- Introduction:
Nations of the world view the year of 1988 as a decisive one in relation to international trade talks under the guidance of the General Agreement on Tariffs and Trade GATT.
With the start of the year being prevalent with fears of a recession triggered by the breakdown witnessed on Wall Street and confusion in global currency markets, in addition to the huge deficit in the American budget, trading countries have become much more aware of the importance of minimizing protection and moving the wheel of trade forward. More than 100 states are participating in the latest GATT round in Geneva, which includes 14 sectors that cover agricultural and trade of services - namely the same topics that we heard good studies on today.
I’d like to focus on what is considered a “non-unique” topic on the table of discussions of GATT, and that topic is concerned with the trade related aspects of industrial property, including trafficking of counterfeit products. But first, allow me to present a brief background of the ongoing negotiations of the GATT.
- The Uruguay Round of Negotiations:
While trade disagreements have been increasing in recent years, governments have been taking steps that confuse international trade and are considered inconsistent with the general agreement, such as using subsidies and protective procedures that are non-accredited for tariffs. Therefore, it became necessary to implement conditions for competition that were more open and fair, and to reduce procedures that limited and confused trade.
The GATT established the necessary procedures to be taken in this regard, and issued in Punta Del Este (Uruguay) a ministerial statement in September 1986, that declared that the Uruguay Round of Negotiations were to be concluded within 4 years. During this time, member nations agreed not to increase protective or confusing trade procedures, and to remove them gradually.
- Trade Related Aspects of Industrial Property Rights:
The ministerial statement specified numerous fields it hopes will be discussed in these negotiations, and one of these is the trade-related aspects of industrial property rights, which includes trafficking in counterfeit goods. This topic will be worked on by one of the 14 committees formed by the GATT.
- Issues Raised related to Counterfeiting:
While numerous industrial property rights are subject to violation due to forgery, the GATT focus was on products that carry brand names that are not permissible, due to their being registered trademarks that are legally protected. This is the most widespread and dangerous type of counterfeit, due to what it entails in infringing upon industrial rights –namely the trademark itself- which are protected by domestic laws in most countries.
Countries that face this problem of trading forged goods emphasize the negative results brought upon:
- The consumers: Said products are usually of a lesser quality than the originals, and this can present a health and safety hazard. Also, the consumers do not have the means to acquire legal compensation as a result of (damage from) counterfeit goods.
- The producers: Counterfeiting leads to a direct loss in current and future sales and revenues, in addition to the unfair competition. Additionally, this action necessitates spending precious time and money in identifying and prosecuting these counterfeiters.
- Labor: Delays in contracts due to counterfeiting.
Naturally because this action is illegal, there are no reliable official numbers available to determine the magnitude of the problem. The estimates of those in the trade industry for the problem it faces are approximate and deal with a sector-by-sector basis. It seems though that counterfeit goods have increased in the last decade, as has their distribution and marketing globally, and this applies to a wide variety of items produced in both developed and developing countries.
The main problems encountered are related to the deficiency in global organizations in doing enough to monitor this effectively at international borders, based on the request of the trademark owner. Some nations have expanded these procedures to include more effective methods of monitoring the problem domestically.
- Issues Raised related to other aspects of Industrial Property:
While the GATT discussions in the early eighties focused on the problems resulting from importing goods that carry imitated marks, the interests of those representatives gradually expanded to include trade aspects for other industrial property rights, such as patents, designs, certificates of origin and geographical location, and questions related to the availability and efficiency of national protection in these areas. This, in addition to (the interest in) the existence of domestic legislation that covers details for local activity on imports.
Some countries believe that many of these issues are not trade-related as much as they are industrial-property related, and that the Uruguay Round is not the appropriate forum for their discussion.
This field is being uncovered in great detail, and the attitudes and opinions of those participating in this discussion vary vastly.
Written reports have drawn the attention of the European market, Japan, the USA, the Scandinavian countries, and Switzerland to the trade problems in this field that they face. These problems focus on either the absence of some industrial property rights, or their limitations. They also focus on the inefficiency of procedures aimed at supporting already protected rights, or on the other hand exaggeration of protection or bias towards domestic producers. Following are the main problems cited by these countries:
- In relation to copyrights, the non-existence -in some countries-of protection of sound/visual recordings or artistic works that are re-broadcast with cable, has, in addition to the effect of pirating cinematic and literary works and computer programs, the effect of a major disruption in the trade movement. The problems in this area have been exacerbated lately due to the advances in re-production technology.
