THE NEXUS OF INTELLECTUAL PROPERTY AND INTERNATIONAL TRADE

Author: Sonia Attri, Faculty of Law, University of Delhi
                                              



ABSTRACT

In the last 20 years, intellectual property (IP) law and policy have evolved significantly due to increased international trade and numerous trade agreements. The rise in global exchanges of goods, services, and knowledge, coupled with structural economic shifts emphasizing knowledge as a key asset, has driven these changes. This paper reviews the intersection of IP rights with globalization and trade, analysing economic theories and empirical evidence. It evaluates how trade-related IP issues are addressed in various agreements and concludes that IP rights will remain crucial in trade agreements but with diverse standards and enhanced enforcement reflecting evolving attitudes and deeper insights into innovation and IP distribution.

INTRODUCTION

Intellectual property (IP) refers to creations of the mind, including inventions and artistic works. These creations require substantial investment in terms of time, effort, and resources. Legal rights, known as intellectual property rights (IPR), are granted to creators to protect and commercialize their innovations and creations. IPR are territorial and allow owners to sell, license, or otherwise exploit their IP, akin to physical property. Registration is typically required to assert these rights. The primary categories of IPR include: I) patents, ii) trademarks, iii) industrial designs, iv) semiconductor layout designs, v) geographical indications, and vi) copyrights (covering literary, artistic, musical, and other creative works). IPR provide time-limited exclusivity to encourage innovation and creativity, with rights expiring to allow further public use and development.

INTELLECTUAL PROPERTY RIGHTS

Intellectual Property Rights (IPR) are legal protections granted by governments to promote innovation and creativity by providing exclusive rights to creators. IPRs include patents, trade secrets, copyrights, trademarks, and geographical indications. These rights are usually national but must align with international standards, such as those set by the WTO’s TRIPS Agreement.

TYPES OF IPR: –
1. Patents: Protected under national laws like the U.S. Patent Act (35 U.S.C. 101 et seq), patents cover new inventions, designs, or plants, granting exclusive rights for 20 years. Inventors must disclose their inventions to foster further innovation.

2. Trade Secrets: Guard confidential business information, such as formulas or processes, that provides a competitive advantage. Protection is indefinite as long as secrecy is maintained, without the need for formal registration.

3. Copyrights: Under laws like the U.S. Copyright Act (17 U.S.C. 101 et seq), copyrights cover original works such as literature, music, and software. They last for the author’s life plus 70 years, or 95 years from publication for corporate works.

4. Trademarks: Governed by the Lanham Act (15 U.S.C. 1051 et seq), trademarks protect distinctive signs like names or symbols that identify goods or services, preventing consumer confusion and ensuring brand quality.

5. Geographical Indications: Protect products from specific regions to maintain their quality and reputation, similar to trademarks, particularly for agricultural products and wines.

IPR INFRINGEMENT AND MISAPPROPRIATION: –

– Infringement occurs when IPR is used without authorization. For patents, this involves unauthorized use of the invention; for copyrights, it involves unauthorized reproduction or distribution.

– Piracy refers to the illegal copying and distribution of copyrighted works or unauthorized use of trademarks, often facilitated online.

– Counterfeiting involves creating fake goods that imitate genuine products to deceive consumers, harming the original product’s reputation.

IPRs are essential for safeguarding creativity and innovation by providing legal protection against unauthorized use and infringement.

REGULATION OF INTERNATIONAL TRADE AND IPR

International trade has transitioned from simple export-import models to a complex system involving fragmented production and service exchanges. This system is regulated by both national and international frameworks. The World Trade Organization (WTO), established in 1995 from the General Agreement on Tariffs and Trade (GATT), oversees global trade through its political, legislative, and judicial mechanisms, including a mandatory dispute resolution system. However, the WTO’s scope does not encompass all cross-border activities, some of which are governed by other organizations like the Organisation for Economic Co-operation and Development (OECD) or by private contract law and social norms. Intellectual Property Rights (IPRs) became integral to international trade agreements with the implementation of the TRIPS Agreement on January 1, 1995, alongside agreements like NAFTA. These agreements established minimum standards and enforcement mechanisms for intellectual property across member countries but do not cover all aspects of existing conventions such as the Rome or Berne Conventions. The primary challenge of TRIPS is enhancing IPR systems in developing countries. Historically, IPR standards originated with the Paris Convention (1883), Berne Convention (1886), and Madrid Agreement (1891), which were later incorporated into the World Intellectual Property Organization (WIPO). While WIPO focuses on setting IPR standards, its enforcement mechanisms are limited compared to TRIPS and TRIPS-plus agreements, which are crucial for trade-related IPRs and technology transfer.

