Establishment of the Global Agreement That Currently Governs the Subject: The TRIPS Agreement
Taken from “A global solution for the protection of inventions“, pp. 8-43.
“To address the central proposal of this study, which is to introduce the principle of proportionality as an essential corrective to the international legal instrument that has so far in this publication been referred to as the “global agreement governing the matter” (which is the TRIPS Agreement), it is necessary to know how this international instrument came to be and became the global agreement that currently governs the matter. As mentioned in the previous subchapter, this international instrument regulates a malleable and mutable subject and therefore a subject adaptable to the needs of human beings. Reviewing this historical background in this subchapter does not have the intention on reviving old disputes but to provide analytical elements of study (like the diplomatic pressure that preceded its subscription or the forum change that the subject of intellectual property had and how it was produced). For purposes of the foregoing, in this section the background and the establishment of TRIPS Agreement (Trade-Related Aspects of Intellectual Property Right) will be discussed, accompanying the discussion with criteria that the doctrine has conveyed about the topic.
This review seeks to recognize the strengths and weaknesses of the TRIPS Agreement while it advances some opinions that are related to the central proposal of this work, which will be developed in the second chapter. The second chapter also outlines a conceivable solution to the problems identified in the international agreement, a solution that also tends to enhance the virtues identified in the international agreement. As it has been exposed throughout this investigation, this solution consist in establishing a differentiated term (time period) of protection for inventions, taking into account the economic capacity of each country or each different free-trade area as may be the case. This analysis (the one presented in this first chapter in addition to that presented in the second chapter) will permit to perceive the necessity and feasibility of the insertion of the proposed corrective in the current system, determining the compatibility of this proposal with the principles and objectives of the global agreement governing the matter.
The TRIPS Agreement is an expression of the globalized world. Today borders are disappearing, which has led to “the gradual erosion of the ‘National Country’ conception as a territorial and social space wherein free and independent fundamental political decisions are adopted and the corresponding legal regulations are elaborated autonomous: the crisis ultimately of state sovereignty.” (Mir Puigpelat 2004, 37) This study does not ignore this phenomenon. It places itself in this reality to propose the necessary solutions in reference to the matter it addresses. As a manifestation of globalization the different countries around the world have reached universal agreements in various topics. Intellectual property is undoubtedly one of the most universally rooted legal fields, which is a consequence of the nature of the assets it protects.
This has been so in industrial property, with the subscription from more than a century ago of several international treaties governing the subject of patents as well as other manifestations of industrial property among which stand out chronologically the following: the Paris Convention for the Protection of Industrial Property (established in 1883 and revised several times with its last revision in 1967 and amended in 1979) the Patent Cooperation Treaty of 1970 amended in 2001 (mainly regulating procedural aspects of patent applications and the recognition of their priority), the central object of this study, which is the TRIPS Agreement of 1994, and the Patent Law Treaty of 2000 (regarding some procedural issues of filing, filing date, priority, etc.).
In this study in reference to the industrial property, the emphasis is centered on the analysis of the TRIPS Agreement without neglecting the Paris Convention, whose validity is acknowledged by the TRIPS Agreement. It is clear that the TRIPS Agreement establishes higher standards of protection than the Paris Convention and to the Bern Convention for the Protection of Literary and Artistic Works in regard to copyright and droit d’auteur (signed in 1886, last revised in 1971 and edited in 1979).[1] Additionally as it will be appreciated further on, the acceptance of TRIPS is greater, and its implementation and instrumentation mechanisms are more effective (Kresalja 2001, 211). It is clear that as a basis for the construction of the TRIPS Agreement, previous global agreements were used. “TRIPS negotiators did not reinvented the wheel in regard to those levels of protection that were founded on the consensus that the Paris-Bern legal system represents.” (Geller 1997, 182-183) This study gives “special importance to TRIPS considering that it is the most important intellectual property treaty signed in the twentieth century, it is recent and therefore its influence will probably be very significant in aspects related to technology and everyday life aspects of the people, for decades to come.” (Kresalja 2001, 192)
Further on following Geller, the agreements before TRIPS will be referred to as the “Paris-Bern regime.” In future references to this Paris-Bern binomial (to avoid making the reading of this document heavy), it has to be understood that the reference includes the Rome Treaty on copyright and the Washington Treaty on semiconductors (which contents are also incorporated mutatis mutandis by the TRIPS Agreement) as well as the agreements referred to in the preceding paragraphs, assimilating them all as part of the old system previous to the TRIPS Agreement (Paris-Bern) even though some of them are contemporaries with it.
It is logical that because of the current communicational development, product of more than a hundred years of exponential evolution among other factors, such as trade for example, intellectual products have been and are truly universal. “A purely regional approach will not help us to comprehend the reality of the XXI century. Today the Internet is where the priority relevant to determining the originality of inventions can be broadcast around the world.” (Geller 1997, 186) Therefore, it is also logical that the regulations governing the protection of intellectual products have been and are universal. The TRIPS Agreement is the instrument that has achieved the global harmonization of intellectual property in general and consequently of the protection for inventions.
