Tuesday, October 26, 2010

ITSSD 'Geneva Diary' of the Proceedings of the 15th Session of the WIPO Standing Committee on the Law of Patents Reflects Developed Country IP Rights Under Third World Assault

[The ITSSD, an ad hoc observer to the WIPO Standing Committee on the Law of Patents (SCP), recently attended the 15th session meetings of the SCP that took place during October 11-15, 2010 in Geneva, Switzerland.  As an ad hoc observer, the ITSSD heard, observed and contributed to the discussion during the SCP's Plenary sessions.  The ITSSD has transcribed its notes of these Plenary sessions to the best of its ability in the interest of providing a reportage of the proceedings for the public interest. The ITSSD acknowledges that its 'Diary of the Proceedings' is incomplete and reflects in some cases a summary of the statements made by particular delegations; but it does provide an accurate assessment of those discussions the ITSSD was able to gather and report.   To assist the reader in better understanding the context of those discussions the ITSSD has provided annotations containing SCP/WIPO document references and, in some instances, excerpts of those documents.

As noted above the ITSSD intervened in the discussions at various points.  However, since those interventions were made in a contemporaneous and impromptu fashion, they are not fully reproduced in this Diary.  The ITSSD has been assured that its interventions (or a summary thereof) have been recorded by the SCP and will be transcribed and incorporated within  the Secretariat's Report for the SCP's 15th session.  This is the first time that the ITSSD attended SCP session meetings.  The ITSSD will strive in the future to improve its reporting capabilities.]

ITSSD Geneva Diary
 15th WIPO SCP Plenary Session
October 11-15, 2010
Geneva, Switzerland

Day 1 - Monday, October 11, 2010 (Full day session):

A coordination mechanism with the WIPO Committee on Development and Intellectual Property Rights (CDIP) is being developed and is in the process of being added to the agenda and work plan.

The Draft Report of the SCP’s 14th Session is adopted.

The French delegate questioned the adding of a new agenda item.

New additions include the following documents:


Discussion was begun on Agenda Item 5B - SCP document SCP/13/3 – “Exceptions and Limitations to the Right”, SCP/14/7 and SCP/15/3.

Brazilian Delegate took to the floor:

There is no proposal for harmonization of international patent law, yet there are interconnections.  All studies submitted to the SCP must be of high quality and balanced. We wish to make a new proposal: All studies must reflect development dimensions. Member states studies and comments should be separately collated.  The Development Agenda should be incorporated within SCP reports.  Member countries did express views on this matter; e.g.: SCP/15/Add./2 relating to the status of the list of non-exhaustive list of issues its relationship to the Development Agenda. The SCP must approach its work in a manner supportive of the Development Agenda and provision and policy space must be made for development goals. Member countries need not agree on the contents of the report; their views need only be taken into account. This must itself be reflected as a new agenda item.  The Brazil Proposal for a work agenda should be considered again during this session – immediately.  [See for reference prior document WO/GA/31/11 Add. – “Proposal by Argentina and Brazil for the Establishment of a Development Agenda for WIPO” (Oct. 4, 2004).] As concerns Agenda Item 5B [“Exclusions from Patentable Subject Matter and Exceptions and Limitations to the Rights (documents SCP/13/3, SCP/14/7 and SCP/15/3], we refer to the proposal to advance progress on the issue of exceptions and limitations to the right.

The African Group Delegate took to the floor:

The delegate agrees with the Brazil proposal in respect of exceptions and limitations to patent rights (SCP/14/7). The attorney-client privilege issue should be addressed at the national level. As concerns patent information disclosure, PTO office efforts are needed to strengthen the capacities of national patent offices to foster increases in the dissemination of knowledge, technology investment and technology transfer.  Such capacity building must be user-friendly, development oriented.  Capacity building is needed to foster technology transfer in LDCs based on WTO TRIPS Article 66.2, which requires developed countries to provide assistance to developing companies to develop technologies.  Joint ventures and other collaborations with universities, etc. are necessary to foster technology transfer. The non-exhaustive list of issues should remain open for discussion and issues should be added – e.g., a) the impact of the patent system on LDCs and food security; b) the proposed preliminary study on publish health.

The Slovenian delegate, on behalf of the Baltic States, commented that the move towards harmonization should rely on existing SCP reports.

The Belgian delegate speaking on behalf of the EU 27 took to the floor:

The EU confirms its commitment to the SCP and its recent reports – 4 new reports, and is thankful for the new Expert Study on Exceptions and Limitations to the Patent Rights.  It wants to discuss these issues at this session.  International harmonization of patent law should take place through this committee and a balance work plan sought. Third World consideration should be given before each subject is selected for a work agenda.

The Mexican delegate, speaking on behalf of the Group of Latin America and Caribbean Countries (GRULAC), took to the floor.

The recent studies provide a good point of departure for debate. A balanced work program is needed. The Brazil proposal on Exceptions and Limitations to the Patent Rights provides a good basis for discussions on the issues to achieve a balanced patent system. The SCP must make progress on topics set forth by developing countries in terms of implementation.

Presentation by Professor Lionel Bently, Herchel Smith Professor of Intellectual Property Law, Centre for Intellectual Property & Information Law, University of Cambridge.