- Protection by use of patents is typically not adequate or efficient enough in many countries. Some products (such as those of the food industry, chemical and pharmaceutical products) cannot be protected by registering patents in some states. The length of patents is considered in many instances not long enough to market these innovations and restoring their costs. The compliance with licensing patents, the complicated procedures involved, and the expenses tied into patents all lead to the obstruction of trading these products, instead of actually promoting them.
- Designs may be attributed to the wrong persons, particularly those related to textiles, pottery, spare car parts, aircraft, and so on. The protection available with domestic laws is usually very limited or non-existent.
- Some countries consider the current protection of producing locations and other geographical entities as inadequate, and a major problem, particularly in relation to alcoholic beverages.
- Protection is inadequate for new technologies according to some nations, as they consider that industrial property legislation has not kept up with the developments in new innovations. They point particularly to the computer software and the industrial applications to advances in biology, and in these fields obfuscating the trade movement can be very dangerous.
- Specific Problems in Application:
The extent and shape of intellectual property rights varies greatly from one country to the next. It is difficult to find specific information that study these problems and evaluate their effects on global trade. Nations hurt by these combined practices consider them to affect a considerable percentage of global trade and severely damage their own trade interests. For example, in some areas, stolen sound and visual recordings represent 80 to 90% of the market. Other states believe that when evaluating the proper level of industrial property protection, not only trade aspects must be considered, but also the economic, industrial, and technical needs for nations providing protection, in addition to the social objectives that industrial property rights aim to support.
Some countries think that even in the areas where law protects intellectual property rights, trade problems arise since it is practically difficult to ensure that these rights are being respected. The main obstacles referred to are:
- Administrative problems that prevent obtaining appropriate compensation via legal means in a particular country.
- A deficiency in legal precautions that enable obtaining evidence necessary for a successful lawsuit, in addition to the slowness and expenses of procedures.
- The insufficiency of the criminal deterrents and civil compensation for violating intellectual property rights, including the confiscation of goods, fees, and so on.
- Existing International Norms:
Certain nations believe that current international law is unable to effectively deal with the trade-related issues they bring up. Others consider that those issues can be discussed within the framework of norms and institutions existent for the protection of intellectual property.
Most international conferences lay down the groundwork for protecting intellectual property rights. These conferences are run by WIPO, the World Intellectual Property Organization, with the participation of UNESCO and the International Labor Union ILU. Some of the most important are:
- The Paris Conference (by WIPO) which focused on patents, usage forms, designs and trademarks, brand names and labeling the sources of production, in addition to preventing illegal competition.
- Related to copyrights, there was the Bern Conference (by WIPO) for the protection of literary and artistic works, and the Intergovernmental Copyright Conference (by UNESCO).
- The Madrid and Lisbon Agreements related to the prevention of fraud and circumventing the identification, protection, and registration of production sources.
- The Rome and Geneva conferences related to protecting the representatives and producers of audio recordings and radio bureaus.
- GATT Assignments:
Until now, I’ve focused the duties of the negotiating party, which are still in their first stage, on determining and analyzing trade problems of intellectual property rights including trafficking/trading forged goods, in addition to the conditions that can be met in the general agreement, and gathering information from institutions responsible in this field, and analyzing the possible relationship between their work and the GATT negotiations.
As for the terms of the agreement, it has been stated that they do not cover all points of concern. For example, it was emphasized that with the exception of Article (9:6) related to geographical names, the general agreement does not contain any items that force the contracting parties to protect intellectual property. Some countries see this as yet another reason to negotiate new laws and systems within the GATT framework, whereas others question the feasibility of discussing these within the Uruguay Round.
Numerous specific suggestions have been evaluated. For example, two participants suggested implementation of comprehensive laws for intellectual property rights that include norms for their protection and application. Another participant suggested a number of broad outlines that focus on the execution of intellectual property rights. One country suggested that all nations sign the Madrid-WIPO Agreement, to prevent fraud related to naming the sources of some products.
Also, some delegations suggested that work continue based on a 1982 agreement draft related to trade of counterfeit goods.