Thus, under the negotiations resulting from the Uruguay Round, which saw the birth of the World Trade Organization (WTO) in 1994, the TRIPS Agreement was finally signed at Marrakesh. As stated at the time by Gomez Segade “independently of what the results in the future from the implementation of TRIPS may be, it is undeniable that this Agreement represents the most ambitious attempt to adequately regulate and protect the different intangible assets worldwide.” (Gómez 1995, 34)
This was recognized at the time by the doctrine:
The TRIPS Agreement—which came into force on January 1st 1995—is the most inclusive multilateral agreement on intellectual property. It deals with each of the main categories of Intellectual Property Rights, establishing regulations for protection and enforcement rules, and provides the application of dispute settlement mechanism of the WTO to resolve disagreements between member countries. (WTO Secretariat 1997, 385-386)
The TRIPS Agreement (Trade-Related Aspects of Intellectual Property Rights) is a major event on the history of intellectual property. Indeed it does not only represents what P. Demartel called ‘the broader and more ambitious attempt to harmonize Intellectual Property Rights at a global level’ but also introduces intellectual property (until then distinguished by a different regime) in the organization of international trade relations. Also ensures overall strengthening of Intellectual Property Rights. (Demartel 1994, 176)
Upon this reality (the palpable universality of intellectual property), many denounce a fact that causes a major concern if considered from the perspective of justice. The regulations are imposed by the strongest. For example, the economic power that worldwide pharmaceutical corporations have is undeniable. (Companies whose business is closely linked with the protection of patents and whose power—without a doubt—greatly influence political power.) Many authors have reported with strong bases that global regulations respond more to the interests of the countries hosting multinationals than to the collective interest. An example of this lays in the fact that with the establishment of the TRIPS Agreement the worldwide patentability of pharmaceutical products (discussed until then) was then guaranteed, as Remiche and Desterbecq explained,
Patents (one of the main intellectual property rights) show some peculiarities in the field of medicines, taking into account the crucial nature that these products have for Public Health. Subsequently the laws of many developing countries do not allow patenting medicines. But members of the WTO (World Trade Organization) are induced to provide patents—under the agreement—to pharmaceutical products (Remiche and Desterbecq 1997, 246).
This situation is aggravated because international organizations are not structured in a democratic way—at least in the sense that the representatives of these organizations are not directly elected by popular vote.[2] Democracy is a system that uses mechanisms to establish equality as a principle among human beings, but “however, neither that principle nor those governing mechanisms are present at international organizations. ( … ) The huge pressure that these companies (Multinationals) put on countries and over international organizations goes far beyond the democratic debate.” (Mir Puigpelat 2004, 60-62) This explanation, however, does not justify the realities that are briefly described in the following pages.
Although in the current situation a global system that ensures democratic representation in decision-making is inconceivable, it is feasible to demand that existing international organizations legislate considering the general welfare of all humankind and not (as it is denounced by some authors) based on certain economic interests (Stiglitz 2002, 342). It is upon this premise that the proposal of this book has its foundation.
According to José Eduardo Faria, as an adverse effect of globalization, a phenomenon called legal neo feudalism has been created, which is implemented through a system of international organizations (Faria 2001, 264). This situation, which certainly is a throwback of mankind when compared with the progress of civil rights and rechtsstaat (the rule of law concept) accomplished within countries, must be remedied. Without delving further into this topic—it does not correspond to the analysis proposed in this publication, and to approach it would distract the main focus of study—it must be stated that the principle that should govern the supranational legal creation (as a sine qua non requirement) is always having in mind as a primary and fundamental objective worldwide welfare.
Returning to the matter concerning this publication (having succinctly referred some criticisms about globalization and having briefly stated what should be the corrective to this reality), it is worth recounting how the current global system came to be. When building a new global regulation for intellectual property in general (within it industrial property and specifically the patent system), in the international arena two distinct poles of opinion were formed. Those who advocated (still do) for the strengthening of patentability and its scope, and those that opposed to this approach sought to limit the rights granted by a patent (still do) with prohibition and exclusions. Both these opposed views presented valid arguments, but unfortunately each linked with a greater or lesser extent to their economic convenience to which they adjust the doctrinal criteria and scientific parameters that favored them. At the time this placed a distance between the international arena discussions and a proper academic discussion (still do). There is a clear fact that traces the origin of these economic conveniences, for example from a Latin American perspective: “Less than 2% of global patenting originates in Latin America; 97% of the European and U.S. patents are concentrated in European, USA and Japanese companies. While there is no precise data, it is conservatively considered that in Latin America over 90% of patents have been granted to non-residents and that over 50% of them belong to companies of U.S. origin.” (Kresalja 2001, 206)
Developed countries have always promoted the strengthening of patent protection to stimulate research and development. Also as a result of technologies that facilitated mass reproduction of works and inventions, developed countries promoted more effective regulations that ensure the full enjoyment of intellectual rights, as well as seeking fewer distortions in trade among other objectives.[3] Developed countries argued that there are “difficulties to stop the appropriation of the results of research and development, particularly in the area of new easily copied technologies (such as computer programs).” (Correa 1997, 97) Developing countries, on the other hand, always struggled for more lax protection parameters, searching for the less possible affectation toward their impoverished populations, technology transfer to enable them to overcome underdevelopment, recognition of the value of biological material and genetic resources that exists in their territory, and the value of ancestral knowledge of indigenous peoples among other objectives.
With this general background in mind, the events and phenomena that preceded and led to the signing of the TRIPS Agreement are next outlined. It should be recalled that the proposal contained in these pages encourages the possibility that the positions of industrialized countries and developing countries (whose pretensions and desires are equally valid), revealed in the past as opposite, are not necessarily irreconcilable. Addressing these background facts does not intend to resuscitate old disputes. Its allusion helps to understand the need to adopt the corrective proposed in this study, which comprehends the introduction of a principle that at the time of the construction of the agreement was shelved—proportionality.
Many think that prior to the subscription of the TRIPS Agreement and even more with its subsequent implementation (as a result of the same diplomatic agenda), developed countries managed to impose their objectives and therefore ended as winners (if it could be said as so) in the construction of the international system that currently governs the matter. This has been affirmed by a number of writers. Some quotes in this respect are presented next. Carlos Correa stated the following almost two decades ago:
At the beginning of the last decade, as much as fifty countries in the world did not recognize patent protection for pharmaceuticals. Multinational pharmaceutical companies and the U.S. government (acting under section 301 and ‘Super 301’ of the Trade and Tariffs Act), developed an extensive strategy to alter this situation, which they considered an obstacle to the profitability of the industry and the long-term maintenance of activities of R and D (research and development). The patentability of pharmaceutical products has been accepted by Argentina, Chile, Mexico, Bolivia, Ecuador, Colombia, Peru and Venezuela (the last five countries under a Common Legal system on Industrial Property- Decision 344), and was introduced in Brazil in 1996. Many other countries introduced pharmaceutical patents since the beginning of the Uruguay Round, such as South Korea, Indonesia, Saudi Arabia and China (Correa 1997, 109).
