The WIPO patent system has been based on two main treaties, namely, the Paris Convention for the Protection of Industrial Property (Paris Convention)²  and the PCT. The Paris Convention, considered the cornerstone of the existing international patent system, established substantive standards in various areas of intellectual property including patents, while the PCT established procedural standards. In addition to these two treaties, the Budapest Treaty on the Deposit of Micro-organisms established a system for the international recognition of deposits of micro-organisms in specified institutions for the purposes of patent disclosure.

Though WIPO was considered an important institution during the 1980s, due to the lack of uniform standards and a strong enforcement mechanism, key industry players in the US, persuaded their government that WIPO had failed to secure appropriate levels of intellectual property protection in other countries. They lobbied to bring the issue of IPR protection within the General Agreement on Tariffs and Trade (GATT) system [Drahos 2002]. An obvious advantage of GATT vis-a-vis WIPO was the possibility of applying trade sanctions on countries found as non-compliant.

Developing countries, as expected, resisted the proposal of negotiating on IPR in the Uruguay Round. However, the US, supported by the European Union (EU), succeeded in its efforts through bilateral dealings and the threat of unilateral retaliatory measures such as under Section 301 of the US Trade and Tariffs Act, as well as promises of concessions in agriculture, textiles and clothing.

The TRIPS agreement introduced the concept of minimum standards for IPRs in diverse areas and placed heavy obligations on national governments. However, there are some ‘flexibilities’ available for the design and implementation of the patent regime at the national level. Much of this flexibility now faces the possibility of being eroded or suppressed under the new WIPO Patent Agenda.

Though WIPO is much weaker as a forum compared with the WTO, it is not a toothless organisation. In an arbitration case where an arbitral award is decided by the arbitrator/arbitration tribunal of WIPO, if that award is rendered in a country that is a signatory to the New York convention on the Recognition and Enforcement of Foreign Arbitral Awards (the ‘New York Convention’) it may be enforced relatively easily in any of the more than 120 signatory countries to the convention.

Moreover, once higher standards were adopted at WIPO, pressure would build up at the WTO for further increases in intellectual property standards for all its members, under Article 71 of TRIPS. It should not be forgotten that much of the substantive provisions of TRIPS are drawn from WIPO. Due to the existing international geopolitical situation, it would be extremely difficult to raise IPR standards at the WTO. Hence, the US – the prime driver of higher IPR standards – thought it prudent to adopt a two-stage procedure: to raise standards first at WIPO, and then export these higher standards to WTO.

This is part of the gameplan where the US has been preparing the ground for higher IPR standards globally through several bilateral agreements, notably with Jordan, Singapore and Australia as well as other means like asking China, or even least developed countries like Nepal and Cambodia, to join the UPOV Convention as a condition for accession to WTO.³

The discussions and negotiations at WIPO are therefore extremely important for developing countries, as they set the agenda for the development and harmonisation of intellectual property standards at the multilateral level. The upcoming WIPO general assembly, to be held from September 27 to October 5, which will discuss the WIPO Patent Agenda is therefore of crucial significance for developing countries.

Issues in the Patent Agenda

The WIPO Patent Agenda was presented to and approved by the WIPO Assembly, the Paris Union Assembly and the Patent Cooperation Treaty (PCT) Assembly in September 2001. The patent agenda activities are taking place under three main processes in WIPO. There are: (1) the move to promote the ratification of the Patent Law Treaty (PLT); (2) the effort to reform the PCT; (3) the ongoing negotiations on the draft substantive patent law treaty (SPLT). These processes are ultimately oriented to create an international legal framework for a universal patent. The three main pillars of the patent agenda are briefly described below.⁴
Patent Law Treaty: The PLT, adopted in Geneva on June 1, 2000, mainly aims to harmonise the procedures for applying for, obtaining and maintaining patents by means of a set of standardised formal requirements for national and regional patent offices. The PLT is not yet in force and only four countries have ratified and/or acceded to it, while 53 others and the European Patent Organisation (EPO) have signed the treaty.⁵

The PLT provisions attempt to reduce the risk of errors by patent offices, as well as the time and costs of procedures for patent applicants, thereby facilitating the acquisition of patent rights internationally. The PLT provides a clear linkage to the PCT for current and any future patent law harmonisation [Nolff 2001].
Reforms of Patent Cooperation Treaty: The PCT was concluded in 1970, amended in 1979 and further modified in 1984, with the aim of providing a single system under which patent applicants could file one international application that would be valid in all the contracting states designated by the applicant. While certain stages are still reserved for national and/or regional patent offices, the system allows for international publication, an international prior art search and even an international preliminary examination if the applicant so desires. The PCT system is seen as a great success upon which a truly international patent system can evolve.

