IPR provisions
in the EU-ASEAN FTA
Asian Regional Workshop on Free Trade Agreements:
Towards inclusive trade policies in post-crisis Asia
Bangkok, Thailand 8-9 December 2009
Elpidio V. Peria
Third World Network
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OVERVIEW
Development and Intellectual Property
 EU's thrusts in the EPA Chapter
 The draft text and their impacts on ASEAN
- technology transfer, copyrights,

.

trademarks, geographic indications,
patents, plant variety protection,
enforcement
Confronting the Issue of IPRs in the EPA
Development and Intellectual Property (1)

Intellectual property as an issue with binding rules within a
trade agreement was very controversial; even Joseph Stiglitz
and free trader Jagdish Bhagwati decried the inclusion of IP
issues in the WTO

Cost of implementing TRIPS obligations to developing
countries – US$B 60 annually (Michael Finger, World Bank)

Developed countries seek FTAs to
a) remove or reduce the flexibilities of the TRIPS Agreement
and
b) establish higher standards of IP protection in developing
countries
Development and Intellectual Property (2)

Prior to TRIPS, countries were able to tailor their level of IP
protection to their level of development

USA, Europe, Japan, S. Korea and Taiwan did not have high
levels of IP protection until it suited them

Switzerland had no patents on chemicals until 1978

Italy, Sweden and Switzerland did not allow patents on
medicines until 1978

Spain did not have patents in chemicals or medicines until
1992
EU's thrusts in the IPR Chapter
(Article 1-Objectives)

Facilitate the production and commercialization of
innovative and creative products between the
Parties

Achieve an adequate and effective level of
protection and enforcement of intellectual property
rights
EU's thrusts in the IPR Chapter
(Article 1-Objectives-INTERPRETATION)

All likely to lead to stronger IP protection

There is no corresponding mention of ensuring
access to things protected by taking into account
differing levels of development or the goals of devt
(such as sustainable development, poverty
reduction/alleviation)

Even the TRIPS Agreement objectives that balance
the concerns of consumers are not even mentioned
Art. 7, TRIPS Objectives : The protection and enforcement of IPR
should contribute to the promotion of technological innovation and
to the transfer and dissemination of technology, to the mutual
advantage of producers and users of technological knowledge…”
EU's thrusts in the IPR Chapter
- WHO ACTUALLY BENEFITS MORE?

Almost without exception, developing countries are net importers
of technology, except the USA and European Union
- in Malaysia, 98% of patents granted are to foreigners (including in 2005)
- 1.1% of patents granted in Indonesia from 1993-2006 were to Indonesians.
- from 1998-2005, 0.6-1.4% of patent grants in Philippines were to Filipinos.
-Between 1991 and 2001, the net US surplus of royalties and fees (which mainly
relate to IP transactions) increased from $14 billion to over $22 billion.
In 1999, World Bank figures indicate a deficit for developing countries of
$7.5 billion on royalties and licence fees.’ report of the Commission on
Intellectual Property Rights established by the British Government,
http://www,iprcommission.org/graphic/documents/final_report.htm, page 21
TECHNOLOGY TRANSFER
(Article 3)

Parties agree to exchange views and information on
their domestic and international practices and
policies affecting transfer of technology

Parties shall ensure that the legitimate interests of
intellectual property rights holders are protected
TECHNOLOGY TRANSFER
(Article 3-INTERPRETATION)

Parties agree to exchange views and information on their domestic
and international practices and policies affecting transfer of
technology. This, in particular, shall include measures… on a
VOLUNTARY basis.
- this is not SPECIFIC ENOUGH and NOT even mandatory to
ensure technology transfer.

Parties shall ensure that the legitimate interests of intellectual
property rights holders are protected
- this may limit the ability to achieve technology transfer
via compulsory licensing or other exceptions to IPR
TECHNOLOGY TRANSFER
- ASEAN at the RECEIVING END ?

National patenting patterns in ASEAN dominated by nonresidents
fewer than one in five applications is by a resident of the country concerned,
while in terms of patents granted, around one in four patents are granted to
residents.
⦁
The ‘inventiveness coefficient’ (resident patent applications per 10,000
population) averages about 6.0 for the OECD countries. For the ASEAN, this
coefficient is currently around 0.3.
☥
Based on this index, the ASEAN countries reporting are strongly dependent on
foreign technology, suggesting that there are far more foreign companies trying
to establish protection for their technology in the ASEAN market than there are
ASEAN companies.
(from www.astnet.org, Indicators of Science and Technology in
ASEAN Countries)
COPYRIGHTS & NEIGHBORING RIGHTS
(ARTICLE 5)

