U.S. CITIZENS' ANALYSIS OF THE NORTH AMERICAN FREE TRADE AGREEMENT
Analysis Team Coordinators
John Audley Sierra Club
Steve Beckman UAW
Beth Burrows Fair Trade Campaign
John Cavanagh Institute for Policy Studies
Lance Compa National Lawyers Guild Free Trade Task Force
Cam Duncan Greenpeace USA
Karen Hansen-Kuhn The Development Group for Alternative Policies
Pharis Harvey International Labor Rights Education &
Research Fund
Thea Lee Economic Policy Institute
Karen Lehman Institute for Agriculture and Trade Policy
Nikos Valence Fair Trade Campaign
Lori Wallach Public Citizen
December 1992
For more copies contact:
The Development GAP, 1400 I Street, NW, Suite 520, Washington, DC 20005
Tel: (202)898-1566, Fax: (202)898-1612, E-mail: DGAP@igc.apc.org or
The Institute for Agriculture and Trade Policy, 1313 5th Street, SE,
Suite 303, Minneapolis, MN 55414
Tel: (612)379-5980, Fax: (612)379-5982, E-mail: IATP@igc.apc.org
PREFACE
This month, the Presidents of the United States and Mexico and the Prime
Minister of Canada will sign the North American Free Trade Agreement
(NAFTA), an accord designed to liberalize trade and deregulate investment
among the three countries. President-elect Clinton may submit the
implementing legislation to Congress within the next few months. If
approved by the legislatures of the three nations and implemented in its
current form, the NAFTA will have far-reaching consequences for many
sectors, including the areas of labor and the environment.
Despite the importance of the NAFTA to citizens' groups across the country,
there is, as yet, very little public knowledge and understanding of its
actual content. The NAFTA negotiations were very secretive, with little
information provided to the U.S. Congress and even less to the general
public. The completed agreement is over 2,000 pages long and is filled
with ambiguous "legalese".
This citizens' analysis of the NAFTA is intended to contribute to an
informed public debate on the agreement. It is a work in progress, with
contributions from a variety of authors. Citizens' groups across the
United States worked in 13 issues teams to complete this analysis. Similar
teams were established in Canada and Mexico. Representatives from the
three national teams plan to meet soon to formulate an integrated
trinational analysis of the NAFTA. Readers are encouraged to contact the
contributors listed at the end of this document for further information on
particular sectors.
Many of the contributors to this document are members of one or more of the
U.S. citizens' coalitions on the free-trade agreement -- the Alliance for
Responsible Trade (ART, formerly MODTLE), Citizen Trade Campaign and the
Fair Trade Campaign. The content of the analysis, however, is the
responsibility of the contributors and the team coordinators.
While the contributors and the coalitions may have somewhat different
interpretations of specific aspects of the NAFTA, we are united in our
conviction that this agreement must either be rejected or fundamentally
recast. We call for a more democratic process through which the people of
the United States, Canada and Mexico can engage their governments in the
search for equitable and sustainable solutions to the profound problems
related to the economic integration that is currently underway. These
include declines in wages and employment levels, a diminishing of labor
rights and standards, environmental degradation, dislocations in rural
communities, massive migration, and human rights violations.
INTELLECTUAL PROPERTY PROVISIONS
The main beneficiaries of the NAFTA provisions on intellectual property
rights are pharmaceutical and biotechnology companies and the computer
software industry. The potential losers are the consumer, the individual
inventor or creator or performer, the indigenous, and the poor. They are
the likely payers of the high costs implied by the intellectual property
protections offered in the NAFTA. Clearly, the intellectual property
rights proposed in the NAFTA were designed to support the continued
technical and scientific advantage of transnational corporations.
In general, the NAFTA has granted corporations the privileges of
intellectual property without recognizing corresponding obligations to the
broader society. It is not so much that Chapter 17 creates new inequities;
rather, it endorses and exacerbates existing inequities. The NAFTA does
not recognize the intellectual property rights of indigenous peoples; it
does not protect the intellectual property of large numbers of creators and
performers in the entertainment and mass media industries; and, it does not
protect the public's right-to-know. It does protect industry's right to
keep trade secrets; it endorses the privatization, commodification, and
ownership of life itself by compliance with the notion of life-form
patenting; and it effectively shackles the use of compulsory licensing, one
of the few existing means for ensuring the public access to new products at
affordable prices.
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** Topic: Intellectual Property-NAFTA Analys **
** Written 7:45 am Dec 16, 1992 by kmander in cdp:trade.library **
INTELLECTUAL
PROPERTY
INTELLECTUAL PROPERTY TEAM
Beth Elpern Burrows (Contact)
Fair Trade Campaign
Gary Chapman
Computer Professionals for Social Responsibility
John Dillon
Ecumenical Coalition for Economic Justice
Pat Roy Mooney
Rural Advancement Fund International
Anonymous Attorney
(with suggestions from Marsi Baez, Karen Doulac, Howard Frederick,
Janet McGowan, and others)
November, 1992
INTRODUCTION
The North American Free Trade Agreement (NAFTA) has been touted as an
historic, trade barrier busting leveller of the economic playing field
among nations. NAFTA, we are told, will lead to prosperity for all.
And yet there is Chapter 17.
