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Principles for Intellectual Property Provisions in Bilateral and Regional Agreements

Building on years of research at the Max Planck Institute for Innovation and Competition, a group of academics has drafted a set of Principles for Intellectual Property Provisions in Bilateral and Regional Agreements. The Principles address the core problems the drafters see when international IP rule-making occurs in a framework of non-transparent, export-industry-driven trade negotiations which produce ever more complex and detailed IP rules that often are transplanted from the laws of the IP-demanding country with little flexibility for the domestic situation in the implementing country. In response to this situation, the Principles recommend ways to achieve a better, mutually advantageous and balanced regulation of international IP.

Letzte Änderung: 01.02.15

For several years, research at the Max Planck Institute for Innovation and Competition – in collaboration with experts from all over the world – has examined the trend of bilateral and regional agreements that include provisions on the protection and enforcement of intellectual property (IP) rights. Early research in this area focused on a trend towards comprehensive Economic Partnership Agreements of the European Union with African, Caribbean and Pacific (ACP) countries and on the complex network of free trade agreements (FTAs) in Asia. Those projects generated very useful insights on the objectives, functions and substance of IP provisions in these agreements, published in two volumes edited by Josef Drexl, Henning Grosse Ruse-Khan and Souheir Nadde-Phlix (see photo right column and page 157) and Christoph Antons, Reto Hilty (Intellectual Property and Free Trade Agree-ments in the Asia-Pacific Region, Springer Berlin 2015, VIII + 438 S.) from the Institute.

Building on this research, a group of academics led by Henning Grosse Ruse-Khan has drafted a set of Principles for Intellectual Property Provisions in Bilateral and Regional Agreements. These Principles express the core concerns of the drafters regarding the use of IP provisions as a bargaining chip in international trade negotiations; the increasing comprehensiveness and complexity of international IP rules in bilateral and regional agreements; the lack of transparency and inclusiveness in the negotiating process; and the resulting imbalances that are often reflected in the respective IP provisions negotiated on the bilateral or regional level. In response to these concerns, the Principles recommend international rules and procedures that can achieve a better, mutually advantageous and balanced regulation of international IP. They are open to signature, have been translated into French, Spanish and Portuguese and have received significant support within and outside the academic community. The Principles were presented to the public at the Annual Conference of the International Association for the Advancement of Teaching and Research in Intellectual Property (ATRIP) in Oxford, United Kingdom, 23 – 26 June 2013. They are now being integrated into the work of the International Law Association on regional trade agreements.

A brief look at the numbers of existing bilateral and regional agreements provides a good indication of why academic work in this area is crucial. The World Trade Organization (WTO) counts some 600 notifications of regional trade agreements (RTAs) that have been received by the GATT / WTO. Of these, about 400 are in force. What all RTAs in the WTO have in common is that they are reciprocal trade agreements which further liberalise trade between two or more countries. A considerable number of these agreements contain a chapter with obligations for the protection and enforcement of IP rights. Typically, IP obligations are demanded by one of the trading partners for the benefit of its IP-dependent export industries – and agreed to by the other partner in exchange for commitments which benefit its own export industries, such as enhanced market access for goods or services.

While the Principles do not aim to secondguess whether the benefi ts outweigh the losses that follow from such political decisions, they do question the sustainability of such an approach on a global scale: A trade concession obtained for agreeing to stronger IP rights usually derives its economic value from being exclusive to the export industry of the country receiving this concession. Once this or a similar concession is granted to competitors in third countries, the relative advantage is gone. That is why WTO law allows its members, under certain conditions, to shield further trade liberalisation in the form of such concessions from the application of the most-favoured-nation (MFN) principle. In fact, this creates the raison d‘être for negotiating agreements that liberalise trade beyond the multilateral WTO standards. However, once the IP-demanding country starts to grant equivalent trade concessions to other countries, the first country that agreed to higher IP standards risks losing the economic benefits it hoped to obtain from the trade concession it won.

This process of preference erosion calls into question the original rationale for agreeing to higher IP standards as part of a trade-off – and thereby the overall concept of IP law-making in the trade context. It is needless to add that IP standards driven by the export needs of another country are hardly ever those most suited to the domestic needs of innovators, creators, users and the general public.

Of course, trade-offs in international IP law are hardly a new phenomenon: the WTO TRIPS Agreement is generally viewed as the beginning of a new era in which IP is regulated from a trade perspective. The Principles nevertheless take TRIPS as the multilateral benchmark against which several of the problems identified in bilateral and regional agreements are examined and judged. This is justified primarily by the internal balance for which TRIPS is increasingly recognised, especially due to the flexibilities that it leaves WTO members in designing their IP system to focus on domestic needs. Today’s IP provisions in bilateral or regional agreements on the other hand are becoming ever more detailed and prescriptive. They are often transplants of specific comprehensive IP protection or enforcement rules that are borrowed from the domestic law of the IP-demanding country with hardly any consideration of the corresponding limits of IP protection and other checks and balances operating in that domestic law. The Principles articulate the threats which such an erosion of policy space brings with it – not only for the country importing such detailed rules, but also for the country exporting them. Both risk casting inflexible and uncompromising standards in the hard-to-amend stone an international treaty represents.

The specificity and complexity of IP regulation in bilateral and regional agreements also aggravates another problem in international IP law and policy: the lack of concern for other areas of international law with their own rules that aim to protect, inter alia, public health, the environment, biological diversity, food security, access to knowledge and human rights. The Principles attempt to indicate how these interfaces can be taken into account by using tools within the IP system and those of general international law. International IP law, especially in bilateral and regional agreements, must be understood in a way that is less self-contained. Other areas of international law and general international law are relevant; the latter not least because it offers guidance on how the relationship between the multilateral framework and bilateral and regional agreements can be properly constructed.

In sum, the Principles aim to address core problems in international IP law and offer recommendations for resolving them. They certainly do not claim to teach countries how to conduct their IP (foreign) policy, or what provisions to include in future bilateral or regional agreements. Based on years of academic work, they do however attempt to highlight an alternative perspective on the negotiation, interpretation and implementation of IP provisions in bilateral and regional agreements.



Dr. Henning Grosse Ruse-Khan

Beteiligte Forschende

Dr. Mor Bakhoum,
Prof. Dr. Josef Drexl,
Prof. Dr. Reto M. Hilty,
Prof. Dr. Thomas Jaeger,
Prof. Dr. Annette Kur,
Dr. Kaya Köklü,
Dr. Matthias Lamping,
Souheir Nadde-Phlix


Die Fragmentierung des Internationalen Immaterialgüterrechts