TRIPS Agreement of the WTO: Implications and Challenges for Bangladesh [1 ed.] 1443848344, 9781443848343

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Copyright 2013. Cambridge Scholars Publishing. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law.

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TRIPS Agreement of the WTO

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TRIPS Agreement of the WTO: Implications and Challenges for Bangladesh

By

Mohammad Towhidul Islam

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TRIPS Agreement of the WTO: Implications and Challenges for Bangladesh, by Mohammad Towhidul Islam This book first published 2013 Cambridge Scholars Publishing 12 Back Chapman Street, Newcastle upon Tyne, NE6 2XX, UK British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Copyright © 2013 by Mohammad Towhidul Islam All rights for this book reserved. No part of this book may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the copyright owner. ISBN (10): 1-4438-4834-4, ISBN (13): 978-1-4438-4834-3

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To my family

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Copyright 2013. Cambridge Scholars Publishing. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law.

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TABLE OF CONTENTS

Preface ...................................................................................................... viii List of Abbreviations ................................................................................ xiii Chapter One ................................................................................................. 1 TRIPS Agreement and Bangladesh: Mapping Out the Context for Implications and Challenges Chapter Two .............................................................................................. 21 Origin and Growth of the TRIPS Agreement from WIPO to WTO: Politics and Problems Chapter Three ............................................................................................ 68 TRIPS Agreement and Agriculture: Implications and Challenges for Bangladesh Chapter Four ............................................................................................ 125 TRIPS Agreement and Public Health: Implications and Challenges for Bangladesh Chapter Five ............................................................................................ 194 TRIPS Agreement and Economic Development: Implications and Challenges for Bangladesh Chapter Six .............................................................................................. 257 TRIPS Agreement and Bangladesh: A Way Forward Bibliography ............................................................................................ 283 Index ........................................................................................................ 342

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PREFACE

This book examines the application of the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) in the fields of agriculture, public health and economic development in a least developed country (LDC) such as Bangladesh. In particular, it evaluates the question whether the TRIPS’ one-size-fits-all approach compulsorily applicable for all countries, irrespective of their development standing, fulfils the developmental needs of Bangladesh in the fields of agriculture, public health and economic development. In answering this question, the book re-visits the debate on the international intellectual property rights (IPRs) system starting from the World Intellectual Property Organization (WIPO) regime to the WTO. This discussion is critical from the standpoints of both the developed countries that own IPRs and prosper by renting them and the developing countries and LDCs that appropriate IPRs in ensuring agriculture-prone livelihoods of the peoples, public health and economic well-being. With these issues acting as the backdrop, the research question attempts to put the legal discourse, including the TRIPS, IPRs related treaties and Bangladesh IPRs laws, into perspective in determining the TRIPS implications and challenges for Bangladesh. The analysis shows that the TRIPS introduction of IPRs in the name of plant varieties protection (PVP) and patents not only secures private sector investment in agriculture but also brings traditional agricultural practices within the spectrum of private monopoly, increases the price of agricultural products and forces people into dependency on engineered seeds and other agricultural inputs. To guard against such trade rules, the research recommends that Bangladesh should incorporate the TRIPS flexibilities either in its Patents and Designs Act, 1911 or in a new PVP legislation. The flexibilities can appear in the form of redefining patentable invention, choosing between patents and PVP and providing for compulsory licensing. The analysis also reveals that the TRIPS patenting in pharmaceuticals encourages innovations by ensuring royalty collections and protects public health by raising standards of living. However, patenting offers exclusivity to pharmaceutical companies, extending the duration of the patent term and establishing their control over production, supply and distribution.

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TRIPS Agreement of the WTO

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Such means of control results in exclusivity over drug pricing. The flexibilities of compliance deadline, compulsory licensing, parallel importation and others built into the TRIPS are set to tackle untenable situations arising from patenting exclusivity. However, patent laws in most LDCs are age-old in terms of capturing such flexibilities. Given this, the research recommends that LDCs such as Bangladesh should invoke the TRIPS flexibilities—transitional and after compliance. This can lead to a change in compulsory licensing provisions, making public interests and security exceptions as a criterion for issuing licences. This can also allow parallel importation of the over-priced drugs and safeguard against other anti-competitive practices. The analysis further establishes that the TRIPS standard-setting in relation to agriculture and pharmaceuticals does not help the country to fulfil subsistence needs or promote economic development through innovations. However, the appropriation of agricultural and pharmaceutical goods during use of the TRIPS flexibilities has the potential to feed the people, protect public health interests and increase economic development with the supply of food and drugs at home and abroad. To this end, the research asks Bangladesh to reform its existing IPRs provisions by redefining patentable inventions and simplifying compulsory licensing and other differential treatments to appropriate foreign technologies. It also urges for further negotiations that can dictate the TRIPS to include mandatory provisions on technology transfer arrangements in order to reward LDCs who tend to comply with the TRIPS in spite of their clear disadvantages. To conclude, the research asks Bangladesh and other LDCs to press for the further extension of the compliance deadline which is currently 2013, and 2016 for pharmaceutical patenting, since the circumstances that led to the previous extension continue to exist. This book contains six chapters. The inter-relation between the chapters is as follows: x The first chapter ‘TRIPS Agreement and Bangladesh: Mapping out the Context for Implications and Challenges’ introduces the thesis and provides background information leading to the research questions. It then outlines the parameters upon which these questions stand. The chapter then outlines the direction and rationale of the research. It also delimits the scope of the research and describes the methodology to be followed. Finally, it explains how the organisation of the book addresses the research questions. x The second chapter ‘Origin and Growth of the TRIPS Agreement from WIPO to WTO: Politics and Problems’ contextualises the

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x

Preface

scope and significance of the research questions. It analyses the debate in the forums of the WIPO, the GATT, and the WTO that initiated the development and protection of IPRs and benchmarks the protection with the adoption of the TRIPS. The chapter also analyses the strengths and weaknesses of the WIPO and the GATT regimes that help some countries make economic development through innovations and reverse-engineering while others allege insufficient rewards for their creations. These latter countries press for a strengthened regime with wider and longer protection of IPRs. The chapter also analyses how the IPRs protection finds places in LDCs that have nothing to do with the protection of inventions but appropriate IPRs for meeting survival needs. The intention of such analysis is to find the points of departure from the previous IPRs regimes and prepare grounds for the investigation of the TRIPS with a view to owning IPRs and appropriating interests. The sectorwise examinations of the TRIPS include TRIPS and Agriculture, TRIPS and Public Health, and TRIPS and Economic Development. x The third chapter ‘TRIPS Agreement and Agriculture: Implications and Challenges for Bangladesh’ deals with the protection of IPRs in agriculture as provided in the TRIPS. This is the first in the series of the TRIPS analyses. It examines IPRs in agriculture from the perspective of IPRs-owning interests, which often involve the bio-prospecting of natural resources and also from the viewpoint of users such as Bangladesh, where the use of natural resources is a traditional practice. x The fourth chapter ‘TRIPS Agreement and Public Health: Implications and Challenges for Bangladesh’ continues the series analyses of the TRIPS and focuses on its patenting provisions in relation to pharmaceuticals. In particular, the chapter deals with the relationship between the TRIPS and public health. It examines whether patenting in pharmaceuticals raises standards of living as well as ensuring rewards for further investments or deteriorates public health in countries like Bangladesh that have low income and cannot afford patented medicines. x The fifth chapter ‘TRIPS Agreement and Economic Development: Implications and Challenges for Bangladesh’ highlights the TRIPS impact on and prospects for economic development, and is a continuation of the series analyses of the TRIPS. This analysis takes IPRs protection as a means for developed countries to initiate innovations in agriculture, especially for the development of new varieties and the initiation of innovations in pharmaceuticals. In

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this context, IPRs protection ensures that developed countries are able to rent such innovations and thus increase their economic development. This analysis also takes IPRs protection as a means for LDCs such as Bangladesh with a thriving manufacturing capacity to attract technology transfer in agriculture and pharmaceuticals or to extract the TRIPS flexibilities in order to reverse IPRs products and supply them at home and abroad to enhance economic development. x And finally, the sixth chapter ‘TRIPS Agreement and Bangladesh: A Way Forward’ concludes the study with a summary of the recommendations and contributions made in each chapter in response to the research questions and aim of the research. This book builds upon work completed for my doctorate in 2011. The development of my argument owes enormously to discussions with my two doctoral supervisors at Macquarie University, Dr Shawkat Alam and Professor Rafiqul Islam. I owe the most gracious thanks and gratitude to my principal supervisor, Dr Shawkat Alam, who, despite his own busy schedule, generously gave his time to enable me to maintain my selfimposed time frame for completing the research. His insightful criticisms on every aspect of the research, valuable suggestions, understanding and patience were exceptional. Dr Alam helped me to establish initial contact with some of the key resources for my study. I deeply appreciate the role he played when my health broke down. His encouragement during that time was as a ray of hope glimmering from a lighthouse. I owe a particular debt to my associate supervisor, Professor Muhammad Rafiqul Islam, for his invaluable guidance in writing the thesis and for reading and commenting on many drafts with thoughtful insights, who provided wonderful advice, feedback, and support throughout three and half years. I am profoundly thankful to Macquarie University for its scholarship, which enabled me to undertake this research. I thank the staff of the university, the Higher Degree Research Office and the library that provided timely support to keep the research process on track. I would like to especially thank Macquarie Law School and its staff for providing me with excellent logistical, financial and other generous assistance, which allowed me to complete my research project. I also offer sincere thanks to my fellow higher degree research students for all the fun, friendship and useful arguments while working together. I would like to thank University of Dhaka for granting me study leave to conduct the research. I also thank my parents, extended family members and friends for their prayers, help and encouragement for the progress of my doctoral studies.

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xii

Preface

At Macquarie, in fulfilling the requirements for the doctoral degree, I followed the ‘thesis by publication’ mode. Having based on the draft chapters, I published refereed articles in [Oxford] Journal of Intellectual Property Law and Practice, Macquarie Journal of Business Law, [Sweet and Maxwell Journal] International Trade Law and Regulation, Manchester Journal of International Economic Law, Mediterranean Journal of Human Rights, and Sri Lanka Journal of International Law. For peer reviewing the articles, I extend great thanks to anonymous reviewers of these journals. I am especially grateful to Dr Lisa Lines who read and commented on the full draft thesis. I also benefited tremendously from comments provided by the examiners of my thesis and from an anonymous reviewer of the Cambridge Scholars Publishing. I also extend my thanks to the Cambridge Scholars Publishing for guiding this manuscript to completion. I accept full responsibility for any errors, omissions or deficiencies anyone may find in this book. Finally and most importantly, I tender my heartfelt love and gratefulness to Khushi, my lovely wife, and Daiyan, my adorable son for their affection and unwavering support, for putting up with my tantrums and for sparing me from household responsibilities, all of which made it possible for me to reach the finishing line. And finally, I dedicate this book to my parents. April 2013

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LIST OF ABBREVIATIONS

A2K

Access to Knowledge

ABS

Access and Benefit Sharing

AFPF

Armed Forces Pharmaceutical Factory

AIDS

Acquired Immune Deficiency Syndrome

API

Active Pharmaceutical Ingredient

ARV

Antiretroviral

BADC

Bangladesh Agriculture Development Corporation

BARC

Bangladesh Agricultural Research Council

BAU

Bangladesh Agriculture University

BELA

Bangladesh Environmental Lawyers’ Association

BINA

Bangladesh Institute of Nuclear Agriculture

BIRPI

United International Bureau for the Protection of Intellectual Property

BIT

Bilateral Investment Treaty

BMI

Business Monitor International

BRRI

Bangladesh Rice Research Institute

BSCIC

Bangladesh Small and Cottage Industries Corporation

Bt

Bacillus thuringiensis

CBD

Convention on Biological Diversity

CINVESTAV

Centre of Research and Advanced Studies

CPGRFA

Commission on Plant Genetic Resources for Food and Agriculture

DPCO

Drug Price Control Order

Islam, Mohammad Towhidul. TRIPS Agreement of the WTO : Implications and Challenges for Bangladesh, Cambridge Scholars Publishing, 2013. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/cam/detail.action?docID=1753494. Created from cam on 2023-05-14 10:09:56.

