EU Approach to IP Protection in Partnership Agreements
© Springer-Verlag Berlin Heidelberg 2015
Christoph Antons and Reto M. Hilty (eds.)Intellectual Property and Free Trade Agreements in the Asia-Pacific RegionMPI Studies on Intellectual Property and Competition Law2410.1007/978-3-642-30888-8_7The EU Approach to IP Protection in Partnership Agreements
(1)
Max Planck Institute for Innovation and Competition, Munich, Germany
Abstract
The EU’s third generation approach to international IP protection and enforcement is essentially TRIPS-plus driven, but it is considerably more balanced than, in particular, the EU’s domestic legislative approach. Nonetheless, significant imbalances persist. They arise from issues like enforcement universalism, a lack of sufficient ceilings woven into agreements under the third generation approach and an ensuing over-burdening of developing countries with high standards similar to those of the EU. Thus, overall there is still considerable leeway for fine-tuning and re-balancing the EU’s approach to IP protection and particularly enforcement in FTAs.
Keywords
CEPACotonou AgreementEconomic Partnership AgreementsEuropean Commission IP enforcement strategyKoreaLomé ConventionTRIPST. Jaeger: PD Dr., LL.M. (KUL), Senior Research Fellow.
1 Genesis of the EU’s Policy Approach
The European Union (EU) approach to the protection of intellectual property (IP) rights in free trade agreements (FTAs) concluded with its overseas trade partners can be divided into three distinct phases, ranging from no concern to high concern with IP.
1.1 First Generation Laxity
The first free trade agreements of the EU [then: European Economic Community (EEC)] with overseas trade partners outside the framework of the General Agreement on Tariffs and Trade (GATT) of 1947 were concluded in the late stages of the de-colonialization movements that took place after World War II. Under the four agreements of Lomé1 of (initially) 1976 (expired 1999) and their successor, the Cotonou2 Agreement of 2000 (in force), preferential trade regimes between the EU and the states of the African-Caribbean-Pacific (ACP) region were established. The ACP states were typically former colonies of EU member states, in particular of France, Great Britain and the Netherlands, but also of the more recent EU (EEC) members Spain and Portugal.
Both the four Lomé agreements as well as the later Cotonou Agreement are essentially concerned with the provision of a framework for re-launching the political relationship and deepening economic integration and have a strong focus on the development of the overseas partner states. Accordingly, IP protection plays only a marginal role here and no substantive provisions on IP are contained in any of these documents.
Lomé makes brief reference to IP only as a vague development promise, that is, the Community promising to help the ACP States to ‘facilitate the acquisition, on favourable terms and conditions, of patents and other industrial property, in particular through financing and/or through other suitable arrangements with firms and institutions within the Community’.3 Lomé, modelled onto the EC Treaty in this respect,4 furthermore authorizes restrictions on goods in transit on IP protection grounds.5
Although the later Cotonou Agreement is generally more sophisticated in terms of spelling out the terms of trade than Lomé, it contains only a single Article dealing with IP.6 That Article engages parties ‘to ensure an adequate and effective level of protection of intellectual, industrial and commercial property rights, and other rights covered by [the agreement on Trade-Related Aspects of Intellectual Property Rights] (TRIPS) in line with the international standards with a view to reducing distortions and impediments to bilateral trade’.7 Other relevant international conventions on IP as referred to in Part I of TRIPS are to be acceded to ‘in line with [the parties’] level[s] of development’.8 Cotonou finally contains a promise of further cooperation in the IP field9 and the familiar clause allowing for IP-motivated restrictions on transit.10 In the context of the promise to cooperate further, the Cotonou Agreement also envisages negotiations on an agreement for the prevention of the abuse of IP rights by rightholders,11 but there was evidently no follow-up on this idea to work towards a re-balancing IP rights protection between rightholders and users.
Under the EU’s first generation FTA framework therefore, in essence, the bottom-line of obligations imposed is a reminder for parties to reach at least the international average of IP protection under the TRIPS standard. No details are stipulated as to time-frames for implementation, monitoring or sanctions. The first generation agreements therefore take a minimal and indirect approach to the details, scope and substance of protection of IP rights. However, although this is not followed-up directly (indeed, not until the recent third generation agreements), at least they already contain the idea of setting maximum levels or ceilings for IP protection figures.
1.2 Second Generation TRIPS-Plus Drive
The second generation of the EU’s FTA policy phases abandons the previous attitude of passivity in the field of IP protection and moves towards engaging in an active standard-setting exercise beyond the obligations contained in TRIPS. It is to be mentioned at the outset however that this second generation consists of policy papers only and has, apparently, not been implemented in any agreements.
1.2.1 Underlying Assertions
In 2004, the European Commission (the Commission) for the first time outlined a policy change from the Lomé-Cotonou line of agreements passivity in a Strategy for the Enforcement of Intellectual Property Rights in Third Countries.12 The shift in the EU’s IP policy is explained in the Strategy by two important assertions.
