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The TRIPS Patent Protection Provisions and Their Effects on Transferring Climate Change Technologies to LDCs and Poor Developing Countries: A Critical Appraisal

Published online by Cambridge University Press:  19 October 2012

Khorsed ZAMAN
Khorsed ZAMAN*
Affiliation:
Macquarie University, Australia
*
khorsed.zaman@mq.edu.au
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Abstract

Despite the existence of almost eighty international agreements and legal instruments, there has not been a marked development in the transfer of climate change technologies to poor and the least developing countries. This article investigates the role of intellectual property rights (IPDs) and scrutinizes the effects of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) on the transfer of these technologies. It explores the TRIPS patent protection provisions and examines the associated flexibilities like compulsory licensing and parallel import options in the context of the transfer of climate change technologies. It finally concludes that the TRIPS patent protection rules, including the existing flexibilities, are one of the biggest impediments to the transfer of these technologies to poor and least developed countries. New agreements or promises on the transfer of green technologies would be fruitless if these TRIPS rules are not amended.

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Type
Articles
Information
Asian Journal of International Law , Volume 3 , Issue 1 , January 2013, pp. 137 - 161
Copyright
Copyright © Asian Journal of International Law 2012

I. Setting the context

Climate change has devastating effects on almost all countries in the world, irrespective of their levels of socioeconomic development, and politico-diplomatic power and status. However, it has more catastrophic consequences for the poor developing and least developed countries (LDCs).Footnote 1 Their vulnerable economies and geographies further aggravate the intensity of climate change consequences. Freshwater scarcity and water inundation are the two biggest threats to the livelihood of poor communities located in arid regions and low-lying tropical zones, respectively. Expensive energy, the collapse of national electric infrastructure due to the shortage of power supply, deforestation, lower agricultural productivity and food shortages, heavy metal and arsenic poisoning, vector-borne diseases, bacterial contamination, and immunity deficits are some of the dreadful effects of climate change. In addition, there is also stratospheric ozone layer depletion, global warming, the untimely and excessive melting of glaciers and the rise of sea levels, changes in rainfall patterns, increased frequency of extreme events (e.g. cyclones, floods, and droughts), soil erosion, land degradation, and other associated climate disasters. In order to prevent these catastrophic effects of climate change, the introduction and diffusion of climate change technologiesFootnote 2 is especially crucial for poor developing countries and LDCs. They are in dire need of these technologies and also need to formulate effective plans for implementing climate change mitigation and adaptation strategies.Footnote 3 However, they do not have easy access to these technologies. Government-owned and multinational entitiesFootnote 4 of developed countries are the patent holders of most modern and cutting-edge climate change technologies.Footnote 5 Contemporary research shows that developed countries own almost all the environmentally sound technology patents which have been submitted under the Patent Cooperation Treaty (PCT)Footnote 6 from 2000 to 2004.Footnote 7 A few advanced developing countries like Brazil, China, and India own the remaining share.Footnote 8 The LDCs and poor developing countries, on the other hand, are totally incapable of getting the benefits of these patents. The fragile and vulnerable economies of these countries are the main reason why these countries lack the technical, institutional, and financial capacity to access these technologies. Technological research and development in these poor developing countries is also low. So far, they account for only four percent of global research and development expenditure.Footnote 9 Thus, these countries are unable to innovate and create advanced climate change technologies on their own, and are almost fully dependent on developed and industrialized countries for technological support.

At present, there are more than eighty international agreements and legal instruments that contain provisions on the transfer of technologies to developing countries.Footnote 10 These do not include different subregional and bilateral agreements.Footnote 11 The catalytic role of technology and the crucial need for developing countries to get technical, institutional, and financial assistance to address climate change consequences have been recognized and emphasized in most important international legal instruments and conventions like the Montreal Protocol on Substances that Deplete the Ozone Layer (Montreal Protocol),Footnote 12 the United Nations Framework Convention on Climate Change (UNFCCC),Footnote 13 the Kyoto Protocol to the United Nations Framework Convention on Climate Change (Kyoto Protocol),Footnote 14 the Bali Action Plan 2007,Footnote 15 the Copenhagen Accord,Footnote 16 the Convention on Biological Diversity (CBD),Footnote 17 Agenda 21 of the Rio Earth Summit (Agenda 21),Footnote 18 multiple technology sharing arrangements under the World Intellectual Property Organization (WIPO),Footnote 19 and the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS).Footnote 20 Different mechanisms of assistance like the overseas development assistance (ODA), foreign direct investment (FDI), assistance through non-governmental organizations (NGOs), and the “climate change fund”Footnote 21 have also been designed in different climate change discussions, negotiations, and agreements. There has been much discussion about the environmental, political, economic, and climatic aspects of climate change, but the effects of stringent patent protection under TRIPS in the transfer of climate change technologies to poorer countries is less discussed. The issue came up in the initial level discussions and negotiations of the Copenhagen Accord, but following strong opposition from the US, the EU, Australia, and some other developed countries, no compromise was reached on the question of the exemption or waiver of IPR for transferring climate change technologies to LDCs and poor developing countries.Footnote 22 Bypassing the IPR issues, the participating countries agreed upon the establishment of a “Green Climate Fund” and a “Technology Mechanism”.Footnote 23 The technology mechanism is generally meant for accelerating “technology development and transfer in support of”Footnote 24 mitigation and adaptation strategies, but a close examination of the negotiation history clearly reveals that the IPR issues concerning the transfer of technologies are omitted from the final text of the Copenhagen Accord.Footnote 25 The IPR issue, or more specifically, the patent right flexibility or waiver issue, is also carefully omitted from the Cancun AgreementFootnote 26 and the recently held Durban Climate Change Conference.Footnote 27 In the absence of any specific compromise among nations, TRIPSFootnote 28 is still the central legal document which determines the relationship between trade, the protection of IPR, and the transfer of climate change technologies to poor developing countries. On the other hand, some recently developed mechanisms like patent information databases, patent pools, public sector licensing, and patent exclusions are not subject to the regulations of TRIPS. These arrangements are complementary with WTO policies and are not the direct means of transfer of technologies under the WTO legal framework. Given the context, this article focuses only on the patent protection provisions of TRIPS, which is the core legal instrument on intellectual property (IP) protection, and examines their role in the transfer of climate change technologies to poor developing countries.Footnote 29 This article is based on the premise that the stringent patent protections in climate change technologies predominantly serve the interests of the IPR holders and owners instead of promoting the TRIPS objectives of maintaining a balance between innovators’ rights and consumers’ rights through addressing urgent public necessities. Finally, the article shows that the existing parameters of TRIPS are one of the biggest impediments to the transfer of technologies to poor and vulnerable developing countries.

This article is structured in four parts. This part has explained the context, while the concept of transfer of technology and the multiple mechanisms for transferring technologies are explained in Part II. Part III examines the TRIPS flexibility provisions which are considered to be the core policy mechanisms for developing countries to adjust to modern innovations of science and technology. Lastly, Part IV contains the concluding remarks which include suggestions and other possible means for diffusing climate change technologies.

II. THE NOTION OF “TRANSFER OF TECHNOLOGY”

The term “transfer of technology” does not have a universally accepted definition. In the absence of any clear definition, most countries rely on the concept given by the United Nations (UN), which identifies “transfer of technology” as the “transfer of systematic knowledge for the manufacture of a product, for the application of a process or for the rendering of a service. It does not extend to the transactions involving the mere sale or mere lease of goods.”Footnote 30 Thus, the transfer of technology is not completed simply by transferring the hardware, software, or the main substance of a product. It also requires facilitating the access to the relevant technical information, know-how, and socioeconomic support to develop sufficient human skills for effective use of the technology.

The Kyoto Protocol first coined the term “environmentally sound technologies” (ESTs) instead of using the common term “transfer of technologies”, and suggested that party countries “take all practicable steps to promote, facilitate and finance, as appropriate, the transfer of, or access to, environmentally sound technologies”.Footnote 31 The legal framework of ESTs dates back to 1992, when the Agenda 21 was adopted at the United Nations Conference on Environment and Development (UNCED) in Rio de Janeiro.Footnote 32 The Agenda 21 ended with promises to uphold intellectual property rights and for countries to act on a “mutually agreed” basis.Footnote 33 These promises were supposed to make significant developments in the area of technology transfer, but the Agenda 21 has done very little to defuse tensions between the protection of intellectual property and the transfer of technology to poor developing countries.

