Protection of IP and international investment treaties: a new book

Even if it is a serious IP book,
based on a PhD thesis, Kluwer
could have put a pretty picture
on the cover ...

Simon Klopschinski (Hoffmann Eitle, Munich) writes to tell IP Finance that his German-language PhD thesis "Der Schutz geistigen Eigentums durch völkerrechtliche Investitionsverträge" (The Protection of Intellectual Property under International Investment Treaties) has recently been published by Carl Heymanns Verlag, an imprint of Kluwer.  German-speakers can click here for details of this title.

Simon has kindly provided this note, so that English-speakers will know what he has been working so hard on:

The Protection of Intellectual Property under International Investment Treaties  

There have long been international treaties that protect intellectual property, such as, for instance, the Paris Convention for the Protection of Industrial Property (1883) or the Berne Convention for the Protection of Literary and Artistic Works (1886). The many multilateral efforts to strengthen international protection of intellectual property rights over the decades have now culminated in the TRIPs Agreement that is one part of the WTO legal order. This Agreement stipulates that the member states must implement a minimum standard of protection for intellectual property rights in their national legal systems. In addition to IP-specific treaties for the protection of intellectual property rights, other international treaties have also come into being over recent years which protect intellectual property along with other property rights. These also include: (a) Art. 1 of the First Protocol to the European Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR) and (b) various international investment treaties.  

International investment treaties oblige the contracting states to grant private investors of the other state and their investments adequate treatment. If the host state violates the provisions of such a treaty a number of these agreements provide for a dispute settlement mechanism, which enables the private investor to sue the host state before an international arbitral tribunal under international law without requiring the participation of his home state. Many investment disputes are decided by arbitral tribunals set up under the auspices of the International Center for the Settlement of Investment Disputes (ICSID), which is part of the World Bank group. In contrast to the national laws of the host state the investment treaty can only be amended with the consent of the other contracting state. Therefore the investment treaty not only provides the investor with the opportunity to pursue his claims before an extraterritorial tribunal, but it also allows him to rely on provisions which are detached from unilateral activities of the host state. Since 1990 the number of treaties has increased enormously and there were 2,750 treaties of this kind in 2009.

 As of yet not much literature has been published regarding the protection of intellectual property rights under international investment treaties [Quite right! It seems to be a remarkably neglected subject, one which even this weblog has not yet covered], nor has an arbitral tribunal issued a decision addressing the question of the extent to which intellectual property rights enjoy protection under such treaties. These topics are not just of academic interest since in the past there have been several attempts by enterprises to protect their intellectual property rights by using the mechanisms offered by international investment treaties. The most recent example is the ICSID arbitration case Philip Morris Brand Sàrl (Switzerland) et al. v Uruguay in which the Philip Morris tobacco company alleged that the anti-smoking legislation of Uruguay interferes with Philip Morris’ trademarks and that this is in contravention of Uruguay’s international obligations under the investment treaty between Uruguay and Switzerland (ICSID Case No. ARB/10/7). 

Furthermore, a number of intellectual property cases have also been decided by the European Court of Human Rights under Art. 1 of the First Protocol to the ECHR, e.g. the case of Anheuser-Busch, Inc. v. Portugal in 2007. A recently published German-language study by Simon Klopschinski has attempted to explain the relevance of international investment treaties for intellectual property rights as well as the relationship between investment treaties and IP-specific international treaties for the protection of intellectual property rights, e.g. TRIPs. This study, which was published under the title “Der Schutz geistigen Eigentums durch völkerrechtliche Investitionsverträge” [“The Protection of Intellectual Property under International Investment Treaties”], is divided into eight chapters and covers a number of issues which may be of relevance in arbitration proceedings involving an intellectual property right that has – in view of its owner – been affected by a state measure in contravention of an applicable investment treaty.  

The first chapter introduces recent legal, economic and political developments in the fields of international investment protection and international protection of intellectual property.  

The second chapter deals with the question of the role IP-specific treaties generally play in arbitral proceedings regarding the protection of intellectual property rights under international investment treaties. This chapter also especially analyses the role of the second sentence of Art. 1 (1) TRIPs for the application and interpretation of international investment treaties in relation to intellectual property rights (“Members may, but shall not be obliged to, implement in their laws more extensive protection than is required by this Agreement, provided that such protection does not contravene the provisions of this Agreement”).  

The third chapter attempts to answer the question of how far TRIPs and the WTO legal order in general allow investment arbitration regarding intellectual property rights (see Art. 4 TRIPs and Art. 64 (1) TRIPs in conjunction with Art. 23 DSU). Furthermore, this chapter explores the relationship between IP-specific proceedings on a national level and the “fork in the road” clauses in international investment treaties.  

In its fourth chapter the study handles a variety of questions involving the issue of under what circumstances and to what extent intellectual property rights constitute an investment within the meaning of investment treaties as well as Art. 25 (1) of the ICSID Convention.  

In how far national treatment provisions as well as most-favored-nation-treatment provisions in investment treaties offer protection to intellectual property rights is analyzed in the fifth chapter. The author also uses the facts and circumstances of the WTO case Canada – Term of Patent Protection (WT/DS170/AB/R) to illustrate what legal issues might come up in arbitration proceedings regarding the protection of intellectual property rights under national-treatment and most-favored-nation provisions of investment treaties.  

 The relevance of “fair and equitable treatment” and “full protection and security” clauses for intellectual property rights is assessed in the sixth chapter. On the basis of, inter alia, the European Commission’s Trade Barrier Regulation case Chinese Taipei – Compulsory Licensing of CD-R Patents, the study explores the following topics: The “fair and equitable treatment” standard and compulsory licenses under patents, the impact of WTO law on the “fair and equitable treatment” standard. Furthermore, the sixth chapter analyses in how far the “fair and equitable treatment” standard can be used by intellectual property owners to combat counterfeiting and IP piracy on a large scale. 

 The seventh chapter explores whether compulsory licenses under patents constitute an expropriation within the meaning of international investment treaties. Furthermore, the chapter tries to answer the question of whether anti-smoking legislation expropriates tobacco companies’ trademarks. In this context the study analyses what instruments international investment law offers to balance the interests of individual investors against the public’s interests.  

The last chapter compares the protection of intellectual property rights offered by international investment treaties with the protection offered by IP-specific instruments, e.g. proceedings before national courts and authorities, the EU’s Trade Barrier Regulation, the USTR’s Special 301 proceedings as well as WTO proceedings. 

 The aforementioned instruments are specifically designed for intellectual property rights and their impact is generally well known, but the specific advantages of protection of intellectual property rights under international investment treaties over other instruments should not be disregarded: International investment treaties allow investors to sue the host state before an international tribunal on the basis of an international treaty and the host state cannot abrogate this unilaterally. By contrast, if the owner of an intellectual property right uses one of the afore-mentioned instruments, said owner will be dependent on either its home state or the courts and/or authorities of the host state, and this may be a constraint on the successful enforcement of said owner’s rights".