Kresalja stated that developed countries achieved “the incorporation in the TRIPS of the vast majority of legal regulations wanted by developed countries and transnational corporations, which represented for them an unquestionable victory in the international arena.” (Kresalja 2001, 273) In this sense the Peruvian author in relation to Latin America, exposed:
“We cannot fail to mention the fact that most Latin American countries have changed their laws relating to Intellectual Property Rights, whether in the field of droit d’auteur (copyright) or industrial property in recent years, by extending the protection to new fields (such as pharmaceuticals or software), as well as have strengthened exclusive rights and the means available for their implementation. A characteristic of this process has been its considerable speed and the direct influence that industrialized countries have exercised on it.” (Kresalja 2001, 199)
Pedro Roffe, when making an assessment of the approval of TRIPS, stated,
The potential benefits of the Agreement will become more obvious in countries with an industrial and technological advanced basis, where a process of technological innovation already takes place [ … ]. On the contrary the Agreement will result in net costs for a relatively long period of time in those nations with a rudimentary technological development in where the transfer and diffusion of technology is limited and of little or no technological innovation (Roffe 1997, 346-347).
The following quotes of Cerro Prada and Casado Cerviño present alike findings from the perspective of European countries:
The overall valuation of the negotiations outcomes on intellectual property can be classified as positive from the perspective of the European Union and its Member Countries being that with the exception of certain specific issues, the goals of European countries have been met (Casado and Cerro, 78).
From the Spanish perspective, we consider that the general assessment that can be done of the content of the TRIPS Agreement is a positive one. Indeed the new agreement is a balanced text that reconciles different interests that on this matter the major forces on the international arena maintain (the European Union and the United States) and will not have a major impact on the Spanish legislation in the field of intellectual property (Casado and Cerro, 91-92).
Commenting on a broader level about the negotiations (not only in relation to intellectual property), Stiglitz said, “The Western countries pushed trade liberalization for the products that they export, but at the same time continued to protect those sectors in which competition from developing countries might have threatened their economies.” (Stiglitz 2002, 98) Later in his brilliant book Stiglitz stated,
As we have noted, so unfair has the trade agenda been that not only have the poorer countries not received a fair share of the benefits; the poorest region in the world—the Sub-Saharan Africa—was actually made worse off as a result of the last round of trade negotiations.[4]
Regarding patents, even prior to the implementation of the TRIPS Agreement, the terms of protection were extended in the legislations of developing countries that traditionally used shorter terms of protection, adopting the standards of the legislations of developed countries. At the same time the patentable subject matter was spread out to other areas of technology. This change of mind of the developing countries, as will be showed further on, responds to a diplomatic pressure that came from the United States prior to the beginning of the Uruguay Round. These changes were established in developing countries even before the TRIPS Agreement (in terms of the duration of the protection as well as of its characteristics), which paved the way for its later subscription.
Several authors have observed this. “During the 70s there was a wave of amendments in Latin America, particularly in patent laws. However in sharp contrast to the amendments of the 90s, they were intended to limit the scope of patent protection.” (Kresalja 2001, 199-200) In the nineties though, “the patent protection for pharmaceutical products in countries such as Argentina, Chile, Mexico, and the Andean Group was extended.” (Correa 1997, 101-102) When the TRIPS Agreement was going to be implemented, Carlos Correa wrote,
To this day, the duration of patent rights has not been subject to any international regulation. Historically the laws of developing countries (as was the case for example of previous regulations of the Andean Group) have had a tendency to confer protection periods lower than developed countries. This has substantially changed; the Latin American countries that have amended their patent law have adopted the minimum regulations of the TRIPS Agreement, i.e., twenty years from the filing date (Correa 1997, 113).
“The universalization of the minimum standards of protection, which will be strengthened with the TRIPS, means the incorporation of less developed countries to the protection already applied in industrialized countries which is significant in areas such as software, semiconductor, pharmaceuticals, etc.” (Kresalja 2001, 200) Regarding patentable subject matter, the Belgians Desterbecq and Remiche commented about how pharmaceutical products in developing countries were excluded prior to the signing of the TRIPS Agreement, and how at a time they were excluded in European countries too.
In fact, until the late eighties (1980) pharmaceuticals were very often excluded from patent protection in developing countries. These countries justified their position concerned with avoiding restrictions of the supply for indispensable products and even under ethical considerations [ … ] many industrialized countries had introduced the drug patenting in their legislation just from the moment that their industry had reached a certain degree of development; such as the UK in 1949, France in 1960, Germany in 1968, Japan in 1976, Switzerland in 1977, Italy and Sweden, in 1978 (it is important to say that Spain and Greece started granting pharmaceutical patents from the year 1992) (Remiche and Desterbecq 1997, 262-263).
Traditionally developing countries (especially Latin Americans) have “strongly questioned the role of intellectual property (particularly patents) in economic and social development aspects,” while developed countries see in this kind of protection the way toward development. (Remiche and Desterbecq 1997, 108) As it will be showed up next, many studies questioned (and still do) the possible positive effect of the protection of pharmaceuticals, while others stand out for it.
