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7
Update on International Negotiations on Intellectual Property Rights

JACQUES J. GORLIN

GENERAL COMMENTS

Currently, the two principal international organizations that deal with intellectual property matters are the General Agreement on Tariffs and Trade (GATT) and the World Intellectual Property Organization (WIPO). This chapter reviews the current state of play in the GATT negotiations on intellectual property-the Trade Related Aspects of Intellectual Property Rights (TRIPS) negotiations—and in the WIPO negotiations on a patent law harmonization treaty, a trademark law harmonization treaty, a possible protocol to the Berne Copyright Convention, and a dispute settlement treaty. Although other negotiations are currently underway in WIPO and the United States continues to pursue bilateral efforts under the Special 301 provisions of the Omnibus Trade and Competitiveness Act of 1988, the negotiations discussed below best typify the new "competitive" situation in the field of international intellectual property negotiations.

The GATT negotiations on TRIPS and discussions in WIPO share similar objectives: the strengthened protection and improved enforcement of intellectual property rights via multilateral instruments. However, the overwhelming interest of the principal developed countries in a trade-based multilateral regime for intellectual property as part of the current GATT Uruguay Round, and the fact that the TRIPS negotiations are in their final stage have pushed the TRIPS negotiations to the fore. While attention is



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Global Dimensions of Intellectual Property Rights in Science and Technology 7 Update on International Negotiations on Intellectual Property Rights JACQUES J. GORLIN GENERAL COMMENTS Currently, the two principal international organizations that deal with intellectual property matters are the General Agreement on Tariffs and Trade (GATT) and the World Intellectual Property Organization (WIPO). This chapter reviews the current state of play in the GATT negotiations on intellectual property-the Trade Related Aspects of Intellectual Property Rights (TRIPS) negotiations—and in the WIPO negotiations on a patent law harmonization treaty, a trademark law harmonization treaty, a possible protocol to the Berne Copyright Convention, and a dispute settlement treaty. Although other negotiations are currently underway in WIPO and the United States continues to pursue bilateral efforts under the Special 301 provisions of the Omnibus Trade and Competitiveness Act of 1988, the negotiations discussed below best typify the new "competitive" situation in the field of international intellectual property negotiations. The GATT negotiations on TRIPS and discussions in WIPO share similar objectives: the strengthened protection and improved enforcement of intellectual property rights via multilateral instruments. However, the overwhelming interest of the principal developed countries in a trade-based multilateral regime for intellectual property as part of the current GATT Uruguay Round, and the fact that the TRIPS negotiations are in their final stage have pushed the TRIPS negotiations to the fore. While attention is

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Global Dimensions of Intellectual Property Rights in Science and Technology currently focused on the GATT TRIPS negotiations, the WIPO negotiations are, to a large extent, on hold. NEGOTIATIONS ON TRADE RELATED ASPECTS OF INTERNATIONAL PROPERTY RIGHTS1 On December 20, 1991, GATT Director General Arthur Dunkel tabled a draft final act, which offered "a concrete and comprehensive representation of the final global package of the results of the Uruguay Round." Included in this 450-page text was an agreement on TRIPS. The TRIPS text reflected the combined efforts of the individual country negotiators and, where consensus could not be reached, the views of Ambassador Lars Anell of Sweden, the chairman of the TRIPS negotiating group, and the GATT Secretariat. Although the document was presented on an almost "take-it-or-leave-it" basis by Mr. Dunkel as a final package, the reaction of U.S. Trade Representative Carla Hills best characterizes the current status of the document: "It is important to emphasize that the Director General's document is only a draft; it is not a finished legal text." Both developed and developing countries have proposed changes in TRIPS as well as in other elements of the Uruguay Round package. The TRIPS agreement covers copyright and related rights, trademarks, geographical indications, industrial designs, patents, layout designs (topographies) of integrated circuits, and protection of undisclosed information. In addition, it contains sections on basic principles, such as national and most favored nation treatment; internal and border measures that countries will have to implement to enforce the intellectual property rights covered in the agreement; and transitional and institutional arrangements. The following is a brief summary of the key provisions of the draft agreement as they affect technology-related intellectual property2: Copyright and Related Rights Parties to the agreement (i.e., countries) are required to provide Berne Convention protection. The moral rights provisions of Berne, however, are excluded from coverage under TRIPS. Computer programs are protected as literary works under the Berne Convention. 1   In providing this brief status report and summary, the author has not assessed the TRIPS provisions and their relative effectiveness in meeting the intellectual property-related objectives of the various parties to the negotiations. 2   Readers are urged to consult the TRIPS text that is contained in GATT document MTN.TNC/ W/FA.

