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Legal Aspects (Barriers) of Granting Compulsory Licenses for Clean Technologies in Light of WTO/TRIPS Rules: Promise or Mirage?

Published online by Cambridge University Press:  11 February 2015

KUEI-JUNG NI
KUEI-JUNG NI*
Affiliation:
Professor of Law, Institute of Technology Law, School of Law, National Chiao Tung University, Taiwan
*
* Email: kueijungni@gmail.com
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Abstract

The development and use of clean technologies constitute a useful means of mitigating global warming. Although certain developing countries have become major emitters of greenhouse gases, they are not in a position to access the clean technologies that are prevalent in developed nations. In advocating technology transfers under the United Nations' climate change regime, developing countries argue that the intellectual property regime covering climate-related technologies must be ameliorated. In their proposals, they argue that compulsory licensing for clean technologies can be instrumental in furthering global access.

This paper examines the legal issues associated with granting compulsory licenses for clean technologies. I analyze the legal challenges to authorizing such licenses, particularly in light of WTO/TRIPS and of national practices.

An analysis of the previous practices surrounding the application of compulsory licensing reveals the severe hurdles facing competent national authorities and indicates the costs and burdens of such an action, which not every WTO member can afford. Jumping to the conclusion that the compulsory licensing of clean technologies is simply an illusory option may be premature; nevertheless, the legal barriers and burdens may dissuade developing nations from using such licenses injudiciously.

Type
Review Article
Information
World Trade Review , Volume 14 , Issue 4 , October 2015 , pp. 701 - 719
Copyright
Copyright © Kuei-Jung Ni 2015 

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References

1 The United Nations Framework Convention on Climate Change, adopted 5 June 1992, in force 21 March 1994 [hereinafter UNFCCC]. See notes 28–30, infra and accompanying text.

2 Tim Wilson (2008), ‘Undermining Mitigation Technology: Compulsory Licensing, Patents and Tariffs', Working Paper, the Institute of Public Affairs, at 6, 8, http://www.apec.org.au/docs/08_IPAAASC_MT.pdf. At the 2012 Asia-Pacific Economic Cooperation (APEC) Summit, APEC members agreed to reduce tariffs on environmental goods and services. See Reuters, ‘Asia-Pacific Forum to Cut Import Duties for Green Technologies', http://www.nytimes.com/2012/09/08/business/energy-environment/asia-pacific-forum-to-cut-import-duties-for-green-technologies.html?_r=0 (accessed 1 December 2014).

3 World Trade Organization, Declaration on the TRIPS Agreement and Public Health, WT/MIN(01)/DEC/2 (20 November 2001), http://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_trips_e.pdf [hereinafter Doha Declaration].

4 See Vienna Convention on the Law of Treaties, adopted 23 May 1969 and entered into force 27 January 1980, art. 31, para. 3(1) [hereinafter VCLT]; Boyle, Alan and Chinkin, Christine (2007), The Making of International Law, New York: Oxford University PressGoogle Scholar, at 216–217 (explaining how the resolutions adopted by the General Assembly of the United Nations may be instrumental in clarifying the UN Charter).

5 See de Carvalho, Nuno Pires (2010), The TRIPS Regime of Patent Rights, 3rd edn, New York: Kluwer Law InternationalGoogle Scholar, at 435 (emphasizing the compulsory licensing practices of developing countries such as Malaysia, Indonesia, Thailand, and Brazil regarding patented medicine ingredients in the past decade).

6 Canada and some African countries, such as Botswana, have enacted laws and implemented the WTO 2003 decision that streamlines the use of compulsory licenses. See the WTO: http://www.wto.org/english/tratop_e/trips_e/par6laws_e.htm (accessed 2 December 2014).

7 de Carvalho, The TRIPS Regime of Patent Rights, supra note 5, at 435.