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xiv

List of Abbreviations

DPDT

Department of Patents, Designs and Trademarks

EC

European Community

ECOSOC

Economic and Social Council

EDCL

Essential Drug Company Limited

EDV

Essentially Derived Variety

EMR

Exclusive Marketing Right

EPC

Convention on the Grant of European Patents

ETP

Effluent Treatment Plant

EU

European Union

FAO

Food and Agriculture Organization

FDI

Foreign Direct Investment

GATT

General Agreement on Trade and Tariff

GDP

Gross Domestic Product

GI

Geographical Indication

GMO

Genetically Modified Organism

GPO

Government Pharmaceutical Organization

GSP

Generalised System of Preferences

GURT

Genetic Use Restriction Technology

HAL

Hindustan Antibiotics Ltd

HIV

Human Immunodeficiency Virus

IARC

International Agricultural Research Council

ICC

International Chamber of Commerce

ICJ

International Court of Justice

ICTSD

International Centre for Trade and Sustainable Development

IDPL

Indian Drugs and Pharmaceuticals Ltd

IPC

Intellectual Property Committee

IPGRI

International Plant Genetic Resources Institute

Islam, Mohammad Towhidul. TRIPS Agreement of the WTO : Implications and Challenges for Bangladesh, Cambridge Scholars Publishing, 2013. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/cam/detail.action?docID=1753494. Created from cam on 2023-05-14 10:09:56.

TRIPS Agreement of the WTO

IPRs

Intellectual Property Rights

IRRI

International Rice Research Institute

ISAAA

International Service for the Acquisition of Agri-Biotech Applications

ITPGRFA

International Treaty on Plant Genetic Resources for Food and Agriculture

IUCN

International Union for Conservation of Nature and Natural Resources

IUPGRFA

International Undertaking on Plant Genetic Resources for Food and Agriculture

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xv

LDC

Least Developed Country

MDG

Millennium Development Goal

MFN

Most Favoured Nation

MNC

Multinational Company

MSF

Médecins sans Frontières

MTA

Material Transfer Agreement

NBA

National Biodiversity Authority

NDP

National Drug Policy

NGO

Non-governmental Organisation

NIC

Newly Industrialised Country

NIEO

New International Economic Order

NPVC

New Plant Variety Certificate

OECD

Organisation for Economic Cooperation and Development

OLI

Ownership, Location and Internalisation

OTC

Over-the-counter

PBRs

Plant Breeders’ Rights

Islam, Mohammad Towhidul. TRIPS Agreement of the WTO : Implications and Challenges for Bangladesh, Cambridge Scholars Publishing, 2013. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/cam/detail.action?docID=1753494. Created from cam on 2023-05-14 10:09:56.

xvi

List of Abbreviations

PGRs

Plant Genetic Resources

PLT

Patent Law Treaty

PVP

Plant Varieties Protection

PVPC

Plant Variety Protection Certificate

R&D

Research and Development

RMG

Ready-made Garment

SME

Small and Medium Enterprise

SPLT

Substantive Patent Law Treaty

TIFA

Trade and Investment Framework Agreement

TK

Traditional Knowledge

TRIPS

Agreement on Trade-Related Aspects of Intellectual

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Property Rights TUA

Technology Use Agreement

UDHR

Universal Declaration of Human Rights

UK

United Kingdom

UNAIDS

Joint United Nations Programme on HIV/AIDS

UNCTAD

United Nations Conference on Trade and Development

UNDP

United Nations Development Programme

UNESCO

United Nations Educational, Scientific and Cultural Organization

UNIDO

United Nations Industrial Development Organization

UNO

United Nations Organization

UPOV

International Convention for the Protection of New Varieties of Plants

US

United States

USDA

United States Department of Agriculture

USFDA

United States Food and Drug Administration

USTR

United States Trade Representative

Islam, Mohammad Towhidul. TRIPS Agreement of the WTO : Implications and Challenges for Bangladesh, Cambridge Scholars Publishing, 2013. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/cam/detail.action?docID=1753494. Created from cam on 2023-05-14 10:09:56.

TRIPS Agreement of the WTO

Value Added Tax

WHA

World Health Assembly

WHO

World Health Organization

WIPO

World Intellectual Property Organization

WTO

World Trade Organization

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VAT

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xvii

Copyright © 2013. Cambridge Scholars Publishing. All rights reserved. Islam, Mohammad Towhidul. TRIPS Agreement of the WTO : Implications and Challenges for Bangladesh, Cambridge Scholars Publishing, 2013. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/cam/detail.action?docID=1753494. Created from cam on 2023-05-14 10:09:56.

CHAPTER ONE TRIPS AGREEMENTS AND BANGLADESH: MAPPING OUT THE CONTEXT FOR IMPLICATIONS AND CHALLENGES

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1.1 Introduction The World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)1 is set to offer uniform and extensive protection of intellectual property rights (IPRs)2 to trademarks, patents, copyrights, industrial designs, trade secrets, geographical indications (GIs) and integrated circuit industrial designs. For uniform protection of IPRs, the TRIPS defines certain basic standards of IPRs protection and makes it binding for all WTO member countries, irrespective of their developmental standing.3 In order to set wider protection for IPRs, the TRIPS broadens the extent and scope of IPRs protection by offering protection to inventions including pharmaceuticals, plant varieties and GIs.4 It also imposes restrictions on compulsory licensing that allows 1

Agreement on Trade-Related Aspects of Intellectual Property Rights, 15 April 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, 33 ILM 1197 [hereinafter TRIPS Agreement]. 2 It was customary to refer to industrial and intellectual property rights. The term ‘industrial’ was used to cover technology-based subject areas like patents, designs and trade marks. ‘Intellectual property’ was used to refer to copyright. The modern convention is to use ‘intellectual property’ to refer to both industrial and intellectual property. The TRIPS Agreement translates IPRs into trade-related intellectual property rights in order to commercialise the inventions and simultaneously stop others from doing so unless rents are paid on licensing; for details, see M Rafiqul Islam, International Trade Law of the WTO (2006) 379–380. 3 TRIPS Agreement Article 1(1) reads: Members shall give effect to the provisions of this Agreement. Members may, but shall not be obliged to, implement in their laws more extensive protection than is required by this Agreement, provided that such protection does not contravene the provisions of this Agreement. 4 TRIPS Agreement Part II.

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2

Chapter One

manufacturing a patented product without the patent owner’s consent and delimits existing IPRs protection flexibilities, including parallel importation of a patented product from another cheaper source or experimental uses of inventions before the expiration of the patent.5 The TRIPS containing such protection standard-setting of IPRs is adopted as one of the Marrakesh Agreements establishing the WTO and liberalising the global trade from protectionist state regulations prevailing in the pre-TRIPS regime. To reap the fruits of trade liberalisation, a strict enforcement and dispute settlement mechanism is also provided in the WTO Agreements and is shared by all Agreements, including the TRIPS. The standard-setting, especially the uniform and extensive protection of IPRs, serves IPRs-owning interests in line with IPRs protection theories, i.e. reward follows creation and compensation needs to be paid until and unless full value of creation is optimised.6 It brings in trade benefits of IPRs products to IPRs-owning developed countries by securing rent payments therein.7 The TRIPS restriction on flexibility clauses that meet emergencies or extraordinary circumstances also ensures the remuneration of IPRs owners.8 Further, the TRIPS formulation of minimum standards in IPRs protection gives the IPRs-owning developed countries leeway to go for the TRIPS-plus agreements.9 Such agreements tend to further prolong the rent payments by lessening the special and differential treatment,10

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5

TRIPS Agreement Articles 31, 30, 39 and 6; Carlos M Correa, ‘Pro-competitive Measures under TRIPS to Promote Technology Diffusion in Developing Countries’ in Peter Drahos and Ruth Mayne (eds), Global Intellectual Property Rights: Knowledge and Development (2002) 47. 6 See William Fisher, ‘Theories of Intellectual Property’ 20 July 2009; see also Michael J Trebilcock and Robert Howse, The Regulation of International Trade (2005) 396–400. 7 Jagdish Bhagwati, ‘From Seattle to Hong Kong’ (December 2005: WTO Special Edition) 84(7) Foreign Affairs 2, 2–12. 8 Peter K Yu, ‘The Objectives and Principles of the TRIPS Agreement’ (2009) 46 Houston Law Review 979, 1015; Bryan C Mercurio, ‘TRIPS, Patents, and Access to Life-Saving Drugs in the Developing World’ (2004) 8(2) Marquette Intellectual Property Law Review 211, 217–222. 9 United Nations Conference on Trade and Development, ‘Intellectual Property in the World Trade Organization: Turning it into Developing Countries’ Real Property’ (UNCTAD Series on Assuring Development Gains from the International Trading System and Trade Negotiations, United Nations, New York and Geneva, 2010) [hereinafter UNCTAD]. 10 ‘Special and differential treatment’ is based on the premise that developing countries are inherently disadvantaged in their participation in international trade

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TRIPS Agreements and Bangladesh

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including the extended compliance deadline of 1 July 2013 and 1 January 2016 (patenting of pharmaceuticals) that typically considers the economic standing of least developed countries (LDCs).11 It is alleged that such TRIPS protection mandate is a ‘one-size-fits-all’ approach and is taken as a whole from a small group of IPRs-owning countries.12 This allegation seems to be well-founded, since such standardsetting already exists in developed countries and undervalues hundreds of developing countries and LDCs that have different welfare needs often called as development needs and their diverse means of fulfilment.13 This and none of the GATT provisions legally binds developed countries to undertake actions in favour of developing countries. For this reason, the GATT Contracting Parties has agreed in 1979 to establish an Enabling Clause for the GATT with the mandate to ensure the participation of developing countries in international trade. This agreement did not amend the text of the GATT, but as a decision by the GATT Contracting Parties it had an essentially equivalent legal effect. With this clause, in principle, developing countries should be subject to somewhat different rules and disciplines in international trade than those that apply to developed countries; and that the latter will implement their obligations under the GATT and WTO in ways that would be favourable to development. The WTO agreements that ended the Uruguay Round are consistent with this principle of special and differential treatment since they contain numerous provisions in favour of developing countries; see details Constantine Michalopoulos, ‘Special and Differential Treatment of Developing Countries in TRIPS’ [TRIPS Issue Papers 2, Quaker United Nations Office (QUNO), Geneva, 2003]. 11 See Decision of the Council for TRIPS of 29 November 2005, IP/C/40 (‘Extension of the Transition Period under Article 66.2 for Least-Developed Country Members’); and paragraph 7 of the Declaration on the TRIPS Agreement and Public Health, WT/MIN(01)/DEC/W/2 [hereinafter TRIPS Council]. 12 Peter Drahos, ‘Developing Countries and International Intellectual Property Standard-setting’ (2005) 5(5) Journal of World Intellectual Property 765; Vandana Shiva, Protect or Plunder? Understanding Intellectual Property Rights (2001) 49– 53; Jerome H Reichman, ‘The TRIPS Agreement Comes of Age: Conflict or Cooperation with the Developing Countries’ (2000) 32 Case Western Reserve Journal of International Law 441; Laurence R Helfer, ‘Regime Shifting: The TRIPS Agreement and New Dynamics of International Intellectual Property Lawmaking’ (2004) 29(1) Yale Journal of International Law 1; World Health Organization, ‘Public Health: Innovation and Intellectual Property Rights’ (Report of the Commission on Intellectual Property Rights, Innovation and Public Health, 2006) [hereinafter WHO]; The Commission on Intellectual Property Rights, ‘Integrating Intellectual Property Rights and Development Policy’ (Report of the Commission on Intellectual Property Rights, London, September 2002) 35 [hereinafter UK Commission]. 13 Peter K Yu, ‘The International Enclosure Movement’ (2007) 82 Indiana Law Journal 827, 828.