EVOLUTION OF THE GLOBAL GOVERNANCE REGIME

Global trade has evolved to a system where production and distribution are dispersed across countries, often referred to as “trade in tasks.” The WTO, the primary international body overseeing trade, handles many aspects of global trade regulation, but not all activities are covered. Some are managed by organizations like the OECD or private contracts. The Doha Development Round has faced difficulties and stagnation since 2008, and about 30 countries remain outside the WTO.
IPR protections have historical roots with early agreements such as the Paris Convention, Berne Convention, and Madrid Agreement. These agreements laid the foundation for the World Intellectual Property Organization (WIPO), which sets IPR standards but lacks robust enforcement capabilities. The WTO has stronger enforcement mechanisms compared to WIPO. U.S. and EU policies, including measures like Section 301 of the U.S. Trade Act, have significantly shaped global IPR standards and international agreements.

TRADE AGREEMENT AND IPR

Trade agreements play a pivotal role in shaping the landscape of intellectual property rights (IPR) globally. These agreements establish standards for IP protection, enforcement, and international cooperation. They influence how countries adopt and implement IP laws, which can impact trade flows, innovation, and economic growth. Below are some key trade agreements and their implications for IP.


WTO TRIPS Agreement

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) sets minimum standards for the protection and enforcement of intellectual property rights (IPR) within the World Trade Organization (WTO) framework. It encompasses several key components:

TRIPS mandates member compliance with its provisions while allowing flexibility in implementation. It emphasizes that IPR should not obstruct legitimate trade and must align with GATT principles, ensuring non-discrimination and most-favoured-nation treatment for foreign nationals.
– Standards Concerning Availability, Scope, and Use of IP Rights:
  – Copyrights and Related Rights: Covers protection for literary and artistic works, including computer programs and performers’ rights.
  – Trademarks: Protects signs capable of distinguishing goods or services, with rights to prevent confusion and misuse.
– Enforcement of IP Rights: Establishes obligations and procedures for civil, administrative, and criminal enforcement of IPR, including border measures.
– Acquisition and Maintenance of IP Rights: Outlines procedures for obtaining and maintaining IPR.
– Dispute Prevention and Settlement: Provides mechanisms for resolving disputes between WTO members regarding IPR.
-Transitional Arrangements: Allows for gradual compliance with TRIPS standards.
– Institutional Arrangements: Sets the framework for cooperation between WTO and WIPO, among other organizations.

The TRIPS Agreement aims to standardize IP protection, reduce trade distortions, and balance private rights with public benefits, particularly for least-developed countries, which receive extended implementation deadlines. The 2001 Doha Declaration reinforces TRIPS support for public health and access to medicines.
To provide a detailed discussion on trade agreements and intellectual property (IP), you can enhance the article by exploring specific agreements, their provisions related to IP, and their impact on global trade and innovation. Below is an expanded and detailed section on trade agreements and IP that complements your existing content:

1.2. Doha Development Round

– The Doha Development Round, initiated in 2001, aimed to address trade issues pertinent to developing countries, including IP rights. The Doha Declaration on TRIPS and Public Health was a significant outcome of this round.
  – Emphasizes the need to interpret TRIPS provisions in a manner that supports public health and access to medicines. It allows flexibility in IP laws to address public health needs.
  – The declaration has provided developing countries with more leeway to implement measures that can improve access to essential medicines.

2. Regional Trade Agreements
2.1. Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
The CPTPP, which came into force in December 2018, is a free trade agreement among 11 countries across the Asia-Pacific region. It incorporates comprehensive IP provisions that extend beyond those required by TRIPS.
  – Enhances patent protection, including provisions on data exclusivity for biologics.
  – Extends copyright protection to cover digital and online content, addressing issues such as digital rights management and enforcement.
  – Strengthens protection for trade secrets, with specific measures to prevent unauthorized disclosure and acquisition.
  – The CPTPP sets higher IP standards than TRIPS, influencing member countries to adopt more stringent IP protections.
– Facilitates deeper economic integration among member countries through improved IP protections and enforcement.