Chapter 17 deals with Intellectual Property, specifically, the adequate and
effective protection and enforcement of intellectual property rights that
safeguard the designated owners of copyrights, sound recordings,
trademarks, encrypted satellite signals, patents, layout designs of
semiconductor integrated circuits, geographical indications, trade secrets,
and industrial designs.
Make no mistake about it. Although some of the Chapter 17 protections are
cherished ones, they are protections and thereby effective barriers to
trade. This is a chapter about regulation and protection. And there is
little here that suggests the work of an even hand.
The chapter begins by endorsing certain previous intellectual property
regimes, goes on to propose specific protections, and ends with suggestions
for general enforcement, remedies, provisional measures, criminal
procedures and penalties, enforcement at the border, and cooperation and
technical assistance. In general, the chapter reflects a broadening of the
usual intellectual property agenda. It is no secret that industry groups
worked hard to ensure that the Dunkel GATT/TRIPS (General Agreement on
Tariffs and Trade / Trade-related Intellectual Property) text would be
considered a floor---not a ceiling---for the level of protection that must
be involved in NAFTA's section on intellectual property.[2]
Most industry groups were happy with the NAFTA outcome. The Intellectual
Property Committee(IPR), representing Bristol-Myers Squibb, FMC,
Hewlett-Packard, Johnson & Johnson, Monsanto, Proctor & Gamble, DuPont,
General Electric, IBM, Merck, Pfizer, Rockwell International, and Time
Warner, praised the NAFTA as a significant advance in the standards of
protection and enforcement of intellectual property rights that have been
negotiated by the United States to date.[3]
The "accomplishments in the NAFTA intellectual property chapter" were also
praised and acknowledged as "a critical element in determining the support
of the member companies for the entire agreement." [4]
Clearly, the intellectual property rights proposed in the NAFTA were
designed to support the continued technical and scientific advantage of
transnational corporations. When one reads the proposals with an eye to
discerning what(who) is protected and what(who) is not, it becomes apparent
that the main beneficiaries are the pharmaceutical and biotechnology
companies and the computer software industry. The potential losers are the
consumer, the individual inventor or creator or performer, the indigenous,
the less industri-alized, and the poor. They are the likely payers of the
high costs implied by the intellectual property protections offered in the
NAFTA.
It is not so much that Chapter 17 creates new inequities; rather it
endorses and exacerbates existing inequities:
NAFTA does not recognize the intellectual property rights of
indigenous peoples; it does not protect the intellectual property of
large numbers of creators and performers in the entertainment and mass
media industries; it does not protect the public's right-to-know while
it does protect industry's right to keep trade secrets; it endorses
the privatization, commodification, and ownership of life itself by
compliance with the notion of life-form patenting; and it effectively
shackles one of the few existing means for ensuring the public access
to new products at affordable prices. In general, the NAFTA has
granted corporations the privileges of intellectual property without
recognizing corresponding obligations to the broader society. [5]
OMISSIONS
Performers and Creators
The Labor Advisory Committee (LAC) for Trade Negotiations and Trade Policy
on the NAFTA has noted that strong NAFTA protections for the holders of
patents and copyrights stands in sharp contrast to (the) complete absence
of provisions protecting labor rights and standards. [6]
Looking to the specific provisions of Article 1706, paragraph 1 of the
Intellectual Property chapter, the Committee notes that the section accords
producers but not performers "national treatment" with respect to rights
over "secondary uses" of sound recordings, and the Committee objects that
"performers would be robbed of revenue to which they are entitled..." [7]
Canadian analyst John Dillon, looking at the same section, sees
An example of the bias towards protecting the owners of publishing
houses, motion picture studios or recording studios instead of
authors, script writers, actors, musicians, or other artists. [8]
Dillon goes on to point out that the object in giving at least 50 years of
patent protection "to the producer of a sound recording"
...is to protect companies that make records, tapes, compact disks or
any future recording technologies. There is no mention of the artists
who compose or perform a musical work. [9]
Indigenous People
Other intellectual achievers and achievements are left unrecognized in the
NAFTA. The traditional knowledge and intellectual products of indigenous
peoples, the result of less formal innovation systems than the NAFTA is
designed to protect, are nowhere recognized and nowhere protected. The
inequities of such omissions are worth remembering:
Indigenous peoples have in effect been engaged in a massive program of
foreign aid to the urban populations of the industrialized North.
Genetic and cultural information has been produced and reproduced over
the millennia by peasants and indigenous people. Yet, like the
unwaged labor of women, the fruits of this work are given no value
despite their unrecognized utility. On the other hand, when such
information is processed and transformed in the developed nations, the
realization of its value is enforced by legal and political mandate. [10]
The cost of such inequity is not one-sided:
The contributions that indigenous people have made to Western
agriculture, medicine, and the arts have yet to be
recognized....Because their knowledge is not valued or compensated,
they cannot make a living in traditional ways. Children take up new
lifestyles and the groups themselves (and their living libraries of
knowledge) are lost....(And) consumers, who have benefitted so long
from this wealth of information, also lose. Everybody loses unless we
do more than just say "thanks". [11]
In an agreement intended to set the standard for the Western
Hemisphere [12], the intellectual property of indigenous peoples and
minority cultures deserve protection no less than the intellectual
property of transnational corporations. Expressions of
"folklore"---as indigenous peoples' intellectual property is sometimes
called---whether those expressions are attributable to individual
inventors or creators or to the accretion of community effort, whether
those expressions take the form of music, written word, artifact, art
work, or folk variety of cultivated crop, medicinal plant, animal
breed, or wild material traditionally safeguarded by the community,
those expressions deserve NAFTA protection from illicit exploitation,
expropriation, and other prejudicial actions.
