Digital LibraryThe Changing Structure and Governance of Intellectual Property Enforcement
RESEARCH PAPERS
15
THE CHANGING STRUCTURE AND GOVERNANCE
OF INTELLECTUAL PROPERTY ENFORCEMENT
∗
Ermias Tekeste Biadgleng and Viviana Munoz Tellez
SOUTH CENTRE
JANUARY 2008
∗ Ermias Tekeste Biadgleng and Viviana Munoz Tellez are Programme Officers of the Innovation and Access to
Knowledge Programme of the South Centre. The authors can be contacted at biadgleng@southcentre.org and
munoz@southcentre.org.
THE SOUTH CENTRE
In August 1995 the South Centre was established as a permanent inter-governmental
organization of developing countries. In pursuing its objectives of promoting South
solidarity, South-South cooperation, and coordinated participation by developing
countries in international forums, the South Centre has full intellectual independence.
It prepares, publishes and distributes information, strategic analyses and
recommendations on international economic, social and political matters of concern to
the South.
The South Centre enjoys support and cooperation from the governments of the
countries of the South and is in regular working contact with the Non-Aligned
Movement and the Group of 77. The Centre’s studies and position papers are prepared
by drawing on the technical and intellectual capacities existing within South
governments and institutions and among individuals of the South. Through working
group sessions and wide consultations, which involve experts from different parts of
the South, and sometimes from the North, common problems of the South are studied
and experience and knowledge are shared.
ACKNOWLEDGEMENT
We wish to thank the various individuals who reviewed this paper in draft form. Special thanks to Carlos
Correa (University of Buenos Aires), Fernando Piérola (Advisory Centre on WTO Law) and Pedro Roffe
(International Centre for Trade and Sustainable Development), for the very useful comments and
suggestions in their personal capacity. We have also benefited enormously from the discussions and
feedback from participants at the South Centre International Symposium on Examining Intellectual
Property Enforcement from a Development Perspective, held on 9 October 2007.
TABLE OF CONTENTS
EXECUTIVE SUMMARY................................................................................................................................... vii
I.
INTRODUCTION .................................................................................................................................... 1
II.
THE CURRENT MULTILATERAL STRUCTURE FOR INTELLECTUAL PROPERTY ENFORCEMENT ....... 3
II.1 The TRIPS Agreement ........................................................................................................... 4
II.1.1 Main Elements of Intellectual Property Enforcement in the TRIPS Agreement ....... 5
II.1.2 The Relationship between the TRIPS Agreement and the WTO
Dispute Settlement Mechanism ................................................................................. 7
II.2 Intellectual Property Enforcement in WIPO.......................................................................... 10
III.
RECENT LEGAL AND POLICY TRENDS IN INTELLECTUAL PROPERTY ENFORCEMENT ..................... 11
III.1 Recent Trends in the United States ....................................................................................... 11
III.2 Recent Trends in the European Union.................................................................................. 14
III.3 United States and European Union Foreign Policy.............................................................. 17
III.3.1. Bilateral Technical Assistance ............................................................................... 18
III.3.2. Unilateral Trade-Related Mechanism.................................................................... 18
III.4 The Role of Industry in Shaping the Structure of Intellectual Property Enforcement ........ 19
III.5 Recent Trends in Developing Countries............................................................................... 21
IV.
THE CHANGING STRUCTURE AND GOVERNANCE OF INTELLECTUAL
PROPERTY ENFORCEMENT.................................................................................................................. 23
IV.1 The Agenda of the G8, the Heiligendamm Process, the OECD and the
Emerging Interest in a New International Framework on Enforcement ........................... 23
IV.2 The TRIPS Council and Accession Protocols...................................................................... 25
IV.3 The WIPO Advisory Committee on Enforcement............................................................... 26
IV.4 Intellectual Property Technical Assistance........................................................................... 26
IV.5 The World Customs Organization and Interpol ................................................................... 27
IV.6 The World Health Organization ........................................................................................... 28
IV.7 Free Trade Agreements and Economic Partnership Agreements........................................ 29
IV.7.1 Main TRIPS-plus Features in FTAs ......................................................................... 30
IV.7.2 Expanded Scope of Enforcement Standards under FTAs ......................................... 31
IV.7.3 Intellectual Property Rights as an Investment........................................................... 35
V.
CONCLUSION: THE CHANGING STRUCTURE OF INTELLECTUAL PROPERTY ENFORCEMENT
AND THE POLICY OPTIONS FOR DEVELOPING COUNTRIES................................................................ 36
BIBLIOGRAPHY ............................................................................................................................................... 39
ANNEX: SELECTED PROVISIONS OF THE AGREEMENT ON TRADE-RELATED
ASPECTS OF INTELLECTUAL PROPERTY RIGHTS........................................................................... 46
EXECUTIVE SUMMARY
Twelve years ago the TRIPS Agreement introduced global minimum standards of intellectual property
protection and enforcement. To the extent that the substantive obligations under the Agreement have now
been widely implemented in national legislation, developing countries are facing increased pressure to
bolster intellectual property enforcement.
The European Union, Japan and the United States are undertaking new efforts to strengthen and
harmonize at the international level the various means by which countries seek to enforce intellectual
property rights. To boost the agenda they have jointly announced plans to negotiate a new international
anti-counterfeit treaty independently of WIPO and have made intellectual property enforcement a priority
issue for the G8.
This research paper provides a broad overview and analysis of the changing multilateral framework
for intellectual property enforcement and the challenges that it presents for developing countries. It
examines current multilateral obligations and traces developments in the field of intellectual property
enforcement in various multilateral fora, including the WCO, WHO, WIPO, WTO and Interpol. Finally, it
analyses the approach of the United States and European Union to strengthening intellectual property
enforcement in third countries through regional, bilateral and unilateral mechanisms such as regional and
bilateral agreements.
The main findings of the paper are the following:
• Greater coordination and dialogue involving the private sector, government and civil society
stakeholders are necessary to find appropriate solutions to both supply and demand problems
related to the trade in international counterfeit trademark and pirated copyright goods. The
initiatives and activities being undertaken to enforce intellectual property rights by different
multilateral fora and agencies can benefit from greater coherence.
• Developing countries are increasingly redirecting resources to strengthen the enforcement of
intellectual property rights at a time when global investment in areas of poverty, hunger, health,
and education is less than half of what is needed to reach the Millennium Development Goals.
• Countries that adopt TRIPS-plus enforcement obligations may be renouncing sovereign
authority to adopt innovation and intellectual property policies suited to their level of
development. They may also forego important flexibilities afforded under the TRIPS
Agreement that accommodate differences among national legal systems and levels of
development. In the case where such obligations are acquired through FTAs, they may also
suffer trade and other economic sanctions due to their potential inability to comply with new
obligations that may be excessively intrusive and restrictive.
• There is a lack of reliable information and objective data as well as of harmonized definitions
that would allow proper quantification of the magnitude and impact of international trade in
counterfeit and pirated goods and an adequate definition of the problems it poses.
• The continued exchange of national information, experience and practice aimed at tackling
counterfeiting and piracy is positive and desirable as a means of acquiring a better
understanding of the problems and building common agendas. Current sharing of experience
should be broadened to include the use of enforcement measures to ensure the exercise of
limitations on and exceptions to intellectual property rights and to prevent abuse of intellectual
property rights; the use of competition law; and analysis of related national case law.
The main recommendations suggested for developing countries are the following:
• Enforcement measures must be equitable and fair and must balance the intellectual property
rights of their holders and the rights of third parties, and the limitations and exceptions provided
in the intellectual property system.
• Do not adopt stronger measures and procedures for the enforcement of intellectual property
rights beyond those found in the TRIPS Agreement, unless prior assessment is made to
determine that TRIPS-plus enforcement standards would bring domestic benefits. TRIPS-plus
enforcement standards in regional and/or bilateral FTAs and EPAs should be avoided.
• Resist developed country pressure in the WTO TRIPS Council, the WIPO and other fora to
establish soft law norms, including best practices and declarations that may require
strengthening domestic enforcement of intellectual property rights beyond TRIPS standards and
may lead to harmonization of enforcement standards.
• Maintain flexibilities available in the TRIPS Agreement as they apply to the enforcement of
intellectual property rights, including: 1) flexibility as to the method of implementing
enforcement measures and procedures in national legal systems; 2) flexibility to balance
resources for general law enforcement with those that may be mobilized for the specific
enforcement of intellectual property rights; 3) flexibility confine the availability of procedures
for border measures and criminal sanctions to cover counterfeit trademark or pirated copyright
goods as defined in Article 51, footnote 14; 4) flexibility as to the granting of injunctions; 4)
flexibility as to determining what amounts to ‘adequate compensation’ in awarding damage.
• Adopt clear definitions of counterfeiting and piracy to avoid legal uncertainty and potential
abuse of enforcement measures. Definitions can be found in the TRIPS Agreement’s Article 51,
footnote 14. The common elements of the agreed definition in TRIPS should be applied: (1)
identical or close similarity to intellectual property protected locally, (2) unauthorized use, (3)
infringement in a country of importation, (4) traded internationally. Ensure that TRIPS-
compliant parallel importation of goods is excluded from the definition of counterfeit or piracy.
Do not extend definition to include patent infringement.
• Avoid making use of criminal law to deal with intellectual property infringement. At the least,
limit the application of criminal law to cases of intellectual property infringement that are wilful
and occur on a commercial scale, and thoroughly define the elements that would constitute a
“crime”.
• Avoid commitments to act directly against infringement of intellectual property rights. While
government ought to provide intellectual property right holders with the legal means to enforce
their private rights, responsibility for intellectual property rights enforcement must be vested in
right holders. Right holders must initiate any legal actions and bear their full costs.
• Strengthen checks against abuse and misuse of intellectual property rights and enforcement
measures. The means to do so include more rigorous vetting of patent applications, stronger
enforcement of competition law, ensuring that measures for intellectual property rights
enforcement are equitable and fair, and providing stronger protection of limitations on and
exceptions to intellectual property rights, such as “fair use” for access to information,
educational and research purposes.
I. INTRODUCTION
Intellectual property law refers to the general area of law that encompasses copyright and related rights,
patents, design rights, marks and trade secrets. A common characteristic of the various forms of intellectual
property is that they establish property rights over intangible subject matter such as inventions capable of
industrial application, the form in which an idea or information is expressed, and signs distinguishing goods
and services. The term intellectual property rights refers to the specific legal rights which authors, inventors
and other right holders may hold and exercise in relation to intellectual property subject matter. Intellectual
property rights are granted by governments and operate within the territory where they are granted.
Countries have undertaken bilateral and multilateral agreements to allow national intellectual property
rights holders to gain protection in other jurisdictions. Most intellectual property-related agreements adhere
to the principle of “national treatment” as a rule of non-discrimination. That is, each member state must
offer protection to the nationals of other member states that is not less favourable than that which it gives to
its own nationals. However, it is important to note that while national treatment is a mechanism of
international protection, it does not amount to harmonization. As noted by Bentley and Sherman “the
beauty of the principle of national treatment is that it allows countries the autonomy to develop and enforce
their own laws, while meeting the demands for international protection”.1
The autonomy of countries to develop and enforce their own intellectual property law while
complying with their international obligations is essential to the effective functioning of a national
intellectual property system. Whether an intellectual property system can function as an instrument
promoting economic and social policy objectives is directly linked to how the system is designed to fit the
particular needs, conditions and context of each country.
Historically, national intellectual property systems have developed progressively with the evolving
economic and social context. It was only in the nineteenth century that countries which were net exporters
of intellectual property began to seek international agreements for the protection of intellectual property.
Initial agreements included mainly European countries and excluded others such as the United States, a
country that later became a leading intellectual property exporter. In the 1980s, concerns about eroding
national competitiveness led the United States along with other industrialized countries to seek to expand
the protection of intellectual property globally in the pursuit of their economic interests.
The flexibility in the design of national intellectual property systems has been rapidly eroding since
the 1960s when the World Intellectual Property Organization (WIPO) was established, the peak being the
conclusion of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement)
which in 1995 entered into force among member states of the World Trade Organization (WTO). The
TRIPS Agreement created a new multilateral framework for global minimum standards on the protection
of intellectual property at the national level. The substantive obligations cover various intellectual property
subject matters, including the availability and scope of patents, copyright, industrial designs, topographic
circuits, trademarks and undisclosed information. The TRIPS Agreement also established for the first time
obligations in respect of national measures and procedures for the enforcement of intellectual property
rights. Nonetheless, TRIPS did not harmonize standards of protection among intellectual property systems.
These still may vary substantially from jurisdiction to jurisdiction. Recognizing the differences in member
states’ legal systems and practices, the TRIPS Agreement left room for countries to exercise various
flexibilities and did not cover all aspects of intellectual property law. One of the most significant
flexibilities provided by the TRIPS Agreement is the freedom for member states to determine the method
of implementing the provisions of the Agreement, including both the substantive obligations and the
procedures for the enforcement of intellectual property rights.
1 Bently and Sherman (2004), p.5.
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One of the main reasons why developing countries agreed to the TRIPS Agreement during the
Uruguay Round was the expectation that once it was concluded that the United States would ease off
negotiating intellectual property standards bilaterally.2 Another reason is that they expected the TRIPS
Agreement to exclude unilateral retaliatory actions by developed countries. Both assumptions, however,
proved to be incorrect. The United States and other developed countries continue to push for TRIPS-plus
standards at both the multilateral and the bilateral level. Higher standards of intellectual property protection
are being set multilaterally at WIPO and at the bilateral level through the inclusion of intellectual property
provisions in free trade agreements (FTAs). Recent trends are marked by the increase in number of
multilateral institutions participating in the policy and norm setting on intellectual property enforcement.
This research paper provides a broad overview and analysis of the changing structure and
governance of intellectual property enforcement and the challenges that it presents for developing
countries. It examines current multilateral obligations and traces developments in the field of intellectual
property enforcement in various multilateral fora, including the World Customs Organization (WCO),
WIPO, the World Health Organization (WHO), WTO and Interpol. It analyses the United States and
European Union approach to strengthening intellectual property enforcement in third countries through
regional, bilateral and unilateral mechanisms such as regional and bilateral agreements. Finally, it
synthesizes the nature of the changing structure, the main governance issues, and the policy options for
developing countries.
2 Drahos (2002), p. 16.
The Changing Structure and Governance of Intellectual Property Enforcement 3
II. THE CURRENT MULTILATERAL STRUCTURE FOR INTELLECTUAL PROPERTY
ENFORCEMENT
The effectiveness of procedures for enforcement of intellectual property is more than ensuring that
intellectual property rights are respected. To guarantee a proper balance in the intellectual property rights
system, the policy of intellectual property enforcement should be supported by (1) substantive laws
safeguarding the legitimate interest of third parties and the public at large, providing adequate limitations
on and exceptions to rights conferred by intellectual property, and regulating anti-competitive practices;
and (2) procedural rules that are equitable and fair to all parties.
Intellectual-property based industries have pushed developed countries to aggressively promote at
the multilateral level a narrow approach for the enforcement of intellectual property rights focusing on the
interest of right–holders. This approach can be partly evidenced in the TRIPS Agreement, which dedicates
a whole section (Section III) to the enforcement of intellectual property rights, while including some
elements to balance the obligations. However, since the conclusion of the TRIPS Agreement there are
ongoing efforts by developed countries to strengthen the TRIPS enforcement obligations via new
multilateral and bilateral mechanisms. As a result, intellectual property enforcement is one of the major
emerging challenges for developing countries to maintain balance in their national intellectual property
systems.
As national legal systems vary widely among countries, so do the procedures and measures
available for enforcement of intellectual property rights under the different national systems. National
governments, in safeguarding the balance between the interest of the right holders and the public interest,
should have the policy space to determine the kind of administrative structures and legal procedures
necessary for both right holders and third parties. Addressing intellectual property rights infringement relies
primarily on the right holder. Intellectual property rights are, in fact, rights conferred on individuals by law
and rely on the private right holder for their enforcement.3 The state may assist a right holder in enforcing
such rights, yet it is the foremost responsibility of the affected party to take action. It is up to the right
holder to assume the initiative and costs of enforcing their private rights.4
The substantive obligations under the TRIPS Agreement are now being widely implemented in
national legislations and so have become common denominators among member states of the WTO. Most
countries make available various procedures and remedies for intellectual property enforcement. However,
intellectual property right holders, especially bigger companies, constantly demand further government-led
efforts for strengthening intellectual property right protection. Thus, developing countries are facing
increased pressure from developed countries to bolster their efforts on the enforcement of intellectual
property rights. These efforts are largely beyond international obligations as set out in the TRIPS
Agreement.
In most developed countries, intellectual property right holders use civil processes to deal with cases
of infringement of their private rights. The types of remedy, in particular the injunction (interlocutory and
permanent) and damages are also more useful for the right holders than criminal punishment. Criminal law
usually plays a limited role in dealing with intellectual property infringements, and criminal judgements are
very seldom passed in such cases, particularly in patent law. Generally where criminal law is applied it is
for intellectual infringement that is wilful and on a commercial scale, or because of other major threats to
the state or its citizens. In addition, unless the scale and damage of the infringement merits it, and given the
lengthy and expensive nature of litigation processes, the complainant would generally rather not take any
action at all against the infringer or would rather settle the dispute out of court. Increasingly, developed
3 The Preamble of the TRIPS Agreement expressively recognizes intellectual property rights as private
rights.
4 Commission on Intellectual Property (2002a), p. 165.
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countries have sought to make use of criminal law as a deterrent to infringement, but such use may work
against the intellectual property system itself by creating public resentment.
Police raids and the use of criminal law enforcement mechanisms can be effective deterrents but
they may also be highly dangerous. Moreover, these require extensive use of public funds and in
developing countries may entail pulling resources away from other law enforcement efforts when there are
other means, particularly via civil law, that may be strengthened to allow private parties to enforce their
rights and which do not require extensive use of public funds. Furthermore, even when a country’s legal
enforcement agencies aim at combating infringements, they may be unable to do so, especially if the right
holder does not take the lead in establishing whether harm has in fact been done or in determining the scale
of damages and the appropriate remedies. In short, a central question in defining what type of measures and
procedures should be made available and utilized under national legislation relates to determining at what
point the state should be involved in the enforcement of intellectual property rights and whether it has the
capacity to do so.
Developing countries require ample policy space to address this key policy question. Today, this
same exercise of judgment and discretion for the enforcement of private intellectual property rights that has
historically persisted, including under the TRIPS Agreement, is being eroded through bilateral FTAs and
other bilateral pressures. The erosion of policy space necessary to determine the appropriate enforcement
policies and procedures based on the public interest and the capacity of government institutions is the new
emerging challenge for developing countries. This new emerging challenge involves the increased pressure
to use the state machinery to reduce the cost of private enforcement for multinational companies based in
the developed world.
