreement; and
- It is necessary and beneficial, especially to the Pacific countries, to
conclude agreements for protecting trademarks and geographical
indications.

The objectives proposed by the EC Non-Paper, that is ensuring an adequate and
effective level of IP protection and strengthening regional capacity to deal with
IP, are also difficult to rationalise as justifying substantive provisions in the EPA.
This is because first, the EC provides no reasoned basis or evidence that the
TRIPS standards are insufficient to ensure an adequate and effective level of
protection of IPRs in the Parties and second, because there is no basis to argue
that a regional approach to IPRs in the Pacific needs to be introduced and
fostered based on legal obligations owing to the EC. In sum, both the objectives
suggested by the EC for an IP Section in the EPA with the Pacific countries, in the
absence of further explanations and/or evidence, offer little or no justification
for including IP in the EPA beyond the minimum level required by Article 46 of
the Cotonou Agreement. In particular, the proposed objectives do not offer a
basis for clarifying and complimenting the TRIPS provisions on the various
issues listed in the Non-Paper as possible elements.

In this context, the paper arrives at the following conclusions and
recommendations with respect to each of the eight elements proposed by the
EC as the basis for an IP section in the EC-Pacific EPA. On:

WIPO Internet Treaties & Protection of Computer Programmes & Databases
1. Considering the lack of empirical evidence on the advantages of the
Internet treaties, taking into account the minimum requirements of the
Cotonou Agreement regarding the protection of performers and
producers of phonograms, there is no convincing case for the inclusion of
detailed rules in the EC-Pacific EPA on these issues. Benefits for the Pacific
countries are at best uncertain and hence this element should not be
considered for inclusion.
2. With respect to databases especially the protection through a sui generis
right, EC’s own evaluation has shown such a right to have limited, if not,
negative value. The economic value (impact) of the sui generis right is
unproven 10 years since the promulgation of the Directive on databases.
In light of such damning evaluation, it is difficult to see how such
protection could benefit Pacific countries with their limited sophistication
in electronic and other databases.

Well-Known Marks
3. Caution should be exercised in considering the application of the WIPO
Joint Recommendations. The possible implications of elevating these soft
law rules into treaty obligation should be addressed.
4. Regarding the adherence to the Madrid Protocol, while Article 46 of the
Cotonou Agreement does not require such adherence, Pacific countries
could consider adherence to the Protocol though more work needs to be
done on the actual benefits that may accrue to them.

Protection of Geographical Indications
5. Only an empirical study can help Pacific countries make a determination
of whether the advantages of protecting geographical indications
outweigh the disadvantages and vice-versa.
6. Overall, since negotiations on geographical indications in the EPAs should
be predicated on identification of products of interest to the Parties,
before considering any commitments in this area, Pacific countries have to
identify their products of interest, if any, and to consider the market value
(potential) as well as other challenges that may arise. The enormity of this
task suggests that this process can not be completed in the six months
that remain before the end of the EPA negotiations.

Protection of Textile Designs
7. The protection of textile designs has the potential to benefit Pacific
countries. However, the proposal to introduce new EPA obligations on
areas of interest to the EC in the area of industrial designs while
maintaining the TRIPS standard for textile protection does not make
sense. There is little to gain for these countries from the proposed
approach to textile designs protection.

Relationship between the TRIPS Agreement and the Convention on Biological
Diversity (CBD)

8. Simply saying that the TRIPS Agreement should be implemented in line
with the CBD would add little, if anything to the quest by developing
countries and LDCs including Pacific countries to secure mandatory
disclosure requirements. Since both the EC and the Pacific countries, by
virtue of Article 46.2, agree to adhere to both the TRIPS Agreement and
the CBD, it is implicit that they would have to implement the treaties in a
mutually supportive way as they would do with any other treaties. It
appears that the EC has placed this element into the Non-Paper essentially
as a bargaining chip with no intention to move anywhere closer to what
developing countries and LDCs are seeking on the subject.

Public Health
9. As in the case of the relationship between the TRIPS Agreement and the
CBD, there is very little a provision such as that proposed by the EC would
add to existing international obligations and objectives with respect to IP
and health. The only value that could be added for Pacific countries with
respect to the Doha Declaration and related decisions is if the EC agreed
to provide the benefits under the 30 August 2003 Decision to all Pacific
countries irrespective of their membership of WTO. It should be noted,
however, that the Agreement of the EC to extent the benefits of the
Decision to all Pacific countries should not be a basis for the EC to claim
reciprocity vis-à-vis its interests on IP.

IPRs and Genetic Resources, Traditional Knowledge and Folklore
10. No positive and practical solution is offered by the EC’s proposal in
the Non-Paper on this subject. The EC justifies it approach by taking
refuge in the Cotonou Agreement Article 46.1 caveat that the EPA should
not prejudice the position of parties in multilateral negotiations.
Consequently, the proposed approach to genetic resources, traditional
knowledge if implemented as proposed by the EC in other regions, would
add no value and offer no benefit to Pacific countries.

Plant Variety Protection
11. For Pacific countries which do not have developed plant variety
protection systems, it is difficult to see why they should take on more
onerous obligations than required under the TRIPS Agreement. Unless,
there is more compelling evidence there seems to be no basis to ask the
Pacific countries to consider adherence to UPOV 91 which is TRIPS-plus.

Enforcement
12. Judging from the ECOWAS and CARIFORUM texts, and in light of the
areas proposed to be covered on enforcement under the EPA with Pacific
countries, the direction taken by the EC on enforcement would result in a
range of specific problems and challenges for Pacific countries including
the following, among others: loss of flexibility to determine appropriate
method of implementing enforcement under TRIPS; lack of safeguards
and balancing mechanism to protect the rights and freedoms of third
parties including to prevent abuse of procedures by right holders;
creation of liability for intermediaries; far-reaching and unproportional
evidence gathering capabilities; and basing the assessment of damages
on the consideration of extraneous factors.

Overall, it can be concluded that while there are a number of areas such as
protection of traditional knowledge and folklore in which Pacific countries have
a beneficial interest, the proposed elements on these issues add no value. Going
by the textual proposals on these issues in other regions it is unlikely that
Pacific countries could get positive commitments from the EC on these issues.

Consequently, the combination of the time-factor (six months), the TRIPS-plus
implications of many of the elements suggested by the EC in the Non-Paper, the
challenges that would face non-WTO Pacific countries to even adhere to TRIPS
and the general level of development in these countries, it is strongly
recommended that Pacific countries do not agree to the inclusion of an IP
section in the EC-Pacific EPA.

Full paper: http://www.iprsonline.org/ictsd/docs/Musungu%20Pacific%20EPA.pdf


 source: ICTSD