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LAWS90094 International IP Dispute Settlement

TAKE-HOME EXAMINATION

March 2020

QUESTION 1 (compulsory)

The preamble of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights ('TRIPS Agreement') emphasizes "the importance of reducing tensions by reaching strengthened commitments   to   resolve   disputes   on   trade-related   intellectual   property   issues   through multilateral procedures."

Article 23.1 of the WTO Dispute Settlement Understanding, under the heading 'Strengthening of the Multilateral System', provides:

When Members seek the redress of a violation of obligations or other nullification or impairment  of  benefits  under  the  covered  agreements  or  an  impediment  to  the attainment of any objective of the covered agreements, they shall have recourse to, and abide by, the rules and procedures of this Understanding.

1. What is the nature of the ensuing commitment by WTO Members to resolve such disputes through multilateral procedures? Why was such a commitment considered necessary?

2. Critically review the experience of WTO members in settling such disputes in the 25 years since the TRIPS Agreement came into force, with reference to at least one decided case. Has the system been effective in settling disputes and reducing tensions?

3. Many bilateral trade agreements provide for their own dispute settlement mechanisms which cover intellectual property standards in those agreements which overlap considerably with the provisions of the TRIPS Agreement. What legal and policy issues does this practice raise?

QUESTION 2

(answer either this question or question 3)

Article  64  of  the  WTO  Agreement  on  Trade-Related  Aspects  of  Intellectual  Property  Rights (TRIPS), concerning Dispute Settlement, provides that:

1. The provisions of Articles XXII and XXIII of GATT 1994 as elaborated and applied by  the  Dispute  Settlement  Understanding  shall  apply  to  consultations  and  the settlement  of  disputes  under  this  Agreement  except  as  otherwise  specifically provided herein.

2. Subparagraphs 1(b) and 1(c) of Article XXIII of GATT 1994 shall not apply to the settlement of disputes under this Agreement for a period of five years from the date of entry into force of the WTO Agreement.

The period referred to in Article 64.2 has since been extended to cover the present time.

The bilateral Japan-Australia Economic Partnership Agreement (JAEPA), which entered into force in January 2015, includes provisions on investment (Chapter  14) and on intellectual  property (Chapter  16).    Chapter  14  defines the term “investment”  as  "every  kind  of  asset  owned  or controlled, directly or indirectly, by an investor, that has the characteristics of an investment, including such characteristics as the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk."  It specifies that the forms that an investment may take include "intellectual property as defined in Article 16.2 (Intellectual Property - Definitions)." Chapter   14   establishes   standards,   among   other  things,  for   "Prohibition   of   Performance Requirements"  (Article  14.9)  and  for  "Expropriation  and  Compensation"  (Article  14.11),  in relation to investments covered by the JAEPA.

Both the  investment  and  intellectual  property  chapters  of JAEPA  are  subject to the  dispute settlement provisions set out in Chapter 19 of the Agreement.  Article 19.4, setting out the basis for consultations that commence dispute settlement procedures under JAEPA, provides:

1. Either Party may request consultations with the other Party if it considers:

(a) any  benefit accruing to  it directly or  indirectly  under this Agreement  is  being nullified or impaired as a result of:

(i) the application by the other Party of a measure which is inconsistent with this Agreement; or

(ii)  the  failure  of  the  other  Party  to  carry  out  its  obligations  under  this Agreement; or

(b) any benefit accruing to it directly or indirectly under Chapter 2 (Trade in Goods), 3 (Rules of Origin), 4 (Customs Procedures), 9 (Trade in Services) or 16 (Intellectual Property) is being nullified or impaired as a result of the application by the other Party of a measure that is not inconsistent with the provisions of those Chapters, provided that the complaining Party presents a detailed justification in support of any complaint relating to that measure.

1. Describe the scope and legal foundation of disputes concerning intellectual property that can be brought

(i) under the WTO TRIPS Agreement and (ii) under the JAEPA

and, on the basis of your description, contrast the application of the two dispute settlement mechanisms to intellectual property issues.

2. Select any decided WTO TRIPS dispute and discuss whether the outcome may have been different if the case was brought under the JAEPA.

3. Comment on the policy implications of the differences between the two dispute settlement mechanisms and discuss which mechanism you find more suited to settling intellectual property disputes in the contemporary economic and political environment.

QUESTION 3

(answer either question 2 or this question)

Propinquity and Proximity are two developing countries,  both  longstanding  members of the WTO, located in the Asian region.  Local village enterprises in two regions of Proximity have for many years produced two products, designated by traditional names

o     Grattan textiles, a unique style of hand-woven flax linen

o     Pelham tea, traditionally made from certain herbs harvested in the Mount Pelham rainforest

The bilateral agreement

Propinquity and Proximity concluded a bilateral trade agreement in 2016 (the Propinquity and Proximity Economic Relations Agreement, or the  PAPER Agreement), which  has  entered  into legal force following the necessary domestic procedures.

The PAPER Agreement chapter on intellectual property includes the following provision on the protection of geographical indications ('GIs'):

•    pointing out that these terms had not been published prior to their protection as GIs, in conflict with Article 14.2 of the Agreement, and

•    arguing that 'Grattan' was a long-established customary term used in the trade in both countries and that 'Pelham' was a geographical term legitimately used by Nimby.

The application was refused by the Propinquity authorities on the following basis:

As the applicant is not a national of either Proximity or Propinquity, the applicant has no standing as an 'interested person' under the procedure for invalidation or cancellation of protected geographical indications implemented in accordance with Article 14.3 of the PAPER Agreement.

Recent exports of cloth marked as  'Grattan' from  Nimby to  Propinquity  have been seized  by Propinquity customs officials at the  border.   The  Propinquity authorities  have declared them illegal imports on the basis that the term 'Grattan' is now a protected GI in that territory, despite the long-established past trade.  When the Embassy of Nimby in Propinquity submitted a formal complaint to the host Government, it was advised:

The right for continuing use of customary terms provided for in Article 14.4 of the bilateral  PAPER  Agreement  is  reserved  for  nationals  of  the  two  Parties  to  the Agreement and is not extended to nationals of third countries such as Nimby.   The Government of Propinquity expresses its openness to enter into bilateral negotiations with the Government of Nimby concerning the status of such terms along with other matters of joint interest.

As Senior Legal Counsel for the Nimby Ministry of Trade, you are required to prepare a legal analysis for Nimby's Trade Minister for a potential response to Propinquity under the WTO dispute settlement mechanism. The brief should address:

(i) The implications for Nimby of the bilateral agreement between Propinquity and Proximity, and its implementation in Propinquity's domestic legal system.

(ii) The potential grounds for complaint relating to the WTO TRIPS Agreement under the WTO Dispute Settlement Mechanism, and the available legal arguments to support such a complaint.

(iii) Possible proposals for the pragmatic resolution of the dispute to be submitted in the course of informal consultations with the Government of Propinquity, making reference to provisions in Articles 23 and 24 of the TRIPS Agreement.