New WIPO treaty may remove South's ability to decide on patents

Original Publication Date: 
27 March, 2006
Developing countries risk losing their present flexibility to decide on the standards for granting patents if developed countries' proposals for a new WIPO treaty on patents are adopted.

This warning was given by an expert on intellectual property law in a paper distributed at the WIPO Open Forum on the draft Substantive Patent Law Treaty (SPLT) which started in Geneva on Wednesday.

Professor Carlos Correa of the University of Buenos Aires, who is a renowned authority on intellectual property and development issues, said the developed countries had proposed a uniform definition to key aspects determining the scope of patentability for the SPLT, which is being negotiated in WIPO.

Under the TRIPS Agreement of the WTO, Members are allowed to adopt their own definitions on all the concepts proposed for harmonization in the SPLT (i.e. definition of prior art, grace period, novelty and inventive step). Thus, TRIPS provides the WTO Members with flexibility to design their patent regimes.

However, if the developed countries' proposals in the SPLT are adopted, the harmonization of patent standards would eliminate the room that countries have retained to decide what an 'invention' is and how the patentability standards are determined.

Correa is a speaker on the opening day of the three-day WIPO open forum. His paper, "An Agenda For Patent Reform And Harmonization For Developing Countries" is available on the WIPO website, together with papers of other speakers.

The forum was mandated by the WIPO General Assembly as part of an attempt to break the impasse in the negotiations on the SPLT. The developed countries are pushing for a new patent treaty that harmonises national patent laws in order to have common treatment of aspects including prior art, grace period, novelty, and inventive step.

Many developing countries are opposed to this narrow agenda and want the treaty to address public interest flexibilities, anti-competitive practices and disclosure in patent applications of the source of origin of genetic resources and traditional knowledge.

An informal meeting of the WIPO's Standing Committee on Patents will be held on 10-12 April to discuss how the work on the SPLT is to proceed, taking into account the results of the forum.

Correa's paper gives an account of the patent harmonization process in WIPO (of which the SPLT negotiations are a major part) and analyses its implications for developing countries.

According to the paper, the patent system contains serious distortions and there is need for a "deep re-examination" of how it operates in different countries. Correa warned that the patent harmonization process under WIPO overlooks the problems of the system, nor is it intended to adapt the system to the needs of the developing countries.

"The harmonization process poses a significant challenge and creates a number of risks for developing countries," said Correa, adding that there are no convincing reasons for the developing countries to support the process, if it proceeds further on the basis of the proposals of the major developed countries.

Correa also warned that it would be a great disservice to developing countries if they were induced through WIPO processes to import features of a patent regime that is growingly seen as malfunctioning in developed countries, and often stifling rather than promoting innovation.

The paper recalled that in 2001, WIPO's Director-General Dr Kamil Idris launched a 'Patent Agenda' whose main emphasis has been to facilitate the acquisition of patent protection in foreign countries by making the system more user-friendly, cost effective and secure.

The main purpose of the Patent Agenda, as set out by the WIPO Director-General is, therefore, to create mechanisms whereby inventors and industry have access to national, regional and international patent protection systems that enable them to obtain, maintain and enforce their patents globally.

"Development objectives are completely absent from the initiative," said Correa. "No assessment was provided about the benefits and costs of the proposed harmonization, particularly as it would eliminate the room that countries have retained to decide what an 'invention' is and how the patentability standards are determined.

"The proposed Agenda failed to acknowledge the major problems that the patent system currently face, as a result of the application of lax patentability criteria, the asymmetries in the ability to use it due to high enforcement costs, and the disadvantages of patent policy harmonization for different levels of economic and technological development."

One component of the Patent Agenda is the development of an SPLT. As originally conceived in 2000, the SPLT was to have a wide agenda of issues. But due to resistance from developing countries and disagreement among developed countries on some provisions, the developed countries opted for a more gradual approach.