Public Right-to-Know
A third NAFTA omission is its lack of adequate provision for the public
right-to-know: Article 1704 states that
Nothing in this (Intellectual Property) Chapter shall prevent a Party
from specifying in its domestic law licensing practices or conditions
that may in particular cases constitute an abuse of intellectual
property rights having an adverse effect on competition in the
relevant market. A Party may adopt or maintain, consistent with the
other provisions of this Agreement, appropriate measures to prevent
or control such practices or conditions. [13]
In other words, the only "abuse" of intellectual property rights this
agreement fears is an abuse having "an adverse effect on competition".
The way this concern for "abuse" plays out in the Trade Secrets section of
the chapter on intellectual property is for the section to grant industry
extensive rights to keep trade secrets without at the same time adequately
providing for the public's right-to-know. The LAC's published concern that
provisions in this chapter may have the effect of weakening or
preventing improvements in "right-to-know" laws and regulations
concerning hazardous goods and materials [14]
is well founded, according to one commentator:
The point is well taken. The only reference to an exception to a
non-disclosure rule for the protection of the public is in Article
1711(5), but that Article refers only to test data and other data
involved in product approval for pharmaceutical or agricultural
chemicals. In other words, data relating to approval for other
products or products for which no approval is required,
e.g. cosmetics, foods, household chemicals, nuclear plants, can be
maintained as trade secrets indefinitely, no matter what information
about hazards to the public they contain, unless, of course, they are
subject to disclosure under environmental or other provisions, a fact
which Article 1711 should explicitly recognize (but doesn't). [15]
Interestingly, but not unexpectedly, industry's Intellectual Property
Committee, commenting on the final version of the NAFTA, remains concerned
about...the continued use of a "gross negligence" standard relating to
third party acquisition of trade secrets...and the exclusion from
protection of proprietary data on old chemical entities that require
considerable effort to originate. [16]
The industry concern obviously is not based in public right-to-know or
common good arguments.
COLLISIONS
Life-Form Patenting
Perhaps the most hotly debated and deeply disturbing achievement of the
framers of the NAFTA is their endorsement and consequent geographical
extension of U.S.-style life-form patenting.
Article 1709 states that
A party may exclude from patentability inventions if preventing in
its territory the commercial exploitation of the inventions is
necessary to protect ordre public or morality, including to protect
human, animal, or plant life or health or to avoid serious prejudice to
nature or the environment...
A Party may also exclude from patentability:
(a) diagnostic, therapeutic and surgical methods for the treatment of
humans or animals;
(b) plants and animals other than microorganisms; and
(c) essentially biological processes for the production of plants or
animals, other than non-biological and microbiological processes for
such production. [17]
Despite the apparent lengthiness of the list, the final NAFTA exclusions
from patentability are considerably more limited than those which appeared
in an earlier version. The leaked Dallas composite draft of the NAFTA
contained Mexican suggestions to exclude from patentability:
a) essentially biological processes;
b) plant species and animal species and varieties;
c) biological material such as is found in nature;
d) genetic material; and
e) inventions relating to living matter that compromise the human
body. [18]
The effect of excluding the Mexican exclusions is to permit claims of
ownership of that which is currently non-patentable under Mexican law,
notably "genetic material, biological material such as is found in nature
and inventions relating to living matter that comprise the human body."
[19]
Further, because the operative verb on the exclusions is "may exclude",
parties to the NAFTA remain free to implement in (their) domestic law more
protection of intellectual property rights. [20]
In other words, parties to the NAFTA may take their national life- form
patenting beyond the bounds suggested by the NAFTA.
Finally, despite the apparent right to exclude plants from patentability,
Article 1709.3 ends with an injunction to provide for the protection of
plant varieties through patents or through breeders rights which do not
convey ownership over genetic material but do give plant breeders monopoly
rights over the marketing of seed varieties. [21]
As John Dillon has rightly noted,
"This requirement to implement either patent protection or plant
breeders rights legislation has enormous implications. It...will not
stop the biotechnology industry from pursuing an incremental
strategy, seeking first patents on microorganisms, then plants, then
animals, and eventually even parts of the human body." [22]
Sadly, Dillon has described the history of the biotechnology industry's
attempts at patenting.
The NAFTA reflects a decision that trade will industrialize biology and
make biological diversity, even the survival of organisms, a matter of
privately held intellectual property.
The concern over the degree to which or whether genes and species may be
patented is not a trivial concern. The objections to life-form patenting
are still being raised in the United States and, in part, stem from
apprehensions about whether the gains from such patents warrant the costs.