II.1 The TRIPS Agreement
The TRIPS Agreement constituted a paradigm shift in intellectual property rights enforcement. While prior
to the TRIPS Agreement international treaties for the protection of intellectual property rights included a
few obligations regarding enforcement,5 none had explicitly dealt with intellectual property enforcement;
nor did these instruments provide for any mechanism for settling disputes that could arise between States
over intellectual property-related obligations, including those concerning enforcement. Precisely because of
this, industrialized countries sought to define common standards for the enforcement of intellectual
property rights in the TRIPS Agreement sanctioned by recourse to the WTO dispute settlement mechanism.
Under the Paris Convention for the Protection of Industrial Property (Paris Convention) and the
Berne Convention for the Protection of Literary and Artistic Works (Berne Convention), the adoption in
domestic law of norms that embodied an international minimum standard was sufficient to fulfil the
obligation of members. The benchmark for the standards of enforcement was that members should strictly
observed national treatment in the application of such law. Under the TRIPS Agreement, in contrast,
adopting legislation that complies with international minimum standards is only the starting point.
Domestic laws must be adequately enforced in compliance with the provisions concerning enforcement of
intellectual property rights.6 However, the TRIPS Agreement clearly recognizes the existence of widely
varying standards in the protection and enforcement of intellectual property rights among countries. It only
attempts to establish general standards to be implemented according to the mechanism determined by each
Member.7 For example, The Agreement in Article 1.1 on the nature and scope of the obligations establishes
that Members are free to determine the appropriate method of implementing the provisions of the
Agreement within their own legal system and practice. In this regard, the Agreement does not attempt to
harmonize procedural rules for enforcement of intellectual property rights.
5 These include Art. 25 of the Paris Convention 1883, Art. 36 of the Berne Convention 1886, and Art. 26 of the
Rome Convention 1961.
6 Reichmann (1997), p. 2.
7 UNCTAD-ICTSD (2005), p. 575.
The Changing Structure and Governance of Intellectual Property Enforcement 5
The general principles of the TRIPS Agreement established in Article 8, including the explicit
recognition that Members may need to take measures 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, also apply to Section III of the Agreement on the Enforcement of Intellectual
Property Rights.
II.1.1 Main Elements of Intellectual Property Enforcement in the TRIPS Agreement
The enforcement provisions of the TRIPS Agreement “are truly minimum standards, unlike the substantive
standards set out by the TRIPS Agreement, as attempted by the loose and open-ended language in which
they are cast.”8 Creating an international standard on enforcement procedures for private rights was
practically impossible owing to the large differences in countries’ legislations. As a result, the provisions of
the TRIPS Agreement essentially define the objective to be attained rather than the specific details of the
procedures that may be brought into play. Following this approach, the language is minimal, and open-
ended in setting the obligations.9
Part III of the TRIPS Agreement includes general obligations, rules on civil and administrative
procedures and remedies to fulfil the general obligations, provisional measures, special requirements
related to border measures, and criminal procedures.
Article 41 sets out the main principles regarding enforcement, as follows:
• procedures must be available under domestic laws to permit effective action against
infringement of intellectual property rights, including expeditious remedies to prevent
infringements and remedies which constitute a deterrent to further infringements;
• enforcement procedures must be applied in such a manner as to safeguard against abuse and to
avoid the creation of barriers to legitimate trade;
• procedures must be fair and equitable and not unnecessarily complicated or likely to cause
unwarranted delays;10
• courts and administrators must base their decisions only on evidence available to all parties, and
these should preferably be written and reasoned;
• there must be some form of review for decisions handed down by first instance administrative
or judicial agencies;
• Members are under no obligation to put in place a judicial system for the enforcement of
intellectual property rights distinct from that for the enforcement of law in general. Members do
not acquire any obligations as to the distribution of resources between the enforcement of
intellectual property rights and the enforcement of law in general.
The TRIPS Agreement includes both compulsory and optional provisions on intellectual property
rights enforcement. Most of the provisions do not establish straightforward obligations, but require
Members to empower judicial or other competent authorities to order certain acts. The relevant national
8 Reichmann (1997), p. 5
9 As noted in UNCTAD-ICTSD (2005), p. 580, in assessing whether a Member’s enforcement procedures
actually permit “effective action”, the effectiveness of measures may be differently assessed in different legal
systems. There cannot be one single standard of what constitutes effectiveness, which is confirmed in the
TRIPS Preamble by the statement that the provision of effective and appropriate means for the enforcement of
trade-related intellectual property rights needs to take into account “differences in national legal systems.”
10 This corresponds to the principle of fairness and equity that “applies to all parties concerned in enforcement
procedures, and not only to right holders.” See UNCTAD-ICTSD (2005), p. 582.
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authorities may order certain procedural remedies, but they are not obliged to do so, and can exercise
discretion in applying the mandated rules.11
Some procedures are compulsory only with regard to certain types of intellectual property rights.
For example, the availability of the procedures for border measures and criminal sanctions under Articles
51 to 61 apply only to “counterfeit trademark or pirated copyright goods” as clearly defined in footnote 14
to Article 51. The definition provides four elements of what constitute “counterfeit trademark goods” and
“copyright piracy”. First, counterfeit goods shall mean goods bearing a trademark identical to, or that
cannot be distinguished in its essential aspects from, the validly registered trademark. Pirated goods shall
mean copies of the copyrighted material or copies made directly or indirectly from an article. Secondly, the
goods are to be considered counterfeit or pirated only where the use of the trademark was without
authorization and the reproduction of the copyright material was without the consent of the right holder or
person duly authorized by the right holder in the country of production. Third, the definitions clearly
provide that the existence of infringement is to be determined by the law of the country of importation.
Since the TRIPS Agreement does not harmonize the substantive laws on copyright and trademark,
the infringement of the rights conferred by copyright and trademark can only be determined in each
jurisdiction. The emphasis on the laws of the country of importation under the definitions indicates that the
definitions are supposed to guide only the procedures for the application of border measures rather than to
other forms of infringement for which Member States are required to make available civil procedures and
remedies. As a result, the fourth element of the definitions pertains to their applicability to goods traded
internationally. Among other things these specifications mean that infringement of a trademark or
copyright, i.e. unauthorized use, is a necessary but insufficient condition for counterfeit and piracy.
Under the provisions on border measures, members are required to provide the legal procedures for
right holders to lodge an application in writing with competent authorities to suspend the release of
imported goods into free circulation when the right holders have valid grounds for suspecting the goods are
“counterfeit trademark or pirated copyright goods”. The provisions spell out the basic procedures for
lodging applications, rights of inspection and information, the required security and assurance, remedies for
wrongful suspension of the release of goods, conditions for ex officio action and remedies. Finally,
according to Article 61, States must provide criminal procedures and penalties, at least, for cases of “wilful
trademark counterfeiting or copyright piracy on a commercial scale”.
The intellectual property rights enforcement provisions also allow for certain exceptions. According
to Article 44.2, where the remedies against infringements stipulated under the TRIPS Agreement are
inconsistent with a Member’s law, the remedies shall be limited to declaratory judgments and payment of
adequate compensation. Members also have significant leeway in determining what amount of
compensation is ‘adequate.’ Similarly, under Article 44.1, Members are not required to grant injunctions in
respect of intellectual property rights acquired by a person prior to knowing or having reasonable grounds
to know that dealing in such subject matter would entail the infringement of an intellectual property right.
Finally, the TRIPS Agreement provides a “checks and balances approach” to the application of
procedures for intellectual property enforcement that safeguard the interests of third parties and of the
public. Article 48.1 empowers judicial authorities to order a plaintiff who has abused enforcement
procedures to provide to the defendant adequate compensation for the injury suffered. Articles 50.3 and
53.1 also empower judicial authorities to request the applicant to provide security or other assurances
sufficient to protect the defendant and to prevent abuse of proceedings for provisional measures. Judicial
authorities must have the authority to impose certain requirements on the applicant of a provisional
measure “in order to satisfy themselves that the applicant is the right holder and that the applicant’s right is
being infringed or that infringement is imminent.”12 Other main standards to be applied include the
proportionality of the measure with respect to the seriousness of the infringement, and the protection of
confidential information. According to Article 46 of the TRIPS Agreement, the authorities should consider
11 UNCTAD-ICTSD (2005), p.593
12 WTO (1994), the TRIPS Agreement, Article 50 (3).
The Changing Structure and Governance of Intellectual Property Enforcement 7
the need for proportionality between the seriousness of the infringement and the remedies ordered as well
as the interests of third parties. In addition, Article 42 requires fair and equitable procedures under civil and
administrative proceedings. Article 41.4 exempts member states from obligation to provide an opportunity
for review of acquittals in criminal cases. A clear safeguard exists in Article 41.5 that attenuates the
obligations on intellectual property rights enforcement.13 Members are not obliged to establish court
divisions specialised on the enforcement of intellectual property rights and to allocate resources separately
for intellectual property rights enforcement. The provision relieves Members from any duty to beef up their
overall judicial and administrative structures to emphasize and/or prioritize the enforcement of intellectual
property rights over the enforcement of law and order in general.14
II.1.2 The Relationship between the TRIPS Agreement and the WTO Dispute Settlement Mechanism
Disputes among WTO Members regarding the violation of any of the provisions embodied in the TRIPS
Agreement are subject to the dispute settlement mechanism. As a result, failure of a member state to meet
its obligations regarding intellectual property rights enforcement can jeopardize its market access rights and
other benefits at the multilateral level. Nevertheless, many complexities arise in applying the WTO dispute
settlement mechanism to the TRIPS Agreement and, in particular, to its enforcement provisions.
The language of the provisions on procedures for enforcement of intellectual property rights allows
wide interpretation that could have a specific meaning largely when the domestic legislation determines the
exact procedure to be followed in the legal system and, most importantly, when the competent authorities
or the judiciary apply the rules to specific cases.15
The TRIPS Agreement omits various details, such as time-bound limitations on the right to institute
claims or appeal a ruling. However, there are cases where the general availability of the minimum
standards is interpreted under dispute settlements with wider application. In Canada - Patent Term, the
Panel in its finding referred to the application of Article 41.2 to acquisition procedures of patents under
Article 62.4 and stated that:
In our view, requiring applicants to resort to delays such as abandonment, reinstatement, non-
payment of fees and non-response to a patent examiner's report would be inconsistent with
the general principle that procedures not be unnecessarily complicated as expressed in Article
41.2 and applied to acquisition procedures by Article 62.4. By their very nature, the delays,
which are not tied to any valid reason related to the examination and grant process, would be
inconsistent with the general principle that procedures not entail 'unwarranted delays' as
expressed in Article 41.2 and applied to acquisition procedures by Article 62.4.
…. We find potential requirements that an applicant commence proceedings [in a court of
law] for a writ of mandamus and pay additional fees to be in breach of the general principle
that procedures not be 'unnecessarily complicated or costly' as expressed in Article 41.2 and
applied to acquisition procedures by Article 62.4.16
The findings of the Panel were not subsequently reviewed by the Appellate Body (AB). It is
possible for the AB to confirm the findings of the Panel, in so far as it relates to legislative matters that are
not in compliance with Article 41. However, the AB may need to consider the difficulty of applying the
13 This article was not suggested in the original US and EC proposals but was introduced by India during
negotiations on the adoption of the TRIPS Agreement in its proposal, MTN.GNG/GN11/W/40, at 3, No.4 (e).
See also UNCTAD-ICTSD (2005), p.585.
14 Reichmann (1997), p.5.
15 The nature of the inconsistency that the Dispute Settlement Body (DSB) should examine could be evidence of
a failure to provide effective enforcement procedures that shows a systemic problem. See UNCTAD-ICTSD
(2005), p. 580.
16 WTO (2000) Panel Report on Canada- Patent Terms, WT/DS170/R, para. 6.117 and 6.118.
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general standard of procedures not to be unnecessarily complicated or costly, when the TRIPS Agreement
clearly imposes the obligation to safeguard the same procedures from abuse, and most importantly, when
generalization is not possible in procedural rules that may take a different form of application depending on
the cases.
The compliance with the provisions that require members to make available civil procedures and
provide for criminal procedures and penalties would be evaluated based on the general availability of rules
and procedures domestically. In the US - Section 211 Appropriations Act both the Panel and the Appellate
Body relied on the ordinary meaning of to ‘make available’ under Article 42 of the TRIPS Agreement that
provides for fair and equitable standards of enforcement procedures. Accordingly, the phrase suggests that
"right holders" are entitled under Article 42 to have access to civil judicial procedures that are effective in
bringing about the enforcement of their rights covered by the Agreement. Furthermore, the AB stated that:
Article 42, first sentence, does not define what the term "civil judicial procedures" in that
sentence encompasses. The TRIPS Agreement thus reserves, subject to the procedural
minimum standards set out in that Agreement, a degree of discretion to Members on this,
taking into account "differences in national legal systems". Indeed, no Member's national
system of civil judicial procedures will be identical to that of another Member.17
The above findings of the AB should be the basis for interpretation of Part III of the TRIPS Agreement.
The Panel found that the wording of Section 211(a)(2), which provides that "[no] U.S. court shall
recognize, enforce or otherwise validate any assertion of rights" in certain circumstances, effectively
prevents the right holder from substantiating a claim. However, the AB went further and vacated the
decision of the Panel, stating that Article 42 is basically a procedural obligation and it does not prevent
members from legislating whether courts should consider each and every requirement of substantive law at
issue before making a ruling. Accordingly, the AB determined that the legislation does not deny the
procedural rights guaranteed by Article 42.18
In so far as the application of the fair and equitable procedures to domestic judicial proceedings is
concerned, Article 42 cannot be interpreted as requiring WTO panels to review or exercises appellate
jurisdiction over domestic administration of justice. The TRIPS Agreement establishes minimum standards
that should be in place, and it is quite unnecessary for WTO panels to act as an appeal forum over
dissatisfaction with the procedures and final rulings of an administrative or judicial body of member states.
Investment arbitration tribunals in the case of Loewen v US (2003) have rejected any interpretive approach
to fair and equitable treatment as requiring the tribunal to function as an appellate or reviewing panel with
respect to how national courts administer justice.
A number of the provisions of the TRIPS Agreement on enforcement of intellectual property require
only the availability of judicial discretionary power to order procedural relief. The enforcement provisions
of the TRIPS Agreement have not adequately developed through case law or practices of dispute settlement
panels. But panel and appellate body rulings have provided important observations on the interpretation of
the provisions. The Panel in India - Patents (EC) confirmed that the function of the words 'shall have the
authority' is to address the issue of judicial discretion, not that of general availability.19 Accordingly,
countries can comply with their obligation by providing under their legislation the relevant judicial
discretionary power. Some of the ‘shall have the authority’ provisions prescribe conditions on the exercise
of the discretionary power. For example, under Article 45 member states should provide the judicial power
to award damage. In exerting their power, judicial authorities may or may not order damage. If they do,
Article 45 requires that the award must be adequate to compensate for the injury to the right holder. It is an
important flexibility under the enforcement section of the TRIPS Agreement that national authorities
maintain significant leeway to determine what amounts to ‘adequate compensation’ in awarding damage.
17 WTO (2002) Report of the Appellate Body in US - Section 211 Appropriations Act, WT/DS176/AB/R, para.
216 (emphasis added).
18 Ibid., para. 227.
19 WTO (1998), Panel Report on India - Patents (EC), WT/DS79/R , para. 7.66.
The Changing Structure and Governance of Intellectual Property Enforcement 9
The requirement to provide for criminal procedures and penalties under Article 61 should be
interpreted on the basis of the ordinary meaning of words and phrases. Article 16 of the TRIPS Agreement
establishes that the rights conferred by a trademark consist of the exclusive right to prevent all third parties
not having the owner’s consent from using in the course of trade signs for goods or services which are
identical or similar to those in respect of which the trademark is registered where such use would result in a
likelihood of confusion. Use of a trademark in the course of trade may infringe the rights conferred by a
validly registered trademark in accordance with Article 16. Article 61 applies only to counterfeiting or
copyright piracy on a commercial scale as opposed to all other infringing activities in the course of trade.
What amounts to ‘counterfeiting and copyright on a commercial scale’ must be different from infringing
use of trademark in the course of trade. Otherwise, Article 61 would have simply referred to use of
trademark in the course of trade. From this, one could adduce that ‘commercial scale’ must imply a far
greater infringement than use of trademark in the course of trade infringing the right conferred by a
registered trademark. The use of the phrase ‘commercial scale’, for example, in industrial production does
not convey the sense of usage limited to value of goods traded but of the operation of industrial production,
marketing channels and sufficient supply of goods in such quantities, value and persistence that establish
commercial viability for the producer. The interpretation of Article 61 should be limited to determining the
general availability of the specific criminal procedures and remedies.
The provisions of the TRIPS Agreement on enforcement of intellectual property rights could also be
interpreted in conjunction with the provisions of the General Agreement on Tariffs and Trade (GATT).
According to Article 41 of the TRIPS Agreement, the procedures for enforcement of intellectual property
rights shall be applied in a manner to avoid the creation of barriers to legitimate trade. A GATT Panel in
United States- Section 337 found that the fact that legislations are applied as a means of the enforcement of
intellectual property at the border does not provide an escape from the applicability of Article III (4) of the
GATT.20 The approach remains valid, although the TRIPS Agreement has adopted a mandatory
requirement to maintain the means for right holders to lodge an application for suspension of the release of
goods. Similarly, Article XX of the GATT and Article XVI of the General Agreement on Trade in Services
(GATS) could be applied to provisions of the TRIPS Agreement on enforcement of intellectual property
rights to avoid barriers to international trade.
One of the current processes taking place at the WTO is the recent dispute settlement consultations
initiated by the United States with the People’s Republic of China on intellectual property rights protection
and enforcement.21 If the consultations fail a WTO dispute panel will be convened to settle the dispute.
An unsettled issue with regards to the enforcement of the TRIPS Agreement, and to the rest of the
TRIPS provisions for that matter, is whether non–violation complaints would apply to intellectual property
rights enforcement provisions.22 Many developing countries have clearly and repeatedly indicated in the
TRIPS Council that non-violation complaints should not be applicable to intellectual property rights as it
raises fundamental and systemic concerns.23 The Hong Kong Ministerial Declaration has extended further
the moratorium on non-violation and situation complaints until the adoption of modalities that should be
reported to the next ministerial conference.
20 GATT (1989), Panel Report on United States - Section 337 of the Tariff Act of 1930, L/6439, BISD 36S/345,
385-386, para. 5.10.
21 See USTR Press Release (2007), United States Files WTO Cases Against China Over Deficiencies in China’s
Intellectual Property Rights Laws and Market Access Barriers to Copyright-Based Industries, 4 September 2007.
22 Under Article XXIII of the GATT 1994, WTO Members can challenge one another not only for actions
contrary to their obligations under the WTO agreements, but also for actions that, though consistent with those
agreements, otherwise nullify or impair a benefit arising from them. See South Centre-CIEL (2004), p.2.
23 Ibid.
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II.2 Intellectual Property Enforcement in WIPO
There is no in-built dispute settlement mechanism in WIPO similar to that of the WTO which can be used
to compel the observance of provisions on enforcement under WIPO-administered treaties.24 While
members of WIPO-administered treaties are obliged to adopt measures to ensure the implementation of the
treaties they ratify, some of the treaties provide special provisions with regard to enforcement.
