Intellectual property provisions of bilateral and regional trade agreements in light of US federal law
ICTSD and UNCTAD
Intellectual Property Provisions of Bilateral and Regional Trade Agreements in Light of U.S. Federal Law
Frederick M. Abbott [*]
Draft of January 4, 2006
(Not for quotation or redistribution without author’s consent.)
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During the past several years the United States has concluded a substantial number of
bilateral and regional free-trade agreements (hereinafter “FTAs”), largely with developing
countries. [1] Each of those FTAs includes substantial commitments in the field of intellectual
property rights and related regulatory matters. The United States is exporting high levels of
intellectual property rights protection. These levels of protection exceed those required by the
TRIPS Agreement which establishes minimum substantive standards of protection and
enforcement for all WTO Members.
There is a relatively consistent view among economists studying intellectual property
rights that the interests of countries with respect to standards of protection varies depending upon
the level of development and other characteristics of the country adopting such protection. [2] The
TRIPS Agreement provides some flexibility to WTO Members with respect to the level of
protection, allowing developing countries a measure of leeway. [3] Because there has been little
enthusiasm at the WTO for raising standards of IPRs protection above that mandated by TRIPS,
the United States has shifted its attention to other fora to accomplish its objective of securing
greater levels of IPRs-based rents or royalties. U.S. FTA policy only weakly takes into account
developmental interests. In some areas, such as the protection of pharmaceutical patent holders,
U.S. policy threatens to cause harm to the interests of comparatively poor populations. [4]
The intellectual property rights chapters of the FTAs set forth obligations to provide
protection for various subject matter, including expressive works (protected by copyright),
trademarks, geographical indications, inventions (protected by patents) and data (protected by
marketing exclusivity rules). These obligations are in most, but not all, cases consistent with the
general level of IPRs protection required by U.S. federal law, [5] which law is more favorable to
right holders than the TRIPS Agreement. In a number of cases, the exceptions in the FTAs are
narrower than those allowed by the TRIPS Agreement. The problems potentially created for
developing countries by the adoption of these IPRs provisions in fields such as public health have
been widely noted. [6]
Differences in the capacity of the United States and many developing countries to create
and manage legal infrastructure may lead to a disparity in the way FTA rules are implemented.
The United States already has in place a sophisticated system of checks and balances to offset the
general intellectual property and regulatory standards which are reflected in the FTAs.
Historically, the internal law of the United States has reflected a careful balance between the
interests of intellectual property rights holders and the general public. [7] While over the past two
decades the balance may have shifted in favor of IPRs holders, nonetheless, U.S. law continues to
reflect a balance. Some of that balance is constitutionally mandated. [8] Some is codified in
legislation and regulation, and some arises out of court interpretation.
Developing countries may not have such checks and balances in place and may be limited
in the technical capacity to implement such checks and balances effectively. [9] Unless developing
countries are effectively enabled to legislate appropriate checks and balances, they may find
themselves with substantially stricter intellectual property and related regulatory systems than the
United States. The critical lesson for developing countries accepting IPRs commitments in FTAs
with the United States is that U.S. IPRs law is replete with exceptions to the general rules, in
many cases elaborated in considerable detail. If developing countries accept obligations in the
FTAs, they must also be prepared to implement a significant level of exceptions so as to create a
reasonable balance within their own law. If they do not implement these exceptions, they will
find themselves not only with TRIPS-plus levels of IPRs protection, but also with U.S.-plus
levels of IPRs protection.
This key lesson presents a substantial dilemma for developing countries. The IPRs and
related regulatory system in place in the United States is complex, difficult to develop and
implement, and costly to maintain. Many developing countries have yet to implement basic
TRIPS standards in a way that the United States considers adequate. It is difficult to understand
the purpose of imposing even more rigorous and complex undertakings on developing countries
in the circumstances. It appears that developing countries which enter into these FTA
commitments may immediately be in default of their obligations, and remain so. As such, they
will be vulnerable to trade-related claims by the United States and its industry groups.