8 On 12 March 2012, the India patent authority granted compulsory licenses to a local company, Natco, on patents owned by the German company Bayer; this was an unprecedented move by India for a pharmaceutical product since its accession to the TRIPS Agreement. See Patralekha Chatterjee (2012), India's Generics-Big Pharma Battle Drops Drug Prices, Raises Legal Debate, http://www.ip-watch.org/2012/05/20/india%E2%80%99s-generics-big-pharma-battle-drops-drug-prices-raises-legal-debate (accessed 16 September 2013); see also International Centre for Trade and Sustainable Development (ICTSD) (2012), ‘Bayer Challenges India Compulsory License Ruling’, Bridges Weekly Trade News Digest, 16(18), http://www.ictsd.org/bridges-news/bridges/news/bayer-challenges-india-compulsory-license-ruling (accessed 15 August 2014).

9 See Manoj Kumar (2014), India to Block US Trade Probes, Ready for Fight at WTO, Reuters, http://in.reuters.com/article/2014/02/25/india-trade-usa-idINDEEA1O08X20140225 (accessed 15 August 2014).

10 Ibid.

11 See Michael Froman (2014), The 2014 Special 301 Report and India, http://www.ustr.gov/about-us/press-office/blog/2014/April/The-2014-Special-301-Report-and-India (accessed 15 August 2014).

12 The Decision of the Taiwan Intellectual Property Office (TIPO) on Gigastorage's Application for Granting Compulsory Licensing, No. 0931860052-0 (26 July 2004) (on file with the author) [hereinafter TIPO Decision].

13 See Cheng, Huai-Chi and Ni, Kuei-Jung (2012), ‘The Boundary of a WTO Member's Obligation to Comply with Art. 31(f) of the TRIPS Agreement: A Critical Review of Granting Compulsory License on Philips’ CD-R Patents by Taiwan’, 43(8), International Review of Intellectual Property and Competition Law, 885, at 889–890Google Scholar.

14 Trade Barriers Regulation Committee (2008), ‘Examination Procedure Concerning an Obstacle to Trade, within the Meaning of Council Regulation (EC) No. 3286/94, Consisting of Measures Adopted by the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu Affecting Patent Protection in Respect of Recordable Compact Discs', http://trade.ec.europa.eu/doclib/docs/2008/january/tradoc_137633.pdf (accessed 6 April 2014) [hereinafter EC Trade Barriers Report].

15 The Kyoto Protocol to the UNFCCC, adopted 11 December 1997, and entered into force 16 February 2005, arts. 2, 3.

16 Recital 6 of the Preamble to the UNFCCC.

17 See US Environmental Protection Agency, ‘Terminology Services', http://www.epa.gov/cleanenergy/energy-and-you/glossary.html#renew (accessed 1 December 2014).

18 See US Department of Energy, ‘Carbon Capture, Utilization & Storage’, http://energy.gov/carbon-capture-sequestration (accessed 1 December 2014).

19 Third World Network, ‘Climate Change & Technology Transfer: Addressing Intellectual Property Issues', http://twnside.org.sg/title2/climate/pdf/TWN_submission_to_TECfinal.pdf, at 4–5 [hereinafter Third World Network].

20 See OECD, ‘OECD Science, Technology and Industry Scoreboard 2011: Highlights', http://www.oecd.org/sti/sci-tech/48712591.pdf, at 5.

21 Ibid.

22 The UNFCCC, art. 4.5.

23 See UNFCCC, ‘Technology’, http://unfccc.int/cooperation_and_support/technology/items/1126.php (accessed 1 December 2014).

24 Ibid.

25 Zhuang, Wei (2011), ‘Intellectual Property Rights and Transfer of Clean Energy Technologies’, 1(4), International Journal of Public Law and Policy, 384, at 384–401Google Scholar.

26 John H. Barton (2007), ‘Intellectual Property and Access to Clean Energy Technologies in Developing Countries: An Analysis of Solar Photovoltaic, Biofuels and Wind Technologies', ICTSD Trade and Sustainable Energy Series Issue Paper No. 2, International Centre for Trade and Sustainable Development, Geneva, Switzerland.

27 Third World Network, supra note 19, at 11.

28 Ibid., at 16.

29 See UNFCCC, ‘Report of the Ad Hoc Working Group on Long-Term Cooperative Action under the Convention’, at para. 188, http://unfccc.int/resource/docs/2009/awglca6/eng/08.pdf (accessed 12 September 2014).

