RESTRICTEDWORLD TRADE
ORGANIZATIONWT/CTE/W/82
7 April 1998
(98-1408)
Committee on Trade and Environment Original:  English
CLUSTER ON MARKET ACCESS
Statement by India
The delegation of India has made the following statement at the 19-20 March 1998 meeting of
the Committee on Trade and Environment (CTE) under Item 8, and has requested that it be circulated
to Members of the Committee.
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I. INTRODUCTION
1. India had made a contribution to the discussion in the Committee on Trade and Environment
on the issue of transfer of environmentally sound technology and products (EST&Ps) as a part of the
issues related to the Market Access Cluster.  The re levance of this issue has been reinforced by the
comments made by several Members in the discussions on market access in the Committee, pointingout the significant impact transfer of such technologies can have for enhancing market access,
especially for exports from developing countries including from small and medium enterprises.
2. India would like to refer to the detailed comments made by the United States on the paper
submitted by India (WT/CTE/W/66) at the November 1997 meeting of the Committee, and provide
clarifications.  In our view, WT/CTE/W/66 arises from the mandate of the CTE to examine therelationship between TRIPS and Environment.  This discussion is subsumed in the larger question of
reconciling an open, non-discriminatory and equitable multilateral trading system on the one hand
with the objective of the protection of the envir onment and the promotion of sustainable development,
on the other hand.  In its report to the Singapore Ministerial Conference (SMC), the Committee had
concluded, inter alia, that further work is required to help to develop a common appreciation of the
relationship of the relevant provisions of the TRIPS Agreement to the protection of the environment
and the promotion of sustainable development, and whether and how, in comparison to other factors,these provisions relate to among other things, faci litating the access to and transfer and dissemination
of EST&Ps.  India’s paper falls squarely within the mandate of the CTE and in particular, within the
scope of the further work required in this Committee.  Several questions have been raised by the
United States on the Indian submission which are dealt with below.
II. HOW IS THE INDIAN SUBMISSION RELATED TO THE MARKET ACCESS?3. The TRIPS Agreement is a market access agreement, not only because it is a part of the
Marrakesh Agreement but also because this Agreement relates to "trade-related" aspects of
intellectual property rights (IPRs) and their use, and not to IPRs in general.  Technology transfer, in
the context of technologies covered by IPRs, is definitely trade-related, and therefore closely related
to market access.  Thus, India is not simply adding the words "market access" without any reason.WT/CTE/W/82
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III. PATENTS AND COMPETITION
4. While it is clear that patents reward inventions and thus lead to the generation of new
technologies, including environmentally sound technologies, it is equally clear that they legally
restrict competition.  Other things being equal, such restrictions generally lead to restrictions on
output and to higher prices.  While India agrees that patents need to be granted to generate newtechnologies, in its submission to the CTE, India is calling for certain minimalistic measures required
in three specific situations, namely: (i) MEAs;  (ii) mandatory national environmental standards;  and
(iii) voluntary international environmental standards.  Such reconciliation of technical standards with
IPRs is being attempted in several fora, including in courts in the United States.
IV. THAT A SERIOUS PROBLEM EXISTS OR WILL ARISE ON PROPRIETARY EST&Ps
NOT BASED IN FACT
5. India has brought to the notice of this Committee in 1996 that a serious problem exists on its
industry’s access to certain patented technologies of Ozone Depleting Substances (ODS) substitutes
required for implementation of the Montreal Protocol.  This was also confirmed by the intervention
made by the Republic of Korea in the CTE.  In an UNCTAD Meeting on positive measures held in
November 1997, the People's Republic of China also confirmed that it was facing similar problems on
accessing these patented technologies.  At this meeting, representatives of UNEP and the MultilateralFund confirmed that such problems had been brought to their notice and that so far no guidance has
been finalized for funding projects on the production of ODS substitutes in these countries.  Even
funding of indigenous research and development efforts on the production of ODS substitutes have
not been financed by the Multilateral Fund.  That other countries with strong patent protection have
revealed no problem with the discrimination of patented technologies or patented products is notrelevant, since these countries may not have had the domestic technologies to produce ODS in the
first place.  Moreover, there are many more MEAs which could develop in the future with time bound
targets for eliminating environmentally harmful substances.  A notable example is the framework
Convention on Climate Change.  Research on new substitute technologies is being funded by
governments in developed countries.  Such technologies would in future be covered by IPRs.  Oncethere are time bound targets, this gives private companies holding such IPRs a double advantage, in
having guaranteed markets with legally restricted competition.  It should be the responsibility of the
international community to make available such techno logies at reasonable prices to all participants of
the MEA or the international environmental standard.  Therefore, it cannot be said that India's
arguments on these issues are not based on fact.  Moreover, it may be noted that the discussions on
other issues in this Committee are also based on apprehensions of a possible future conflict between
the multilateral trading system and the MEAs.
