Statement by India on Non-Violation and Situation complaints in TRIPS Council meeting

October 2014

India would like to thank the chair for initiating the discussion on non-violation and other situation complaints under the TRIPS Agreement today. India associates itself with the statements made by Venezuela and Brazil which raise fundamental concerns on the applicability of non-violation complaints under the TRIPS Agreement.

We thank the US for circulating a communication on this issue in June 2014 (IP/C/W/599) which attempts to to summarize the relevant provisions of the GATT 1994, the TRIPS Agreement, and the Dispute Settlement Understanding (DSU); relevant GATT and WTO panel and Appellate Body reports; and responses to issues raised by other WTO Members regarding the applicability of non-violation complaints under the TRIPS Agreement. The US paper does not address, in India’s view, the fundamental concerns that India and several other WTO members have raised with regard to non-violation complaints under the TRIPS Agreement. India would be submitting a detailed paper outlining and reiterating the fundamental concerns of having non-violation complaints under the TRIPS Agreement.

In today’s meeting, Mr. Chairman, India would like to reiterate its position on non-violation complaints under the TRIPS Agreement while also addressing some of the issues that have been raised by the US. In this context, it is important to note that the elements highlighted in the submission IP/C/W/385 made in 2002 are of critical relevance. The submission gives details of our systemic concerns and reasons why there should be no application of non-violation and situation complaints to the TRIPS Agreement. We have contended that non-violation complaints can upset the delicate balance of rights and obligations in the TRIPS Agreement. This can also limit use of the flexibilities inherent in the TRIPS Agreement to secure objectives relating to public health, nutrition, transfer of technology and other issues of public interest in sectors of vital importance to socio-economic and technological development.

India would like to address some of points raised by the US under three broad pillars:

Firstly the nature of the TRIPS Agreement:

As stated by Brazil, it is important to recognize that the TRIPS Agreement is a unique, “sui generis” agreement and is distinct from the GATT and GATS, contrary to the assertion made in the US communication. In the GATT/WTO legal framework, the establishment of the non-violation procedure aims primarily to prevent the tariff concessions or specific commitments on trade in services from being adversely distorted by the additional trade measures taken. With the gradual evolution of comprehensive trade agreements addressing a wide range of issues, it does not make any logical sense to extend the same concern of circumvention/ dilution of trade obligations in the context of agreements such as the TRIPS Agreement. When it comes to the GATT and the GATS as market access agreements, the non-violation complaint is an additional tool with which to balance the rights and obligations concerning market access in the GATT and GATS respectively. Fundamentally differing from the GATT and the GATS, the TRIPS Agreement is not “about reciprocal market access rights of governments”. While IPRs might facilitate trade and investment, the obligations under the TRIPS Agreement cannot be characterized as market access concessions.

Secondly, is the issue of Flexibility under the TRIPS Agreement:

The Preamble to the TRIPS Agreement recognizes the inherent policy flexibility of WTO Members when it states that the TRIPS Agreement recognizes “the underlying public policy objectives of national systems for the protection of intellectual property, including developmental and technological objectives.” It is widely acknowledged that the TRIPS Agreement put in place global minimum standards for IPRs, and left room for policy flexibilities for WTO Members to enact their laws so long as they meet the TRIPS minimum standards. We are concerned that the application of non-violation complaints would not only threaten to undermine regulatory authority but would infringe sovereign rights. Flexibilities that the TRIPS Agreement provides would be severely curtailed by non-violation complaints. A Members’ rights to introduce new and vital socio-economic, health, environmental and cultural measures, including the measures on the basis of the Doha Declaration on Public Health, would be severely curtailed and would undermine the enjoyment of WTO Members’ sovereign right to develop new laws to protect public interest. Any measure under Article 8 would thus encourage unilateral pressure and speculative claims to force countries to raise protection beyond minimum requirements or to refrain from using TRIPS-consistent measures. Inevitably, non-violation complaints will make it harder for Members to rely on the agreed text of the TRIPS Agreement.

