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The WTO/TRIPS Dispute Settlement Mechanism: Experiences and Perspectives

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TRIPS plus 20

Part of the book series: MPI Studies on Intellectual Property and Competition Law ((MSIP,volume 25))

Abstract

In 1994, the WTO dispute settlement mechanism was amended so as to become more efficient and law-based. This was widely considered as a clear improvement on the earlier system. For the first time, this mechanism was also extended to intellectual property rights; this fact was also considered as an important point of progress when compared to the previous system in international intellectual property law. This contribution examines different aspects of the use of the dispute settlement mechanism in intellectual property fields and tries to make an assessment of the expectations held at the time. It then shows the systemic limits and weaknesses of this system, in particular regarding the example of the WTO panel procedure DS160 (on Section 110(5) of the US Copyright Act). Moreover, it analyses a particular problem, namely retaliation by suspension of intellectual property protection, before drawing conclusions on this topic.

Prof. Dr. Silke von Lewinski is Tenure at the Max Planck Institute for Innovation and Competition.

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Notes

  1. 1.

    See Article 33 Berne Convention, Article 28 Paris Convention, Article 15 Universal Copyright Convention, and Article 30 Rome Convention.

  2. 2.

    See also below (next paragraph).

  3. 3.

    See in particular H.J. Schlochauer (1987), International Court of Justice, in R. Bernhardt (Ed.), Encyclopedia of Public International Law, Vol. 1, pp. 72 et seq., 77, 79 et seq., on the compulsory jurisdiction of the ICJ and on the declaration of acceptance of the ICJ’s jurisdiction.

  4. 4.

    See Industrial Property and Copyright 1995, 168 et seq. and 205 et seq., and S. von Lewinski (2008), International Copyright Law and Policy, Ch. 16.

  5. 5.

    See WIPO, Commitee on Experts on the Settlement of Intellectual Property Disputes between States, Seventh Session, SD/ECVII/8, para. 25. The WTO Agreement including its Dispute Settlement Understanding, which would also apply to the TRIPS Agreement, then was about to be adopted at that time.

  6. 6.

    Ibid., paras. 1–24 and 26–42.

  7. 7.

    See also S. von Lewinski (2008), International Copyright Law and Policy, paras. 10.114 et seq.

  8. 8.

    The discussion of this issue goes beyond the scope of this article; on non-violation complaints in the field of TRIPS, see, e.g., http://www.wto.org/english/tratop_e/trips_e/nonviolation_e.htm; S. Frankel (2009), Challenging TRIPS-Plus Agreements: The Potential Utility of Non-Violation Disputes, 12 J. Int’l Econ. L. 2009, 1023; G.E. Evans (2000), A Preliminary Excursion into TRIPS and Non-Violation Complaints, 3 J. W. Intell. Prop. 2000, 867.

  9. 9.

    For an overview of the procedure and the sanctions, see S. von Lewinski (2008), International Copyright Law and Policy, paras. 10.120 et seq., 10.124 et seq.; see also A. Taubman, H. Wager & J. Watal (2014), A Handbook on the WTO TRIPS Agreement, pp. 161 – 165.

  10. 10.

    For more detail, see S. von Lewinski (2008), International Copyright Law and Policy, paras. 10.52 – 10.54.

  11. 11.

    See http://www.wto.org/english/tratop_e/dispu_e/dispu_agreements_index_e.htm?id=A26.

  12. 12.

    For an exploration of explanations for the limited use of the WTO proceedings overall by Asian countries, see M. Ewing-Chow, A.W.S. Goh & A.K. Patil (2013), Are Asian WTO Members Using the WTO ‘Effectively’?, 16 J. Int’l Econ. L. 2013, 669. See also K.M.W. Mitchell (2013), Developing Country Success in WTO Disputes, 47 J.W.T. 2013, 77. For references to several explanations by scholars, see also A. Bakardjieva Engelbrekt (2011), The WTO Dispute Settlement System and the Evolution of International IP Law: An Institutional Perspective, in A. Kur & M. Levin (Eds.), Intellectual Property Rights in a Fair World Trade System, pp. 139 – 141.

  13. 13.

    J. Pauwelyn (2010), The Dog that Barked but Didn’t Bite: 15 Years of Intellectual Property Disputes at the WTO, pp. 4 – 5 = 1 J. Int’l Dispute Settlement 2010, 389; A. Bakardjieva Engelbrekt (2011), The WTO Dispute Settlement System and the Evolution of International IP Law: an Institutional Perspective, in A. Kur & M. Levin (Eds.), Intellectual Property Rights in a Fair World Trade System, p. 139, referring to R.C. Dreyfuss & A. Lowenfeld (1997), Two Achievements of the Uruguay Round: Putting TRIPS and Dispute Settlement together, 37 Va. J. Int’l L. 1997, 275.

  14. 14.