It has been built upon and has respected differences in substantive patent law. There are only three mandatory PCT obligations [Nolff 2001] These are:
– A regularly filed PCT application must have the effect of a regularly filed national application;
– A PCT application cannot be processed by national authorities before the expiry of a certain time limit, unless expressly requested by the PCT applicant;
– A PCT contracting state cannot require, subject to certain exceptions, compliance relating to the form or contents of a PCT application, which differs from the requirement provided by the PCT.

The process of reforming the PCT started in 2000 with the US championing it. The reform of the PCT is geared towards introducing amendments to the treaty to simplify and streamline procedures while at the same time aligning it to the new PLT standards. The changes that are anticipated relate to coordination of international searches and international preliminary examination and time limits for entering the national phase. The objectives of the reform, as presented by its proponents, include:
– To streamline and simplify procedures for patent applicants;⁶ 
– To reduce the duplication of examination tasks and remedy the overload of patent offices due to the growth in patent applications;
– To reduce the cost of filing for patent applicants and facilitate the acquisition of the same patent in a large number of countries.

The initiative to reform the PCT has found substantial support from both developed and developing countries, but there is no consensus on several aspects of the reform, including its scope.⁷ Colombia, in particular, is opposed to the grand objective of the reform, that is, the grant of ‘international patents’. Some others have emphasised that the reform should not only take into account the interests of applicants but also those of third parties.
Substantive Patent Law Treaty: The current negotiations on SPLT taking place in the WIPO standing committee on the law of patents (SCP) are aimed at drawing up initial, but uniform and largely complete, patent law standards relating to issues of prior art, novelty, utility and inventiveness, requirements for proper disclosure, drafting and interpretation of claims, grounds for refusal of an application, and for revocation and invalidation of a patent. The draft treaty, as prepared by the WIPO secretariat, covered the substantive issues. Some of these issues were dealt with by the TRIPS agreement, notably the rights conferred by the patent, term of patents and the reversal of burden of proof, while many of the rest are now part of the agenda of the SCP on its work on the SPLT.

The SPLT differs from the PLT, the PCT and the TRIPS in several aspects. Unlike the PCT and the PLT, it seeks to prescribe substantive standards to determine what an invention is, how the patentability is to be established, and what the scope of patent protection will be. It goes beyond TRIPS, which indicates the requirements for patentability (novelty, inventive step or non-obviousness, and industrial applicability or usefulness)⁸ but fails to define such concepts or what an ‘invention’ is, and which also is devoid of rules on the scope and interpretation of patent claims, essential to establish the scope of protection.

However, from the perspective of developing countries, the SPLT is, as discussed below, potentially the most troublesome building-block of the international patent system envisaged in the WIPO agenda. If this system is adopted, it would establish new binding international standards in critical areas of patent law which until now have been left to national governments.

Defining SPLT

Discussions on the SPLT are still at the initial phase. However, the participation of developing countries has been quite limited. Yet, some controversies have already arisen. Some of the main controversial issues are discussed below.
Defining patentability requirements: The draft SPLT – which contains specific definitions on what is eligible for protection, on the requirements of patentability and on the concept of ‘prior art’ – would create the basis for a universal concept of patentability.

The proposed SPLT rules will in all likelihood lead to, among other things, the disappearance of the freedom to determine patentability for biological materials, including genes. For instance, under the US laws, an isolated and purified form of a natural product can be patented, while the Brazilian patent law (1996) stipulates that no patents shall be granted with respect to living beings or ‘biological materials found in nature’, even if isolated, including the ‘genome or germplasm’ of any living being. Thus, if the draft SPLT were adopted, the room currently used to limit the patenting of biological materials may disappear.
Technical character of inventions: As per current multilateral arrangements, for an invention to be patentable, it should show a ‘technical character’. However, the US and its allies argued that “requiring a technical character was unnecessarily limiting the innovations in new fields of endeavour, such as information technology and biotechnology”, and that the term ‘in all fields of technology’, which appeared in Article 27.1 of the TRIPS agreement was not mandating any requirement relating to technical character.

The US proposal aims to export to the rest of the world its policy of patentability of software, business methods and research tools. Software is patentable as such in the US. In Diamond vs Diehr and Diamond vs Bradley (both decided in 1981), the US Supreme Court applied a liberal rule that permitted the patenting of software algorithms. The US patent and trademark office followed up by expanding the definition, by issuing software patenting guidelines of patentable subject matter.⁹ However, in European countries and elsewhere, software as such is not deemed an ‘invention’ due to lack of industrial applicability.¹⁰ 

Business methods include those applied to business activities such as buying and selling, marketing techniques, financial schemes and strategies, generally supported on computer software and networks. The State Street Bank vs Signature Financial Group case also opened the way for the controversial patenting of business methods. However, the broad definition of ‘invention’, allowing the patentability of business methods, is controversial even in the US.

