ON COMPULSORY LICENSING OF TRADE SECRETS TO SAFEGUARD PUBLIC HEALTH

Reported trade secret the ft: 323% rise in the United States during the 1990s (Whaley 1999). Annual employee turnover in business and professional services: more than 21% (Essex 1993). These cautionary statistics, along with the currency of information in funding global success, require sophisticated businesses to routinely address the unwanted disclosure of trade secrets. Balanced against businesses' desire to prevent this disclosure are the policies of free competition and the employee's right to apply his skills and knowledge. Within this tension lies a body of law—preventive and compensatory—that technologically intense and information-dependent oil and gas companies should know. The discussion that follows deals with trade secrets in the context of U.S. law, but many other countries have comparable underlying concepts. The Treaty of Rome, governing the European Union, similarly provides that a trade secret is something not generally known or easily accessible (Van Arnam 2001). English jurisprudence protects trade secrets in much the same way as they are protected in the U.S. but through court-made law rather than statutes (Lipton 2003). Japanese law parallels U.S. law by protecting technical or business information useful in commercial activities and that is kept secret and not publicly known (Harris 2002). China also defines a business secret as technical and operational information that is not known to the public, is capable of bringing economic benefits to the owners, has practical applicability, and has been subjected to measures to keep it secret (Bejesky 2004). The U.S. definition of a trade secret is mirrored in key international agreements: the World Trade Organization's Agreement on Trade-Related Aspects of Intellectual Property Rights and the North American Free Trade Agreement. Nonetheless, this property right and punishment for its violation can differ across nations in important ways. Criminal law, in particular, may diverge on remedies, the elements of proof, and the right to seek relief. Useful analysis of law outside the U.S. and of international agreements can be found in Melvin F. Jager's Trade Secrets Throughout the World (1994) and his Trade Secrets Law (1985) and in D. Campbell's World Intellectual Property Rights and Remedies (1999).

This chapter presents a background on international investment law and intellectual property (IP) rights, reviewing pertinent legal, economic, and political developments in these fields, and how they relate to the broader public international law context. It considers IP as a form of intangible property right and identifies the principal forms of IP: patent, trademark, copyright, and trade secret. The single most important multilateral IP treaty is the World Trade Organization's (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement). The chapter then looks at the increasing importance of intellectual property rights in foreign direct investment (FDI), as well as the increasing use and exploitation of IP rights through registrations of patents and trademarks. It also investigates the possibility of relying on international IP treaties in IP-related investor–state dispute settlement (ISDS) cases.

This chapter examines whether the competition rules in the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) are adequate or not. The competition rules in the TRIPS Agreement leave each WTO Member substantial discretion in the development and application of competition law to intellectual property rights (IPRs), including the right to forestall anti-competitive abuses of IPRs. The chapter concludes that there are no compelling grounds for changing these TRIPS rules. Both IPRs and competition rules aim at promoting innovation and general consumer welfare and should be applied in a mutually compatible manner. As a ‘down-payment’ in the Doha Development Agenda, developed WTO Members should agree to reform their competition laws such that anti-competitive conduct undertaken by their enterprises in foreign markets is no longer exempted, tolerated, or encouraged.

Different types of intellectual property rights have an impact on various points along the food chain. Patent laws and laws for the protection of new plant varieties affect not just innovation but also access to seeds by farmers. Trademarks influence the packaging and sale of various food products consumed in society. There are also debates regarding the extent to which copyright law can be used to protect recipes, dishes, and artistic culinary creations. Other forms of intellectual property rights equally intersect with food chains in various ways. Geographical indications can be used to enhance the commercial value of food products that possess certain characteristics, qualities, or reputation because they are produced in a particular geographical location or region of the world. Trade secrets can be used to protect the technical know-how or undisclosed information relating to the production of certain food products and beverages. Utility model laws can also be used to protect some plant-related innovation. Laws relating to access and benefit-sharing from the use of genetic resources can also affect the conservation and commercialization of plant genetic resources (including those associated with traditional knowledge). Crucially, international intellectual property law also affects the relationship between food chains and national intellectual property laws. While the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (WTO’s TRIPS Agreement) does not mandate the protection of plants and animals via patent laws, it does require WTO members to protect plant varieties either through patent rights or effective sui generis laws or by any combination thereof. A number of states are also parties to the International Convention for the Protection of New Varieties of Plants (UPOV Convention), which mandates the protection of new plant varieties. In addition, the TRIPS Agreement requires WTO members to protect geographical indications (without mandating any specific form of protection). A number of treaties also contain provisions on access to and benefit-sharing from the use of genetic resources. These treaties include the Convention on Biological Diversity (CBD), the Nagoya Protocol to the CBD, the International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA), and the Agreement on the Conservation and Sustainable Use of Marine Biological Diversity of Areas beyond National Jurisdiction. The impact of intellectual property rights on food chains also intersects with debates regarding the interface between intellectual property rights and human rights. The right to food is implicated when intellectual property rights, especially patents and plant variety protection laws, affects the ability of small-scale farmers to access, save, and exchange seeds. Furthermore, relying on the need to protect public health, some states have implemented measures to regulate the packaging of food products (including the use of trademarks on products) that contribute to non-communicable diseases such as cancer and obesity.