The United States in its communication is of the view “that the availability of non-violation complaints will protect Members from intentional evasions of obligations under the TRIPS Agreement while preserving the ability of any Member to implement legitimate social, economic development, health, environmental and cultural policies. Non-violation complaints will only be successful if they could not have been foreseen when the Uruguay Round negotiations were underway. Because there are a number of ways to implement social and cultural policy goals, a Member may take this element of non-violation complaints into consideration when crafting measures to protect these goals.” India’s concern with this reasoning of the US communication is that “any intentional evasion of a TRIPS obligation can be challenged as a violation of that obligation itself; and there is no need for the ‘non-violation’ route to address the same. India’s concern is that what is more likely to be questioned in a non-violation complaint is the exercise of available policy flexibility. In fact, the US communication admits as much in the same paragraph when it implies that what is likely to be questioned in a non-violation complaint is the manner in which policy objectives are sought to be achieved. It notes that “because there are a number of ways to implement social and cultural policy goals, a Member may take this element of non-violation complaints into consideration when crafting measures to protect these goals.” Thus, the concerns of curtailment of flexible policy space provided by the TRIPS Agreement through the applicability of non-violation complaints is a genuine and serious one.

Thirdly is the issue of Inadequate Guidance:

The issue of inadequate guidance on non-violation complaints under the TRIPS Agreement continues to be a cause of concern. The US communication states that the GATT and WTO panels and the Appellate Body have provided extensive guidance regarding non-violation complaints. However, the nature of non-violation complaints being an “exceptional remedy” does not address the fundamental inappropriateness of the remedy itself in the context of the TRIPS Agreement. The US has also argued that non-violation complaints will be successful only when these could not have been ‘foreseen when the Uruguay Round negotiations were underway”. The practical effect of this approach could be to require developing countries to compensate for measures that adversely affect foreign holders of intellectual property rights, and that were not foreseen during the Uruguay Round. Such an approach would arguably bring within its fold a large number of national laws and domestic measures, and may undermine the TRIPS Agreement’s preambular goal of ensuring maximum flexibility in the domestic implementation of laws and regulations. Thus, we remain concerned about the ambiguities in the applicability of non-violation complaints to the TRIPS Agreement.

To conclude:

Article 64.1 of the TRIPS Agreement establishes that GATT Article XXIII applies to the TRIPS Agreement except as otherwise provided in Articles 64.2 and 64.3.  Notwithstanding the expiry of the time-period under Article 64.2, non-violation and situation complaints only apply to the TRIPS Agreement in accordance with the procedure established under Article 64.3.  Complying with this procedure, the importance of which Ministers reaffirmed through their adoption of the Decision on Implementation-Related Issues and Concerns, should be a matter of priority for the TRIPS Council. The Decision directed the TRIPS Council to “continue its examination of the scope and modalities for complaints of the types provided for under subparagraphs 1(b) and 1(c) of Article XXIII of GATT 1994 and make recommendations to the Fifth Session of the Ministerial Conference.” It also agreed that, in the meantime, members will not initiate such complaints under the TRIPS Agreement. Thus, the assertion that the expiry of the time-period under Article 64.2 makes non-violation and situation complaints automatically applicable to the TRIPS Agreement is, in our view, incorrect.

The absence of non-violation complaints in the TRIPS context does not in any manner threaten or dilute the enforceability of TRIPS related rights and obligations. On the contrary, the application of non-violation complaints in the TRIPS context could potentially present issues relating to rights of Intellectual Property Right holders versus the legitimate exercise of regulatory policy choice by Governments. Introducing non-violation and situation complaints into the TRIPS Agreement is unnecessary and inconsistent with the interests of the WTO members. Any benefits arising from the Agreement can be adequately protected by applying the text of the Agreement in accordance with accepted principles of international law, and without introducing the legally uncertain notion of non-violation and situation complaints.

Mr. Chairman, India calls on all members to seriously reflect on the concerns expressed in communication IP/C/W/385 of 2002 and should join the consensus that complaints on the grounds of nullification or impairment of the type identified in Article XXIII:1(b) and (c) of the GATT 1994 be determined inapplicable to the TRIPS Agreement, in the interest of the stability and certainty of the multilateral system.

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