. /.WORLD TRADE
ORGANIZATIONIP/C/W/390
26 November 2002
(02-6541)
Council for Trade-Related Aspects
of Intellectual Property RightsOriginal:  English
IMPLEMENTATION OF ARTICLE 66.2 OF THE TRIPS AGREEMENT
Communication from Least-Developed Countries
The following communication, dated 15 November 2002, has been received from the
delegation of Zambia on behalf of the Least-Developed Countries' Group.
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Introduction
1. In the TRIPS Council meeting of 25-27 June 2002, the Least-Developed Countries' (LDCs)
Group in the WTO presented a proposal outlining the main considerations that needed to be taken into
account in developing the mechanism for ensuri ng the monitoring and full implementation of
Article 66.2 of the TRIPS Agreement.1  At that meeting there was some discussion of the elements
outlined by the LDCs Group including comments by the delegations of the European Communities(EC) and the United States (US).  At the end of that meeting, it was agreed that the Chair would hold
consultations with a view to finding a solution that would be satisfactory to all Members concerned.
2. Subsequently, the Chair on 18 September 2002, produced a note suggesting some elements
for consideration by the Members.  The LDCs Group welcomes the Chair's note and wishes to thank
the Chair for the efforts to move this process forward.  Having considered the Chair's note, the LDCs
Group wishes to respond to some of the points made by the Chair.
Elements for the Mechanism to Monitor the Full implementation of Article 66.2
3. As pointed out by the LDCs Group in its communication in June 2002, the Ministers'
instruction on this issue were clear.  It is important to remember that the Ministers, in fact, took somedecisions on this matter in Doha itself.  In particular, the Ministers were unequivocal under paragraph
11.2 of the Decision on Implementation-Related Issues and Concerns that:
"Developed country Members shall submit prior to the end of 2002 detailed reports on
the functioning in practice of the incentives provided to their enterprises for the transfer
of technology in pursuance of their commitments under Article 66.2".2
4. In that regard, the Chair's suggestion under point 2(I) of the note that - developed country
Members might be requested to submit annually reports – seems to water down the mandatory
language (shall) used by the Ministers in the Implementation Decision.  It is the view of the LDCsGroup that developed country Members should provide detailed reports by the end of 2002.  It is also
important to note, as pointed out by the delegation of Zambia in the June 2002 TRIPS Council
meeting, that the Ministers' mandatory instructions in Doha on the submission of reports by the end of
                                                     
1 See WTO document IP/C/W/357 dated 5 July 2002.
2See paragraph 11.2 of the Decision on Implementation-Related Issues and Concerns, WT/MIN(01)/17.IP/C/W/390
Page 2
2002 and on the establishment of the monitoring mechanism superseded any earlier practice such as
notifications on implementation of Article 66.2 in the TRIPS Council.  Clearly the Ministers were
aware of the existing practice and their instructions were intended to initiate action to improve the
existing practice.
5. The LDCs Group, however, welcomes the Chair' s suggestion that subsequent to the initial
detailed reports to be submitted by the end of 2002, developed country Members should provide new
detailed reports every third year and annual updates in the intervening years.
6. In its June 2002 communication, the LDCs Gro up had suggested four basic parameters that
were important in guiding the development of the m onitoring mechanism.  One of the parameters was
to the effect that there was need for clarity on the type and nature of the reports to be submitted bydeveloped country Members.  One of the elements to satisfy this parameter had been suggested to be a
requirement that the detailed reports should contain information regarding the terms under which the
technology is being transferred by the developed country enterprises and that the reports should also
contain information on the appropriateness and local  adaptability of the technology to the particular
circumstances of the LDC to which technology is tr ansferred.  These two critical elements are not
reflected in the Chair's note.
7. In addition, the LDCs Group had proposed that developed country Members should show in
their reports that there have been specific legislative, policy and regulatory measures undertaken to
fulfil the obligations under Article 66.2, in particular, by providing information showing that theincentives regimes reported are specific only to enterprises and institutions transferring technology to
LDCs.  In other words, the information should show that the particular incentives regime is not simply
within the general overseas development assistance (ODA) that benefits all developing countries but
that it is specific to LDCs or at any rate, is over and above what is provided for developing countries
generally. The LDCs Group considers this a critical element of any mechanism for monitoring the fullimplementation of Article 66.2.  This element is also not reflected in the Chair's note.
8. During the discussions on the monitoring mechanism at the TRIPS Council meeting in June
2002, one of the issues raised by developed country Members related to the proposal by the LDCs
Group that the monitoring mechanism provides some clarity as to steps that would be taken by the
TRIPS Council or the General Council or as the case may be, if a Member failed to comply with the
mandate such as providing the initial reports by the end of 2002 or other reports as subsequentlyagreed under the monitoring mechanism.  This w ould also include a failure to comply with the
fulfilment of the requirements of the monitoring mechanism and other mandates.  The LDCs Group is
of the view that such failure to comply should be  treated as any other failure under the WTO rules.
The Chair's note has not addressed this important issue which the LDCs Group considers an important
element if the monitoring mechanism is to work effici ently.  It must also be recalled that compliance
is one of the main pillars of the WTO.
Conclusion
9. The LDCs Group would like to reiterate the importance which it attaches to the speedy
establishment of the mechanism for ensuring the monitoring and full implementation of the
obligations under Article 66.2.  The Group welcomes  the contribution of other Members and looks
forward to working together with other Members to find an appropriate solution to this issue.
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