The European Parliament commissioned an "ethical assessment" of life-form
patenting in 1992. The assessment noted:
The patenting...in general, acts as an incentive for (the)
biotechnological industry: the exclusive nature of the rights to use
the research results---even when it concerns living organisms---should
favor investments in research on the part of industry. The economic
growth and international competition should translate into economic
and social advantage. But, notwithstanding this, many are opposed to
patenting, itself, and in this field sustain that the objective to
transfer the concept of property onto modified organisms and more
generally onto research products implies a change in the way in which
science is conducted by limiting the freedom of information and the
traditional free circulation of scientific information. Concerning
patenting of plant genetic resources, many wonder if they should be
subject to privatization or they should be considered a component of
the "common heritage of mankind"... Going into more details
(regarding)...patenting of animals: the fears raised are that the
patenting of transgenic animals amplifies the instrumental use and the
neglect of their sentient, non-objectual nature: patenting motivates,
instead, the tendency to consider animals as the standard of things
invented and as new consumer products. Patenting, in turn, increases
production and this causes great animal suffering....Moreover in this
case (but also in that of the micro-organisms), there are those who
sustain that patenting of a life form is an attempt at the sacrilege
of life or nature. (Underlining not added) [23]
Pat Mooney, of Rural Advancement Foundation International,
makes the following points:
Exclusive monopoly control over patents or through plant breeders'
rights (PBR) cannot be justified for the following reasons...
1. There is no empirical data available in any country that
positively correlates exclusive monopoly provisions with an
increase in innovation. There is considerable evidence, in fact, that
both inventiveness and information dissemination are constrained by
exclusive monopoly.
2. Exclusive monopoly provisions and the opportunities for
cross-licensing across different industrial segments and markets
bias intellectual property toward transnational enterprises with
large legal departments, and exclude new entrants and smaller companies
from equal access to technologies.
3. The evolution of intellectual property law over the last 150
years shows a continual strengthening of "rights" for patent holders
and a constant erosion of "rights" for society in general. The
willingness of governments to challenge intellectual property law,
once in place, is almost non-existent. Therefore, the adoption of any
form of patent or plant breeders' rights provisions must be assumed
to lead irresistibly toward adoption of ever-more powerful monopoly
provisions. [24]
The question of life-form patenting is connected to an issue raised
earlier: the intellectual property rights of indigenous peoples:
Most of the naturally occurring genetic material from which new plant
and animal varieties and medicines are derived comes from the Third
World. Patent law does not consider these genetic resources to be the
property of the countries in which they are found. They are treated
as the common heritage of humankind and therefore available to any
biotechnology company wishing to exploit them. But once genetic
resources have been appropriated by biotechnology firms, they become
private property. [25]
The increased costs for seeds and medicines derived from the
germplasms of their own plants and animals make life-form patenting
particularly onerous to indigenous peoples.
Life-form patents will result in farmers being denied their
traditional rights to save seeds (because) planting seeds without
paying royalties is making an unauthorized copy of a patented
product. Farmers will be forced to pay royalties for every seed and
farm animal derived from patented stock, forced to become more
dependent on fertilizers, pesticides, herbicides, and the machinery
made by the same companies who collected the traditional seeds in the
first place and now sell back the chemically-dependent derivatives. [26]
Pat Mooney has warned that where biological processes and products
become patentable, corporations have won the right to dictate morality
and evolution to governments and when this is done without recognizing
the informal innovation systems of indigenous peoples, "the only
innovations in the world that will not be patentable will be those of
the poor." [27]
So it is in the NAFTA.
Clearly, as the signers of the Alternative Treaty on Trade and
Sustainable Development enjoined,
In order to address issues of intellectual property while preserving
the rights of traditional societies using non-patentable living
resources, all patenting of biological resources and life-forms should
be halted. [28]
Generally, intellectual property rights should imply intellectual property
responsibilities. On the level of nation-states, this suggests that
nations have, vis-a-vis other nations, the right, and vis-a-vis their own
citizens, the responsibility, to design intellectual property regimes
suitable to their cultures and their financial, social, health, and trade
needs. So, it would seem, in a trade agreement, a nation's heritage should
not be impoverished, its sovereignty compromised, or its citizens rights
and health abused. Where this is not possible, where private self interest
and the Common Good cannot be balanced, intellectual property rights should
be abrogated, altered, or not granted in the first place. [29] Hence it was
that the framers of the Alternative Treaty on Trade and Sustainable
Development denied life-form patenting utterly and suggested:
Trade mechanisms that reduce or restrict the free flow of ideas and
technologies necessary for the protection of the environment and
health must be eliminated. Mechanisms such as compulsory licensing
ensure nations' rights to use products with broad social value; these
rights must not be compromised by GATT or any other negotiations. [30]
Unfortunately, neither these suggestions nor the Common Good was the
standard by which the NAFTA was written.
Compulsory Licensing
A patent, it will be remembered, is a grant of specified rights, generally
consisting in (1) the exclusive right to make (manufacture) or use the
subject matter of the patent for a specified time as well as (2) the right
to exclude others from making or using.
In some countries, where patents are not "worked"---meaning that some level
of actual manufacturing does not take place---"compulsory licenses" are
awarded to a company other than the patent holder for the manufacture or
use of the subject of the patent. In return, the company pays a fee to the
patent holder.