The UNCED laid the foundation for the formulation of the UNFCCC,Footnote 34 which led to the Kyoto Protocol that recognized “common but differentiated responsibility” (CBDR) for developing and industrialized countries in addressing global climate change.Footnote 35 It gives developed countries greater responsibility to address climate change through the reduction of greenhouse gas (GNG) emissions and through helping poorer countries to reduce such emissions through technology transfer, financial assistance, and other means. The CBDR principle is based on the notion of fairness by underscoring the reality that developed countries are disproportionately responsible for GNG emissions and have the greatest capacity to act.Footnote 36 The UNFCCC provisions basically emphasize that developed countries should transfer climate change technologies to poorer countries which are unable to innovate on their own. The transfer of climate change technology emerged as a key topic at the Bali Conference in 2007, and its importance has set it as one of the four pillars of the Bali Action Plan.Footnote 37 Since then, the role of IPR in the transfer of climate change technologies has been subject to increased attention, and developing countries have been repeatedly urging a reduction in the rigidity of the TRIPS system, which creates substantial difficulties in accessing climate change technologies. A wide spectrum of views, options, and proposals have been put forward regarding the multiple implications of stringent patent protection;Footnote 38 however, none of them has thus far created any means which allow poor developing countries easy access to climate change technologies.

A. Common Channels for Technology Transfer

There are numerous channels for technology transfer at the international level, but two have been classified as important for multilateral trade, namely market-mediated mechanisms and non-market mechanisms.Footnote 39 Market-mediated mechanisms are formal and intentional transactions. These are the most legalistic and straightforward ways of transferring technologies to different countries. This mode of transfer has three fundamental characteristics. First, it includes the transfer of technology through trade in goods, especially capital goods and technological inputs. Second, foreign direct investment is important for this channel, as it generally tends to disseminate comparatively newer and productive technological information to local firms and industries. Third, the sharing of technology licences between different companies for business objectives is another type of market-mediated technology transfer: it involves the sharing of copyrights, patent rights, trade secrets, and trademarks under commercial agreements between particular business entities. It also involves the sharing of production and distribution rights and know-how for commercial interest. Patent Pools, PCT,Footnote 40 Public Sector Licensing, and similar arrangements are examples of this type of mechanism. In addition to these, there may be joint venture arrangements between trading entities which invest their capital to carry out a mutual plan of action. None of these mechanisms are specifically mentioned as a tool of technology transfer under TRIPSFootnote 41 and the WTO legal framework.

Non-market mechanisms of technology transfer are mainly informal and involuntary transactions. These channels do not provide any incentive or compensation to the patent holders. Developing countries and LDCs prefer this type of mechanism as a means of getting access to essential technologies. Most developed and industrial countries also have a long history of using non-market mechanisms during their early days of economic development.Footnote 42 The lack of socioeconomic capacity to afford the most appropriate form of intellectual property rights compels poor developing countries to resort to this mechanism. One of the most important channels for this method of technology transfer is imitation, which is the use of technological secrets or product design without any kind of authorization from the patent owner. It is usually done through product or patent inspection from the patent database. Imitation sounds like counterfeiting, but there is a substantial difference between them. Counterfeiting is a way to use recognized trademarks, but imitation is mainly a method of absorbing technological innovations. Therefore, counterfeiting is obviously illegal while imitation is a recognized mode of informal technology transfer.

Reverse-engineering is another recognized non-market mechanism like imitation. It is a process of dismantling a product to analyze its components and thereafter creating a competitive product. It is a costlier and more complex process than imitation; however, it is also frequently exercised by the LDCs and developing countries. In addition to imitation and reverse-engineering, the decompiling of software and the dissemination of technological knowledge through temporary migrant students and researchers working mainly in developed countries are two significant modes of technology transfer through non-market mechanisms.

In the recent past, these non-market mechanisms of technology transfer have been frequently used by most developed and industrialized countries during their years of development and industrialization. It is a proven and effective tool for economic development. Japan and Korea are the most topical examples in East Asia. Their history of development reveals that these two countries pursued very liberal IPR policies until the late 1990s, which allowed them to utilize non-market mechanisms to absorb foreign cutting-edge technologies.Footnote 43 Ruthless utilization of these policies helped them tremendously to move from crude imitators to creative imitators, and finally to become knowledge-intensive innovators. In Europe, Switzerland did not have a true patent system during its progression from an agricultural country to a modern industrialized nation. It became one of the world's technology leaders without having any patent law until the last days of the nineteenth century.Footnote 44 Very recently, Switzerland has adopted IP protection laws in response to its compliance responsibilities under TRIPS.Footnote 45 The absence of IP law helped Switzerland to utilize and exploit the advantages of all the non-market mechanisms of technology transfer during its period of economic development. Some other developed countries like France and West Germany did not have patent laws for pharmaceuticals and chemical substances until the last days of the twentieth century.Footnote 46

In terms of rapid economic development, developed countries like Japan and Korea, in particular, could be models for LDCs and poor developing countries. LDCs and poor developing countries could follow similar IP protection policies like these developed nations. However, TRIPS has narrowed such opportunities by setting common IP standards and specific compliance deadlines for all WTO members. It does not allow LDCs and developing countries to have unfettered freedom to use non-market channels that the developed countries had previously used to utilize the technological learning and adaptation of foreign technologies during their transitional period of development and industrialization.Footnote 47 In other words, LDCs and poor developing countries cannot use the channels of technology transfer which developed countries had used as a tool for economic development. In this sense, TRIPS stands as a stumbling block in the use of non-market channels for the transfer of technologies, which ultimately goes against the interests of LDCs and developing countries.

B. Barriers to Transfer of Climate Change Technologies

“Environmentally sound technologies”Footnote 48 largely refers to technologies for energy efficiency improvement, low carbon energy production for urban and rural communities, improved waste management techniques, and the cheaper treatment of sewage effluents. Generally, ESTs reduce the emission of greenhouse gases and increase energy efficiency, and are considered as environmentally friendly technologies.Footnote 49 This group of technologies plays an important role in the adoption of climate change mitigation and adaptation strategies.Footnote 50

There are numerous barriers for LDCs in their access to ESTs. These barriers are mostly economic, institutional, policy-oriented, and related to capacity building, and are attributed to insufficient human resources.Footnote 51 Economists prefer to consider them either as “supply-side” or “demand-side” barriers.Footnote 52 “Supply-side barriers” refers to the situation where a “vast majority of technologies are held by a handful of firms in industrialized countries”.Footnote 53 They include, among others, trade and investment restrictions, small market size, huge transaction costs, and the fear of losing proprietary control over products or processes. On the other hand, multiple socioeconomic shortcomings suffered by developing countries are called “demand-side barriers” to the transfer of technologies. All of these barriers are generally seen as non-legal and unrelated to patent protections issues and TRIPS.Footnote 54 Nonetheless, certain legal measures, especially the strict patent protection system of the WTO legal framework, are a formidable obstruction in the access to these technologies. It plays a pivotal role in creating both supply-side and demand-side barriers.

Developed and industrialized countries innovate, patent, and commercialize most cutting-edge technologies, and TRIPS and TRIPS-based domestic IPR regulations confer the patent holders monopolistic rights to exclude others from using these technologies for at least twenty years.Footnote 55 There are, however, limits and boundaries in patentable subject matter under Article 27 of TRIPS. Nevertheless, Article 27(3)(b) identifies some exceptions, including the following three conditions:

  1. 1. Members may not require the patenting of plants and animals produced through essential biological process.

  2. 2. Plants and animals produced or created through non-biological or microbiological process and micro-organisms must be patented.

  3. 3. Even when the patenting of plants is not mandatory, members are obligated to protect plant varieties either by patents or by an effective sui generis system or by both.Footnote 56

In short, these provisions mandate that each and every innovation, including plants and animals, must be patented, with the only exception being “essential biological processes” and products. These TRIPS provisions all together maintain strict restrictions on the use of all types of technologies, innovated products, and processes for twenty years, which serve as a substantial impediment to the transfer of technologies to poor developing countries. This regime of a very strict and comprehensive IPR protection mechanism clashes with the concept of technology transfer.

TRIPS also has some provisions which attempt to maintain a balance between the protection of technological innovations and the provision of social goods and necessities.Footnote 57 Article 27(1) states that “patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced”.Footnote 58 These “patent availability” and “discrimination” issues were considered in the Canada-Term of Patent Protection case but the Panel applied judicial economy and deferred the ruling on the question of “technology discrimination”.Footnote 59 It noted that “some circumstances, some technology-specific rules could be implemented with the very intention of ensuring that patent rights could be enjoyed without discrimination”.Footnote 60 Nevertheless, this decision does not clarify the appropriate balance between strict IPR protection and the technological discrimination that such patents could create. On the whole, TRIPS does not create any scope for WTO members to hold certain innovations of modern science in the public domain.

TRIPS, however, incorporates a provision on technology transfer which seeks to encourage firms in developed countries to transfer technologies to less developed countries, but this provision is discretionary.Footnote 61 Due to this discretionary character of TRIPS Article 66(2), it is almost ineffective. Moreover, the TRIPS flexibility of granting transitional time to LDCs and developing countries is also now obsolete. Most of the deadlines either have already expired or will expire within a year. These issues are examined later in this article in the context of transferring green technologies.