Islam, Mohammad Towhidul. TRIPS Agreement of the WTO : Implications and Challenges for Bangladesh, Cambridge Scholars Publishing, 2013. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/cam/detail.action?docID=1753494. Created from cam on 2023-05-14 10:23:10.

4

Chapter One

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undervaluation gives rise to implications and challenges for development needs usually pertaining to agriculture, public health and economic development and the fulfilling of means, which is mainly the free use of technology, i.e. IPRs appropriation.14 This is because those TRIPS measures that protect IPRs owners’ interests are protectionist and lead to trade protectionism. Here the protectionism measures operate at the cost of restricting the free use of technology for developing countries and LDCs and obstruct their trade in goods reverse-engineered15 by way of adding value and reshaping.16 In fact, the free use of technology in reverseengineering helps developing countries and LDCs in adding value and shaping existing products.17 Such use also proves to be comparatively advantageous for most of them in fulfilment of their developmental needs, particularly in agriculture, public health and economic development.18 However, in the name of uniform and extended protection of IPRs, the TRIPS restricts the free use of technology for protectionist purposes.19 This protectionist standard-setting contradicts with the WTO’s trade 14 Kamil Idris and Hisamitsu Arai, ‘The Intellectual Property-Conscious Nation: Mapping the Path from Developing to Developed’ (WIPO Publication No. 988, World Intellectual Property Organization, Geneva, Switzerland, 2006) 10 January 2011. 15 ‘Reverse engineering’ is taken to mean adding value and shaping the existing the product. See Pamela Samuelson and Suzanne Scotchmer, ‘The Law and Economics of Reverse Engineering’ (2002) 111 Yale Law Journal 1575. 16 Martin Khor, ‘Responding to the Globalisation Challenge: A Perspective from the South’ [Eleventh Meeting of the Intergovernmental Follow-up and Coordination Committee on Economic Cooperation among Developing Countries (IFCC-XI) Havana, Cuba, 21-23 March 2005] 10 January 2011; Rokiah Alavi, ‘Trade Protectionism under the WTO: The Impact on Muslim Countries’ (2002) 23(4) Journal of Economic Cooperation 1, 22-27. 17 UNCTAD, ‘Integration of Developing Countries in Global Supply Chains, Including through Adding Value to Their Exports’ (Item 5 of the Provisional Agenda, Trade and Development Board, Trade and Development Commission, Third Session, Geneva, 6–10 June 2011) 10 January 2011. 18 Philippe Cullet and Patricia Kameri-Mbote, ‘International Property Protection and Sustainable Development: Towards a Common African Institutional Framework and Strategy’ [Background Study Paper for NEPAD’s Steering Committee for Science and Technology, International Environmental Law Research Centre (IELRC) and New Partnership for Africa's Development (NEPAD), 19 January 2005] 10 January 2011. 19 Jagdish Bhagwati, above n 7, 2–12.

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5

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liberalising agenda of freeing trade from state regulations and reaping benefits from it.20 Additionally, the protectionism inherent in the provision of security for rent payments restricts the free trade principle of comparative advantage in ‘getting trade benefits out of individual advantages’.21 Indeed, most developing countries and LDCs possess the individual infrastructures necessary for reverse-engineering and utilise the free trade principle of comparative advantage for individual gains from it.22 However, the restriction of the free trade principle of comparative advantage results in the establishment of a monopoly of IPRs owners in the manufacture, supply and pricing of IPRs products. In the end, the monopolisation of IPRs obstructs developing countries and LDCs in the fulfilment of their developmental needs.23 As a signatory to the TRIPS, Bangladesh uses its LDC status for meeting the compliance deadline. However, it is pre-loaded with certain IPRs laws, including the Patents and Designs Act, 1911 (Patents and Designs Act),24 the Trade Marks Act, 2009 (Trade Marks Act)25 and the Copyright Act, 2000 (Copyright Act)26 as amended in 2005.27 Almost all

20 Ibid. In spite of his great active role in liberalising trade under the World Trade Organization (WTO), Jagdish Bhagwati is of the view that the TRIPS legitimates rent seeking behaviour and perpetuates monopoly, and these aspects are inconsistent with the principle of free trade. 21 Trebilcock and Howse, above n 6, 335-366. 22 UNCTAD, ‘Policies and Programmes for Technology Development and Mastery, Including the Role of FDI’ (Issues Paper, Commission on Enterprise, Business Facilitation and Development, Expert Meeting on Policies and Programmes for Technology Development and Mastery, Including the Role of FDI, Geneva, 16–18 July 2003) 10 January 2011. 23 See Josef Drexl, ‘The Relationship between the Legal Exclusivity and Economic Market Power: Links and Limits’ in Inge Govaere and Hans Ullrich (eds), Intellectual Property Market Power and the Public Interest (2008) 16–18. 24 Patents and Designs Act, 1911 (ACT NO. II of 1911) Bengal Code Vol. VII; Pakistan Code Vol. 6, enacted 1 March 1911 [hereinafter Patents and Designs Act]. 25 Trademarks Act, 2009 (ACT NO. XIX of 2009) Bangladesh Gazette Extra published 31 August 2010 10 December 210 (hereinafter Trade Marks Act). 26 Copyright Act, 2000 (ACT NO. XXVIII of 2000) Bangladesh Gazette Extra 18 July 2000 (hereinafter Copyright Act); Copyright (Amendment) Act, 2005 (ACT NO. XIV of 2005) Bangladesh Gazette Extra 18 May 2005.

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of them are taken to serve the trade liberalising agenda and for protecting IPRs owners’ interests, since they provide for similar treatment to IPRs owners irrespective of their country of origin. The IPRs laws in Bangladesh also contain broad terms for the extension of IPRs protection to any improvement or modification.28 With the use of the broad definition for patentable invention, patenting of pharmaceuticals or plants or plant varieties is also possible. However, to meet extraordinary circumstances including emergencies and insufficiency of supply, the IPRs laws contain some exception clauses including compulsory licensing and fair use.29 In addition, the LDC status entitles the country to the special and differential flexibility in order to deny patent protection to pharmaceuticals or copy IPRs protected products during the transitional period.30 It is clear that in order to fulfil the developmental needs of domestic consumption and to furnish the necessary trade, especially in agriculture and public health, Bangladesh appropriates products that are innovated and reverse-engineered.31 However, since the country has LDC status and with one-third of its population living below the poverty line, Bangladesh can rarely afford the cost of research and development (R&D) for innovations. Alternatively, it depends upon reverse-engineering, for which it possesses the necessary infrastructures. This reverse-engineering in agricultural products for livelihoods and pharmaceutical products for health necessitates the addition of value and the shaping of other countries’ innovations, which are protected by IPRs.32 This practice of adding value is generally carried out in the country by means of imitation and adaptation on accessing technology through IPRs appropriation or sometimes in the way of licensing or foreign direct investment (FDI).33 In this way, the reverse-engineering fulfils the developmental interests of Bangladesh mostly through IPRs appropriation. Such reverseengineering of foreign patented products and technology transfer are also taken into account in aiding the country to promote its economic 27

The pre-loading occurs due to the process of colonisation. See Peter Drahos, The Global Governance of Knowledge: Patent Offices and Their Clients (2010) 2. 28 For example, Patents and Designs Act Section 2(8). It defines ‘invention’ as any manner of new manufacture and includes an improvement and an alleged invention. 29 For example, Patents and Designs Act Section 22. 30 TRIPS Council, above n 11. 31 UNCTAD, ‘The Least Developed Countries Report 2007: Knowledge, Technological Learning and Innovation for Development’ (prepared by the UNCTAD Secretariat, Geneva, 2007) 125–126. 32 Ibid. 33 Ibid.

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development. However, the membership commitment of Bangladesh regarding trade protectionism and monopolistic ownership, as inserted in the TRIPS, restricts it from the IPRs-appropriating advantages of imitation and adaptation of existing knowledge products. Further, the transitional arrangement for excluding pharmaceuticals from patenting or copying IPRs-protected products and supplying them at home and abroad during the transitional period does not have a place in the local legislation. Thus, the TRIPS mandated trade protectionism and monopolistic ownership conjoined with the insufficiency of local laws brings in implications and challenges for Bangladesh in meeting those developmental needs that are most dependent on IPRs-appropriation.34

1.2 The Research Questions

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The preceding background leads to the following research questions: (1) What implications and challenges are posed by the TRIPS one-sizefits-all approach to the fulfilment of the developmental needs of an LDC such as Bangladesh in the fields of agriculture, public health and economic development? (2) What are the factors and elements responsible for such implications and challenges? (3) How do the relevant IPRs laws and regulations of LDCs like Bangladesh tend to face such implications and challenges?

1.3 Mapping a Baseline in Determining the TRIPS Implications and Challenges In answering the research questions, this study finds it necessary to defend and discard the TRIPS protection of IPRs in terms of some of the core features of neo-liberalism upon which the WTO’s trade liberalisation is based. The intention here is to show that in the name of liberalising trade and benefiting countries in trade, the TRIPS contains re-regulating features for uniform protection standard-setting. This, however, results in monopolisation of IPRs or restricts the comparative advantage in reverseengineering for adding value and shaping the existing the product and brings in implications and challenges to meet the survival needs based on free use of IPRs goods. Such defence and discarding helps to establish a baseline for determining the TRIPS implications and challenges for LDCs like Bangladesh. In addition, in order to institute the baseline, the TRIPS is compared and contrasted with IPRs protection theories and the former is 34

Ibid.

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found to be more useful for the purposes of this study. This comparison shows that protection theories support the securing of investment in IPRs products. However, protection without competition standard-setting, as the comparison goes, gives rise to protectionism and therefore monopolisation and affects the trade liberalising principle of comparative advantage. This comparison exercise has been taken as a parameter in determining the TRIPS implications and challenges for Bangladesh.

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1.3.1 TRIPS Agreement and Neo-liberalism Theory: Implications and Challenges The TRIPS is set to serve the WTO’s trade liberalising agenda, which makes every part of trade facilities open to all. This free trade agenda of the WTO is said to have based on neo-liberalism theory since it follows neo-liberalism features that include privatisation, marketisation, deregulation and re-regulation.35 It relies on the neo-liberalism feature that assigns previously state-owned, un-owned or communally owned property rights to individual or corporate persons.36 It also assigns prices to phenomena that were previously shielded from market exchange for various reasons.37 It pushes for the rollback of state intervention in numerous areas of social life so that state regulation is minimised and increasing numbers of actors become self-regulating within centrally determined frameworks and rules.38 In order to facilitate privatisation and marketisation of ever-wider spheres of social life, it insists on the deployment of state regulations or policies.39 The TRIPS emerges within such trade-liberalising auspices of the WTO.

35 David Harvey, ‘Neoliberalism as Creative Destruction’ (2006) 88(2) Geografiska Annaler: Series B, Human Geography 145; see also Jim MacGuigan, ‘Neo-Liberalism, Culture and Policy’ (2005) 11(3) International Journal of Culture and Policy 229. 36 David Harvey, A Brief History of Neoliberalism (2005) 152–182; John Braithwaite, ‘Neoliberalism or Regulatory Capitalism’ (Occasional Paper 5, Australian National University, October 2005). 37 Noel Castree, ‘Neoliberalising Nature: The Logics of Deregulation and Reregulation’ (2008) 40(1) Environment and Planning A 131. 38 Ha-Joon Chang, ‘Breaking the Mould: An Institutionalist Political Economy Alternative to the Neoliberal Theory of the Market and the State’ (Social Policy and Development Programme Paper 6, United Nations Research Institute for Social Development, May 2001). 39 Ibid.