Two of the most recent treaties negotiated in WIPO, namely the WIPO Copyright Treaty (WCT)
and the WIPO Performances and Phonograms Treaty (WPPT) (jointly called “Internet Treaties”), signed in
1996, include specific intellectual property rights enforcement provisions. The provisions require Members
to provide, on the one hand, adequate legal protection and, on the other, effective legal remedies against the
circumvention of effective technological measures (such as encryption) used by right holders to protect
their rights and against the deliberate alteration or deletion of electronic ‘rights management information.’25
These are two very new areas concerning the grant of intellectual property rights that create specific
enforcement obligations. It should be noted that developing countries are the main subscribers to these
treaties.
The International Convention for the Protection of New Varieties of Plants (UPOV) of 1991 defines
the scope of the rights of plant breeders with respect to plant varieties. The Convention do not provide for
detailed procedures on the enforcement of plant breeders’ rights. Article 30 of the Convention requires
courtiers to adopt all measures necessary for the implementation of the Convention. Such measures should
at least;
a) provide for appropriate legal remedies for the effective enforcement of breeders' rights
b) maintain an authority entrusted with the task of granting breeders' rights
c) ensure that the public is informed through the regular publication of information concerning
applications for and grants of breeders' rights, and proposed and approved denominations
The nature and scope of the legal remedies for the effective enforcement of breeders’ rights would be
determined by each country. However, countries have the obligation to ensure that the public will be
notified through a regular publication of information concerning the application and grant of rights.
In addition to enforcement provisions in recent WIPO treaties, WIPO has established a permanent
committee for members to discuss and share national experiences on intellectual property enforcement. The
WIPO Advisory Committee on Enforcement (ACE) was established in 2002, which structured the
discussion on enforcement of copyrights and industrial property rights. The establishment of the ACE
merged the Advisory Committee on Enforcement of Industrial Property Rights and the Advisory
Committee on Management and Enforcement of Copyright and Related Rights in Global Information
Networks into a single forum.26 When the ACE was established, it was agreed that its mandate would be
limited to discussions on technical assistance and coordination. It was specifically agreed that the mandate
would not include norm-setting in the field of enforcement. Several members are of the view that the issue
of enforcement should be seen in the broader context of the public interest and the obligations of right
holders, and not just in the context of combating infringement of protected intellectual property rights.27
However, to date the focus of the ACE has been on strengthening the enforcement of intellectual property
rights and the problems right holders face in enforcing their intellectual property rights in third countries.
24 Other than the obligations of certain WIPO treaties (Paris Convention and Berne Convention) that were
incorporated into the TRIPS Agreement.
25 WIPO (1996), Performances and Phonograms Treaty, Article 19.
26 WIPO (2002), WO/GA/28/7.
27 WIPO (2003), WIPO/ACE/1/7 Rev., para. 7.
The Changing Structure and Governance of Intellectual Property Enforcement 11
III. RECENT LEGAL AND POLICY TRENDS ON INTELLECTUAL PROPERTY
ENFORCEMENT
The European Union and the United States have defined intellectual property rights enforcement as one of
their core areas of transatlantic cooperation.28 The growing pressures for increased intellectual property
protection reflect the shift in the capital structure of industries as well as changes in the developed
countries’ trade policies aimed at reinforcing the international competitiveness of their industries.29
The recent policy trends in developed countries show a marked shift from the minimum standard to
the highest achievable, and considerable emphasis is placed on the enforcement of intellectual property
rights. Unilateral measures and FTAs are employed as effective tools to demand an increased level of
enforcement of intellectual property rights. On the promise of reciprocal concessions, more developing
countries are undertaking FTAs, in particular with the United States, whereby they assume “TRIPS-plus”
obligations with respect to intellectual property rights to which they are effectively bound under the dispute
settlement mechanism of the agreement.
The United States, in particular, is pursuing its aggressive intellectual property protection strategy by
combining higher standards and harmonization of intellectual property rules at the multilateral and bilateral
level together with increased enforcement of the standards by way of FTAs. So far, the United States’
strategy has proved highly effective for the interests of multinationals, and the European Union has moved
in the same direction. In the process, developing countries are bound by intellectual property enforcement
standards beyond the multilateral commitment.. Developing countries continue to engage in a highly
complex multilateral and bilateral web of intellectual property rights standards.30
III.1 Recent Trends in the United States
In the United States the enforcement of intellectual property rights is strengthen by measures implemented
throughout government agencies. Intellectual property rights enforcement involves the Office of the United
States Trade Representative, the Department of Commerce, the Patent and Trademark Office, the
International Trade Administration, the Department of Homeland Security, which includes Customs and
Border Protection and Immigration and Customs Enforcement, and the Department of Justice and the State
Department. The effort of these organs is coordinated by the National Intellectual Property Law
Enforcement Coordination Council established in 1999.31
United States launched the Strategy Targeting Organized Piracy (STOP!) initiative in October 2004.
The strategy aims at aggressively engaging trading partners in increasing efforts to seize counterfeit goods
at United States borders, pursuing criminal enterprises involved in piracy and counterfeiting.32 The
28 European Union (2006), EU - US Summit Declaration
29 In this regard, Joseph Papovich, former United States Assistant Trade Representative on Services, Investment
and Intellectual Property, in discussing how the US programme for promoting intellectual property in other
countries came about, noted: “In the 1980s the United States began facing chronic trade deficits, so our
government undertook a rather intensive examination about how we should address these deficits. One of the
things that became apparent was that we needed to emphasize exports of products for which we had a
comparative advantage. The area of intellectual property… is one in which the United States has a strong
comparative advantage. It became apparent to US policy-makers that potential US exports were not being
exported because people in other countries were copying, were counterfeiting these US products.” Papovich
and Claude (1998).
30 Drahos (2004), p.14.
31 United States National Intellectual Property Law Enforcement Coordination Council (2006).
32 Ibid., p. 10.
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Department of Justice of the United States has developed what it calls ‘a comprehensive, multi-dimensional
strategy to fight intellectual property crime’. The strategy includes the following principles:
1. laws protecting intellectual property rights must be enforced;
2. government and intellectual property rights owners have a collective responsibility to take
action against violations of intellectual property rights laws;
3. the Department should take a leading role in the prosecution of the most serious violations of
the laws protecting copyrights, marks, and trade secrets;
4. government should punish the misappropriation of innovative technologies rather than
innovation itself;
5. intellectual property rights enforcement must include the coordinated and cooperative efforts of
foreign governments through informal assistance and formal cooperation, such as treaties and
international agreements.33
These principles are meant to addresses the many different aspects of intellectual property rights
enforcement, including criminal enforcement and prevention and civil and antitrust enforcement. Recent
trends in intellectual property rights enforcement in the United States are also marked by an increase in the
involvement of the Supreme Court of the United States since the creation of the United States Court of
Appeal for the Federal Circuit.34 It is also notable that while the United States Supreme Court has been
active only occasionally in reviewing patent cases, it is currently increasing its reviews of decisions of the
appellate court.
In MedImmune, Inc. v. Genentech, Inc. (2007), with respect to declaratory Judgement, the Supreme
Court ruled that subject matter jurisdiction stands, even though the licensee did not refuse to make royalty
payment under the license agreement.35 This decision follows Illinois Tool Work, Inc. v. Independent Ink,
Inc. (2006), where the Supreme Court ruled that a patent does not necessarily confer market power upon
the patentee, and in all cases involving a tying arrangement the plaintiff must prove that the defendant
(patentee) has market power in the tying product.36
In Metro-Goldwyn-Mayer Studios Inc. v. Grokster, (2005) the Supreme Court established the
jurisprudence for secondary liability. It state that:
one who distributes a device with the object of promoting its use to infringe copyright, as
shown by clear expression or other affirmative steps taken to foster infringement, going
beyond mere distribution with knowledge of third-party action, is liable for the resulting acts
of infringement by third parties using the device, regardless of the device’s lawful uses.37
In McFarling v. Monsanto (2005) the Supreme Court denied petition to appeal in a case concerning
the refusal to permit the saving and replanting of second generation genetically-modified agricultural seeds.
The court agreed to the argument under amicus brief and the ruling of the appellate court that it is well
settled that a patent does not engage in patent misuse when it merely invokes its core right to refuse to
license its patented invention.
Although the trends in the Supreme Court of the United States reinforce the right of intellectual
property owners to exercise their rights, there is one particular decision that could be singled out as
promoting equity in enforcement proceedings. In eBay Inc V. MercExchange, L.L.C., the Supreme Court
33 United States Department of Justice (2006), pp. 15-16.
34 Arthur and Cogswel III (2005), 821-23.
35 United States Supreme Court (2007), MedImmune, Inc. v. Genentech, Inc, et. al., Certiorari to the United
States Court of Appeal for the Federal Circuit, (No. 05-608) 427 F. 3d 958 (2007).
36 Arthur and Cogswel III (2005), 821.
37 United States Supreme Court (2005), Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Certiorari to the United
States Court of Appeals for the Ninth Circuit, (04-480) 545 U.S. 913 (2005)
The Changing Structure and Governance of Intellectual Property Enforcement 13
swept away a well established practice of the Federal Circuit in issuing injunction relief automatically when
there is infringement of valid patents. The Court holds that traditional equitable principles apply in
enforcement proceedings. By applying traditional equitable considerations for injunction, the Supreme
Court narrowed down the long-standing jurisprudence in the United States that emphasised that a patent is
the inventor’s ‘absolute property’38 when it stressed that ‘the creation of a right is distinct from the
provision of remedies of that right.’39 In seeking injunction the Supreme Court emphasized the four tests of
equity: namely, that (1) the patentee has suffered an irreparable injury; (2) remedies available in law, such
as monetary damages, are inadequate to compensate for that injury; (3) considering the balance of hardship
between the plaintiff and defendants, a remedy in equity is warranted; and (4) the public interest would not
be disserved by a permanent injunction. However, the court also stated that the mere fact of non-working of
patent does not establish that the patentee will not suffer irreparable damage.
The trends in the United States reflect the focus on enforcement of intellectual property rights, at the
same time narrowing down the applicability of antitrust law and regulations of misuse of intellectual
property rights. In April 2007, the United States Department of Justice and the Federal Trade Commission
jointly issued a report on antitrust enforcement and intellectual property rights.40 The conclusion of the two
agencies is important to understand the policy orientation in the United States, as their analysis is based on
the legal, judicial and policy developments of the country. The agencies stated that licensing practices,
tying arrangements and incorporation of intellectual property rights in standards do not create anti-trust
liability or require a case by case analysis. However, the agencies concluded that conditional refusal to
license that causes competitive harm is subject to antitrust liability. They also concluded that a tying
arrangement would likely be susceptible to challenge if (1) the seller has market power in the relevant
market in the tying product, (2) the arrangement has an adverse effect on competition in the relevant market
for the tied product, and (3) efficiency justifications for the arrangement do not outweigh the
anticompetitive effects.41 On many of the instances that lead to competition concerns, the agencies framed
their conclusion in favour of the rights conferred by intellectual property rights.
These developments should be assessed in the light of other legislative developments that have
implications that go beyond the understanding of the relevant government agencies in the United States.
The United States continues to update its legislation on intellectual property rights enforcement, and in
2007 the Department of Justice submitted an Intellectual Property Protection Act for approval by the
Congress. The Act would provide:
1. authority to prosecute criminal copyright offences before the registration of claims of copyright
has been made;
2. a new federal offence of attempting to commit criminal copyright infringement;
3. ex parte order for seizure in civil copyright cases of records related to infringement of
copyright, and forfeiture in criminal copyright cases of any copies manufactured, reproduced,
distributed, sold, or otherwise used, intended for use, or possessed with intent to use, and any
property that constituted or was derived from any proceeds obtained directly or indirectly as a
result of copyright infringement offences. The same applies to any property used or intended to
be used in any manner or part to commit or facilitate the commission of a copyright
infringement offence;
4. that the export of infringing copies should be treated as an infringing distribution and may form
the basis for a criminal copyright prosecution in certain cases;
5. application of the repeated-offender penalties when the copyright infringing committed any two
copyright felonies, regardless of the particular type of offence - including attempt offences;
38 Otherwise known as the “continental Paper bag” after Continental Paper Bag Co. v. Eastern Paper Bag Co.,
210 U.S. 405 (1908).
39 Tang (2006), p. 241.
40 United States Department of Justice and Federal Trade Commission (2007).
41 Ibid. See the introduction section for the summary of all conclusions of the agencies.
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6. voice intercept (wiretap) authority for offences that are equivalent, if not greater, in impact to
other predicate offences that already give rise to such authority.42
Criminal persecution for enforcement of intellectual property rights is increasing and forming a part
of bigger offences such as financing terrorism and organized crime, including organized online piracy.
These efforts have led to enforcement procedures involving highly sophisticated intelligence, and the
worldwide arrest of suspects targeting various acts that include peer-to-peer file sharing, satellite signal
theft, counterfeiting of luxury goods, pharmaceuticals and cosmetics, theft of trade secretes, and selling of
counterfeit goods such as software.43
In summary the legal and policy trends in the United States demonstrate the strict enforcement of
intellectual property rights as the main public policy objective. The rights conferred by intellectual property
reduce the role of competition/antitrust rules.
III.2 Recent Trends in the European Union
The European Union has been actively pursuing measures to harmonize standards and institutional
mechanisms for intellectual property rights enforcement. In 2003 a new common regulation concerning
customs action against goods suspected of infringing certain intellectual property rights, and the measures
to be taken against goods found to have infringed such rights, entered into force.44 The regulation extends
the scope of intellectual property rights subject to action by customs authorities. In addition to trademark
counterfeit goods and copyright piracy goods as defined in the TRIPS Agreement45, the scope of
infringement of intellectual property rights are extended to include, among others, goods infringing a
patent, a supplementary certificate (plant protection or medicinal product) and geographical indications.
The regulation also extends the scope of possible actions by customs authorities on border measures.
The possible actions will include suspension of the release of goods in the European market, detention of
the goods for three days or destruction of the goods without awaiting the outcome of final legal proceedings
with the agreement of the holder of the goods or the declarant.46 The regulation provides for certain
safeguards against the potential abuse of the border measures and provides rights for the declarant, importer
or consignee of the goods. For example, under Article 4 of Council Regulation 1383/2003, customs
authorities act only at the right-holder's request. The customs authority may also ask the right holder to
provide information in the application for customs action before taking any action on the suspected
infringing good. The importer, holder or consignee of the goods can obtain release of the goods if
proceedings for a substantive decision are not taken within 10 days.
However, there are reasonable grounds to be concerned about the potential impact of extending
broad powers to customs officials on border measures. The potential danger is exemplified in the strategic
use by the United States’ multinational Monsanto Co. of the European Union’s legislation on customs
action in suspected cases of intellectual property infringements. Monsanto filed patent infringement
lawsuits against soymeal importers in Denmark, the Netherlands, the United Kingdom and Spain.47
Monsanto Co. aimed at collecting royalties on imports of Argentine soymeal based on a European patent
on the company's “Roundup Ready” soybeans. Monsanto Co. argued that these were illegal imports given
42 United States Department of Justice, Office of Legislative Affairs (2007).
43 Department of Justice, Progress Report of the Department of Justice’s Task Force on Intellectual Property,
2006, pp. 25-29.
44 European Union, Council Regulation (EC) No 1383/2003 of 22 July 2003. See also Commission Regulation
(EC) No 1891/2004 of 21 October 2004 laying down provisions for the implementation of Council Regulation
(EC) No 1383/2003.
45 WTO (1994), TRIPS Agreement Article 51, footnote 14.
46 European Union, Council Regulation (EC) No 1383/2003 of 22 July 2003, Article 4.
47 El-Amin , Ahmed, 2006, “Soy imports delayed as Argentina fights Monsanto over GM”, GRAIN, available at
http://www.grain.org/research/contamination.cfm?id=368
The Changing Structure and Governance of Intellectual Property Enforcement 15
that the soymeal was made from soybeans that Argentine farmers use without paying royalties. The
European Commission gave its expert opinion that soybean by-products are not covered under European
patents held by Monsanto Co. Monsanto Co. requested customs officials in various ports of European
Union countries to seize incoming soymeal shipments from Argentina. Given that the common regulation
on customs actions concerning intellectual property infringements No 1383/2003 extends coverage to
include patent and plant variety infringements, Monsanto Co. was able temporarily to block the shipments
from entering European territory, from which both Argentine exporters and European importers of soymeal
suffered extensive losses, including legal expenses and costs of storing the merchandise delayed at the
ports. Recently, the Spanish court48 and United Kingdom High court49 ruled against Monsanto’s claims.
The regulations on border measures and their impact as to whether they may constitute barriers to
legitimate trade might constitute non-compliance with Article 41 of the TRIPS Agreement and the relevant
provisions of GATT. The European Commission has established that an annual report should be produced
to evaluate the regulation and that, where necessary, it should include recommendations for its amendment.
A second important development in the European Union is the adoption of Directive 2004/48/EC on
enforcement of intellectual property rights in April 2004. The stated aim of the Directive was to
‘approximate legislative systems so as to ensure a high, equivalent and homogenous level of protection in
the Internal Market.’50 The Directive applies to any infringement of intellectual property rights that have
been harmonized among the European Union, including those not covered under the TRIPS Agreement
such as utility model rights and the sui generis right of a database maker, and establishes penalties and
remedies that must be available under civil law. Some of the "TRIPS plus" elements of the Directive
include: (1) the power for the authorities to seize documentary evidence relating to the suspected
infringement and the suspected goods themselves, (2) an obligation for courts to provide information on the
source of infringing goods, (3) interlocutory (preliminary) injunctions that may be provided in advance of a
decision on the merits of a case, (4) the seizure of offenders' bank accounts and other assets and profits to
ensure payment of due damages, (5) the recall of infringing goods at the offender's own expense, and (6)
the choice for the right holder of either lump sum damages (up to double normal royalties or license fees)
or compensation for lost profits.
The Directive underlines that it should not be used to restrict competition unduly in a manner
contrary to the Treaty establishing the European Community.51 The European Commission undertook
several measures to ensure the implementation of the Directive, including signing cooperation agreements
with major trade representatives such as airlines, shipping companies and express carriers with a view to
improving information exchange on traffic in fakes.52
Recent efforts in the field of intellectual property rights enforcement in the European Union are
focusing on the Directive on criminal measures aimed at ensuring the enforcement of intellectual property
rights.53 However, the move to harmonize and implement higher criminal sanctions under intellectual
property rights enforcement faces difficult challenges considering the divergence in the legal systems and
policies of European countries.
48 Ruling of the Madrid Trade Tribunal, Monsanto vs. Sesostris, 6 September 2007.
49 United Kingdom England and Wales High Court (Patents Court) Decisions (2007), Monsanto Technology LLC
vs. Cargill International S.A. & Anor [2007] EWHC 2257 (Pat), 10 October 2007, available at
http://www.bailii.org/ew/cases/EWHC/Patents/2007/2257.html.