2.2. United States-Mexico-Canada Agreement (USMCA)

– The USMCA, which replaced NAFTA on July 1, 2020, includes significant updates to IP provisions.
  – Introduces provisions on biologic drug data protection, extending exclusivity periods.
  – Addresses issues related to digital trade, including data flow and cross-border data transfers, and enhances protection against IP infringement in digital environments.
  – Strengthens enforcement mechanisms for IP rights, including provisions for online infringement.
  – By providing stronger protections for pharmaceuticals and digital content, the USMCA aims to incentivize innovation and protect creators’ rights.
  – The agreement impacts trade dynamics among North American countries by aligning IP standards and enhancing regulatory cooperation.

3. Bilateral Trade Agreements

3.1. United States-Korea Free Trade Agreement (KORUS FTA)

-The KORUS FTA, effective from March 15, 2012, includes extensive IP provisions designed to enhance protections and enforcement mechanisms.
– Improves trademark protection, including provisions for the prevention of counterfeit goods.
  – Strengthens enforcement against copyright infringement, particularly in the digital realm.
  – Facilitates better market access for US and Korean companies by aligning IP standards and improving enforcement mechanisms.

3.2. EU-Japan Economic Partnership Agreement (EPA)
The EU-Japan EPA, effective from February 1, 2019, includes provisions aimed at enhancing IP protection and cooperation.
  – Geographical Indications: Enhances protection for geographical indications, benefiting both European and Japanese producers of regional products.
  – Enforcement: Strengthens IP enforcement mechanisms and promotes cooperation between IP offices.
  – Consumer Protection: Improves consumer protection by preventing counterfeiting and ensuring product authenticity.
  – Regional Trade: Boosts regional trade by aligning IP standards between the EU and Japan.

Trade agreements play a crucial role in shaping the global IP landscape. They establish minimum standards for IP protection, influence national IP laws, and affect international trade dynamics. By understanding the provisions and impacts of key agreements such as TRIPS, CPTPP, USMCA, and various bilateral agreements, stakeholders can better navigate the complexities of international IP law and leverage opportunities for innovation and trade.


JUDICIAL PRECEDENTS IN INTERNATIONAL IPR: –

1. World Trade Organization (WTO) Dispute Settlement Cases

1.1. US – Section 110(5) (1999)

– Case: United States – Section 110(5) of the US Copyright Act
– Issue: Examination of Section 110(5) of the US Copyright Act, which provides exemptions for certain public performances of copyrighted works. The core issue was compliance with the TRIPS Agreement.
– Outcome: The WTO Dispute Settlement Body determined that Section 110(5) did not meet TRIPS standards, prompting legislative amendments by the US.
– Significance: Illustrates the WTO’s role in enforcing TRIPS standards and ensuring alignment with international IP agreements.

1.2. EC – Trademarks and Geographical Indications (2004)

– Case: European Communities – Protection of Trademarks and Geographical Indications for Agricultural Products and Foodstuffs
– Issue: Review of EU regulations on geographical indications and trademarks for compliance with TRIPS.
– Outcome: The WTO upheld the EU’s measures as consistent with TRIPS obligations.
– Significance: Affirms the validity of stringent GI protections under TRIPS, balancing IP rights with trade practices.

2. Regional Judicial Precedents

2.1. Novartis AG v. Union of India (2013)

– Case: Novartis AG v. Union of India
– Issue: Challenge to India’s patent denial for Gleevec, asserting non-compliance with TRIPS standards for patentability.
– Outcome: The Indian Supreme Court upheld the denial, reinforcing that patent should be granted for genuine innovations, not minor modifications.
– Significance: Demonstrates the intersection of national patent laws with international IP standards and public health considerations.

2.2. Apple Inc. v. Samsung Electronics Co. Ltd. (2012)

– Case: Apple Inc. v. Samsung Electronics Co. Ltd.
– Issue: Allegations of patent infringement by Samsung concerning smartphone technology.
– Outcome: The US District Court found Samsung liable for patent infringements, awarding substantial damages.
– Significance: Highlights challenges in global patent enforcement and the complexities of international IP litigation.

3. International Court of Justice (ICJ) and IP

3.1. Advisory Opinion on the “Legality of the Threat or Use of Nuclear Weapons” (1996)

– Case: Advisory Opinion on nuclear weapons
– Issue: While not directly related to IP, it discussed balancing international obligations with national interests.
– Outcome: Emphasized balancing international obligations with national policies, relevant for understanding IP implementation.
– Significance: Provides a framework for reconciling international IP obligations with domestic interests.