[Professor Bently was commissioned by the SCP during January 2010 to lead a group of experts in preparing an external “study on exclusions, exceptions and limitations focused on, but not limited to, issues suggested by members, such as public health, education, research and experimentation and patentability of life forms, including from a public policy, socio-economic development perspective, bearing in mind the level of economic development, [t]aking into account the discussions at the thirteenth session of the SCP… See SCP/14/INF/2 (Jan. 26, 2010)]

Exclusions from patentability serve the purpose and are equivalent to defining the scope of a patentable invention.  For example, there is the EU exclusion for "discoveries" per se, while inventions applying "discoveries" are okay.  Sometimes an exclusion from patentability is a convenient way to address problems with patenting certain subject matter – e.g., due to the novelty of the invention or due to the difficulty in ‘disclosing’ the invention.  They may also be useful where there is a problem with searching prior art relating to the invention – e.g., software programs and business methods.  In other words, where there is an inability to search for ‘novelty’, as where there is no system in place to search novelty from the prior art.

If an invention is excluded from patentability, there is sometimes protection afforded by a separate intellectual property right – e.g., computer programs, aesthetic creations and plant varieties are adequately covered by copyright and/or the UPOV [The International Union for the Protection of New Varieties of Plants (UPOV) was established by the International Convention for the Protection of New Varieties of Plants (“UPOV Convention”). The UPOV Convention was adopted on December 2, 1961].

The existence of some exclusions also reflect economic cost-benefit analysis, especially with respect to reducing ex post costs without affecting the ex ante incentive.  Inventions are not necessary where other incentives are provided – e.g., business method patents.

There is also a social dimension to exclusions as in the case of ordre public and morality exclusions.

Furthermore, there are ‘countervailing interests’ (‘public interests’) as in the case of trade, health, competition, education, privacy, customary expectations.

Finally, there are exclusions necessary for the working of the patent system – e.g., ‘experimental use’.

Private uses exemptions vs. public uses.  Such uses can be accommodated by both exceptions and exclusions:

-protection elsewhere;
-patent protection too costly;
-undesirable invention;
-countervailing value/interest

Exceptions can meet the same policy goal as exclusions, but they are more permissive.

Software programs’ patentability may be permitted but subject to broad exceptions.

Exclusions offer certain benefits: 1) offer real clarity; 2) ex ante awareness.

Dangers of Exceptions:

1)         Users placed on the back foot (burden of proof against the user);

2)         Traditions of restrictive interpretation;

3)         A broad interpretation of patentability narrows the public domain – courts will read back from an exception a broad rule of patentability.  In the Bilsky case, the        US Supreme Court majority declined to recognize an exclusion from business            method patentability because of the availability of exceptions.

4)         There is a danger of ‘private-ordering’.  Similarly, copyright owners seek to limit            the application of exceptions via private contracts that subvert exceptions.

Problems of Exclusions:

1)         Most depend on the resources and capacities of patent examination offices;

2)         They are rather blunt instruments;

3)         They convey a lack of clarity in certain cases – there are continuing problems with computer- implemented inventions;

4)         They depend on patent office examination;

5)         International granting.

Benefits of Exceptions:

1)         Avoid use of resources of patent examination offices – they are easier if a national government lacks the resources [SERVES AS A ‘DEFAULT MECHANISM’]

2)         They allow for nuance, by organizations, payments, by whether profitable, etc.

3)         Enforced by the courts, rather than by the patent office (i.e., no ex ante enforcement by PTOs);

4)         There is room for local diversity;

Conclusions for National Legislatures:

In some cases exclusions are the only way to fulfill policy goals (e.g., immorality, defining inventions).  In other cases there are benefits to using exceptions as alternatives or additionalities to exclusions. Exceptions provide a benefit where there is an overlap between different IP rights and IP systems.

Conclusions for International Lawmakers:

Facilitates interaction between provisions of treaties – e.g., if excludable under WTO TRIPS Article 27 (“Patentable Subject Matter”), it should be possible to operate as an exception under WTO TRIPS Article 30 (“Exceptions to the Rights Conferred” under WTO TRIPS Article 28 (“Rights Conferred”).

There are dangers with interpreting TRIPS Article 30 narrowly.  In particular, ‘limited exceptions’ could impede positive development.  For example, the Canadian Pharmaceuticals Patent case gave a rather narrow exception under TRIPS Article 30.  This could impede positive developments outlined in the report.

[SCP document SCP/13/3 at pp. 22-23, discusses this: 

“85. Article 30 allows Members to provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties… Article 30 establishes three conditions, namely, (i) that the exceptions to the exclusive rights must be “limited”; (ii) that the exceptions do not unreasonably conflict with a normal exploitation of the patent; and (iii) that the exceptions do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties. In conjunction with the Canada-Patent Protection of Pharmaceutical Product case (DS114),29 the Dispute Settlement Panel provided some guidance with respect to the above three conditions in Article 30.

86. First, the Panel found that the three conditions apply cumulatively, and “the exact scope of Article 30’s authority will depend on the specific meaning given to its limiting conditions”. When examining the words of those conditions, “both the goals and the limitations stated in Articles 7 and 8.1 must obviously be borne in mind, as well as other provisions of the TRIPS Agreement which indicate its objective and purposes”.

87. Second, the Panel held that the ‘limited’ character of an exception should be ‘measured by the extent to which the exclusive rights of the patent owner have been curtailed’.