50 European Union, Directive 2004/48/EC of the European Parliament and the Council of 29 April 2004 on the
enforcement of intellectual property rights, 30.4.2004 Official Journal of the European Union L157/47,
preamble, para. 10.
51 Ibid., preamble, para. 12.
52 United Kingdom Central Government (2005), p. 25.
53 European countries are also continuing to explore the possibility of establishing an optional European Patent
Litigation Agreement. The proposed agreement would establish a European Patent Judiciary and its organ, the
European Patent Court.
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After much debate, the more stringent initial proposal of the Directive that included applying
criminal sanctions and penalties to patent infringements was required to be revised. The European
Parliament legislative resolution on the recent draft of the Directive on criminal measures amended and
clarified various provisions of the Directive.54 For example, the resolution clarifies that the Directive does
not apply to any infringement of an intellectual property right related to patents, utility models and
supplementary protection certificates or to parallel imports of original goods which have been marketed
with the agreement of a right holder in the third country.55 Member States are also required to ensure that
the rights of defendants are duly protected and guaranteed. The resolution also requires Member States to
prohibit and sanction the misuse of threats of criminal sanctions, and requires that Member States prohibit
procedural misuse, especially where criminal measures are employed for the enforcement of the
requirements of civil law. The justification provided for this amendment is as follows:
“the potential for a right-holder to deter potential infringers (i.e., competitors) increases
considerably if he can threaten them with criminal penalties. Both international and European
law require the prevention of misuse of intellectual property rights. Misuse disrupts free
competition”.56
The development in jurisprudence with respect to intellectual property rights enforcement in the
European Union is fragmented. However, a landmark decision in Finland in a criminal case involving the
distribution of a computer programme for circumventing effective technological protection measures
(TPM) in DVDs may set a precedent if it is upheld by appellate bodies. The Court ruled that the specific
TPM affected by the computer programme distributed by the defendants is not an ‘effective’ protection
measure for protection purposes since it has been circumvented before and the conduct in challenge cannot
be considered to have caused any slight gap in the protection compared to the circumstances already
existing.57 In another cases a Belgian court has ruled that internet service providers (ISP) should install the
filtering mechanism to prevent the illegal sharing of copyrighted materials in peer-to-peer file sharing
platforms.58
The growing consideration in Europe on the interaction between competition law and intellectual
property law may in future impact the current framework for enforcement of intellectual property rights.
The European Commission has recently issued various landmark decisions related to competition and
intellectual property rights. The IMS Health case concerns the refusal to license to use a database in which
copyright subsists despite an offer to pay valuable considerations for the license. The European Court of
Justice stated that in order for the refusal to license to be abusive it is sufficient that three cumulative
conditions be satisfied, namely, (1) the refusal prevented the emergence of a new product for which there
was a potential consumer demand; (2) the refusal to license by the copyright owner was not justified by
objective considerations; and (3) the refusal was such as to exclude any competition on a secondary
market.59
In a case against Microsoft, the European Commission rejected Microsoft’s argument that its rights
in intellectual property rights products should justify maintaining absolute discretion with respect to the
licensing of its product, regardless of antitrust law. The Commission reasoned that lack of interoperability
would lock in consumers to a specific product, that if Microsoft’s strategy is successful new products will
be confined to niche existence or not be viable at all, that there will be little scope for innovation, and that
these reasons outweigh the mere protection of the proprietary interest if Microsoft’s anti-competitive
54 European Parliament (2007a), P6_TA(2007)0145.
55 European Parliament (2007b), A6-0073/200.
56 Ibid., Amendment 12, Article 2.
57 Helsinki District Court (2007), 07/4535, Public Prosecutor v. Rauhala and X, (Misdemeanor of violating a
technological measure), 5 February 2007.
58 Intellectual Property Watch (2007).
59 Stockholm Network (2006), p.12.
The Changing Structure and Governance of Intellectual Property Enforcement 17
behaviour remains unfettered.60 The European Court sustained the decision of the Commission. Microsoft
declared that it would comply with the ruling.
Recently the European Commission began an enquiry into the pharmaceutical sector in Europe to
the whether companies have undertaken anti-competitive practices including deliberate abuse of patent
rights and patent-dispute settlements between companies to ward of competition.61 The enquiry so far has
included a number of raids of the offices of European-based pharmaceutical companies such as Pfizer and
GlaxoSmithKline. One of the concerns that prompted the enquiry is the declining number of new
pharmaceuticals coming to market alongside the growing number of patents being granted.
In brief, the European Union is aggressively pushing to harmonize the legal mechanisms and
facilitate the enforcement of intellectual property rights under a community rule. The effort of the European
Union with regard to the enforcement of intellectual property rights is accompanied by the active role of the
European Parliament in attempting to ensure that the European Commission regulations respect due
process, balance interests and provide safeguard mechanisms. Moreover, Europe is emerging as the world’s
top regulator of competition, at least in cases involving Microsoft.
III.3 United States and European Union Foreign Policy
There are several initiatives in the developed countries targeting the developing countries and transition
economies on intellectual property rights enforcement. The enforcement of intellectual property rights in
third countries is the main foreign policy objective and driving force for trilateral cooperation between the
European Union, Japan and the United States on intellectual property rights. The most recent initiative of
the triad is to negotiate a new international treaty on “anti-counterfeiting” – known as the Anti-
Counterfeiting Trade Agreement (ACTA) - with major trading partners.62 The stated purpose of the
agreement is to “contribute to fighting counterfeit by building international cooperation leading to
harmonized standards and better communication between authorities, establishing common enforcement
practices to promote strong intellectual property protection, and creating a strong modern framework which
reflects the changing nature of intellectual property theft in the global economy.”63
The United States position on intellectual property rights enforcement is clear: the ‘goal is to control piracy
through strong laws and effective enforcement worldwide, and to ensure that protection remains effective
as technology develops in the future. 64
Likewise, the European Union’s policy shows that it considers it to be legitimate to utilize
asymmetrical powerful positions in the world economy to carry out international intellectual property rights
policy.65 The European Commission adopted a strategy for the enforcement of intellectual property rights
in third countries in 2005.66 The strategy provides for several action areas that include:
1. periodically conducting surveys in order to develop a list of priority countries for the
implementation of the strategy;
2. the possibility of launching an initiative in the TRIPS Council highlighting the fact that the
implementation of the TRIPS Agreement requirements in national laws has proved to be
insufficient to combat piracy and counterfeiting, and of considering possible amendments to the
TRIPS Agreement so that countries apply border measures not only on imports but also on
exports and transit trade.
60 Commission Decision of 24.03.2004 relating to a proceeding under Article 82 of the EC Treaty (Case
Comp/C-3/37.792 Microsoft), Apr. 21, 2004, paras. 694, 700 and 724.
61 European Union press release IP/08/49, Antitrust: Commission launches sector inquiry into pharmaceuticals
with unannounced inspections, Brussels, 16 January 2008.
62 USPTO (2007) press release.
63 European Union press release ( 2007).
64 United States Trade Representative, Work on Intellectual Property webpage, visited on December 2007.
65 Braithwaite and Drahos (2000), p. 27-33.
66 European Commission Directorate General for Trade (2004).
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3. full implementation and strengthening of bilateral customs-cooperation agreements with China,
the United States, Japan and other trading partners;
4. turning technical assistance from ‘demand-driven’ to ‘dialogue driven’ and, in the case of
‘production’ countries, shifting the focus in any cooperation programmes from assistance in
drafting legislation to a more enforcement-oriented strategy, including training programmes for
judges, police and customs. The strategy also aims at improving dialogue with international
organizations to ensure that their technical assistance is compatible with the strategy for
enforcement of intellectual property rights;
5. considering trade dispute settlement and sanctions within the WTO.
As part of STOP!, both the United States Trade Representative (USTR) and the State Department
are actively promoting the adoption of best practices, sharing information, streamlining procedures and
strengthening technical assistance efforts for enforcement internationally. These efforts include new
initiatives in multilateral fora to improve global intellectual property rights environment, such as the G8,
the United States–European Union Summit, the Organization for Economic Cooperation and Development
(OECD), the Asia-Pacific Economic Cooperation (APEC) forum and the Security and Prosperity
Partnership (Canada and Mexico).
III.3.1 Bilateral Technical Assistance
The United States and European Union are utilizing technical assistance as a means of strengthening
intellectual property rights enforcement in third countries. Under Article 67 of the TRIPS Agreement,
developed countries are obliged to provide technical assistance in favour of developing countries and least
developed countries (LDCs). The examination of the submissions of developed countries to the TRIPS
Council demonstrates that most of the technical assistance provided is now aimed at strengthening the
capacity of developing countries to enforce the protection of intellectual property rights. 67
The United States government has undertaken extensive training in China and the rest of Asia, Latin
America and the Caribbean, Africa and the Middle East, and other countries. The training involved
interagency arrangements and discussions, academic training and seminars, and even an intellectual
property rights enforcement program for Supreme Court and Appellate Court judges from 23 countries.68
There were joint operations and international enforcement coordination with other countries. The first joint
operation with China led to the arrest and prosecution of United States’ citizens in China for trade in
counterfeited DVDs.69 Moreover, the United States has increased the number of its official representatives
abroad dedicated exclusively to intellectual property rights enforcement.
III.3.2 Unilateral Trade-Related Mechanism
Important foreign policy tools of the developed countries include the combined use of unilateral trade
review mechanisms and the WTO dispute settlement mechanism. The challenges in intellectual property
enforcement for developing countries are aggravated by the fact that their efforts in this field are not
measured only by their compliance with enforcement obligations under the TRIPS Agreement but by the
results achieved.70 Key activities include Special 301 reviews of United States’ trading partners, the special
provincial review of China, and continued engagement with Russia through both bilateral and multilateral
67 D. Matthews and V. Munoz-Tellez (2006), p. 629-653.
68 United States National Intellectual Property Law Enforcement Coordination Council (2005), pp. 48-60.
69 United States Department of Justice (2006), p. 27.
70As the former United States Trade Representative Robert Zoellick noted in a speech at the Electronics
Industries Alliance 2004 Government – Industry Dinner, May 25, 2004, the U.S. strategy is “not focused on
process, but on producing real results that create opportunities for American workers and American
companies.”
The Changing Structure and Governance of Intellectual Property Enforcement 19
avenues. The United States maintains a review mechanism for protection and enforcement of intellectual
property rights in other countries called ‘Special Section 301.’71 The European Union Trade Barrier
Review (TBR) mechanisms also function as key tools to influence countries to increase the enforcement of
intellectual property rights. While it is a basic obligation of all WTO Members to channel any controversy
relating to intellectual property rights through the multilateral procedure under Article 23 of the Dispute
Settlement Understanding, the United States has continued to use the threat of sanctions relying on
unilateral determinations made under its Section 301 Review.72 In the case of the United States, in order for
developing countries to achieve beneficiary status for preferential trade programmes, they must provide
adequate and effective protection of intellectual property rights. However, the interpretation of what
constitutes enforcement is subject to the discretionary power of the United States.
While the unilateral mechanisms and United States and European Union cooperation create the
necessary pressure, FTAs and the WTO dispute settlement mechanism secure compliance. The most active
negotiations on intellectual property rights are currently occurring at the bilateral level, mainly through
FTAs. The FTAs and the subsequent changes in intellectual property enforcement standards are analysed in
the next section. An integral part of the United States’ strategy with regards to FTAs is to provide for
higher standards of intellectual property rights protection and enforcement. For the powerful United States
domestic corporations, the negotiation of each FTA is a new opportunity to lobby the government for new
and higher standards, which serve as precedents for future intellectual property rights policy.73 Moreover,
the coming into force of the 2002 Trade Act, which was valid until July 2007, solidified the relationship
between the United States’ intellectual property rights policy-making officials and the industry groups.74
III. 4 The Role of Industry in Shaping the Structure of Intellectual Property Enforcement
The adoption of the TRIPS Agreement under the WTO was the direct result of the demands of the
information technology, biotech, pharmaceutical, entertainment and semiconductor industries in the
advanced countries.75 These industries continue to play an important role in the subsequent implementation
of the agreement, upgrading the standards of protection and intellectual property rights enforcement. The
current national and international discourse led by the industries in the developed countries is important for
an understanding of the policy developments and approaches of governments.
From the industry perspective, international discourse is an important element in the strategy aimed
at establishing harmonized standards of intellectual property protection and enforcement modelled on the
normative framework of the United States, European Union and Japan, and which surpass the obligations
of the TRIPS Agreement. Industrial groups and developed countries are aggressively promoting a narrow
approach for intellectual property rights enforcement, which is unduly limited to defending only the
interests of right holders.76 The objective is to achieve an international framework that acts as a deterrent to
71 Section 301 of the United States. Trade Act of 1974, as amended.
72 During negotiations on the Dispute Settlement Understanding (DSU) in the Uruguay Round, other Quad
countries (European Union, Japan and Canada) and main players from the developing world had agreed on
Article 23 to put an end to the United States’ unilateralism and to scrutinize actions through the multilateral
system. However, the basic consistency of Section 301 was unsuccessfully challenged by the EC in 2000. See
WTO (2000), Panel Report, United States — Sections 301-310 of the Trade Act of 1974, WT/DS152/R,
adopted 27 January 2000, DSR 2000:II, 815.
73 ITAC (2004a), p.4.
74 Section 2104 (e) of the Trade Act of 2002 requires that separate advisory committees provide the President
and the U.S. Trade Representative and Congress with a detailed report, which must include an advisory
opinion as to whether and to what extent the agreement promotes the economic interests of the U.S..
75 The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) was adopted upon the
conclusion of the Uruguay Round of multilateral trade negotiations in 1994 as part of the ‘single undertaking’.
76 WIPO’s webpage on Intellectual Property Enforcement Issues and Strategies defines intellectual property
enforcement as “the guarantee that the private rights the intellectual property right holder has obtained through
the intellectual property system are respected” (last visited in August 2006).
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infringements of state-conferred intellectual property rights and to assist right holders to obtain quick and
efficient remedies when infringements take place. The aim is to make intellectual property rights
enforcement cheaper, easier and more secure and to put industries in a better position to earn profits from
the export of their intellectual property rights-based products. As a result, the industry approach to
enforcement, in sharp contrast to a public policy approach that takes into consideration issues broader than
industry interests in formulating policy, is one of the major emerging challenges for national intellectual
property rights systems, particularly for developing countries.
The current industry discourse, which is also reflected in the official stance of the United States and
the European Union, has taken a particular new form: a massive global campaign against ‘piracy and
counterfeit’ based on claims of losses by industries. It is important to note the specific language and
linkages in the discourse. For example, while not making any distinction as to the types, areas and scope of
the infringement, generally the arguments seek to connect intellectual property rights “piracy and
counterfeiting” to theft, criminal activities and organized crime, even to terrorism. While there might be
instances where this in fact occurs, it distorts the perspective of what intellectual property rights
infringement is and what intellectual property rights enforcement is about.
While the terms ‘counterfeiting’ and ‘piracy’ do not follow a single agreed definition and are used in
various ways, international business associations, developed country governments and WIPO refer to these
terms as relating to the infringement of trademarks, in the case of ‘counterfeit’, whereas ‘piracy’ is
associated with infringements of copyright or related rights. However, more recently the term is being re-
defined to include patent infringement, which is not included in the definition of counterfeit and piracy in
the TRIPS Agreement. In relation to copyrighted works, piracy is said to occur mainly with respect to
digital media, e.g., DVDs and CDs, as well as in the digital distribution of films, music and software on
internet. In relation to trademarks, it is argued that counterfeiting takes place mainly in clothing, footwear,
electronic devices, and pharmaceutical products.
The powerful corporations holding strong economic interests lobby their governments to set up
complex legal frameworks in developing countries. It is important to note that many of the piracy and
counterfeit activities were until recently legitimate activities in most countries, including in developed
countries (e.g., circumvention of DVD encryption systems). It is only recently that such acts have been
deemed illegitimate, and thus considered serious infringements and criminal acts. While it is clear that
serious intellectual property rights infringement should be tackled, expanded claims of infringement based
on loss of profit and a loose interpretation of enforcement rules without balanced and pro-competitive
mechanisms are emerging as a challenge for developing countries.77 According to the proposed intellectual
property enforcement Act of the United States, an attempt to infringe intellectual property rights could also
entail criminal responsibility. A similar approach was pursued, but defeated, in the second European
intellectual property Directive.
Another problematic area is the accounting of and data on the extent and effect of international
counterfeiting and piracy. While it is necessary that claims on intellectual property rights infringement be
based on substantial evidence, the United States and the European Union are evaluating intellectual
property enforcement in developing countries against levels of counterfeiting and piracy that are mainly
based on estimated losses that their industries claim to exist according to their own surveys. The industry
surveys are often subjective, based on uncertain methodologies and special pleading.78 The estimates of the
levels of counterfeit and piracy are imperfect and tend to exhibit an upward bias. The difficulty in
estimating levels of actual counterfeiting and piracy is exacerbated by the lack of common use of the
definition of the terms in the TRIPS Agreement. The problem in accounting the levels of counterfeiting and
piracy and the upward bias in most industry-based figures were confirmed in recent expert reports leading
up to the 2007 OECD report on counterfeiting and piracy.79
77 Commission on Intellectual Property (2002a), p. 167
78 Business Software Alliance (BSA) and International Data Corporation (IDC) (2004), IIPA (2004b) and
Appendix B, for the methodologies used. See also Drahos (2004), p.14.
79 Karsten Olsen (2005), and OECD Report (2007).
The Changing Structure and Governance of Intellectual Property Enforcement 21
Most estimates assume, for example, that counterfeit and pirated sales displace legitimate sales,
regardless of how the price and purchasing behaviour may be affected by stronger copyright and trademark
protection. Likewise, the methodology used in the surveys to calculate levels of intellectual property rights
infringement in foreign countries is largely based on the industry’s subjective opinion. This disregards the
conduct of trade and business organizations in price fixing or in arbitrary inflation of price and remains the
continued challenge for developing countries.
The emerging trends in the promotion of intellectual property rights enforcement, based on narrow
interest-group politics, increase the need for human and financial resources, undermine the development of
a balanced public policy and disregard the conduct and practices of companies. The challenge emerging
from the current discourse is enormous, as it is pursued at the coordinated European Union/United States
level for the exercise of power and influence through unilateral trade review mechanisms, through the
multilateral process (including the TRIPS Council and WIPO) and through FTAs.
III. 5 Recent Trends in Developing Countries
Many developing countries started to implement the TRIPS Agreement in 2000 upon the expiry of the
transition period provided under it. The least developed countries are not required to implement the
provisions of the TRIPS Agreement until 2013, except for the obligation to provide national treatment and
most-favoured-nation treatment.
