Abstract
In the 1980s, significant differences in the levels of IP protection around the globe triggered unilateral responses of the US as the key demandeur for stronger IP rights. Aspects of this unilateralism in turn served as a trade barrier for the importation of goods from other countries into the US. Some of these US measures were successfully challenged as a breach of international trade rules under GATT. The WTO TRIPS Agreement then created common standards for IP protection and enforcement, including some binding rules on IP as a barrier to trade that were motivated by the pre-TRIPS experiences. Against this background, this contribution questions whether the rules in TRIPS and GATT are still adequate to deal with today’s reality of IP protection and enforcement in and beyond the trade context. This reality is increasingly framed by unilateral, bilateral and regional standards of IP rule-making that go beyond the multilateral norms found in TRIPS and create an increasingly fragmented system of “TRIPS-plus” protection and enforcement of IP rights around the globe.
My core argument is that the uncoordinated expansion of TRIPS-plus rules increasingly serves as a barrier to global trade. This in turn begs the question whether the WTO rules on IP (TRIPS) and those on trade in goods (GATT) are—in the words of the overall conceptual framing of this project—“still fit to operate in such a changed environment” and can provide for adequate safeguards against trade barriers. My proposed answer is that for TRIPS and GATT to fulfil this function, they have to be applied in a way which facilitates harmonized, global maximum standards or ceilings for IP protection and enforcement as a necessary counterpart to the familiar minimum standards. These ceilings do exist in GATT and TRIPS, but have been under-used in the first 20 years of the WTO. I suggest that there are indications and good reasons for relying on them more extensively in an effort to mitigate the trade barriers resulting from uncoordinated expansion of TRIPS-plus rules in the last 15 or so years. In addition, in an ideal world, we would be aiming to introduce multilaterally agreed, more specific ceilings ensuring that reasonable limits to IP rights are available on a global scale.
Dr. Henning Grosse Ruse-Khan is Lecturer at the University of Cambridge, Fellow at King’s College and External Research Fellow at the Max Planck Institute for Innovation and Competition, Munich.
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Notes
- 1.
TRIPS Preamble, para. 1.
- 2.
See Article XX(d) GATT. The chapeau of Article XX GATT further prohibits an application of IP protection and enforcement measures, which constitutes a “disguised restriction on international trade”.
- 3.
Article 8(2) TRIPS – which however is subject to a TRIPS consistency test.
- 4.
Article 41(1) TRIPS.
- 5.
Article XX(d) GATT.
- 6.
See H. Grosse Ruse-Khan et al. (2013), Principles for Intellectual Property Provisions in Bilateral and Regional Agreements, 44 IIC 2013, 878.
- 7.
On the origin of Section 337 see W. Watson (2012), Still a Protectionist Trade Remedy: The Case for Repealing Section 337, CATO Policy Analysis of 19 September 2012. He explains that legislative changes to Section 337, especially in 1974 when the International Trade Commission (ITC) with formal adjudication procedures that highly resemble a court trial was newly created, were intended to make the law more effective as a patent enforcement mechanism. Since 1974, more than 90 % of the cases under Section 337 relate to allegedly patent infringing imports.
- 8.
See B. Sadler (1992), Intellectual Property Protection through International Trade, 14 Hous. J. Int’l L. 1992, 393, 393–395.
- 9.
F. Emmert (1990), Intellectual Property in the Uruguay Round: Negotiation Strategies of Western Industrialised Countries, Mich. J. Int’l L. 1990, 1317, 1344, 1395–1396.
- 10.
GATT Panel Report, United States Section 337 of the Tariff Act of 1930, L/6439, adopted 7 November 1989, BISD 36S/345. For a general discussion of the Section 337 cases in light of national treatment under GATT and TRIPS see G. Evans (1996), The Principle of National Treatment and the International Protection of Intellectual Property, EIPR 1996, 149, 154–156. For a defence of Section 337 as a necessary tool to protect US IP interests see M. Modak-Truran (1988), Section 337 and GATT in the Akzo Controversy: Post-Omnibus Trade and Competitiveness Act Analysis, 9 Nw. J. Int’l L. & Bus. 1988, 382.