First of all, the Strategy finds that although most WTO members have adopted legislation implementing the minimum levels of protection imposed by TRIPS, ‘the levels of piracy and counterfeiting continue to increase every year. These activities have, in recent years, assumed industrial proportions, because they offer considerable profit prospects with often a limited risk for the perpetrators.’13 There is, thus, a need for a focus on enforcement14 rather than just protection of IP rights, and that enforcement needs to be stronger and stricter than what is currently the level of TRIPS and, consequently, the former Lomé-Cotonou policy line.
The Strategy’s second major aspect is that it asserts that interest in strong IP rights enforcement is mutual among the EU and third countries, given the ‘obvious and direc[t]’ negative ‘consequences of IPR violations in terms of consumer and health protection, organised crime and loss of fiscal revenue’ in the countries where IP rights violations occur.15 Also, ‘a matter of good governance and international credibility’, an
[E]effective enforcement of IP rights (even if these belong to third parties) is an essential tool to attract foreign investment and the transfer of technology and know-how, as well as to protect local right-holders in developing and least-developed countries who are already suffering the misappropriation of their intellectual property … [A]dequate IPR enforcement can contribute to [poverty alleviation and development] by making a link with investment opportunities, transfer of technology and know-how, protection of traditional knowledge, improvement of health and safety standards, etc.16
The Commission also acknowledged that ‘In the mid-to-long term, it will also encourage domestic authors, inventors and investors and contribute to the development of these countries.’17
The Strategy thus establishes a direct connection between IP rights enforcement on a TRIPS-plus level and the development success of the economy concerned.
However, none of the assertions on the extent of the counterfeiting and pirating problems or on the economic benefits of improved IP rights enforcement is backed up by immediate authoritative references to economic or social studies.18
1.2.2 A Multi-Tier Enforcement Strategy
Based on these assertions about the inadequacy of TRIPS and mutual benefits from TRIPS-plus enforcement, the Commission in the context of its second generation approach announced a multi-tier strategy for reinforcing the fight against counterfeiting and pirating and for ensuring truly effective enforcement of IP rights as laid out in the Strategy paper. The level at which this TRIPS-plus enforcement is precisely to be situated is not specified.
On the one hand, the re-launch of the international IP enforcement strategy is put in context with the EU’s preceding internal legislative developments for effectuating stronger IP enforcement before the national courts19 and customs authorities20 (both of which are set at considerable TRIPS-plus levels); and with third country IP enforcement seen as a ‘logical sequence’21 to these developments, it can be presumed that the EU seeks to establish some coherence between internal and external enforcement levels and that the EU-internal level also constitutes at least a long-term goal for the global level. On the other hand, the EU refuses to adopt ‘a one size fits all’ approach to the promotion of IPR enforcement:
It will be necessary to have a flexible approach that takes into account different needs, level of development, membership or not of the World Trade Organisation (WTO), and main problems in terms of [IP rights] (country of production, transit or consumption of infringing goods) of the countries in question.22
Therefore, the TRIPS-plus enforcement level aimed at, and the measures to attain that level, will be different for different trade partners. Nonetheless, a gradual increase of enforcement levels constitutes a declared goal and the eventual aim must, as was shown, be deemed to lie in something resembling the EU’s domestic level.
The second generation TRIPS-plus strategy is to be pursued primarily in relation to certain priority countries, on which the Commission’s enforcement efforts are to be focussed.23 These countries are identified by the Commission beforehand. Priority countries are source, transit and target countries alike. Meanwhile, the Commission has named China, Russia, the member countries of the Association of Southeast Asian Nations (ASEAN), South Korea, the countries of the Southern Common Market (Mercosur), Chile, the Ukraine and Turkey as current priority countries for its enforcement efforts.24 For each of these countries, ‘the type of measures most adequate to address the situation’25 will be applied by the EU. In other words, these countries face a threat of sanctions for non-compliance with the IP protection regime.
Another leg consists of diplomacy and the various possibilities offered by international cooperation, rather than outright sanctioning. In this regard, the Strategy envisages a mainstreaming of IP rights protection in general political and diplomatic dialogue and in international fora as well the negotiation of bi- and multilateral agreements beyond TRIPS.26 This latter aspect will be picked up in a later Commission paper (the 2006 Communication) discussed immediately below. In other words, under the 2004 Strategy, however, the EU already seeks to negotiate its own bilateral TRIPS-plus agreements with priority countries as well as multilateral TRIPS-plus agreements. One example for the latter type is the anti-counterfeiting trade agreement (ACTA),27 which was signed in 2011, but rejected by the European Parliament in 2012 over multiple concerns of over-enforcement and a criminalization of small-scale IP infringements. It is likely that ACTA will, for loss of political support, not enter into force on the global level either. In parallel to agreements, the EU seeks the promotion of its IP strategy by use of all available fora, such as particularly the WTO’s TRIPS Council and the World Intellectual Property Organization (WIPO).28 Fora for enhanced political dialogue on IP rights enforcement are diplomatic events as well as flexible bilateral initiatives established on an ad hoc basis, like the EU-Japan Joint Initiative for IPR Enforcement in Asia (established in 2003) or the EU-China Dialogue on Intellectual Property (established 2003).29 In all these contexts, the Strategy underlines the importance of technical cooperation and the provision of incentives to priority countries to reinforce the IP enforcement structure.
