Suspending IP Obligations Under TRIPS: A Viable Alternative to Enforce Prevailing WTO Rulings?

Dr. Henning Grosse Ruse-Khan
Center for International Environmental Law
May 7, 2008

In two recent prominent disputes in the World Trade Organization (WTO), developing country complainants are using the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) to induce compliance with favorable WTO rulings. Brazil in the US – Cotton dispute and Antigua in the US – Gambling case announced their intention to “cross-retaliate” against WTO-inconsistent measures of the US by suspending obligations under TRIPS. This approach can offer a practical alternative enforcement mechanism especially for developing countries and smaller economies in disputes against (industrialized) countries with significantly greater economic power in international trade. The concept has been explored in some academic writings and approved by WTO arbitrators in a recent US – Gambling decision and in response to Ecuador’s retaliation request in the EC – Bananas III case. It is now time for a thorough and comprehensive analysis of the opportunities and problems surrounding intellectual property (IP) crossretaliation.

Given the imbalances in trade and economic power amongst WTO Members, the central issue is whether suspending TRIPS obligations can do a significantly better job than traditional retaliation in facilitating compliance by powerful WTO Members. This policy paper examines the rationale and wider economic feasibility of suspending IP rights; looks at the requirements set out by the WTO dispute settlement system; addresses, in brief, potential conflicts with other multi- or bilateral obligations; and points to crucial factors for implementing an authorization to suspend TRIPS obligations in domestic IP laws.

The main conclusion is that in some cases, IP cross-retaliation can be effective, legal and practical and should be considered a viable means to enforce a WTO ruling. Another added value lies in the potential to generate positive welfare effects: if implemented wisely, suspending TRIPS obligations can create temporary policy space for designing the domestic intellectual property regime in a way that facilitates technological development and domestic innovation through imitation and technological learning. A successful use of suspending IP protection requires, however, that (developing) countries establish domestic implementation systems that are economically feasible, compatible with WTO law as well as other international obligations on IP and consistent with their domestic constitutional treatment of IP.

The full CIEL report is avaiable here: http://www.ciel.org/Publications/TRIPS_IP_7May08.pdf

 

 

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