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The TRIPS follows the trade liberalising features of the WTO in response to the criticism levelled against the IPRs protection regime, which commenced in the 19th century. This regime is managed by the World Intellectual Property Organization (WIPO) with the help of the Paris Convention for the Protection of Industrial Property 1883 (Paris Convention)40 and the Berne Convention for the Protection of Literary and Artistic Works 1886 (Berne Convention).41 The regime witnesses increasing competition in manufactured exports of IPRs products from newly industrialised countries (NICs) in the 1980s and 1990s. It faces developed countries’ complaints regarding various state regulations prevailing in developing countries and LDCs, which hold trade protectionism with shorter periods of IPRs protection, random compulsory licensing or inadequate protection resulting in loss of rents for IPRs.42 However, it fails to find a sustainable solution in these situations of trade protectionism. As a consequence, developed countries prefer forum shifting for IPRs protection by placing IPRs issues in the General Agreement on Trade and Tariff (GATT)43 that already initiates the free trade regime but contains trade protectionism measures discouraging IPRs appropriation.44 Subsequently, the Uruguay Round of GATT negotiations led to tradeliberalisation in the WTO and the TRIPS. Although it is in the WTO’s patronage, the TRIPS incorporates the trade-liberalising features of the WTO, since it translates IPRs into traderelated IPRs to commercialise the inventions; it recognises IPRs as private rights and denounces its affiliation with the public domain.45 It re-regulates the protection of IPRs with the help of centrally administered authorities and rules.46 The TRIPS also upholds the WTO’s aim to liberalise trade by 40

Paris Convention for the Protection of Industrial Property 1883, signed 20 March 1883, 828 UNTS 305 [hereinafter Paris Convention]. 41 Berne Convention for the Protection of Literary and Artistic Works 1886, signed 9 September 1886, 828 UNTS 221 [hereinafter Berne Convention]. 42 Trebilcock and Howse, above n 6, 396–400. 43 General Agreement on Tariffs and Trade, signed 30 October 1947 (entered into force 1 January 1948) 58 RTNU 187 [hereinafter GATT]. 44 Carlos M Correa, ‘Globalisation and Intellectual Property Rights’ in Shawkat Alam, Natalie Klein and Juliette Overland (eds), Globalisation and the Quest for Social and Environmental Justice: The Relevance of International Law in an Evolving World Order (2011) 155. 45 Islam, above n 2, 380. 46 Katia Segers and Ellen Huijgh, ‘Clarifying the Complexity and Ambivalence of Cultural Industries’ (Working Paper 2006–02, Re-Creatief Vlaanderen, Gent, Belgium). They note that the formalised procedures, such as new licensing rules or mechanisms of control, are instances of re-regulation.

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Chapter One

inserting most favoured nation (MFN) and national treatment principles as incorporated in Articles I and III of the GATT. The MFN principle requires members to give equal advantage to all nationals irrespective of membership.47 The national treatment principle component of the TRIPS requires member countries to give the same rights to works originating from other member countries as they give to the works of their nationals.48 The TRIPS also breaks the shackles of protectionist regulations involving state interference through unfettered compulsory licensing, shortening the period of IPRs protection and narrowing the defined protection or addressing the lack of state vigilance regarding enforcement. In order to liberalise trade, it also inserts provisions on preventing the exploitation of IPRs by right-holders through resorting to practices that unreasonably distort trade or adversely affect the international diffusion of technology.49 Thus, theoretically, the TRIPS features concur with the WTO’s neoliberalising approach of freeing the trade of IPRs goods. However, those TRIPS features that endorse the re-regulating practices of broadening IPRs protection and streamlining compulsory licensing appear to result in protectionism.50 This is because all the TRIPS features warrant privatisation of IPRs and engender monopolisation in establishing the control of IPRs owners therein. The identical features of dictating uniform and mandatory protection standard-setting, as laid down in the TRIPS, also result in restricting the comparative advantage of reverseengineering and lead to monopolisation.51 Such monopolisation of IPRs goods and restriction on comparative advantages in reverse-engineering bring in IPRs owners’ exclusivity over the manufacturing, supply and pricing of products. The monopolisation of IPRs in the owners’ hand, together with the restriction of comparative advantages leads to trade protectionism and appears to clash with the free trade principle of the WTO. In Bangladesh, the currently enforceable IPRs laws already appear to carry out the task of trade liberalisation. This is because the laws pledge to facilitate free trade for all members by incorporating the MFN and the national treatment principles. For example, in order to bring free trade with the national treatment principle into effect, Section 3 of the Patents and Designs Act offers patent protection to an invention irrespective of its 47

TRIPS Agreement Article 3. Ibid. Article 5. 49 Ibid. Article 8. 50 Khor, above n 16; Alavi, above n 16, 22-27. 51 Josef Drexl, above n 23, 16–18. 48

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TRIPS Agreements and Bangladesh

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country of origin.52 Giving equal trade advantages to all regardless of citizenship in view of the MFN is also a general principle adopted in IPRs laws in Bangladesh.53 In addition, most other defining IPRs provisions specify the mode of protection and sanction for IPRs infringement, and are set to facilitate trade, encourage inventions and promote economic development. However, this situation hardly inspires inventions among Bangladeshi people; neither does it encourage the development and exploitation of new inventions. The laws are unable to nurture FDI and technology transfer in order to initiate economic development, nor to ensure fulfilment of developmental needs.54 Such circumstances lead to the suggestions that currently enforceable IPRs laws are either protectionist and contain monopolising features that clash with the free trade principle of the WTO, or they are underdeveloped and thus unfit to take on the fruits of the free trade.

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1.3.2 IPRs Protection: Justificatory Theory and Monopolisation From the perspectives of those innovators based in developed countries, the extended reach and length of IPRs protection as set in the TRIPS receives support from the Lockean compensatory justice argument that persons (innovators) are naturally owners of the fruits (innovations) of their own labour and that the improperly taking of these fruits amounts to an attack (piracy or theft) on the self-government or even the veracity of the person.55 It also follows the economic argument that if an invention or creation is not compensated at its full social value, there will be suboptimal incentives to carry it out. In other words, in the case of free-riding for an invention where significant economic returns arise at little or no cost, an individual or firm may hesitate to make an investment.56 In fact, IPRs are often instilled on public goods that are found in nature and are trivially

52

Patents and Designs Act Section 3(1): ‘An application for a patent may be made by any person whether he is a citizen of Bangladesh or not, and whether alone or jointly with any other person’. 53 For example, Patents and Designs Act Section 29(1): ‘A patentee whether he is a citizen of Bangladesh or not may enforce his patent in respect of an invention by instituting a suit for making, selling or using the invention without his license, or for counterfeiting, or imitating’. See also Copyright Act Section 69. This empowers the government to offer protection to works copyrighted in foreign countries. 54 UNCTAD, above n 31, 125–126. 55 Trebilcock and Howse, above n 6, 398–399. 56 Ibid.

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Chapter One

modified; such instillation prevents free-riding and helps compensating the costs of modification-cum-invention. However, this economic argument does not apply in the case of developing countries and LDCs suffering from poverty, without the means to afford the cost of modification, much less R&D for invention. As a result, they depend largely on easily accessible natural resources or public goods for meeting their survival needs. However, the extended reach and length of IPRs protection, as provided in the TRIPS, re-establishes the recognition and protection of natural resources as private rights in line with the economic argument, since some modifications therein enable them to qualify as IPRs goods.57 To confer control of public goods in private owners’ monopoly in this way amounts to monopolisation, as opposed to the free trade philosophy of neo-liberalism. By introducing patents for products or processes, the TRIPS also prevents members from producing the same product using different processes and restricts competition among manufacturers of products. This trend helps multinational companies (MNCs) to monopolise the price and supply of products.58 In addition, the extended reach and length of IPRs protection forces manufacturers to wait longer before producing the generics of the IPRs protected products and supply them to the market.59 This process also endorses monopolisation in the hands of certain inventors or creating firms, which creates problems for IPRs-using developing countries and LDCs. In Bangladesh, the existing laws in relation to IPRs are in line with the Lockean compensatory justice argument, since all innovative works are under IPRs protection in order to compensate the creator. For example, Section 2(8) read with Section 2(11) of the Patents and Designs Act 57 Vandana Shiva, ‘TRIPS Agreement: From the Commons to Corporate Patents on Life’ in Jerry Mander and Victoria Tauli-Corpuz (eds), Paradigm Wars: Indigenous People’s Resistance to Globalisation (2006) 81. 58 Sumanjeet Singh, ‘Intellectual Property Rights and Their Interface with Competition Policy: In Balance or in Conflict?’ (CPRsouth5, Communication Policy Research South Conference, Xi'an, China, 12 December 2010) 10 January 2011; Bernard M Hoekman, Keith E Maskus and Kamal Saggi, ‘Transfer of Technology to Developing Countries: Unilateral and Multilateral Policy Options’ (Working Paper Pec2004-0003, Research Program on Political and Economic Change, Institute of Behavioural Science, University of Colorado at Boulder, May 2004) 10 January 2011. 59 For example, Article 33 of the TRIPS Agreement sets 20 years as the minimum duration for patent whereas the Paris Convention does not fix it.

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protects all inventions with patents; Section 32 is rigid in relation to amending the violation of patent rights with costs, charges and expenses of and incidental to the infringement suit properly incurred. In addition to IPRs laws containing damages for IPRs infringement, Sections 478-489 of the Penal Code 186060 prescribes punishment for IPRs violation with simple or rigorous imprisonment for a term that may extend from one to three years, sometimes including a fine. Further, IPRs laws as applied in Bangladesh also follow the economic argument, since the government or the High Court Division are given the authority to extend the duration of rent-receiving interests until and unless IPRs have been found sufficiently remunerative.61 Such provisions, offering IPRs protection to an invention or creation as a substitute for achieving compensation at full social value, have full concordance with IPRs protection theories. However, the extent of IPRs protection, particularly in Section 15 of the Patents and Designs Act, gives rise to a monopoly by IPRs owners, which affects the country’s ability to fulfil its developmental needs. In addition, the extended reach of IPRs protection, which means that IPRs protection is available in respect of any improvement in or modification of the invention (as provided in Section 15A of the Patents and Designs Act), gives recognition and protection to natural resources as private rights with minor modifications therein. Further, the unscrupulous protection in the name of patenting any improvement in or modification of the natural resources excludes the ‘farmers’ privilege’ of commercially marketing and selling the seeds. This extended protection unduly favours the plant breeders, who are predominantly MNCs and who monopolise the market in the name of plant varieties protection (PVP). This monopoly right granted to agricultural enterprises causes an increase in the price of seeds and other inputs, which means that many Bangladeshi farmers are then unable to afford such products.62 In an attempt to curb such trade monopoly, Articles 31 and 40 of the TRIPS contain provisions on trade

60

(ACT NO. XLV of 1860) Bangladesh Code Vol. I. Patents and Designs Act Section 15. 62 Laurence R Helfer, ‘Intellectual Property Rights in Plant Varieties: An Overview with Options for National Governments’ (FAO Legal Papers Online, July 2002) 23 March 2008. See also, Marie Byström and Peter Einarsson, ‘TRIPS Consequences for Developing Countries: Implications for Swedish Development Cooperation’ (Consultancy Report to the Swedish International Development Cooperation Agency, Final Report, August 2001). Both studies reveal concerns about the increased price of seeds and the change in livelihoods in developing countries. 61

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Chapter One

retaliatory practices. However, the local IPRs laws fail to mention these provisions.