88. With respect to the expression ‘normal exploitation of the patent’, the Panel considered that it referred to the ‘commercial activity by which patent owners employ their exclusive patent rights to extract economic value from their patent’. The term “normal” was interpreted by the Panel as the combination of ‘an empirical conclusion about what is common within a relevant community’ and ‘a normative standard of entitlement’. Further, the Panel’s decision stated that, while the specific forms of patent exploitation by the patent owner are not static, ‘protection of all normal exploitation practices is a key element reflected in all patent laws’. In the specific circumstances of the case, the Panel concluded that the ‘additional period of de facto market exclusivity’ created by using patent rights to preclude submissions for regulatory authorization should not be considered ‘normal’. It was not a ‘natural or normal consequences of enforcing patents rights’, but rather an ‘unintended consequences of the conjunction of the patent laws with product regulatory laws’ that resulted in such additional period of de facto market exclusivity.

89. As regards the third criteria, the Panel concluded that the term ‘legitimate interest’ must be ‘defined in the way that it is often used in legal discourse – as a normative claim calling for protection of interests that are ‘justifiable’ in the sense that they are supported by relevant public policies or other social norms’. In the specific circumstances of the case, the Panel considered that the ‘interest claimed on behalf of patent owners whose effective period of market exclusivity had been reduced by delays in marketing approval was neither so compelling nor so widely recognized that it could be regarded as a ‘legitimate interest’ within the meaning of Article 30”.

Footnote 29 The dispute concerned the regulatory review provision and the stock piling provision under the Patent Act of Canada, which allowed generic pharmaceutical manufacturers to override the patent rights in certain situations. As regards compliance with Article 30, the Panel found that, while the stock piling provision did violate Article 30 because it was not a “limited” exception to the rights, the regulatory review provision was justified under Article 30 by meeting all criteria in that Article. [http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds114_e.htm].]

The Venezuelan delegate commented that private interests benefit more than nations. The philosophy of patents is a problem.

The Bolivian and Argentine delegates agreed.

The Tanzanian delegate questioned how to reconcile exceptions and limitations with the application of national patent law.

The Indian delegate questioned whether exceptions can be more accommodated in the case of software with open source software.

Prof. Bently responded that open source systems may support some things, but may appear unpalatable for others.

The Brazilian delegate wanted the SCP to proceed with a substantive discussion of Agenda Item 5B [as noted above].

NGO Observer Free Software Foundation Europe intervened. Based on the European model if exceptions were applied to software patents they would violate the European Patent Convention Article 52.

NGO Observer Third World Network intervened. The shift from exclusions to exceptions is not reflective of developing country social policy interests.  Exclusions are prone to pressures thrown upon the national patent office.  EPO facilitated the grant of patents for computer implementations only after such inventions were better understood Exclusions should continue to exist where they can meet the policy goal not met by exceptions.

Professor Bently intervened - Exceptions for pharma patents were formerly exclusions. More exceptions are possible e.g., US academics are arguing for more exceptions analogous to ‘fair use’ in copyright.

NGO Observer ITSSD intervened.

Prof. Bently, your study seems to begin with the flawed premise of market failure such that exclusive private property rights are deemed an impediment to the public interest…

Prof. Bently Response to ITSSD intervention.

The right of exploitation and commercialization – these are concepts from neoliberal economics property rights theorists most prevalent in the United States.  A focus on the exploitation of rights is premised on a logic that assumes a ready capacity for private transactions – i.e., the existence of a willing buyer and seller.  Even neoliberal economics recognizes the need for exceptions and limitations. Bently states that he shares the view of the Lemley critique of the Posner study.  The starting point in our study’s analysis is that there is a market failure.  There are no effective willing buyers and sellers in LDCs; thus they cannot use neoliberal economics-based private transactions as the basis for IP.

The Chilean delegate commented that consensus is needed – no one will benefit – neither the advocates of flexibilities, nor the advocates of international harmonization.  Brazil’s suggestion is a good one – to move forward with an in-depth analysis of the Brazil proposal in respect of exceptions and limitations to patent rights (SCP/14/7).  We need a mechanism to report on the implementation of recommendations, including the development agenda.

The Ecuadorian delegate, speaking on behalf of the Group of Latin America and Caribbean Countries (GRULAC), commented that the Brazilian view is consistent with the Ecuadorian view.

The Venezuelan delegate commented that the social goals of IP serve the whole population not just the few individuals. We welcome the Brazilian document SCP/14/7. There is a need to review the WTO TRIPS system which allows governments to resolve medical treatments in LDCs which are not yet effective.  We disagree with the TRIPS not being reconciled with the human rights to health, food security and the environment.  IP is not an end-in-itself, but a means-to-an-end.

The Iranian delegate pointed out that IP must be development-friendly and that there must be an open discussion about the patent development agenda and public policy issues.

[ITSSD summary of Bently’s response and preparation for another ITSSD intervention:  The Bently study and response presumes that a market failure exists with respect to information that would prevent willing buyers and sellers from being able to engage in private transactions to exploit a patent in the marketplace. If this is the case, there should be capacity building which takes place within the province of the CDIP, not the SCP.  Capacity building should take into account education, technical training, infrastructure development, patent examination. There should also be training in establishing a rule-of-law ‘enabling’ environment that recognizes exclusive private property rights, and which can attract knowledge-based foreign direct investment (FDI). Where these capacities are lacking such that Exclusions wouldn’t be possible, Exceptions and limitations are viewed by developing countries including Brazil as a ‘default’ mechanism to be used without the need to look any further into the invention and its intended uses.]

NGO Observer ITSSD intervened.

The South African delegate commented that there must be a balance between IP rights and public policy.  The Brazil proposal in respect of exceptions and limitations to patent rights SCP/14/7 is consistent with their view.