Footnotes:
[*] Edward Ball Eminent Scholar Professor of International Law, Florida State University College of
Law. This paper reflects comments and suggestions at various draft stages from John Barton,
Carsten Fink, Pedro Roffe, Christoph Spennemann and Johanna von Braun.
[1] See discussion and analysis of the phenomenon in Frederick M. Abbott, The WTO Medicines
Decision: World Pharmaceutical Trade and the Protection of Public Health, 99 AM. J. INT’L L. 317,
348-58 (2005) and Frederick M. Abbott, Toward a New Era of Objective Assessment in the Field
of TRIPS and Variable Geometry for the Preservation of Multilateralism, 8 J. INT’L ECON. L. 77, 88-
98 (2005).; Peter Drahos, Developing Countries and International Intellectual Property Standards-
Setting, 5 J. WORLD INTELL. PROP. 765 (2002); Carsten Fink & Patrick Reichenmiller, Tightening
TRIPS: The Intellectual Property Provisions of Recent US Free Trade Agreements (World Bank
Trade Note No. 20, 2005); WORLD BANK, GLOBAL ECONOMIC PROSPECTS 2005, ch. 5, at 98B110.
[2] See generally See KEITH MASKUS, INTELLECTUAL PROPERTY RIGHTS IN THE GLOBAL ECONOMY
(Inst. for Int’l Econ., 2000), INTELLECTUAL PROPERTY AND DEVELOPMENT (C. Fink and K. Maskus
eds. 2005)(Oxford U. Press) and Keith Maskus & Jerome Reichman, The Globalization of Private
Knowledge Goods and the Privatization of Global Public Goods, 7 J. INT=L ECON. L. 279, 314B16
(2004).
[3] See generally UNCTAD-ICTSD, TRIPS AND DEVELOPMENT RESOURCE BOOK (2005)(Cambridge
U. Press).
[4] See British Comm’n on Intellectual Property Rights, Integrating Intellectual Property Rights and
Development Policy, ch. 2, Health (Sept. 2002) and Abbott, Toward a New Era, supra note 1, at
94-95 (discussing impact assessments undertaking to date).
[5] Because Congress is generally required to approve the terms of FTAs, U.S. trade negotiators
exercise some care to avoid direct conflicts with existing U.S. federal law.
[6] See note 1, supra, and Frederick M. Abbott, The Doha Declaration on the TRIPS Agreement and Public
Health and the Contradictory Trend in Bilateral and Regional Free Trade Arrangements (QUNO
Occasional Paper No. 14, Apr. 2004), available at http://www.geneva.quno.info, and; Carlos Correa,
Bilateralism in Intellectual Property: Defeating the WTO System for Access to Medicines, 36 CASE W. RES.
J. INT’L L. 79 (2004). See also, various NGO papers cited in Abbott, Medicines Decision, supra note 1, at
footnote 234.
[7] The Hatch-Waxman Act, which is the legislative basis for the system under which generic
medicines are authorized for marketing by the U.S. FDA (discussed infra), illustrates the balance
between protecting the rights of patent holders and promoting the introduction of competitive non-
patented generic medicines onto the market.
[8] The Constitution authorizes Congress: "To promote the Progress of Science and Useful Arts, by securing
for limited Times to Authors and Inventors the exclusive Right to their respective Writings and
Discoveries" (art. 1, §8, cl. 8, U.S. Const.). This clause restricts copyrights and patents to a limited term.
The Supreme Court has interpand ifreted "Authors” to impose a requirement of creativity for the grant of
copyright protection. See Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991).
[9] Theoretically, the FTAs could spell out in greater detail exceptions to general rules, effectively mandating
an equivalency among intellectual property systems. However, the creation of a more elaborate system of
exceptions would be contrary to the preservation of flexibility in the establishment of intellectual property
policy. Reflecting the object and purpose of the Doha Declaration, the objective of developing countries
should be to preserve regulatory flexibility, not restrict it.