C. The Role of Strict IP Protection in Technology Transfer

The inclusion of transfer of technology provisions in different international legal instruments clearly shows its importance, viability, and necessity in achieving the objective of sustainable development. However, there are still some conflicting views regarding the role of IPR in the process of the transfer of technology.Footnote 62 Since the UNCED in 1992, developing countries have been demanding a relaxed IP protection system. Nonetheless, TRIPS was adopted as an inseparable part of the WTO legal framework for enhancing the strength of IPR. Proponents of strict IPR protection argue that it encourages innovation and contributes to technology transfer. However, opponents, especially the developing countries, believe that strong IPR protection will lead to monopolies and obstruct the promotion of research and development. In the 2006 UNFCCC report, a number of economic and market barriers to the transfer of technology were featured, but the report does not mention IP-related barriers.Footnote 63 Thus, the UNFCCC either does not consider existing IP protection mechanisms as impediments to the transfer of technologies, or it might have overlooked the issue given its contentious nature.Footnote 64 On the other hand, WIPO believes that “the intellectual property system has a direct impact on many technologies that can help mitigate climate change”.Footnote 65 There is currently almost no comprehensive research or studies on the potential impact of IPR on the transfer of climate change technologies to LDCs.Footnote 66 Some initial studies have shown that the impact of contemporary patent laws is not significant in developing countries’ access to solar energy, wind, and biofuel technology.Footnote 67 However, such a conclusion requires comprehensive analysis supported by empirical studies. The main limitation of this research lies in the fact that what may be the case for the three advanced developing countries like Brazil, China, and India may not reflect the climate change realities of other LDCs and poor developing countries.Footnote 68

It is generally acknowledged that an intellectual property right is a private right, and the main object of IPR is to encourage and reward innovation by providing maximum economic benefit to the owners. This right is a legal mechanism to develop incentives through the methods of licensing, patenting, and other convenient ways of protecting intangible rights. It is generally expected that the benefits of innovation must not be shared freely with others.

Transfer of this technology to poor developing countries, on the other hand, is the distribution of IPR without providing sufficient monetary incentives for the research, innovation, and development of a product. Its main objective is to support vulnerable communities which have a dire need to access the technological product or process but who cannot afford it. Therefore, technology transfer, in whatever mode, contradicts the concept of individual reward and encouragement and is thus contrary to the traditional concept of IPR protection. Even though different international legal instruments have urged the striking of a balance between these two conflicting concepts,Footnote 69 in practice the tension remains. The more the gap between these two concepts can be bridged, the greater the prospect of the transfer of climate change technologies to the poorer countries. Factors like economic conditions, appropriate infrastructure, governance, and competition systems are also important.Footnote 70 In most circumstances, the mere obligation of stringent IP protection systems cannot ensure the effective transfer of technologies to poor developing countries. For the majority of LDCs, IP protection may, in fact, hinder or prevent the transfer of technology.Footnote 71 It has also been shown that LDCs adapt and absorb existing technologies, usually by imitation and reverse-engineering. Strong IP protection stops or tends to control these imitations, informal mechanisms, and the reverse-engineering processes, which ultimately deprive the poorer nations at the expense of conferring benefits on the IPR holders and owners. Recent research has also revealed that formal mechanisms for the transfer of technology, including trade in goods, FDI, and licensing, which would have been supported by stronger IP protection in other contexts, do not seem to have any significant effect on LDCs.Footnote 72 Circumstances like their limited market capacity, poor regulatory mechanisms, and the weak technological capacity of their domestic firms limit the potential of small and vulnerable economies to benefit from formal technology transfer mechanisms.Footnote 73 Empirical evidence from the Korean development experience has indicated that there is no positive relation between strict IP protection and the transfer of technologies.Footnote 74 It is also evident that instead of facilitation, stringent IP protection hinders technology transfer and the development of indigenous capacity to “learn by doing”.Footnote 75 The experience of developing countries in Asia and Japan has proved that a poor IPR protection system helped them to build up tremendous export capacities even though they were at a lower level of development, while strict IPR protection only benefited technologically developed countries.Footnote 76

The negative effect of strict IPR protection is also true for the transfer of climate change technologies. Determining the appropriate balance between the need for innovation and the promotion of public development objectives like the transfer of technology to poorer nations, and maintaining such a balance, is a sine qua non for sustainable development. The need for such balance has been noted in the UNFCCC, the Montreal Protocol, the Kyoto Protocol, the Bali Action Plan, the Copenhagen Accord, and, above all, in TRIPS.Footnote 77 However, its implementation is still far from a reality.

III. TRANSFER OF TECHNOLOGY PROVISIONS UNDER TRIPS

It was TRIPS which introduced the protection of IPR into the multilateral trading system. Before this, international regulations on IPR were exclusively administered and monitored by WIPO. TRIPS created a major shift in the regulatory power of WIPO.Footnote 78 It empowered the WTO to create, regulate, and monitor multilateral rules relating to IPR. Now, the WTO is the principal regulatory body for multilateral IPR, and TRIPS is the most comprehensive international legal instrument on global intellectual property law. Most importantly, infringements of TRIPS rules are now brought and adjudicated under the WTO dispute settlement system.Footnote 79

TRIPS claims to be a minimum standard agreement and WTO members are allowed to establish higher levels of IP protection in their territories. They are required to adjust their domestic laws in conformity with the TRIPS provisions. This compliance requirement ultimately increases the level of IP protection, and it gradually stops developing countries and LDCs from using non-market channels of technology transfer mechanisms like imitation and reverse-engineering.Footnote 80 One of the main objectives of IPR protection, as set out in Article 7 of TRIPS, is that:

the protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.Footnote 81

This objective was set to establish a balance between the two conflicting interests of the protection of technological innovations and the provision of social goods and necessities.Footnote 82 The WTO dispute settlement body (DSB) in the Canada-Term of Patent Protection case recognized this balance, but declined to discuss it further. It stated that this should “still await appropriate interpretation”.Footnote 83 This indecisiveness, in a way, allows some WTO members to formulate or amend their legislation to address social and public needs, like protecting public health and nutrition, and to promote development in technological and other socioeconomic sectors of public interest.Footnote 84 On the other hand, it allows some countries to strengthen their patent protection at the highest possible level in the name of preventing “abuse of intellectual property rights … which … adversely affect the international transfer of technology”.Footnote 85

Despite some acknowledgement under Articles 7 and 8 of TRIPS of the need for the protection of IPR to contribute to technology transfer,Footnote 86 it is still unclear whether the agreement has been able to establish any framework which is conducive to the transfer of technologies to poor developing countries. The agreement does, however, consider allowing them a flexible implementation timeline to become TRIPS-compliant members.Footnote 87 It recognizes a transition period for LDCs, which is currently set to expire on 1 July 2013.Footnote 88 After this time, they would not be able to use non-market mechanisms of technology transfer, including imitation and reverse-engineering.

In addition to the transitional timeline, Article 66(2) of TRIPS also provides some advantages to LDCs. It obliges developed countries to “provide incentives to enterprises and institutions in their territories for the purpose of promoting and encouraging technology transfer to least developed country Members in order to enable them to create a sound and viable technological base”.Footnote 89 This mandatory provision was inoperative until the Doha Conference in 2001, due to the lack of specific monitoring and implementation guidelines. To resolve this, the Doha Declaration mandated the Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS Council) “to put in place a mechanism for ensuring the monitoring and full implementation of the obligations” under Article 66(2).Footnote 90 The Council adopted a decision to set up a mechanism in February 2003.Footnote 91 Accordingly, a new mechanism was devised which merely requires developed countries to submit an annual report on technology transfer to the TRIPS Council;Footnote 92 however, many developed countries do not do so.Footnote 93 This type of responsibility under the TRIPS technology transfer mechanism is ineffective and is an example of the lack of commitment by developed countries to assist LDCs in multilateral trade. A recent empirical study on the measures taken so far under Article 66(2) has found multiple shortcomings in the types, patterns, areas, and real needs for technology transfer.Footnote 94 The Commission on Intellectual Property Rights (CIPR) of the British government has also reported that developed countries have not successfully implemented Article 66(2) and that it does not seem that they have taken any extra measures to encourage technology transfer.Footnote 95 It is therefore evident that the objective of Article 66(2) is still not effectively implemented as mandated in the provision. The TRIPS Council should review and revise the mechanism urgently.

Despite the special transitional timelines for LDCs, and developed countries’ vague pledges to support LDCs, TRIPS practically encourages and seeks to establish a strict IP protection regime for all WTO members. On this point, there arises the much discussed defence of TRIPS flexibilities, which allows for some relaxation to developing countries and LDCs in complying with the TRIPS provisions. Some authors believe that “TRIPS gives Members sufficient flexibility to cope with most barriers that patents may pose in climate change mitigation and adaptation policies”.Footnote 96 Some of these flexibilities which are relevant to the transfer of technologies are examined below in the context of the transfer of climate change technologies to LDCs and poor developing countries.

