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GENEVA (Reuters) - Rich and developing countries clashed on Wednesday over controversial proposals to tighten up the enforcement of intellectual property (IP) rights.
The Anti-Counterfeiting Trade Agreement is being negotiated by a dozen governments and authorities, mainly in rich states but including some emerging economies, to police trademark protection more effectively and ban Internet piracy.
But many developing countries fear the ACTA proposals will go beyond the current rules at the World Trade Organization, known as TRIPS, and could be used to block legitimate trade.
China and India put the ACTA proposals on Thursday's regular meeting of the WTO's TRIPS council to voice their concerns, backed by the bulk of the WTO's 153 members.
"They might be a loophole for competitors to use to disrupt trade," Zhao Hong, a senior Chinese trade diplomat, told Reuters after the meeting.
ACTA would allow customs officers of signatory states to make searches if they believe counterfeit or pirated goods are being brought in, leading to seizures or criminal prosecution.
India, which argued that ACTA would go far beyond the minimum levels of enforcement foreseen in the TRIPS agreement, possibly contravening it, is particularly concerned about the impact on trade in generic drugs.
India has launched a WTO trade dispute against the EU over seizures of generic drugs in transit to countries such as Brazil, and believes some ACTA states are using fears of counterfeit medicine to fight legal generics.
"Nobody supports counterfeits, India doesn't support counterfeits, but what we are against is confusing these things," said one Indian diplomat who asked not to be named.
But European and U.S. officials say counterfeits such as fake drugs and car parts are a growing threat to health and safety, especially in developing countries, exploited by organised crime.
The EU quotes data from the Organisation for Economic Cooperation and Development (OECD) estimating that infringements of intellectual property traded internationally total more than 150 billion euros ($201.3 billion) a year.
"Fifteen years since the introduction of the TRIPS agreement there's an explosion of counterfeiting," said Luc Devigne, the European Commission's top intellectual property official. "Something's wrong," he told reporters.
Devigne insisted that India's fears of disruption to legitimate trade in generics were misplaced, because disputes over generics involve disagreements over patent protection.
But under ACTA customs would be on the look out for trademark infringements, such as deliberate fakes, not patents disputes which are a matter of IP ownership.
The countries negotiating ACTA are Australia, Canada, the European Union, Japan, Mexico, Morocco, New Zealand, Singapore, South Korea, Switzerland and the United States.
The ACTA states, who launched formal discussions in June 2008, will hold interim talks in Geneva on Friday, and a full round at the end of June in the Swiss city of Lucerne.
They may need further talks as many open issues among the parties remain, including differences of the scope and coverage of intellectual property rights, the definition of commercial scale, and whether camcording -- recording films on a video recorder to distribute on the Internet -- should be covered.
ACTA is controversial within negotiating states too, with digital rights advocates arguing that consumers could be penalised.
But Devigne said talk of people having their iPods seized at the airport was nonsense as ACTA would target commercial-scale pirates and have waivers for personal use.
ACTA is backed by U.S. business.
"The ACTA negotiating countries are working to forge an ACTA wholly consistent with TRIPS, because IP theft is killing jobs, stifling innovation, harming consumers and retarding their economic recovery," Mark Esper, a top IP official at the U.S. Chamber of Commerce, blogged on Tuesday. (Editing by Ralph Boulton)