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Public Policy-related Assistance - Flexibilities

Under the Paris Convention , the national treatment principle allowed for what was usually called the "asymmetries" in the patent system, i.e., the adoption of different standards of patent protection by different countries in accordance with different levels of national development (provided the same treatment that was secured to nationals was granted to citizens or residents of other Contracting Parties). The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), of the World Trade Organization (WTO), has changed that. Under the TRIPS Agreement, national treatment is linked to minimum standards in all areas of IP that it covers, thus eliminating those asymmetries.

However, the TRIPS Agreement incorporates certain "flexibilities." These aim to permit WTO Members to use TRIPS-compatible norms in a manner that enables them to pursue their own public policies, either in specific fields like access to pharmaceutical products or protection of their biodiversity, or more generally, in establishing macro and microeconomic and institutional conditions that support economic development.

Advice on flexibilities is provided by the Secretariat only after careful consideration of their TRIPS-consistency as well as their legal, technical and economic implications. However, such advice is essentially and exclusively Member-driven, and thus ultimately the decision regarding the choice of legislative options lies entirely with each individual Member State.

The WIPO Secretariat, in tandem with Member States, has identified four clusters of flexibilities:


Flexibilities as to the method of implementing TRIPS obligations

These result from the language of Article 1.1 of the TRIPS Agreement. Under these flexibilities, WTO Members can exploit creative solutions to transpose into national law and practice those concepts that the TRIPS Agreement simply enunciates but does not define. Examples of those flexibilities include concepts such as novelty and inventiveness; or of situations of extreme urgency for the purposes of compulsory licenses. Streamlining national procedures for the granting of protection also falls under this cluster: for example, adopting a mechanism of substantive pre-grant examination; using existing IP regimes for protecting certain assets or resorting to sui generis regimes (such as in the case of protection of geographical indications and layout-designs (topographies) of integrated circuits).

Flexibilities as to substantive standards of protection

These flexibilities can operate either downward or upward, i.e. they may permit measures that reduce or limit the rights conferred; or measures that raise the level of protection above the minimum standards established by the TRIPS Agreement.

Examples of the former are the introduction of exceptions to rights conferred (such as experimental use and the "Bolar"-type exceptions; and the limitation to the use of trademarks in pharmaceutical packaging and advertisement of products considered prejudicial to health, like alcohol and tobacco). Another important standard in which the WIPO Secretariat has introduced a new flexibility is exhaustion of rights. It is generally understood that WTO Members may choose between national (or regional) and international exhaustion. Because, on the one hand, national (or regional) exhaustion has the advantage of encouraging foreign direct investment and international transfer of technology but leaves the country (or the region) unprotected in the case of abuses, such as market segmentation and price discrimination; and, on the other hand, international exhaustion constitutes an element of persuasion against abuses of rights but discourages foreign direct investment and international transfer of technology, the Secretariat has developed a modality of exhaustion that eliminates the inconvenient aspects of those two modalities and retains their convenient elements: controlled international exhaustion. This third modality can operate in two ways: a) in principle, exhaustion only takes place at the national level; but in the event abuses occur, or the product is not made available in sufficient quantity or quality or at reasonable prices, a competent national authority may, ex officio or upon request, consider that the sale of that product under a parallel intellectual property right owned by the same IP owner or someone under his/her control has exhausted the rights in question; b) alternatively, national law may establish a primary regime of international exhaustion; but where the IP owner proves that he/she is using his/her rights in a reasonable manner, he/she recovers the exclusive rights to import. This second alternative is more complicated to operate, but from a political perspective it may seem more appealing. Gradually, national practices involving that third modality of exhaustion are emerging.

Examples of raising the level of protection above the minimum levels set by the TRIPS Agreement (sometimes referred to as "TRIPS plus") are the introduction of temporary protection of industrial property rights before the grant of protection; the extension of the term of patents to compensate for delays in granting the marketing approval of products; or the extension of the scope of patentability and/or registrability of trademarks beyond the minimums established, respectively, by Articles 27 and 15 of the TRIPS Agreement.

