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INTELLECTUAL PROPERTY RIGHTS IN BILATERAL AND
REGIONAL TRADE AGREEMENTS
TRADE, INVESTMENT AND INNOVATION DIVISION
Teemu Alexander PuutioLuca Parisotto
11 March 2016
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Observations: the Role of the Multilateral
FrameworkPart 1Part 2Part 3Part 4
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TRIPS contains not only minimum standards, but also flexibilities and limits to IP protection (ceilings). Art.7 & 8 TRIPS express this balance and guide TRIPS interpretation
Bilateral and regional treaties amongst WTO Members addressing IP are inter-se modifications of the WTO/TRIPS framework
As such, they may not derogate from TRIPS rules which are crucial for giving effect to the object & purpose of TRIPS. Thus, flexibilities crucial for the balance which Article 7 establishes should not be restricted.
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Observations: the Role of the Multilateral Framework
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TRIPS Article 7 & 8
Article 7Objectives
The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare , and to a balance of rights and obligations.
Article 8Principles
1. Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of this Agreement
2. Appropriate measures, provided that they are consistent with the provisions of this Agreement, may be needed to prevent the abuse of intellectual property rights by right holders or the resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology
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IPRs in FTAs Index 2016
OverviewPart 1Part 2Part 3Part 4
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The IPRs in FTAs Index• Caveat! This is not a review of the country’s IPR
laws– We therefore cannot say the extent an agreement may
surpass TRIPS or any existing domestic laws• Calculated for the 80 agreements that include IPR
provisions– Scaled to range from 0 to 100
• Based on tallying points for the presence of provisions concerning:– Cooperation– Reaffirming international obligations– WTO coverage– Commitments to technology transfer and access to technology– Competition and consumer protection– Coverage of the different types of IPR (1-3 scale)– Enforcement
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Proliferation of IPR Inclusive Agreements
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Introduced by advanced economies
Top Asia-Pacific Countries Number of IPR inclusive Agreements
Turkey 21Singapore 15Japan 12Korea, Rep.of 9Malaysia 8New Zealand 7Australia 6China 6Thailand 6Brunei Darussalam 5Taiwan, POC 5India 4Indonesia 4Lao PDR 4Philippines 4Viet Nam 4Cambodia 3Hong Kong, China 3Kazakhstan 3Myanmar 3
Top Partners Number of IPR inclusive Agreements
Chile 7EFTA 4Peru 4United States 4EU 2Total 78
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Highest and Lowest rated agreements
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Distribution of Index scores
ASEAN-CHIN
A
INDIA-SI
NGAPORE
PANAMA-SINGAPORE
TURKEY
-CROATIA
TURKEY
-ISRAEL
CHINA-PAKIST
AN
UKRAINE-R
USSIAN FE
DERATIO
N
UKRAINE-T
URKMENIST
ANEA
EC
TAIW
AN-EL SA
LVADOR-H
ONDURAS
PERU-SI
NGAPORE
SINGAPORE-J
ORDAN
TURKEY
-MAURITI
US
CHILE - H
ONG KONG, CHIN
AEC
OTA
KOREA-INDIA
TURKEY
-PALEST
INE
TURKEY
-SYRIA
SINGAPORE-TAIW
AN
TURKEY
-EGYP
T
RUSSIAN FE
DERATIO
N-KAZAKHST
AN-BELARUS
GEORGIA-TU
RKEY
MALAYS
IA-PAKISTAN
NEW ZE
ALAND-M
ALAYS
IA
NEW ZE
ALAND-TH
AILAND
JAPAN-SI
NGAPORE
CHINA-PER
U
TRANS-P
ACIFIC SEPA
KOREA-CHILE
NEW ZE
ALAND-H
ONG KONG,China
KOREA-SI
NGAPORE
JAPAN-CHILE
TURKEY
-EFTA
JAPAN-PHILI
PPINES
COSTA RICA-CHIN
A
ASEAN-AUST
RALIA-NEW
ZEALA
ND
JAPAN-PER
U
US-LAO
JAPAN-IN
DONESIA
JAPAN-TH
AILAND
EU-KOREA
KOREA-U
S
AUSTRALIA-CHILE TP
P0
10
20
30
40
50
60
70
Agreement reaffirms TRIPS Agreement does not reaffirm TRIPS
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More innovative countries sign more comprehensive agreements
0 10 20 30 40 5017
22
27
32
37
42
47
52
57
62
67Switzerland
United States of America
Australia
Nicaragua
EU
Costa Rica
Japan
EFTA
Korea, Rep.