- 11.
GATT Panel Report, United States Section 337 of the Tariff Act of 1930, L/6439, adopted 7 November 1989, BISD 36S/345, para. 5.20.
- 12.
GATT Panel Report, United States Section 337 of the Tariff Act of 1930, L/6439, adopted 7 November 1989, BISD 36S/345, para. 5.26–5.27.
- 13.
Ibid.
- 14.
See Sect. 4.2 for a further discussion.
- 15.
See TRIPS Preamble, para. 1 and the last sentence in Article 41:1 TRIPS.
- 16.
C. Primo Braga (1989), The Economics of Intellectual Property Rights and the GATT: A View from the South, 22 Vand. J. Transnat’l L. 1989, 243, 249.
- 17.
See T. Jaeger & H. Grosse Ruse – Khan (2009), Policing Patents Worldwide? EC Border Measures against Transiting Generic Drugs under EC- and WTO Intellectual Property Regimes, 40 IIC 2009, 502–538 and H. Grosse Ruse – Khan (2011), A Trade Agreement Creating Barriers to International Trade? ACTA Border Measures and Goods in Transit, 26 Am. U. Int’l L. Rev. 2011, 645–726. Seizing goods in transit will often amount to a barrier for legitimate trade as soon as there is no evidence that the trade is being diverted onto the domestic market of the transit country – for example based on the operation of a so called “manufacturing fiction” which assumes that goods in transit are domestically produced when assessing whether they violate IP rights.
- 18.
Request for Consultations by India, European Union and a Member State–Seizure of Generic Drugs, WT/DS408/1 of 19 May 2010; and Request for Consultations by Brazil, European Union and a Member State – Seizure of Generic Drugs in Transit, WT/DS409/1 of 19 May 2009.
- 19.
TRIPS-plus standards in almost all instances add another layer of protection on top of existing standards under TRIPS which then – if falling under the ambit of the national treatment or MFN clauses in TRIPS, BC or PC – are made available to all right holders from WTO members.
- 20.
- 21.
United States International Trade Commission, Facts and Trends Regarding USITC Section 337 Investigations, 2013 Update of 15 April 2013. See also C. Chien (2008), Patently Protectionist? An Empirical Analysis of Patent Cases at the International Trade Commission, 50 William & Mary Law Review 2008, 92–93.
- 22.
As discussed by W. Watson (2012), Still a Protectionist Trade Remedy: The Case for Repealing Section 337, CATO Policy Analysis of 19 September 2012, the Omnibus Trade and Competitiveness Act of 1988 (OTCA) included a number of amendments to Section 337 designed to make the law a more effective avenue for pursuing patent disputes. These included a new patent-specific cause of action under which complaints need not allege any injury to domestic industry and clarifications that mere licensing activity in the US, regardless of manufacture, was enough to bring a claim before the ITC.
- 23.
In order to address the Panel Report, Section 337 now allows for filing of counterclaims and for stays of District Court actions while an ITC action pending. The US has also eliminated the statutory 12–18 month timelines for completion of ITC action, but kept the requirement for conclusion at “earliest practicable time” and the requirement of a target date for final determination within 45 days from the start of an action. The other aspects found in breach of GATT however remain intact – for example the greater deference of the Court of Appeals for the Federal Circuit (CAFC) to ITC vis-à-vis District Court decisions; the availability of general in rem exclusion orders only in front of the ITC; and the inapplicability of the “eBay test” for injunctive relief under Section 337(d)(1).
- 24.
Ibid. The ITC exclusion order issued on request of Samsung (an eligible complainant, as it conducts patent licensing in the US) against certain Apple mobile phone products (as goods manufactured abroad) is a case in point which in the end required the veto of the US president to ensure that Apple’s defence based on the need to license the patented technology on FRAND terms is given effect; see J. Contreras (2013), The Topsy-Turvy ITC, InfoJustice of 16 June 2013.