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1.3.3 IPRs Protection: Uniform and Mandatory Standard-Setting and Comparative Advantage Theory The TRIPS provisions for basic and obligatory standards of IPRs protection are interpreted as the highest minimum protection standards. However, these provisions seem to constitute a floor rather than a ceiling. This means that members possess the right to adopt higher and more extensive levels of protection; they may also eliminate an option awarded under the TRIPS, subject to adherence to the general principles of the national treatment and the MFN.63 In order to offer protection in each of the main areas of intellectual property covered, member countries can develop mechanisms to enforce these rights. The TRIPS does allow countries to pursue different policies with respect to IPRs protection, but specifies minimum standards that should be attained by a designated time.64 The highest minimum protection standards also touch many different issues, including those related to compulsory licensing, technology transfer and innovation, public health or biodiversity-related issues. The standards impose restrictions on compulsory licensing and other flexibilities that deny IPRs protection.65 From the innovators’ perspectives, this uniform and mandatory protection standard-setting secures their returns from the investment made in inventions, since the TRIPS re-regulates renting provisions in favour of inventors. However, from the users’ point of view, the uniform and mandatory protection standard-setting appears to clash with David Ricardo’s classical principle of comparative advantage that goes in line with neo-liberalism. In accordance with this principle, a country should do what it finds advantageous and no compulsion is desirable in this regard.66 Therefore, countries with R&D should go for innovations and countries that have 63 L Liberti, ‘Intellectual Property Rights in International Investment Agreements: An Overview’ (OECD Working Papers on International Investment, No 2010/1, OECD Publishing, 2010). 64 Rod Falvey and Nei Foster, ‘The Role of Intellectual Property Rights in Technology Transfer and Economic Growth: Theory and Evidence’ (Working Papers, United Nations Industrial Development Organization, Vienna, 2006). 65 UNCTAD, above n 9. 66 See Justin Lin and Ha-Joon Chang, ‘Should Industrial Policy in Developing Countries Conform to Comparative Advantage or Defy it? A Debate between Justin Lin and Ha-Joon Chang’ (2009) 27(5) Development Policy Review 483, 489.

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manufacturing capacities but little or no R&D should focus on the imitation and adaptation of others’ innovations. In fact, such imitation and adaptation contributes to the domestic welfare of some NICs prior to the introduction of the TRIPS. By containing certain flexibilities, the TRIPS endorses imitation and adaptation involved in producing generics.67 However, the generality of the TRIPS uniform and mandatory protection regime prevents developing countries and LDCs from enjoying the comparative advantage of imitating and adapting developed countries’ innovations. This general restriction on comparative advantage threatens their existence and prevents them from reaching the minimum standard considered to be a level playing field for IPRs protection or for achieving economic development. As a result, the TRIPS uniform and mandatory protection standard-setting contradicts with the comparative advantage theory and bears implications and challenges for developing countries and LDCs in their major developmental needs of agriculture, public health and economic development. In Bangladesh, the TRIPS uniform and mandatory protection standardsetting in relation to IPRs already exists in the present IPRs laws and in some cases, the laws exceed the TRIPS standards. For example, Section 2 read with Section 15A of the Patents and Designs Act, defines the patentable invention as including any invention or improvement in or modification of the invention. The term ‘invention’, as defined in the Act, refers to both product and process. Each product, pharmaceutical or plant variety is assigned to the patent list. Such existing local provisions are in excess of the TRIPS mandate, because the TRIPS treaty was furnished later. Its specific wording on patenting pharmaceuticals and the provision of IPRs for PVP was only added recently. It requires the country to offer a new sui generis (of its own kind) model protection.68 This form of protection is mentioned in the International Convention for the Protection

67

Robert Wade, ‘What Strategies are viable for Developing Countries Today? The World Trade Organisation and the Shrinking of Development Space’ (2003) 10(4) Review of International Political Economy 621. He notes that in the past, for their own economic development, the US, Japan and other newly industrialised countries (NICs) practised imitation or copying of foreign patented products and technologies to meet their developmental needs. Japan, Taiwan and South Korea were each known as ‘the counterfeit capital’ of the world. In the 19th century, the US, then a rapidly industrialising country, was known—to Charles Dickens, among many other foreign authors—as a bold pirate of intellectual property. 68 TRIPS Agreement Article 33.

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of New Varieties of Plants (UPOV Convention)69 and often referred to as Plant Breeders’ Rights (PBRs). In addition, the TRIPS offers 20 years of protection to the patent right.70 However, the Patents and Designs Act exceeds the TRIPS mandated duration, since it offers 16 years protection to the patent and if the patent owner cannot get sufficiently rewarded, the patent term can be extended for another ten years.71 Such protection standard-setting in relation to IPRs, which sometimes exceeds the TRIPS mandate, appears to be in conflict with the trade liberalising principle of comparative advantage. In the case of pharmaceuticals, for example, such standard-setting restricts the country’s comparative advantage in reverseengineering, delays the production of the generics and brings in public health implications by increasing the drug prices and making them unaffordable for the common people.72 In addition, the protection standard-setting, as it appears in the Patents and Designs Act in relation to the patenting of plant varieties, is disadvantageous for Bangladesh because IPRs protection effectively removes the ‘farmer’s privilege’ which is also known as the farmers’ right to sow and re-sow seeds suited to local environment and cultivation practices. This change of control ruins farmers’ traditional advantage of selecting seeds, cultivating them and fulfilling livelihoods.73 As the preceding analysis explains, it appears that the TRIPS follows the IPRs protection theories for standard-setting, including reward justificatory theory and economic justification, whereas in keeping with the WTO’s trade liberalising premises, the TRIPS adopts re-regulating provisions of redefining IPRs, makes IPRs private rights and restricts state regulations on compulsory licensing or shortening IPRs protection. However, such re-regulating features lead to protectionism and create the monopolisation of IPRs, which restricts developing countries’ comparative advantage in reverse-engineering, upon which the fulfilment of developmental needs is dependent. This allows owners and dominating MNCs from developed countries to refuse to deal with would-be competitors in developing countries and LDCs. As a result, the monopolisation created by the strict protectionism and the comparative 69

International Convention for the Protection of New Varieties of Plants was adopted on 2 December 1961, by a Diplomatic Conference held in Paris 10 July 2010. 70 TRIPS Agreement Article 33. 71 Patents and Designs Act Sections 14–15. 72 Ibid. 73 UNCTAD, above n 31, 125–126.

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disadvantage in reverse-engineering created by the uniform and mandatory protection standard is responsible for sufferings in developing countries and LDCs. For Bangladesh, although the present IPRs laws concur with the TRIPS and sometimes exceed its mandate, they do not take into account the general consumption needs of the great majority of poor people living therein. The laws bind the country in ensuring that appropriate rents are given to IPRs owners, who are predominantly foreign MNCs, with very few local IPRs owners benefiting. The establishment of monopolies in the manufacturing and pricing of the products means that protectionism is apparent from the outset. However, some of their age-old provisions are not as protectionist as the TRIPS. For example, the initial patent duration as stated in the Patents and Designs Act is five years less than that in the TRIPS; further, the Act is not specific regarding pharmaceutical patenting. Hence, the TRIPS requires the country to adopt more protectionist measures in its national legislation, restricting compulsory licensing or eliminating shorter protection of IPRs. The TRIPS also requests further re-regulation of the trade in IPRs goods with more areas covered in the protection list. Such standard-setting not only underestimates those people in other countries who have already complied with the TRIPS but also restricts the comparative advantage of reverse-engineering in IPRs products, which generally helps to fulfil a nation’s developmental needs. In addition, there is no other local legislation in Bangladesh regulating the monopoly activities of MNCs or local IPRs owners. Thus, prioritising the interests of a smaller section is likely to monopolise the market and bring sufferings to the people of Bangladesh.

1.4 Aim and Objective of the Study The aims and objectives of the study are (1) to answer the research questions listed above and (2) to identify measures through which Bangladesh as an LDC could successfully accept the TRIPS and meet its developmental needs in agriculture, public health and economic development.

1.5 Rationale of the Study In order to make the TRIPS suitable to the local conditions, strategic policies need to be framed. This is because the TRIPS ‘one-size-fits-all’ approach does not automatically suit the conditions in a given LDC. In order to assist the strategists in framing policies, intensive studies are

Islam, Mohammad Towhidul. TRIPS Agreement of the WTO : Implications and Challenges for Bangladesh, Cambridge Scholars Publishing, 2013. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/cam/detail.action?docID=1753494. Created from cam on 2023-05-14 10:23:10.

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18

Chapter One

carried out in some member countries to assess how their citizens’ interests are best served in the face of the implications and challenges presented by the TRIPS and how their level of economic development responds to the new protection regime.74 The findings made so far have been confined to the perspectives of countries with dissimilar issues and interests and are, therefore, not relevant to many other countries. In this sense, the current study involving Bangladesh makes a unique contribution in assessing the implications and challenges of the TRIPS. This is because the research carried out so far in Bangladesh falls short of implicating IPRs linkages to trade and in assessing their impact on agriculture, public health and economic development. In order to map out the TRIPS implications and challenges for an LDC like Bangladesh, this study performs a thorough analysis of the relevant provisions of the TRIPS, IPRs related treaties and the IPRs laws of Bangladesh enacted in the early 1920s or 1950s from the standpoints of protecting IPRs and fulfilling its developmental needs in agriculture, public health and economic development. The study seeks to generate an information-rich environment in which policy-makers, strategists and legislators can adopt appropriate policies, implementation strategies and legislations to simultaneously maximise national interests and the protection of IPRs in Bangladesh. The study identifies the gaps or constraints either in Bangladesh IPRs laws or in the TRIPS provisions for taking up the welfare challenges in agriculture, public health and economic development, particularly from the perspective of developing countries and LDCs, and formulate policy recommendations accordingly. This study engages in determining the possible implications and challenges arising from the TRIPS establishment of IPRs in agriculture by means of PVP. This protection standard-setting in agriculture is the most important issue insofar as the right of the Bangladeshis to food and livelihood are concerned. This study will therefore be useful in introducing PVP in the name of sui generis protection in the local laws with a view to protecting the rights of farmers and plant breeders at the same time. This sui generis form of protection is likely to recognise farmers as breeders by offering protection to their traditional agricultural practices. The study will also be helpful to grant farmers access to genetic resources, especially the 74

e.g. Michael W Smith, ‘Bringing Developing Countries’ Intellectual Property Laws to TRIPS Standards: Hurdles and Pitfalls Facing Vietnam’s Efforts to Normalise an Intellectual Property Regime’ (1999) 31(1) Case Western Reserve Journal of International Law 211; Santanu Mukherjee, ‘The New Indian Patent Law: A Challenge for India’ (2006) 1(1–2) International Journal of Intellectual Property Management 131.

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TRIPS Agreements and Bangladesh

19

re-sowing and exchanging of seeds. This will also help requiring the breeders to indicate the sources of their genetic resources for the purposes of benefit sharing. In addition, the study addresses important public health issues, since Bangladesh has manufacturing capacities for the production of pharmaceuticals and supplies them at home and abroad at reasonable prices. For this purpose, the country is using the flexible and more lenient patent regime during the TRIPS transition period. However, after 2016, Bangladeshi generic producers will no longer be able to copy patented life-saving drugs to supply the local and overseas market at an affordable price. For this reason, the country needs thoughtful recommendations in order to support its public health needs regarding compliance with the TRIPS commitments. Accommodating the TRIPS flexibilities in local laws is a viable option for protecting such public health needs. Therefore, this study will be useful in making amendments to the patent laws by matching the TRIPS transitional flexibility, i.e. exempting pharmaceuticals from patenting. The study will also be useful in the amendment of patent laws by prohibiting trivial drug improvements as inventions in order to help the generic producers. The study will also provide guidelines on how the existing provisions on compulsory licensing can be configured to make more grounds for licence issuing. This study will also be of use in amending patent laws by inserting the TRIPS flexibility clauses such as parallel importation or early working exception with a view to supplying medicines at cheaper rates. Further, the study addresses major economic development issues involving receiving technology, encouraging people to innovate or reverse-engineer and supplying reverse-engineered products at home and abroad. Since Bangladesh cannot often afford R&D for innovations, it has to depend on the reverse-engineering of foreign patented technologies with the use of the TRIPS flexibility clauses or accessing technology through FDI or licensing. This study covers issues involving legal aspects of reverse-engineering and the supply of products manufactured therein. In summary, this study will be helpful in exploiting the TRIPS flexibilities with a view to ensuring food security, protecting public health and earning money with the export/trade of drugs and agricultural products. It will also enable the TRIPS stakeholders to focus on future negotiations regarding these issues more effectively and ensure equal benefits to all. This study will provide a valuable contribution to knowledge, both during the TRIPS transitional period and afterwards.