According to Remiche and Desterbecq (based on Braga), the protection of pharmaceuticals “generally speaking, does not help but instead obstruct technological industrial development and makes the supply of first necessity products difficult [ … ]. The experiences of Argentina, Costa Rica and Turkey have been presented in various studies, as cases in which the abolition of patents was decisive for the expansion of the local pharmaceutical firms.” (Braga 1997, 49-50). On the other hand, adequate studies to argue for the protection of pharmaceutical industry were made at the time and still continue to be done. For example, “according to calculations made by the United States International Trade Commission, the pharmaceutical field was one of the industries with greater loss due to deficiencies concerning intellectual property”[5] (Braga 1997, 109).
Despite this obvious difference of opinions, the debate was opened. On the stage prior to the negotiations of the TRIPS Agreement as well as at the time of the negotiations that concluded with its genesis, this underlying dispute was present and still is. As shown in the second chapter, the key to bring these seemingly irreconcilable criteria together is for the negative aspects that come from the protection of inventions to be assumed proportionally among the different countries, taking into account their economic conditions. Thus, mankind may even offer more and more effective protection, obtaining as a whole the benefits of the positive aspects of the worldwide protection.
Regardless of the previous consideration, the debate was raised. As it was already stated, prior to the subscription of the TRIPS Agreement these two opposite positions were brought together, always toward the goals identified with the interests of developed countries. According to some legal authors, those interests were imposed either by bilateral agreements or even by unilateral pressures. Referring to Latin American laws, Carlos Correa denounces a “direct influence of industrialized countries to define new rules on Intellectual Property adopted in the region.” (Correa 1997, 96) As it will be discussed in the historical account that is further briefly referred, undoubtedly the lobbying of developed countries was more effective, especially the one of the United States. “Particularly the legal system for the protection of inventions has been expanded and extended often influenced by the laws of the United States, given the active role that this country has played in modeling international regulations on this matter.”[6] According to Perez Miranda, these are some events that show how this political pressure was produced:
The United States has a long experience in this system of meddling in other countries national laws, applying the clause that is called Super 301 corresponding to their Foreign Trade Act. In the eighties Reagan threatened to close its borders to Brazil’s coffee exports if a law on technological development was sanctioned in this country, being that it was considered harmful to the economic interests of United States companies. This threat was not made by the confidential diplomatic traditional media, but in a radio broadcast. [ … ] The U.S. ambassador in Argentina made a public declaration in 1991 claiming that for certain facilities to be granted to that country in the renegotiation of the foreign debt, its legislation on intellectual property had to be amended. His successor threatened with divestment if the legislation that had passed in 1994 was not changed (as they did not fully contemplate the interests of transnational pharmaceutical companies) which resulted on him being declared a non grata person by the Argentine Council. Although in a more discreet manner, Mexico also yield to the pressures both when conducting negotiations on external debt as within the negotiations linked to the Free Trade Agreement with Canada and the United States of America (Pérez 1997, 226-227).
Being that the present dissertation’s main objective is to approach the two groups that so far have been distinguished as opposed (developed and developing countries), only a brief description of how some authors believe an interference took place is outlined in the previous and following paragraphs, so to highlight the existence of these criteria. Now it’s time to let go of old disputes. This book argues for a renewed global agreement taking on account global welfare and the points of view of both developed and developing countries.
In 1974 in the United States a regulatory act was created called the Trade and Tariffs Act, in which section 301 established a permit to the United States executive power (previous verification) to “establish measures of unilateral trade retaliation in cases where it considers that the intellectual property rights of American citizens are not adequately protected in other countries [ … ] that pressure led to the signing of a significant number of bilateral agreements between the United Sates and a number of countries that agreed to establish certain levels of intellectual property protection.” (Bercovitz 1997, 17) Some have argued that the economic power of the United States in relation to the epoch, made it possible that the mere suggestion of trade retaliation could be used as a powerful instrument of persuasion, even though if retaliations did not ever came to be.[7]
Another pressure system was to “exclude countries from the Generalized System of Preferences (GSP), 19 USC 4211-4216, established in 1974 and updated with amendments as part of the International Trade and Investment Act of 1984,” to those who do not provide “adequate and effective protection” to US intellectual property (Correa 1997, 103-104). A more direct and explicit method was used in the case of Caribbean countries, which was crystallized through Caribbean Basin Economic Recovery Act of 1983.
It is argued that because of this pressure in Latin America, changes motivated by the United States were crystallized even before they were established in the TRIPS Agreement. Correa wrote, “Most Latin American countries have already matched to a great extent their legislation with the new international regulations emerging from the Uruguay Round of GATT, despite the transition period available under the TRIPS Agreement. These changes in the legislation have been induced in general by claims and actions taken by governments and foreign associations, especially the USTR (United States Trade Representative)” (Correa 1997, 126)
As stated by Carlos Correa, the introduction of these amendments in Latin America was not peaceful. “Legislative changes found considerable resistance in some countries particularly in the area of patent law. Such resistance cannot be attributed simply to the intention to copy freely (hacking) foreign technologies, but key differences to the philosophy underlying the patent system and the advantages and disadvantages of harmonization of intellectual property rights.” (Correa 1997, 126)
However the regulations were unified in a multilateral agreement (even with imposition), the important thing is that it was done.[8] Banishing the negotiations on intellectual property from the bilateral field constituted an irrefutable worldwide victory, even though some think the multilateral forum in which the basic agreements that currently govern were established was not the most appropriate. Bercovitz states that the TRIPS Agreement “integrated into a multilateral agreement the approximately fifty bilateral agreements that had already been signed by the United States.” (Bercovitz 1997, 17) To isolate the regulation of intellectual property from the disparities that can come from the vortex of bilateral agreements and unilateral pressures, directing its discussion toward a multilateral field, is undoubtedly a positive element that is worth noticing.[9] Today within the multilateral arena, efforts should be joined to bring more effectiveness and justice to the regulations that have been issued. These are valid objectives for both developing countries and developed countries. As it is analyzed in the next chapter, the establishment of the TRIPS Agreement has provide intellectual property rules a virtually universal validity. What must be strengthened is its justice and effectiveness.