V. THAT PATENT PROTECTION IS ONLY ONE FACTOR INFLUENCING TRANSFER OF
EST&Ps
6. It is true that patent protection is only one of the many factors that influence transborder
transfers of patented technologies and trade in patented goods.  However, the UNEP case studies of
India and Korea’s implementation of the Montreal Protocol clearly reveal problems in accessingpatented ODS substitute technologies. The People's Republic of China has also confirmed similar
difficulties.  Given the different foreign investment and other regulatory and market regimes of these
three countries it is unlikely that any of these other factors could have uniformly contributed towards
the non-availability of these technologies in all these countries.  This is the reason why India has not
made any specific mention of these factors in its latest paper.WT/CTE/W/82
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VI. THAT IT IS HIGHLY UNLIKELY THAT A PARTICULAR EST&Ps IS REQUIRED IN
AN MEA OR BY NATIONAL LAW
7. It is true that there may be many substitutes, whether patented or not, which can be used for
the implementation of the targets of an MEA or to meet national or international environmental
standards.  However, in practice, for technical and commercial reasons, the market tends to favourparticular EST&Ps and this tends to become the virtual standard for implementing a certain aspect of
an MEA or a certain national or international standard.  Further, in future there may be a situation
where one particular EST&P is the only available substitute to implement an MEA or an
environmental standard.  In such circumstances it is important that the international community finds
a solution to effectively reconcile IPRs with transfer of technology and access to such EST&Ps.
VII. THAT INDIA SEEKS TO ELIMINATE HONEST COMMERCIAL PRACTICES IN
ARTICLE 31 OF THE TRIPS AGREEMENT
8. India has suggested that some conditions in Article 31 are cumbersome and could delay the
grant of compulsory licenses.  There are already circumstances such as public non-commercial use
and adjudicated cases under competition law where exceptions to some of the conditions are already
available under Article 31.  India has suggested that in the limited three cases set out in its paper
similar flexibility should be allowed.  This cannot be construed to advocacy of the elimination ofhonest commercial practices.
VIII. THAT REDUCTION IN PATENT TERM FOR SOME LIMITED EST & Ps IS A
LOSE-LOSE SITUATION
9. India's proposal on the reduction of patent term is limited to the three specific situations listed
in its paper and not to all EST&Ps.  With the certainty of markets ensured by MEAs or national/international standards, India feels that there could be a reduction in patent term without a consequent
reduction in rewards for invention.  The patent term decided under the TRIPS Agreement did not
consider the optimal patent length for rewarding innovation and certainly did not consider the specific
three cases mentioned in India's submission.  In the case of an MEA which has time-bound targets, the
issue of the patent term becomes especially relevant.
IX. THAT THE TRIPS AGREEMENT CONTAINS NO PROVISIONS ON REVOCATION
EXCEPT IN ACCORDANCE WITH ARTICLE 5(A) OF THE PARIS CONVENTION
10. In the TRIPS Agreement, Article 32 entitled "Revocation" lays down that revocation of
patents must be subject to judicial review . In addition, Article 2 requires WTO Members to comply
with Articles 1 through 12 and Article 19 of the Paris Convention.  Article 5(A) of the Paris
Convention lays down that parties must first seek to correct abuses of the exclusive rights of patents,
such as,  for example, failure to work, by the gr ant of compulsory licenses and that only after two
years from the grant of the first such compulsory license can proceedings for the revocation of patents
be instituted.  However, as far back as 1968, Bodenha usen, the Director of BIRPI (now WIPO), in a
commentary on the Paris Convention based on documents of meetings concerning these amendments,
interpreted this article to mean that these provisions apply only to cases where measures are taken to
counter the abuse of exclusive patent rights and not in other circumstances, such as in public interest.At the time of the TRIPS negotiations at least one country, India, had clearly stated in its written
submissions that it intended to retain the provision of revocation in public interest.  Such a provision
would now be subject to judicial review.  Theref ore it cannot be said that such a limited use of
revocation to safeguard the environment would create chaos in the market place.  This interpretation
of the Paris Convention is not simply wrong on its face and would not nullify all the obligations underSection 5 of Part II of the TRIPS Agreement.WT/CTE/W/82
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X. ON INDIA'S INTERPRETATION OF FAIR AND MOST FAVOURABLE TERMS
11. India has made a practical suggestion that where the cooperation of the right holder is
necessary in the transfer of EST&Ps, there should be an obligation on right holders to transfer such
technologies at fair and most favourable terms and conditions, upon demand, to any interested party
which has an obligation to adopt these under national law of another country (as for instance in thecase of mandatory national environmental standards) or under international law (as for instance in
MEAs).  This proposal does not state that fair and most favourable terms and conditions should be
unfavourable to the right owner.  In most proprietary products and technologies there is no "market"
as it is the IPR holder who sets the price, based on the legal right to exclude all competition for his
product or technology for a limited period of time.  Certainly the negotiation of such terms and
conditions can be done by the home country where the IPR owner is based.
12. In conclusion, India's proposal has addressed the need for the CTE to examine and
recommend certain measures reconciling the TRIPS Agreement with the demands made to implement
time bound MEAs, mandatory national standards and voluntary international standards, where such
implementation involves the use of EST&Ps covered by IPRs. We look forward to further
consideration of this issue under the Market Access Cluster by the CTE.
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