    A. Bakardjieva Engelbrekt (2011), The WTO Dispute Settlement System and the Evolution of International IP Law: an Institutional Perspective, in A. Kur & M. Levin (Eds.), Intellectual Property Rights in a Fair World Trade System, pp. 139 – 140.

  15. 15.

    See J. Pauwelyn (2010), The Dog that Barked but Didn’t Bite: 15 Years of Intellectual Property Disputes at the WTO, pp. 5 – 9, with further details.

  16. 16.

    Ibid., pp. 10–13.

  17. 17.

    Ibid., pp. 13–15.

  18. 18.

    Ibid., pp. 15 et seq. with further references. For example, in the ‘US — Section 110(5) Copyright Act’-case analyzed below, the ‘homestyle’ exception was held to be in compliance with TRIPs, although even some US commentators had previously considered that exception as violating TRIPS, e.g., L. McCluggage (2000), Section 110(5) and The Fairness in Music Licensing Act: Will the WTO Decide the United States Must Pay to Play?, 40 IDEA 2000, 20.

  19. 19.

    European Communities v. United States, ‘US — Section 110(5) Copyright Act’, WT/DS160.

  20. 20.

    Panel Report, United States – Section 110(5) of the US Copyright Act, WT/DS160/R, adopted 27 July 2000, DSR 2000:VIII, p. 3769.

  21. 21.

    The EC (now EU) calculated on the basis of the potential licensing income (US $ 25,486,974), while the US chose the factual outcome of the preceding three years as a basis (between US $ 446,000 and US $ 733,000), see also S. von Lewinski (2008), International Copyright Law and Policy, para. 10.130.

  22. 22.

    Award of the Arbitrators, United States – Section 110(5) of the US Copyright Act – Recourse to Arbitration under Article 25 of the DSU, WT/DS160/ARB25/1, 9 November 2001, DSR 2001:II, p. 667.

  23. 23.

    WT/DS160/19.

  24. 24.

    WT/DS160/22.

  25. 25.

    See also J. Pauwelyn (2010), The Dog that Barked but Didn’t Bite: 15 Years of Intellectual Property Disputes at the WTO, pp. 38–39.

  26. 26.

    This situation was also explained at the time by the influence of a particular Senator in the US Senate, see S. von Lewinski (2008), International Copyright Law and Policy, para. 10.131/fn 298.

  27. 27.

    See Article 22.1 Dispute Settlement Understanding (DSU); if they do not agree, they may also have recourse to binding arbitration on the amount to be paid, see Article 25.2 DSU.

  28. 28.

    See R. Owens (2003), TRIPS and the Fairness in Music Arbitration: The Repercussions, 52 E.I.P.R 2003, 49, 52 et seq.

  29. 29.

    On this function and working of the TRIPS Council, see, e.g. K. Kaiser (2009), in P.-T. Stoll, J. Busche & K. Arend (Eds.), WTO – Trade-Related Aspects of Intellectual Property Rights, Article 68 nos. 5–7; see also D. Gervais (2012), The TRIPS Agreement – Drafting History and Analysis, Article 68 No. 2.751, with further references; see also A. Taubman, H. Wager & J. Watal (2014), A Handbook on the WTO TRIPS Agreement, pp. 156–157.

  30. 30.

    On this procedure, and on the list of developing countries for which the reviews began in 2000, see http://www.wto.org/english/tratop_e/TRIPS_e/intel8_e.htm; at this site, one may also find the links to individual reviews in the TRIPS Council of individual Members and TRIPS areas.

  31. 31.

    See A. Taubman, H. Wager & J. Watal (2014), A Handbook on the WTO TRIPS Agreement, p. 30.

  32. 32.

    Ibid., pp. 32, 33.

  33. 33.

    J. Pauwelyn (2010), The Dog that Barked but Didn’t Bite: 15 Years of Intellectual Property Disputes at the WTO, p. 45, also points at the frequent effect of requests for formal consultations, namely, pressure to come to an agreement before a panel needs to be established; he also mentions technical and financial support or “diplomatic push” as alternative, effective ways of avoiding disputes.

  34. 34.

    See, e.g. A. Taubman, H. Wager & J. Watal (2014), A Handbook on the WTO TRIPS Agreement, p. 166.

  35. 35.

    J. Pauwelyn (2010), The Dog that Barked but Didn’t Bite: 15 Years of Intellectual Property Disputes at the WTO, p. 41.

  36. 36.

    As a rule, retaliation by suspension of concessions must take place in the same sector as that of the complaint, or, if not practicable or effective, in other sectors under the same Agreement, or, if not practicable or effective, under another covered Agreement, see Article 22.3 DSU, and a short presentation in S. von Lewinski (2008), International Copyright Law and Policy, para. 10.126. On cross-retaliation in the field of intellectual property rights; see also F. Abbott (2009), Cross-Retaliation in TRIPS: Options for Developing Countries, ICTSD Issue Paper No. 8 of April 2009.

  37. 37.