A. TRIPS Flexibilities

The TRIPS flexibilities can be described as a policy which allows WTO members certain limitations and exceptions from strict IPR protection as prescribed in the agreement. In short, these are special relaxations of the TRIPS standards. In a sense, the setting of additional deadlines for LDCs to comply with TRIPS is one type of procedural flexibility. With regards to transferring climate change technologies to LDCs, two other policies of TRIPS are also relevant. These are “compulsory licensing” and “parallel imports”, which can also be used by all WTO members in addition to poor developing countries and LDCs.Footnote 97 These TRIPS flexibility options have so far been considered only in the area of public health with regard to the production and export of generic drugs. Nonetheless, in the context of the transfer of ESTs, these flexibilities can also be considered in the context of the dissemination of technical knowledge, the development of agriculture, and the protection of global biodiversity, which can be important tools for the socioeconomic development of LDCs and poor developing countries.

1. Compulsory licensing under TRIPS

The term “compulsory licence” does not exist in TRIPS. WTO members frequently refer to it as “other use without the authorisation of the holder”.Footnote 98 Compulsory licence is merely one type of “other use”. It allows governments to either use the patent for their own purposes, or to issue licences to someone else to produce the patented product or process without the consent of the patent holder.Footnote 99 It is justified on the grounds of public need, and the main argument behind this practice is that government intervention to break the shackles of absolute monopoly is legal if the IPR holders do not make necessary technologies available in the public interest.

Under TRIPS, there are some conditions for issuing a compulsory licence. Generally, the person or the company applying for the licence should first seek a voluntary licence from the patent holder. If unsuccessful, they can then request a compulsory licence. If the licence is granted, they have to pay appropriate royalties or remuneration to the patent holder.Footnote 100 However, in cases of “national emergency”, or “other circumstances of extreme urgency”, or against other anti-competitive practices, the requirement of applying for a voluntary licence is not a must and governments can issue a compulsory licence immediately.Footnote 101 Nonetheless, it is expected that WTO member countries authorize the licence only to address their domestic demands.Footnote 102

The need for clarifying the TRIPS compulsory licensing provisions first arose in the WTO negotiations in the context of resolving the import and export of generic drugs produced under a compulsory licence. The main problem was exporting these drugs to poor developing countries and LDCs which did not have the capacity to produce them. The TRIPS default provision in Article 31 provides an excellent opportunity for the countries that have the capacity to produce generic pharmaceuticals or reverse-engineered medicinal products on their own through their local pharmaceutical companies. However, most developing countries and LDCs do not have the capacity to produce generic drugs domestically. This creates enormous difficulties for them in invoking the provision. Even if they may have the legal capacity to issue compulsory licences, this is fruitless in the absence of any capable domestic pharmaceutical industry which can use that licence. The TRIPS rule brings about no change in their access to life-saving generic drugs. Moreover, the original TRIPS agreement is silent on the legality of importing or exporting generic drugs produced under compulsory licences. This situation compelled the developing countries to press for clarification of the provision.

Members’ rights to grant compulsory licences and their freedom to determine the grounds for granting such licences is subsequently assured in the Doha Declaration on the TRIPS Agreement and Public Health.Footnote 103 It recognized that although developing countries theoretically have the flexibility to issue compulsory licences, a huge number of poor developing countries do not have any manufacturing capacity in the pharmaceutical sector.Footnote 104 The Declaration therefore instructed the TRIPS Council to take expeditious action to address this problem of exporting generic drugs produced under a compulsory licence: what is commonly known as the “Paragraph 6 issue”.Footnote 105

On 30 August 2003, the eve of the 2003 Cancun Ministerial Conference, WTO members struck a deal to implement the “Paragraph 6 issue”.Footnote 106 It authorized members incapable of producing generic medicine on their own to import generic medicines produced under compulsory licences from other member countries. In other words, this deal temporarily waived Article 31(f) of TRIPS, which required that members can only issue compulsory licences to satisfy a need in their own domestic markets.Footnote 107 This means that generic drugs produced under compulsory licences can now be exported to other needy developing countries. All WTO members are entitled to import generic medicines under the decision, but some thirty-three countries declared that they would not use this system to import.Footnote 108 Eleven other members also subsequently announced that they would not use this form of importation.Footnote 109 However, to take advantage of the export or import rules under the TRIPS compulsory licences, members have to make the necessary amendments to their domestic intellectual property laws. So far, Canada, the EU, India, and Norway have reported to the TRIPS Council that they have made the necessary changes to their IP laws.Footnote 110

It is noteworthy that the General Council's decision of 30 August 2003 regarding the “Paragraph 6 issue” was interim and provisional.Footnote 111 Therefore, the General Council on 6 December 2005 agreed unanimously to make this decision permanent.Footnote 112 The decision adopts a protocol of amendment which is open to WTO members for ratification. This amendment of TRIPS will make the “Paragraph 6” rule permanent and members will be able to export or import life-saving generic drugs produced under compulsory licences under these settled regulations. This is the first ever successful amendment of any WTO agreement.

2. Challenges of compulsory licensing in transferring climate change technologies

As mentioned above, the TRIPS compulsory licence provisions have been clarified, amended, and refined in the context of exporting life-saving generic drugs that are produced under such licences. It is thus pertinent to consider and compare the clarified provisions in the context of the transfer of green or climate change technologies to poor developing countries, because there are some remarkable similarities between these issues. Both of these issues are related to the technological incapacity of poor developing countries which are unable to address their domestic needs. Generic drugs and the transfer of climate change technologies both have considerable international importance in terms of global health, the protection of human rights, and the environment. Also, as in the case of generic drugs, compulsory licensing has almost similar functions and utilities in the case of the transfer of climate change technologies.

It is admitted that compulsory licensing is one type of forced licensing. Therefore, the first and foremost prerequisite for issuing such licences should be the existence of a patent in a country. Any particular product or process must be legally patented or licensed in the country which is issuing the compulsory licence. If any special situation or emergency arises,Footnote 113 the government or other assigned domestic authorities of that country can issue compulsory licences to their domestic manufacturing entities to reproduce that particular product or to follow any special technological process. It is noteworthy that the majority of the climate change technologies and products are not patented or licensed in most poor developing countries and LDCs. If they are not patented or licensed, the question of compulsory licensing does not necessarily arise. Nevertheless, this is not an act of altruism; rather, it is the unwillingness of the patent holders to patent a high-tech product or process in a poor country, which is not a feasible or profitable market for that product. If at any point in time the patent holder or producer foresees any demand for the product in the market, they must apply for a licence without further delay. Thus, the absence of patents usually does not have any far-reaching benefit to poor developing countries. However, depending on the presence of patents in any LDC, compulsory licences can have the following implications:

  1. 1. If a particular climate change technology is not patented or licensed in any LDC, it can use the technological product or process through imitation and reverse-engineering, or through any other valid means of non-market mechanisms of technology transfer up to 1 July 2013. Under the existing parameters of TRIPS and other IP laws, they do not have an obligation to seek or get permission from IPR holders. No question regarding the issuance of compulsory licences in such cases arises, but it is highly likely that patent holders would immediately register their patents in those countries to secure their IPR. In addition to these, generally all LDCs have major concerns about the implications of the aforementioned deadline, which will bring all LDCs under the full IPR coverage of TRIPS. It will terminate the LDCs’ existing IP privileges, however small they may be.

  2. 2. If the licence or patent of those products or processes is already registered or subsequently registered in an LDC, it can issue a compulsory licence on the ground of emergency necessities.Footnote 114 However, this could be a critical issue under TRIPS because the agreement does not define “emergency” or “extreme urgency”. It is expected that climate change mitigation and adaptation technologies would create strong demand for the issuing of compulsory licences, as in the case of essential generic drugs for the poor communities of the world who cannot afford to buy the original patented versions. In order to save the global environment, and given the vulnerability of LDCs in the areas of socioeconomic development and infrastructure, the compulsory licensing of climate change technologies can be considered a matter of national and global emergency, and of public importance. On the basis of “the planetary emergency of global warming”,Footnote 115 the patentability of certain climate change technologies could be waived for LDCs and poor developing countries. However, at the moment, this is perhaps controversial and not clearly defined under TRIPS. The TRIPS-plus provisions in some recent free trade agreements (FTAs) prescribe conditions of “emergency” or “urgency” that are necessary requirements for issuing compulsory licences.Footnote 116 Considering the catastrophic effects of global climate change, it is also important to redefine or clarify the TRIPS terminology of “emergency”.

