An interesting article on the interface of intellectual property rights and ISDS in the latest edition of the Michigan Journal of International Law by Daniel Gervais here caught my attention.
No it has nothing to do with IP waivers and the present debate on the covid pandemic. Titled "Intellectual Property: A Beacon for Reform of Investor-State Dispute Settlement", it relates to the challenge of state action related to intellectual property in ISDS tribunals and what lessons cases have on treaty negotiation and tribunal interpretation.
The two cases referred to were the Eli Lilly case against Canada and the Philip Morris case against Uruguay. Ofcourse, in both the instances the ISDS tribunals did not find the measure to be incompatible with the State's obligations under the investment treaty. However, in the case of Canada, a judicial decision invalidating a patent on the ground that it did not satisfy the utility test was challenged. Thus, decisions of courts pertaining to patentability were seemingly under the scanner.
The article also brings to light how treaty drafting adapted to this challenge. The future treaty texts of the EU-Canada CETA had specific provisions dealing with exclusion of decisions of domestic courts regarding intellectual property. Annex 8-D of the Canada-EU CETA states:
Mindful that the Tribunal for the resolution of investment disputes between investors and states is meant to enforce the obligations referred to in Article 8.18.1, and is not an appeal mechanism for the decisions of domestic courts, the Parties recall that the domestic courts of each Party are responsible for the determination of the existence and validity of intellectual property rights. The Parties further recognise that each Party shall be free to determine the appropriate method of implementing the provisions of this Agreement regarding intellectual property within their own legal system and practice. The Parties agree to review the relation between intellectual property rights and investment disciplines within three years after entry into force of this Agreement or at the request of a Party. Further to this review and to the extent required, the Parties may issue binding interpretations to ensure the proper interpretation of the scope of investment protection under this Agreement in accordance with the provisions of Article 8.31.3.
The author asks the relevant question - does this mean that earlier treaties that do not have this exclusion allow such claims to be made? Or is the new treaty language just clarificatory and not a new addition to the earlier intent?
Intellectual property cases are not extensively covered in ISDS cases so far. Would tribunals show more consideration to state regulatory discretion or will property rights be more strictly observed?
The article brings out the tensions between regulatory power, treaty obligations, intersection of intellectual property and public policy and the inevitability of legal challenges.
A great read!
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