Compulsory licensing, it is argued, serves to advance the public good,
allowing a government to act in the interest of public health or national
security or the furtherance of national development by making certain an
invention deemed useful is indeed accessible and affordable to citizens.
Further, compulsory licenses have served to provide relief from monopoly
use of patent rights, as in the case of antitrust suits.
In Canada, for example,
Compulsory licensing of basic medicinEssaves Canadians a quarter of
a billion dollars a year in drug costs since generic drugs sell for
much less than their brand-name equivalents. [31]
As would be expected, there are some who deeply resent compulsory licensing
and the loss of control of market and revenue it implies. The
Pharmaceutical Manufacturers Association (PMA) in the United States
represents a manufacturing sector with some of the highest profits of any
sector anywhere in the world. PMA has been in the forefront of the fight
against compulsory licensing; it was also the first industry association to
endorse the NAFTA. [32]
The NAFTA places so many restrictions on the use of compulsory licensing
(Article 1709.10) that, according to John Dillon,[33] it is highly unlikely
that any new generic copies of patent medicines will ever be authorized
under the NAFTA. These NAFTA restrictions herald more than the end of the
Canadian use of compulsory licensing. They also suggest the probability
that compulsory licensing will never be adopted in any country acceding to
the NAFTA, including the United States.
Canada has used compulsory licensing to restrain health care costs for
consumers and Canadian prescription drug prices are lower than those in the
United States.[34] Considering the health care burdens currently being
suffered in the United States (and about to be suffered in all three NAFTA
countries), the loss of the compulsory licensing mechanism is great indeed.
Compulsory licenses were one of those means of ensuring that the privilege
of holding an intellectual property right was balanced by the right
holder's responsibility to serve the common good. Compulsory licenses
might have made health care costs lower for all of us.
Computer Programs
Article 1705 recognizes computer programs as literary works and extends the
50-year protection of copyright to computer programs and to databases.
This effectively protects "not only the source code and object code and
flow diagrams but also the `look and feel' of a program." [35]
Buried in this concession to the computer industry is a still unresolved
controversy:
This (protection) would probably be objectionable to people
who...(have) taken the position that some hypothetical computer
interface or operating system may in fact be the optimal way of using
computers...Then (to the holders of this position) this method should
be available to all computer users, perhaps by anchoring the program
in the public domain. So any 'protection' of the program would be
antithetical to (their) reasoning. However, (their) position is very
controversial. [36]
The "literary work" protection afforded computer programs in the NAFTA may
raise costs for all computer users and, if the "controversial" (League for
Programming Freedom) position is to be believed, the extra costs, in some
cases, will be payment for the obvious. As one anonymous observer has
noted[37], the perception of "justice" seems to depend on whose ox is being
gored: the group or individual who doesn't want to pay some outrageous fee
for a relatively simple program, which they could have devised themselves
but somebody happened to devise before them, or the group or
individual---not necessarily a mammoth corporation---who may have devised
one and doesn't want to be ripped off.
The sometimes thin line between Common Good and Private Self- Interest is
also reflected in the database protections of the NAFTA. While it may not
be generally in the interest of "the people" to have to pay copyright fees
for "compilations of data or other material", sometimes it is the "people"
who have put valuable time and effort into such compilations; hence the
added cost.
OTHER ISSUES
* The NAFTA provides "a term of protection for patents of at least 20 years
from the date of filing or 17 years from the date of grant." (Article
1709.12) Although it might have been desirable to have at least certain
public interest patents granted for shorter periods, nowhere is such a
possibility considered.
* The NAFTA does not deal with the issue of the ownership of germplasms in
national and international gene banks, thereby leaving those germplasms
vulnerable to exploitation and patenting by bodies other than their
original (indigenous) stewards. (Apparently, this is already happening at
CIMMYT, the International Maize and Wheat Improvement Center in Mexico.)[38]
* The NAFTA does not discuss the rules for use by the international
community, trans-nationals included, of publicly-held (and financed)
research work.
* The NAFTA has some democratic process problems... The words "transparent
and effective" were removed from NAFTA's Article 1714.2, dealing with the
"Enforcement of Intellectual Property Rights: General Provisions":
Each party shall ensure that its procedures for the enforcement of
intellectual property rights are fair and equitable, are not
unnecessarily complicated or costly, and do not entail unreasonable
time limits or unwarranted delays.
One wonders what harm transparency and effectiveness would have brought
to this article.
* The NAFTA offers no protections for the parties from unilateral trade
remedies, such as the infamous U.S. Section 301.
* The NAFTA even has some "due process" problems; for example, Article
1715.1(b) allows parties in a proceeding "to be represented by
independent legal counsel". However, there is no mention of what will
happen to a party who cannot afford legal counsel. There is no provision
for legal aid or court-appointed counsel; there seems only to be the
presumption that all the players will be big companies well able to afford
legal counsel.
* Lastly and perhaps most revealingly, the NAFTA makes no provision for the
creation of intellectual property rights. Article 1719 deals with
"Cooperation and Technical Assistance" and does not mention cooperation
and technical assistance for the creation of intellectual property
rights. There is no mention of joint research and development and
exchange of technical information.