Chile
China
Hong Kong (China)New Zealand
Malaysia
PanamaThailand
IndonesiaPeru
MontenegroViet Nam
GuatemalaPhilippines
Singapore
Brunei DarussalamGeorgia
Myanmar
Cambodia
Turkey
IndiaMexico
Albania
Pakistan
Morocco
Moldova, Rep.
Azerbaijan
SerbiaBelarus
Iran, Islamic Rep.
Kazakhstan
Russian Federation
Tunisia
Jordan
Romania
Mauritius
Uzbekistan
Kyrgyzstan
Tajikistan
Ukraine
Croatia
Israel
f(x) = 0.604368014073393 x + 31.5388876056026R² = 0.350022550855372
Correlation between mean IPR index and Global Innovation Index by country
Mean IPR Index
Glob
al In
nova
tion
Inde
x (2
014)
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A reflection of domestic policy?
0 5 10 15 20 25 30 35 40 45 502
2.5
3
3.5
4
4.5
5
Switzerland
United States of America
Australia
Nicaragua
EU
Costa Rica
Japan
EFTA
Korea, Rep.
Taiwan, POC
Chile
China
Hong Kong (China)
New ZealandMalaysia
PanamaThailand
Indonesia
PeruViet Nam
Guatemala
Philippines
Singapore
TurkeyIndiaMexico
Egypt
Pakistan
Morocco
Syria
Iran, Islamic Rep.
Russian Federation
Jordan
Mauritius
Romania
Tunisia
UkraineIsrael
f(x) = 0.0289868524167269 x + 3.20703905243445R² = 0.239660049083915
Correlation between mean IPR index and Ginarte-Park IPR pro-tection index
Mean IPR Index
Gina
rte
Park
IPR
Inde
x (2
010)
12
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Medicines and Medical Devices Committee.
Top participants and partners
Top Asia-Pacific Countries Number of IPR inclusive Agreements
Mean Overall Index
Minimum Overall Index
Maximum Overall Index
Standard deviation Overall Index
Turkey 21 7.79 1.85 24.24 6.82Singapore 15 10.72 1.85 35.45 10.66Japan 12 23.09 1.85 53.97 13.84Korea, Rep.of 9 19.47 1.86 44.79 14.53Malaysia 8 14.47 1.85 37.36 13.40New Zealand 7 14.68 1.85 26.18 7.43Australia 6 33.58 14.85 61.48 18.53China 6 17.58 1.85 43.03 14.27Thailand 6 13.88 1.85 37.34 13.77Brunei Darussalam 5 9.64 1.85 26.18 9.86Taiwan, POC 5 19.16 7.41 31.85 11.71India 4 7.45 1.85 14.94 6.75Indonesia 4 13.07 1.85 33.62 15.58Lao PDR 4 11.96 1.85 28.07 13.86
Top Partners Number of IPR inclusive Agreements
Mean Overall Index
Minimum Overall Index
Maximum Overall Index
Standard deviation Overall Index
Chile 7 18.64 3.73 46.66 13.63EFTA 4 22.00 18.70 26.22 3.21Peru 4 13.05 1.89 27.98 11.30United States 4 42.45 28.07 61.48 14.42EU 2 31.73 24.24 39.22 10.59Switzerland 2 48.50071 43.02849 53.97293 7.738893Total 78 12.97 1.85 61.48 13.18
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Agreements involving developed countries are more comprehensive
Developing countries Developed countries Developing and developed countries0
5
10
15
20
25
30
35
40
45
50
Distribution of IPR Index by agreement member’s status
Inde
x va
lue
Min
Mean
Mean + Std. Dev.
Mean – Std. Dev.
Australia - U.S. TPP
China - Chile
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Ratcheting up?
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
No. Agr. 0 0 1 0 1 0 1 2 1 0 1 1 1 4 4 10 10 5 9 4 8 8 3 3 3 1
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 20150
10
20
30
40
50
60
70
Mean, Minimum, and Maximum IPR Index per year
IPR
Inde
x va
lue
Max
Min
Mean
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Or business as usual?
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015No. Developing
Agr. 0 0 0 0 0 0 0 1 1 0 1 0 0 2 1 2 4 2 4 0 4 3 0 0 0 0No. Developed
Agr. 0 0 0 0 0 0 0 0 0 0 0 1 1 2 0 3 2 0 0 1 0 2 2 0 0 0No. Developed and Developing
Agr. 0 0 1 0 1 0 1 1 0 0 0 0 0 0 3 5 4 3 5 3 4 3 1 3 3 1
1 9 9 0 1 9 9 1 1 9 9 2 1 9 9 3 1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5
0
10
20
30
40
50
60
70
Mean IPR index per year and member statusYearly Mean Index (Developing countries) Yearly Mean Index (Developed countries)Yearly Mean Index (Developed and Developing countries)
IPR
Inde
x va
lue
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A means to complement multilateral agreements
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IPRs in FTAs Index 2016
Focusing on patentsPart 1Part 2Part 3Part 4
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Patent Index• Constructed in a similar manner as
the IPR index• Covers:
• Specific pharmaceutical provisions
• Compulsory licensing• Exceptions to patent rights• Patentability criteria• Test data exemption• Patent linkage
• Term extensions• Patenting period• Security exemptions• Parallel importing• Border measures• Novelty grace period
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Example of provisions related to patents
• Score of 1: New Zealand – China
• Score of 2: Japan – Philippines
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Examples of provisions related to patents
• Score of 3: EU – Korea, Rep.