‘Research tools’ are methods or substances used to undertake research in specific fields. Genes are an example of research tools used to identify possible therapeutic molecules or therapies, and patents on genes are likely to restrict their use as research tools. It is feared that the progress of science may be slowed down, particularly in developing countries, because of the need to obtain multiple licences as well as the escalation of research costs due to licence fees.
Exclusions from patentability: Another important issue raised by some developing countries was the need to incorporate in the draft treaty Articles 27.2 and 27.3 of the TRIPS agreement,¹¹ and to include a general provision allowing exceptions to patentability, which would be necessary for the protection of public health and environment. The US and the biotechnology industry, in particular in relation to plants and animals, opposed this proposal by arguing that the TRIPS agreement ‘provides for minimum requirements under the WTO’ and that the SPLT, in contrast, would aim at establishing ‘best practices at the international level’. It is quite clear that if the US proposal is accepted, the national policy space of other countries will be curbed further.
Infringement and doctrine of equivalents: The issue of the ‘theory of equivalence’ to be applied¹²  has been outside the TRIPS agreement standards and left entirely to national law. Thus, it is national legislation that defines when products or processes that are not literally described in a claim may be deemed ‘equivalent’ and therefore considered as infringing on patent rights. The approach adopted in this regard should provide adequate protection for the inventor’s interests while leaving more room for third party innovations in the field covered by the patent.

It is crucial for developing countries to have as much room as possible for inventing around patented inventions, a view shared by many in developed countries as well, where some experts believe that a narrow doctrine of equivalence would more likely promote innovation. Adopting a global approach in this area is fraught with danger and is also a further encroachment on the national policy space.

One of the most controversial provisions of the draft is one that would prohibit member countries from imposing any further conditions to obtain a patent other than those specifically provided for in the treaty. Such a requirement would tie the hands of national governments in limiting or remedying the misappropriation of genetic resources and traditional knowledge, as they would not be able to ask for more complete information on the ‘prior art’.

The negotiation process at the SCP shows wide disparity in the involvement and preparation of developing countries compared with that of developed countries, and many NGOs representing corporations’ and patent lawyers’ interests but none representing the views of consumers or developing countries. In a recent study, Drahos concluded that due to the continued use of webs of coercion by the US and EU, developing countries still have comparatively little influence in international intellectual property standard setting [Drahos 2002].

It may be mentioned that the NGOs mentioned here are not those organisations representing public interest. All of them are essentially industry associations or lawyers’ associations representing business interests.¹³ Curiously, despite their ‘observer capacity’, these NGOs participated in the debates on the same footing as governments, making proposals or ‘reservations’, supporting the positions of some governments or being opposed to government positions.¹⁴ 

Conclusion

The TRIPS agreement has already introduced the principle of minimum intellectual property standards. Thus, any subsequent bilateral or multilateral intellectual property agreement can only necessarily create higher standards. Thus the patent agenda can now only aim at higher standards and towards more harmonisation. The patent agenda essentially aims at introducing new standards that would exclude the flexibility available under the TRIPS agreement. However, preserving flexibility in framing national patent laws is a necessary but not sufficient condition to allow countries to adapt, as far as permitted under existing international obligations, patent standards to their own needs and circumstances.

There is growing recognition that the regulation of patents and other IPRs cannot be reasonably made with a unique, universal standard. Different socio-economic conditions and levels of development require different intellectual property systems [CIPR 2002]. A recent World Bank report shows that the patent system may entail considerable short-term costs for developing countries, mainly due to administrative costs and problems with higher prices for medicines and key technological inputs, while ‘long-term benefits seem uncertain and costly to achieve in many nations, particularly for the poorest countries’ [World Bank 2001]. Moreover, higher standards of patent protection are unlikely to have a positive effect on local innovation, except in those few countries (and sectors) that have reached a certain level of technological development and have the capacity to finance substantial research and development (R and D).

History shows that even some well-developed OECD countries used a softer approach towards IPR protection until a threshold level of technological advancement was achieved. For instance, pharmaceutical products were excluded from patent protection in Germany till 1968, in Switzerland till 1977, Italy till 1978, Spain and Portugal till 1992, and Finland till 1995. In countries with a longer history of pharmaceutical product patents, such as Canada, France and the UK, compulsory licensing provisions were quite liberal [Chang 2002]. India’s pharmaceuticals sector is yet another example of benefiting from more relaxed patent regime [Nanda and Lodha 2002].