Many areas of intellectual property, such as indigenous peoples' rights and
appellations of origin, could profit from cooperative research. And
certainly, future technologies will generate a felt need for future
intellectual property protections. So why the omission of provision for
the creation of intellectual property?
Curiously, nowhere in the NAFTA is it even stated by what standard an
intellectual property right is treated. There is not even the slightest
suggestion that intellectual property rights imply obligations to the
Common Good.
Instead, the whole issue of intellectual property right creation is avoided
and thereby the NAFTA misses the opportunity to chose for the Common Good
when the desire for individual or corporate profit clashes with society's
need for free access to ideas and innovation.
It is not surprising that the opportunity is missed. The intellectual
property section of the NAFTA is not really about rights or what is right;
it is primarily about the protection of property and the creation of
wealth.
NOTES
[1] The North American Free Trade Agreement (NAFTA), Part Six, Intellectual
Property, Chapter Seventeen, Article 1701.1.
[2] The Intellectual Property Committee in a letter to Carla A. Hills, U.S.
Trade Representative, published in Inside U.S.Trade, March 13,
1992, p. 18.
[3] The Intellectual Property Committee in a letter to Carla A. Hills, U.S.
Trade Representative, published in Inside U.S.Trade, October 9,
1992, p. 18.
[4] Ibid.
[5] John Dillon, Economic Justice Report, "NAFTA: A New Economic
Constitution for North America," vol. III, number 3, October 1992,
p.4. preliminary Report of the Labor Advisory Committee for Trade
Negotiations and Trade Policy on the North American Free Trade
Agreement Submitted to The President of the United States, The United
States Trade Representative, and The Congress Of The United States,
September 16, 1992, p.21.
[7] Ibid.
[8] Dillon, Op.cit.,p.4.
[9] Ibid.
[10] Jack Kloppenburg, Jr., "No Hunting: Biodiversity, indigenous
rights, and scientific poaching", Cultural Science Quarterly, Summer,
1991 (issue on "Intellectual Property Rights"), p. 16. [11]
"Introduction: The Politics of Ownership", Cultural Science Quarterly,
Summer, 1991 (issue on "Intellectual Property Rights"), p.3.
[12] "Regional Approaches: U.S. Industry Goals," The Journal of
Proprietary Rights, vol. 4, number 4, April, 1992, p. 4.
[13] NAFTA, Part Six, Intellectual Property, Chapter Seventeen,
Article 1704.
[14] Labor Advisory Committee, Op.cit., p.21.
[15] Anonymous, Comments on Current NAFTA IP Section, fax to Beth
Burrows, November 4, 1992, p. 1.
[16] The Intellectual Property Committee in a letter to Carla A. Hills,
United States Trade Representative, published in Inside U.S.Trade,
October 9, 1992, p. 18.
[17] NAFTA, Part Six, Intellectual Property, Chapter 17, Article 1709(2)
and 1709(3)
[18] The (leaked) Dallas composite draft of the North American Free
Trade Agreement, Article 2210.3.
[19] Article 20 of Mexico's Ley de Fomento y Protecci_n de la
Propiedad Intelectual, Diario Oficial, Mexico, D.F.27 junio 1991,
p. 7, noted in John Dillon, Op.cit.
[20] NAFTA, Part Six, Intellectual Property, Chapter 17, Article 1702.
[21] John Dillon, Op.cit., p.5.
[22] Ibid.
[23] Bioethics in Europe, Final report. European Parliament Scientific
and Technological Options Assessment, Luxembourg, 8 September
1992, p. 102.
[24] Pat Mooney, RAFI Comments on the NAFTA Intellectual Property
Provisions, notes sent to Beth Burrows, June 16, 1992, RAFI
International Office, p. 1.
[25] John Dillon, Intellectual Property Rights in the NAFTA,
Ecumenical Coalition for Social Justice, June, 1992, p.3.
[26] Beth Elpern Burrows, Biotechnology: Coopting the Genetic Heritage
of the Third World, Washington Biotechnology Action Council, November,
1991.
[27] Pat Mooney, Op. cit., p.2.
[28] The Active Negotiators of the Trade Work Group at the NGOs
International Forum in Rio de Janeiro, Alternative Treaty on Trade and
Sustainable Development, Final Text, June 9, 1992, p.2.
[29] The Intellectual Property Team, Draft Principles and Suggestions
Regarding Intellectual Property Rights, October, 1992.
[30] The Active Negotiators, Op. cit.,p.3.
[31] "F. Intellectual Property Rights and Basic Medicines," Economic
Justice Report ("Ethical Reflections on North American Economic
Integration"), Ecumenical Coalition for Economic Justice, Toronto,
Canada, vol. II, number 3, October, 1991, p.14.
[32] Inside U.S. Trade, August 7, 1992, p.18.
[33] John Dillon, Analysis of the Intellectual Property Rights of the
North American Free Trade Agreement, Second Draft, October 2, 1992,
Ecumenical Coalition for Economic Justice, Toronto.
[34] Milt Freudenheim, "Drug Costs Less in Canada Than in the U.S.,
Study Finds," New York Times, October 22, 1992, C1.
[35] Gary Chapman, in a letter to Beth Burrows, June 22, 1992, p.2.
[36] Ibid.
