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The Relevancy of ‘Rollback Clause’ for LDCs IPRs Regime

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'rollback clause' The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), with its ‘one-size-fits-all’ approach has created serious entailments for the developing and least developed countries (LDCs) in the field of public health, agriculture and development. Having recognised the inadequacy in infrastructure and policy regime for enforcing the stringent IPRs standards as envisaged by the TRIPS by many WTO members (especially LDCs), the agreement itself has provided ‘special and differentiated treatment’ for certain members.The ‘transition period’ for LDCs is a part of that differentiated treatment agenda. While the initial ‘period of transition’ to compliance for LDCs was until 1 January 2006, the TRIPS provided that, the TRIPS Council “shall upon duly motivated request by a least developed country member, accord extensions of this period” (article 66 of the TRIPS Agreement). Accordingly, there have been three subsequent extensions since the commencement of the TRIPS. Two of them were plenary i.e. applicable to all IPRs as included in the Trips Agreement and the other one (para.7 of the Doha Declaration the TRIPS and Public Health, 2001) was applicable for only pharmaceuticals and agricultural chemicals. The objective of the LDC transition arrangement as stated in article 66.1 is to accommodate “the needs and requirements of least developed country Members…and their need for flexibility to create for a viable technological base”.

The central concern for and regarding LDCs is promoting the creation of the technological base. Like many WTO flexibilities, the primary benefit of an extended transition period lies in the preservation of policy space for LDCs –conserving the autonomy of LDCs to determine appropriate development, innovation, and technological promotion policies, according to local circumstances and priorities. The TRIPS transition period is a strategic advantage for LDCs who has sufficient manufacturing capacity in pharmaceuticals. (Islam, Mohammad Towhidul, TRIPS Agreement of the WTO: Implications and Challenges for Bangladesh, CSP, 2013, 168). This enables the generic producers of the LDCs to freely copy patented medicines for domestic consumption needs and export purposes without having followed the WTO’s complex 30 August 2003 decision.

Paragraph 5 of the TRIPS Council decision of 29 November, 2005 provided that, ‘[l]east-developed country Members will ensure that any changes in their laws, regulations and practice made during the …transition period do not result in a lesser degree of consistency with the provisions of the TRIPS Agreement’. This ‘no-rollback’ provision has serious implications on LDCs, for many they have an existing IPRs regime which impedes them to take the comparative advantage of reverse engineering and many other TRIPS flexibilities. For example, the IPRs regime of Bangladesh, an LDC, allows patents protection for pharmaceuticals and, therefore cannot use the Paragraph 6 of the Doha Declaration on TRIPS and Public Health vi’s-à-is another LDC who has no patent protection regime in pharmaceuticals. A clause precluding adoption of IP laws that are less consistent with the TRIPS Agreement than existing laws might lock some LDCs into maintaining stronger IP law than would be adopted “writing on a clean slate”.

This ‘no rollback’ provision seriously affects policy space for LDCs and they cannot prohibit practices like ‘ever greening’ of patents having serious implications on the public health, if their existing IPRs regime provides for such protection. Accordingly, they cannot include some potential areas, e.g. geographical indications, traditional knowledge within their IPRs protection regime. Again, the post-TRIPS initiatives (in the Doha Round) for LDCs e.g. ‘Waiver Decision’ of 2003 would be meaningless if the LDCs cannot incorporate those flexibilities in their policy framework. Further, such ‘no rollback’ provision might preclude the LDCs from incorporating some innovative policy options, e.g. the parallel importation regime, having serious implication from development perspective.

The 2005 extension of “transition period” for LDC was up to July 2013. On the eve of the deadline, the TRIPS Council extended the transition period for a further period of eight years starting from 1 July 2013 in pursuance of a proposal sponsored by the LDC Group. The decision of 11 June 2013 has removed the condition introduced in the earlier 2005 decision that LDCs cannot rollback the level of implementation of the TRIPS agreement that they have already undertaken in their national legislation. LDCs have argued that the ―non-rollback clause is an undue restriction of their policy space and contrary to the letter and the spirit of the extension, as stipulated in the TRIPS Agreement. Under the new wording, LDC members have expressed ―their determination to preserve and continue the progress towards implementation of the TRIPS Agreement.

The new extension manifestly does not establish an enforceable WTO legal obligation on LDCs that precludes rollback of existing intellectual property legislation and rules (except with respect to national treatment and most favoured nations). However, a debate has arisen as to whether the extension of 11 June 2013 is a general or piecemeal approach, i.e. whether it applies to pharmaceuticals and regulatory data protection. The Developed countries have interpreted the extension in a restricted manner and argued that, the LDCs will have to give pharmaceutical patent in 2016 and they will not be able to rollback from the existing IPRs regime (if any). Professor Abbott has categorically said echoing the voice of LDCs “the June 11, 2013 decision includes patents within its subject matter scope, so it is rather difficult to understand why LDCs would be required to provide patent protection for pharmaceutical products (or any other products) in 2016 since the general extension runs to July 1, 2021”. He further said “[b]ecause the June 11, 2013 decision allows LDCs to roll back existing levels of protection, they can elect to reduce existing levels of patent protection up until July 1, 2021, including for pharmaceutical subject matter. In this scenario the ‘TRIPS-Plus regime’ has appeared as a great threat for LDCs for an effective utilisation of the ‘transition period’. This regime mainly takes place in the form of Bilateral Investment Agreement (BIA) and Free Trade Agreement (FTA) with alluring market accessibility packages. These Agreements always try to curb the TRIPS flexibilities including the concession of ‘transition period’, since most of them (TRIPS-Plus) prohibits the LDCs in transition to ‘rollback’ from the existing IPRs regime. However, it may be argued that, under the ‘Most Favoured Nation’ (MFN) principle LDCs obligation under TRIPS-Plus regime is only limited to the party of the respective Agreement, for these ‘TRIPS-Plus’ Agreements are Preferential Trade Agreements (PTAs) (Article 4 of the TRIPS Agreement)

Md. Ahsan Habib

Md. Ahsan Habib

Lecturer at Eastern University, Bangladesh
Md. Ahsan Habib is an adviser and contributor to Bangladesh Law Digest. He did his LLB and LLM from University of Dhaka. He is currently working as a lecture in Law at Eastern University, Bangladesh.
Md. Ahsan Habib
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