  3. 3. The next issue of uncertainty regarding the transfer of climate change technology is similar to the inability of LDCs to use or produce generic drugs domestically. The question lies in the fact that even if they attain the legal privilege to issue compulsory licences, most of them do not have the capacity to imitate or use reverse-engineering technologies domestically. As with life-saving generic drugs, some LDCs would like to import climate change products and technologies from other LDCs or WTO members which are capable of producing them under compulsory licences, in order to get them in a cheaper and hassle-free way. It is again a question of the legitimacy of the import or export of climate change technologies produced under compulsory licences. Axiomatically, LDCs would be able to do so if the amended TRIPS rules on pharmaceutical patents are equally applied in the context of climate change cases. However, WTO members have not resolved the issue clearly. It is still a legal question whether the TRIPS clarification on Article 31(f) can be directly applied to the transfer of climate change technology cases without further modifications or amendment. Members should also make it clear whether the spirit behind the Doha Declaration on the TRIPS Agreement and Public Health and its associated “Paragraph 6 issue” decisions can ipso facto be invoked by LDCs and developing countries in cases of transferring climate change technologies.Footnote 117 Acknowledging or incorporating climate change protection as grounds for issuing compulsory licences will serve the objectives of TRIPS and would further increase reliance upon it by LDCs and developing countries. It would also serve the objectives of the post-Kyoto climate change regime.Footnote 118

It should be remembered that the practice of issuing compulsory licences for the production, export, or import of green technologies is still at a preliminary stage. With regard to pharmaceutical patents, TRIPS has endorsed it, but so far TRIPS does not permit compulsory licences for transferring climate change technologies. Thus, some experts argue that compulsory licences will be an ineffective means of transferring ESTs.Footnote 119 There are, however, contrasting views which favour compulsory licensing in the context of green technologies.Footnote 120 However, the main argument of this article is that the TRIPS patent protection rules are so stringent that compulsory licences for green technologies are not legally permissible, and thus these rules should be amended on a priority basis. On the question of the effectiveness of compulsory licences, some experts also equate it with the export of generic drugs produced under compulsory licences.Footnote 121 It has been argued that because of bureaucratic and procedural complexities, this mechanism has hardly been used;Footnote 122 for example, it took five years to use the “August 2003 waiver”.Footnote 123 It was in September 2008 that Canada used the waiver for the first time and shipped its first generic drug exports to Rwanda.Footnote 124 Since then, exports of this type of pharmaceutical product have been continuing, of course, amid a wide range of hurdles. Nevertheless, it is acknowledged that it is only because of either the amendment of TRIPS Article 31(f)Footnote 125 or the famous “August 2003 waiver” that it is now possible to export generic drugs produced under compulsory licences, even though it is still a difficult and cumbersome procedure. Without these supplies of life-saving drugs, thousands of poor people in Rwanda and similar countries would have died. Moreover, exports have reduced the price and substantially increased the accessibility of antiretroviral drugs to patients in poor developing countries.Footnote 126 The threat of compulsory licensing also works as leverage in negotiations with patent holders and suppliers of medicines to lower prices in local markets.Footnote 127 In 2001, during the aftermath of the 9/11 attacks, even the US threatened the German pharmaceutical giant Bayer with a compulsory licence on Ciprofloxacin (Cipro), which the US had intended to stockpile as a defence against anthrax.Footnote 128 Bayer drastically reduced the price in response.Footnote 129 It is thus arguable that even though compulsory licensing is not a holistic solution to the problem and has some flaws, the TRIPS rules on the transfer of climate change technologies should be amended similarly to those for the production, import, and export of generic drugs produced under compulsory licences.

3. Parallel imports as a mode of transferring climate change technologies

“Parallel import” refers to the importation of a product without the authorization of its patent holder in a country where the same product is already imported and available in the market. In the case of the first imports, the patent holder's permission is taken according to due legal procedure, but this is not done in the case of parallel imports. For example, company A has a drug patented and placed in Australian and Indonesian markets, and the product price is remarkably low in Indonesia due to lower production costs and other market factors. If company B buys the product in Indonesia and sells it to Australia at a price lower than the prevailing market price, it is a parallel import or “grey market import”.Footnote 130 These imported goods are legitimately produced in the country where they are made, but are purchased and imported by a third party who does not have legal authorization from the patent holder, producer, or distributor in the importing country. Nonetheless, parallel imports are not illegal under the existing parameters of IP laws and TRIPS.Footnote 131 The legal principle of exhaustion applies here.Footnote 132 The patent holders are considered to have exhausted their rights from the products once they have been placed in a market under the patent.Footnote 133 Members are “free to establish their own regime of exhaustion of intellectual property rights without challenge”.Footnote 134 This term “without challenge” also qualifies Article 6 of TRIPS, which prevents members from filing a case at the WTO DSB if it relates to parallel imports.Footnote 135 However, to avail themselves of this flexibility, WTO members would have to permit parallel import provisions in their domestic laws.

Parallel imports can exist only in the presence of normal import transactions in a country. This is the main reason why it is not suitable for transferring green technologies to poor developing countries. It is admitted that most of these countries and LDCs lack the capacity to import green products and technologies through regular means. Thus, in the absence of regular import procedures, the question of the parallel import of green technologies simply does not arise.

Generally, parallel imports can be seen as a supportive import policy for poor developing countries. Given the fact that there is a huge price variation between identical products across different countries, parallel imports may be a helpful policy instrument. Nevertheless, it has very little developmental effect on the economies of poor developing countries, since it is merely a non-traditional and infrequent way of conducting trade. Parallel imports is an alternative and not a mainstream method of import transactions, and thus it plays a very limited role in facilitating developing countries’ economic development by attenuating the adverse effects of the stringent patent protections of TRIPS. In addition, parallel imports may have trade-distorting effects on developing countries’ markets. Price hikes and product unavailability are possible consequences in the markets that supply the products of parallel imports. Some developing countries like Thailand, Argentina, and South Africa have amended their laws in order to allow parallel imports,Footnote 136 while Brazil has prohibited them.Footnote 137 It also evidences the lack of coherence in developing countries’ domestic policies on parallel imports.

IV. CONCLUSION

It is evident from the above discussion that the TRIPS patent protection regime is a great stumbling block in diffusing and transferring climate change technologies to LDCs and poor developing countries. It is understandable that patent owners have a strong interest in protecting their rights from abuse. However, as with pharmaceutical patents, the transfer of climate change technologies is also an important environmental issue. It should get equal, if not higher, priority than other global public health concerns. It is therefore necessary to strike a balance between IPR and public need, as is mentioned in Articles 7 and 8 of TRIPS,Footnote 138 and this must be reflected in future DSB rulings. Under the TRIPS IPR protection regime, if patent owners and patent holders utilize their patents only for their exclusive commercial interests, this could have negative consequences in other areas which have tremendous public importance, such as the protection of the global environment and public health. People should not be left to die simply because they cannot buy their life-saving medicines. Likewise, countries should not be left to suffer negative environmental consequences because they cannot afford to innovate or use modern technologies which could mitigate their suffering.

If the stringent patent protection regime of TRIPS is not relaxed for poor developing countries and LDCs, it will certainly hinder efforts to save the global environment from further deterioration. This will deprive these countries of the use of ESTs. In such a situation, the billion-dollar compensation commitmentsFootnote 139 to these nations could lead to further social injustice to the point that poor developing countries would have to buy the ESTs with the compensation money from the donor countries which are also the owners of the ESTs. It is a situation where the economic incapacity of poor developing countries is not the only barrier, but where strict IP protection is the central obstacle. On the one hand, this situation makes it difficult for these countries to satisfy their pollution reduction commitments under the different international environmental protection agreements like the Montreal Protocol.Footnote 140 On the other hand, it is only the lack of ESTs which leads them to continue polluting the global environment. Monetary help alone would not attenuate the adverse effects posed by strict IP protection in mitigating and adapting the climate change strategies. Two main efforts might help to overcome this difficulty. First, LDCs and poor developing countries should be granted maximum flexibility in utilizing the policy mechanisms of TRIPS, which will assist them in accessing cutting-edge green technologies. Second, the relevant provisions of TRIPS should also be clarified to maintain a more conducive balance between IPR and the socioeconomic welfare objectives referred to in Articles 7 and 8.Footnote 141 This may be an arduous process, but not an impossible one.

Despite the presence of almost eighty international agreements on the transfer of technologies, very little progress has been made to help LDCs and poor developing countries adopt their own mitigation and adaptation strategies. These legal instruments alone are incapable of ensuring the dissemination of climate change technologies. Most importantly, none of them have recognized IPR as the major impediment to the diffusion of these technologies. It is very unlikely that another new multilateral agreement can improve the situation as long as IPR protectionism under TRIPS is not carefully addressed. It is thus pertinent for the global community to make further amendments to TRIPS. Unless the relevant TRIPS provisions are relaxed, clarified, and amended, any new agreement would be fruitless. The new amendment should clarify and expand the existing TRIPS flexibilities regarding the transfer of technologies in general and climate change technologies in particular. The amendment should at least offer clear incentives for the transfer of climate change and other important technologies to poor developing countries. The changes should focus on LDCs, where the consequences of global climate change are particularly acute. It should facilitate compulsory licensing for the transfer of climate change technologies so that it reduces the research and development costs to LDCs and poor developing countries. Unless this is done, the transfer of technology as a whole will remain a promise existing only in theory in international legal instruments.

It is understandable that there are enormous difficulties in the process of amending WTO agreements. The challenges of the amendment process can be seen from the experience of the decade-long negotiations on pharmaceutical patents. However, the potentially destructive consequences of global climate change make it a worthwhile effort. The short-term cost that developed countries might experience from the relaxation of IPR on climate change technologies for poor developing countries would certainly be compensated by the long-term gains from the public good of the sustainable protection of the global environment.

Footnotes

*

PhD (Macquarie University); Lecturer in Law, Department of Accounting and Corporate Governance, Macquarie University, Australia. The author acknowledges the insightful comments of the reviewers on an earlier draft of the article.