The most notable trend in intellectual property enforcement in developing countries is the increase
in awareness campaigns, the coordination of government agencies for enforcement of intellectual property
rights, the establishment of specialized benches with jurisdiction over intellectual properly rights, the
undertaking of various administrative measures, police raids, and an extensive review of laws.80
The establishment of a national mechanism for coordination of government agencies for the
enforcement of intellectual property rights has been the major trend since 2000. In Brazil the National
Council against Piracy was established on 1 October 2004, The Council is composed of seven ministerial-
level agencies, other federal agencies, and six private associations: the audiovisual industry (ADEPI),
phonograms (ABPD), software (BSA), publishing (ABDR), tobacco, alcohol and fuel (industrial sector –
ETCO) and the Brazilian Intellectual Property Association (ABPI).81 In India an Inter-ministerial
Coordination Committee was established consisting of 10 ministries and departments.
Some developing countries are also establishing divisions in courts of law with jurisdiction
exclusively over intellectual property rights. Malaysia introduced court divisions dedicated to their
enforcement in July 2007. Thailand has had intellectual property courts since 1997.82
Campaigns, police raids and sudden crackdowns have become the most reported government-led
efforts in the enforcement of intellectual property rights. In China arrests related to intellectual property
enforcement crimes increased by 36% and prosecutions by 75% from 2000 to 2004. During that period
5,305 criminal intellectual property infringement cases were brought to court.83 Administrative remedies
are also used extensively to address infringements of intellectual property rights.84
80 See for example, WIPO/ACE/3/16 (China) WIPO/ACE/3/5 (Sri Lanka) and WIPO/ACE/3/8 Rev. (South
Africa).
81 WIPO (2006), Public Policy for Combating Piracy in Brazil, WIPO/ACE/3/14, May 2006.
82 Ariyanuntaka (1998), Vichai TRIPS and the Specialized Intellectual Property Court in Thailand, available at
http://asialaw.tripod.com/articles/trips-vichai.html.
83 Hunter (2007), 545.
84 Ibid. 528.
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Furthermore, several countries continue to introduce intellectual property enforcement legislation.
Since its accession to the WTO, China has adopted legislation and judicial interpretations of existing
legislation on enforcement of intellectual property rights that includes:
1. Interpretation by the Supreme People's Court and the Supreme People's Procuratorate of Several
Issues of Concrete Application of Laws in Handling Criminal Cases of Infringing Intellectual
Property (2004 and 2007). The interpretation lowered the economic value of the infringement
for the initiation of criminal proceedings, expanded the definition of an intellectual property
infringement accomplice, and increased the punishment. However, this interpretation of the
Supreme Court has become the basis for the United Sates to initiate a WTO dispute settlement
case against China.85
2. Regulation of People's Republic of China on Customs Protection of Intellectual Property Rights,
Order of the State Council of the People's Republic of China, No. 395, Adopted by the State
Council on 26 November 2003, enacted from 1 March 2004. These regulations have also
become the basis for the United States to request a panel on measures affecting the enforcement
of intellectual property rights in China.
3. Interpretations of the Supreme People’s Court of Several Issues Concerning the Application of
the Law to the Trial of Civil Dispute Cases Involving Trademarks, promulgated on 12 October
2002 and effective from 16 October 2002
4. Measures for Administrative Enforcement of Patent, promulgated on 17 December 2001 by the
State Intellectual Property Office
5. Several Provisions of the Supreme People's Court for the Application of Law to Stopping
Infringement of Patent Right Before Instituting Legal Proceedings, adopted on 5 June 2001 at
the 1179th Meeting of the Adjudication Committee of the Supreme People's Court.86
The developments show the major challenges of developing countries in building their intellectual
property system and meeting the demands of developed countries. Enforcement of intellectual property
rights appears to have been taken mainly as the responsibility of government involving the use of law
enforcement agencies.
85 WTO (2007), WT/DS362/7.
86 All laws available at http://www.chinaiprlaw.com/english/default.htm
The Changing Structure and Governance of Intellectual Property Enforcement 23
IV. THE CHANGING STRUCTURE AND GOVERNANCE OF INTELLECTUAL PROPERTY
ENFORCEMENT
Developed countries are making a concerted and coordinated effort to increase enforcement of intellectual
property rights globally through a combination of efforts at the multilateral, regional and bilateral level.
These include:
1. setting enforcement of intellectual property rights as a priority in the common agenda of the G8
countries and proposing negotiations on a new international treaty on anti-counterfeiting;
2. demanding that the WTO make enforcement part of the permanent agenda of the TRIPS
Council;
3. exerting pressure at WIPO to strengthen the mandate of the ACE to include soft law norm-
setting, such as developing best practices and guidelines on enforcement
4. increasing the role of the WCO and Interpol in intellectual property enforcement, particularly
through border measure controls and the use of criminal law;
5. introducing detailed TRIPS-plus obligations in the enforcement of intellectual property rights in
bilateral FTAs and EPAs (economic partnership agreements) negotiated by the United States
and European Union with developing countries.
IV.1 The Agenda of the G8, the Heiligendamm Process, the OECD and the Emerging Interest in a
New International Framework on Enforcement
At the 2006 G8 Leaders Summit in St. Petersburg, a comprehensive intellectual property rights
enforcement strategy was announced that delivered upon the strategy adopted in 2005. The G8 Statement
on “Combating International Property Rights Piracy and Counterfeiting” has several key objectives,
namely:
a. to keep the spotlight on trade in counterfeit and pirated goods and secure agreement on projects
that promote greater cooperation among national law enforcement and customs officials;
b. to link victims of intellectual property rights infringement to national enforcement authorities;
c. to build capacity in developing countries to combat trade in counterfeit and pirated goods;
d. to conduct further research into the economic impact of piracy and counterfeiting on national
economies, brands, rights holders and public health/safety;
e. to refer relevant law enforcement work (including online piracy) to the Lyon-Roma Anti-Crime
and Terrorism Group (LR/ACT);
A year later, specific initiatives were endorsed by the G8 in June 2007 aimed at improving and
deepening cooperation among G8 members and deliver real enforcement results87. These include:
a. guidelines for customs and border enforcement cooperation, designed to strengthen cooperation
and coordination among G8 nation customs and law enforcement administrations;
b. guidelines for technical assistance on intellectual property rights protection to developing
countries, and a mechanism to better coordinate and leverage existing G8 assistance to such
87 See Summit Declaration, Growth and Responsibility in the World Economy, 7 June 2007, G8 Summit
Heiligendamm. Summit documents are available at http://www.g-8.de.
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countries to build capacity to combat trade in counterfeited and pirated goods and to strengthen
intellectual property enforcement.
c. recommendations aimed at improving G8 countries’ cooperative actions to combat serious and
organized intellectual property rights, and further work on this basis to facilitate structured
international cooperation in the investigation and prosecution of those crimes.
Progress of the pilot plans will be reviewed by the G8 in 2008.
The G8 also established an “IPR Taskforce” focusing on “anti-counterfeiting and piracy” to look
together at how best to improve international intellectual property rights protection and enforcement and to
produce recommendations for action. The G8 intends to place the recommendations emerging from the
IPR Taskforce for discussion as part of the Heiligendamm process. The G8 also expects that while “fully
respecting the mandate, function and role of the component multilateral organizations, in particular WTO
and WIPO, participants in the Heiligendamm dialogue may also discuss initiatives aimed at the
strengthening of intellectual property rights protection which should then be addressed in the appropriate
fora.”
The Heiligendamm process is a new two-year high-level dialogue between the G8 countries and
emerging countries, mainly Brazil, China, India, Mexico and South Africa. The platform for the dialogue
will be the Organization for Economic Cooperation and Development (OECD), which is dominated by
developed countries. But, while the initiative is a significant step towards increasing collaboration among
the G8 and the larger developing country economies on issues of global importance, the desire for
participation in the “club-of-the-rich” should not come at any price.88
Intellectual property rights protection and enforcement is not an integral part of the issues that make
up the Heiligendamm dialogue. The joint statement of the G8 and the Heads of State and/or Government of
Brazil, China, India, Mexico and South Africa in Heigendamm on 8 June 2007 clearly specifies the issues
on which there is to be dialogue89, namely:
-
promoting cross border investment to their mutual benefit;
-
promoting research and innovation;
-
fighting climate change;
-
energy
-
development, particularly in Africa
The commitment to cooperate in “promoting research and innovation” includes “a positive
exchange of views on international experiences” related to intellectual property protection and
implementation of agreed international intellectual property rights’ protection standards. It does not
envisage strengthening intellectual property rights protection and enforcement, or discussing
recommendations from the G8 “IPR Taskforce on anti-counterfeiting and piracy”. Instead, the Joint
Statement of Heiligendamm provides a more balanced approach to the expected dialogue, highlighting that
in the exchange of views on international experience of intellectual property rights protection there is a
“need to consider the protection of intellectual property rights in conjunction with the common good of
human kind for the purposes of protecting the environment and supporting health. In this regard, we recall
the Doha Declaration on the TRIPS Agreement and Public Health”.
The continued push by the G8 to impose new intellectual property standards of protection and
enforcement on developing countries risks tarnishing the new cooperation envisaged by the Heigendamm
process in the area of promoting research and innovation, even before dialogue has commenced.
88 Katharina Gnath (2007).
89 See Joint Statement by the German G8 Presidency and the Heads of State and/or Government of Brazil, China,
India, Mexico and South Africa on the occasion of the G8 Summit in Heiligendamm, June 8, 2007.
The Changing Structure and Governance of Intellectual Property Enforcement 25
On 23 October 2007, the Ministry of Foreign Affairs of Japan, the European Commission and the
Office of the United States’ Trade Representative (USTR) separately announced their intention to bring
about “a new international legal framework to strengthen the enforcement of intellectual property rights.”90
The USTR pointed out that the agreement would not involve changes to the TRIPS Agreement; rather, the
goal was to set a new, higher benchmark for enforcement that countries could join “on a voluntary basis”
and negotiations would not be conducted as part of any international organization.
According to the United States Patent and Trademark office (USPTO), the reasoning for the new
treaty is that “worldwide proliferation of counterfeit and pirated products poses an ever-increasing threat
not only to sustainable economic development but also to consumers’ health and safety. Moreover, new
issues have also been emerging rapidly on a global scale, such as the violation of intellectual property rights
through the trading of counterfeit goods over the Internet.”91 This statement disregards many important
facts and omits important information. First, there is no conclusive evidence as to the extent or effects of
international trade in “counterfeiting and pirated products”. Second, it is unclear from the use of the terms
“counterfeit” and “piracy” what the new treaty would actually cover. Third, the statement omits the fact
that many countries have not taken up international obligations and granted rights incorporated under the
WIPO Copyright and the WIPO Performances and Phonograms Treaties. Whether there is “violation of
intellectual property rights through the trading of counterfeit goods over the Internet” depends on whether
such intellectual property rights are protected or not in the respective jurisdiction.
Other misleading statements such as that “developing countries are among the biggest victims [of
counterfeiting and piracy], as counterfeiters passing off shoddy and unsafe goods undermine emerging
local economies”92 also need dissecting.
The effects of trade in trademark counterfeit, copyright piracy and other forms of intellectual
property infringement cannot be judged as a whole. To address the real problems there is a need to provide
clear facts and information, avoiding dogma and rhetoric. The trade in substandard or “counterfeit”
pharmaceutical drugs provides a case example. Counterfeit drugs can be understood as those that mimic
authentic drugs, that is, substandard drugs produced with little or no attention to good manufacturing
practices.93 A problem of concern for both developed and developing countries on which collaboration may
be meaningful is that of organized illegal circuits dealing in the trade of substandard drugs. However, such
collaboration should ensure that the legal trade in generic drugs in accordance with the TRIPS Agreement,
the Doha Declaration on the TRIPS Agreement and Public Health and the related Decision of 6 December
2005 is not in any way affected. It should not be an opportunity for pharmaceutical multinationals to cut
back trade by potential competitors from developing countries manufacturing generic drugs. Generic drugs
are chemically identical to their branded counterparts, yet they are sold at substantially lower prices.
Problems related to the existence of substandard “counterfeit” drugs, mainly in developing country
markets, should be clearly distinguished and separated from the broader debate and differing interests in the
strengthening of global enforcement of intellectual property rights.
IV.2 The TRIPS Council and Accession Protocols
The TRIPS Council continuously reviews the implementation of the TRIPS Agreement and commitments
by developing countries under the accession protocols.94 Developed countries, particularly the United
States, the European Union, Switzerland and Japan, are actively seeking that the TRIPS Council increase
90 See), Ministry of Foreign Affairs of Japan (2007), press release.
91 See USPTO (2007) press release.
92 Ibid.
93 Definition of “counterfeit drugs” as found in Pécoul, Chirac, Trouiller and Pinel (MSF), Access to essential
drugs in poor countries: a lost battle?, JAMA, 27 January, 1999.
94 WTO (2005), IP/C/38.
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its vigilance role in respect of member states’ compliance with their obligations under the TRIPS
Agreement. In particular, they seek that enforcement be a standing agenda item of the TRIPS Council and
that the TRIPS Council follow up and discuss members’ compliance and share experiences in
implementing enforcement measures. They argue that the TRIPS Agreement has given the TRIPS Council
the role of overseeing members’ commitments.
Moreover, in the negotiations of accession to the WTO, acceding countries were required to review
their laws, and sometimes enter into a commitment to adopt intellectual property enforcement procedures
beyond those required under the TRIPS Agreement. The full extent of the TRIPS-plus impact of accession
procedures is difficult to measure for each acceding countries. The obligations of members of the WTO in
respect of intellectual property now cannot be explained only by the provisions of the TRIPS Agreement;
they also include the commitments they made during accession to the WTO.
Finally, there are increased initiatives by developed countries to challenge developing country
intellectual property enforcement efforts under WTO dispute settlement. The United States recently
submitted a formal request under the WTO Dispute Settlement Understanding (DSU) to establish a panel
regarding China’s compliance with the obligations under the TRIPS Agreement.
IV.3 The WIPO Advisory Committee on Enforcement
The exclusion of norm-setting from the mandate of the ACE has not stopped the push from developed
countries in this committee to work towards standard-setting in the form of soft law. At the past WIPO
Assemblies in September 2007, Italy proposed that the ACE be entrusted with a broader mandate to
include the establishment of guidelines and best practices on enforcement of intellectual property rights.
This approach of seeking soft-law norm-setting would increase pressure on developing countries to
establish TRIPS-plus enforcement standards and serve to legitimize such standards that are being
developed through bilateral trade agreements. At the past ACE meeting in November 2007 the issue of the
mandate of the committee was not raised.
The discussions in the ACE should continue to focus on sharing national experiences. In the
unlikely event that mandate of the ACE be revised to include any form of norm-setting, it is unlikely that
developing countries would be in a position to participate fully in its development. The participation of
developing countries in the ACE remains limited.
The participation of multiple stakeholders in the ACE is important in seeking that enforcement is
discussed in a more holistic manner, not restricted to intellectual property rights enforcement.95 Part of the
implementation of the Development Agenda recently approved by the General Assembly in September
2007 requires the ACE to examine the development dimension of intellectual property enforcement and
technical assistance and consider such issues as competition and transfer of technology in relation to
enforcement.
IV.4 Intellectual Property Technical Assistance
WIPO is the main intellectual property rights-related technical assistance provider to developing countries.
WIPO and the WTO have an agreement for the provision of intellectual property-related technical
assistance, in which WIPO provides technical assistance, including assistance in the implementation of the
TRIPS Agreement, to member states of WIPO and the WTO. As enforcement becomes a key priority of
95 The Committee itself is heavily influenced by industry-based trade groups such as the Anti-Counterfeiting
Group, AIPPI, and the International Anti Counterfeit Coalition. Only recently have NGOs representing wider
public interests begun to join the Committee.
The Changing Structure and Governance of Intellectual Property Enforcement 27
industries in the developed countries and greater influence is exerted by WIPO committees, technical
assistance focuses increasingly on strengthening the enforcement of intellectual property rights
enforcement in developing countries. Programmes provided through WIPO for intellectual property rights
enforcement have been increasing rapidly, though technical assistance in principle should be provided
solely on a demand-driven basis.96
The development of the principles and guidelines for technical assistance under the WIPO
Development Agenda provides an important opportunity for developing countries and WIPO to redirect
technical assistance to a more development-oriented and demand-driven system.97 The WIPO
Development Agenda requires the approach on intellectual property to be framed in the context of broader
societal interests, and especially development oriented concerns, with the objective that:
...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", in
accordance with Article 7 of the TRIPS Agreement.98
IV.5 The World Customs Organization and Interpol
WIPO is increasingly coordinating its enforcement activities with other intergovernmental organizations
such as the World Customs Organization (WCO) and the International Criminal Police Organization
(Interpol). Recent developments in the WCO and Interpol also show the growing interest of developed
countries in increasing intellectual property enforcement by means of greater border measure controls and
the criminalization of intellectual property infringement.
The WCO has developed model legislation related to border measures and customs legislation to
deal with intellectual property enforcement. One of the dangers of the increased focus on border control
measures is the possibility that the powers given to customs authorities over intellectual property
enforcement may be too broad if they have not been adequately trained to pass judgement on whether
goods are actually counterfeit or pirated. The risk is even greater for patent infringements, where the criteria
determining infringement may vary significantly from one jurisdiction to another. There is also the
possibility that the granting of excessively broad powers to customs officials to control the flow of imports
and exports of goods that they suspect to be infringing intellectual property rights may create barriers to
trade.
Interpol has established a new unit on “intellectual property crime” to deal specifically with
intellectual property infringements that may be connected to terrorist and other criminal activities. Interpol
characterizes trademark counterfeiting and copyright piracy as “serious intellectual property crimes”99 but
does not provide a clear definition of the terms to clarify what are the necessary elements that must be
present to constitute counterfeiting and piracy. This is a serious concern for developing countries and
consumers, given that the potential scope of the definition of counterfeit and piracy may be so wide as to
include legitimate uses of works and cases where an individual may infringe an intellectual property right
without knowing it. There has so far been no harmonization of the scope or definitions of counterfeiting,
piracy or crimes related to intellectual property infringements, but the definitions given by the TRIPS
Agreement are sufficiently explicit and should be used for reference purposes by the various organizations
dealing with counterfeiting and piracy.
96 WIPO (2004), Intellectual Property Enforcement Issues and Strategy webpage, Report of Activities.
97 WIPO, (2005), IMM/1/4.
98 WIPO (2007), A/43/13 REV, Annex, para. 45.
99 See INTERPOL webpage on Intellectual Property Crime.
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IV.6 The World Health Organization
The G8 stressed in its declaration that trade in pirated and counterfeit goods threatens health, safety and
consumers worldwide, particularly in poorer countries, and added that “in this regard we welcome the work
on the WHO initiative to implement the International Medicinal Products Anti-Counterfeiting Taskforce
(IMPACT)”.