4. European Court of Justice (ECJ) Cases

4.1. Google Inc. v. Equustek Solutions Inc. (2017)

– Case: Google Inc. v. Equustek Solutions Inc.
– Issue: Equustek sought to compel Google to remove search results linked to counterfeit goods.
– Outcome: The Supreme Court of Canada ordered Google to globally remove search results, a decision supported by other jurisdictions.
– Significance: Significant for its implications on global IP enforcement and internet platform responsibilities.


INDIA’S POSITION ON INTELLECTUAL PROPERTY RIGHTS

India is ranked 29th out of 30 in the IP Index according to the US Chamber of Commerce report. This indicates a critical need for enhancements in India’s intellectual property rights (IPR) infrastructure.: India has significant expertise in fields such as software engineering, missile technology, and space exploration. However, this expertise has not been fully leveraged into a robust IPR portfolio.

International Participation
1. World Intellectual Property Organization (WIPO):
   – India is a member of WIPO, which seeks to harmonize global IPR regulations and facilitate international cooperation. WIPO’s role is crucial for aligning national policies with global standards and fostering international trade in intellectual property.

2. Patent Cooperation Treaty (PCT):
   – As a participant in the PCT, India benefits from a streamlined process for filing international patent applications, which is recognized by over 145 member countries. This system enhances the ability of Indian inventors to secure patent protection across multiple jurisdictions efficiently.

3. Compliance with International Standards:
   – Aligning national IPR regulations with international standards is essential for facilitating global trade and protecting intellectual property. Active engagement with international bodies ensures that India remains in sync with global IPR trends and practices.

India’s intellectual potential is underutilized due to its current low ranking in global IPR indices. Addressing this issue requires a comprehensive approach, including improving awareness, refining policy frameworks, and enhancing enforcement mechanisms. Active participation in international IPR frameworks and alignment with global standards will be pivotal in protecting and capitalizing on India’s intellectual property, ultimately fostering innovation and contributing to economic growth.


CONCLUSION

In the last 20 years, intellectual property (IP) law has evolved significantly due to globalization and trade agreements. Key international agreements, such as the WTO’s TRIPS Agreement, regional accords like the CPTPP and USMCA, and various bilateral treaties, have shaped global IP standards and enforcement. India’s low ranking in global IP indices highlights the need for improved IP infrastructure As IP law continues to evolve, aligning national practices with international standards will be crucial for leveraging global trade and innovation opportunities.

REFERENCES

Lalit Jajpura, Bhupinder Singh & Rajkishore Nayak, An Introduction to Intellectual Property Rights and Their Importance in Indian Context (2017).
R Michael Gadbaw, Intellectual Property and International Trade: Merger or Marriage of Convenience?
Shayerah I Akhtar & Liana Wong, Intellectual Property Rights (IPR) and International Trade, Intellectual Property Rights.
Shayerah Ilias Akhtar, Ian F Fergusson & Liana Wong, Intellectual Property Rights and International Trade.
John M Curtis, Intellectual Property Rights and International Trade.
Shayerah Ilias & Ian F Fergusson, Intellectual Property Rights and International Trade.
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Michele Fink, Legal Analysis of International Trade Law and Digital Trade.
STANDARDS CONCERNING THE AVAILABILITY, SCOPE AND USE OF INTELLECTUAL PROPERTY RIGHTS, , in The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights 239 (2014), http://www.elgaronline.com/view/9781845424435.00026.xml (last visited Jul 31, 2024).


Frequently asked questions

1. What is the TRIPS Agreement?
The TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement sets minimum standards for IP protection and enforcement under the WTO framework, aiming to harmonize IP laws across member countries.

2. How do trade agreements impact intellectual property rights?
Trade agreements, such as the CPTPP and USMCA, establish higher IP protection standards and enforcement mechanisms, influencing national IP laws and affecting global trade and innovation.


3. What is the role of the WTO in IP disputes?
The WTO resolves IP-related disputes between member countries, ensuring compliance with TRIPS standards and promoting uniformity in IP protection.


4. Why is India’s IP ranking low globally?
India’s low IP ranking reflects weaknesses in its IP infrastructure and enforcement mechanisms. Improving awareness, policy frameworks, and international alignment is crucial for enhancement.


5. What are the challenges faced by IP systems in developing countries?
Developing countries often struggle with implementing and enforcing IP standards due to limited resources, which can hinder innovation and global trade opportunities.

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