1. RAVINDARANATH, N.H. and SATHEAYE, Jayant A., Climate Change and Developing Countries (Amsterdam: Kluwer Academic Publishers, 2002) at 2−5

2. So far, there is no standard and uniform definition of “climate change technology”. It is also popularly known as “green technology” or “clean technology”, or “cleantech” for short. Generally, these technologies are a diverse range of products and services that are more economically competitive and environmentally sustainable than their conventional counterparts. These technologies harness renewable materials and energy sources, dramatically reduce the use of natural resources (especially the dependency on fossil oil), generate less waste, and cause less environmental damage than the available alternatives.

3. Numerous mitigation and adaptation strategies to address climate change are now clearly identified and widely recognized in almost all climate change negotiations, conventions, and agreements. Mitigation strategies are mainly some anthropogenic intervention to reduce the sources of, or to increase the sinks of, greenhouse gases. Adaptation strategies, on the other hand, are defined as an adjustment in natural or human systems in response to actual or expected climatic stimuli or their effects. Technologies for lowering greenhouse gas emissions, renewable and energy-efficient technologies, energy-efficient transportation technologies, energy and material-saving building and construction technologies are examples of technologies for mitigation. In contrast, technologies to control desertification, stop the rise of sea levels and the acidification of oceans, control floods, drought, destructive pests, and tropical diseases are examples of technologies for adaptation. They also include water capture, water reuse, and other water-saving technologies. Generally, these technologies are also known as green technologies.

4. They include multinational corporations, as well as private and public research institutions and organizations.

5. OH, Cecilia, “IPR and Biological Resources: Implications for Developing Countries” (2003) 8 Journal of Intellectual Property Rights 400

6. Patent Cooperation Treaty, 19 June 1970, online: WIPO <http://www.wipo.int/pct/en/texts/articles/atoc.htm> [PCT].

7. Organisation for Economic Co-operation and Development, “Science, Technology and Industry Scoreboard 2007: Innovation and Performance in the Global Economy” (25 October 2007), online: OECD <http://www.oecd.org/dataoecd/43/24/40305816.pdf>.

8. Ibid.

9. United Nations Development Programme, “Human Development Report 1999”, online: UNDP <http://hdr.undp.org/en/media/HDR_1999_EN.pdf> at 67; Jacques GAILLARD, “Measuring Research and Development in Developing Countries: Main Characteristics and Implications for the Frascati Manual” (2010) 15 Science Technology and Society 77 at 82.

10. United Nations, “Compendium of International Agreement on Transfer of Technology: Selected Instruments” (June 2001), online: <http://www.iprsonline.org/unctadictsd/docs/ToT_selected-inst_UNCTAD1.pdf> at iii.

11. Ibid.

12. Montreal Protocol on Substances that Deplete the Ozone Layer, 16 September 1987, 1522 U.N.T.S. 3, 26 I.L.M. 1541 (entered into force 1 January 1989) [Montreal Protocol].

13. United Nations Framework Convention on Climate Change, 9 May 1992, 1771 U.N.T.S. 107 (entered into force 21 March 1994) [UNFCCC].

14. Kyoto Protocol to the United Nations Framework Convention on Climate Change, 11 December 1997, 2303 U.N.T.S. 148 (entered into force 16 February 2005) [Kyoto Protocol].

15. United Nations, “Bali Action Plan 2007, Report of the Conference of the Parties on Its Thirteenth Session, Held in Bali from 3 to 15 December 2007” (March 2008), online: UN <http://unfccc.int/resource/docs/2007/cop13/eng/06a01.pdf> [Bali Action Plan].

16. Copenhagen Accord, United Nations Climate Change Conference 2009 in Copenhagen, UN Doc. FCCC/KP/CMP/2009/L.9 [Copenhagen Accord].

17. Convention on Biological Diversity, 5 June 1992, 1760 U.N.T.S. 143 (entered into force 21 March 1994) [CBD].

18. United Nations, “Agenda 21: Earth Summit - The United Nations Programme of Action from Rio” (June 1992), online: UN <http://www.un.org/esa/dsd/agenda21/res_agenda21_01.shtml> [Agenda 21].

19. It includes, among others, the Patent Information Database (PID) and the Patent Cooperation Treaty of the WIPO. See PCT, supra note 6. It is noteworthy that before the creation of the WTO in 1995, the WIPO and its arrangements were the main international initiatives for the promotion and protection of intellectual property rights. Previously, global IPR issues were almost exclusively administered and monitored by the WIPO. The creation of the WTO and the adoption of TRIPS have changed the regulatory role and power of the WIPO. This power-shift and power-sharing were made through an agreement between WIPO and the WTO. See Agreement Between the World Intellectual Property Organization and the World Trade Organization, 22 December 1995, online: WTO <http://www.wto.org/english/tratop_e/trips_e/wtowip_e.htm> [WTO-WIPO Cooperation Agreement].

20. Agreement on Trade Related Aspects of Intellectual Property Rights, 15 April 1994, online: WTO <http://www.wto.org/english/tratop_e/trips_e/t_agm0_e.htm> [TRIPS]. Arts. 4(1)(h), 4(3), 4(4), 4(5), and 4(7) of the UNFCCC, art. 10(c) of the Kyoto Protocol, arts. 3, 6, 8, 10, and 11 of the Copenhagen Accord, chap. IV of the Agenda 21, and mainly art. 66(2) of TRIPS deal with technology transfer to poorer countries. See UNFCCC, supra note 13; Kyoto Protocol, supra note 14; Copenhagen Accord, supra note 16; Agenda 21, supra note 18.

21. A multilateral fund was created to help developing countries phase out the use of ozone-layer depleting substances under the Montreal Protocol. See Montreal Protocol, supra note 12. It is said to be the first financial mechanism created under an international environmental treaty to help poor developing countries in the mitigation and adaptation of green technologies. In 2009, the Copenhagen Accord set up a provision for establishing the “Copenhagen Green Climate Fund”, which will raise 100 billion dollars per year for developing countries. See Copenhagen Accord, supra note 16, at paras. 10 and 11. It will not be fully in place until 2020. See “Summary of the Copenhagen Climate Change Conference: 7−19 December 2009” Earth Negotiations Bulletin (22 December 2009), online: Earth Negotiations Bulletin <http://www.iisd.ca/download/pdf/enb12459e.pdf> [2009 Earth Negotiations Bulletin].

22. Tove Iren S. GERHARDSEN, “IP References Left Out of Last Minute, Weak Global Climate Deal in Copenhagen” Intellectual Property Watch (19 December 2009), online: Intellectual Property Watch <http://www.ip-watch.org/2009/12/19/ip-references-left-out-of-last-minute-weak-global-climate-deal-in-copenhagen/>; Adam MORTON, “Anger at ‘Secret’ Climate Change Deal” The Age (10 December 2009).

23. 2009 Earth Negotiations Bulletin, supra note 21.

24. Ibid.

25. Copenhagen Accord, supra note 16.

26. The Sixteenth Session of the UNFCC Conference of Parties (COP) was held in Cancun, Mexico from 29 November to 10 December 2010. The COP Seventeenth Session was held in Durban, South Africa from 28 November to 9 December 2011. So far, these are the latest COP meetings. In Cancun, there were negotiations among members regarding transfer of technologies and associated IPR difficulties, but these issues were discarded in the final agreement. See Baskut TUNCAK, “Technology Mechanism for Climate Change: Still in the Lab” Centre for International Environmental Law Blog (18 April 2010), online: Centre for International Environmental Law Blog <http://ipsd.typepad.com/ipsd/2010/04/technology-mechanism-for-climate-change-still-stuck-in-the-lab.html>.

27. See online: United Nations Framework Convention on Climate <http://unfccc.int/meetings/durban_nov_2011/meeting/6245/php/view/decisions.php>.

28. TRIPS, supra note 20.

29. LITTLETON, Matthew, “The TRIPS Agreement and Transfer of Climate-Change-Related Technologies to Developing Countries” (2009) 33 Natural Resources Forum 233

BARTON, John H., “Intellectual Property and Access to Clean Energy Technologies in Developing Countries: An Analysis of Solar Photovoltaic, Biofuel and Wind Technologies”, International Centre for Trade and Sustainable Development, Issue Paper, December 2007

30. Draft International Code of Conduct on Transfer of Technology [1985 Version], UN Doc. A/CN.9/269, chap. 1, art. 1(2), online: <http://www.unctad.info/en/Science-and-Technology-for-Development---StDev/Science--Technology-on-the-UN-Agenda/UN-Programmes-and-Agencies/Compendium/Index/Themes/International-code/Transfer-of-Technology-code/>.