Islam, Mohammad Towhidul. TRIPS Agreement of the WTO : Implications and Challenges for Bangladesh, Cambridge Scholars Publishing, 2013. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/cam/detail.action?docID=1753494. Created from cam on 2023-05-14 10:23:10.

20

Chapter One

1.6 Methodology

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The projected study revisits the implications and challenges of the TRIPS from the perspective of an LDC such as Bangladesh, where onethirds of the population live below the poverty line and cannot afford the cost of R&D for innovations. Through the revisitation, this study outlines the gaps and constraints prevailing in existing Bangladeshi legislation and in the TRIPS. The findings of this study will be uses to frame the appropriate policy recommendations. In order to support its recommendations, the study follows qualitative research methodology consisting of primary and secondary sources. It uses international conventions, domestic laws and regulations as primary sources, depending mostly on background resources or literature commonly known as secondary resources. These resources include textbooks, legal journals, legal encyclopaedias, conference papers, study reports, manuals and online resources, as they provide a broad overview of legal provisions and their explanations, comparisons and commentaries. The literature used herein focuses on the WTO/TRIPS from the standpoint of countries owning and appropriating IPRs. The study also considers reports from national and international organisations dealing with the TRIPS issues. Information procured from these sources is analysed critically to examine the issues and challenges that Bangladesh faces pertaining to its obligations for implementing the TRIPS.

1.7 Scope and Limitation of the Study The study focuses on the implications and challenges of the TRIPS but is restricted to the major issues/concerns for an LDC such as Bangladesh. The issues of agriculture, public health and economic development have been chosen because they have become the focus of controversy for the least income-generating and agriculture-dependent people of Bangladesh. To exemplify the issues, the research takes examples from studies made by countries that have already complied with the TRIPS, concentrating particularly on the TRIPS implications and challenges for Bangladesh. This study also explores viable options and means for facing these implications and challenges. However, considering the word length, this study does not include other issues such as climate change, biodiversity, traditional knowledge (TK), GIs, information technology and education, although the TRIPS also impacts these regarding the developmental needs of LDCs. In addition, since the research topic is dynamic and contemporary, some information used herein may be out of date.

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CHAPTER TWO ORIGIN AND GROWTH OF THE TRIPS AGREEMENT FROM WIPO TO WTO: POLITICS AND PROBLEMS

2.1 Introduction

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The origin and growth of the World Trade Organization (WTO) Agreement on Trade-Related Intellectual Property Rights (TRIPS)1 goes alongside the debate between developed and developing countries over the ownership and use of intellectual property rights (IPRs)2 including trademarks, patents, and copyrights. This debate started at the beginning of the international system for such protection in the 19th century and enjoyed increased influence when the World Intellectual Property Organization (WIPO) was formed in 1967. Developed countries raised this debate in the WIPO in consideration of their investment in IPRs goods and safeguarding of their IPRs ownership.3 In order to secure their investment, they argued 1 Agreement on Trade-Related Aspects of Intellectual Property Rights, 15 April 1994, Marrakesh Agreement Establishing the World Trade Organisation, Annex 1C, 33 ILM 1197 [hereinafter the TRIPS Agreement]. 2 It was customary to refer to industrial and intellectual property rights. The term ‘industrial’ was used to cover technology-based subject areas like patents, designs and trade marks. ‘Intellectual property’ was used to refer to copyright. The modern convention is to use ‘intellectual property’ to refer to both industrial and intellectual property. The TRIPS Agreement translates IPRs into trade-related intellectual property rights in order to commercialise the inventions and simultaneously stop others from doing so unless rents are paid on licensing; for details, see M Rafiqul Islam, International Trade Law of the WTO (2006) 379–80. 3 United Nations Development Programme, ‘New Technologies and Global Race for Knowledge’ in Human Development Report (1999) 68 [hereinafter UNDP]. It states that 97 per cent of patents in the world are held by developed countries, whilst 80 per cent of patents in developing countries also belong to owners based in developed countries. This leaves developing countries with less than one per cent of the patents in the world.

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22

Chapter Two

for restrictive IPRs protection with extended reach and length. However, IPRs-using developing countries still insist on the flexibility for IPRs appropriation that helps them to fulfil their developmental needs including agriculture and public health. In finding a balance through such differing situations, the TRIPS appeared during the Uruguay Round of General Agreement on Tariff and Trade (GATT)4 negotiations that led to the formation of the WTO. The TRIPS launches a new regime with extensive membership, an unprecedented level of international protection with the extended reach of protectable items, relatively detailed and specific enforcement obligations and mechanisms for the application of the WTO’s dispute settlement system to IPRs related disputes.5 It also initiates a substantive harmonisation in various aspects of IPRs protection on making it mandatory for all current and intending members of the WTO irrespective of their developmental standing.6 This initiative proves to be a major move in securing IPRs owning interests. However, developing countries invariably find that the TRIPS negotiations are a power-based bargain that coerces them to join on the tempting promise of market access. They consider the TRIPS rewarding for creations as ignoring to their IPRs-appropriating nature of developmental needs. In fact, IPRs-appropriation that gives birth to manufactured goods and fulfils developmental needs in agriculture, health, and economic development makes developed countries lag behind developing countries in competition for the trading of such goods.7 For its developmental standing, the protection of IPRs in a least developed country (LDC) like Bangladesh is a contentious issue for the problems and prospects associated with the ownership and use of technology-based subjects like patents, designs, trademarks and copyright. The contention began when Bangladesh joined the international protection system consisting of the WIPO, the GATT and the WTO, since such association usually takes place earlier than that in the colonial parentage.8 4

General Agreement on Tariffs and Trade, signed 30 October 1947 (entered into force 1 January 1948) 58 RTNU 187 [hereinafter GATT]. 5 World Trade Organization, ‘Overview: The TRIPS Agreement’ 20 May 2008 [hereinafter WTO]. 6 Jerome H Reichman, ‘From Free Riders to Fair Followers: Global Competition under the TRIPS Agreement’ (1997) 29 New York University Journal of International Law & Politics 11. 7 Ibid. 8 Bangladesh is a member of the Convention Establishing the World Intellectual Property Organization, signed at Stockholm on 14 July 1967 and as amended 28

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Origin and Growth of the TRIPS Agreement from WIPO to WTO

23

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As part of joining the international protection system, Bangladesh succeeded the colonial IPRs laws enacted in British India. The laws include the Patents and Designs Act, 1911 (Patents and Designs Act),9 the Trade Marks Act, 1940 as substituted by the Trade Marks Act, 2009 (Trade Marks Act)10 and the Copyright Act, 2000 (Copyright Act)11 as amended in 2005. The IPRs laws in Bangladesh are said to have followed the [British] Patents and Designs Act 1907,12 the [British] Copyright Act 191113 and the [British] Trade Marks Act 193814 suiting the British IPRs-owning interests.15 Such British laws correspond with the Paris Convention for the Protection of Industrial Property 1883 (Paris Convention)16 and the Berne Convention for the Protection of Literary and Artistic Works 1886 (Berne September 1979, 828 UNTS 3 [WIPO Convention], since 11 May 1985; Paris Convention since 3 March 1991; Berne Convention since 4 May 1999; TRIPS Agreement since 1 January 1995, and Universal Copyright Convention done 6 September 1952 and revised 24 July 1971, 216 UNTS 133 (entered into force 16 September 1955), [hereinafter UCC], since 5 May 1975. See 31 March 2008; 31 March 2008. 9 Patents and Designs Act, 1911 (ACT NO. II of 1911) Bengal Code Vol. VII; Pakistan Code Vol. 6, enacted 1 March 1911 [hereinafter Patents and Designs Act]. 10 Trade Marks Act, 2009 (ACT NO. XIX of 2009) Bangladesh Gazette Extra published 31 August 2010 10 December 2010. It replaces the Trade Marks Act, 1940 (ACT NO. V of 1940) Pakistan Code, Vol. 10, enacted 11 March 1940 [hereinafter Trademarks Act]. 11 Copyright Act, 2000 (ACT NO. XXVIII of 2000) Bangladesh Gazette Extra 18 July 2000 (hereinafter Copyright Act) and the amendment took place by the Copyright (Amendment) Act, 2005 (ACT NO. XIV of 2005) Bangladesh Gazette Extra 18 May 2005. 12 1907 CHAPTER 29 7_Edw_7 10 January 2011. 13 1911 CHAPTER 46 1_and_2_Geo_5 10 January 2011. 14 1938 CHAPTER 22 1_and_2_Geo_6 10 January 2011. 15 K Hodkinson, Protecting and Exploiting New Technology and Designs (1987) 101–102. 16 Paris Convention for the Protection of Industrial Property 1883, signed 20 March 1883, 828 UNTS 305 [hereinafter the Paris Convention].

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24

Chapter Two

Convention).17 They have changed several times18 in order to cater for the needs and developmental objectives,19 and also to keep pace with the revision of the conventions as regards shifting from soft coordination to hard institutional organisation or providing for compulsory licensing for the translation and reproduction of copyrighted educational materials in developing countries.20 However, after its birth, Bangladesh retains the same colonial laws that predominantly secure the ownership of IPRs. This brings in contradictions with its least developing economy having been based on a little R&D and mainly on IPRs appropriation in mitigating welfare needs.21 The contradictions arising from the IPRs protection get a momentum with the impending compliance deadline of the TRIPS, which is one of the most stringent instruments in protecting IPRs and restricting appropriation. The TRIPS requires an LDC such as Bangladesh to ensure compliance in the patenting of all products and processes, including plant varieties and biotechnology, by 1 July 2013. For addressing possible adverse effects on public health, the compliance regarding patenting in pharmaceuticals is delayed until 1 January 2016.22 This TRIPS formulation asks for strict enforcement of the existing IPRs laws, which formerly required patenting of all products and processes, including pharmaceuticals, and expected to gradually increase the protection of IPRs. Such TRIPS obligations collide

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17

Berne Convention for the Protection of Literary and Artistic Works 1886, signed 9 September 1886, 828 UNTS 221 [hereinafter the Berne Convention]. 18 See Patents Act 1977 (Amendment) Bill, Bill 9 of 2001–02, Research Paper 01/84, 31 October 2001, http://www.parliament.uk/commons/lib/research/rp2001/rp01-084.pdf> 12 November 2007. 19 R L Okediji, ‘Sustainable Access to Copyrighted Digital Information Works in Developing Countries’ in K E Maskus and J H Reichman (eds), International Public Goods and Transfer of Technology: Under a Globalized Intellectual Property Regime (2005) 159–60. 20 For details of the revisions, see 31 March 2008; see also 31 March 2008. 21 World Bank, ‘Public and Private Sector Approaches to Improving Pharmaceutical Quality in Bangladesh’ (Paper No. 23, Bangladesh Development Series, Human Development Unit, South Asia Region, March 2008); United Nations Conference on Trade and Development, The Least Developed Countries Report 2007 Report: Knowledge, Technological Learning and Innovation for Development (Report prepared by UNCTAD Secretariat 2007) [hereinafter UNCTAD]. 22 ‘Doha Declaration on the TRIPS Agreement and Public Health’ [WTO Press Release (2001) WT/MIN(01)/DEC/2, 20 November 2001, (01-5860)].