- The Arab Society for the Protection of Intellectual Property:
It is unfortunate to note that the Arab world –which represents 22 countries in the UN, has a population of close to 200 million, and contains huge reserves of valuable resources such as oil, gas, and phosphate- does not have much weight in the current negotiations. Although we are to blame for the status quo, the Arab world is beginning to awaken to the new facts of global markets.
Lately as a result of efforts of a number of organizations behind the scenes, we’ve established the Arab Society for the Protection of Intellectual Property with 140 founding members from 19 Arab countries for the specific goal of establishing an appropriate platform to discuss and develop laws that govern this important discipline worldwide.
ASPIP’s objectives can be summarized as follows:
- Assistance in the implementation of laws and systems that are consistent with the Paris Conference and other legislation relevant to the protection of industrial property.
- Educating the public through the appropriate media and conferences, lectures, research and studies, to protect the interests of producers and consumers.
- Training Arab professionals in this field.
We seek to achieve these objectives through close collaboration with WIPO, which we think is very dedicated to finding solutions for specific problems rather than postponing this through academic discussions.
ASPIP, which is a non-governmental organization, has obtained the support of numerous Arab governments, and is serious about acquiring the blessings of those remaining, to move forward in this important endeavor.
- GATT and WIPO:
As chairman of the board for the largest establishment for registration of trademarks and patents in the Arab world, and as President of ASPIP, I am somewhat in agreement with Australian Prime Minister Bob Hawke as he told the GATT delegation in Geneva:
“Addressing the difficulties facing the global trade system is not, nor can it be, an issue exclusive to the major trading nations.”
Some western countries and the USA in particular, have been urging the GATT to address this problem for years. The USA’s GATT delegation even forwarded in 1979 a draft for a law against counterfeiting. This draft law takes the form and content of a multilateral agreement, to be adopted, signed, and accredited as any other agreement. But in the past 7 years, there has been no progress in studying this document.
At the same time, the same western countries resisted the desire of developing countries to study the issue of forgery within the WIPO framework instead of the GATT.
However –and this is important- in the September 1985 meetings for the WIPO bodies, the attitude of the western nations changed, as they accepted that related aspects of “Industrial Property” law be studied within the WIPO framework, without refraining from urging the GATT to follow up on it as well, or at the very least, its “trade” aspects.
This change in attitude is reflected in the unanimous decision adopted by the general assembly of WIPO. This decision gives WIPO’s global office instructions to establish a committee of experts amongst governments to study more effective procedures to combat forgery. These procedures did not come in the context of a multilateral agreement, as was the case with the USA suggestion, but what was mentioned was an examination of conditions that were related to domestic legislations.
We agree with WIPO that there is a clear compliance, in accordance with the Paris Conference, from each member nation that participated in it, to provide effective procedures to prevent fraud, on the basis that these procedures be “legal” and “appropriate” for effective prevention. We’d also like to see WIPO’s general assembly conduct what is called “information meetings”. These meetings are a forum where governments can discuss their experiences –be they positive or negative- in the field of counterfeiting whether these copied goods emanated from their own countries or others.
If this recommendation is adopted, then a new era in WIPO will begin, where successes and shortcomings of intellectual property rights’ protection will be discussed by governmental representatives not only in general terms, but also by referring back to real experience in specific cases.
We’d also like to see model conditions for domestic laws, which include “provisional processes” such as confiscation and warning on the one hand, and civil solutions and legal penalties on the other. These conditions would also define what exactly counterfeit products are, and what actions are defined as “counterfeit” in producing these items.
- Conclusion:
Finally, I’d like to say that GATT and WIPO have so far covered a large part of what’s involved in intellectual property protection, and ideally the duties and powers should be distributed between GATT and WIPO, as their efforts should converge and not contradict one another.
Bibliography:
1- “GATT andIndustrial Property” by Dr. Alfred Brener, General Secretary of AIPPI. Study presented to the AIPPI’s Board of Presidents in Dublin, Ireland, September 12, 1987.
2- “Future Developments in WIPO”, by Dr. Arpad Bogsch, Director General of WIPO. Lecture delivered at the International Trademarks Society Conference, London, March 14, 1986.
3- “Information”. Vicbe. September 17, 1987.
4- GATT Newsletter, editions 44-50, March-November, 1987.
5- WIPO.