[37] Anonymous, Some Comments on the NAFTA Intellectual Property
Draft, June 13, 1992 , p.2
[38] Pat Mooney, Re: NAFTA and Patents, letter to Beth Burrows, June
16, 1992, p.2
DRAFT PRINCIPLES AND SUGGESTIONS
THE INTELLECTUAL PROPERTY TEAM
*October, 1992
*Contact: Beth Burrows, 206-775-5383
After consideration of the problems and omissions of the Intellectual
Property chapter of the North American Free Trade Agreement, the following
principles and suggestions are offered:
When nations agree to enter into intellectual property arrangements with
other nations, certain standards and principles should apply:
1. Intellectual property rights, that is, protections of intellectual
property, shall be recognized as privileges granted by nations to promote
the common good.
2. Privileges of intellectual property shall be balanced by
responsibilities to the common good. Where a granted privilege is
exercised with insufficient regard for the common good, that privilege may
be rescinded or modified.
(a) Nations shall be free to establish the criteria of patentability, to
decide whether a patent should be granted to products or processes, [to
decide whether a patent should be granted to the first inventor or to the
first applicant for a patent,] and to decide the length of term of a
patent.
(b) Mechanisms, such as compulsory licensing, that ensure a nation's right
to use products with broad social value, shall not be compromised. Where a
patent holder does not make available, in a timely manner, to its country's
trading partners, the knowledge and technology implied by its patent, that
patent shall be subject to automatic compulsory licensing in the offended
countries. However, adequate remuneration shall be paid to the patent
holder.
3. Nations have the responsibility to design intellectual property regimes
suitable to their cultures and their self-perceived social, health,
financial and trade needs. Hence, nations shall not be required to
impoverish their heritage, compromise their sovereignty, adopt technologies
they consider inappropriate, or abuse their citizens' rights and
health. Therefore, even for the furtherance and increase of trade:
(a) No nation shall be required by another to extend patents to or
recognize patents of biological products, processes, or parts thereof.
Among nations, all life forms shall be strictly excluded from
patentability.
(b) Intellectual property rights that, without adequate and democratically
negotiated compensation, infringe on or alienate the property and
achievements of any community or individual inventor or creator, shall not
be granted.
(1) Since transnational intellectual property rights impact the creations
and achievements of many sectors of society, representatives of those
sectors from all countries party to an intellectual property shall be
included in the creation, maintenance, and oversight processes of any
transnational intellectual property rights. [1]
(2) Specific provision shall be made for the recognition of indigenous
peoples' and minority cultures' intellectual property. Expressions of
"folklore", that is, forms of indigenous or minority culture intellectual
property, whether those expressions are attributable to individual
inventors or creators or to the accretion of community effort, whether
those expressions take the form of music, written word, artifact, art work,
or folk variety of cultivated crop, medicinal plant, animal breed, or wild
material traditionally safeguarded by the community, access to, use of, and
recompense for such folklore shall be at the will of and by the rules
agreed to by the cultural community involved. Mechanisms shall be created
to so safeguard the intellectual property of indigenous people. [2]
(3) The materials deposited in national or international gene banks, or the
components of those materials, shall not be considered the subject of
patents.
(4) Research and research materials that are the result of public funding
and/or reside in public institutions shall not be considered the subject of
patents.
(c) Trade secret protection that does not adequately protect the
public right to know shall not be granted.
4. The parties to an agreement concerning intellectual property rights
shall cooperate and offer mutual assistance both for the protection of
intellectual property rights and for the creation of intellectual property
rights. Mechanisms shall be established and endowed by the agreement to
ensure joint research and development and exchange of technical
information.
5. Procedures for enforcing and creating intellectual property rights shall
be fair, equitable, transparent, and effective and shall not be
unnecessarily complicated, or costly, or entail unreasonable time limits or
unwarranted delays. Where such is not possible for a proposed intellectual
property right, that "right" shall not be granted to or insisted upon among
trading partners.
(a) Parties to a civil suit concerning intellectual property rights shall
not only entitled to be represented by legal counsel but shall also be
provided legal counsel should they not be able to afford such counsel on
their own. Parties to an intellectual property agreement shall endow and
maintain a fund for this purpose.
(b) Time limits established for the initiation and completion of
proceedings for enforcement of intellectual property rights shall be made
explicit in any intellectual property agreement in terms of number of days.
6. The sharing of ideas and technologies shall be encouraged and rewarded.
Therefore:
(a) Each party shall accord to the nationals of the other parties treatment
no less favorable than it accords to its own nationals with regard to the
protection and enforcement of intellectual property rights.
(b) Mechanisms shall be created to ensure the compensation of Third World
countries and indigenous communities for the use of biological life forms
which they have preserved, selected, bred, and cultivated, and which are
now the basis of agricultural and pharmaceutical products.3 (Future use is
covered in 3 (b) (2).)
(c) No party shall be required to extend intellectual property protection
to technologies, designs, or programs that are commonplace at the time of
their creation. The meaning of "commonplace" shall be democratically
determined on an industry- by-industry basis.
NOTES
[1] Among these representatives shall be the elected spokespersons of each
nation's artists, freelance writers, musicians, small business owners,
composers, computer programmers, dancers, inventors, healers, scientists,
and any pertinent others.