It has been argued that there was a deliberate change of international forum induced by developed countries. Many authors have referred to this phenomenon. For example, Dhar and Rao stated that developed countries are “the main actors of the inclusion of intellectual property rights in the WTO negotiations.”[10] Similarly Perez Miranda stated, “Developed countries managed to move the debate of the international patent legal system to a field that resulted more favorable for them, the Uruguay Round of the GATT, which culminated in the establishment of the World Trade Organization.” (Pérez 1997, 224) In the same way Correa explained, “Some industries in those countries (mainly software, semiconductors, phonograms and pharmaceutical industries) actively promoted the adoption of new intellectual property rules in the GATT, in order to make possible the economic benefit that a quasi universal protection of these rights could generate.” (Correa 1997, 101)
Before these aspects where discussed in the GATT/WTO, intellectual property issues where being addressed in an international agency linked to the United Nations, whose central purpose is intellectual property—WIPO.[11] WIPO was created in 1967, although its history dates back to 1883 with the adoption of the Paris Convention and then also to the Berne Convention. It was recognized as a nongovernmental advisory corps of the United Nations on December 17, 1974. From a conceptual point of view, this was the appropriate forum to generate global agreements of greater impact.[12] Nonetheless, this forum failed.[13] Because of aspects of political convenience or practical matters, WIPO was left aside.[14] Under “the necessity to find new solutions adapted to the global market situation and to the protection of the interests at stake (especially in developed countries) there was a change of forum and that change was to integrate the negotiations on the protection of Intellectual Property Rights within the GATT [ … ] This change was accompanied by the growing interest of American business circles for the protection of Intellectual Property Rights.” (Bercovitz 1997, 16)
The same way as with the earlier recount of the influence on developing countries of some developed countries on the stage prior to the negotiations of the TRIPS Agreement—being that the present dissertation pursues an approach between two groups that so far have been distinguished as opposites (developing and developed countries)—the fact of this change of forum is just briefly outlined to highlight the main fact of its existence. So even with all the conflicting opinions that this issue could raise, the fact is that the forum changed to the binomial GATT/WTO in which the establishment of an indeed necessary global agreement was effectively settled. It is time now to turn the page, and based on the current scenario within the worldwide forum in which the global agreement governing the matter was established, the international community must seek a quality leap in terms of the axiological content (justice) of the regulation. At the same time, mankind should seek to strengthen its effectiveness. Within this forum (the WTO), this quality leap should be sought. Only if the necessary axiological (justice) changes are not materialized within this forum, the efforts should continue elsewhere.
Something that is a major weakness of the global agreement governing the matter is that it was developed taking into account almost only commercial issues. (The very title of the agreement shows this conceptual shortcoming—Agreement on Trade Related Aspects of Intellectual Property Rights.) Other vital aspects were ignored. In the WTO forum, the regulations of intellectual property were seen as one more component of trade “which is still surprising and disturbing.” (Remiche and Desterbecq 1997, 264) As a result of it, the major failures that can be found in the current system are produced; however, they can and should be corrected within.
Those who pushed the inclusion of issues of intellectual property in the negotiations of the Uruguay Round of the GATT argued in their favor because an unequal treatment of the legislation of intellectual property in the different countries meant an obstacle for free trade. Even though the commercial objective before accounted, some claimed that the change of forum responded to a deliberate intention of not putting the discussion under the rules of WIPO, being that “developed countries have less impact there as a group of power.” (Remiche and Desterbecq 1997, 264)
Undoubtedly under the progress of communications, the phenomenon of globalization, and the growing international commerce of the products intellectual property protects, intellectual property inevitably had to be regulated by a more effective global legal system that the agreements so far produced (those of Paris and Bern). The WTO proved to be the forum in which it was possible. Within the trade forum of the Uruguay Round, which led to the establishment of WTO and the TRIPS Agreement, only the aspects of intellectual property in relation to trade should have been included, leaving the others to WIPO.[15] However, to set this limit was proven to be impossible.[16] Even though the intention was not to exceed this limit (this can be seen from the very title of the TRIPS Agreement —“Trade Related”), the very essence of intellectual property rights and within it patent regulations were inevitably reshaped. Thus the limit was surpassed, unfortunately mainly from a trade perspective without taking into account other issues.[17]
Thus, a global legal system for the protection of intellectual property was embodied in the imminently commercial conception of the WTO, which at the end had positive and negative connotations. The establishment of a global system of protection for inventions is positive because it was necessary—the agreement was only possible under the WTO—and it banished in some degree the bilateral negotiations.[18] Secondly this agreement is a relatively adequate tool to prevent trade distortions of immaterial goods. A high degree of global harmonization, a universal validity, and a relative global effectiveness has been achieved under this agreement (although work on its justice is needed).[19]
On the other hand, it is a shortcoming of the TRIPS Agreement that its regulations are centered in the economical and commercial aspects of intellectual property.[20] This is a result of the forum in which the negotiations took place.[21] To a very large extent, other vital aspects related to the system of intellectual property protection were ignored at the time of its conception. Having structured the system for protection of inventions from a trade perspective represents an error, though it is amendable.
The WTO promotes free trade of services, material goods, and intangible assets (intellectual property), which is consistent with its purposes.[22] That is why it is important for the WTO to achieve a scenario that allows the free movement of such products without distortion. It is also important for the WTO the effective exercise of intellectual property rights. Still it was not appropriate for it to regulate them.[23] The technical supranational body for the purpose should have been the one in charge (WIPO).