30 See Miller, Todd R. and Amos, Dawn M. (2010), ‘Cleantech Innovators Should Be Aware of Certain Global Intellectual Property Issues’, 22(5), Intellectual Property and Technology Law JournalGoogle Scholar, 1, at 2.

31 See Submission from Argentina, Bolivia (Plurinational State of), China, Democratic Republic of the Congo, Dominica, Ecuador, Egypt, El Salvador, India, Iran (Islamic Republic of), Iraq, Kuwait, Malaysia, Mali, Pakistan, Philippines, Saudi Arabia, Sri Lanka, Sudan and Thailand, FCCC/AWGLCA/2012/CRP.11, http://unfccc.int/resource/docs/2012/awglca15/eng/crp11.pdf (accessed 1 December 2014).

32 McManis, Charles R. and Contreras, Jorge L. (2014), ‘Compulsory Licensing of Intellectual Property: A Viable Policy Lever for Promoting Access to Critical Technologies?’, in Ghidini, Gustavo, Peritz, Rudolph J. R., and Ricolfi, Marco (eds.), TRIPS and Developing Countries–Towards a New IP World Order?, Cheltenham: Edward Elgar, at 112–113Google Scholar.

33 Wilson, ‘Undermining Mitigation Technology’, supra note 2, at 6, 8.

34 Lane, Eric L. (2011), ‘Cancun, Climate Change, and Intellectual Property Rights: No News Is Good News for Green Patents’, 2(1), European Journal of Risk Regulations, 61, at 63–67Google Scholar.

35 The Paris Convention, governed by the WIPO, addresses compulsory licenses; however, the WIPO has yet built-in enforcement power like that established for the WTO.

36 TRIPS Agreement, arts. 1, 31.

37 The Dispute Settlement Body of the WTO owns compulsory jurisdiction so that all WTO members must defer to its dispute settlement arrangements. Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), art. 1.

38 TRIPS Agreement, art. 1 (1).

39 Ibid., art. 28 (1).

40 Ibid., art. 28 (2).

41 The title of Article 31 does not mention the term ‘compulsory licenses' but uses the expression ‘other use without authorization of the right holder’.

42 Certain grounds can be inferred from the individual conditions of Article 31, such as antitrust, public non-commercial use, and national emergency.

43 Like many provisions of the TRIPS Agreement, the final text of Article 31 was the outcome of a compromise. For the negotiation history of Article 31, see Watal, Jayashree (2001), Intellectual Property Rights in the WTO and Developing Countries, Netherlands: KluwerGoogle Scholar, at 320–321.

44 Some argue that the declaration is a non-binding soft law. See Gathii, James Thuo (2002), ‘The Legal Status of the Doha Declaration on TRIPS and Public Health under the Vienna Convention on the Law of Treaties’, 15(2), Harvard Journal of Law & TechnologyGoogle Scholar, 291, at 314; Sykes, Alan O. (2002), ‘TRIPs, Pharmaceuticals, Developing Countries, and the Doha “Solution”’, 3(1), Chicago Journal of International LawGoogle Scholar, 47, at 54.

45 The Doha Declaration, supra note 3, para. 5 (b).

46 Ibid., para. 5 (c).

47 Ibid., para. 6. A decision was adopted later to implement the instruction, which waives the obligation in para. (f) of article 31 of the TRIPS agreement.

48 Since the 2002 WTO Doha Round negotiation, no substantial achievements have been made.

49 See McManis and Contreras, ‘Compulsory Licensing of Intellectual Property’, supra note 32, at 130; Abbott, Frederick M. (2005), ‘The WTO Medicines Decision: The Political Economy of World Pharmaceutical Trade and the Protection of Public Health’, 99(2), American Journal of International LawCrossRefGoogle Scholar, 317, at 349–350 (observing that US-initiated FTAs tend to limit the grounds for triggering compulsory licensing for national emergencies, public non-commercial use, and anti-competitive practices).

50 Nevertheless, it should be noted that global warming resulting in rising sea levels may constitute a national emergency for certain small islands.

51 Wilson, ‘Undermining Mitigation Technology’, supra note 2, at 6, 9.

52 See Fair, Robert (2009), ‘Does Climate Change Justify Compulsory Licensing of Green Technology?’, 6(1), International Law and Management ReviewGoogle Scholar, 21, at 38 (stressing that the inadequacy of manufacturing capabilities may dilute the value of the compulsory licensing of green technologies).