Article 5.1 –compels ASEAN member-states to comply with :
a)
Arts. 1-22 of the ROME CONVENTION for the Protection of
Performers, Producers of the Phonograms and Broadcasting
Organizations (1961)
b)
Arts. 1-18 of the BERNE CONVENTION for the Protection of
Literary and Artistic Works (1886, last amended in 1979)
c)
Arts. 1-14 of the WIPO COPYRIGHT TREATY [WCT] (1996)
d)
Arts. 1-23 of the WIPO Performances and Phonograms Treaty
[WPPT] (1996)
COPYRIGHTS & NEIGHBORING RIGHTS
(ARTICLE 5.1-Interpretation)
a)
ROME CONVENTION for the Protection of Performers, Producers of
the Phonograms and Broadcasting Organizations (1961)
- compliance with this is NOT required by TRIPS
a)
BERNE CONVENTION for the Protection of Literary and Artistic
Works (1886, last amended in 1979)
- although required by TRIPS, Laos is not yet a WTO
member and should not yet comply with this
a)
WIPO COPYRIGHT TREATY [WCT] (1996)
WIPO Performances and Phonograms Treaty [WPPT] (1996)
(also known as WIPO Internet Treaties)
- strongly criticized; goes beyond TRIPS and BERNE
Convention; provides copyright holders exclusive rights
over material in the online environment and specifically
calls on
countries to provide effective legal remedies
against the circumvention of technological protection
measures
COPYRIGHTS & NEIGHBORING RIGHTS
(ARTICLE 5)

(Art. 5.2)DURATION of AUTHORS’ RIGHTS
– lifetime of author plus 70 years
- TRIPS only provides for 50 years

(art. 5.4) COLLECTIVE MANAGEMENT of RIGHTS
- to be established by ASEAN member-states to ensure
access and delivery of content and mutual transfer of
royalties
- a new issue introduced by the EU in WIPO
(art. 5.5) BROADCASTING
- Parties to provide for exclusive rights by broadcasting
organizations to prohibit the re-broadcasting of their
broadcasts by any means
- very controversial; WIPO has suspended

consideration of
this issue
COPYRIGHTS & NEIGHBORING RIGHTS
(ARTICLE 5)

(art. 5.6) ARTISTS' RESALE RIGHTS – Parties to provide for an
inalienable right to receive in advance a royalty based on any resale
of the work, after the first transfer of the work by the author
- while this may provide needed income to struggling artists,
it encourages them to commodify their artworks for money
(Art. 5.7)PROTECTION OF TECHNOLOGICAL MEASURES - Parties
to provide for adequate legal protection against the circumvention of
any effective technological measure, including the import,
distribution, sale, rental, advertisement for sale or rental or
possession for commercial purposes of such devices
- end users of a circumvention device may be liable even
when they did not know they were circumventing a TPM
⦁
(art. 5.8) PROTECTION OF RIGHTS MANAGEMENT INFORMATION
– Parties to provide for adequate legal protection against the
removal or alteration of any electronic rights management
information
- may be used to provide mechanisms for tracking
document usage, which may affect privacy of users
TRADEMARKS
(article 6)
Art. 6.1 - compels ASEAN member-states to accede to :
1) Madrid Protocol –only Singapore and Vietnam are members so
far
2) Singapore Treaty on the Law of Trademarks – has 16 members
at present, with Singapore as a member from ASEAN
3) Trademark Law Treaty – has 45 members, counting Indonesia
from ASEAN
Art. 6.2 Registration Procedure – a TRIPS-plus provision
Art. 6.4 Exceptions to Rights Conferred on a Trademark – in TRIPS
agreement, this is only an optional course of action, but now being
made mandatory by the E another TRIPS-plus which is being made
mandatory a
GEOGRAPHIC INDICATIONS
(article 7)
- establishes a register for listing geographic indications protected in the
territory including an administrative process verifying the geographic
indications and identifying the good possessing such quality or
reputation essentially attributable to its geographic origins
- ex officio enforcement of GIs are not required by TRIPS
塨 - will mainly affect upscale agricultural products such as wine, whisky, ready-toserve meal, food for dogs and cats, malt and sugar.
- content of EU agricultural exports to ASEAN;
the EU has the dominant market advantage here, though scattered products of
the ASEAN may gain market share eventually
- will sidestep the issue of traditional knowledge protection in ASEAN
What an Effective TK Protection Should Be

Consists of ensuring the physical and economic well-being of
the practitioners and generators of TK, including its
underlying material and cultural bases and ensuring the
transmission of TK between generations;

Recognizes the rights of indigenous and local communities in
national legislation and policy

