402
Carsten Fink
and BITs, it is difficult to answer this question precisely. Some 421 trade agreements had been notified to the WTO up to December 2008 and there are estimated to be more than 2,500 BITs in force.43 Not all trade agreements feature investment disciplines, and some only establish limited disciplines on foreign direct investment or commercial presence, which does not encompass IPRs.44 Where PTAs adopt fully fledged investment chapters, intellectual property rights are typically included in the definition of investment. The same is true for BITs, including most treaties concluded between developing countries. There is more variation on the specifics of investor-state arbitration mechanisms; for example, in some agreements, the initiation of arbitration proceedings is subject to the consent of the affected governments. As a final note, it is important to point out that the reach of investment agreements into the intellectual property domain remains in many ways legally uncertain (Correa 2004). So far, no arbitration claim related to government measures in the IPR field has been made. At the same time, given the proliferation of investment disciplines over the past decade, private investors may well initiate claims if they feel their IPRs have been unduly “expropriated.” In this context, it is worth pointing out that some arbitral decisions have been criticized for their expansive interpretation of BIT provisions, creating more burdensome obligations than those originally intended by the signatories.45 It is therefore important for governments to carefully consider all the implications of signing onto investment disciplines that cover measures affecting IPRs. Annex. Further Information The IPRs module of the World Bank Institute (WBI)–Columbia University Executive Training Course (Fink 2007) offers a basic introduction to the economics of IPRs and discusses the main obligations of the TRIPS Agreement. For an in-depth legal analysis of the TRIPS agreement and the multilateral IPR treaties administered by the WIPO, interested readers are referred to UNCTAD–ICTSD (2005) and Abbott, Cottier, and Gurry (2007). Maskus (2000) provides a comprehensive economic analysis of the IPR system, including the perspective of developing countries. Abbott (2006) and Roffe (2004) analyze U.S. FTA chapters in light of U.S. and Chilean law, respectively; Santa Cruz (2007) and Vivas Eugui and Spennemann (2005) review the treatment of IPRs, especially GIs, in EU agreements. A number of NGOs have campaigned against the inclusion of TRIPS+ provisions in PTAs. Some of their policy
papers and positions can be found on the following Web sites: • Knowledge Ecology International, http://www.cptech .org/ip/health/trade/ • Oxfam, http://www.oxfam.org.uk/resources/policy/ health/bp102_trips.html • Médecins Sans Frontières, http://www.doctorswithoutborders.org/news/issue.cfm?id=2379 The following Web sites contain some industry positions on the inclusion of IPR provision in trade agreements: • International Intellectual Property Alliance, http:// www.iipa.com/fta_issues.html • Pharmaceutical Research and Manufacturers of America (PhRMA), http://www.phrma.org International agreements referred to in this chapter can be accessed at the following Web sites: • WTO Secretariat, http://www.wto.org/english/tratop_e/ TRIPS_e/TRIPS_e.htm • World Intellectual Property Organization, http://www .wipo.int • U.S. Trade Representative, http://www.ustr.gov • European Commission, Directorate General for Trade, http://ec.europa.eu/trade/issues/index_en.htm • European Free Trade Association, http://www.efta.int Notes The views expressed are the author’s own and were written during his tenure as Professor of International Economics at the University of St. Gallen, Switzerland. They do not necessarily reflect the views of the World Intellectual Property Organization or its member states. 1. U.S. Chamber of Commerce, http://www.uschamber.com/issues/ index/international/ipr.htm. 2. An important caveat is that when trade opening takes the form of preferential tariff liberalization, the welfare consequences from increased trade are more ambiguous. In fact, it is possible that preferential tariffs will lead to the displacement of imports from nonmember countries to such an extent that overall welfare may fall. See Panagariya (2000) for a review of the standard economics of preferential trade agreements. 3. The rationale for the protection of trademarks and geographical indications is different. These two forms of IPRs seek to promote an orderly functioning of markets by reducing information asymmetries between buyers and sellers of goods and services. Fink (2007) provides more detailed treatment of the various economic arguments for protecting IPRs. 4. For example, would a patent owner in the form of a juridical person qualify if that person were established in the territory of one of the PTA parties but 50 percent of its equity were owned by another juridical person in a nonmember state? 5. A possible exception is the inclusion in PTAs of lists of protected geographical indications, which may lead to a de facto trade preference. See the section “TRIPS+ Provisions in EU PTAs,” in this chapter.