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. -------------------------------------------------------------------------- ** 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.