[2] Among the mechanisms that have been suggested are the expansion of
the Appellation of Origin system, the expansion of the interpretation
of the Berne Convention for the Protection of Literary and Artistic
Works (Article 15(4)), and the development of a sui generis form of
intellectual property. Pat Roy Mooney, in his statement RAFI Comments
on the NAFTA Intellectual Property Provisions, notes:
Include provisions that could allow Mexico and indigenous peoples to
maintain their intellectual integrity over biological materials.
Areas to be specifically developed include the following:
A. Appellation of Origin:
Extension of Appellation of Origin system that currently protects
certain products such as champagne and cognac to include other biota
indigenous to countries. This provision is particularly useful to
Mexico which is a Centre of Genetic Diversity for maize, cocoa,
various beans, and tomatoes. The present system is based on the
specificity of know-how that has been acquired and refined over the
centuries and is still undergoing refinement today, and on geological
and climatic peculiarities of the region from whence the product
comes. The system operates at both the national level (through
statutory law and enforcement regulations), and the international
level (through the Inter-national Vine and Wine Office - IWO).
Unfortunately, the system is a highly specific legal regime,
enshrining no general principle since it has only been applied to
finished products. Nevertheless, Mexico and indigenous peoples in all
three countries should explore approaches to expand Appellation of
Origin to folk varieties of cultivated crops, folk medicinal plants,
and wild material traditionally protected by local communities.
B. Berne Convention for the Protection of Literary and Artistic Works:
Under the Berne Convention for the Protection of Literary and Artistic
Works (Article 15(4)), and pursuant to the Acts of Stockholm (1967)
and Paris (1971) Conferences of the Convention, it is a matter for the
legislation of the country concerned to identify a national
"authority" who shall represent and protect the rights of unknown
authors (in case of an unpublished work). While the text does not
explicitly refer to expressions of folklore, the UN Food and
Agriculture Organization (FAO) argues it is reasonable to suppose that
the phrase "unpublished works" is of sufficiently wide connotation to
cover any traditional creative activity. Customary rules governing
the precise designation of this authority and the organizing of
protection for a work during the "author's" lifetime do not apply
under the Berne agreement.
Folklore, the resulting product or process of an ongoing evolution, is
the common heritage of a given cultural community. New recording and
other technologies have made it possible for outsiders to distort
and/or profit from expressions of folklore. The purpose of the Berne
provisions was to protect the interests of cultural communities.
Mexico and indigenous peoples should explore the full enactment of the
Berne provisions to cover biological products and processes as well as
manufacturers.
C. Model Provisions for National Laws on the Protection of Expression
of Folklore against Illicit Exploitation and Other Prejudicial
Actions:
To protect community intellectual integrity against expropriation,
Bolivia and Morocco have specific legislation protecting expressions
of folklore. UNESCO and WIPO have prepared Model Provisions for
National Laws on the Protection of Expressions of Folklore Against
Illicit Exploitation and Other Prejudicial Actions. These provisions
pave the way for a degree of harmonization within the different legal
systems and set forth certain basic rules governing the designation
and protection of folklore. Under these provisions, "expressions of
folklore" are taken to mean productions consisting of characteristic
elements of the traditional artistic heritage developed. While UNESCO
and WIPO assumed in their 1985 Model Law that the expressions might be
verbal, musical, by means of action (of the human body) or tangible
(productions of folk art, musical instruments, and architectural
forms), FAO has concluded that a broader construction including folk
plant varieties or animal breeds and medicinal plants is now
justifiable under the provisions.
NAFTA should explore the entrenchment of the UNESCO/WIPO Model
Provisions for indigenous peoples, and for Mexico, in order to secure
their intellectual integrity over folklore....
(As a third option re patents:) Develop a sui generis form of
intellectual property for biological products and processes (as
proposed by Dunkel for plant varieties), that amounts to a "trade
union" for local communities and indigenous peoples to safeguard the
intellectual integrity of their innovations. This initiative would
build upon the recognition given to "informal innovation" in UNCED's
Agenda 21 and in the biodiversity convention ("indigenous knowledge
and technologies"), and would utilize "Farmers' Rights" as adopted by
NAFTA Parties (among others) at FAO.
Another commenter, who wished to remain anonymous, adds: (This) is
fraught with difficulties, largely because "folklore", by definition,
is in the public domain and things which are in the public domain are,
by definition, not subject to protection in the form of any of the
traditional intellectual property rights. So it does require the
invention of a "sui generis form of intellectual property." One
precedent would be the law enacted four or five years ago which
protects native American symbols against unauthorized misuse. In
terms of already existing institutions, as I have suggested ..., use
of collective marks should be explored; so should certification marks
and jointly owned patents and copyrights, as well as the excellent
references in Pat Mooney's footnote C.
3. Among the suggestions for the form this compensation may take is a
fund into which "royalties" are paid, the "royalties" to be
distributed on a basis to be determined in conference with all
concerned. As John Dillon pointed out in his commentary, Intellectual
Property Rights in NAFTA, Precedents exist in intellectual property
law for collecting funds to remunerate the originators of materials
that are copied by others. For example, several states place a
surcharge on the sale of blank cassette tapes and on the use of
library photocopiers to collect funds for distribution to recording
artists or authors.