    Panel Report, European Communities – Regime for the Importation, Sale and Distribution of Bananas, Complaint by Ecuador, WT/DS27/R/ECU, adopted 25 September 1997, as modified by Appellate Body Report WT/DS27/AB/R, DSR 1997:III, p. 1085.

  38. 38.

    Appellate Body Report, United States –Measures Affecting the Cross-Border Supply of Gambling and Betting Services, WT/DS285/AB/R, adopted 20 April 2005, DSR 2005:XII, p. 5663 (Corr.1, DSR 2006:XII, p. 5475). On this case, with further considerations, see, e.g. H. Große Ruse-Khan (2008), A Pirate of the Caribbean? The Attractions of Suspending TRIPs Obligations, 11 J. Int’l Econ. L. 2008, 313.

  39. 39.

    Decision by the Arbitrator, United States – Subsidies on Upland Cotton – Recourse to Arbitration by the United States under Article 22.6 of the DSU and Article 4.11 of the SCM Agreement, WT/DS267/ARB/1, 31 August 2009, DSR 2009:IX, p. 3871.

  40. 40.

    Medida provisoria No. 482, de 10 de fevereiro de 2010, published in the Federal Official Gazette of 11 February 2010.

  41. 41.

    For a detailed presentation of this case up to the mutual agreement in form of a Memorandum of Understanding, see J. Straus (2013), Global Intellectual Property and Innovation Landscape in 1990 and Today, in A. Matlak & S. Stanislawska-Kloc (Eds.), Spory o Własność Intelektualną (Ksiega jubileuszowa dedykowana Profesorom Januszowi Barcie i Ryszardowi Markiewiczowi), p. 1135, 1151–1159.

  42. 42.

    Decision by the Arbitrators, European Communities – Regime for the Importation, Sale and Distribution of Bananas – Recourse to Arbitration by the European Communities under Article 22.6 of the DSU, WT/DS27/ARB/ECU, 24 March 2000, DSR 2000:V, p. 2237.

  43. 43.

    Ibid., paras. 139–165.

  44. 44.

    Ibid., paras. 140–147.

  45. 45.

    Ibid., para. 144.

  46. 46.

    Ibid., para. 150; see ibid., para. 151.

  47. 47.

    Ibid., para. 152.

  48. 48.

    Ibid., para. 149.

  49. 49.

    Such analysis goes beyond the scope of this article; see, for example, P.-T. Stoll, J. Busche & K. Arend (2009), WTO – Trade-Related Aspects of Intellectual Property Rights, Article 64 no. 43 with further references.

  50. 50.

    Decision by the Arbitrators, European Communities – Regime for the Importation, Sale and Distribution of Bananas – Recourse to Arbitration by the European Communities under Article 22.6 of the DSU, WT/DS27/ARB/ECU, 24 March 2000, DSR 2000:V, p. 2237, paras. 153–156.

  51. 51.

    Ibid., para. 157.

  52. 52.

    P.-T. Stoll, J. Busche & K. Arend (2009), WTO – Trade-Related Aspects of Intellectual Property Rights, Article 64 no. 42.

  53. 53.

    Decision by the Arbitrators, European Communities – Regime for the Importation, Sale and Distribution of Bananas – Recourse to Arbitration by the European Communities under Article 22.6 of the DSU, WT/DS27/ARB/ECU, 24 March 2000, DSR 2000:V, p. 2237, para. 158.

  54. 54.

    Similarly, J. Pauwelyn (2010), The Dog that Barked but Didn’t Bite: 15 Years of Intellectual Property Disputes at the WTO, p. 40.

  55. 55.

    See J. Straus (2013), Global Intellectual Property and Innovation Landscape in 1990 and Today, in A. Matlak & S. Stanislawska-Kloc (Eds.), Spory o Własność Intelektualną (Ksiega jubileuszowa dedykowana Profesorom Januszowi Barcie i Ryszardowi Markiewiczowi), p. 1160.

  56. 56.

    Ibid., p. 1161.

  57. 57.

    On this practice of “constructive ambiguity”, see, in the context with the rental right under Article 14(4) TRIPS Agreement, von S. von Lewinski (2008), International Copyright Law and Policy, para. 10.73–10.77.

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Authors and Affiliations

  1. Max Planck Institute for Innovation and Competition, Munich, Germany

    Silke von Lewinski

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  1. Max Planck Institute for Innovation and Competition, Munich, Germany

    Hanns Ullrich

  2. Max Planck Institute for Innovation and Competition, Munich, Germany

    Reto M. Hilty

  3. Max Planck Institute for Innovation and Competition, Munich, Germany

    Matthias Lamping

  4. Max Planck Institute for Innovation and Competition, Munich, Germany

    Josef Drexl

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von Lewinski, S. (2016). The WTO/TRIPS Dispute Settlement Mechanism: Experiences and Perspectives. In: Ullrich, H., Hilty, R., Lamping, M., Drexl, J. (eds) TRIPS plus 20. MPI Studies on Intellectual Property and Competition Law, vol 25. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-48107-3_19

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