Download II. Issues in Intellectual Property

Intellectual Property in the Americas & Beyond
I. Intellectual Property Terminology
II. Issues in Intellectual Property
III. The Evolution of IP Agreements
IV. IP in the Americas
I. Intellectual Property Terminology
 A. General Definition
– ideas with commercial application
 B. Specific Types of IP
– patents: the rights to specific ideas related to product innovation & process innovation
• product designs
• process designs for producing certain products
– copyrights: the rights to a particular expression of an idea or ideas
• books, films, recordings, & computer software
– trademarks: the rights to use a particular symbol or term in presenting goods & services
for sale
• in constrast to patents & copyrights, trademarks are not ideas tied to the product itself
– instead, they are ideas used to convey the firm associated with the production of the
good
II. Issues in Intellectual Property
 A. The Liberal Agenda
– IP should be protected like other forms of private property held by individuals & firms for
productive use
• otherwise, others can “free ride” on IP developed by those individuals
– cheaper, generic copies of products &/or process designs
– pirated copies of copyrighted works
– counterfeit imitations that exploit trademarked brand names
– if IP rights were not protected, this would form a barrier to economic activity because
people would “underproduce” IP for fear of not recovering the investment of time &
money used to generate the ideas
• in other words, paradoxically, on this issue liberals argue that barriers to the free
exchange of productive ideas are needed to stimulate the production of new ideas
– IP rights therefore need to be long enough (& secure enough) to permit return on
investment yet short enough to permit the eventual circulation of ideas
• particularly relevant for considering patent & copyright law
II. (cont.)
 B. The Mercantilist Agenda
– given the centrality of IP to comparative advantage,
• states should protect IP for domestic firms & individuals while providing minimal
protection for foreigners
• states should take aggressive steps to promote IP at home via government-sponsored
research-and-development (R&D) programs
– the government thereby helps to absorb the potential risks associated both with IP
violations and with failed ideas
– government activity aims at avoiding the “underproduction of IP” scenario
 C. The Structuralist Agenda
– the problem: LDCs should use mercantilist IP policies to avoid paying monopoly prices
for prolonged periods to firms & individuals primarily located in the North
• otherwise, large sums of money will be sent to the North when they are needed at home
both for improving productive capacity and for raising standards of consumption
– the tradeoff: some contact w/ IP developed in the North can speed the process of
technology transfer
• from this angle, LDCs would be willing to grant patent protection for firms willing to
produce locally
– contact with these processes spreads knowledge and can stimulate technological
spinoffs developed locally
– the question: what constitutes “working a patent”?
• in order to stimulate economic activity, domestic patent law in the North & South alike
historically tended to tie patent production to its commercial application
• however, in contemporary int’l talks, the North has tended to argue that int’l trade of
the product constitutes working the patent while the South has called for local
production in exchange for patent protection
III. The Evolution of IP Agreements
 A. The First Wave of Int’l IP Accords
– Paris Convention for the Protection of Industrial Property
• deals with patents and some trademark issues
• signed in 1883, last major revision in 1967
• 168 signatory states at present
– Berne Convention for the Protection of Literary & Artistic Works
• deals with copyrights
• signed in 1886, last major revision in 1971
• 157 signatory states at present
– both agreements call for “national treatment” of foreign applicants for IP rights &
domestic enforcement of rights held
III. (cont.)
 B. Enforcement Issues
– 1. Limitations of Standard Int’l Law
like most instruments of international law, these two conventions require states to
behave in a certain way but provide no binding forum for dispute resolution
• injured states can take their claims to the International Court of Justice (ICJ), but the
accused state needs to accept the ICJ’s jurisdiction
• after the creation of the World Intellectual Property Organization (WIPO) by the United
Nations in 1970, states could take cases to WIPO’s mediation and arbitration division
but, again, accused states must voluntarily submit themselves to this process
– 2. The Impact of New Technologies on IP Diffusion
over the last quarter of the 20th century, firms holding patents, copyrights, &
trademarks fell victim more readily than ever before to generics of patents and
nearly perfect pirated copies of copyrighted & trademarked goods
• firms in the North began to pressure their governments for unilateral & multilateral
action
– to improve enforcement of existing int’l commitments & foreign laws
– to expand the protection offered by foreign countries
• both Northern firms & governments were concerned the WIPO would not push
aggressively for these changes because it works under the auspices of the United
Nations
• the U.S. government responded quickly to the 1986 formation of the Intellectual
Property Committee by 12 major U.S. firms
– a government study estimated $40-60 billion lost to IP infringement in 1986
– the 1988 revision of U.S. trade law expanded U.S. unilateral action in pursuit of IP
protection abroad
 3. The Use of Unilateral Action by the North
in 1988, revisions to U.S. trade law expanded executive branch authority to use
retaliatory trade measures to pressure states to expand IP rights and improve
enforcement measures
• “Special Section 301” of the Trade Act requires the executive branch to produce a list
of countries documented to be violating U.S. IP rights
– countries on the list can be subjected to retaliatory trade measures
– the stick of potential retaliation is then used to negotiate bilateral agreements that
expand IP protection for U.S. firms and individuals
• amendments to Section 337 of the Tariff Act changed the standard for retaliatory tariffs
on imports violating IP rights from proof of injury to U.S. IP holders to the lesser
standard of proof of legal violation of IP rights
– this particular provision was later found in the WTO to violate the GATT’s national
treatment principle
– the EU has analogous, albeit less sweeping, procedures in place on many of these matters
