83. Brazil has the honor of introducing the document IP/C/W/385/Rev 1 to the TRIPS Council. The document entitled "Non Violation and Situation Nullification or Impairment under the TRIPS Agreement" was submitted to this Council on 22 May, expressing the views of seventeen countries that consider non violation and situation complaints should be deemed inapplicable under the TRIPS Agreement. In order to present the revised version of a document, a brief historical introduction is needed. I ask the indulgence of the Members to take us back to 2002, when a group of 14 countries submitted IP/C/W/385.
84. At that time, Members were struggling during TRIPS Council Sessions to consider the possibility of allowing non violation and situation complaints to apply to intellectual property disciplines. A number of WTO agreements, decisions and declarations refer to non-violation complaints. Nonetheless it was unclear how such an exceptional mechanism used in market access treaties would interact with the international IP System.
85. Even though GATT Article XXIII established the basic rules on non-violation and situation complaints and Article 26.1 of the Dispute Settlement Understanding provided basic procedures, Article 64.3 of the TRIPS Agreement requested a consensus on the adoption of scope and modalities prior to their use. According to the text of the treaty:
3. "(…) , the Council for TRIPS shall examine the scope and modalities for complaints of the type provided for under subparagraphs 1(b) and 1(c) of Article XXIII of the GATT 1994 made pursuant to this Agreement, and submit its recommendations to the Ministerial Conference for approval. Any decision of the Ministerial Conference to approve such recommendations or to extend the period in paragraph 2 shall be made only by consensus, and approved recommendations shall be effective for all Members without further formal acceptance process."
86. In 2002, a group of 14 Member states, comprised by Argentina, Bolivia, Brazil, Colombia, Cuba, Ecuador, Egypt, India, Kenya, Malaysia, Pakistan, Peru, Sri Lanka and Venezuela, submitted the document W/385, in order to express the view that the application of non-violation and situation complaints to TRIPS would raise systemic concerns that could adversely affect not only the IP system, but also the World Trade System and its dispute settlement mechanism. The elements that led to this shared interpretation are, inter alia, the understanding that non-violation and situation complaints would,
(i) introduce incoherence among WTO agreements by allowing something which a WTO Member has agreed to accept in one part of the single undertaking (e.g. the GATT or the GATS) to be challenged on the basis that it could nullify or impair benefits in another area (e.g. TRIPS);
(ii) upset the delicate balance of rights and obligations in the TRIPS Agreement by elevating private rights over the interests of the users of intellectual property – both within and between countries – and over other important public policy considerations in a manner inconsistent with Article 3.2 of the DSU;
(iii) undermine regulatory authority and infringe sovereign rights by exposing to challenge any measure that affects intellectual property and that could not have been foreseen at the time of the Uruguay Round;
(iv) limit use of the flexibilities inherent in the TRIPS Agreement to secure objectives relating to public health, nutrition, the transfer of technology and other issues of public interest in sectors of vital importance to socio-economic and technological development.
87. Taking into consideration the document W/385, communications from Canada, the European Communities, the United States, as well as discussions inside the TRIPS Council, no decision could be adopted on scope and modalities at the 4th Ministerial Conference. The MC4 oriented the TRIPS Council to "continue its examination of the scope and modalities for complaints of the types provided for under subparagraphs 1(b) and 1(c) of Article XXIII of the GATT 1994 and make recommendations to the Fifth Session of the Ministerial Conference. (…), in the meantime, Members (would) not initiate such complaints under the TRIPS Agreement."
88. Moratorium to the use has been approved in every Ministerial Conference, every two years, since the 4th Ministerial.
89. In 2013, the Bali Ministerial Conference extended the moratorium and Members agreed they would intensify their work in the TRIPS Council on NVNI complaints. Approximately one year ago, on 10 June 2014, the delegation of the United States circulated the document IP/C/W/599. The communication intended to advance the Council's intensified examination of non-violation complaints under the TRIPS Agreement, while trying to address concerns raised by other Members. The US document presented, also, a new interpretation on the implementation of the Article 64.3 TRIPS. According to this interpretation, "questions regarding the implementation of Article 64 have to a great extent been answered, in part by the text of the relevant covered agreements and in part by the GATT and WTO dispute settlement system. Where additional questions remain, dispute settlement continues to be the mechanism agreed by WTO Members to further clarify provisions of the covered agreement, including Article 64".
90. Taking into account previous discussions as well as the contribution of the document W/599 to the debate, the group of co-sponsors of document W/385 intensified discussions on non-violation and situation complaints in order to produce an updated version of the document that would also encompass eventual changes in the last 13 years of discussion. This work involved new co-sponsors and a huge effort of coordination among Geneva delegates and capitals.
91. The result of our discussions is reflected in document W/385/Rev 1, circulated to Members on 27 May 2015, co-sponsored by Argentina, Plurinational State of Bolivia, Brazil, China, Colombia, Cuba, Ecuador, Egypt, India, Indonesia, Kenya, Malaysia, Pakistan, Peru, Russian Federation, Sri Lanka and Bolivarian Republic of Venezuela. Besides providing a document up to date, this group of countries conveyed a common understanding on the implementation of Article 64.3.
92. This group of countries understands that "non-violation and situation complaints only apply to the TRIPS Agreement in accordance with the procedure established under Article 64.3 and complying with this procedure should be a matter of priority for the Council for TRIPS". The document expresses the view that "non-violation and situation complaints would be applicable to TRIPS only when there is a consensus on the scope and modalities as envisioned in Article 64.3 of the TRIPS Agreement."
93. Taking all aforementioned into account the result of the discussion was that
"introducing non-violation and situation complaints into the TRIPS Agreement is unnecessary and inconsistent with the interests of the WTO Members. Any benefits arising from the Agreement can be adequately protected by applying the text of the Agreement in accordance with accepted principles of international law. The absence of non-violation complaints in the TRIPS context does not in any manner threaten or dilute the enforceability of TRIPS related rights and obligations. On the contrary, the application of non-violation complaints in the TRIPS context could potentially present issues relating to rights of intellectual property right holders versus the legitimate exercise of regulatory policy choice by Governments."
94. Consequently, we propose that the TRIPS Council recommend to the Ministerial Conference that complaints of the type provided for under subparagraphs 1(b) and 1(c) of Article XXIII of GATT 1994 shall not apply to the settlement of disputes under the TRIPS Agreement."
95. The document is open to new co-sponsors that share the same understanding regarding non-violation and situation complaints.