The Bolivian delegate echoed the Venezuelan delegate – IP is not an end-in-itself: it is a tool of policymaking.

The Brazilian delegate, on behalf of the Development Agenda Group (DAG), insisted that the SCP move the Development Agenda forward.

The Indian delegate stated that a focus on the access to knowledge and the public interest will permit LDC participation in the global knowledge economy.  It approved of Brazil’s proposal contained in SCP/14/7, especially paragraphs 25-27, and with Brazil’s new proposal that a Development Agenda should be incorporated within all work of the WIPO – within the modalities and the substantive matters.  And, the non-exhaustive list should remain non-exhaustive and open.

The Swiss delegate commented that the attorney-client privilege needs to be discussed.

The Egyptian delegate expressed their interest in the Bently Expert Study concerning exceptions and limitations and was looking forward to reviewing the forthcoming expert study on technology transfer due to be released during the Fall 2011, which should explain how to implement the development agenda.

NGO Observer International Chamber of Commerce (ICC) intervened.

There is a need for economic and legal certainty.  The issues being addressed are of great importance to industries represented by the ICC. The broad use of compulsory licenses can lower judicial certainty and incentive to research and development.  Attorney-client privilege must be maintained, as must confidentiality and transparency.  Companies seek to harmonize their technologies through use of standards and to secure return on investment (ROI) through use of the patent system.  There should be NO changes to the IP system.  As concerns technology transfer, the private sector is still responsible for most of the investment and dissemination of knowledge. The public benefit depends on the private sector.  Open innovation is an increasingly popular business model. IP (patents) support open innovation.

NGO Observer AIPPI (International Association for the Protection of Intellectual Property / Association Internationale pour la Protection de la Propriété Intellectuelle) intervened.

During the 2008 WIPO conference on privilege, the SCP took up the lack of protection against forcible disclosure.  Attorney-client protection exists practically in all countries but it is inadequate in most. There is a need for international harmonization of such protection.

NGO Observer German Association for Industrial Property and Copyright Law (GRUR) intervened.

Attorney-client privilege must be protected. Patent attorneys are attorneys at law.  Secrecy protection should be confirmed by a binding international instrument that bridges the gap between common law and civil law countries – PCT union members.

NGO Observer Free Software Foundation intervened.

FOSS relies on a license relying on copyright. Free software is incompatible with patents. We have practical experience and were instrumental in getting the EU Commission to reject the EU software patent. Licensing through RAND terms confers a monopoly that is not entitled to protection. We agree with the Development Agenda Group that patents should be granted only in areas where there is a market failure to provide innovation. We first proposed a three-step test for inclusion of an invention in the patent system during the 13th session of the SCP during March 2009. In order for any subject matter to be included in the patent system, there must be: 1) a demonstrated market failure to provide innovation; 2) a demonstrated positive disclosure of the invention from patenting; and 3) a demonstrated effectiveness of the patent system in the area to disseminate knowledge. Software fails all three steps of this test.  

Day 2 - Tuesday, October 12, 2010 (Half-day Plenary Session – Informal Work Group meetings):

The Uruguayan delegate commented that the Brazil proposal on Exceptions and Limitations to the Patent Rights (SCP/14/7) is a good beginning.

NGO Observer Knowledge Ecology International (KEI) intervened.

Public comments should be permitted on compulsory licensing. The U.S. has many compulsory laws and court decisions that permit the issuance of compulsory licenses against patents as well as administrative enforcement actions for the same purpose.

NGO Observer Third World Network intervened.

Patents and enforcement of intellectual property rights should be treated as a development issue.

NGO Observer Asian Patent Attorneys Association (APAA) intervened.

The attorney-client privilege is deemed important by all members.

NGO Observer Fundacao Getulio Vargas (FGV) intervened.

We are supportive of the position Brazil has taken regarding intellectual property rights and new technologies.

NGO Observer International Federation of Industrial Property Attorneys/ Federation Internationale des conseils en propriete industrielle (FICPI) intervened.

The attorney-client privilege must be protected at all costs.

NGO Observer ITSSD intervened.

We wish to correct the record that NGO Observer KEI has misrepresented in its recent interventions (past and present). Contrary to KEI’s statement that US law, administrative practice and judicial decisions broadly provide for the issuance of compulsory licensing is completely and utterly false and misleading. As the ITSSD’s comments to document SCP/13/3 (available online both on the WIPO and ITSSD websites) clearly explain and illustrate there are very few US compulsory licensing statutes and where they do exist, compulsory licenses are virtually never issued unless there is an imminent public emergency or there is a significant market abuse of the patent right, as in the case of a proven antitrust violation. As concerns the statement and position of the Third World Network regarding development issues, the ITSSD agrees with its observation concerning the capacity needs of developing countries, but the ITSSD disagrees with its conclusion that these issues are the burden and fall within the province of the SCP to address. Rather, they more appropriately belong within the WIPO Committee on Development and Intellectual Property ('CDIP").

Discussion was begun on Agenda Item 5A - SCP document SCP/13/2 – “Standards and Patents”.

The Brazilian delegate commented that standards fall within the domain of public policy as in the case of security, public health and the environment – where there is a strong ‘public interest’ at stake.  “Open source standards have a high value”.  Standards should be tied in with WTO Technical Barriers to Trade (TBT) activities/efforts.

The Nepalese delegate commented that anti-trust issues must be taken into account with respect to standards.

The Indian delegate commented that standards entail a very complex subject matter and concern issues that have many ramifications for developing countries, especially as concerns anti-competitive practices.  We seek more SCP studies and guidance on this important subject matter.