The US, Japan and the EU suggested (in what is known as the trilateral approach) to limit immediate discussions to a narrow but important set of four issues: definition of prior art; grace period; novelty; and non-obviousness/Inventive Step.

"The issues suggested for this initial phase of harmonization are crucial. If agreed upon, they would provide a uniform definition to key aspects determining the scope of patentability," said Correa.

In order to push forward this proposal, WIPO's Director-General convened 'informal consultations' concerning future sessions of the Standing Committee on Patents in Casablanca, in February 2005. Widely criticized for lack of transparency and the attempt to give undue weight to the outcome of the meeting, this process was unable to move the negotiations further. At the WIPO Assemblies held in September 2005, a compromise was reached to continue work at the SCP.

Correa said that the 'Trilateral proposal' aims at addressing key issues concerning the patentability standards. These concepts determine the extent of knowledge that may be detracted from the public domain and subject to exclusive rights for a minimum twenty years' period. The TRIPS Agreement does allow Members to adopt their own definitions on all these concepts, thereby providing Members flexibility to design their patent regimes.

The paper examines the proposals on the four issues. On the first issue of prior art, the eventual harmonization of this concept would require agreement on a number of issues on which national laws differ, notably: Non-written disclosures; Secret prior commercial use or the offer for sale without disclosure; Disclosures in prior patent applications; Determination of the date of availability to the public; Availability to the public; and Indigenous/traditional knowledge.

On the issue of grace period, the application of a grace period (admitted in the US and in many other countries) has raised a significant controversy between the US and European countries, where such period is not provided for.

"It expands the scope for patenting, as inventions disclosed during that period would be eligible for protection, notwithstanding that they would have been deemed in the prior art in accordance with the general rule on novelty."

On the third issue of novelty, Correa said that the definition of 'novelty' is crucial. Since the TRIPS Agreement allows Members to adopt their own concept, the US, for instance, has been able to maintain its relative novelty standard with regard to the place where disclosures have taken place.

Novelty results from the comparison between the existing prior art at the date of filing (or the date of priority) and the claimed invention. In practice, the concept of novelty is narrowly construed by patent offices, requiring in some cases an almost 'photographic' disclosure of the invention in a single prior document in order to consider that novelty does not exist.

On the fourth issue of non-obviousness/inventive step, Correa said defining this is one of the most critical aspects of a patent regime, as it determines the level of technical contribution required to obtain protection. As the TRIPS Agreement does not define this concept, Member countries are free to determine whether they want a system under which a myriad of minor, incremental, developments are patentable, or one aimed at rewarding substantive departures from the prior art.

The draft SPLT Regulations proposed a low standard for determining inventive step. The claimed invention would be assessed against the general knowledge of an ordinary skilled person, and not against specialized knowledge in a particular field of technology.

"Developing countries will be made a great disservice if they were induced, through the WIPO patent harmonization process, technical assistance or other means, to import features of a patent regime that is growingly seen as malfunctioning in developed countries, and often stifling rather than promoting innovation," said Correa.

The decline in the patentability standards is one of the factors behind what has been described as the 'intense pathology of the current [patent] system' in the US.

"The best policy for developing countries would rather be to establish high standards of inventive step, in order to avoid 'ever-greening' and other patenting strategies aimed at blocking genuine competition and follow-on innovation," said Correa.

['Ever-greening' consists of the patenting of minor changes to or versions of existing products (e. g. formulations, dosage forms, polymorphs, salts, etc.) in order to extend the life of the original patent over an active ingredient.]

For instance, the recent reform (2005) of the Indian Patent Law has incorporated an anti-ever-greening provision, which tightens the inventive step requirement as applied to new forms or modifications of existing pharmaceutical products.

Correa said that developed countries are likely to pursue negotiations on a 'light' SPLT on the basis of the trilateral proposal.

