by Carlos M. Correa *
Developing countries have entered into a large number of bilateral investment treaties (BITs) as well as free trade agreements (FTAs) that include explicit obligations for the protection of intellectual property rights as "investments". These agreements fall outside the arena of multilateral standard-setting on intellectual property rights, and are being strategically pushed by developed countries to advance their industries’ economic interests.
This study examines whether and how bilateral and regional investment instruments increase the scope and availability of IPR protection beyond current standards, reduce flexibilities available to developing countries under international treaties and can be used to expand the application in their territories of IPRs over biodiversity.
The study finds that:
– Bilateral investment treaties and investment chapters of free trade agreements go beyond international norms since they extend to intellectual property rights not covered by the World Trade Organisation (WTO) TRIPS Agreement and incorporate the "national treatment" principle without the exceptions provided for under international treaties.
– It is unclear the extent to which rights granted by investment agreements may be used to substantiate IPR claims through investment-related disputes. Areas of particular concern are the granting of compulsory licenses, since investors would be able to claim an economic loss, and the enforcement of disclosure of origin principles to prevent biopiracy, which may be challenged by investors as incompatible with international law.
– Biological materials collected under an access permit may be considered the "property" of the collector who, under a broad definition of investment, may claim protection as an investor with regard to the materials.
– There is no "international standard" relating to the protection of IPRs as an investment that could be invoked in the context of bilateral obligations to comply with "the highest international standards" imposed in some investment agreements.
– Because of the grey areas that investment agreements generate, they provide room for investment-related disputes to induce changes in national IPR legislation of developing countries, even if that legislation is TRIPS-compliant.
– The "most favoured nation" clauses in BITs and FTAs contribute to a global elevation of IPR protection standards. If negotiations on investment were initiated in the framework of the WTO, for instance, pressure to replicate the highest levels of investment protection for IPRs, as currently found in the bilateral treaties, can be expected.
1. Assets as investments
2. IPRs as investment
– Unregistered IPRs
– IPR applications
– Subject matter not protected in the host country but protected in the investor’s or other countries
3. National treatment
4. Most-favoured-nation clause
5. Fair and equitable treatment
6. Compulsory licenses
8. Parallel imports
9. Highest international standards
10. Genetic resources in investment agreements
– Contracts or permits to access or exploit genetic resources
– Materials collected under a contract or permit to obtain access to genetic resources
– Materials received under material transfer agreements (MTAs) and license contracts
– Seed technology in use agreements, sales agreements or other end-user contracts and at the post-harvest stage
– Lack of effective enforcement of IPRs
– Access to genomic data on a "non-commercial use only" basis
– Access to technology and benefit sharing
11. Right to sue the State
* This study was commissioned by GRAIN as an independent exploration into the implications of bilateral investment treaties, and free trade agreements with chapters on investment, in terms of international standards for the protection of intellectual property rights. GRAIN is making this study publicly available, through its website, as a resource for further research and analysis. However, the views expressed in this work are those of the author and should not be attributed to GRAIN.
The full study is available online at http://www.grain.org/briefings/?id=186