While it may be a worthy initiative, public health groups have expressed concern that the G8 is prioritizing
counterfeit medicines over other pressing issues. The international non-governmental organization
Médecins sans frontières (MSF) on the G8 Declaration on “Promoting Innovation – Protecting Innovation”
affirmed that “counterfeit medicines are a danger to people's health that received particular attention by the
G8. Similar attention should have been paid to the need for affordable, quality generic medicines upon
which poor countries can rely.”100 The Millennium Development Goals were also not high on the priority
of the G8 agenda. Moreover, other important processes related to innovation and intellectual property
rights taking place in the WHO were absent from the G8 high level declaration.101
The WHO International Medicinal Products Anti-Counterfeit Taskforce (IMPACT) was created in
2006 as a global coalition of stakeholders to “build coordinated networks across and between countries in
order to halt the production, trading and selling of fake medicines around the globe.” The participation of
government representatives is voluntary. The taskforce is composed of representatives of the WHO,
Interpol, Organization for Economic Co-operation and Development, World Customs Organization, World
Intellectual Property Organization, World Trade Organization, International Federation of Pharmaceutical
and Manufacturers' Associations, International Generic Pharmaceuticals Alliance, World Self-medication
Industry, Asociación Latinoamericana de Industrias Farmacéuticas, World Bank, European Commission,
Council of Europe, Commonwealth Secretariat, ASEAN Secretariat, International Federation of
Pharmaceutical Wholesalers, European Association of Pharmaceutical Full-line Wholesalers, International
Pharmaceutical Federation, International Council of Nurses, World Medical Association, and Pharmaciens
sans frontières.102
While, on the one hand, the United States has strongly opposed the idea that the WHO should play a
greater role in issues related to intellectual property rights and public health, in the context of the
Intergovernmental Working Group on Intellectual Property Rights, Innovation and Public Health, by
limiting its scope and mandate, the United States and other G8 countries are strongly backing the
pharmaceutical industry-led initiative linked to the WHO on counterfeit medicines. Counterfeit medicines
are described in a WHO fact sheet as constituting a “global public health crisis”,103 though there is a lack of
comprehensive data or studies on the matter other than estimates of industry losses. While manufacturing
and trade in suboptimal counterfeit medicines pose a health risk for patients and a hindrance to the
development of the nascent domestic pharmaceutical industry in developing countries, the IMPACT
taskforce focuses narrowly on “mobilizing awareness and action against fake drugs”. The five areas of
focus are:
1. Legislative and regulatory infrastructure, focusing on developing stronger legislation to
empower the police, customs officials and the judiciary. The taskforce is to look at existing laws
in countries and present effective models that countries can replicate and adapt to meet their
own needs, and will focus on developing principles for the establishment of appropriate
legislation and penal sanctions, including a clear legal definition of counterfeit medicines.
100 MSF press release, “G8 declaration on innovation and intellectual property will directly harm access to
medicines across the developing world”, 7 June 2007.
101 A WHO intergovernmental working group is currently developing a Global Strategy and Plan of Action for
needs-driven, essential health research and development relevant to diseases that disproportionately affect
developing countries. See http://www.who.int/phi/en/.
102 International Medicinal Products Anti-Counterfeit Taskforce (IMPACT):
http://www.who.int/impact/impact_q-a/en/index.html
103 World Health Organization, Fact Sheet No.275, “Counterfeit Medicines”, Revised 14 November 2006.
The Changing Structure and Governance of Intellectual Property Enforcement 29
2. Regulatory implementation, to identify means by which regulators may take action and
implement legislative measures taken on counterfeit medicines, including revised approaches to
ensure the standards for quality, safety and efficacy are implemented and distribution chains
effectively controlled.
3. Enforcement, to help identify and coordinate actions between customs, police and the judiciary
of different countries to monitor borders, track counterfeit goods and apprehend counterfeiters.
4. Technology, to help facilitate the transfer of technology across both developed and developing
countries, by utilizing the broad partnership from health agencies to pharmaceutical
manufacturers and distributors.
5. Risk communication, to identify and create coordinated and effective mechanisms to respond
and alert key audiences, stakeholders and the general public about counterfeits in communities
and across countries.104
The broad scope of the IMPACT programme calls for close examination and monitoring. It is of
concern that while emphasizing enforcement and regulatory reform to include criminal measures to deal
with the production of and trade in counterfeit medicines, the potential problems that this may entail for
access to medicines are disregarded. For example, as noted by MSF: “Counterfeiting and piracy are
different from patent infringement. The TRIPS Agreement does not require that patent infringement be
made a criminal offence—it only requires that the patent holder be able to take legal action against the
infringement. Where people cannot afford the patented version of a life-saving medicine they may try to
import or use a less expensive generic version; the patent holder may then choose to sue to cut off the
supply of generic medicines. Legal provisions that criminalize patent infringement… could result in
sending doctors and patients to prison for trying to get access to affordable medicines. Such provisions are
harsh, extreme, and certainly not required by TRIPS.”105
Similarly, the question of the pricing of medicines as an underlying problem related to trade in
counterfeit medicines will not fall within the purview of the WHO IMPACT initiative. Moreover, there is
no emphasis on the need to stimulate and improve local production capabilities in developing countries to
ensure quality and safety. The means through which IMPACT would provide an incentive for the transfer
of technology to developing countries to improve local production through IMPACT is unclear. There is a
risk that, without proper monitoring, the legislative and regulatory reforms promoted by the IMPACT
taskforce may put at risk the legitimate production of and trade in generic drugs, thereby further hindering
access to medicines.
IV.7
Free Trade Agreements and Economic Partnership Agreements
The most active negotiations on intellectual property rights are currently occurring at the bilateral level,
mainly through FTAs. Developing countries may seek to engage in FTAs with the aim of, among other
reasons, strengthening political ties and, in particular, gaining preferential market access.106 The
explanations for the bilateralism of developed countries compared to that of developing countries are fairly
straight-forward. FTAs allow the United States and the European Union to tailor concessions from
developing countries. Through FTAs, the European Union and the United States are also able to by-pass
the dead-end debates at the TRIPS Council and to consolidate key elements of multilateral intellectual
104 Ibid, at 100.
105 MSF report, “DOHA derailed: Extra burdens - IP provisions not required by TRIPS”, 10.09.2003.
106 In the case of the United States–Chile FTA, for example, Chilean authorities, clearly aware of the
asymmetries, perceived the signing of the agreement as a major economic and political success. The
consolidation of the United States preferential trade system (GSP) granted to Chile and subject to periodical
renewal and negotiations was considered an important achievement deriving from the agreement. See Roffe
(2004), p.4.
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property rights treaties by targeting specific countries in which they have specific interests.107 However,
bilateral trade alliances have their own limitations for developing countries, which can be addressed only at
the multilateral level. As the United States and European Union negotiate more FTAs with developing
country counterparts that export similar products, the overall value of the preferences individual developing
countries may currently enjoy in the United States and European markets will tend to fall. It is also likely
that FTAs weaken the multilateral bargaining power of developing countries as a whole. Finally, FTAs
include a whole wide range of issues beyond the scope of trade, including intellectual property rights on
which developing and developed countries may have very different interests. As has been widely noted,
binding obligations for higher intellectual property rights standards may significantly diminish the
flexibility to regulate intellectual property rights according to the development priorities of each country.
Both the United States and the European Union have so far pursued a multilateral approach in
parallel with bilateral mechanisms. The form and extent to which the United States and the European
Union’s FTAs are changing the intellectual property rights enforcement structure differ in some important
aspects. The treatment of intellectual property rights in the European Union agreements is not as extensive
as the provisions of the United States’ FTAs. There is a clear scaling up of provisions with each FTA that is
negotiated, with few ‘reversals’ from the higher standards obtained in previous FTAs by the United States.
The strategic goals of the industry are being fully achieved, and this is further demonstrated in issues that
are still under negotiation at the multilateral level, such as those relating to technical enforcement and
updates of precedents as best practices. The European Union agreements require an adequate and effective
protection of intellectual property rights in accordance with the ‘highest international standards,’ including
‘effective means to enforce such rights.’108 The highest international standards function as a platform for
the European Union to demand the standards as developed at the multilateral and FTA level, including
WIPO treaties, which are in force at the time the obligation is accepted. The European Union is following
the United States in seeking to include ‘TRIPS-plus’ intellectual property rights enforcement provisions
under the ongoing negotiation with African, Caribbean and Pacific (ACP) countries.
The intellectual property rights provisions of both the United States and the European Unions’
agreements are reinforced by providing recourse to the dispute settlement mechanism established in the
agreements.109 These mechanisms can be triggered under the European Union agreements in cases of non-
compliance with the required “highest” standards of intellectual property rights protection. In the case of
the European Union–Mexico FTA, an independent Consultation Mechanism for Intellectual Property
Matters is provided ‘with a view to reaching mutually satisfactory solutions to difficulties arising in the
protection of intellectual property.’110 The FTA defined ‘protection’ as including the maintenance and
enforcement of intellectual property rights as well as those matters affecting the use of intellectual property
rights.111 The dispute settlement chapters in selected United States FTAs explicitly establish the application
of non-violation and situation complaints that are suspended under the TRIPS Agreement.112
IV.7.1 Main TRIPS-plus Features in FTAs
The TRIPS Agreement established the minimum standards on which countries could later build if they
wished to do so. Since the rights and obligations under the TRIPS Agreement do not derogate from or
cease to apply in FTAs, the intellectual property rights chapters build on the set of minimum standards in
selected areas and addresses new issues considered key to the industries in the developed world. Both the
107 Morin (2003).
108 See Art 168, European Union–Chile FTA (2002).
109 See e.g. Art 182 European Union–Chile FTA.
110 See Art 40(1), Decision 2/2000 of the EU-Mexico Joint Council of 23 March 2000.
111 Ibid, Art 40(2).
112 See Annex 22.2 of the United States. – Chile FTA, Annex 20.2 of the United States – CAFTA FTA. A
safeguard on non-violation complaints that both Agreements contain is that the benefits expected under the
intellectual property chapter cannot be invoked with respect to measures taken under the general exception
provisions, under Article XX of GATT 1994.
The Changing Structure and Governance of Intellectual Property Enforcement 31
European Union and the United States’ FTAs can become TRIPS-plus in varying degrees by incorporating
one or more of the following:
provisions that extend coverage of intellectual property rights to new areas not addressed by the
TRIPS Agreement, and the requirement for accession to, or the ratification of, WIPO-
administered treaties and the UPOV Convention 1991. These treaties include the WIPO
Copyright Treaty (WCT), the WIPO Performances and Phonograms Treaty (WPPT), the Patent
Law Treaty (PLT), the Trademark Law Treaty (TLT) and the Budapest Treaty;
provisions that change the optional provisions of the TRIPS Agreement on intellectual property
rights enforcement to mandatory obligations and that extend the patent term for delays caused
by regulatory approval processes;
provisions that extend the scope of enforcement and require wider use of the criminal justice
system to tackle intellectual property rights violations as a deterrent to possible future
infringements;
provisions in the dispute settlement chapters of FTAs that explicitly establish non-violation and
situation complaints;
Definitions of ‘investment’ in the “Investment” chapters of FTAs that include intellectual
property rights as investment assets.
IV.7.2 Expanded Scope of Enforcement Standards under FTAs
The general provisions of the intellectual property rights chapters in the United States’ FTAs expand
existing obligations under the TRIPS Agreement and omit important flexibilities that take into account the
differences in national legal systems. The FTAs underscore that the procedures and enforcement of
intellectual property rights are established in accordance with the foundations of the respective legal
systems of the countries. In particular, the FTAs establish, as does the TRIPS Agreement, that the
enforcement provisions do not create any obligation to put in place a judicial system for the enforcement of
intellectual property rights distinct from that for the enforcement of law in general; or with respect to the
distribution of resources for the enforcement of intellectual property rights and the enforcement of law in
general.113 However, the volume of new regulations and new principles introduced under the FTAs call into
question whether United States’ partners have any choice to safeguard their legal system and not to
reallocate resources in order to enforce intellectual property rights. In fact, FTAs themselves declare that
the choices that countries make in distributing resources shall not be an excuse for failure to comply with
intellectual property rights chapters.114 In other words, the enforcement provisions do not necessary call for
the increased allocation of resources as a matter of principle; however, the implementation of the
agreements would, in any case, require doing so.
FTAs require the accession to WIPO-administered treaties and the UPOV Convention 1991. Under
the WTO system the rights and obligations of member states arising from treaties other than those
incorporated in the TRIPS Agreement would not be enforced through the dispute settlement mechanisms.
However, the first important implication of the FTAs is to subject claims of violation of the obligations and
the enforcement of the rights under the WIPO treaties and the UPOV Convention to FTAs dispute
settlement mechanisms.
Similarly, although potentially advantageous, FTAs establish for the United States partners the
principles of limitation of liabilities of service providers that are involved in the hosting and transmission of
infringing material through their facilities. These provisions establish the basic functional equivalent of the
concepts and provisions embodied in Section 512 of the United States’ Digital Millennium Copyright Act
of 1998 (DMCA). Under FTAs, if the general norms and principles for the limitation of liabilities of an
FTA partner do not confirm a limitation in favour of ISPs, each FTA partner will have to introduce similar
113 See Article 15 (11) (1) and (2) of CAFTA- DR.
114 Ibid.
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legal or statutory limitations. The TRIPS Agreement was never meant to address the limitation of liabilities
and other related issues, except in cases of remedies related to use by governments or by third parties
authorized by a government, without the authorization of the right holder.
The general obligations in the intellectual property rights enforcement section of the intellectual
property rights chapters of the United States’ FTAs expand existing TRIPS obligations in Article 41 and re-
phrase the language of the provisions of the TRIPS Agreement so as to reduce the scope of different
interpretations. The general principle of fairness and equitability, which rules of enforcement are required
to meet under the TRIPS Agreement, is absent in the FTAs. The same is true of those provisions on the
protection against abuses by right holders and on the proportionality of the measure vis-à-vis the
seriousness of the infringement.115
Instead of the more general principle of fairness and equitability, which is applicable and evaluated
on a case by cases basis and depending on the circumstances of each case, FTAs adopt more precise and
detailed provisions on enforcement. However, they tighten the scope of flexibility for the implementing
countries and redefine the standard when countries could be considered as failing to comply with the
provisions. The resort to detailed and more precise enforcement standards overcomes the limitations of the
TRIPS Agreement and allows the United States to challenge, under dispute settlement proceedings, the
implementation of the enforcement provisions of the agreement and to upgrade intellectual property rights
norms by harmonizing procedural laws — something that would have been difficult to achieve under
public international law.
FTAs further impose the obligation to make available enforcement statistics with regard to
transparency obligations on the publication of information on enforcement. FTAs also create the obligation
to publicize efforts to enforce intellectual property rights, i.e. media dissemination, arguably for awareness
raising.116 This would shift the focus of the public relation activities of governments from questioning the
balance of interests in intellectual property rights to enforcing rights.
The TRIPS Agreement requires decisions to be made preferably in writing and reasoned, as well as
to be made available to the parties, whereas FTAs require that they be in writing, reasoned, that they state
the relevant facts and that they be published or made publicly available.117
Border enforcement measures in FTAs are also more stringent than those under the TRIPS
Agreement. For example, parties must provide for enforcement at the border without any formal complaint
filing requirements, and the competent authorities must have the power to initiate actions ex officio relating
to suspect shipments being imported, exported or in transit. The provisions of FTAs on provisional
measures are short and the emphasis is on summary proceedings — known as provisional measures
inaudita altera parte. Even in situations when no irreparable harm has been done to the right holder and
there is no evidence that may be destroyed, judicial authorities should issue an injunction if requested. A
proceeding for provisional measures would not enable defendants to argue against the claims of a right
holder. As a result, judicial authorities in ordinary provisional measure proceedings and in provisional
measures inaudita altera parte have little or no authority to question or allow arguments against the
plaintiff on claims of entitlement and validity. Instead, they are required to act on the plaintiff’s request and
to execute such request.118
115 As in Arts 41.1, 48.1, 50.3 and 53.1 in TRIPS
116 USTR (2005),United States- CAFTA, Article 15.11 (4).
117 Ibid., 15.11 (1)and (3).
118 Ibid., 15.11 (17)-(19).
The Changing Structure and Governance of Intellectual Property Enforcement 33
Table 1: Border Measures under FTAs
Border enforcement measures in FTAs are more stringent than those under the TRIPS Agreement.
Based on the reading of Article 15. 11 (20-25) of the United States, Central America and Dominican
Republic Free Trade Agreement (CAFTA), the following are the notable changes to enforcement
standards required under the TRIPS Agreement:
a)
Procedures for suspension of the release of goods by customs authorities apply to ‘counterfeit or
confusingly similar trademark goods, or pirated copyright goods’ following the standard set on
the protection of trademarks under the FTAs;
b)
Parties must provide the competent authorities the power to initiate actions ex officio relating to
suspect shipments, including goods in transit, and to the country’s own exports without any
formal complaint filing requirements;
c)
Right holders supply only sufficient information that may reasonably be expected to be within
his/her knowledge to make the suspected goods reasonably recognizable by the competent
authorities. In contrast to the TRIPS Agreement, the information submitted by the right holder
should only help to “reasonably” recognize the goods by the competent authorities as opposed to
“readily” recognize them;
d)
The requirement for reasonable security or equivalent assurances can take the form of any of
instruments issued by a financial service provider;
e)
Where storage fees are assessed in connection with border measures, the fee shall not be set at an
amount that unreasonably deters recourse to border measures;
f)
The competent authorities are required to destroy the infringed goods in all cases, unless the right
holder consents to alternative disposal. In cases of counterfeit and pirated goods the only
alternative avenue for authorities is to donate the goods for charity, provided that the removal of
the trademark effectively eliminates the infringing characteristics of the goods;
g) The provisions are silent about (1) the authority to order the indemnification of the importer and
of the owner of the goods subject to border measures for any injury caused to them through the
wrongful detention of goods; (2) procedures with respect to the release of goods upon deposit of
a security by the importers in the absence of provisional measures or in cases of delayed border
proceedings with respect to goods involving industrial designs, patents, layout designs or
undisclosed information; (3) duration of suspension, and (4) exceptions for de minimis imports
and exceptions for border trade where an FTA partner has dismantled substantially all controls
over the movement of goods across its border in the context of customs union or trade
arrangements with neighbouring countries.
The provisions of FTAs on provisional measures are short and the emphasis is on summary proceedings —
known as provisional measures inaudita altera parte. Even in situations when no irreparable harm has
been done to the right holder and there is no evidence that may be destroyed, judicial authorities should
issue an injunction if requested. A proceeding for provisional measures would not enable defendants to
argue against the claims of a right holder. As a result, judicial authorities in ordinary provisional measure
proceedings and in provisional measures inaudita altera parte have little or no authority to question or
allow arguments against the plaintiff on claims of entitlement and validity. Instead, they are required to act
on the plaintiff’s request and to execute such request.119
FTAs are silent or ambiguous on several procedures that are intended to protect abuse of
enforcement procedures. These, however, are not derogations from the obligations under the TRIPS
Agreement. The FTAs reaffirm the existing obligations and rights of parties under the TRIPS Agreement.
The omissions include: procedures requiring the plaintiff to institute regular proceedings on the claim of an
119 Ibid., 15.11 (17)-(19).
34 Research Papers
infringement that is the subject of a provisional measure proceeding within a reasonable period; procedures
for revocation of the provisional measure; the exception provided under Article 44.1 concerning injunctions
in respect of protected subject matter acquired or ordered by a person prior to knowing or having
reasonable grounds to know that dealing in such subject matter would entail the infringement of an
intellectual property right;120 exceptions provided under Article 44.2 authorizing declaratory judgements
and payment of adequate compensation where remedies recommended under the agreement are
inconsistent with the laws of member states.