It is clear that the organization that governs trade-related aspects should have some influence in the construction of intellectual property, even beyond advocating for a system that avoids trade distortions. This is obvious because by determining the matter and the scope of a patent, the type of right that will integrate the market will be shaped. It is therefore logical that the WIPO and the WTO (each in its sphere of competence) coordinate actions regarding the protection of intellectual property rights.[24] Unfortunately this relation, which should have been marked by the supremacy of WIPO regarding the conceptual determination of intellectual property rights, was established the other way around.
In order to emphasize what was expressed before, it must be taken into account that the purpose of the previous review related with the change of forum does not pretend to stoke the rivalry between the two poles of opinion that has been created but to understand the effects that this historical fact has brought with it. It should be recognized that even though the WTO regulations on intellectual property (the TRIPS Agreement) has its shortcomings (because its regulations have an impending commercial content relegating other vital aspects, and therefore consequently compromising its righteousness), it still raised important advantages concerning its global validity and effectiveness.
Rules from WIPO wouldn’t have had coercive power, while the regulations issued under WTO and its predecessor the GATT Agreement do. Through dispute settlement mechanisms and the establishment of compensations for failure to comply the obligations of the WTO (which is discussed in the next chapter in regards to the effectiveness of the regulation; see chapter 2.3. Effectiveness), global regulations governing the matter have found their effectiveness. Furthermore (as also discussed in the following chapter; see chapter 2.1. Validity), the rules of the TRIPS Agreement have found an almost universal validity.
Be that as it may, the forum changed, and negotiations began. Within this forum (as outlined by Casado Cerviño and Cerro Prada) during the special sessions held in Punta del Este in September 1986, the ministers representing the countries that formed the GATT decided to launch multilateral trade negotiations (the Uruguay Round), creating with that the Trade Negotiations Committee. These negotiations began on October 31, 1986, and had to conclude in a term of four years, meaning 1990. Nevertheless, because of a lack of concrete results, this period of time was extended to 1993 (Casado and Cerro 1997, 75).
Bercovitz (supported by Gust Ledakis and André Francon) states that these negotiations were not public and therefore there are no records of its evolution, which makes difficult the interpretation of the result (Bercovitz 1997, 18). The negotiations under the Uruguay Round were directly carried out between the different countries participating in it, which marks a transcendental difference to what happened in the context of WIPO, where negotiations are carried through its general secretariat. “The negotiations at WIPO are always done through its General Secretariat, while in the GATT were made directly between participating Countries and especially among the most important of them.” (Bercovitz 1997, 18) This created a dark cloak over the Uruguay Round in which no records were kept of the progress for the negotiations.[25] The only documentary reference there is is a text titled “Draft Final Act,” which incorporates the results of the Uruguay Round of multilateral trade negotiations, known as “Dunkel text” (named after the former director of GATT, Arthur Dunkel —it results an ironic coincidence that the name that was given to this document means obscure in the German language).
As expressed, when the delegates of different countries where trying to regulate the aspects related to trade of intellectual property, “the first difficulties came when determining what these aspects were or what property rights can be linked to trade.” (Casado and Cerro 1997, 77) This limit ended up being too vague. This had an impact in that beyond avoiding trade distortion or by doing so, the very substance of patent regulations was affected—unfortunately from a purely trade perspective.
The initial phase of the negotiations should have had (as it happened) several steps that included on one hand the identification of trade distortions related to problems of intellectual property protection. On the other hand the identification and study of the relevant provisions of the GATT, its applicability, adaptability and the elimination of trade distortions detected. And third, the presentation and analysis of proposed procedures and techniques that could be used to eliminate identified trade distortions. (Casado and Cerro 1997, 75-76)
With the scenario set up this way, negotiations were initiated. Obviously the matter was handled as a politically. The different countries participating in the negotiations and looking forward to ensure the interest of their people tried to obtain maximum benefits. Many argued that the agreements were reached by granting intellectual property protection regulations in exchange for trade advantages of agricultural products or services. This does not sound far from the truth (though not absolutely technical) since under this forum intangible goods are considered as part of international trade.[26] To this end, every diplomatic tool available was used, as well as strategies of the most varied nature.
As an example, it is worth bringing up an event that took place in the nineties in the United States, an event that revealed the impact that the Uruguay Round held on the internal politics of that country facing the negotiations being carried in the GATT. Under the growing concern over drug prices within the United States, a law called The Pryor Bill was being discussed. It was a law that aimed to establish limitations on intellectual property rights in regard to pharmaceutical products to alleviate the crisis in question.[27] Taking this into account, some voices within the United States rose up in warning, “The fact that the United States is undermining its own patent protection, will encourage developing countries to resist the strengthening of intellectual property in their regulations and therefore depriving companies of the United States of the benefits and earnings of such protection.” (Barfield and Beltz 1995, 13-14) This mainly responded to the forum in which the agreements were established where the products of the intellect protected by intellectual property regulations were treated as any other commodity. In the case of patents, the United States sought to project to the international negotiation a protection scheme of wide subject matter and prolonged term duration without taking into account the internal criticisms concerning the effect that this protection produced to its own population.[28]
The same way, developing countries governments took into account their own practical necessities. “If developing countries eventually agreed to negotiate under the GATT and committed to increase intellectual property protection in their territory, it was actually due to reasons that were not related to a change in philosophy about intellectual property.” (Remiche and Desterbecq 1997, 266) As stated by the author Gomez Segade:
“The TRIPS Agreement has produced a decoy effect for developing countries and least developed countries, when adhering massively to the WTO ( … ) and indeed TRIPS has something that attracts these countries that is the possibility to obtain commercial advantage and benefits from foreign tariff reductions. In exchange for this expectation of benefits, they have committed to increase the protection of intellectual property, which hardly fits their economic structure and that can cause them damage: an increase in the prices of goods protected by intellectual property rights. (Gómez 1995, 77)
The previous account is brought to attention because this situation—as part of global geopolitics—invites the world to reflect on it. The state of things today is the result of a historical evolution that should be understood and accepted as such without looking back. But if the time comes and fair pretentions proposed to correct the current system are not embraced, the recognition of intellectual property rights in some extent and even the legitimacy of international institutions could be conditioned (as indeed is happening) to the recognition of such fair aspirations. Fair aspirations must be understood not only from a developing country’s perspective but from an account of a developed country’s population’s well-being too. This is not intended at all as a call to international disobedience but seek to encourage the analysis to prevent it from happening. Humankind is in a historical moment of the utmost importance. The chance of conceiving a healthy globalization shouldn’t be neglected.[29]
From today’s perspective, the way the global agreement governing the matter came to be should be understood as a questionable but unchangeable reality in the historical evolution of intellectual property protection, and within it the international community could find the appropriate corrective measures for the future.
