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Intellectual Property and the Trans-Pacific Partnership

by Susy Frankel, Faculty of Law, Victoria University of Wellington


The current P4 Agreement has a fairly limited intellectual property chapter.  The existing agreement is, however, in many ways a TRIPS- plus agreement. It requires that the parties provide for reproduction and communication rights for copyright owners and phonogram producers that are consistent with certain World Intellectual Property Organization (“WIPO”) treaties that came into force after the TRIPS Agreement did. These treaties are the WIPO Copyright Treaty (WCT) and the Performances and Phonograms Treaty (WPPT).which “update” copyright law for the digital era.[1] P4 also expressly allows for certain intellectual property rights that the TRIPS Agreement is silent on. These include, for example, that parties may establish measures to protect traditional knowledge.

 

The expansion of P4 is likely to result in a much greater level of TRIPS–plus intellectual property protection.

From New Zealand’s perspective some of the increases in intellectual property protection are likely to be more problematic than others. Broadly, of concern is what New Zealand will concede, or be forced to concede, in the intellectual property field in order to make gains in other fields. In the short-term concessions in the intellectual property field can look palatable, but the social and economic impact of over-reaching intellectual property laws is too often underestimated.

The P4 preamble provides that the parties resolve to:

“FOSTER creativity and innovation, and promote the protection [of][2] intellectual property rights to encourage trade in goods and services among the Parties.”

Although the intellectual property chapter expands on this preamble, with a series of “intellectual property principles”, it reveals an undeveloped and under-analysed view about the role and function of intellectual property in trade. Primarily, it appears not to contemplate that trade in intellectual property occurs independently from goods and services as well as in connection with them. While intellectual property rights can foster creativity and innovation, P4 (like many international intellectual property agreements) has no internal mechanism to measure the appropriate level of protection to achieve the goals of the agreement. Rather, intellectual property protection without qualification, other than the general principles, is presumptively the starting point. If the only limits on protections are in general principles this tends towards the principles taking a back seat in interpretation.[3]

This summary describes the main areas of intellectual property protections that are likely to raise issues in the expanded P4 negotiations and raises questions about what the extended P4 negotiations might mean for intellectual property protection.

A.            Copyright

1.            Parallel importation of copyright products

P4 provides that the parties may “provide for international exhaustion of intellectual property rights.”  NZ allows for the parallel importation of copyright goods and some trade marked goods. Singapore allows these sorts of parallel imports and also parallel imports of patented goods. US domestic and trade policy aims to prevent all parallel imports. Under AUSFTA patented products cannot be parallel imported. MED has indicated that NZ’s policy is that the current permissive parallel importing regime should not be pulled back in anyway.

 

2.            Term of protection for copyright works

The US will wish to extend copyright term to life of the author plus 70 years or 70 from the making of the work. The current term in New Zealand, which is the TRIPS Agreement minimum term, is life of the author plus 50 years. The US/Chile FTA and AUSFTA have the 70 year term. In principle the 70 year term is too long, but what will the impact on NZ be if it extends term? As the term is already extended in the EU, US and Australia, New Zealand potentially gains little from not extending term. A potential gain, from having a shorter term, is that creators and businesses could use and reproduce copyright works, expired elsewhere, for use and sale in New Zealand and other markets with the 50 year term. Is there evidence of such uses and businesses developing in New Zealand? Maybe it is impractical for such businesses to be established?

The shorter term of protection does not enable New Zealand to import goods any cheaper from overseas where they are still copyright protected overseas under the 70 year term. Keeping the shorter term is a stance against longer term, but it may be more a principled stance that does not have a co-relative benefit. Should term extension, however, be used as a “bargaining chip”?

 

 

3.            Digital copyright issues
P4 affirms that Parties may establish provisions to facilitate the exercise of permitted acts where technological measures have been applied. The US has more extensive protections of technological protection mechanisms, digital rights management and other digital protections. AUSFTA makes all reproductions, even those transient in nature, a copyright infringement. New Zealand law does not. New Zealand’s digital copyright laws are unique, and although in part controversial, were largely designed for New Zealand rather than the legislature adopting the UK or US law without significant alteration, as past copyright laws have been..

The US domestic law is different from its FTA approach to digital copyright. Will a trade agreement claw back the position to be more in line with the US FTA approach to digital copyright protection? As a result of AUSFTA, in some areas, owners of Australian copyright now have stronger rights than US domestic rights owners. At the very least NZ negotiators should aim that the P4 obligations are no greater than US domestic law digital copyright protections. Will the P4 negotiators succeed where Australia did not?