FTAs have expanded the criminal procedures and remedies available for the protection of
intellectual property rights.
Table 2: Criminal Procedures and Penalties under FTAs
The following are the major TRIPS-plus elements of FTAs on criminal procedures and remedies based on
Article 15. 11 (18 and 26) of CAFTA.
a) The criminal procedures and penalties under FTAs include wilful piracy of related rights in addition to
copyright piracy and trademark counterfeiting, on a commercial scale and receiving and further
distributing wilfully a programme-carrying signal that originated as an encrypted satellite signal,
knowing that it has been decoded without the authorization of the lawful distributor of the signal.
Furthermore, in addition to intellectual property rights, the manufacture, assembly, modification,
import, export, sale, lease, or otherwise distribution of a tangible or intangible device or system,
primarily of assistance in decoding an encrypted programme-carrying satellite signal without the
authorization of the lawful distributor of such signal are considered as criminal offences.
b) The standard to measure the infringement giving rise to criminal liability is relaxed and includes wilful
infringements that have no direct or indirect motivation of financial gain, provided that there is more
than a de minimis financial harm. The application of criminal procedures should also include the
wilful importation or exportation of counterfeit or pirated goods.
c) Parties should establish policies or guidelines that encourage penalties to be imposed by judicial
authorities at levels sufficient to provide deterrence to future infringements. This requirement
overemphasises one purpose of criminal punishment (deterrence) as opposed to the reformative
objectives of the justice system.
d) The procedure for requesting discovery and seizure of evidence and infringing goods is relaxed by
stating that such request should neither describe in detail nor individually identify the evidence and
goods.
e) The judicial authority is expanded to order the forfeiture of any asset traceable to the infringing
activity, the forfeiture and destruction of all counterfeit or pirated goods without compensation of any
kind and, with respect to wilful copyright or related rights piracy, the forfeiture and destruction of
materials and implements that have been used in the creation of the infringing goods. The standards
reflect the intention of establishing ‘deterrence’ as the main purpose of criminal penalty. The forfeiture
of any asset traceable to the illegal activity might also end up affecting third parties that do not know
or have reason to know that their assets leased to, or in any other way employed by, the defendant are
being used for an alleged criminal activity’
f) Finally, criminal law enforcement in cases of counterfeiting or copyright piracy are required under
FTAs to be instituted ex officio, without the need for a formal complaint by a private party or right
holder, at least for the purpose of preserving evidence or preventing the continuation of the infringing
activity.
FTAs also provide that damages should be payable in all cases of infringement. In determining the amount
of damage, the judicial authorities are required to consider, inter alia, the value of the infringed good or
120 Ibid. Article 15.11 (15) –that omits the exception for good faith use.
The Changing Structure and Governance of Intellectual Property Enforcement 35
service, based on the suggested retail price or other legitimate measure of value that the right holder
presents. Under the FTAs, in all cases lost profits are to be calculated as part of the damages.121 In the
United States–Chile FTA and the CAFTA, the court of law is provided the authority to order the
destruction of infringing goods ‘at its discretion’, whereas the Morocco FTA requires such orders ‘at the
right holder’s request’.122
In respect of copyright piracy, the United States FTAs differentiate between the civil remedies
available for TPMs and DRMs and those for other intellectual property rights infringements. While
generally requiring the civil remedies to be available to TPMS and DRMs, FTAs in particular require:
a) provisional measures, including the seizure of devices and products suspected of being involved
in the prohibited activity;
b) actual damages plus any profits attributable to the prohibited activity not taken into account in
computing the actual damages or pre-established damages;
c) payment to the prevailing right holder — as opposed to the prevailing party — at the conclusion
of civil judicial proceedings, of court costs and fees and reasonable attorney’s fees by the party
engaged in the prohibited conduct; and
d) destruction of devices and products found to be involved in the prohibited activity, at the
discretion of the judicial authorities.
FTAs relieve libraries, archives, educational institutions or public broadcasting entities from
payment of awards if they are non-profit organizations and if they can prove that they are not aware and
have no reason to believe that their acts constitute a prohibited activity. FTAs do not provide a similar level
of difference or limitation of liabilities with respect to government agencies and their officials.123
IV.7.3 Intellectual Property Rights as an Investment
The United States FTAs further facilitate the effectiveness of intellectual property rights enforcement by
providing an expanded definition of ‘investment’, which explicitly includes intellectual property rights as
an investment asset protected.124 FTAs may potentially allow an investor to bring a violation and/or non-
violation claim by seeking diplomatic protection of the home state before the state-to-state dispute
settlement mechanism, or choose to bring a claim directly under an investor-State dispute settlement
procedure, bypassing domestic legal processes and ‘giving ascendancy to the investor, who is the principal
beneficiary of rights under investment agreements’.125 In these cases, by asserting a violation or “non-
violation” of the broad substantive rights provided to investors, investors can demand compensation for the
impact of governmental actions (including enacted laws and regulations and government ‘inaction’) on the
investment interests. Some of the enforcement procedures in fact have direct relevance to subsidiaries and
intellectual property rights asset management service providers.
121 Ibid. Article 15.11 (6), (7) & (8).
122 USTR (2004), United States - Morocco FTAs Article 15.11 (10).
123 Ibid., Article 15.11 (14)
124 See Art 10.28, United States. – CAFTA FTA.
125 UNCTAD (2003) as quoted in Correa (2004).
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V. CONCLUSION: THE CHANGING STRUCTURE OF INTELLECTUAL PROPERTY
ENFORCEMENT AND THE POLICY OPTIONS FOR DEVELOPING COUNTRIES
As enforcement of intellectual property rights gains greater preponderance on the international agenda,
developing countries must develop appropriate policy responses. Our research indicates that the concerns
regarding international trade in counterfeiting and piracy on a global scale require greater coordination and
dialogue involving the private sector, government and civil society stakeholders in order to find appropriate
solutions to both supply and demand problems. There is also need for greater coherence among the
initiatives and activities being undertaken on enforcement of intellectual property rights by different
multilateral fora and agencies.
The continued exchange of national information, experiences and practices to tackle counterfeiting
and piracy is positive and desirable in order to foster a better understanding of the problems and build
common agendas. Current sharing of experiences should be broadened to include the use of enforcement
measures to ensure the exercise of limitations and exceptions to intellectual property rights and prevent
abuse of intellectual property rights the use of competition law, and analysis of related national case law.
In order to work towards a common definition of the problems and identification of solutions, there
is a dire need for reliable information and objective data, as well as harmonized definitions that would
allow proper quantification of the magnitude and impact of international trade in counterfeit and pirated
goods and to define the problems adequately.
Developing countries are facing increased pressure to bolster intellectual property enforcement. In
response, developing countries are increasingly redirecting resources to strengthen the enforcement of
intellectual property rights and involving public agencies in the efforts. While government ought to provide
intellectual property right holders with the legal means to enforce their private rights, the responsibility for
intellectual property rights enforcement must be vested in right holders.
An increasing number of developing countries are adopting TRIPS-plus enforcement obligations
and renouncing sovereign authority in order to adopt innovation and intellectual property policies suited to
their level of development. They may also be foregoing important flexibilities afforded under the TRIPS
Agreement that accommodate differences among national legal systems and levels of development. In the
case where such obligations are acquired through FTAs, they may in future also suffer trade and other
economic sanctions owing to their possible inability to comply with new obligations that may be unduly
intrusive and restrictive.
Enforcement of intellectual property rights is costly in financial terms. There are high costs linked to
institutional reform and the training of judges inter alia, which in the short term make compliance with the
enforcement obligations in FTAs highly questionable. This is evidenced by the fact that many developing
countries are still struggling to implement the substantial provisions in the TRIPS Agreement. Under the
FTAs, the substantive issues in intellectual property rights will prove ever more difficult to implement.
Clearly, there will continue to be an “unwillingness to absorb the costly administrative expenses associated
with enforcement and an inability to manage many of the technical and judicial issues associated with the
use and infringement of intellectual property rights.”126
Tailored national solutions are the best means to meet practical intellectual property rights
enforcement concerns and the actual needs of each country. Thus, countries should maintain the ability to
protect intellectual property rights from illegal violations in the manner that best suits their circumstances.
Likewise, as members from parliaments of WTO member countries recently proposed, different and less
126 Maskus Keith (1997:10)
The Changing Structure and Governance of Intellectual Property Enforcement 37
expensive mechanisms for addressing the problems of counterfeit and piracy should be promoted,
including competition regulations,.127
As in the case of the WIPO Development Agenda, the framing of the issue of intellectual property
enforcement by developing countries should focus on two critical elements: (1) the interests of other
stakeholders beyond those of right holders, and (2) the limited role that governments should play in the
enforcement of private rights.
In particular, the main recommendations suggested for developing countries are the following:
•
Enforcement measures must be equitable and fair and must balance the intellectual property
rights of their holders and the rights of third parties, and the limitations and exceptions
provided in the intellectual property system.
•
Do not adopt stronger measures and procedures for the enforcement of intellectual property
rights beyond those found in the TRIPS Agreement, unless prior assessment is made to
determine that TRIPS-plus enforcement standards would bring domestic benefits. TRIPS-
plus enforcement standards in regional and/or bilateral FTAs and EPAs should be avoided.
•
Resist developed country pressure in the WTO TRIPS Council, the WIPO and other fora to
establish soft law norms, including best practices and declarations that may require
strengthening domestic enforcement of intellectual property rights beyond TRIPS standards
and may lead to harmonization of enforcement standards.
•
Maintain flexibilities available in the TRIPS Agreement as they apply to the enforcement of
intellectual property rights, including: 1) flexibility as to the method of implementing
enforcement measures and procedures in national legal systems; 2) flexibility to balance
resources for general law enforcement with those that may be mobilized for the specific
enforcement of intellectual property rights; 3) flexibility confine the availability of
procedures for border measures and criminal sanctions to cover counterfeit trademark or
pirated copyright goods as defined in Article 51, footnote 14; 4) flexibility as to the granting
of injunctions; 4) flexibility as to determining what amounts to ‘adequate compensation’ in
awarding damage.
•
Adopt clear definitions of counterfeiting and piracy to avoid legal uncertainty and potential
abuse of enforcement measures. Definitions can be found in the TRIPS Agreement’s Article
51, footnote 14. The common elements of the agreed definition in TRIPS should be applied:
(1) identical or close similarity to intellectual property protected locally, (2) unauthorized
use, (3) infringement in a country of importation, (4) traded internationally. Ensure that
TRIPS-compliant parallel importation of goods is excluded from the definition of counterfeit
or piracy. Do not extend definition to include patent infringement.
•
Avoid making use of criminal law to deal with intellectual property infringement. At the
least, limit the application of criminal law to cases of intellectual property infringement that
are wilful and occur on a commercial scale, and thoroughly define the elements that would
constitute a “crime”.
•
Avoid commitments to act directly against infringement of intellectual property rights. While
government ought to provide intellectual property right holders with the legal means to
127 “We stress the need to continue making progress in the area of trade-related aspects of intellectual property
rights (TRIPS) and taking action against counterfeiting and piracy by promoting fair forms of competition.”
Declaration of the Brussels Session of the Parliamentary Conference on the WTO adopted on 26 November
2004
38 Research Papers
enforce their private rights, responsibility for intellectual property rights enforcement must be
vested in right holders. Right holders must initiate any legal actions and bear their full costs.
•
Strengthen checks against abuse and misuse of intellectual property rights and enforcement
measures. The means to do so include more rigorous vetting of patent applications, stronger
enforcement of competition law, ensuring that measures for intellectual property rights
enforcement are equitable and fair, and providing stronger protection of limitations on and
exceptions to intellectual property rights, such as “fair use” for access to information,
educational and research purposes.
The Changing Structure and Governance of Intellectual Property Enforcement 39
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46 Research Papers
ANNEX
SELECTED PROVISIONS OF THE AGREEMENT ON TRADE-RELATED ASPECTS OF
INTELLECTUAL PROPERTY RIGHTS
(Preamble, Part I, III, IV and V)
Members,
Desiring to reduce distortions and impediments to international trade, and taking into account the need
to promote effective and adequate protection of intellectual property rights, and to ensure that measures and
procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade;
Recognizing, to this end, the need for new rules and disciplines concerning:
(a)
the applicability of the basic principles of GATT 1994 and of relevant international intellectual
property agreements or conventions;
(b)
the provision of adequate standards and principles concerning the availability, scope and use of
trade-related intellectual property rights;
(c)
the provision of effective and appropriate means for the enforcement of trade-related
intellectual property rights, taking into account differences in national legal systems;
(d)
the provision of effective and expeditious procedures for the multilateral prevention and
settlement of disputes between governments; and
(e)
transitional arrangements aiming at the fullest participation in the results of the negotiations;
Recognizing the need for a multilateral framework of principles, rules and disciplines dealing with
international trade in counterfeit goods;
Recognizing that intellectual property rights are private rights;
Recognizing the underlying public policy objectives of national systems for the protection of intellectual
property, including developmental and technological objectives;
Recognizing also the special needs of the least-developed country Members in respect of maximum
flexibility in the domestic implementation of laws and regulations in order to enable them to create a sound and
viable technological base;
Emphasizing the importance of reducing tensions by reaching strengthened commitments to resolve
disputes on trade-related intellectual property issues through multilateral procedures;
Desiring to establish a mutually supportive relationship between the WTO and the World Intellectual
Property Organization (referred to in this Agreement as "WIPO") as well as other relevant international
organizations;
Hereby agree as follows:
PART I
GENERAL PROVISIONS AND BASIC PRINCIPLES
The Changing Structure and Governance of Intellectual Property Enforcement 47
Article 1
Nature and Scope of Obligations
1.
Members shall give effect to the provisions of this Agreement. Members may, but shall not be obliged
to, implement in their law more extensive protection than is required by this Agreement, provided that such
protection does not contravene the provisions of this Agreement. Members shall be free to determine the
appropriate method of implementing the provisions of this Agreement within their own legal system and
practice.
2.
For the purposes of this Agreement, the term "intellectual property" refers to all categories of
intellectual property that are the subject of Sections 1 through 7 of Part II.
3.
Members shall accord the treatment provided for in this Agreement to the nationals of other
Members.128 In respect of the relevant intellectual property right, the nationals of other Members shall be
understood as those natural or legal persons that would meet the criteria for eligibility for protection provided for
in the Paris Convention (1967), the Berne Convention (1971), the Rome Convention and the Treaty on
Intellectual Property in Respect of Integrated Circuits, were all Members of the WTO members of those
conventions.129 Any Member availing itself of the possibilities provided in paragraph 3 of Article 5 or
paragraph 2 of Article 6 of the Rome Convention shall make a notification as foreseen in those provisions to the
Council for Trade-Related Aspects of Intellectual Property Rights (the "Council for TRIPS").
Article 2
Intellectual Property Conventions
1.
In respect of Parts II, III and IV of this Agreement, Members shall comply with Articles 1 through 12,
and Article 19, of the Paris Convention (1967).
2.
Nothing in Parts I to IV of this Agreement shall derogate from existing obligations that Members may
have to each other under the Paris Convention, the Berne Convention, the Rome Convention and the Treaty on
Intellectual Property in Respect of Integrated Circuits.
Article 3
National Treatment
1.
Each Member shall accord to the nationals of other Members treatment no less favourable than that it
accords to its own nationals with regard to the protection130 of intellectual property, subject to the exceptions
already provided in, respectively, the Paris Convention (1967), the Berne Convention (1971), the Rome
Convention or the Treaty on Intellectual Property in Respect of Integrated Circuits. In respect of performers,
producers of phonograms and broadcasting organizations, this obligation only applies in respect of the rights
provided under this Agreement. Any Member availing itself of the possibilities provided in Article 6 of the
128 When "nationals" are referred to in this Agreement, they shall be deemed, in the case of a separate customs
territory Member of the WTO, to mean persons, natural or legal, who are domiciled or who have a real and
effective industrial or commercial establishment in that customs territory.
129 In this Agreement, "Paris Convention" refers to the Paris Convention for the Protection of Industrial Property;
"Paris Convention (1967)" refers to the Stockholm Act of this Convention of 14 July 1967. "Berne Convention"
refers to the Berne Convention for the Protection of Literary and Artistic Works; "Berne Convention (1971)"
refers to the Paris Act of this Convention of 24 July 1971. "Rome Convention" refers to the International
Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations, adopted
at Rome on 26 October 1961. "Treaty on Intellectual Property in Respect of Integrated Circuits" (IPIC Treaty)
refers to the Treaty on Intellectual Property in Respect of Integrated Circuits, adopted at Washington on
26 May 1989. "WTO Agreement" refers to the Agreement Establishing the WTO.
130 For the purposes of Articles 3 and 4, "protection" shall include matters affecting the availability, acquisition,
scope, maintenance and enforcement of intellectual property rights as well as those matters affecting the use of
intellectual property rights specifically addressed in this Agreement.
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Berne Convention (1971) or paragraph 1(b) of Article 16 of the Rome Convention shall make a notification as
foreseen in those provisions to the Council for TRIPS.
2.
Members may avail themselves of the exceptions permitted under paragraph 1 in relation to judicial and
administrative procedures, including the designation of an address for service or the appointment of an agent
within the jurisdiction of a Member, only where such exceptions are necessary to secure compliance with laws
and regulations which are not inconsistent with the provisions of this Agreement and where such practices are
not applied in a manner which would constitute a disguised restriction on trade.
Article 4
Most-Favoured-Nation Treatment
With regard to the protection of intellectual property, any advantage, favour, privilege or immunity
granted by a Member to the nationals of any other country shall be accorded immediately and unconditionally to
the nationals of all other Members. Exempted from this obligation are any advantage, favour, privilege or
immunity accorded by a Member:
(a)
deriving from international agreements on judicial assistance or law enforcement of a general
nature and not particularly confined to the protection of intellectual property;
(b)
granted in accordance with the provisions of the Berne Convention (1971) or the Rome
Convention authorizing that the treatment accorded be a function not of national treatment but
of the treatment accorded in another country;
(c)
in respect of the rights of performers, producers of phonograms and broadcasting organizations
not provided under this Agreement;
(d)
deriving from international agreements related to the protection of intellectual property which
entered into force prior to the entry into force of the WTO Agreement, provided that such
agreements are notified to the Council for TRIPS and do not constitute an arbitrary or
unjustifiable discrimination against nationals of other Members.
Article 5
Multilateral Agreements on Acquisition or
Maintenance of Protection
The obligations under Articles 3 and 4 do not apply to procedures provided in multilateral agreements
concluded under the auspices of WIPO relating to the acquisition or maintenance of intellectual property rights.
Article 6
Exhaustion
For the purposes of dispute settlement under this Agreement, subject to the provisions of Articles 3 and
4 nothing in this Agreement shall be used to address the issue of the exhaustion of intellectual property rights.