53 McManis and Contreras, ‘Compulsory Licensing of Intellectual Property’, supra note 32, at 127–30. See also Fair, ‘Does Climate Change Justify Compulsory Licensing of Green Technology?’, supra note 52, at 39–40 (arguing that the difference between these two industries makes clean technologies less appropriate for compulsory licensing).

54 McManis and Contreras, ‘Compulsory Licensing of Intellectual Property’, supra note 32, at 127.

55 See TRIPS Agreement, art. 31, para. c. (regarding semi-conductor technology, lawful grounds are confined to public non-commercial use and anti-competitive practices only).

56 See Draft Agreement on TRIPS: Communication from the United States, MTN.GNG/NG11/W/70, http://keionline.org/sites/default/files/mtn.gng_.ng11.w.70_11may1990_us_draft_trips.pdf (accessed 1 December 2014).

57 UNCTAD-ICTSD (2005), Resources Book on TRIPS and Development, New York: Cambridge University Press, at 465–466.

58 According to Article 32 of the VCLT, the preparatory works (travaux préparatoires) of treaty drafters may be used as supplementary means for treaty interpretation.

59 See generally Office of the United States Trade Representatives (2001), ‘USTR Zoellick Says World Has Chosen Path of Hope, Openness, Development and Growth’ (14 November 2001), http://www.ustr.gov/archive/Document_Library/Press_Releases/2001/November/USTR_Zoellick_Says_World_Has_Chosen_Path_of_Hope,_Openness,_Development_Growth.html (accessed 1 December 2014); Schott, Jeffrey J. (2002), ‘Comment on the Doha Ministerial’, 5(1), Journal of International Economic Law, 191, at 195Google Scholar; Sykes, ‘TRIPs, Pharmaceuticals', supra note 44, at 54.

60 See VCLT, art. 31, para. 3(a); A recent WTO ruling confirmed that the decision of a WTO organ (i.e., the Committee on Technical Barriers to Trade) can constitute a treaty interpretation tool because it qualifies as a subsequent agreement to its treaty text. See Appellate Body Report, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products (US–Tuna II), WT/DS381/AB/R, adopted 13 June 2012, paras. 371, 372.

61 See Carlos, Correa (2007), ‘TRIPS and TRIPS-Plus Protection and Impacts in Latin America’, in Gervais, Daniel (eds.), Intellectual Property, Trade and Development: Strategies to Optimize Economic Development in a TRIPS-Plus Era, New York: Oxford University PressGoogle Scholar, at 237.

62 de Carvalho, The TRIPS Regime of Patent Rights, supra note 5, at 436.

63 Ibid.

64 Ibid.

65 Ibid., at 317, 319.

66 EC Trade Barriers Report, supra note 14, at 6.

67 Ibid., at 8, 11.

68 TIPO Decision, supra note 12, at 33–35.

69 The Taiwan Patent Act, art. 78, para. 1 (a subsequent amendment to the Act omitted such a ground to trigger compulsory licenses).

70 See EC Trade Barriers Report, supra note 14, at 18. Later, after Gigastorage requested the termination of the use of the licensing, TIPO decided to revoke the compulsory licenses in May 2007. Ibid., at 21.

71 EC Trade Barriers Report, supra note 14, at 86.

72 Ibid. (emphasis added).

73 Ibid., para. 92.

74 Low, Patrick, Marceau, Gabrielle, and Reinaud, Julia (2012), ‘The Interface between the Trade and Climate Change Regimes: Scoping the Issues’, 46(3), Journal of World TradeGoogle Scholar, 485, at 536.

75 See UNCTAD-ICTSD, supra note 57, at 474; EC Trade Barriers Report, supra note 14, at 55, 56. Cf. de Carvalho maintains that the notion of ‘predominantly’ for supplying a local market should be examined on a case-by-case basis. de Carvalho, The TRIPS Regime of Patent Rights, supra note 5, at 455.

76 TRIPS Agreement, art. 31 (i)(j).

77 EC Trade Barriers Report, supra note 14, at 18, 19.

78 Ibid., at 91, 92.