- 25.
For a more detailed discussion on these measures see H. Grosse Ruse – Khan (2013), An International Trade Perspective on Transit Seizures, 3–4 BMM Bulletin 2013, 142–149.
- 26.
For details, see the website of TG Trade on GIs which lists agreements with Korea, Singapore, Colombia, Peru, Central American States, the Ukraine and several ongoing negotiations.
- 27.
See for example the List annexed to the EU–Singapore FTA or the EU–Central America FTA.
- 28.
The full text of the letter is available at http://www.toomey.senate.gov/?p=press_release&id=1297.
- 29.
L. Dennis (2014), Europe tells US to lay off Brie and get its own cheese names, 6 March 2014.
- 30.
See Articles 10–18 to Article 10–26 and Annex-10A&B of the EU–Korea FTA. In a nutshell, the protection expands the higher level of protection for wines and spirits in TRIPS to all GIs and ensures that trademark rights do not interfere with GIs – subject to trademarks registered and/or used prior to the entry into force of the FTA.
- 31.
L. Dennis (2014), Europe tells US to lay off Brie and get its own cheese names, 6 March 2014.
- 32.
See for example Article 10.67 of the EU–Korea FTA, in particular in note 76.
- 33.
See P. Van der Bossche & W. Zdouc (2013), The Law and Policy of the World Trade Organization, p. 321. This follows also from the US–Sec. 337 Panel report where the Panel held both the substantive US patent law as well as its enforcement via Section 337 as falling under Article III:4 GATT; see section 2 above.
- 34.
See Panel Report, European Communities – Regime for the Importation, Sale and Distribution of Bananas, Complaint by Guatemala and Honduras, WT/DS27/R/GTM, WT/DS27/R/HND, adopted 25 September 1997, as modified by Appellate Body Report WT/DS27/AB/R, DSR 1997:II, p. 695, para. 7.239 and Panel Report, United States – Certain Measures Affecting Imports of Poultry from China, WT/DS392/R, adopted 25 October 2010, DSR 2010:V, p. 1909, para. 7.415–417. This is clearly the case when this exclusivity is invoked against the competing product from the US, but could be argued to exist in general based on the exclusive rights a GI holder enjoys and which facilitate various commercialisation opportunities.
- 35.
See P. Van der Bossche & W. Zdouc (2013), The Law and Policy of the World Trade Organization, p. 325–328.
- 36.
Ibid., p. 328.
- 37.
Panel Report, European Communities – Geographical Indications, WT/DS/174R of 15 March 2005, para. 7.265. The Panel explained that “[i]t is axiomatic that one must compare apples with apples and oranges with oranges. In this dispute, it is not contested that Tasmanian apples may be like pommes de Savoie and Florida citrus may be like cítricos valencianos for the purposes of Article III:4 of GATT 1994.”
- 38.
See Article IX:6 GATT and Article 24:6 TRIPS respectively.
- 39.
Other than the interests of IP right holders, Article XX GATT inter alia concerns measures “necessary to protect human, animal or plant life or health”, “public morals” or relating to environmental protection. With regard to trade in services, Article XIV GATS contains a similar exception.
- 40.
R. Wolfrum, P. Stoll & H. Hestermeyer (2011), WTO – Trade in Goods, p. 454; P. Van der Bossche & W. Zdouc (2013), The Law and Policy of the World Trade Organization, p. 545.
- 41.
Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen Beef, WT/DS161/AB/R, adopted 10 January 2001, DSR 2001:I, p. 5, para. 157; Panel Report, Canada – Measures Relating to Exports of Wheat and Treatment of Imported Grain, WT/DS276/R, adopted 27 September 2004, upheld by Appellate Body Report WT/DS276/AB/R, DSR 2004:VI, p. 2817, para. 6.218 (essentially applying these requirements in a three-step test); GATT Panel Report, United States Section 337 of the Tariff Act of 1930, L/6439, adopted 7 November 1989, BISD 36S/345, para. 5.22.