Technical cooperation may extend to areas such as assistance in ‘drafting legislation, training judges, police forces, customs officials and other experts, setting up agencies or task-forces, public awareness raising etc.’,30 that are tailored to the needs of the partner country. In this regard, the Strategy currently identifies a lack of demand for technical cooperation from the target countries and thus envisages turning the approach from ‘“demand driven” … into … “dialogue driven” […], by discussing its importance and benefits for the recipient’.31 As concerns incentives to accept technical cooperation, no specifics are stated in the Strategy. It is, therefore, to be expected that the incentives and in particular the perception of a particular form of IP enforcement cooperation as beneficial by the partner country will much depend on the argumentative skills of the Commission.
Cooperation is a noble aim, but the Strategy also highlights that ‘[n]o rule can be really effective without the threat of a sanction.’32 Therefore, an important leg of the EU’s Strategy also relies on sanctions against ‘[c]ountries where IP violations are systematic, and where no government action to address the problem is effectively taken’.33 The first step on the path toward such sanctions would be the public identification of the non-cooperative country. Thereafter, imposition of sanctions in accordance with the dispute settlement mechanisms provided for in multilateral and bilateral agreements is reserved as an option of last resort for the Commission. Beyond an ex officio use of the dispute settlement mechanisms provided for in bi- and multilateral agreements, the Strategy also expressly highlights the possibility of application of the mechanism provided for in the EU’s Trade Barriers Regulation (TBR).34 The TBR enables undertakings and industries as well as member states to lodge complaints with the Commission over alleged violations of international trade rules and places the Commission under a duty to investigate the complaint and, if deemed justified, act upon it to either reach a mutually agreed solution or resort to dispute settlement.35 In the course of this procedure,
any commercial policy measures may be taken which are compatible with existing international obligations and procedures, notably: (a) suspension or withdrawal of any concession resulting from commercial policy negotiations; (b) the raising of existing customs duties or the introduction of any other charge on imports; (c) the introduction of quantitative restrictions or any other measures modifying import or export conditions or otherwise affecting trade with the third country concerned.36
The TBR has a broad scope of application and covers, in particular, violations of IP rights having an effect on trade.37 Although the majority of TBR cases have thus far centred around trade in goods, there have already been a number of complaints relating to IP rights in the past.38 In fact, since industry is said to embrace the TBR instruments more or less enthusiastically,39 the TBR is probably a very effective threat and bargaining asset in the relations of the EU with priority countries. Where none of the sanctions helps, or in addition to sanctions, the Strategy finally foresees a creation of ‘alliances against certain countries’,40 that is, a sort of (tax haven-like) ring-fencing of certain IP infringement havens.
Finally, one leg of the international Strategy focuses on the contribution of private parties to enforcement.41 In this regard, the creation of public-private-partnerships between companies and associations active in the fight against piracy and counterfeiting and the EU Commission is sought. Apart from the collection and mutual dissemination of information about enforcement problems and enforcement strategies and a cross-linking of experts, the Commission also undertakes to train ‘private operators in […] border enforcement’.42 It remains unclear whether this involvement of private operators in border enforcement is aimed just at information about ways of procedural cooperation between customs authorities and rightholders in the way provided for, for example, by the EU’s own Border Measures Regulation,43 or whether, beyond simple cooperation, the term ‘private operators’ may indicate an involvement of private units in administrative action and a partial conferment of sovereign powers to private parties in border enforcement in third countries. In addition, the Strategy seeks to raise the awareness for IP rights protection vis-à-vis the general public in third countries, but also, interestingly, among rightholders.44 Awareness-building programs are to be implemented mainly via technical cooperation measures.
Essentially thus, the EU’s second generation strategy advertises the adoption of (however unspecified) TRIPS-plus levels in enforcement via a ‘carrot and stick’ approach. It envisages a mixed application of international cooperation and technical cooperation incentives for pre-identified priority countries, yet paired with sanctions against non-collaborating states and a strengthening of the position of private parties and the private enforcement of IP rights. A major point for the EU is awareness-building, which really is to take place at all possible levels: vis-à-vis the general public, priority countries and the counterparts in international fora. Awareness-building underlies and steers the direction of the political dialogue that the EU seeks to conduct on the multilateral level and it is aimed at creating a demand for technical assistance to states and for the training on private enforcement offered to rightholders and organizations. In other words, the EU’s second generation approach is to advertise a massive TRIPS-plus approach, which comes along with free hand-outs to interested state and private parties and the attractiveness of which is enhanced by a realistic threat of sanctions under international law, taken both ex officio and on private initiative (via the TBR’s mechanism of complaints to the Commission), as well as on the individual administrative level (via border measures). This ‘advertisement’ offer seems hard to resist.