31. Kyoto Protocol, supra note 14.

32. Agenda 21, supra note 18. At the UNCED conference, developing countries demanded specific resolutions on technology transfer and financial resources. The key issue in the negotiating process of the conference was the role, protection, and flexibility of intellectual property rights while transferring technologies to developing countries. The Group of 77 (G-77), a leading group of developing countries, argued that intellectual property rights had to be eased in cases of EST, otherwise there would be obstacles to accessing these technologies. Developed countries delegations, on the other hand, were adamant and refused to accede on this point. However, the Agenda 21 finally adopted a chapter on technology transfer, which called for action to promote and finance access to and transfer of environmentally sound technologies to developing countries on favourable, concessional, and preferential terms. These terms must be on a “mutually agreed” basis and must respect intellectual property rights.

33. Ibid.

34. UNFCCC, supra note 13.

35. Kyoto Protocol, supra note 14. The CBDR principle is succinctly described in Principle 7 of the Rio Declaration on Environment and Development, United Nations Conference on Environment and Development, UN Doc. A/CONF151/26 (Vol. I), and mentioned in arts. 3 and 4 of UNFCCC, ibid. It has been reiterated in art. 1 of the Copenhagen Accord, supra note 16. It appears to be a stepping stone to the extension of climate change assistance to poorer countries. However, thus far, it either serves as rhetoric or addresses the responsibility in a form that is not practically helpful for LDCs and developing countries. See also Ellen Margrethe BASSE and Sanford E. GAINES, “Common But Differentiated Responsibilities and Respective Capabilities as Part of the Post 2012 Climate Regime” (2010) 2 Nordic Environmental Law Journal 189−204.

36. This has been reiterated in the preamble of the UNFCCC, which states, “the largest share of historical and current global emissions of greenhouse gases has originated in developed countries”. See UNFCCC, supra note 13.

37. Bali Action Plan, supra note 15. The Bali Action Plan outlines four basic pillars of climate change, which are enhanced plans for mitigation, adaptation, technology transfer, and financing and investment to support actions on the mitigation, adaptation, and transfer of climate change technologies.

38. United Nations, “Ad-hoc Working Group on Long-term Cooperative Action Under the Convention: Revised Negotiating Text” (June 2009), online: UNFCCC <http://unfccc.int/resource/docs/2009/awglca6/eng/inf01.pdf>.

39. MASKUS, Keith E., Intellectual Property Rights in Global Economy (Washington, DC: Institute for International Economics, 2000)

40. PCT, supra note 6.

41. TRIPS, supra note 20.

42. CHANG, Ha-Joon, Kicking Away the Ladder: Development Strategy in Historical Perspective (London: Anthem Press, 2002) at 19−51

43. BALASSA, Bela A. and NOLAND, Marcus, Japan in the World Economy (Washington, DC: Institute for International Economics, 1988)

SAKAKIBARA, Mariko and BRANSTETTER, Lee, “Do Stronger Patents Induce More Innovation? Evidence From the 1998 Japanese Patent Law Reforms” (2001) 32 Rand Journal of Economics 77

ORDOVER, Janusz, “A Patent System for Both Innovation and Exclusion” (1991) 5 Journal of Economic Perspective 43

KIM, Linsu, “Technology Transfer and Intellectual Property Rights: The Korean Experience”, International Centre for Trade and Sustainable Development, Issue Paper, June 2003

44. Chang, supra note 42 at 2.

45. RITTER, Dominique S., “Switzerland's Patent Law History” (2004) 14 Fordham Intellectual Property, Media and Environmental Law Journal 463

46. DAHLBERG, Anna, “Are Stronger Intellectual Property Rights an Obstacle or a Condition for International Technology Transfer” in Mpazi SINJELA, ed., Human Rights and Intellectual Property Rights: Tensions and Convergences (Amsterdam: Martinus Nijhoff Publishers, 2007)

47. TRIPS, supra note 20.

48. World Bank, International Trade and Climate Change: Economic, Legal and Institutional Perspectives (Washington, DC: World Bank Publications, 2008)

49. Advanced and cleaner fossil fuel technologies, pre-combustion technologies that combine heat and power, hydrogen cells, and hybrid vehicles are some important examples of environmentally friendly technologies.

50. Supra note 3. See generally, United Nations Development Programme, “Handbook for Conducting Technology Needs Assessment for Climate Change” (September 2009), online: UNFCCC <http://unfccc.int/ttclear/pdf/TNAHandbook_9-15-2009.pdf> at 23−34.

51. World Bank, World Development Report 2010: Development and Climate Change (Washington, DC: World Bank Publications, 2007)

52. LITTLETON, Matthew, “The TRIPS Agreement and Transfer of Climate-Change-Related Technologies to Developing Countries”, United Nations Department of Economic and Social Affairs, Working Paper, October 2008

53. Ibid.

54. TRIPS, supra note 20.

55. Ibid., art. 33.

56. Ibid., art. 27.

57. Ibid., arts. 7, 8, and 27(1).

58. Ibid., art. 27(1).

59. Canada-Term of Patent Protection, Panel Report of 5 May 2000, WT/DS170/R at para. 121 [Canada Patent Protection].

60. Ibid., at para. 105.

61. TRIPS, supra note 20, art. 66(2). This provision is examined later.

62. For example, there was debate among the parties to the Kyoto Protocol on the effects of IP protection on the transfer of technologies at the first meeting of the Ad-hoc Working Group on the Further Commitments for Annex I Parties under the Kyoto Protocol (AWG), and the Ad-hoc Working Group on Long-term Cooperative Action under the Convention (AWGLCA). See Kyoto Protocol, supra note 14. Developed countries, including Australia and the US, argued strongly in favour of the existing IP protection system and claimed that IP protection never acts as a barrier, but instead works as a catalyst for technology transfer. On the other hand, a number of developing countries, including China, Cuba, India, Indonesia, Tanzania, and others, stressed the need to address the IP issues appropriately within the technology transfer mechanisms.

63. See generally, United Nations Framework Convention on Climate Change, “Synthesis of Report on Technology Needs Identified by Parties not Included in Annex I to the Convention”, online: UNFCCC <http://unfccc.int/resource/docs/2006/sbsta/eng/inf01.pdf> [UNFCCC Report 2006].

64. Admittedly, adoption of a strict IP protection mechanism is a contentious issue between the developed and developing nations. For theoretical analysis of this controversy, see Josef E. STIGLITZ, “Economic Foundations of Intellectual Property Rights” (2008) 57 Duke Law Journal 1693.

65. World Intellectual Property Organization, “WIPO's Contribution to Meeting the Challenges of Climate Change”, online: WIPO <http://www.wipo.int/export/sites/www/about-wipo/en/pdf/climate_change_conf.pdf>.

66. Very recently, the nexus between intellectual property rights and sustainable development has attracted much attention and it is now a hotly debated issue in the UNFCCC negotiations. See generally, Center for International Environmental Law, “Intellectual Property Quarterly Update”, (Fourth Quarter 2008), online: CIEL <http://www.ciel.org/Publications/IP_Update_4Q08.pdf>.

67. Barton, supra note 29

68. Ibid., at 1. This is the main limitation and one of the important shortcomings of the research, which is acknowledged by the author.

69. For example, arts. 7 and 8 of TRIPS, supra note 20, which seek to establish a balance between the rewards for innovation and social objectives.

70. MASKUS, Keith E., “Transfer of Technology and Technological Capacity Building”, International Centre for Trade and Sustainable Development, Paper, 18−21 September 2003

71. United Nations Conference on Trade and Development, “The Least Developed Countries Report 2007: Knowledge, Technological Learning and Innovation for Development” (19 July 2007)

72. FORAY, Dominique, “Technology Transfer in the TRIPS Age: The Need for New Types of Partnerships Between the Least Developed and Most Advanced Economies”, International Centre for Trade and Sustainable Development (2009)

73. Ibid.

74. See generally, Kim, supra note 43.

75. Ibid.

76. KUMAR, Nagesh, “Intellectual Property Rights, Technology and Economic Development: Experiences of Asian Countries” (2003) 38 Economic and Political Weekly 209 at 226

KUMAR, Nagesh, “Intellectual Property Rights, Technology and Economic Development: Experiences of Asian Countries”, Commission on Intellectual Property Rights, Study Paper, 2002

77. UNFCCC, supra note 13; Montreal Protocol, supra note 12; Kyoto Protocol, supra note 14; Bali Action Plan, supra note 15; Copenhagen Accord, supra note 16; TRIPS, supra note 20.

78. This power-sharing was done through an agreement between WIPO and the WTO. See WTO-WIPO Cooperation Agreement, supra note 19.

79. TRIPS, supra note 20, art. 64.

80. The deadline for developing countries to comply has expired, while the deadline for LDCs is 1 July 2013.

81. TRIPS, supra note 20, art. 7.

82. From the TRIPS negotiating history, it is clear that it was the intention of most of the developing country negotiating parties to strike a balance between stricter IP protections and addressing public necessities. See World Trade Organization, “Negotiating Group on Trade-Related Aspects of Intellectual Property Rights, Including Trade in Counterfeit Goods: Synoptic Tables Setting Out Existing International Standards and Proposed Standards and Principles” (September 1989), online: WTO <http://www.tripsagreement.net/documents/GATTdocs/Synoptic_Tables_Setting_Out_Existing_International_Standards_and_Proposed_Standards_and_Principles_-_Revision_1_E.pdf>, para. 5. However, these views are not completely reflected in two renowned WTO disputes on TRIPS. See India-Patent Protection for Pharmaceutical and Agricultural Chemical Products, WT/DS50/AB/R, and Canada Patent Protection, supra note 59.