But the TRIPS agreement largely denies developing countries the opportunity to adjust and evolve their IPR systems as they develop. This will be more so if the WIPO Patent Agenda were adopted. Hence, while the immediate objective of the US and other proponents of the PCT reform is to streamline procedures and reduce duplication and costs, the final objective is to be able to grant a global patent. The adoption of such a system would also only mean that most national patent offices would become superfluous.

Considering the power and tactics of countries like the US in pushing the second round of harmonisation process under the WIPO Patent Agenda, newer and higher standards of IPR protection under WTO aegis may not be ruled out. Developing and least developed countries are yet to implement TRIPS, and its actual impact is yet to be felt or assessed. Indeed, there are sufficient reasons to believe that post-2005, most of these countries will find it difficult to live up to the TRIPS commitments, and the threat of trade sanctions will be ever-present. Hence, they are not in a position to absorb yet another shock.

Unfortunately, despite lessons learnt from the TRIPS negotiations under the Uruguay Round, developing countries are not serious enough about the new WIPO initiative. Although their participation in the TRIPS council debate on the mandatory review of the agreement is showing some signs of maturity, their participation in the agenda formulation and subsequent negotiation under the WIPO system is still not up to the mark. With their improved understanding on issues they can very well block negotiations (of the WIPO Patent Agenda) in the areas that go against their national interests (such as those taking away TRIPS flexibilities), and can incorporate elements that are favourable to them. Argentina, Brazil and Bolivia have already developed a proposal in this regard.¹⁵ Other developing countries must join them with their inputs and support.

Notes

 1 For instance, the adoption, in 1996, of the WIPO ‘Copyright Treaty’ and the ‘Performances and Phonograms Treaty’ in 1996.
 2 The Convention, adopted in 1883, has since been revised six times, in 1900, 1911, 1925, 1934, 1958 and 1967, and amended once in 1979.
 3 International Union for the Protection of New Plant Varieties (UPOV) entails higher obligation than that under TRIPS. The recent WTO entrants, China, Kyrgyzstan and Cambodia had to join UPOV, whereas Nepal somehow managed to join the WTO without joining UPOV.
 4 The process may include other elements, for example, the revision of the Budapest Treaty on the Deposit of Micro-organisms for the purpose of patent protection [GRAIN 2002].
 5 See current status of ratification and/or accession to the PLT at: http://www.wipo.int/treaties/documents/english/word/u-page33.doc
 6 In its proposal, the US stated that “from the perspective of potential users, the PCT is often criticised as being overly complex and unforgiving”. See (PCT/R/1/2).
 7 Spain, for example, noted that the reform “should not encompass changes of a substantive nature” (PCT/R/1/26, para 30). Some countries expressed agreement only with regard to streamlining and simplifying the current system (see, e g, South Korea’s intervention, para 35).
 8 See article 27.1 of TRIPS.
 9 In a case with similar implications, State Street Bank vs Signature Financial Group (1998), the definition of protectable software was further expanded, and a software patent awarded on a data-processing system used in financial transactions was validated.
10 The diplomatic conference for the revision of the European Patent Convention (Munich 20-29 November 2000) rejected (by 16 of 20 votes) the proposal to delete the prohibition to grant patents for computer programmes from article 52(2)(c) of the convention.
11 These articles allow members to exclude from patentability those inventions whose commercialisation may offend morality or public order, and to exclude plants and animals as well as essentially biological process to obtain them, respectively.
12 This doctrine provides a conceptual framework to determine if a violation exists when there is no literal infringement of patent claims.
13 Representatives of the following NGOs took part in the meeting in an observer capacity: American Bar Association (ABA), American Intellectual Property Law Association (AIPLA), Asian Patent Attorneys Association (APAA), Biotechnology Industry Organisation (BIO), Chartered Institute of Patent Agents (CIPA), Committee of National Institutes of Patent Agents (CNIPA), Institute of Professional Representatives before the European Patent Office (EPI), Intellectual Property Institute of Canada (IPIC), Intellectual Property Owners Association (IPO), International Association for the Protection of Industrial Property (AIPPI), International Federation of Industrial Property Attorneys (FICPI), International Intellectual Property Society (IIPS), Max-Planck-Institute for Foreign and International Patent, Copyright and Competition Law (MPI), Trade Marks, Patents and Designs Federation (TMPDF), Union of European Practitioners in Industrial Property (UEPIP) and Union of Industrial and Employers’ Confederations of Europe (UNICE).
14 See, e g, paragraphs 28, 167, 170, 185, and 186, SCP/6/9.
15 The proposal is available at: http://www.iprsonline.org/resources/docs/BrazilArgentina_WIPO.pdf

References