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Global Dimensions of Intellectual Property Rights in Science and Technology Compilations of data or other material are protected as such. Authors of computer programs and their successors in title are provided with an exclusive rental right. For the purposes of dispute settlement under a TRIPS agreement, nothing in the agreement can be used to address the issue of the exhaustion of copyright rights. Patents "Patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced." This provision would require the United States to do away with Section 104 of the Patent Act, which prohibits reference to acts of invention that take place outside the United States in determining the right to a patent, and would require Canada to end its compulsory licensing system for pharmaceutical products. In addition, countries would have to recognize the importation of patented products as meeting working requirements for purposes of compulsory licenses. Plant and animal inventions and the biotechnological processes for their production are excluded from coverage under TRIPS. Patents are protected for 20 years from the filing of a patent application. Although compulsory licenses are not prohibited, their use is subject to certain conditions on the circumstances and manner in which they may be granted. Among the restrictions are adequate notification and remuneration and judicial review. The use of dependent patent compulsory licensing is also circumscribed. For the purposes of dispute settlement under a TRIPS agreement, nothing in the agreement can be used to address the issue of the exhaustion of patent rights. Semiconductor Layout Designs The TRIPS agreement deals with the major weaknesses of the Washington Chip Treaty: the term of protection has been extended to 10 years; the innocent infringer provisions have been strengthened; and compulsory licensing of chips is subject to the same conditions as patent compulsory licensing. Trade Secrets For the first time, trade secrets or "undisclosed information" are protected in an international instrument from third-party acquisition "in a man-

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Global Dimensions of Intellectual Property Rights in Science and Technology ner contrary to honest commercial practices." In addition, governments are required to protect proprietary data that they require for marketing approval of new chemical entities "against unfair commercial use." Enforcement of Intellectual Property Rights The TRIPS text requires countries to have available enforcement procedures so as to "permit effective action against any act of infringement of intellectual property rights covered by this Agreement, including expeditious remedies to prevent infringements and remedies which constitute a deterrent to further infringements." Procedures covered in the agreement are both civil and administrative in nature and include provisional measures, with proper safeguards, where expeditious action is necessary. In addition, the TRIPS text requires countries to have special border measures that would permit the suspension of the release of suspected infringing imports by the custom authorities. These special border provisions, which are mandatory for counterfeit trademark and pirated copyrighted goods, may be extended to goods involving industrial designs, patents, integrated circuits or undisclosed information. Transitional Periods Before Parties Must Adhere to the Entire TRIPS Agreement The transitional arrangements in the TRIPS text are prospective and do not provide any retroactive "pipeline" protection for pharmaceutical and agrochemical products. The following transition periods apply before a Party (i.e., a country) must adhere to the provisions of the TRIPS agreement: All parties have one year following the date of entry into force of the TRIPS accord. Developing countries and countries that are in the "process of transformation from a centrally-planned into a market, free enterprise economy" have an additional four years for a total of five years. The 46 countries on the United Nations' list of least developed countries have an additional six years (eleven years from entry into force). If a least developed country requests an extension, the Council on Trade Related Aspects of Intellectual Property Rights, established by the TRIPS agreement to monitor the operation of and compliance under the agreement, "shall . . . accord extensions of this period." In addition, developing countries do not have to provide patent protection for pharmaceutical and agrochemical products for an additional five years (ten years from entry into force).

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Global Dimensions of Intellectual Property Rights in Science and Technology WORLD INTELLECTUAL PROPERTY ORGANIZATION DISCUSSIONS Because WIPO discussions have not advanced to the point of the GATT TRIPS negotiations, where a single unbracketed document has been produced, this section discussion on the four WIPO negotiations is focused more on their procedural than on their substantive status. Patent Law Harmonization Treaty The first part of the bifurcated diplomatic conference on patent law harmonization was held in the Hague from June 3-21, 1991. Formal decisions on the text were put off until the second session of the diplomatic conference, which is not expected until July 1993 at the earliest. The decision to bifurcate the diplomatic conference was linked to the one-year delay in GATT negotiations caused by the breakdown of the Brussels ministerial meeting in December 1990. The WIPO patent law harmonization exercise seeks the development of a treaty that will simplify and expedite the obtainment of patent protection around the world and will strengthen that protection once granted. As opposed to the GATT TRIPS agreement, which contains minimum standards of protection and enforcement, the WIPO patent law harmonization treaty sets forth a number of concrete provisions that will have the effect of harmonizing certain administrative and substantive laws and rules for obtaining and enforcing patents in adherent countries. Under the current draft treaty, adhering countries would be required to grant patents to the inventor first filing an application (Article 9); grant patent protection for products and processes in all fields of technology (Article 10); provide a minimum patent term of 20 years from filing of the patent application (Article 22); provide a grace period of one year for disclosures of inventors (Article 12); accept patent applications satisfying certain minimum standards regarding content and format (Articles 3 and 4); accept and give dates to applications in the English language (Article 8); accept and process related inventions in a single application (Article 5); require publication of applications a fixed time period after filing (Article 15); require courts to give a fair breadth of interpretation to patent claims (Article 21); and provide a reversal of the burden of proof for process patents (Article 24). The treaty would mandate certain changes in U.S. patent law. The most