1.2.3 The FTA Strategy in Particular
In a communication45 issued 2 years after the announcement of the global IP enforcement Strategy, the Commission laid out its approach to international agreements in more detail. Therein, the importance of WTO multilateralism and the EU’s commitment to WTO cooperation was reiterated in spite of the suspension in mid-2006 (later resumed) of the thereto46 unsuccessful negotiations on the Doha round.47 At the same time, it was made clear that the halting of progress would not in any way impede the EU’s aim of arriving at TRIPS-plus IP enforcement levels: Where WTO-type multilateralism does not yield the results desired, Free Trade Agreements (FTAs) concluded between those parties willing to enter into TRIPS-plus enforcement obligations would be used to go ‘further and faster in promoting openness and integration, by tackling issues which are not ready for multilateral discussion and by preparing the ground for the next level of multilateral liberalisation’.48 To forestall negative effects from FTAs for the WTO regime (such as a complication of trade, erosion of the principle of non-discrimination or exclusion of the weakest economies), the communication noted that ‘FTAs must be comprehensive in scope, provide for liberalisation of substantially all trade and go beyond WTO disciplines,’49 adding that ‘[i]n terms of content new competitiveness-driven FTAs would need to be comprehensive and ambitious in coverage, aiming at the highest possible degree of trade liberalisation’.50 Also in relation to IP rights enforcement therefore, this calls for a comprehensive TRIPS-plus approach, which maximizes as far as possible both the level of protection as well as the scope of rights covered and range of enforcement measures.51 It is clearly spelt out that the FTAs concluded up to that point, in particular the Lomé-Cotonou line of agreements, ‘support [the EU’s] neighbourhood and development objectives well, [but her] main trade interests, including in Asia, are less well served’52 therein. In combination with supportive measures of the kind already announced in 2004,53 the EU’s FTA effort is to be seen as the ‘[l]aunch [of] a second phase of the EU [IP rights] enforcement strategy’.54
The 2006 communication therefore highlights TRIPS-plus FTAs as an independent major part of the EU’s IP enforcement strategy vis-à-vis flanking measures, such as international diplomacy, technical cooperation and private enforcement. FTAs are to be used as tools for setting international IP norms and standards that cannot be realized under the WTO framework, also with a particular view towards preparing the ground for standard-setting on the WTO level when talks there picked up again. The level at which those standards are to be set is declaredly a maximum of liberalization. With the Lomé-Cotonou line of agreements explicitly identified as unsuitable for the pursuit of this new policy line, the second generation international agreements would have to dwell more extensively on IP rights both in terms of breadth and depth of protection, which meant that elaborate IP chapters would have to be included rather than just single, vague articles (as before). Against the background of the sanctioning mechanisms in place for non-consenting third states as discussed earlier, the FTA initiatives of the EU must also be deemed to have fairly good chances of success: avoidance of sanctions may become an important motive for the EU’s international partners to enter into TRIPS-plus FTAs next to other interests of those countries (such as trade-offs in other areas or possible interests in stronger IP rights enforcement depending on the structure of that country’s economy).
1.2.4 Criticism of the TRIPS-Plus Approach
In economics, the simple equation expressed in the EU’s enforcement strategy that increasing levels of protection and enforcement will boost creativity, innovation, competitiveness and allow sustainable development is neither undisputed55 nor reliably proven.56 Rather than across-the-board increases in enforcement standards, some economic literature suggests target countries should focus their enforcement efforts primarily on cases of deceptive trademark infringements by producers (rather than small-scale distributors), especially those creating health and safety risks.57 Public spending devoted to IP enforcement should reflect these domestic priorities in order to be economically sound.58 By contrast, financing TRIPS-plus obligations in enforcement that will almost exclusively benefit foreign-based rightholders does not yield a clear return on investment for the national economies of target countries, even where possibly increased tax revenue from drying up black markets is taken into account.59 The Commission of course counters this argument by claiming growth in foreign investment and transfer of technology and the eventual development of a national IP industry and increased innovation due to an improved IP enforcement environment in target countries would offset or outweigh any such expenditure,60 but without presenting any data to unambiguously support and quantify any such effects. A 2008 economic impact study for EPAs commissioned by the EU even seems to refute the foreign investment argument by asserting that ‘a major impact [on foreign investment was] unlikely’, since ‘the history of foreign investment in these countries is not very encouraging’.61 In view, therefore, of serious doubts as to the beneficial economic effects of the ‘across the board’ increase in enforcement standards as brought about by CEPA and SAEPA, it was suggested that the economic cost/benefit disequilibrium for increased enforcement measures be balanced through the contributions of the beneficiaries of such measures, that is, by developed countries’ governments or private rightholders.62 If, finally, increased enforcement does not go ‘hand in hand’ with greater spending on enforcement in order to remedy existing institutional deficiencies in target countries, the practical effects of the EPAs or any other TRIPS-plus provisions will likely be zero.63
Likewise from a legal perspective, scholars have expressed doubt as to the IP-systematic justification of one-sided increases in enforcement standards.64 The concern here is not, as in economics, to strike a cost/benefit equilibrium for increased enforcement standards, but their compatibility with and effects on the general legal framework, including the general principles of law. As regards civil court procedure in particular, an important yardstick against which to measure TRIPS-plus rights and remedies is the principle of fairness of procedure and equality of the parties. Against this background, the legal criticism of TRIPS-plus enforcement provisions takes a detailed as well as a general stance. Generally, it was argued that there was no systematic reason to accord IP rights enforcement priority over enforcement in other fields of law, that the existing TRIPS standard of enforcement was already strong enough for the exercise and defence of IP rights and that TRIPS-plus standards should be avoided in FTAs.65 Furthermore, the economic demand for financing of increased enforcement measures by the direct beneficiaries instead of the target countries’ economies also receives some support from legal considerations of fairness.66 In relation to detailed provisions, it was argued that the enforcement provisions may not be cautious enough in relation to provisional measures, border measures and a general preference of private over public IP enforcement.67