83. Canada-Term of Patent Protection, Report of the Appellate Body of 18 September 2000, WT/DS170/AB/R at para. 101.

84. TRIPS, supra note 20, art. 8(1).

85. Ibid., art. 8(2).

86. Ibid., arts. 7 and 8.

87. Ibid., art. 66(1).

88. International Centre for Trade and Sustainable Development, “LDCs Granted Limited Extension for Implementing TRIPS Commitments” (30 November 2005), online: ICTSD <http://ictsd.org/i/ip/39841/>. When the WTO agreements took effect on 1 January 1995, developed countries were given one year to ensure that their laws and practices conformed to TRIPS. Developing countries and transition economies (under certain conditions) were given five years, until 2000. Least-developed countries had eleven years, until 2006 (which has now been extended to 2013 for general matters), and until 2016 for pharmaceutical patents and undisclosed information. See World Trade Organization, “Intellectual Property: Protection and Enforcement”, online: WTO <http://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm7_e.htm>.

89. TRIPS, supra note 20, art. 66(2).

90. World Trade Organization, “Doha WTO Ministerial 2001: Implementation-Related Issues and Concerns” (November 2001)

91. World Trade Organization, “Implementation of Article 66.2 of the TRIPS Agreement: Decision of the Council for TRIPS of 19 February 2003” (February 2003)

92. Ibid., at paras. 1 and 2.

93. MOON, Suerie, “Does TRIPS Article 66.2 Encourage Technology Transfer to LDCs? An Analysis of Country Submissions to the TRIPS Council (1999−2007)”, International Centre for Trade and Sustainable Development, Policy Brief, December 2008

94. Foray, supra note 72 at 9

95. Commission on Intellectual Property Rights, “Integrating Intellectual Property Rights and Development Policy” (September 2002)

96. CHEYNE, Ilona, “Intellectual Property and Climate Change from a Trade Perspective” (2010) 2 Nordic Environmental Law Journal 121 at 122

97. Arts. 30 and 31 of the TRIPS are the two core provisions pertaining to patent flexibilities under TRIPS. See TRIPS, supra note 20. These are rules that define “compulsory license”, while art. 6 deals with “parallel imports”. All WTO members, including developed countries, can use these flexibilities if they can satisfy the prerequisites and there is no special benefit for developing countries or LDCs.

98. As is mentioned in art. 31 of TRIPS; see TRIPS, supra note 20.

99. The compulsory licence is generally considered to be associated with pharmaceutical patents, but according to art. 31 of TRIPS, it could apply to any patents in any field; see ibid.

100. Ibid., art. 31(h).

101. Ibid., art. 31(b).

102. Ibid., art. 31(f).

103. World Trade Organization, “Doha WTO Ministerial 2001: Declaration on the TRIPS Agreement and Public Health” (November 2001)

104. Ibid., at para. 6.

105. World Trade Organization, “Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health: Decision of the General Council of 30 August 2003” (August 2003)

106. Ibid.

107. TRIPS, supra note 20, art. 31(f).

108. The developed nations are Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, the United Kingdom, and the United States. Ten other members made the same decision after joining the EU. They are the Czech Republic, Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Slovak Republic, and Slovenia.

109. World Trade Organization, “Compulsory Licensing of Pharmaceuticals and TRIPS”, online: WTO <http://www.wto.org/english/tratop_e/trips_e/public_health_faq_e.htm>.

110. Ibid.

111. World Trade Organization, “Decision Removes Final Patent Obstacle to Cheap Drug Imports” (August 2003)

112. World Trade Organization, “Amendment of the TRIPS Agreement” (December 2005)

113. As mentioned in TRIPS, supra note 20, art. 31.

114. Ibid., art. 31(b).

115. This term was first used by former US Vice-President Al Gore. For details, see generally, Al GORE, An Inconvenient Truth: The Planetary Emergency of Global Warming and What We Can Do About It (New York: Rodale, 2006).

116. For example, see Agreement Between the United States of America and the Hashemite Kingdom of Jordan on the Establishment of a Free-Trade Area, 24 October 2000, online: The World Bank <http://wits.worldbank.org/GPTAD/PDF/archive/UnitedStates-Jordan.pdf>, art. 4, para. 20(b).

117. See WTO: “Doha Declaration on the TRIPS Agreement and Public Health”, supra notes 103 and 104, and WTO: “Decision of the General Council of 30 August 2003”, supra note 105.

118. VEZIRGIANNIDOU, Sevasti-Eleni, “The Climate Change Regime Post-Kyoto: Why Compliance is Important and How to Achieve it” (2009) 9 Global Environmental Politics 41

119. Maskus, supra note 29 at 25

ROSENZWEIG, Sidney A., “PFF on Cooling the World by Misappropriating Patent Rights” Intellectual Property Watch (1 April 2009)

HUTCHINSON, Cameron, “Does TRIPS Facilitate or Impede Climate Change Technology Transfer into Developing Countries?” (2006) 3 University of Ottawa Law and Technology Journal 517 at 531−532

120. ADAMS, Alexander, “Technology Transfer to Combat Climate Change: Opportunities and Obligations Under TRIPS and Kyoto” (2009) 9 Journal of High Technology Law 1 at 20

121. RIMMER, Matthew, “Race Against Time: The Export of Essential Medicines to Rwanda” (2008) 1 Public Health Ethics 89 at 94

122. Ibid.

123. WTO: “Decision of the General Council of 30 August 2003”, supra note 105; WTO: “Final Patent Obstacle”, supra note 111.

124. Canada was the first country in 2008 to export the first shipment of generic drugs to Rwanda. See “First Generic Drugs En Route to Africa Under 5 Year Old WTO Deal” Bridges Weekly Trade News Digest (25 September 2008), online: ICTSD <http://ictsd.org/i/news/bridgesweekly/29778/>.

125. WTO: “Amendment of the TRIPS Agreement”, supra note 112; WTO: “Amendment of the TRIPS Agreement - Extension of the Period for the Acceptance by Members of the Protocol Amending the TRIPS Agreement”, supra note 112; WTO: “Members Accepting Amendment of the TRIPS Agreement”, supra note 112.

126. “Aids, Drug Prices and Generic Drugs” Avert, online: Avert <http://www.avert.org/generic.htm>.

127. DEERE, Carolyn, The Implementation Game: The TRIPS Agreement and the Global Politics of Intellectual Property Reform in Developing Countries (New York: Oxford University Press, 2009) at 230−232

128. REICHMAN, Jerome H., “Compulsory Licensing of Patented Pharmaceutical Inventions: Evaluating the Options” (2009) 37 Journal of Law, Medicine and Ethics 247 at 250

129. CARROLL, Jill and WINSLOW, Ron, “Bayer Agrees to Slash Prices for Cipro Drug”, Wall Street Journal (25 October 2001)

130. MASKUS, Keith E., “Parallel Imports” (2000) 23 The World Economy 1269 at 1270−1271

131. According to TRIPS, supra note 20, art. 6.

132. ANDERMAN, Steven D.ed., The Interface Between Intellectual Property Rights and Competition Policy (Cambridge: Cambridge University Press, 2007)

COLSTON, Catherine and GALLOWAY, Jonathan, Modern Intellectual Property Law (New York: Routledge, 2010) at 18

133. Looking back to the earlier example, once company A has sold a batch of its products in Indonesia, its patent rights are exhausted for that batch, and it no longer has rights in that batch even though those products are in parallel competition with similar types of patented products placed in the Australian market. The core basis of parallel imports is that all products under such imports are produced under legal patents, and the main defence lies in the fact that parallel importers never produce any product, as they are merely importers.

134. WTO: “Doha Declaration on the TRIPS Agreement and Public Health”, supra note 103, at para. 5(d).

135. Ibid. See also TRIPS, supra note 20, art. 6.

136. SCHERER, F.M., Patents: Economics, Policy and Measurement (Cheltenham: Edward Elgar Publishing, 2005) at 928−929

137. CORREA, Carlos M., “Public Health and the Implementation of the TRIPS Agreement in Latin America” in Chantal BLOUIN, Jody HEYMANN, and Nick DRAGER, eds., Trade and Health: Seeking Common Ground (Ottawa: McGill-Queen's University Press, 2007)

138. TRIPS, supra note 20, arts. 7 and 8.

139. Copenhagen Accord, supra note 16; 2009 Earth Negotiations Bulletin, supra note 21.

140. Ozone Secretariat United Nations Environment Programme, “Handbook for the Montreal Protocol on Substances that Deplete the Ozone Layer” (2009)

141. TRIPS, supra note 20, arts. 7 and 8.

* PhD (Macquarie University); Lecturer in Law, Department of Accounting and Corporate Governance, Macquarie University, Australia. The author acknowledges the insightful comments of the reviewers on an earlier draft of the article.