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Global Dimensions of Intellectual Property Rights in Science and Technology controversial change would require the United States to amend its patent law from a "first-to-invent" to a "first-to-file" system for determining the right to a patent. This would make U.S. law consonant with the almost universal approach found outside the United States that grants the right to a patent to the first inventor to file for the patent, not necessarily to the first to make the invention. U.S. negotiators have indicated their willingness to make this major change in U.S. law provided the final treaty represents a "balanced package" that includes concessions from other countries that would provide quicker and more certain patent protection for U.S. inventors abroad. Among these beneficial provisions that must be included in the final text are acceptance of English language specifications in patent applications; a one-year grace period for the filing of patent applications after an inventor has disclosed his invention; a speedier examination process in which the patent search must be completed within 18 months from filing, and examination completed within five years from filing; acceptance of patent applications that satisfy a minimum standard format; the filing of related inventions in a single application; the requirement for a reasonable breadth of interpretation to patent claims; and elimination of pre-grant opposition procedures. The patent law harmonization exercise is essentially viewed as a forum to resolve differences among the varying but relatively adequate systems of patent protection found in the developed countries. Nevertheless, the treaty would require changes in the laws of all countries, including the developing countries; thus a number of issues on the negotiating table involve critical North-South differences, such as patent term and coverage. Because these issues are also the subject of the TRIPS negotiations in the GATT and—more importantly—are considered more amenable to resolution in the GATT than in WIPO owing to cross-sectoral leverage, the WIPO negotiators delayed their patent harmonization discussions until the GATT could first resolve the overlapping North-South negotiations. Although the diplomatic conference was not actually postponed, the net effect of the bifurcation was the same. There is optimism in some circles that, once the GATT TRIPS negotiations are successfully concluded, a patent harmonization treaty containing improvements in European, Japanese, and U.S. laws will also be concluded. Trademark Law Harmonization Treaty Discussions on a trademark law harmonization treaty are not as advanced as those on patent law harmonization. While the first two meetings of the Committee of Experts have focused on the substantive provisions of a draft trademark treaty put forward by the WIPO Secretariat, a consensus has

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Global Dimensions of Intellectual Property Rights in Science and Technology not yet developed among the participating countries on the desirability of having a WIPO trademark law harmonization treaty or whether the treaty should contain minimum or maximum standards. WIPO had put discussion of a trademark harmonization treaty on the back burner pending the conclusion of the GATT TRIPS negotiations. With the uncertain future of the Uruguay Round, WIPO has once again stepped up its consideration of trademark law harmonization. At the third session of the Committee of Experts, which was held in June 1992, the experts reviewed a draft treaty that sought to address administrative procedures instead of substantive trademark law, which had been the focus of the previous drafts. A diplomatic conference is not expected for at least another year. Possible Protocol to the Berne Convention The two-part meeting of the Committee on Experts, which took place on November 4-8, 1991, and on February 10-11, 1992, represented the first step in the long WIPO process for development of a possible protocol to the Berne Convention. The meetings discussed, among other issues, the inclusion of computer programs in the proposed protocol. Widely different opinions on the inclusion of computer programs were presented at the meeting, and as a result, the issue of protection of computer software was postponed for later consideration by the Committee of Experts. Similarly, it was agreed that it would be premature to deal with "computer-produced" works and that artificial intelligence systems should not be included in the proposed protocol. However, it was agreed that the proposed protocol should deal with the question of protection of data bases and that a future working document should include a study of the possibility of also protecting data bases that contain large amounts of data or information but do not meet the originality criterion, such as catalogues of goods offered for sale. Currently, no future meetings of the Committee of Experts have been scheduled. Settlement of Intellectual Property Disputes Between States In response to the criticism that the weakness of WIPO-administered treaties is in their lack of dispute resolution mechanisms, a Committee of Experts has held three meetings to discuss the outlines of a WIPO dispute settlement treaty. The most recent meeting took place July 1992. The next session is not expected before the fall of 1993. A diplomatic conference will not take place until the experts have met one or two more times. A draft treaty has been prepared by the WIPO Secretariat. The treaty calls for the use of consultation, good offices, conciliation, and mediation

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Global Dimensions of Intellectual Property Rights in Science and Technology for the resolution of disputes. It establishes procedures for the creation of panels but does not give any authority to the WIPO Assembly to adopt the panel's reports. There was also a wide divergence of opinion on whether the dispute settlement treaty should be limited to the enforcement of WIPO-administered treaties.