Gives them equal rights in natural resources management
vis-à-vis government agencies and private land owners

With equal rights and equal power in negotiations, only then
can we ensure that the goals of fair and equitable benefitsharing are achieved

Customary law should play a key role in these mechanisms
PATENTS
(ARTICLE 9)

Article 9.1 –compels ASEAN member-states to comply with
a)
Arts. 1-52 of PATENT COOPERATION TREATY (1971, 2001)
b)
Arts. 1-16 of the PATENT LAW TREATY (2000)
c)
Arts. 2-9 of the BUDAPEST TREATY on the INTERNATIONAL
RECOGNITION OF THE DEPOSIT OF MICRO-ORGANISMS
FOR THE PURPOSES OF PATENT PROCEDURE (1997,
amended in 1980)
PATENTS
(ARTICLE 9- Interpretation)

Article 9.1 – ASEAN member-states are to comply with
a)
Arts. 1-52 of PATENT COOPERATION TREATY (1971, 2001)
- not required by TRIPS; but it makes it easier for foreigners to
apply for patents in developing countries; expected to result in
increased patent applications
- impact on access to affordable medicines
- impact on ability to move up the value chain in mfg.
a)
Arts. 1-16 of the PATENT LAW TREATY (2000)
- would limit the procedural requirements ASEAN countries
can demand of patent applicants, thus lowering the
procedural barriers and costs to applying for a patent in
ASEAN countries
PATENTS
(ARTICLE 9-Interpretation)
a)
Arts. 2-9 of the BUDAPEST TREATY on the INTERNATIONAL
RECOGNITION OF THE DEPOSIT OF MICRO-ORGANISMS
FOR THE PURPOSES OF PATENT PROCEDURE (1997,
amended in 1980)
- results in more micro-organisms being patented
- greater foreign exchange losses
- increased risk of biopiracy
PROTECTION OF DATA SUBMITTED TO OBTAIN A
MARKETING AUTHORIZATION
(article 10)
(Art. 10.1)Parties will implement a comprehensive system to
guarantee the confidentiality, undisclosed and non-reliance of
data submitted for registration purpose of medicinal products
(Art. 10.2) Parties will enact and implement legislation ensuring
that any information submitted to obtain marketing approval will
remain undisclosed to third parties and benefit from a period of
(xxx) years of protection against unfair commercial use…
*Philippines may need to amend Cheap Medicines Law to
incorporate this obligation
Data exclusivity (DE)

TRIPS:
 only requires data protection, so generic can be approved
based on the clinical trial results from the originator
company
 So generic does not have to repeat clinical trials
 So generic can be approved by the DRA immediately

TRIPS+ (‘data exclusivity’):
 for 5-11 years, the generic cannot rely on the originator’s
clinical trial results
 So the generic must repeat the clinical trials if it wants to
be approved in the DE period or wait for 5-11 years before
it can be registered and reach patients.
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WHO Commission on Data Protection

WHO’s Commission on Intellectual Property Rights,
Innovation and Public Health, 2006

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A public health justification should be required for data
protection rules going beyond what is required by the TRIPS
agreement. There is unlikely to be such a justification in
markets with a limited ability to pay and little innovative
capacity.
PLANT VARIETY PROTECTION
(article 11)
Parties shall cooperate to promote and reinforce the
protection of plant varieties based on UPOV 1991
- ASEAN member states may have to revise their existing
PVP legislation and reexamine the exceptions it has given
to farmers to strengthen the protection given to PVP
holders
- Malaysia, Thailand, Philippines, Indonesia
ENFORCEMENT
(article 13)
- Parties
to provide for complementary measures,
procedures and remedies necessary to ensure the
enforcement of IPRs
-
IPRs are private rights. But with this enforcement
provision, the State will have to provide scarce public
resources to protect private rights.
ENFORCEMENT
(article 13)
- This direct cost of TRIPS enforcement includes: (a) Judicial
cost; (b) Administrative cost; (c) Litigation cost; and (d) Cost of
litigation error.
- The second category of costs is indirect cost, which may
have deeper implications than the first category of costs.
These costs are duly associated with static losses which
developing countries have to face due to TRIPS or TRIPS-plus
compliance and the ensuing static consumer welfare losses,
impediments to informal and formal modes of anticompetitive effects, etc.’
Policy Brief 12, South Centre, January 2008
TRIPS+ border measures


TRIPS (Article 51): only have to allow customs to seize counterfeit trademark
or copyright goods
TRIPS+: may require customs to also be allowed to seize allegedly patent
infringing goods such as generic medicines. This is problematic because:
Deciding whether a generic medicine infringes a patent is difficult because