The Swiss delegate on behalf of the EU-27 commented that the EU is willing to discuss the issue of patents and standards, including the need to look at best practices for disclosure of patents for essential areas of technology in connection with standards development.

NGO Observer Latin American Association of Pharmaceutical Industries / Association latino-americaine des industries pharmaceutiques (ALIFAR) intervened.

Developing countries do not have the tools to ensure that patents do not impede standards development.

NGO Observer ITSSD intervened.

The ITSSD invites the SCP chair, committee members, member state delegations and NGO observers to review both its comments on SCP document SCP/13/2 and its supplement to those comments focusing on paragraph 44 – government procurement-driven interoperability frameworks, especially those enacted and/or proposed by EU member states and the European Commission, that express clear preferences and indirect mandates for royalty-free and nonproprietary technologies incorporated within national and/or regional ICT standards, in the same way that advocates of FOSS promote nonproprietary software based on the allegation there is a public policy crisis. The employment of these existing or proposed government intervention mechanisms in the government procurement market also will have a much broader impact on the overall marketplace beyond government procurement than has been considered. They presuppose a public policy crisis in the use and implementation of patents that results in the impairment of standards development at the expense of the public interest. In a word, they are ‘a solution looking for a problem’ since there is little anecdotal evidence to establish there is a widespread problem of patent abuse around the world in the standards development process.

NGO Observer Free Software Federation Europe (FSFE) intervened.

FOSS provides a unique opportunity to develop local businesses. De facto standards developed using patented technologies are equivalent to a monopoly. Royalty-free standards should be mandatory.

The Uruguayan delegated commented that the patent system is in crisis.

NGO Observer Knowledge Ecology International (KEI) intervened.

We refer to the comments contained in the Secretariat’s report of the 14th SCP session during January 2010, SCP document SCP/14/10 (Oct. 11, 2010), specifically, to emphasize the need for a study of ‘best practices’ concerning patent disclosure for essential areas of technology.  We support the EU’s willingness to discuss this issue in further meetings.

NGO Observer European Committee on Interoperable Systems (ECIS) intervened.

We agree that more work needs to focus on the ex ante disclosure of patents and licensing terms. We believe that ‘best practices’ or ‘global norms’ should be adopted. ‘Licenses of Right’ should be mandated.

The Belgian delegate, on behalf of the EU-27, took to the floor.

With regard to SCP document SCP/13/3 – “Exceptions and Limitations to the Right”, strong IP rights and compulsory licenses are compatible in international law, as reflected by the balance set forth in the Paris Convention on Industrial Property and the Plant Breeders Convention. Balanced is needed for the sake of the public’s benefit.

The Brazilian delegate, on behalf of the Development Agenda Group (DAG), took to the floor.

We wish to emphasize again our support for the findings contained in SCP document SCP/15/3 – “Experts' Study on Exclusions from Patentable Subject Matter and Exceptions to the Rights”. In particular we wish to provide our prepared comments to SCP/15/3:

Thank you Mr. Chairman,

DAG welcomes the Expert’s Study on Exclusion and Exceptions/Limitations. The correct understanding of this paramount issue shall surely help WIPO Members to calibrate their  national IP systems in order to achieve the fundamental trade-off of the patents, that is, guarantee the monopoly of a given product or process in order to stimulate, not stifle, innovation. The expert’s study recognizes the cost-benefit analysis underpinning the system, that is, that patents should be granted only to the extent necessary to rectify the market failure, for, as WIPO Economist-Chief Carsten Fink would say, in most cases markets will not foster innovation on their own. In the cases which it restricts further inventions, they should not be granted. Therefore, DAG believes that the study brings elements for a discussion which accepts the complexity of the subject, avoiding simplistic assumptions which ignore the systemic implications and the diversities of concrete realities.

As Professor Bently’s introduction correctly states, the TRIPS Agreement has extensively reduced the flexibilities available for countries in general. Therefore, a full understanding of the exclusions and limitations available is vital for a calibration of the national systems, considering the particularities of the countries and their socio-economical environments. Some important rationales are included, such as the relation between human rights and intellectual property found in Dr. Visser’s study, or the necessity of adjusting the legal provisions in order to reach the highest degree of innovation with the lesser possible social cost.

Nevertheless, DAG believes that the main goal of the study should be a comprehensive reflection on the patent system from the exceptions and exclusions, since the subject is intrinsically linked to others in order to provide real utility for governments, such as transfer of technology and correct disclosure of patent information. Any statement on “a common core” or “set of standards” under no condition shall imply harmonization of legal provisions or limitations on the reach of exclusions and limitations, for the particular characteristics of the countries are expressed in the different patent systems.

Additionally, the seeming favoring of exceptions over exclusions is not coherently explained. In some cases, exceptions may raise litigation costs or stimulate sham litigation, while the possibility of ulterior legal liability for patent violation may reduce the incentive for investment of individuals in what they believe to be an exception, thus reducing innovation. Thus, there is not a conflict between exclusions and exceptions: they are complementary tools necessary to assure the systemic equilibrium and the policy space countries demand to achieve their development.

As professor Bently has emphasized, the utility of exceptions depend on the way they are interpreted by courts in countries with different legal traditions and by the dispute settlement system. Just as the DSU has done, in many legal systems exceptions must be interpreted restrictively. If the supposed superiority of exceptions over exclusions depends on they being interpreted broadly a strong case can be made against such rationale.