Moreover, the Secretariat has identified new approaches to ways of treating patent information, so as to effectively give practical effectiveness to technology dissemination, as per Article 7 of the TRIPS Agreement. For example, the Secretariat has developed language that defines the enabling disclosure requirement in patent applications, as per Article 5 of the Patent Cooperation Treaty and Article 29 of the TRIPS Agreement, as a local content disclosure requirement. Under this new approach, the person skilled in the art to whom the description of the invention is addressed is a person who has studied and acquired his/her technical skills in the country that receives the application, and not, if the application has a foreign origin, in the country of origin. With this requirement, it is ensured that local experts are able to understand the technical contents of patent applications filed in their country. Another approach that contributes to technical dissemination and that, in particular, facilitates the possible use of patented inventions after the respective patents expire, is the obligation of patent applicants, whenever they claim a product or part of a product, to describe the process of making that product (or part thereof), unless the process is covered by another patent or is in the public domain. Such an approach, which does not conflict with the concept of unity of invention, avoids the necessity of patentees’ competitors of engaging in costly and time-consuming reverse engineering when the product patent expires and the process of making it is unknown.

Where WIPO Members are concerned with facilitating access to public health, a vast range of flexibilities are available, from the common measures of compulsory licenses of patents (including implementation of the Doha Declaration and the Decision of the WTO General Council of August 30, 2003) to provisions reducing the power of product branding. Moreover, flexibilities on test data may go from establishing a regime of right-to-remuneration (as opposed to one of exclusivity) to the adoption of exceptions and limitations to rights conferred.

On competition policy, advice by the WIPO Secretariat has focused on three topics. Firstly, the Secretariat has worked on creating awareness of the essentially pro-competitive nature of intellectual property and the complementarity and synergies that exist between intellectual property and competition (or antitrust) law, the two branches of law being the two sides of the same coin: competition policy. Secondly, the Secretariat has worked with a number of Members in drawing a list of examples of anti-competitive practices for the purposes of Articles 31(k) and 40 of the TRIPS Agreement. The issue is the distinction between per se anti-competitives practices from those the assessment of which depends on the application of the rule of reason. In either case, of course, under the due process of law, there is still the need for a judicial or administrative process to determine whether the practice in question has indeed taken place. But where that practice is identified as per se anti-competitive, there is no need for a process to determine that such practice is anti-competitive. Thirdly, the Secretariat has also worked with a number of Members in attributing national authorities (either the national industrial property office or the national antitrust agency) the power to preventively assess the contents of intellectual property licensing agreements to check for the presence of anti-competitive clauses. This matter entails the risks of government interference in the freedom of parties and thus must be approached with great care.

Anyway, WIPO’s advice on antitrust law has been strictly neutral and IP-related. In other words, WIPO has not assisted its Members to design competition policy in general.

Flexibilities as to mechanisms of enforcement

In the field of enforcement, the TRIPS Agreement (in Part III) identifies the mechanisms that Members are obliged to adopt in order to make enforcement measures available to IP owners; and prohibits Members to adopt stricter enforcement measures against defendants than those that are established, in order to avoid theiruse in an abusive manner.

Members can resort to their own legal system and practices to implement enforcement obligations. WTO Members are, for example, free to maintain their own judicial system. WIPO has assisted its Members to use enforcement measures to implement flexibilities as to the standards of protection.

Flexibilities as to areas not covered by the TRIPS Agreement

The TRIPS Agreement does not cover a number of areas of IP subject matter, either because there was no consensus at the time the Agreement was negotiated, or because the areas in question had not yet emerged, or simply because the negotiators of the TRIPS Agreement did not consider that problems of barriers to trade existed in those areas. Some of those areas are of particular interest to developing countries, such as utility models, traditional knowledge and handicrafts.

Unlike the "upward" standards of protection mentioned above, these flexibilities lie outside the TRIPS Agreement. Therefore, countries legislating on those subjects do not need to conform to the principles and provisions of the Agreement. For example, the protection of traditional knowledge can be extended to foreigners on a basis of reciprocity only.