Another key feature of the TRIPS Agreement is that the WTO will be the forum for further negotiations aimed to obtain more demanding commitments in the field of intellectual property [ … ] this is not intended to be a static tool but one capable of evolution. The Council for TRIPS will undertake a global review of the Agreement after five years, but it also has the power to demand its revision at any time in the presence of relevant new events which may require its modification and amendment. (WTO Secretariat 1997, 410)
Even though the malleable nature of the rules that protects inventions enables a complete revision of the regulations contained in the current global system, this book does not seek to ignore the already obtained agreements. It looks forward to optimizing them, taking into account the interests of developed and developing countries with the introduction of one change.
This publication (supported in the analysis presented in the next chapter) advocates for one change or corrective for the worldwide protection of inventions, while it also respects all previous agreements—the introduction of proportionality. Now that the agreement is established, implemented, and organically functional, the discussion to make it better for all of humanity must be brought up to a higher level, to an academic sphere. Unlike what happened at the time of its subscription, particular interests should not be present—at least not only particular interests should be present.[30] This book’s academic approach involves reviewing the worldwide regulations’ validity, effectiveness, and justice (as mentioned in the concept note of this publication). Proportionality is the answer.
[1] “Many other experts argue that the TRIPS Agreement is the most important instrument for the protection of intellectual property developed in the twentieth century,” (Kresalja 2001, 202). Kresalja further states that it transcends (in a quantitative and qualitative manner) the level of protection of Paris-Bern.
[2] “Unfortunately, we have no world government, accountable to the people of every country, to oversee the globalization process in a fashion comparable to the way national governments guided the nationalization process. Instead, we have a system that might be called global governance without global government, one in which a few institutions—the World Bank, the IMF, the WTO—and a few players—the finance, commerce, and trade ministries, closely linked to certain financial and commercial interests—dominate the scene, but in which many of those affected by their decisions are left almost voiceless.” (Stiglitz 2002, 51-52)
[3] “In this sense, studies in the U.S. show that the country loses between 40,000 and 50,000 million dollars in commercial transactions by inadequate and insufficient protection of intellectual property rights (…) have provoked a reaction from more developed countries, wishing to strengthen protection and transfer this matter to the realm of trade, and they consider that this objective can meet better prospects of success within the GATT.” (Casado and Cerro 1997, 75)
[4] This comment does not refer specifically to the TRIPS Agreement but generally to the Uruguay Round, but much of this reality that Stiglitz has criticized relates with this agreement too. (Stiglitz 2002, 339)
[5] Further ahead in this analysis as support of what was said in this quote, Remiche and Desterbeq refer the following studies of the World Bank: H. Saxenian, Getting the most of pharmaceutical Expeditures, Working Paper No. 37, The World Bank, 1994, y G. Dunkes y D. Broun, Pharmaceutical Policies: Rationale and Designe, Working Paper No. 35, The World Bank, 1994 (Remiche and Desterbecq 1997, 255-256).
[6] “These changes are strongly influenced by the trends of U.S. law, given the active role this country has played in modeling international regulations on intellectual property.” (Correa 1997, 97)
[7] “Trade retaliation were actually applied only against Brazil, due to the non-recognition of pharmaceutical patents […] Brazil complained to the GATT referring to these reprisals, for which it received a vociferous support from other members of the GATT” (Correa 1997,103).
[8] “The struggle for multilateralism is really the struggle for a new international economic order, in which the issues that are part of TRIPS will have significant presence,” (Kresalja 2001, 206).
[9] Bercovitz states that “developing countries, threatened by unilateral measures of retaliation, considered better to establish regulations in a multilateral convention to avoid unilateral measures continue to be applied.” (Bercovitz 1997, 118)
[10] “A link between intellectual property rights and trade was established through the effect resulting of controlling counterfeit products.” (Dhar and Rao 1997, 132)
[11] “Until then, the forum of negotiations related to intellectual property rights was WIPO (the World Intellectual Property Organization). This is a UN agency that specializes in this area and that had a long history in the matter since it was created in 1883 following the adoption of the Paris Union Agreement (which was precisely about patents), and under which sponsorship had been revised several times.” (Correa 1997, 264)
[12] In relation to intellectual property, the essential issue that should have concerned the countries that were part of the GATT and then became WTO members was to avoid an unequal treatment of intellectual property regulations within the different countries so that this did not end as an obstacle to free trade. In this sense, this forum (GATT/WTO) should have asked WIPO (the organization that until then was responsible for the management of international intellectual property as the UN global technical agency established for that effect) the creation of proper global rules and regulation to ensure this objective but not to be in charge of the regulation itself. Even with strong opposition, this task was assumed in this forum.