 

B. Patent

1.            Expansion of patent law
AUSFTA and the US/Chile FTA are more expansionist of patent law than the TRIPS Agreement. AUSFTA, for example, provides that “patents shall be available for any new uses or methods of using a known product”. This, if adopted, would be a significant extension of New Zealand law. Even those many new uses of known products are patentable in New Zealand the limits of that concept have not been tested properly and important policy discussions need to occur before such an extension of patent law is made.

 

2.            Patent term for pharmaceuticals

Pharmaceuticals cannot be sold in NZ, and elsewhere, until they pass internal regulatory processes, primarily relating to safety. In both the US and Australia, when a patented pharmaceutical product is subject to a regulatory review process, the patentee can apply to extend the period of term of the patent. This extension period is designed to compensate for the period of time that the patented product could not be sold because it was subject to regulatory review. This phenomenon also occurs in the EU. The EU, US and Australia have different methods of calculating the extension of term. In New Zealand there is no extension of term for patents. Historically, some term extensions were granted in New Zealand, but this was under the law that had a shorter patent term than the now TRIPS mandated 20 year term. An MED discussion paper considered whether to allow extension of patent term under a 20 year patent term regime, but that paper appears to have been rejected by the last Labour cabinet.

In many jurisdictions a patent is not infringed if, during the term of the patented product, a third party makes the patented product to obtain regulatory review of a potential generic pharmaceutical. In some jurisdictions the “pay-off”, to the patentee, for this exception is the extension of term discussed above. New Zealand’s position is unique in allowing for third party regulatory review of patented products, but no patent term extension. This is arguably appropriate for New Zealand’s economic circumstances because we import most medicines. There is likely to be pressure in the expanded P4 negotiations to allow patent term extension for pharmaceuticals.

 

3.            Pharmaceutical cost

AUSFTA’s pharmaceutical marketing provisions can be used to extend patent term. The actual way in which this occurs is legally complex. (If not introduced directly through patent law it may be through a new attempt to establish the Australian New Zealand Therapeutic Products Authority, known as ANZTPA.) The extension of term results in increased prices.

P4 has a provision which preserves Pharmac’s subsidies from the reach of the Commerce Act. Is that enough?  P4 may threaten that anyway.

C.            Trade Marks and Geographical Indications

1.            Expansion of the reach of trade mark

AUSFTA requires protection of sound and smell trade marks. New Zealand has this protection already. AUSFTA requires certain protection of domain names and dispute resolution processes. New Zealand law already has these standards.

 

2.            Geographical indications

The US is a not a fan of geographical indications (“GIs”). Perhaps ironically, the US’s main argument against GIs is that they are protectionist rather than meeting the trade mark reputation based standard. The US has several disputes, including WTO disputes, with the EU over GI protection.

P4 allows for parties to list their claimed GIs. New Zealand has not listed its GIs. Chile has a list incorporated into P4. Will the US resist NZ listing GIs in the future? Is this a problem, particularly for Maori names?

 

 

F.            Treaty of Waitangi clause and traditional knowledge protection
If and how New Zealand protects traditional knowledge is yet to be decided. P4 retains flexibility to protect traditional knowledge. Aspects of AUSFTA, if adopted in P4, might make that harder. An example would be the patent protection of all new uses of known products. Notably, however,, AUSFTA retains an ordre public exception to patent law. The ordre public exception can be used to protect matters of particular importance to New Zealand.

 

G.            Intellectual property enforcement
AUSFTA has a lower threshold, than New Zealand law, for criminal sanctions for intellectual property infringement.

Enforcement issues of difficulty are likely to be quick remedies, such as copyright notice and takedown procedure or removal of internet access for repeat infringers.

Ongoing enforcement negotiations are presentlytaking take place in a different forum, ACTA rather than P4.



[1] TRIPS- plus is the term commonly used to describe levels of intellectual property greater than those required under the WTO TRIPS Agreement.

[2] “of” does not appear in the text of the agreement.

[3] See Susy Frankel, “WTO’s Application of ‘the Customary Rules of Interpretation of Public International Law” to Intellectual Property” (2006) 45 Virginia Journal of international Law 365.

Last Updated on Tuesday, 16 March 2010 10:04
 

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