III. (cont.)
 C. The Uruguay Round talks
trade-related intellectual property rights (TRIPs) reach the GATT agenda for the first time
– Northern countries insisted on IP talks
– many Southern countries voiced opposition
• willing to work against trade in counterfeit goods, but concerned about the call for
harmonization of IP law
– some LDCs had already expanded IP protection (often through recent bilateral accords w/
the U.S. or the EU)
• they were not openly opposed to the TRIPs talks
– an agreement on TRIPS was eventually driven by
• offering longer phase-ins for poorer countries
• the (not unreasonable) fear that the U.S. and the EU might expand use of retaliation
without a TRIPs accord
• the eventual Northern agreement to a phased-in elimination of its protection of
agriculture and textiles
 D. The 1994 Agreement on Trade-Related Intellectual Property Rights (TRIPs)
– like the GATT, TRIPs calls for MFN treatment of WTO partners regarding all future IP
policies
• the existing conventions called only for national treatment
– in stark contrast to the GATT & GATS accords (which bind states not to do certain
things),
• the TRIPs accord requires states to enact minimum IP standards
– 20-year minimum on patent protection
• sale of product in local market sufficient to meet standards calling for “working
the patent”
• almost everything must be patentable (except animals)
– 50-year minimum on copyright protection
• expressly stipulates that computer software is a literary work under the terms of
the Berne Convention
– 7-year minimum for trademark registration
• requires procedures to permit indefinite renewal
• provisions that call for expiration due to non-use can be no shorter than 3 years
– 10-year minimum for industrial design protection
• refers to registered patterns for product decoration
III.D. (cont.)
– these TRIPs commitments were to be phased in differentially
• a 1-year transition for wealthy WTO members
• a 5-year transition for middle-income and low-income countries
• a 10-year transition for the poorest countries
– in contrast to the Paris & Berne Conventions, the TRIPs accord includes a binding
commitment to enforcement via WTO dispute settlement procedures
• all major commitments by WTO members who are parties to the Paris & Berne
Conventions are now subject to WTO jurisdiction
• all new commitments contained within the TRIPs accord are also subject to WTO
dispute settlement
IV. IP in the Americas
 A. Shared International Commitments
– all FTAA-zone states are now parties to the Paris & Berne conventions
• 2/3 joined between 1990 & 2000
– all FTAA-zone states are WTO members except for the Bahamas (which began its formal
application in 2001)
• this binds all but the Bahamas to the TRIPs Agreement standards and to potential WTO
jurisdiction for enforcement
• Haiti is the lone “least-developed country” in terms of UN standards used by WTO to
qualify for the 10-year IP phase-in to be completed by 2004
– all other countries have already had to comply w/ TRIPs
B. IP in Regional Integration: variety across the hemisphere
– CARICOM currently has no internal procedures regarding IP
– MERCOSUR & CACM have reached limited agreements on some aspects of the IP
agenda regarding trademarks
– all contemporary accords involving Mexico &/or the U.S. reflect most of the TRIPs accord
– the Andean Community has moved to set a variety of IP standards at the community level
 C. The FTAA Agenda & IP
– the U.S. will be trying to expand the length of IP protection required by the TRIPs accord
– the U.S. will be trying to require FTAA states to participate in a variety of IP treaties
beyond the Paris & Berne Conventions
• NOTE: there are 23 IP-related treaties in all but only Paris & Berne have been signed
by the vast majority of nation-states in the world
– the LDCs will be trying to fend off these demands and/or to tie LDC concessions on IP to
U.S. concessions in other areas