Furthermore, there is an urgent need of discussing the economic theory underlying the study, since the lack of a theoretical approach of the relation between intellectual property and innovation suggests an automatic and positive relation between them, a relation which is not observed in the realities.

Lastly, Mr. Chairman, DAG considers that these studies represent a positive step in the direction of the proposal made by the Delegation of Brazil.

Document SCP/14/7

The proposal presented by the Delegation of Brazil in document SCP/14/7 intends to provide a wide and sustained debate on exceptions and limitations to patents in three phases.

The first phase shall promote the exchange of detailed information on all exceptions and limitations provisions in national or regional legislations, as well as on the experience of implementation of such provisions, including jurisprudence. The first phase shall also address why and how countries use – or how they understand the possibility of using – the limitations and exceptions provided in their legislations.

To a certain extent, the studies on Exclusions from Patentable Subject Matter and Exceptions and Limitations to the Rights contain some elements of this first phase, which need now to be further developed.

The second phase shall investigate what exceptions or limitations are effective to address development concerns and what are the conditions for their implementation. It is also important to evaluate how national capacities affect the use of exceptions and limitations.

The third phase shall consider the elaboration of an exceptions and limitations manual, in a non-exhaustive manner, to serve as a reference to WIPO Members.

This manual should help each country to adapt the international agreements to its internal IP system, maintaining the adequate policy space for its development needs. to allow dynamic adaptations. For, as rightly stated under the item “Definitions” of the study, an optimal arrangement for the United States is not necessarily so for India or Malawi. Therefore, DAG believes that the Proposal shall be promptly be implemented, for the establishment of such working program would be an important step in the implementation of the Development Agenda.

NGO Observer ITSSD intervened.

End of Plenary session.  Member state delegations depart for the remainder of the day to conduct informal Working Group meetings.

ITSSD prepares for its side-bar event to take place in Room B entitled, Can Government Intervention Sustain Economic Incentive, Technological Innovation, and Capital Flows?.

The following ITSSD side-bar panel event documents are accessible online:

Event Flyer:  

Event Handout Materials:

Event Panelist Bios:

Event Précis:

Day 3 - Wednesday, October 13, 2010 (Half-day Plenary Session – Informal Work Group meetings):

The Venezuelan delegate comments that there must be a balance between private interests and public interests; intellectual property rights must give way to the human rights to life, health, education, environment…

The Bolivian delegate comments that Bolivia disagrees with prior comments of the French and German delegates that there is a lack of precedent within the SCP to address development agenda issues.

NGO Observer Latin American Association of Pharmaceutical Industries / Association latino-americaine des industries pharmaceutiques (ALIFAR) intervened.

Latin America uses flexibilities to the patent right, but the process prescribed by TRIPS Article 31 – “Other Use Without Authorization of the Right Holder” – is difficult.  There is a need to look into how to avoid barriers to flexibilities, and in particular, to revisit the August 2003 Doha Declaration on Public Health Paragraph 6 Waiver which has not yet been adopted by most member states. There is a need for a manual to help developing countries use compulsory licenses.

NGO Observer German Association for Industrial Property and Copyright Law (GRUR) intervened.

GRUR recognizes the contributions of NGOs and the European Patent Office concerning these issues.

NGO Observer Free Software Federation Europe (FSFE) intervened.

FSFE supports the Bently study and its conclusions. We refer again to the Berkeley Patent Survey that finds that patents have only a minor role in innovation. We also wish to emphasize that Exceptions to the Right are a defense to patent infringement.

NGO Observer International Federation of Pharmaceutical Manufacturers Association (IFPMA) / Federation internationale de l’industrie du medicament (FIIM) intervened.

The IFPMA emphasizes that access to medicines have little to do with patents and the costs associated with patent royalties. Rather, access issues mostly are related to lack of healthcare infrastructure, financing, poorly trained and/or non-trained healthcare workers.  A legal and economic regime based on compulsory licenses is not sustainable.

NGO Observer International Chamber of Commerce (ICC) intervened.

The Expert Study on Exceptions and Limitations to the Rights, SCP document SCP/15/3, does a good job of providing concrete examples of how WIPO states use compulsory licenses (Annex I, p. 23-32), the use of exclusions and limitations in the field of biotechnology (Annex III) and the use of compulsory licenses in the cases of public health (Annex V).

International Organization European Patent Office intervened.

Article 52 of the European Patent Act is consistent with and reflects the findings contained in the expert study.

NGO Observer Third World Network intervened.

The expert study is based on longstanding EU and US practices.

The Russian delegate commented that algorithms in computer programs may be patented. Yet the decision of algorithms as a ‘solution’ must be recognized as an invention if a business method is to be patented.

The French delegate announced that there would be a Group B informal meeting during the remainder of this afternoon in the Uchtenhagen Room and also bilaterals with other groups.

The Angolan delegate announced that there would be a Development Agenda Group meeting in Room 13.2 and then a Brazil meeting at 3pm.

Day 4 - Thursday, October 14, 2010 – (Half-day Plenary Session - Informal Work Group meetings):

There will be no Plenary afternoon session; only informal sessions in Room B and elsewhere.

There may be an evening plenary session.  Written interventions are possible and will be incorporated into the Secretariat’s report.

Discussion was begun on Agenda Item 5C - SCP document SCP/13/4 – “Attorney-Client Privilege” and SCP/14/2.

The Belgian delegate, on behalf of the EU-27, commented that there must be international reciprocity with respect to the attorney-client privilege to enable the best defense of client interests.