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Patent index also rising
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 20150
10
20
30
40
50
60
Mean Patent index per year
Mea
n Pa
tent
Inde
x
22
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More comprehensive agreements cover patents more comprehensively
0 10 20 30 40 50 60 700
20
40
60
80
100
120
AUSTRALIA-US
TPP
JAPAN-SWITZERLAND
AUSTRALIA-CHILE
TRIPS
KOREA-US
CHINA-SWITZERLAND
EU-KOREA
MALAYSIA-AUSTRALIA
JAPAN-THAILAND
US-SINGAPORE
JAPAN-INDONESIA
NICARAGUA-TAIWAN,POC
US-LAO
JAPAN-VIET NAM
JAPAN-PERU
EFTA-HONG KONG, China
ASEAN-AUSTRALIA-NEW ZEALANDCOSTA RICA-CHINA
JAPAN-MALAYSIA
TURKEY-EUTURKEY-EFTA
EFTA-SINGAPORE
JAPAN-CHILE
KOREA-SINGAPORE
EFTA-KOREA
KOREA-CHILE
NEW ZEALAND-CHINA
TRANS-PACIFIC SEPA
JAPAN-INDIA
JAPAN-SINGAPORE
NEW ZEALAND-MALAYSIA
CHILE - HONG KONG, CHINAASEAN-KOREA
Correlation between IPR index and Patent index
IPR Index
Pate
nt In
dex
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Patent specific clauses
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Medicines and Medical Devices Committee.
Health-Relevant Provisions?
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Example of compulsory licensing
• In the Investment Chapter of Australia – US Agreement
• Most agreements follow exactly this structure
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Example of Test data exemption• From Japan –
Switzerland agreement
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Example of novelty grace period• Australia –
Malaysia
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Example of term extension• US – Lao PDR
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Example of Pharma.-specific provisions
• Korea – US• These provisions are only
present in developed – developed agreements
• Reimbursement by market means (FRAND), transparency of government regulation, marketing, ethical business practices, Medicines and Medical Devices Committee.
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Setting the stage for discussions
Part 1Part 2Part 3Part 4
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Observations and Problems associated with FTA IP Provisions
IP as a Trade-off: 1. concessions driven by export interest do not always
lead to a mutually beneficial regulation of IP2. Trade preferences obtained may be eroded as soon as
similar or better preferences are granted to other countries
Increasing Comprehensiveness erodes Policy Space:3. IP rules become increasingly comprehensive and
prescriptive, transplanting detailed rules from the IP-demanding country
4. As treaty obligations, these rules are almost cast in stone – with little options to adapt to changing domestic needs
Lack of Transparency, Inclusiveness & Equal Participation:
These deficits cannot be corrected in implementation processes if detailed rules leave no flexibility for a tailored implementation
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RecommendationsNegotiation Mandate & Process:
1. Countries facing IP demands should adopt a proactive agenda on IP, based on input from all stakeholders.
2. No country should demand or agree to IP provisions which have not been subject to a public negotiation process where all stakeholders have an opportunity for review and comment.
The negotiated Outcome:3. TRIPS-plus rules should still allow for policy space,
respect core TRIPS flexibilities and all other int. rules applicable between the parties.
4. Agreements should contain review clauses to asses the impact of IP rules and an option for renegotiating IP provisions in light of an impact assessment.
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Interpretation and Implementation:1. All other applicable int. law forms the interpretative context.
2. Interpretation should be in light of TRIPS balancing objectives. TRIPS-plus rules should be constructed to allow for sufficient policy space to implement this balance. When implementing them, states have the right to draft appropriate exceptions and limitations (E&Ls)
3. The notion of IP protection and enforcement encompasses also E&Ls and other balancing rules. This allows for a wider understanding of MFN: Countries facing IP demands should claim concessions regarding E&Ls secured by other (similar) countries.
4. IP-demanding countries should not use unilateral assessments of compliance; nor should they unilaterally withdraw benefits.
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