If supply of a generic medicine is interrupted because it has been seized by
customs, resistance can develop in patients (eg to antiretrovirals)



it is not visible on the surface of the product the way a trademark or
copyright infringement may be and
It usually takes significant expert evidence to determine
TRIPS (Article 51): only requires checking of imported products
TRIPS+: may require customs to check imported, exported
and transiting products
May make it difficult for remote countries to access generic medicines
Increases cost and burden for customs


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Possible effects of border measures

The effect of most of these TRIPS-plus provisions according to a World Health Organization model
applied to Colombia is that :




A study of the impact thus far of the TRIPS-plus provisions of the Jordan-USFTA found that:







one hospital alone has increased its medicine spending six-fold,
medicine prices in Jordan have already increased 20% since 2001 when the FTA began,
over 25% of the Ministry of Health’s budget is now spent on buying medicines,
data exclusivity has delayed the introduction of cheaper generic versions of 79% of medicines launched by 21
multinational companies between 2002 and mid-2006 and
ultimately the higher medicine prices are threatening the financial sustainability of government public health
programs.
(http://www.oxfam.org/en/files/bp102_jordan_us_fta.pdf/download).
It was recently estimated that eight years of data exclusivity alone in Canada would have added
$600 million to prescription medicine costs alone in the last five years.


Colombia would require an extra US$1.5billion to be spent on medicines every year by 2030.
If this were not spent, Colombians will have to reduce their medicine consumption by 44% by 2030.
(‘Intellectual property in the FTA: impacts on pharmaceutical spending and access to medicines in Colombia’,
Mision Salud and Fundacion IFARMA, Miguel Ernesto Cortes Gamba, Bogota, 2006 available from
http://www.ftamalaysia.org/article.php?aid=153).
( http://www.canadiangenerics.ca/en/news/nov_14_06.shtml)
The extension of patent terms alone has been calculated by the Korean National Health Insurance
Corporation to cost US$529 million for having to extend medicine patents for 3 years and US$757
million if it has to agree to a four year extension in its USFTA negotiations.

(http://english.hani.co.kr/arti/english_edition/e_business/165065.html).
Concerns about impact of TRIPS+
provisions on affordability of medicines

Special Rapporteur of the United Nations Commission
on Human Rights on the right of everyone to the
enjoyment of the highest attainable standard of physical
and mental health

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"I am deeply concerned that the US-Peru trade agreement will waterdown internationally agreed health safeguards, leading to higher prices
for essential drugs that millions of Peruvians will find unaffordable"
WHO Commission’s concerns
WHO’s Commission on Intellectual Property Rights,
Innovation and Public Health, 2006:
 In bilateral trade negotiations, it is important that:



governments ensure that ministries of health be properly
represented in the negotiation, and
that the provisions in the texts respect the principles of the
Doha Declaration.
Bilateral trade agreements should not seek to incorporate
TRIPS-plus protection in ways that may reduce access to
medicines in developing countries.
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Concerns about impact of TRIPS+
provisions continued

Nobel Prize winning Doctors Without Borders:




these USFTA provisions ‘will dramatically reduce the ability of countries to provide
low-cost quality medicines for their citizens.’
Ministers of Health from ten Latin American countries also declared their
commitment to avoid TRIPS+ provisions.[1]
African Union[2] Ministers of Health called upon the countries of Africa
(except Morocco) not to agree to TRIPS+ provisions,[3]
African Union Ministers of Trade agreed with their health colleagues[4]
[1] Declaration of Ministers of South America over Intellectual Property, Access to Medicines and Public Health, Geneva, 23 May 2006.
The Ministers of Health were from Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay and Venezuela.
[2] The African Union represents all African countries except Morocco.
[3] Gaborone Declaration, 2nd Ordinary Session of the Conference of African Ministers of Health, Gaborone, Botswana, 10-14
October 2005, CAMH/Decl.1(II).
[4] AU’s Ministerial Declaration on EPA Negotiations, AU Conference of Ministers of Trade, 3rd Ordinary Session, 5-9 June 2005, Cairo,
Egypt, AU/TI/MIN//DECL.(III).
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WHAT TO DO?
⦁
- suppose ASEAN puts forward its minimum demands on the IPR
Chapter, and the the EU accedes, do we then approve the entire
EU-ASEAN EPA?
- ASEAN member-states should demand for transparency/release of
the other chapters of the EPA
- analyze clearly the trade-offs, do we exchange our ability to
develop as against short-term gains in jobs, market access and
foreign direct investment ?
Thank you
Questions to : pingperia16@yahoo.com
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