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Origin and Growth of the TRIPS Agreement from WIPO to WTO

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with Bangladesh’s fulfilment of developmental needs based upon the appropriating use of IPRs products. In order to resolve such conflicts, some decolonised countries, in spite of the continuity of obligations, conduct reviews in order to assess whether the colonial IPRs laws still suit the socio-economic conditions prevailing in those countries. India is one of these and carries out an extensive review of its IPRs laws and searches for the fulfilment of developmental needs that are different from Britain and are mainly based on the appropriation of IPRs.23 In addition, it finds some of its existing IPRs rules ineffective to ‘stimulate inventions among Indians and to encourage the development and exploitation of new inventions’.24 It redesigns them to suit its own national circumstances, which comprise low R&D, substantial population of poor people and some of the highest drug prices in the world.25 Having started its journey from a similar position and having the same circumstances, Bangladesh has not yet made it possible to review its IPRs laws. In order to contextualise implications and challenges of the TRIPS, the current chapter is designed to provide background information on how the IPRs transform into the trade-related IPRs with the adoption of the TRIPS, what sorts of debates between developed and developing countries arise at the time of adopting the TRIPS and what arguments are put forward by IPRs owners and users. This background information allows the study to determine whether the arguments put forward by IPRs owners and users at the time of the TRIPS negotiations have substance and will prove to have implications and challenges for an LDC like Bangladesh on application of the TRIPS. For these purposes, the study looks into the previous regimes of WIPO, GATT and bilateral treaties and debates their success in rewarding creations and fulfilling developmental needs. The study also offers discussions on whether the regime change that creates the TRIPS has a consensus or has achieved a power-based bargain by way of coercing or tempting through market access. Finally, the chapter discusses why Bangladesh agrees to the TRIPS terms and continues to comply, despite having full knowledge of innovation incapacity.

23

Peter Drahos, ‘Developing Countries and International Intellectual Property Standard-setting’ (2005) 5(5) Journal of World Intellectual Property 765, 766– 769. 24 S Vederaman, ‘The Indian Patents Law’ (1972) 3 International Review of Industrial Property and Copyright Law 39, 39–43. 25 Ibid.

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26

Chapter Two

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2.2 International IPRs System from WIPO to WTO: Politics and Problems The international IPRs system begins its journey with the protection of industrial property and copyright as comprised in the Paris Convention and the Berne Convention respectively. Initially, the term ‘intellectual property’ does not cover ‘industrial property’ since they are incorporated in two different treaties giving protections to two different products. The difference between these two terms follows the commercial use of IPRs products.26 This is because the latter are typically created and used for industrial or commercial purposes but the former does not often require them.27 However, this point of distinction does not bring in any purposive difference to most of the developing countries and LDCs that merely copy knowledge products regardless of the classification of IPRs and satisfy their developmental needs. Rather, they find the WIPO treaties taxing for them and for their developmental needs, since the treaties create a patchwork system of disparate norms, rules, levels of IPRs protection and overlapping membership of a variety of multilateral and bilateral instruments.28 With the passage of time, the international IPRs protection system leaves the conceptual difference between ‘intellectual property’ and ‘industrial property’. It uses ‘intellectual property’ for copyrights, patents, designs, trademarks and technology-based inventions, such as computer software, integrated circuits, amongst others.29 However, the term ‘intellectual property’ does not become popular unless and until industrialised countries fall behind developing countries in the trade of manufactured goods. On finally collapsing in trade competition, developed countries start concentrating solely on IPRs goods in order to regain their trade superiority. For example, during the GATT regime, the developed countries’ trading superiority in manufactured goods remains

26

Islam, above n 2, 380. Michael Blakeney, Trade Related Aspects of Intellectual Property Rights: A Concise Guide to the TRIPS Agreement (1996) 10–11; see also Shahid Alikhan, Socio Economic Benefits of Intellectual Property Protection in Developing Countries (2000) 10–11. 28 Jerome H Reichman, ‘Universal Minimum Standards of Intellectual Property Protection under the TRIPS Component of the WTO Agreement’ in Carlos M Correa and Abdulqawi A Yusuf (eds), Intellectual Property and International Trade (2nd ed, 2008) 23–78. 29 Islam, above n 2, 379–380. 27

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Origin and Growth of the TRIPS Agreement from WIPO to WTO

27

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widespread and the term ‘intellectual property’ does not enjoy popularity.30 However, over time, some NICs of Far-East Asia become formidable competitors in the global market of manufactured goods through reverseengineering31 and other techniques. This diminishes the market share of industrialised countries in the manufactured goods sector. To overcome this diminished market share, the developed countries look for an alternative sector to revive their trading superiority. To this end, they find that intellectual property through the transfer of technology is a handy sector and call for the GATT to ensure the protection of IPRs. However, the developing countries’ nail-biting opposition in the GATT negotiations disappoints them. At one stage, this makes the developed countries maintain their determination, capitalise their trading superiority in the GATT and make further proposals to initiate negotiations on IPRs in the Uruguay Round of GATT Negotiations.32 With the successful completion of the Uruguay Round trade negotiations, the TRIPS develops the formulation that IPRs qualify as trade-related IPRs when they hold market value and involve trade implications quite independent of the product and its accoutrements.33 The TRIPS also establishes a similar protection standard for all types of IPRs qualifying as trade-related IPRs. Therefore, it appears that the international system for protecting IPRs reaches its current position amidst various demands, negotiations and disappointments concerning the stakeholders. The key politics and problems behind the international IPRs system are as follows:

30 Jerome H Reichman, ‘The TRIPS Component of the GATT’s Uruguay Round: Competitive Prospects for Intellectual Property Owners in an Integrated World Market’ (1993) 4 Fordham Intellectual Property, Media and Entertainment Law Journal 171; Michael Blakeney, ‘Intellectual Property in World Trade’ (1995) 1(3) International Trade Law and Regulation 76, 77–78. 31 ‘Reverse engineering’ is taken to mean adding value and shaping the existing the product. See Pamela Samuelson and Suzanne Scotchmer, ‘The Law and Economics of Reverse Engineering’ (2002) 111 Yale Law Journal 1575. 32 Robert Z Lawrence, ‘U.S. International Trade Policy in the 1990s’ in Jeffrey Frankel and Peter Orzag (eds), American Economic Policy in the 1990s (2002) 277–324. 33 Islam, above n 2, 380; Keith E Maskus and Mohan Penubarti ‘How Traderelated Are Intellectual Property Rights?’ (1995) 39(3–4) Journal of International Economics 227.

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28

Chapter Two

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2.2.1 The Paris Convention The European colonial powers that dominate in the ownership of IPRs conclude the Paris Convention and ask the Paris Union constituted with the Convention countries to coordinate the protection of industrial property in member countries.34 In fact, the Paris Convention is the first international convention that covers the international protection regime for IPRs. The Convention offers protection for their own industrial property covering technology-based subject areas such as patents, designs and trademarks. It also contains the flexibility of compulsory licensing to meet emergencies. To some extent, this formulation meets the developmental needs of developing countries’ based on IPRs-appropriation. However, this Convention gradually appears to be the domination-based option that forms coercing strategies, since developed countries use the apparatus of their colonial rule in spreading such protection to IPRs-appropriating colonial societies, largely in Asia and Africa, under the auspices of the international intellectual property system.35 In order to offer IPRs protection, Article 2 of the Paris Convention speaks of the ‘national treatment principle’ with regard to industrial property. It says that a member of the Convention must grant the same industrial property protection to nationals of other member countries as it provides to its own nationals.36 This provision is considered to serve the trade interests of developing countries and LDCs in spite of the fact that these countries have little involvement with the production and trading of IPRs goods. This provision creates an immediate concern for IPRs-owning developed countries, since an LDC offering no IPRs protection to its nationals has no obligation to provide any protection for the nationals of other countries.37 The Convention also guarantees the ‘right of priority’ to foreign nationals of member countries who have applied for a registration of their

34

Paris Convention Article 1. Ruth L Okediji, ‘The International Relations of Intellectual Property: Narratives of Developing Country Participation in the Global Intellectual Property System’ (2003) 7 Singapore Journal of International and Comparative Law 315. 36 Paris Convention Article 2. 37 Monique L Cordray, ‘GATT v. WIPO’ (1994) 76 Journal of Patent and Trademarks Office Society 121, 123; for instance, nations like Brazil and India did not provide for product patents for pharmaceuticals either for nationals or for foreigners; see Gary Gereffi, The Pharmaceutical Industry and Dependency in the Third World (1983) 145–149. 35

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Origin and Growth of the TRIPS Agreement from WIPO to WTO

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rights in another member country.38 In other words, the ‘right of priority’ offers protection to ‘the first to invent or create, rather than the first to file or reproduce’.39 This provision works in favour of IPRs-owning nationals of developed countries, since they are given the priority right of IPRs protection for a longer period of time. However, this provision goes against the interests of developing countries and LDCs, since the prioritised right of protection tends to monopolise the owners’ IPRs regardless of places and takes away the users’ comparative advantage of reverse-engineering by adding value and shaping the existing product much earlier.40 Additionally, the Paris Convention does not establish any patentability criteria and allows random exclusions from patentability. On taking this flexibility of the Convention, member countries use discretionary powers to reject inventions from being patented. For example, pharmaceuticals are made largely unpatentable in countries including India, Brazil and Italy.41 As a result, the unauthorised copying of unpatentable inventions, which are patented in another country, becomes legitimate in countries exercising this discretion.42 Again, the Paris Convention does not fix any minimum term for patents. Hence, a shorter-term patent encourages earlier access to legitimate copying. In addition, the Paris Convention also creates the possibility of granting compulsory licences in relation to patents in order to prevent abuses in exercising exclusive rights.43 However, this provision is heavily restricted to certain cases of national emergency or other circumstances of extreme urgency.44 This restrictive approach on compulsory licensing undermines the protection of public interests in developing countries and LDCs for dire necessities.

38

Paris Convention Article 4. Christopher May, ‘The World Intellectual Property Organisation’ (2006) 11(3) New Political Economy 435, 436. 40 P Samuelson and S Scotchmer, ‘The Law and Economics of Reverse Engineering’ (2002) 111 Yale Law Journal 1575; see Fabiene Orsi and Benjamin Coriat, ‘The New Role and Status of Intellectual Property Rights in Contemporary Capitalism’ (2006) 1(2) Competition and Change 162; see also Donald G Richards, Intellectual Property Rights and Global Capitalism: The Political Economy of the TRIPS Agreement (2004) 57–63. 41 Paris Convention, Article 4quater; World Intellectual Property Organization, ‘Exclusions from Patentable Subject-matter and Exceptions and Limitations to the Rights’ (Document prepared by the Secretariat, Standing Committee on the Law of Patents, Thirteenth Session, Geneva, 23-27 March 2009) [hereinafter WIPO]. 42 Stephen P Ladas, The International Protection of Industrial Property (1930) 54. 43 Paris Convention Article 5A(2). 44 Ibid, Article 5A(4). 39

Islam, Mohammad Towhidul. TRIPS Agreement of the WTO : Implications and Challenges for Bangladesh, Cambridge Scholars Publishing, 2013. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/cam/detail.action?docID=1753494. Created from cam on 2023-05-14 10:08:33.