1.3 Third Generation Balancing?
Between 2003 and 2007, the EU started negotiations on a new form of international agreements, the Economic Partnership Agreements (EPAs). EPAs are different from classic FTAs in that they are not only aimed at promoting trade proper, but also at trade development, sustainable growth and poverty reduction. EPAs set out to help countries integrate into the world economy and share in the opportunities offered by globalisation. Thus far, EPAs apply only to the several groups of states that make up the African-Caribbean-Pacific states cluster that are members of the international organisation of the same name. In the Pacific region, members include the Cook Islands, East Timor, Fiji, Kiribati, Marshall Islands, Micronesia, Federated States of, Nauru, Niue, Palau, Papua New Guinea, Samoa American, Samoa Western, Solomon Islands, Tonga, Tuvalu and Vanuatu. No comprehensive agreement has been concluded between these Pacific states and the EU thus far: Currently, only an interim agreement with Papua New Guinea and Fidji has been in place since 2009, which does not include an IP chapter.68 However, talks with the aim of a regional comprehensive EPA are ongoing.69
EPAs are discussed here under the header of a possible “third generation” since the new approach to trade partnerships expressed there might serve as a model for trade agreements beyond the ACP group, i.e. for agreements between the EU and developing countries (including LDCs) in general. For states, which do not qualify for the specific EPA development focus, the classic FTA approach persists. An example here is the FTA concluded between the EU and South Korea in 2009 and applied since 2011 (Korea-FTA).70
The background of the EPA approach lies in the Cotonou Agreement. The WTO waiver for the Cotonou trade arrangement for ACP states expired at the end of 2007 and that arrangement could not be continued beyond this date.71 As an alternative to the Cotonou arrangement, the conclusion of regionally differentiated EPAs was chosen, with the basic principles and the time frame for EPA negotiations already set out in the Cotonou Agreement itself.72
So far, only one set of negotiations has led to the conclusion of EPAs: The first successful agreement was that with the CARIFORUM group of states73 in 2008 (CEPA).74 This agreement will be discussed here in more detail. Several other negotiations, apart from the aforementioned interim agreement with Papua and Fidji, are somewhere in an interim stage75: For the states of the East African Community, a framework EPA (EAC-EPA)76 was concluded in 2009. Furthermore in 2009, more interim agreements were concluded with the Eastern and Southern Africa (ESA-EPA),77 the Central African Party (comprising Cameroon)78 and the Southern African Development Community (SAEPA).79
As was highlighted, EPAs where designed from the beginning to combine ‘trade and development issues in ways tailored to national and regional conditions’.80 EPAs are therefore a way to combine the development and poverty eradication objectives81 of the Lomé-Cotonou line of agreements with the liberalization-driven second generation strategy of the EU, which is focused on the safeguard of trade interests of the EU and EU companies. Although sustainability is the presiding principle over all EPAs, the EU in parallel pursues the 2004 and 2006 TRIPS-plus drives of the second generation approach, which is still valid throughout the period of negotiation of the EPAs. The EPAs therefore undertake to strike a balance between the first and second generation policy lines of the EU or, in other words, between sustainable development and IP enforcement effectiveness. This balancing attempt, which is evidenced in the provisions of CEPA in particular, is here termed the ‘third generation approach’.