"Quite clearly, it is not in the interest of developing countries to seek either a 'light' SPLT or a more comprehensive SPLT, since they have little to gain from a broader harmonization of substantive patent law," he said. "Developing countries should resist any attempt to limit their capacity to prevent the patenting of developments that do not constitute a real technical contribution to the state of the art."

If such countries wished to promote 'minor' innovations, the appropriate policy would not be to lower the patentability requirements, as it is often argued, but to establish utility models (or 'petty patents') that confer less extensive rights than patents or to explore other options, such as the recognition of a remuneration right rather than exclusionary rights.

In brief, developing countries should endeavour to keep the existing policy space to determine the level of the 'inventive step'.

If negotiations on the prior art and novelty concepts were pursued, developing countries should aim at the recognition of a universal novelty standard that does not discriminate on the basis of the place where non-written disclosures took place. Such a standard could prevent a significant part of the misappropriation of genetic resources and indigenous/traditional knowledge that currently occurs.

However, the change of the novelty standard may not be sufficient to prevent bio-piracy if the evidentiary requirements for non-written disclosures made abroad are too complex or stringent, thus making the proof of the existence of prior art too difficult or impossible . If this were the case, there would be little gain for developing countries.

In addition, the circumstances under which traditional knowledge may be deemed or not part of the prior art should be explored systematically and incorporated into the discussion. Developing countries should also incorporate into any possible negotiating text an obligation to disclose the origin of genetic materials and associated indigenous/traditional knowledge claimed in patent applications, as demanded by such countries within both WTO and WIPO.

In addition to the disclosure of origin obligation, developing countries may seek to incorporate safeguards and other provisions that ensure sufficient flexibilities and a pro-development approach. In fact, those countries had already suggested in the SPLT process some of such provisions, such as exception, public interest exceptions, and compliance with applicable law on other matters.

Correa suggested that other provisions may be worked on, including (i) requirement of industrial applicability (as opposed to utility) based on a distinct technical effect of the invention; (ii) best mode as a uniform requirement; (iii) principles and objectives; (iv) transfer of technology; and (v) measures against anti-competitive practices.

The paper concludes that "a deep re-examination of the patent system and how it operates in different contexts is called for. The system presents a number of serious distortions that affect its potential role in promoting innovation, particularly in developing countries.

"The harmonization process conducted for almost two decades under WIPO's auspices overlooks the problems and asymmetries of the system, and essentially aims at reducing the operational costs for users at a global scale. That process is certainly not intended to address the system's current shortcomings, nor adapting it to the needs of developing countries."

Correa added that the harmonization process poses a significant challenge and creates a number of risks for developing countries. While there are no convincing reasons for such countries to support the process, if it proceeds further on the basis of the trilateral or other proposals, three main issues should be considered.

Firstly, what objectives developing countries should pursue in responding to the harmonization demands of developed countries?

Developing countries should aim at the recognition of a universal novelty requirement and of a disclosure of origin obligation. They should also seek, inter alia, to clarify the treatment of indigenous/traditional knowledge as part of prior art. The ability to determine the required level of inventive step should not be negotiable; in particular, no proposals should be admitted that allow for a low inventive step standard for the granting of patents. Developing countries should consider means alternative to patents to promote minor innovations, if suitable to their developments needs.

Secondly, how feasible and practical do these proposals have to be in order to gain support from other stakeholders and to be successfully carried forward in international fora? Although developing countries should seek the elaboration of a scientifically-based development assessment on the general implications of the proposed harmonization process, they should also elaborate concrete proposals on the issues put on the table by developed countries, as well as those that are of interest to developing countries, such as those mentioned above.

Thirdly, which could be the areas of the respective reform processes where coalitions could be built between developing and developed partners?

There are specific areas in which agreements with some developed countries may be reached. Thus, European countries are likely to support demands for a truly universal novelty requirement, while the US may support the consideration of prior patent applications as part of the prior art for both novelty and inventive step. Developing countries negotiating strategies should try to ably capitalize on the divergences that exist between developed countries in order to advance their own agenda in the process.