Since its inception in 1994, the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) has embodied the orthodox view that enforcing strong intellectual property rights (IPRs) is necessary to solve problems of trade and development. The Doha Declaration of 2001 offered short periods of special dispensation, especially to least developed countries, and proclaimed one goal to be the promotion of “access to medicines for all.” Nonetheless, it is important to recognize that the Declaration did not disturb the orthodox view of strong IPRs reflected in TRIPS. The editors of this collection reject this view and the traditional development theory that underlies it, particularly the theory’s binary model of the world as comprising developed countries and all the rest who must follow the IPR-laden path to development. The editors share the conviction that the TRIPS regime of strong IP rights is increasingly out of phase with the shifting geopolitical dynamics of multilateralism in international relations, a multilateralism in which human rights has become a progressively more influential factor in shaping trade and development policy. The editors of this collection ask, How can TRIPS mature further into an institution that supports a view of economic development which incorporates the ensemble of human rights now seen as encompassing a more comprehensive set of collective interests that includes public health, environment, and nutrition? In particular how can this 21st century congregation of human rights provide a pragmatic ethic for accomplishing a rapport with IPRs in the new landscape of development policy? Addressing such questions, the chapters in the first part of the collection shed new light on recent deployments of human rights ethics, international treaty obligations, and domestic law that have had success in reshaping IPRs, deployments made in developing countries and the BRIC group. The chapters in the second part make new proposals and recommendations for the further use of human rights and related ethics to resolve conflict over IPRs in ways that can benefit less developed countries. Before summarizing the chapters, the Introduction briefly discusses the conflict between intellectual property and human rights, a seemingly inevitable clash, especially between patent rights, given their continuing expansion in the pharmaceutical and biotechnology sectors, and human rights, which now comprise a wider array of collective interests. The conflict between patent rights and human rights is widely understood as expressing a particularly difficult form of the familiar tension between efficiency and dispersion, between encouraging innovation and promoting fair distribution. This dominant view of the conflict bears scrutiny. Why? Because the economic case for patent rights as the engine of economic growth is not well-supported. In consequence, it cannot be taken for granted that the moral virtue of wider distribution of patented goods, especially pharmacological products, exacts a high price on economic growth and development. In this light, the Introduction concludes with some useful principles for human rights activists to counter what should be recognized as the uneasy case typically made for strong protection of patent and other IPRs.

Increasingly, the economy of industrialised countries moves away from being based on a multiplicity of independent innovators to one characterised by cross-licensing and the pooling of intellectual property (IP) rights. Competition law is accorded a more limited role. Refusals to license or restrictive licence terms are tolerated. This paradigm emphasises the innovation at the expense of the dissemination rationale of IP and competition law. The pressure on developing countries is to follow suit. However, this approach jeopardises overcoming the technology dependence of these states. Yet, the political consensus underlying the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) was that, in exchange for IP rights protection, a transfer and dissemination of technology benefiting the global South would occur. This has not taken place so far. Taking this promise seriously requires according an enhanced, more social role to competition law. Articles 8(2), 31 and 40 of TRIPS—the TRIPS competition rules—could be interpreted in a way to accomplish this. This Chapter argues in favour of a ‘prodevelopment’ approach to IP-related competition law. This could be viewed as a demand of the rule of law at the international level. On the one hand, treaties such as TRIPS are to be interpreted in good faith. On the other, public interest and human rights considerations justify, as it were, require, such an approach. Articles 7 and 8 of TRIPS can play a crucial role in this regard. They reflect such public interest considerations as ‘object and purpose’ of TRIPS. They also provide a link to international human rights law (IHRL). IHRL protects a (group) right to development, confirming ‘policy space’ for World Trade Organization (WTO) members and the freedom to opt for a competition law model that facilitates dissemination. The International Covenant on Economic, Social and Cultural Rights (ICESCR) further protects various economic, social, and cultural rights, including the right to enjoy the benefits of scientific progress and its applications (REBSPA). These rights may be said to give rise to ‘transfer and dissemination of technology’ as a human right. Duties under the right to development and ‘territorial’ and ‘extraterritorial’ human rights obligations (ETOs) under the ICESCR support an understanding of competition law which is pro development, which takes account of local access and welfare needs. The Chapter concludes with a set of 10 consolidated considerations for a ‘prodevelopment’ IP-related competition law.