Nonetheless, due to the interim or framework character of most agreements concluded so far, only CEPA contains significant IP provisions. Most other agreements refer to the protection of IP rights only as an area for future cooperation.82 In CEPA, however, the EU’s balancing effort is already spelled out quite clearly in the Preamble and its opening Article, where non-trade related goals such as the aforementioned sustainability and poverty eradication—but also ‘respect for human rights, democratic principles and the rule of law … and … good governance’—are pinned against clear trade objectives like a general ‘commitment to the principles and rules which govern international trade’ and WTO law and the ‘integration [of CARIFORUM states] into the world economy’.83
CEPA’s elaborate IP chapter spells out this balancing approach in more detail. In line with the 2004 Enforcement Strategy, it is declared that ‘the protection and enforcement of intellectual property plays a key role in fostering … competitiveness’ and that the parties are ‘determined to ensure increasing levels of protection appropriate to their levels of development’.84 Although it remains unclear from the text whether the increase in levels of protection is to be implemented progressively, that is, ever increasing, or in a single ‘upgrade’, CEPA stipulates that, at least, a level must be reached that is ‘adequate and effective’.85 That obligation to implement IP protection in an effective manner applies both to the implementation of TRIPS and other international IP treaties86 as well as to the TRIPS-plus obligations (described in more detail below) laid down in CEPA.87 As a means of balancing development and trade interests however, CEPA also stipulates that the joint committee set up by the Agreement may waive the deadline for the obligation for a full implementation of the TRIPS-plus obligations (note: not the TRIPS-obligations) under the Agreement due to ‘the development priorities and levels of development’88 of the CARIFORUM states. In addition, a special, more favourable regime applies to least developed countries (LDCs) among members of the CARIFORUM group (currently only Haiti)89: Haiti will not have to implement the IPR chapter until 2021 at the earliest. Finally, as the examination below will show, it may be that some ceilings to the enforcement of IP rights in terms of laying down maximum levels of protection are woven into CEPA, which again is an expression of the new, third generation approach to re-balance the interests of trade and development or, in the case of IP (predominantly EU-based), rightholders and users in third-countries.
1.4 Open Questions
It was shown above that the EU’s approach to the protection and enforcement of IP rights in third countries has gone from an early period of pronounced laxity to a sudden, sharp rise in concern and the adoption of a multi-tier approach ranging from cooperation to sanctioning private enforcement. It was also shown that, at least in relation to the developing and least developed states of the ACP region, the EU has tried to balance the prima facie juxtaposed aims of imposing adequate and effective levels of enforcement and taking account of the development needs of the partner countries. Adequacy and effectiveness in this context is, notwithstanding that LDCs profit from a less stringent regime, to be understood as, in principle, the TRIPS-plus levels of enforcement laid down in the agreements. Although, exceptionally, the deadline for compliance with TRIPS-plus obligations laid down in the agreement can be waived, this does not alter the requirement to eventually arrive at the TRIPS-plus level.
Prima facie thus, the aim of ensuring effective IP enforcement appears to predominate over the elements introduced to allow for country-specific flexibility and development-based enforcement exceptions. In particular, the TRIPS-plus level of enforcement is clearly laid down as the principal goal; exceptions to that level can apply to implementation deadlines but apparently not to the obligation to implement it at all. Is it, in view of these assertions, really justified to speak of a ‘third generation’ approach at all or are the EPAs not just a regionally specific implementation or sub-form of the generally strict second generation approach to TRIPS-plus IP enforcement? Is there really a new quality in the recent EU documents to IP enforcement? This question will be examined in the following section by looking at a number of selected substantive and enforcement provisions contained in CEPA.
2 Provisions on the Scope of Rights
CEPA’s more interesting substantive IP provisions concern patents (and related rights) and trademarks (and related rights). They will be discussed here in a little more detail.
For copyright, by contrast, CEPA is limited to the stipulation that parties shall comply with the 1996 WIPO treaties on Copyright and on Performances and Phonograms respectively and endeavour to accede to the 1961 Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations.90 In addition, a cooperation on the collective management of rights is envisaged between collective societies with the purpose of mutually ensuring easier access to and delivery of licences for the use of content at the regional level so that right holders are adequately rewarded for the use of such content.
2.1 Patents and Related Rights
As regards patent protection and the protection of plant varieties, CEPA refers to existing standards as imposed by international agreements, like the Patent Cooperation Treaty (PCT), the Patent Law Treaty (PLT) or the Convention for the Protection of New Varieties of Plants (UPOV-Convention),91 and stipulates that parties shall comply with the levels of protection laid down in these agreements.92 The existing international standards of protection therefore form the general basis with which all parties (including, for agreements other than TRIPS, LDCs) must comply, without a possibility for exceptions for deadlines or scope.93
However, CEPA also brings some modifications of the international standards of protection both upward and downward.
In upward (expansionist) terms, CEPA includes protection for utility models94 and thus broadens the scope of protection beyond, in particular, the scope of TRIPS. Although an expansion in terms of the rights covered, it may still be in line with the objective of fostering sustainable development, since utility models may be particularly attractive for small and medium-sized enterprises who cannot or do not want to afford the relatively more expensive and cumbersome registration of a patent.