[13] “A first important attempt to harmonize substantive patent law was initiated by WIPO in 1984, with the ambitious objective of adopting a ‘Treaty Supplementing the Paris Convention as far as Patents are concerned’, which would have dealt with issues ranging from the right to obtain a patent to modalities for claim interpretation. This first failed as a result of many North-South divergences as well as of some key disagreements among developed countries. While developing countries were reluctant to accept treaty rules that would erode their capacity to design national patent regimes, the United States also decisively contributed to the collapse of negotiations.” (Correa 2005, 24-28)
[14] Casado Cerviño and Cerro Prada state that the debate moved toward trade forums such as GATT “normally away from these issues.” They continue, “The growing importance of Intellectual Property in international economic relations has generated as an additional effect that discussions, work and decisions in this area have moved to trade forums such as GATT.” (Casado and Cerro 1997, 74)
[15] “Despite the general statement from the beginning of the negotiations, a first fundamental problem of political nature was raised: the role of the World Intellectual Property Organization (WIPO) in this work. Developing countries (DC) have always defended that the (WIPO), as a United Nations Agency specialized in intellectual property issues, should assume responsibility in this area, and therefore the work of standards and Intellectual Property Rights protection should only be done within WIPO. Developed countries (on the contrary) claim that at least certain aspects of Intellectual Property Rights protection should be discussed within the GATT.” (Casado and Cerro 1997, 76)
[16] “On the other hand, it was agreed that the group negotiations within the GATT had a clear mandate: to discuss aspects of intellectual property rights related to trade. But the first difficulties started in determining which were those issues or which property rights can be linked to trade,” (Casado and Cerro 1997, 77)
[17] “The agreement on intellectual property rights resulting from the negotiations of the Uruguay Round is vast and ambitious: it regulates most of the issues pertaining to industrial property, literary and artistic products, and not only, as the title would make you think, issues relating to international trade.” (Remiche and Desterbecq 1997, 265)
[18] “The US and the EU are working hard to generate bilateral agreements and free trade areas, as mechanisms to bypass international treaties and to set up more stringent IP relationships with a number of smaller countries.” (Sulston 2006)
[19] As it will be mentioned in chapter 2, the introduction of justice to the system of protection of inventions will contribute to strengthen its effectiveness.
[20] Desterbecq and Remiche state that “it is somewhat ironic that the liberalization of international trade is now pursued through the global strengthening of the monopoly of one of the most important factors of production: knowledge,” and “if before they were perceived on international trade as private national monopolies, today they are perceived by those nations as the guarantors for that type of trade.” (Remiche and Desterbecq 1997, 284)
[21] The treatment of intellectual property had an unexpected twist even in this forum. Previously Article XX of GATT allowed protecting intellectual property, provided that there were no distortions and restrictions on international trade or discrimination between the parties. Desterbecq and Remiche affirm that prior to the change of forum the regulation in the GATT about intellectual property was brief and rarely applied. At that time intellectual property rights were conceived as exceptional barriers to international trade.
[22] “Although theoretically free trade is not among its objectives, in practice, the WTO is a forum where Member States seek agreements to reduce tariffs and thus trade liberalization, and which solves any trade disputes that may arise among its members regarding the agreements reached.” Wikipedia, the free encyclopedia, Spanish edition of Wikipedia, started in 2001. http://es.wikipedia.org/wiki/Organización_Mundial_del_Comercio, July 16, 2008. This source is quoted not because of lack of resources on the subject but as a special recognition to the Wikipedia phenomenon, which comes from the increasingly spread principle of free access to information. “Imagine a world in which every single person on the planet is given free access to the sum of all human knowledge. That’s what we’re doing,” J. Wales, funder of Wikipedia.
[23] “The nucleus of the philosophy that permitted to negotiate the TRIPS: this means intellectual property forming part of the international market and so it must be negotiated in this context” (Bercovitz 1997, 17)
[24] Effectively it came to be as so: “To facilitate the TRIPS application the Council has made an agreement of cooperation among this organization (WIPO) and the global organization (WTO), that was effective since January 1, 1996,” (WTO Secretariat 1997, 407)
[25] About the international institutions in general, Stiglitz explains: “Such organizations are opaque rather than transparent, and not only does far too little information radiate from inside to the outside world, perhaps even less information from outside is able to penetrate the organization. The opaqueness also means that it is hard for information from the bottom of the organization to percolate to the top.” (Stiglitz 2002, 64-64)
[26] As said by Remiche and Desterbecq, when intellectual property is considered as any other commodity, it is a mistake “which is surprising and disturbing.” This phrase has been quoted more than once because of its explanatory quality. (Remiche and Desterbecq 1997, 264)
[27] “Congressional critics of pharmaceutical companies are again pressing them to slow the rapid rise in drug prices, which is running at 10.2 percent, or three times the general inflation rate. […] Senator David Pryor, the Arkansas Democrat who initiated the 1990 law that requires drug makers to give rebates to state Medicaid programs, introduced a new proposal last week.” (Freudenheim, Milt 1991)
[28] A journalistic account of the criticism that this protection scheme produced within the United States (mainly for older people in terms of access to medicines) can be found in the book by Merrill Goozner titled The Pill of 800 Million Dollars. An interesting fact that this journalist details in his research is that in the United States the pharmaceutical “industry had also deployed more than six hundred paid lobbying members at the Capitol; more than one for each senator and representative.” A similar lobbying is undoubtedly reproduced internationally (Goozner 2004, 9).
[29] “If globalization continues to be conducted in the way that it has been in the past, if we continue to fail to learn from our mistakes, globalization will not only not succeed in promoting development but will continue to create poverty and instability. Without reform, the backlash that has already started will mount and discontent with globalization will grow.” (Stiglitz 2002, 343–344)
[30] “The international economical justice requires developed countries to take measures to open fair trade relationships with developing countries, without using negotiations to try to obtain concessions in return. The European Union has already taken some steps in that direction.” (Stiglitz 2002, 340-341)”