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Chapter Two

For Bangladesh, the Patents and Designs Act was enacted in line with the Paris Convention originally adopted on 20 March 1883. Section 3 of the Act incorporates the ‘national treatment principle’ as provided in the Paris Convention by saying that ‘[a]n application for a patent may be made by any person whether he is a citizen of Bangladesh or not’. As a result, the foreign patent owner can make a patent application in Bangladesh and on receiving it the owner enjoys the same right in Bangladesh as a Bangladeshi patent owner. This provision is in line with the Paris Convention, securing the interests of patent owners based mostly in developed countries. However, it goes against the interests of local companies, which reverse-engineer the products and supply them to the market at lower costs. In addition, Section 78A read with Section 5 of the Patents and Designs Act gives recognition of the ‘right of priority’ principle as laid down in the Paris Convention in the words:

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[A]ny person who has applied for protection for any invention or design in the United Kingdom, or his legal representative or assignee shall, either alone or jointly with any other person be entitled to claim that the patent that may be granted to him under this Act, for the said invention or the registration of the said design under this Act, shall be in priority to other applicants and shall have the same date as the date of the application in the United Kingdom.

Such provisions of the Act, although the application is confined to the current Commonwealth countries, protect the interests of IPRs-owning developed countries creating longer monopoly of IPRs goods, and defeating local companies’ comparative advantage of adding value to and shaping the existing knowledge products. Moreover, between the date of enactment of the Patents and Designs Act in 1911 and the adoption of the TRIPS in 1994, the concepts of patents and designs have undergone massive development through the adoption of a large number of international conventions, for example, Paris Convention, Convention on the Grant of European Patents (EPC),45 Convention for the European Patent for the Common Market,46 and Patent Co-operation Treaty,47 revisions and amendments made to the Paris Convention, and decisions of courts throughout the world. The international developments taken place so far include independence of patents obtained 45

Opened for signature 5 October 1973 (entered into force 7 October 1977) 13 ILM 268. 46 Done 15 December 1975; Cmnd. 6553; 15 ILM 5 (1976). 47 Adopted in Washington, 19 June 1970, 1970 TIAS 8733.

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for the same invention in different countries,48 mention of the inventor in the patent,49 protection of industrial designs in all the member countries50 or prevention of unfair competition through effective use of compulsory licensing or parallel importation.51 Such developments tend to serve both IPRs owners’ and users’ interests in line with the right of priority and the national treatment principles. For Bangladesh as a member of the Paris Convention, the incorporation of the patent related developments in the current Act is felt necessary to respect the international standards. Further, in defining ‘industrial property’ in Article 1.2, the Paris Convention includes ‘indications of source or appellations of origin’, also known as geographical indications (GI).52 In its Article 10bis, the Convention also obliges the contracting party to stop any use of industrial property that constitutes an act of unfair competition, i.e. ‘all acts of such a nature as to create confusion by any means whatever with the establishment, the goods, or the industrial or commercial activities, of a competitor..... false allegations in the course of trade of such a nature as to discredit the establishment, the goods, or the industrial or commercial activities, of a competitor’ and ‘indications or allegations the use of which in the course of trade is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose, or the quantity, of the goods’.53 In determining an interested party for pressing a charge against false indications of source, Article 10.2 of the Paris Convention reads as follows: Any producer, manufacturer, or merchant, whether a natural person or a legal entity, engaged in the production or manufacture of or trade in such goods and established either in the locality falsely indicated as the source, or in the region where such locality is situated, or in the country falsely indicated, or in the country where the false indication of source is used, shall in any case be deemed an interested party.

48

Paris Convention, Article 4bis. Ibid, Article 4ter. 50 Ibid, Article 5quinquies. 51 Ibid, Article 10bis. 52 A ‘geographical indication’ is a sign assuring consumers that produce comes from, or has been processed in a particular region renowned for the quality of such produce. Familiar examples include Champagne, Scotch whisky and Parma ham. See Andries van der Merwe, ‘Geographical Indication Protection in South Africa with Particular Reference to Wines and to the EU’ (2009) 10(1) Estey Centre Journal of International Law and Trade Policy 186. 53 Paris Convention, Article 10bis.2 and 3. 49

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Chapter Two

In Bangladesh, the Trade Marks Act was enacted as an instrument for protecting the industrial property of trademark. However, the revised or amended provisions of the Convention that extend the definition of industrial property to indications of source or appellations of origin, and the repression of unfair competition are not covered in the present Act. In addition, the Act does not contain provisions in relation to the refusal or cancellation of registration or use of well-known marks in another member country as provided in Article 6bis of the Paris Convention, or protection of marks registered in one member country in the other member countries as incorporated in Article 6quinquies of the Paris Convention protecting IPRs owners’ or users’ interests. Therefore, the incorporation of such provisions in the Trade Marks Act is currently considered to be a necessity in protecting trademarks rights in the region specific handicrafts, sweets, fruits, tea and other household products.54

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2.2.2 The Berne Convention The western groups that take on the Paris Convention feel the necessity after a short while to secure protection for copyrights as intellectual property and adopt the Berne Convention.55 This makes the colonies again parties to this multilateral agreement through colonial outfit or on the basis of the defunct rule of continuity even after decolonisation, while their needs are different and appropriating in nature.56 Such situation occurs when the European colonial master particularly Britain accedes to the IPRs treaties, i.e. the Berne Convention and the Paris Convention and extends the operation of such accession to ‘His Majesty’s Dominions’.57 The Berne Convention assigns its members’ organisation, the Berne Union with the objective ‘[T]o protect, in as effective and uniform a manner as possible, the rights of authors in their literary and artistic works’ through copyright as ‘intellectual property’.58 Like the Paris Convention, the Berne Convention provides for ‘national treatment principle’ requiring member countries to give the same rights to works originating from other member countries as they give to works of their

54

Mahfuz Ullah, Intellectual Property Rights and Bangladesh (2002) 61–71. Berne Convention for the Protection of Literary and Artistic Works 1886, signed 9 September 1886, 828 UNTS 221 [hereinafter the Berne Convention]. 56 Sam Ricketson, The Berne Convention for the Protection of Literary and Artistic Works (1987) 797–807. 57 Drahos, above n 23, 766–9. 58 Berne Convention Preamble. 55

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nationals.59 This is considered to be more efficient than the Paris Convention, since the protection of author’s rights in each member country under the Berne Convention should be unconditional and independent of the existence of such protection in the country of origin.60 In Bangladesh, the Copyright Act as amended in 2005 and substituted the Copyright Ordinance 196261 is updated in many respects as required by the Berne Convention. In Sections 69 and 70, it contains the ‘national treatment principle’, giving the same rights to foreign works as it offers to the nationals of Bangladesh.

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2.2.3 Formation of the WIPO with the Adoption of the WIPO Convention The international intellectual property protection regime that starts facilitating the protection of IPRs with the help of the Paris Union and the Berne Union finds considerable commonalities between their works. This led the two Unions to integrate in 1893 to form an international organisation called the United International Bureaux for the Protection of Intellectual Property (best known by its French acronym BIRPI).62 This new institution feels the need for proper execution of the Paris Convention and the Berne Convention by making them more answerable to member countries and treating them on the same footing. In 1967, the Convention Establishing the World Intellectual Property Organization (WIPO Convention)63 created the WIPO on replacing the BIRPI. By an Agreement64 signed with the United Nations Organization (UNO) on 17 December 1974, the WIPO became a specialised agency of the UN and received the exclusive mandate of accumulating specialised knowledge and expertise in intellectual property.65 59

Ibid, Articles 3–5. Ibid, Article 5. 61 (ORDINANCE NO. XXXIV of 1962) (now stands repealed), Gazette of Pakistan 2 June 1962. 62 ‘WIPO - An Overview’, http://www.wipo.int/about-wipo/en/what_is_wipo.html! 06 November 2007. 63 Convention Establishing the World Intellectual Property Organization, signed at Stockholm on 14 July 1967 and as amended 28 September 1979, 828 UNTS 3 [hereinafter the WIPO Convention]. 64 Agreement between the United Nations and the World Intellectual Property Organization, (entered into force 17 December 1974) GA Resolution No. 3346(XXIX) [hereinafter Agreement between UN and WIPO]. 65 Blakeney, above n 27, 24–25. 60

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34

Chapter Two

The WIPO commences its mission with the aim of ‘developing a balanced and accessible international intellectual property system, which rewards creativity, stimulates innovation and contributes to economic development while safeguarding the public interest’.66 However, the fulfilment of this aim appears to be challenging since economic development and safeguarding public interests depend on securing ownership and use of IPRs goods. In addition, such interests are in nature contradictory to each other and create conflicts between IPRs-owning developed countries and IPRs-using developing countries and LDCs. However, to accomplish this aim, the WIPO entrusts the Paris Union and the Berne Union to attain economic development and protect public interests.67 In addition, the UN requires the WIPO to explicitly work with the United Nations Conference on Trade and Development (UNCTAD), the United Nations Development Programme (UNDP) and the United Nations Industrial Development Organization (UNIDO) to promote and facilitate ‘the transfer of technology to developing countries in such a manner as to assist these countries in attaining their objectives in the fields of science and technology, and trade and development’.68 Commentators find this shift to the UN forum as sympathetic to developing countries and LDCs. This is because most UN forums are perceived as neutral and without ‘vested interests’, and hence, they appear impartial, which means that developing countries and LDCs do not feel helpless in protecting their developmental interests. Meanwhile, the other world bodies serve the interests of dominating powers, i.e., developed countries.69 However, developed countries tend to pressurise the associate organisations of the WIPO in forming policies and implementing them in developing countries and LDCs in order to safeguard their rents through the trade of IPRs goods.70

66

‘What is WIPO?’ 2 April 2008. 67 ‘World Intellectual Property Organization: An Overview’ 20 May 2008. 68 Agreement between UN and WIPO, above n 64, Article 10. 69 Wendell Berge, Cartels: Challenge to a Free World (1944) 3; May, above n 39, 435. 70 UNCTAD, The TRIPS Agreement and Developing Countries (1996) 15–20; see also Mywish K Maredia, ‘Application of Intellectual Property Rights in Developing Countries: Implications for Public Policy and Agricultural Research

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Origin and Growth of the TRIPS Agreement from WIPO to WTO

35

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Over time, the increased volume of trade and the significant reliance on intellectual goods means that the role of the WIPO is crucial to the international community as it harbours and recognises creations of the mind as properties for trade.71 Its mission becomes untenable when developed countries, principally the United States (US), contend that the gradual but huge loss sustained in trade revenues has links with piracy and counterfeiting. Both the WIPO-administered Paris Convention and the Berne Convention fail to make a significant drive to prevent this.72 In addition, the lack of effective enforcement mechanisms under the WIPO creates particular problems for developed countries.73 None of the conventions governed by the WIPO contains penal provisions for countries that fail to set up or implement the required standards for counterfeit and pirated goods crossing national borders.74 The United States General Accounting Office Report thus describes the WIPO’s enforcement mechanisms as ‘unsuccessful’ in ensuring strong worldwide IPRs protection.75 Again, none of the WIPO conventions contains effective dispute resolution systems among member countries. This system is thus under constant criticism as ‘effectively worthless’.76 The only remaining option left is to lodge complaints to the International Court of Justice (ICJ).77 However, the contesting member can declare that it does not consider itself bound by the ICJ’s jurisdiction and consequently, the ICJ’s Institutes’ (Final Draft Submitted to the World Intellectual Property Organization, December 2001) 17 November 2008. 71 World Intellectual Property Organization (ed), Introduction to Intellectual Property: Theory and Practice (1997) 28. 72 Kenneth W Dam, ‘The Growing Importance of International Protection of Intellectual Property’ (1987) 21 Intentional Lawyer 627. 73 Cordray, above n 37, 131. 74 Christopher Arup, ‘TRIPS Forum: A Matter of Interpretation’ (Conference Paper, Victoria University, Melbourne, 2004)