In downward (limiting) terms, CEPA contains a number of limits to the exercise of rights. There is, first of all, a specific exception to patent protection for public health in line with the Doha Declaration of 2001,95 which emphasizes that the application of TRIPS is not to prevent the protection of public health and access to existing medicines as well as the creation of new medicines. On the other hand, beyond what is laid down in (the optional provision of) Art. 31 of TRIPS, CEPA does not contain any added provisions for compulsory licensing. In particular, the possibility of allowing for compulsory licences is not made mandatory by CEPA, although compulsory licences can be deemed key to fostering innovation and production in the third country’s home market.
Furthermore, in terms of limitations, CEPA connects patents and the protection of biodiversity and genetic resources under the Convention on Biological Diversity (CBD) by stipulating that CEPA and the CBD ‘shall be implemented in a mutually supportive way’.96 This places a further limit on the patentability and the scope of patent protection that must be accorded by third countries to EU-based rightholders.
Finally, an expansion of exceptions as compared to the existing international standard can be found in CEPA in relation to plant varieties and the so-called ‘farmer’s privilege’. Given that TRIPS makes no reference to the UPOV Convention, some leeway may exist for the formulation of divergent national standards. Nonetheless, UPOV serves as a benchmark for comparison. In this regard, UPOV only allows an (optional) exception from IP protection for reproduction of plants on their own holdings.97 CEPA, by contrast, extends this (likewise optional) exception ‘to allow farmers to save, use and exchange protected farm-saved seed or propagating material’.98
In conclusion therefore, the substantive provisions laid down in CEPA for patents and related rights show a TRIPS-plus drive at the base (particularly as regards the inclusion of utility models), but equally incorporate strong balancing concerns (particularly as regards the limitations introduced in line with the Doha Declaration and the CBD) and concerns for fostering sustainable development (as regards the expansion of the farmer’s privilege and the potentially positive effects of the inclusion of utility models for small and medium-sized enterprises). In relation to these provisions, a third generation approach in terms of balancing development and IP protection seems to have been implemented.
2.2 Trademarks and Related Rights
As in relation to patents and related rights, and also for trademarks, industrial designs and geographical indications, the starting point of obligations is a stipulation to implement the existing international agreements in those fields, in particular the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (Madrid Protocol) and the revised Trademark Law Treaty (TLT) as well as the Hague Agreement for the International Registration of Industrial Designs (Hague Agreement).99
However, even in these fields there is some support for a drive for the expansion of the scope of protection beyond the existing international standards. As regards trademarks, that expansionist drive takes the form of, for example, recognition of binding force for the recommendations of the WIPO on the definition of well-known trademarks, internet use and the trademark licence agreements.100 In relation to designs, a significant expansion of the scope of protection takes place where not only (as under TRIPS)101 commercial activity is considered an infringement, but also (beyond TRIPS) any non-commercial activity which ‘unduly prejudice[s] the normal exploitation of the design or [is] not compatible with fair trade practice’.102
As concerns, correspondingly, limitations, CEPA (for example) provides for a fair use exception for descriptive terms, including geographical indications and for a balancing of interests.103 In terms of limitations in relation to designs, the period of protection for designs is set at a maximum of 25 years,104 whereas TRIPS only sets a minimum period of 10 years and no maximum.105 Likewise for designs, the option contained in TRIPS106 to exempt designs dictated by functional considerations from protection is made compulsory under CEPA.107 As regards geographical indications, CEPA provides for a reinforced protection of those rights vis-à-vis trademarks.108 While this is, in some respect, an expansion of the scope of IP protection regarding geographical indications, it is at the same time a limitation for trademark protection. Since geographical indications might not be unimportant to developing countries and the development effort,109 this reinforcement of the protection of geographical indications fulfils probably more of a limiting than an expansionist function and is thus not to be counted among the TRIPS-plus provisions of CEPA.
To sum up, for trademarks and related rights, again the aim is essentially compliance with existing international standards (which cannot be waived),110 however this is paired with some significant fine-tuning and balancing as regards the exact delineation of the scope of rights so as to reinforce the development effort pursued by the agreement as a whole. Thus, as was the case for patents and related rights, the intended balancing of increased protection and sustainable development was apparently successful.
3 Provisions on Enforcement
3.1 The EU Level as the Benchmark
As was shown, the EU explained the tightening of its international enforcement efforts in the second generation approach as being in a ‘logical sequence’111 with its rises in the domestic levels for court enforcement and border measures slightly earlier. In terms of court enforcement in particular, ‘a high … level of protection’112 is pursued by the measures, procedures and remedies created. Most of the provisions laid down there are clearly TRIPS-plus.113 In addition to this high enforcement level, rights and sanctions114 laid down in national law—which are ‘more favourable to rightholders’115 (nota bene: not also for defendants), that is, stipulate even higher levels of IP protection—remain untouched. The EU’s domestic legislation for measures, procedures and remedies for the private enforcement of IP rights before the courts therefore incorporates a clear bias in favour of rightholders. The rights in national procedural laws accorded to potential users of IP are not protected to a similar degree and the Directive even authorizes national laws to curtail any defendant’s rights contained in the Directive in favour of rights for rightholders. In this system therefore, fairness and equality between the parties appear not to be warranted. TRIPS, by contrast, does not incorporate comparable stipulations.