- 42.
This follows not only from the term “including” in Article XX(d), used when listing laws protecting copyrights, patents and trademarks, but has been applied to this effect without further discussion in the EC–GIs Panel Report, Panel Report, European Communities – Geographical Indications, WT/DS/174R, 15 March 2005, para. 7.331.
- 43.
Ibid., para. 7.331–332.
- 44.
See the discussion in relation to transit seizures above, Sect. 3.
- 45.
Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R, adopted 6 November 1998, DSR 1998:VII, p. 2755, para. 158.
- 46.
See P. Van der Bossche & W. Zdouc (2013), The Law and Policy of the World Trade Organization, pp. 572–581.
- 47.
Ibid. and C.F. Lo (2013), The Proper Interpretation of ‘Disguised Restriction on International Trade’ under the WTO: The Need to Look at the Protective Effect, 4 J. Int’l. Dispute Settlement 2013, 111–137.
- 48.
Panel Report, European Communities – Geographical Indications, WT/DS/174R, 15 March 2005, para. 7.244.
- 49.
Ibid., para. 7.244 – referring further to the Panel report in Canada–Periodicals, at para. 5.17 and Appellate Body Report, Canada – Certain Measures Concerning Periodicals, WT/DS31/AB/R, adopted 30 July 1997, DSR 1997:I, pp. 449, 465. See generally on the relation between the WTO covered agreements Appellate Body Report, Argentina – Safeguard Measures on Imports of Footwear, WT/DS121/AB/R, adopted 12 January 2000, DSR 2000:I, p. 515, para. 81; Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of Certain Dairy Products, WT/DS98/AB/R, adopted 12 January 2000, DSR 2000:I, p. 3, para. 74; and Appellate Body Report, European Communities – Regime for the Importation, Sale and Distribution of Bananas, WT/DS27/AB/R, adopted 25 September 1997, DSR 1997:II, p. 591, para. 7.160.
- 50.
See Sect. 2 above.
- 51.
See Article 41:1 and the Preamble to TRIPS.
- 52.
As Panel Report, European Communities – Geographical Indications, WT/DS/174R, 15 March 2005, para. 7.244 stated: a “harmonious interpretation” of TRIPS and GATT “does not require an interpretation of one that shadows the contours of the other.”
- 53.
F. Abbott (2009), Worst Fears Realised: The Dutch Confiscation of Medicines Bound from India to Brazil, Bridges Monthly of February–March 2009.
- 54.
Article 6 of the EC Directive 91/250/EEC on the legal protection of computer programs (Software Directive).
- 55.
C. Geiger (2007), Copyright and the Freedom to Create, A Fragile Balance, 38 IIC 2007, 707.
- 56.
In Europe, the EU Commission had set out the notion of the “fifth freedom” (beyond the free movement of goods, services, capital and labour): In its review of the Single Market (see COM 2007 724 final of 20 November 2007 – A single market for 21st century Europe) the Commission highlighted the need to promote free movement of knowledge and innovation as the “Fifth Freedom” in the single market. In relation to IP protection and copyright in particular, a Commission Green Paper (Copyright in the Knowledge Economy, COM(2008) 466/3) focuses on how research, science and educational materials are disseminated to the public and whether knowledge is freely circulating in the internal market. The Green Paper interestingly raises the issue of making certain copyright exceptions mandatory throughout Europe to achieve this goal (ibid., 6–20).
- 57.
Knowledge goods such as access to information only become global public goods whenever the welfare benefits from accessing and using them are available to users around the world; not only to those in the jurisdiction which allows access by drawing appropriate boundaries to IP protection; see B. Hugenholtz & R. Okediji (2008), Conceiving an International Instrument on Limitations and Exceptions to Copyright, Final Report of 6 March 2008, p. 38.
- 58.
Compare R. Okediji (2006), The International Copyright System, ICTSD Issue Paper No. 15, p. 23.
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Ruse-Khan, H.G. (2016). IP and Trade in a Post-TRIPS Environment. 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_5
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