Article 7
Objectives
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.
The Changing Structure and Governance of Intellectual Property Enforcement 49
Article 8
Principles
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.
PART III
ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS
SECTION 1: GENERAL OBLIGATIONS
Article 41
1.
Members shall ensure that enforcement procedures as specified in this Part are available under their law
so as to permit effective action against any act of infringement of intellectual property rights covered by this
Agreement, including expeditious remedies to prevent infringements and remedies which constitute a deterrent
to further infringements. These procedures shall be applied in such a manner as to avoid the creation of barriers
to legitimate trade and to provide for safeguards against their abuse.
2.
Procedures concerning the enforcement of intellectual property rights shall be fair and equitable. They
shall not be unnecessarily complicated or costly, or entail unreasonable time-limits or unwarranted delays.
3.
Decisions on the merits of a case shall preferably be in writing and reasoned. They shall be made
available at least to the parties to the proceeding without undue delay. Decisions on the merits of a case shall be
based only on evidence in respect of which parties were offered the opportunity to be heard.
4.
Parties to a proceeding shall have an opportunity for review by a judicial authority of final
administrative decisions and, subject to jurisdictional provisions in a Member's law concerning the importance of
a case, of at least the legal aspects of initial judicial decisions on the merits of a case. However, there shall be no
obligation to provide an opportunity for review of acquittals in criminal cases.
5.
It is understood that this Part does not create any obligation to put in place a judicial system for the
enforcement of intellectual property rights distinct from that for the enforcement of law in general, nor does it
affect the capacity of Members to enforce their law in general. Nothing in this Part creates any obligation with
respect to the distribution of resources as between enforcement of intellectual property rights and the
enforcement of law in general.
SECTION 2: CIVIL AND ADMINISTRATIVE PROCEDURES AND REMEDIES
Article 42
Fair and Equitable Procedures
Members shall make available to right holders131 civil judicial procedures concerning the enforcement
of any intellectual property right covered by this Agreement. Defendants shall have the right to written notice
131 For the purpose of this Part, the term "right holder" includes federations and associations having legal
standing to assert such rights.
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which is timely and contains sufficient detail, including the basis of the claims. Parties shall be allowed to be
represented by independent legal counsel, and procedures shall not impose overly burdensome requirements
concerning mandatory personal appearances. All parties to such procedures shall be duly entitled to substantiate
their claims and to present all relevant evidence. The procedure shall provide a means to identify and protect
confidential information, unless this would be contrary to existing constitutional requirements.
Article 43
Evidence
1.
The judicial authorities shall have the authority, where a party has presented reasonably available
evidence sufficient to support its claims and has specified evidence relevant to substantiation of its claims which
lies in the control of the opposing party, to order that this evidence be produced by the opposing party, subject in
appropriate cases to conditions which ensure the protection of confidential information.
2.
In cases in which a party to a proceeding voluntarily and without good reason refuses access to, or
otherwise does not provide necessary information within a reasonable period, or significantly impedes a
procedure relating to an enforcement action, a Member may accord judicial authorities the authority to make
preliminary and final determinations, affirmative or negative, on the basis of the information presented to them,
including the complaint or the allegation presented by the party adversely affected by the denial of access to
information, subject to providing the parties an opportunity to be heard on the allegations or evidence.
Article 44
Injunctions
1.
The judicial authorities shall have the authority to order a party to desist from an infringement, inter alia
to prevent the entry into the channels of commerce in their jurisdiction of imported goods that involve the
infringement of an intellectual property right, immediately after customs clearance of such goods. Members are
not obliged to accord such authority in respect of protected subject matter acquired or ordered by a person prior
to knowing or having reasonable grounds to know that dealing in such subject matter would entail the
infringement of an intellectual property right.
2.
Notwithstanding the other provisions of this Part and provided that the provisions of Part II specifically
addressing use by governments, or by third parties authorized by a government, without the authorization of the
right holder are complied with, Members may limit the remedies available against such use to payment of
remuneration in accordance with subparagraph (h) of Article 31. In other cases, the remedies under this Part
shall apply or, where these remedies are inconsistent with a Member's law, declaratory judgments and adequate
compensation shall be available.
Article 45
Damages
1. The
judicial
authorities shall have the authority to order the infringer to pay the right holder damages
adequate to compensate for the injury the right holder has suffered because of an infringement of that person’s
intellectual property right by an infringer who knowingly, or with reasonable grounds to know, engaged in
infringing activity.
2.
The judicial authorities shall also have the authority to order the infringer to pay the right holder
expenses, which may include appropriate attorney's fees. In appropriate cases, Members may authorize the
judicial authorities to order recovery of profits and/or payment of pre-established damages even where the
infringer did not knowingly, or with reasonable grounds to know, engage in infringing activity.
The Changing Structure and Governance of Intellectual Property Enforcement 51
Article 46
Other Remedies
In order to create an effective deterrent to infringement, the judicial authorities shall have the authority
to order that goods that they have found to be infringing be, without compensation of any sort, disposed of
outside the channels of commerce in such a manner as to avoid any harm caused to the right holder, or, unless
this would be contrary to existing constitutional requirements, destroyed. The judicial authorities shall also have
the authority to order that materials and implements the predominant use of which has been in the creation of the
infringing goods be, without compensation of any sort, disposed of outside the channels of commerce in such a
manner as to minimize the risks of further infringements. In considering such requests, the need for
proportionality between the seriousness of the infringement and the remedies ordered as well as the interests of
third parties shall be taken into account. In regard to counterfeit trademark goods, the simple removal of the
trademark unlawfully affixed shall not be sufficient, other than in exceptional cases, to permit release of the
goods into the channels of commerce.
Article 47
Right of Information
Members may provide that the judicial authorities shall have the authority, unless this would be out of
proportion to the seriousness of the infringement, to order the infringer to inform the right holder of the identity
of third persons involved in the production and distribution of the infringing goods or services and of their
channels of distribution.
Article 48
Indemnification of the Defendant
1.
The judicial authorities shall have the authority to order a party at whose request measures were taken
and who has abused enforcement procedures to provide to a party wrongfully enjoined or restrained adequate
compensation for the injury suffered because of such abuse. The judicial authorities shall also have the authority
to order the applicant to pay the defendant expenses, which may include appropriate attorney's fees.
2.
In respect of the administration of any law pertaining to the protection or enforcement of intellectual
property rights, Members shall only exempt both public authorities and officials from liability to appropriate
remedial measures where actions are taken or intended in good faith in the course of the administration of that
law.
Article 49
Administrative Procedures
To the extent that any civil remedy can be ordered as a result of administrative procedures on
the merits of a case, such procedures shall conform to principles equivalent in substance to those set
forth in this Section.
SECTION 3: PROVISIONAL MEASURES
Article 50
1.
The judicial authorities shall have the authority to order prompt and effective provisional measures:
(a)
to prevent an infringement of any intellectual property right from occurring, and in particular
to prevent the entry into the channels of commerce in their jurisdiction of goods, including
imported goods immediately after customs clearance;
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(b)
to preserve relevant evidence in regard to the alleged infringement.
2.
The judicial authorities shall have the authority to adopt provisional measures inaudita altera parte
where appropriate, in particular where any delay is likely to cause irreparable harm to the right holder, or where
there is a demonstrable risk of evidence being destroyed.
3.
The judicial authorities shall have the authority to require the applicant to provide any reasonably
available evidence in order to satisfy themselves with a sufficient degree of certainty that the applicant is the
right holder and that the applicant’s right is being infringed or that such infringement is imminent, and to order
the applicant to provide a security or equivalent assurance sufficient to protect the defendant and to prevent
abuse.
4.
Where provisional measures have been adopted inaudita altera parte, the parties affected shall be given
notice, without delay after the execution of the measures at the latest. A review, including a right to be heard,
shall take place upon request of the defendant with a view to deciding, within a reasonable period after the
notification of the measures, whether these measures shall be modified, revoked or confirmed.
5.
The applicant may be required to supply other information necessary for the identification of the goods
concerned by the authority that will execute the provisional measures.
6.
Without prejudice to paragraph 4, provisional measures taken on the basis of paragraphs 1 and 2 shall,
upon request by the defendant, be revoked or otherwise cease to have effect, if proceedings leading to a decision
on the merits of the case are not initiated within a reasonable period, to be determined by the judicial authority
ordering the measures where a Member's law so permits or, in the absence of such a determination, not to exceed
20 working days or 31 calendar days, whichever is the longer.
7.
Where the provisional measures are revoked or where they lapse due to any act or omission by the
applicant, or where it is subsequently found that there has been no infringement or threat of infringement of an
intellectual property right, the judicial authorities shall have the authority to order the applicant, upon request of
the defendant, to provide the defendant appropriate compensation for any injury caused by these measures.
8.
To the extent that any provisional measure can be ordered as a result of administrative procedures, such
procedures shall conform to principles equivalent in substance to those set forth in this Section.
SECTION 4: SPECIAL REQUIREMENTS RELATED TO BORDER MEASURES132
Article 51
Suspension of Release by Customs Authorities
Members shall, in conformity with the provisions set out below, adopt procedures133 to enable a right
holder, who has valid grounds for suspecting that the importation of counterfeit trademark or pirated copyright
goods134 may take place, to lodge an application in writing with competent authorities, administrative or judicial,
132 Where a Member has dismantled substantially all controls over movement of goods across its border with
another Member with which it forms part of a customs union, it shall not be required to apply the provisions of
this Section at that border.
133 It is understood that there shall be no obligation to apply such procedures to imports of goods put on the
market in another country by or with the consent of the right holder, or to goods in transit.
134 For the purposes of this Agreement:
(a)
"counterfeit trademark goods" shall mean any goods, including packaging, bearing without
authorization a trademark which is identical to the trademark validly registered in respect of such goods, or
which cannot be distinguished in its essential aspects from such a trademark, and which thereby infringes the
rights of the owner of the trademark in question under the law of the country of importation;
(b)
"pirated copyright goods" shall mean any goods which are copies made without the consent of the right
holder or person duly authorized by the right holder in the country of production and which are made directly or
The Changing Structure and Governance of Intellectual Property Enforcement 53
for the suspension by the customs authorities of the release into free circulation of such goods. Members may
enable such an application to be made in respect of goods which involve other infringements of intellectual
property rights, provided that the requirements of this Section are met. Members may also provide for
corresponding procedures concerning the suspension by the customs authorities of the release of infringing
goods destined for exportation from their territories.
Article 52
Application
Any right holder initiating the procedures under Article 51 shall be required to provide adequate
evidence to satisfy the competent authorities that, under the laws of the country of importation, there is prima
facie an infringement of the right holder’s intellectual property right and to supply a sufficiently detailed
description of the goods to make them readily recognizable by the customs authorities. The competent
authorities shall inform the applicant within a reasonable period whether they have accepted the application and,
where determined by the competent authorities, the period for which the customs authorities will take action.
Article 53
Security or Equivalent Assurance
1.
The competent authorities shall have the authority to require an applicant to provide a security or
equivalent assurance sufficient to protect the defendant and the competent authorities and to prevent abuse. Such
security or equivalent assurance shall not unreasonably deter recourse to these procedures.
2.
Where pursuant to an application under this Section the release of goods involving industrial designs,
patents, layout-designs or undisclosed information into free circulation has been suspended by customs
authorities on the basis of a decision other than by a judicial or other independent authority, and the period
provided for in Article 55 has expired without the granting of provisional relief by the duly empowered
authority, and provided that all other conditions for importation have been complied with, the owner, importer,
or consignee of such goods shall be entitled to their release on the posting of a security in an amount sufficient to
protect the right holder for any infringement. Payment of such security shall not prejudice any other remedy
available to the right holder, it being understood that the security shall be released if the right holder fails to
pursue the right of action within a reasonable period of time.
Article 54
Notice of Suspension
The importer and the applicant shall be promptly notified of the suspension of the release of goods
according to Article 51.
Article 55
Duration of Suspension
If, within a period not exceeding 10 working days after the applicant has been served notice of the
suspension, the customs authorities have not been informed that proceedings leading to a decision on the merits
of the case have been initiated by a party other than the defendant, or that the duly empowered authority has
taken provisional measures prolonging the suspension of the release of the goods, the goods shall be released,
provided that all other conditions for importation or exportation have been complied with; in appropriate cases,
this time-limit may be extended by another 10 working days. If proceedings leading to a decision on the merits
of the case have been initiated, a review, including a right to be heard, shall take place upon request of the
defendant with a view to deciding, within a reasonable period, whether these measures shall be modified,
indirectly from an article where the making of that copy would have constituted an infringement of a copyright
or a related right under the law of the country of importation.
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revoked or confirmed. Notwithstanding the above, where the suspension of the release of goods is carried out or
continued in accordance with a provisional judicial measure, the provisions of paragraph 6 of Article 50 shall
apply.
Article 56
Indemnification of the Importer
and of the Owner of the Goods
Relevant authorities shall have the authority to order the applicant to pay the importer, the consignee
and the owner of the goods appropriate compensation for any injury caused to them through the wrongful
detention of goods or through the detention of goods released pursuant to Article 55.
Article 57
Right of Inspection and Information
Without prejudice to the protection of confidential information, Members shall provide the competent
authorities the authority to give the right holder sufficient opportunity to have any goods detained by the customs
authorities inspected in order to substantiate the right holder’s claims. The competent authorities shall also have
authority to give the importer an equivalent opportunity to have any such goods inspected. Where a positive
determination has been made on the merits of a case, Members may provide the competent authorities the
authority to inform the right holder of the names and addresses of the consignor, the importer and the consignee
and of the quantity of the goods in question.
Article 58
Ex Officio Action
Where Members require competent authorities to act upon their own initiative and to suspend the
release of goods in respect of which they have acquired prima facie evidence that an intellectual property right is
being infringed:
(a)
the competent authorities may at any time seek from the right holder any information that may
assist them to exercise these powers;
(b)
the importer and the right holder shall be promptly notified of the suspension. Where the
importer has lodged an appeal against the suspension with the competent authorities, the
suspension shall be subject to the conditions, mutatis mutandis, set out at Article 55;
(c)
Members shall only exempt both public authorities and officials from liability to appropriate
remedial measures where actions are taken or intended in good faith.
Article 59
Remedies
Without prejudice to other rights of action open to the right holder and subject to the right of the
defendant to seek review by a judicial authority, competent authorities shall have the authority to order the
destruction or disposal of infringing goods in accordance with the principles set out in Article 46. In regard to
counterfeit trademark goods, the authorities shall not allow the re-exportation of the infringing goods in an
unaltered state or subject them to a different customs procedure, other than in exceptional circumstances.
The Changing Structure and Governance of Intellectual Property Enforcement 55
Article 60
De Minimis Imports
Members may exclude from the application of the above provisions small quantities of goods of a non-
commercial nature contained in travellers' personal luggage or sent in small consignments.
SECTION 5: CRIMINAL PROCEDURES
Article 61
Members shall provide for criminal procedures and penalties to be applied at least in cases of wilful
trademark counterfeiting or copyright piracy on a commercial scale. Remedies available shall include
imprisonment and/or monetary fines sufficient to provide a deterrent, consistently with the level of penalties
applied for crimes of a corresponding gravity. In appropriate cases, remedies available shall also include the
seizure, forfeiture and destruction of the infringing goods and of any materials and implements the predominant
use of which has been in the commission of the offence. Members may provide for criminal procedures and
penalties to be applied in other cases of infringement of intellectual property rights, in particular where they are
committed wilfully and on a commercial scale.
PART IV
ACQUISITION AND MAINTENANCE OF INTELLECTUAL PROPERTY
RIGHTS AND RELATED INTER-PARTES PROCEDURES
Article 62
1.
Members may require, as a condition of the acquisition or maintenance of the intellectual property
rights provided for under Sections 2 through 6 of Part II, compliance with reasonable procedures and formalities.
Such procedures and formalities shall be consistent with the provisions of this Agreement.
2.
Where the acquisition of an intellectual property right is subject to the right being granted or registered,
Members shall ensure that the procedures for grant or registration, subject to compliance with the substantive
conditions for acquisition of the right, permit the granting or registration of the right within a reasonable period
of time so as to avoid unwarranted curtailment of the period of protection.
3.
Article 4 of the Paris Convention (1967) shall apply mutatis mutandis to service marks.
4.
Procedures concerning the acquisition or maintenance of intellectual property rights and, where a
Member's law provides for such procedures, administrative revocation and inter partes procedures such as
opposition, revocation and cancellation, shall be governed by the general principles set out in paragraphs 2 and 3
of Article 41.
5.
Final administrative decisions in any of the procedures referred to under paragraph 4 shall be subject to
review by a judicial or quasi-judicial authority. However, there shall be no obligation to provide an opportunity
for such review of decisions in cases of unsuccessful opposition or administrative revocation, provided that the
grounds for such procedures can be the subject of invalidation procedures.
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PART V
DISPUTE PREVENTION AND SETTLEMENT
Article 63
Transparency
1.
Laws and regulations, and final judicial decisions and administrative rulings of general application,
made effective by a Member pertaining to the subject matter of this Agreement (the availability, scope,
acquisition, enforcement and prevention of the abuse of intellectual property rights) shall be published, or where
such publication is not practicable made publicly available, in a national language, in such a manner as to enable
governments and right holders to become acquainted with them. Agreements concerning the subject matter of
this Agreement which are in force between the government or a governmental agency of a Member and the
government or a governmental agency of another Member shall also be published.
2.
Members shall notify the laws and regulations referred to in paragraph 1 to the Council for TRIPS in
order to assist that Council in its review of the operation of this Agreement. The Council shall attempt to
minimize the burden on Members in carrying out this obligation and may decide to waive the obligation to
notify such laws and regulations directly to the Council if consultations with WIPO on the establishment of a
common register containing these laws and regulations are successful. The Council shall also consider in this
connection any action required regarding notifications pursuant to the obligations under this Agreement
stemming from the provisions of Article 6ter of the Paris Convention (1967).
3.
Each Member shall be prepared to supply, in response to a written request from another Member,
information of the sort referred to in paragraph 1. A Member, having reason to believe that a specific judicial
decision or administrative ruling or bilateral agreement in the area of intellectual property rights affects its rights
under this Agreement, may also request in writing to be given access to or be informed in sufficient detail of
such specific judicial decisions or administrative rulings or bilateral agreements.
4.
Nothing in paragraphs 1, 2 and 3 shall require Members to disclose confidential information which
would impede law enforcement or otherwise be contrary to the public interest or would prejudice the legitimate
commercial interests of particular enterprises, public or private.
Article 64
Dispute Settlement
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.
3.
During the time period referred to in paragraph 2, the Council for TRIPS shall examine the scope and
modalities for complaints of the type provided for under subparagraphs 1(b) and 1(c) of Article XXIII of
GATT 1994 made pursuant to this Agreement, and submit its recommendations to the Ministerial Conference
for approval. Any decision of the Ministerial Conference to approve such recommendations or to extend the
period in paragraph 2 shall be made only by consensus, and approved recommendations shall be effective for all
Members without further formal acceptance process.