Extracts of India’s Intervention to the WTO TRIPS Council: ACTA

On Wednesday, 27 October 2010, the WTO TRIPS Council held its annual review of the Paragraph 6 System. IP-Watch has a link to the detailed program of the annual review. This annual review of the Paragraph 6 system lasted till around 8 PM Geneva time. More details of this closed door meeting will be provided in due course. Sources close to the negotiations indicate that Canada provided a comprehensive overview of its implementation of the Paragraph 6 system, Canada’s Access to Medicines Regime (CAMR). Rwanda was not present at this review; neither was Ghana, a country which has tried unsuccessfully to make use of Paragraph 6. After 8 PM, the TRIPS Council resumed and certain Members took the floor to discuss ACTA. Here are some key extracts from the intervention made by India yesterday concerning ACTA.

Members will recall that in the June TRIPS Council Meeting, the delegations of China and India had requested for an agenda item on TRIPS+ enforcement trends to highlight the systemic implications of the multiple TRIPS+ initiatives launched by a group of largely developed country members. It has been our consistent position, and we continue to hold it, that enforcement is not a permanent agenda item in TRIPS Council. However, the systemic and specific concerns compelled us to ask for an agenda item in the last TRIPS Council. The ensuing discussions demonstrated that the concerns regarding TRIPS+ enforcement were not only those of China and India but were echoed by a vast majority of developing countries including LDCs. In today’s meeting we have requested for a discussion on ‘Enforcement Trends’ under ‘Other Business’ due to our continuing concerns on the issue of TRIPS+. Let me elaborate on a few such systemic and specific concerns regarding the Anti Counterfeiting Trade Agreement (ACTA) in particular and TRIPS+ enforcement trends in general. After years of negotiations in secrecy, we appreciate that negotiating text has now been released due to the unrelenting pressure of civil society, civil liberty groups and groups of parliamentarians. The ACTA text of 2nd October available in public domain has several elements which have far reaching implications for ACTA non-Members. My delegation is not sure that ACTA is TRIPS compliant but we reserve our final position till after the text is finalised.
1. While we are somewhat relieved that patents have been removed, for the time being, from the section on ‘border measures’, we can not ignore the fact that ACTA is a plurilateral IPR enforcement agreement substantially broader than trademarks and copyrights. We are also concerned at the ambivalence of the proponents to include patents in the section on ‘civil enforcement’ as well as in the overall scope of the agreement. This is further aggravated by the fact that ‘in-transit’ goods is otherwise included in the overall scope of the agreement. There is no general assurance that border measures shall not apply to goods which are “in-transit”, in “customs transit” and in “transhipment”. Damages and injunctions also continue to be applicable to certain patent infringements as also provisions for seizures, forfeiture and destruction. Trademarks and copyrights, in any case, are covered under Border Measures. There remain provisions of the ACTA with significant implications for trade in legitimate generics, including those dealing with labelling which may affect the practice of parallel importation, and the importation of legitimate generics more generally. Although border measures with respect to patents appear to be excluded from the scope of the agreement, including with respect to goods in transit, there remain provisions that might otherwise provide the basis for seizures of legitimate generic drug consignments. [It is of interest to India that EU ACTA negotiators appear to be suggesting that non-EU countries grant rights with respect to goods in transit that its own Court of Justice has expressly denied EU customs authorities.

2. The section on ‘Civil Enforcement’ continues to include patents. It encourages significant damage awards, e.g., damages based on “suggested retail price” of goods; valuation and lost profit presumptions in favor of right holders. This represents an inflated damages basis. The Section also extends injunctions to third-parties not directly accused as infringers and contains no time limitations for determinations or for notice to accused infringers. The United States appears to have proposed to exclude patents from this civil enforcement section, and India presumes this is because USA negotiators recognize that the provisions of that section are inconsistent with US patent law, and appear to adversely prejudge the outcome of patent reform legislation in its Congress.
6. We call attention to the fact that ACTA negotiators have decided among themselves to overturn the decision of the WTO dispute settlement panel in the recent China-Enforcement case by reinterpreting the phrase “commercial scale” with respect to willful trademark counterfeiting and copyright piracy so as to refer to any activity carried out for a direct or indirect economic or commercial advantage. This is startling in light of the WTO panel’s contrary decision that the term “scale” refers to a level of activity, and it highlights the risk to WTO law posed by turning enforcement matters over to small groups of plurilateral negotiators operating outside the WTO legal framework.
While India is committed to dealing with IPR enforcement issues in line with its TRIPS obligations, the introduction of intrusive IPR enforcement rules in international trade does not represent a reasonable or realistic response. Agreements such as ACTA have the portents to completely upset the balance of rights and obligations of the TRIPS Agreement. They could also potentially undermine seriously decisions taken multilaterally such as the Doha Declaration on Public Health in WTO and the Development Agenda in WIPO. An enforcement response, if required, has to emerge from a multilateral and transparent process, as is available in the WTO TRIPS Council, and should fully conform to the Objectives and Principles (Art 7, 8) of TRIPS agreement and the balance of rights and obligations enshrined in the Agreement. As goods and services of developing countries are becoming competitive with those of developed country producers, TRIPS plus measures, like the ACTA, seek to introduce a new set of “non-tariff” barriers to trade that will preponderantly hinder developing country exporters. WTO cannot remain oblivious to such developments.
In conclusion, let me reiterate India’s unwavering commitment to its TRIPS commitments, including, dealing with counterfeiting and piracy. But we should not miss the woods for the trees. To find an effective and enduring solution to the problem, we need to step back from a purely mercantilist approach. We also need to avoid exaggerating the issue of counterfeiting and piracy since there is lack of empirical data. Even the US Government Accountability Office (GAO) has recently raised serious questions concerning the data that has been relied on by proponents of the ACTA to support the effort. Members need to work collectively to create respect for IP and reduce the economic incentive for counterfeiting and piracy by judicious pricing of products under IPRs and working collectively towards realising the objectives of the TRIPS Agreement.