The stringent domestic enforcement regime of the EU forms the model on which the provisions of CEPA are built. Nonetheless, CEPA does not incorporate language that creates a comparable bias for rightholders and is, therefore, more balanced. This is true in spite of CEPA’s general commitment and pursuance of a high enforcement standard.116 CEPA’s enforcement approach is, therefore, somewhat more moderate.
However, CEPA also goes beyond the Enforcement Directive’s TRIPS-plus standard in one important respect: the scope of CEPA is broader than that of the Enforcement Directive (which does not deal with unfair competition, trade secrets and know-how),117 to the effect that the TRIPS-plus standards incorporated therein, albeit perhaps more moderate than those of the Directive in some ways, apply on a broader basis than the standards within the EU.
3.2 Provisions
3.2.1 Structure and Scope
The enforcement chapter of CEPA is very similar to the EU’s domestic legislation both in terms of structure and scope. However, CEPA is even broader than the Directive in terms of the range of IP rights covered. It does not just include enforcement of copyright (including the copyright in computer programmes, and neighbouring rights) and industrial property (utility models; patents, including patents for bio-technological inventions; protection for plant varieties; designs; layout-designs of integrated circuits; geographical indications; trademarks for goods or services; protection for data bases), but also protection against unfair competition118 (understood as ‘[a]ny act of competition contrary to honest practices in industrial or commercial matters’)119 and the protection of undisclosed confidential information on ‘know-how’.120 Given that, the scope of CEPA’s IP enforcement provisions is a little different to that of TRIPS (which limits the protection against acts of unfair competition to trade secrets and know-how but, unlike CEPA, offers protection against the misuse of test data submitted to governments in order to obtain marketing approval for pharmaceutical or agricultural chemicals)121 and is significantly more encompassing than the Enforcement Directive (which does not deal with unfair competition, trade secrets and know-how).122 Looking at EU legislation as a whole (including border measures, the legislation on unfair competition, and so on), CEPA is however not broader. Rather, against this more comprehensive background, CEPA can be seen as an export of the EU’s own enforcement level to the CARIFORUM jurisdictions.
Another area of congruence is criminal sanctions for IP infringements. CEPA does not demand the criminalization of IP infringements beyond the scope of the TRIPS Agreement, which lays down an obligation to criminalize wilful trademark counterfeiting and copyright piracy on a commercial scale.123 No additional provisions are contained in CEPA. Given that the EU has apparently pushed for TRIPS-plus criminalization in its EPA negotiations with the Andean Community (by demanding a penalization of intentional infringements of any kind of IP right on a commercial scale),124 this fact is worth mentioning. If CEPA therefore signals a general abandonment of a strategy to lay down TRIPS-plus criminal standards on the international level, this may be due to the fact that the EU’s own domestic proposal for TRIPS-plus criminal measures125 has encountered heavy criticism from the academic community126 and is currently stalled following its rejection by the European Parliament. Also in the field of criminal measures, CEPA therefore implies that the EU will generally not demand from its trade partners in bilateral agreements significantly more stringent IP enforcement standards than are applied domestically.127
3.2.2 Mostly TRIPS-Plus …
In many respects, CEPA simply copies the TRIPS-plus standards laid down in the EU’s 2004 Directive. Only a few examples will be given here for the sake of illustration. For instance, as concerns the broad definition of the persons entitled to sue as beneficiaries of the rights contained in the Agreement, TRIPS leaves its use of the term ‘right holders’128 essentially open, the only specification being that federations and associations are included in that definition. By contrast, CEPA incorporates an almost exact copy of the respective provision of the Enforcement Directive.129 Accordingly, CEPA does not only (like TRIPS) require a protection for rightholders and associations, but in addition of ‘all other persons authorised to use such rights’ under national law (for example, licensees) as well as of ‘collective rights-management bodies’ and ‘professional defence bodies’, each in accordance with their laws of incorporation.130 In principle, this broad as well as detailed definition of the persons entitled to sue does not have to go beyond the existing provisions of national laws under the TRIPS standard, since TRIPS uses an open term and is likely broad enough to accommodate all of the aforementioned groups. At the same time, TRIPS did not have to be interpreted that broadly, national provisions may therefore have well been narrower in according enforcement rights and still be in line with TRIPS. The TRIPS-plus effect of CEPA thus, as in the Enforcement Directive, is due to the fact that the broad interpretation of the term ‘rightholder’ is, beyond the requirements of TRIPS, now made compulsory.