The Swiss delegate commented that it appreciated the SCP’s work on the document SCP/13/4, and that the committee and all delegates should look at practices in different countries and the content of those practices.  There should be a detailed expert study on the recognition of the attorney-client privilege and confidentiality between countries.

The Slovenian delegate agreed with the EU.

The Nepalese delegate commented that nations’ comparative capacities to uphold attorney-client privilege must be taken into consideration.

The New Zealand delegate commented that there is a lack of cross-border mutuality of attorney-client privilege.

The Australian delegate commented that Australia recognizes and supports the intervention made by the EU, Belgium and Slovenia especially as concerns foreign advisers.

The Russian delegate commented that there is a need to uphold attorney-client privileges to ensure the protection of trade secrets.

The United States delegate took to the floor.
The US is in alignment with the Swiss/Slovenian delegations concerning the summary document prepared by/for the Secretariat on attorney-client privilege. It is valuable to national legislators plus the users of the patent system in various countries. The US is aligned with the EU suggestion for a document on practical next steps for commencing work on a document dealing with state practices concerning attorney-client privilege and confidentiality.

Day 5 - Friday, October 15, 2010 – (Half-day session – Informal Work Group meetings):

Discussion was begun on Agenda Item 5D – SCP document SCP/13/5 - “Dissemination of Patent Information”, and SCP/14/3.

The Brazilian delegate took to the floor.

Mere access to information in a patent application does not ensure technology transfer.  In many cases, there is an insufficient explanation of the patented invention.  Items 8 & 9 of Brazil’s and Argentina’s Proposal for the Establishment of a Development Agenda for WIPO [WO/GA/31/11] are recalled. [“VIII – A Member-Driven Organization Open to Addressing the Concerns of all Stakeholders, in Particular, Civil Society”;  “IX – Conclusion - A vision that promotes the absolute benefits of intellectual property protection without acknowledging public policy concerns undermines the very credibility of the IP system. Integrating the development dimension into the IP system and WIPO’s activities, on the other hand, will strengthen the credibility of the IP system and encourage its wider acceptance as an important tool for the promotion of innovation, creativity and development.”]

The Belgian delegate, on behalf of the EU-27, took to the floor.

Patents and related data must be accessible.  The benefits to the user must be the focus of the patent system.  Harmonization is needed of the different patent classification systems.  Information in national and regional databases must be accessible via cooperation.

The Indian delegate took to the floor.

Dissemination of information, specifically patent data leads to greater patent quality and research & development and more complete search activities.  An international database is necessary because of incomplete search activities, non-published patent applications and other non-patented literature.  A public international database should be sought because it will help to avoid the trap of private hands who own databases.

NGO Observer Third World Network intervened.

The accessibility and content of such a public international database must be considered.

NGO Observer Latin American Association of Pharmaceutical Industries / Association latino-americaine des industries pharmaceutiques (ALIFAR) intervened.

Such a public international database must include the status of patents in application.  Also, many patents have inadequate disclosure.  Disclosure is linked closely to standards and patents disclosure.

Discussion was begun on Agenda Item 5E – SCP/14/4 – “Transfer of Technology”.

The Belgian delegate, on behalf of the EU-27, took to the floor.

Some countries have different capacities to receive technology transfer.  The definition of property rights in this context is unclear. There is an asymmetry of information between the patent holder and prospective licensees, and the potential for abuses of patent holder rights. Each country should be free to enact legislation most suitable to their needs. Public-private sector cooperation must be facilitated.

The Brazilian delegate took to the floor.

The Secretariat’s study on Transfer of Technology (SCP/14/4) is too narrow.  It is focused on the role of the patent system to facilitate technology transfer. The study focuses only where the patent system functions where intended.  It does not focus on situations where there are abuses of the patent right. There is a need for clarity of ownership rights in the report, which must address appropriate and effective enforcement as against the exercise of such right. It must also address the asymmetry of information as between the patent holder and prospective licenseesThere should be a public mechanism for matchmaking patent licensors with patent licensees. The discussion about financial incentives must reflect a balance between the interests of patent holders and users of patented technologies. LDC government support for R&D is lower than in developed countries. The US Bayh-Dole Act / mechanism is inadequate for LDCs.  Many of the advances realized in countries have occurred without patents.  WTO TRIPS Articles 66 and 67 concern the technical cooperation and technology transfer obligations of developed countries. Technology transfer must be broader than it has been described in SCP document SCP/14/4.  It must be broader to include the flexibilities, the anti-competition enforcement mechanisms and compulsory licenses. The study must examine why the US Bayh-Dole Act does not work in LDCs as it does in the US. There must be developed a forum to explain the actual contract experience in licensing in the context of technology transfer.

The Russian delegate took to the floor.

The patent mechanism is very clear, and its impact on international trade is very clear. In many countries there are no analogue standards in current legislation. The rights transfers being studied regard the area of R&D to create conditions to diversify products that innovative in technology. There is a need for government mechanisms that strike a balance between government policymakers and patent holders that permit the enforcement of the patent right without risking R&D.  Provisions must exist to protect IP holders without hampering innovation.

The Indian delegate commented that the committee must study the flexibilities in patent law to facilitate technology transfer.

The Egyptian delegate refers to its prior statement on the Secretariat’s Report on the International Patent System, as contained in paragraph 176 of the SCP’s adopted Report of the 14th SCP Session.

