Thursday, March 7, 2013

Cross retaliation and dispute settlement

International economic law experts watch with keen anxiety the next steps Antigua would take to effectuate the cross-retaliation sanction it has received from the WTO in the  US- Online Gambling case at the WTO. 

This NYT opinion preferred a negotiated deal rather than the execution of cross-retaliation. Simon Lester suggests in this blogpost that Antigua should adopt a non-abusive, reasonable way of retaliation by putting works that have received excessive protection in the public domain. Scott Lincicome highlights the strong impact the threat of cross retaliation can have in the context of non-complied WTO disputes in this view.

While many conjecture on how Antigua would implement the cross-retaliation option (many also feel that it would ultimately lead to a negotiated settlement) Shamnad Basheer in this piece offers a tiered approach to cross retaliation essentially contending that cross-retaliation should be considered a mainstream retaliatory technique rather than a secondary one. Calling it the "Tiered IP suspension model" he proposes:
"Whilst the notion of IP “cross-retaliation” has been doing the rounds for a while, there is considerable uncertainty regarding how this concept will be operationalized and implemented. Developing countries urgently need to work out an optimal model that helps assess losses to the foreign IP owner in a reasonably objective way—this way there is no time lost between the procuring of a favorable order from the WTO sanctioning cross-retaliation and the actual cross- retaliation itself. The lack of a credible domestic model has no doubt caused Antigua’s threat of cross retaliation to be taken less seriously by the US. 
This paper seeks to fill this lacuna by proposing a tiered suspension mechanism as a viable option. That the model lacks technical precision in terms of computing losses to IP owners accurately is not fatal since the current WTO framework only requires a broadly objective model that does not reek of arbitrariness. Further, the aim of this paper is to evolve a model that will help in securing compliance or a settlement. Given that the IP lobbies in countries such as the US and the EU are powerful, the likelihood of a settlement or compliance is very strong. Particularly, since the model advocates an automatic compulsory license after the offending measures have been removed. In other words, the likelihood of a country having to operationalize the IP suspension model is very remote. Any infirmities in the model ought to be evaluated, bearing this over- arching assumption in the model. Further, the current WTO framework only requires that broad equivalence be achieved and not that the retaliating state compute the losses to suspended IP owners in a technically accurate manner."
While one would have to wait to see how Antigua takes it forward, it is clear that cross-retaliation has brought back into focus the issue of compliance under the dispute settlement process. Will it lead to enhanced compliance or more complex negotiated settlements?

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