The Delegation of Egypt stated that the issue of technology transfer was an issue of a high level of importance. The Delegation expressed its satisfaction with the inclusion of the issue in the agenda of the SCP and delivering a preliminary study on the topic, as the issue had not been discussed at WIPO over the previous years… Referring to paragraph 60 of document SCP/14/4 acknowledging that there was no conclusive evidence or limited conclusive evidence with regard to the impact of the patent system on flows of FDI, the Delegation welcomed such observation, as it reflected the objective academic assessments that had been undertaken in that area. The Delegation, however, pointed out some drawbacks to the preliminary study, and suggested a revised version or an Annex to the document for the consideration of the Committee. As regards the lack of definition of the term “transfer of technology” in the document, the Delegation believed that the revision of the preliminary study could be guided by the draft Code of Conduct on the transfer of technology (1985), which had done considerable work with regard to defining that concept. As regards Section 3 of the document, the Delegation was of the opinion that it failed to take into account the historical background. In its view, the preliminary study had not made legitimate reference to the work undertaken by the United Nations since the publication of the UNCTAD report on technology transfer in 1964. As regards Section 5, the Delegation was of the view that the document did not fully describe the criticism of the patent system with regard to barriers that particular levels of patentability or of protection might represent for technology transfer. While those were contributions that were acknowledged, the Delegation considered that paragraph 56 could be further elaborated with respect to some of the negative impacts on the patent system. Concerning Section 6, the Delegation stressed the importance of the international regulatory framework, and noted that the international regulatory framework should be a key concern. As there had been considerable discussions on the impact of free-trade agreements, economic partnership agreements and plurilateral agreements on appropriate transfer of technology, the Delegation pointed out that these should be reflected in the preliminary study. Further, the Delegation noted that, although the issue of climate change was very important, there was too much focus on that issue. The Delegation hoped that the treatment of technology transfer in WIPO should be more systematic, aiming at broader discussions on what was sometimes referred to as the classical issues of technology transfer, i.e., the classical industries that would have a direct impact on economic development in large parts of the membership. Noting the considerable work done by UNCTAD on international arrangements of technology transfer, the Delegation felt that there should be more collaboration between the two organizations. As regards public-private partnerships in Section 8, the Delegation was of the opinion that the issues of concern in the setting of a multilateral organization were primarily geared to trans-boundary transfer of technology. It noted that, although public-private partnerships could entail a foreign element, the Bayh-Dole Act, for example, essentially geared towards mobilizing national resources in order to promote innovation and transfer of technology, but had less impact on the possibility of developing private-public partnerships in a trans-boundary context. The Delegation further noted that, while it could be interesting to look into the successful models of highly advanced market economies, simulating such a model would be problematic in view of different levels of development. The Delegation recalled that, according to some US officials, implanting the Bayh-Dole Act in a foreign country might cause more problems than benefitsThe Delegation recommended more collaboration with other UN Agencies, for example, by organizing a briefing session with leading UN Agencies on the issue of technology transfer. It further suggested that setting up an independent commission to consider the issue of technology transfer would be a good way forward, given that the issue of technology transfer was a cross-sectoral issue in WIPO, such as in the SCP and the CDIP…”

[The Egyptian view that UN agencies should play a more extensive role in technology transfer and the exercise of private intellectual property rights strongly suggests the need to involve the WTO in such policy discussions.  Egypt’s recommendation sounds eerily similar to the demands of developing countries during the 1970’s – the New International Economic Order (NIEO).]

NGO Observer Third World Network intervened.

The study [SCP/14/4] does not analyze the threat of patents to the public interest, nor does it discuss the use of WTO TRIPS flexibilities.  A good model upon which an international legal framework for technology transfer can be established was previously set forth in a report prepared by the UN Commission on Trade and Development (UNCTAD) in 1975. Article I of the agreement between WIPO and the United Nations should also be consulted.

[The TWN delegate is most likely referring to UNCTAD (1975) The Role of the Patents System in the Transfer of Technology to Developing Countries, United Nations Conference on Trade and Development, Geneva Switzerland.  However, there are two additional UNCTAD reports of the same era which should be of concern to IP rights holders given the demands of the NIEO during that era:  UNCTAD (1975) The International Patent System as an Instrument of Policy for National Development, United Nations Conference on Trade and Development, Geneva Switzerland; and UNCTAD (1978) Draft International Code on the Transfer of Technology, United Nations Conference on Trade and Development, Geneva Switzerland.]

Discussion was begun on Agenda Item 5F – SCP/14/5 - “Patent Opposition Systems”

The Indian delegate commented that there must be focus on the pre-grant system.

The Belgian delegate, speaking on behalf of the EU-27, commented that more training is needed on patent search procedures which could be undertaken by the PCT working group.

The Brazilian delegate commented that the Development Agenda Group (DAG) would deliver a prepared statement to the Secretariat.

The Swiss delegate commented that the report should discuss how an effective patent opposition system can contribute to patent quality.

International Organization European Patent Office commented that it supports the Belgian/EU and Swiss statements/observations.

NGO Observer Latin American Association of Pharmaceutical Industries / Association latino-americaine des industries pharmaceutiques (ALIFAR) commented that a more detailed study is needed of the procedures within each country for patent pre-grant opposition.

Friday, October 15, 2010 – (Resumption of Plenary at 6:00pm CET):

Final differences between and among WIPO member state delegations were ironed out in order for the Secretariat to arrive at a final Summary of the 15th Session, accessible online as SCP document SCP/15/5 (Oct. 15, 2010) at: .

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