Patently robbing the poor to serve the rich

The essential need for universal access to vaccines, diagnostics, and treatments has been highlighted by the COVID-19 pandemic. The role of intellectual property (IP) rights under the World Trade Organization's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which provides patent protections that may prevent developing nations from accessing life-saving medical technologies, is at the heart of the global health debate. In response, South Africa and India suggested temporarily waiving several TRIPS clauses to allow for the increased manufacturing and distribution of medical supplies linked to COVID-19. This essay critically analyzes the TRIPS waiver proposal's ethical and legal aspects as well as how WTO members have responded to it and how it affects global health fairness. It assesses how IP regimes both facilitate and impede access and innovation, and it makes the case for a more adaptable and inclusive method of IP governance in times of public health crises. The necessity for a balanced framework that puts public health and human rights ahead of stringent commercial safeguards during times of global crises is emphasized in the study's conclusion.

Increasingly, the economy of industrialised countries moves away from being based on a multiplicity of independent innovators to one characterised by cross-licensing and the pooling of intellectual property (IP) rights. Competition law is accorded a more limited role. Refusals to license or restrictive licence terms are tolerated. This paradigm emphasises the innovation at the expense of the dissemination rationale of IP and competition law. The pressure on developing countries is to follow suit. However, this approach jeopardises overcoming the technology dependence of these states. Yet, the political consensus underlying the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) was that, in exchange for IP rights protection, a transfer and dissemination of technology benefiting the global South would occur. This has not taken place so far. Taking this promise seriously requires according an enhanced, more social role to competition law. Articles 8(2), 31 and 40 of TRIPS – the TRIPS competition rules – could be interpreted in a way to accomplish this. This article argues in favour of a “prodevelopment” approach to IP-related competition law. This could be viewed as a demand of the rule of law at the international level. On the one hand, treaties such as TRIPS are to be interpreted in good faith. On the other, public interest and human rights considerations justify, as it were, require, such an approach. Articles 7 and 8 of TRIPS can play a crucial role in this regard. They reflect such public interest considerations as “object and purpose” of TRIPS. They also provide a link to international human rights law (IHRL). IHRL protects a (group) right to development, confirming “policy space” for World Trade Organization (WTO) members and the freedom to opt for a competition law model that facilitates dissemination. The International Covenant on Economic, Social and Cultural Rights (ICESCR) further protects various economic, social and cultural rights, including the right to enjoy the benefits of scientific progress and its applications (REBSPA). These rights may be said to give rise to “transfer and dissemination of technology” as a human right. Duties under the right to development and “territorial” and “extraterritorial” human rights obligations (ETOs) under the ICESCR support an understanding of competition law which is pro development, which takes account of local access and welfare needs. The article concludes with a set of 10 consolidated considerations for a “prodevelopment” IP-related competition law.

The investment arbitration launched by Philip Morris Asia (PMA) against Australia in 20111 in relation to Australia's mandatory plain packaging of tobacco products is a recent reminder of the significant protections for intellectual property rights (IPRs) in international investment agreements. Given its focus on trademarks, the Philip Morris dispute provides a useful case study for exploring the relationship between intellectual property and international investment law. The parallel legal challenges brought by various tobacco companies against Australia in the High Court of Australia2 on constitutional grounds and by Ukraine,3 Honduras,4 the Dominican Republic,5 Cuba6 and Indonesia7 against Australia in the World Trade Organization (WTO) also make this a valuable case for demonstrating the fragmenting nature of intellectual property law at the domestic and international levels. That fragmentation poses challenges for international trade and investment law, raising questions concerning the relationship between intellectual property rights conceived at the domestic level with the protections available in international fora. For example, what significance does the High Court's conception of intellectual property under Australian law have for the claims against plain packaging under the Agreement between the Government of Hong Kong and the Government of Australia for the Promotion and Protection of Investments (‘Hong Kong-Australia BIT’)8 and the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement)? By using the Philip Morris case study, this chapter aims to explore the complex interaction between intellectual property and international investment agreements (IIAs), meaning bilateral investment treaties (BITs), plurilateral investment treaties such as the Energy Charter Treaty, and preferential trade agreements containing investment provisions. After explaining the background to the Philip Morris dispute in its various forms, we consider the protection of intellectual property as an ‘investment’ under IIAs. We then examine three substantive investment obligations in connection with intellectual property: most-favourednation obligations, expropriation, and so-called ‘umbrella clauses’. This chapter reveals the high degree of uncertainty permeating the relationship between intellectual property and international investment law.

Cross-retaliation, where a World Trade Organization (WTO) member whose rights have been infringed under one WTO Agreement retaliates against the offending member under another WTO Agreement, is seen by some commentators as a way to counteract the deficiencies of conventional trade retaliation and mitigate the asymmetry of power in the WTO dispute settlement system. However, the potential of crossretaliation as an effective remedy remains unclear. This article argues that a credible and probable threat of cross-agreement retaliation could provide a powerful incentive for ex ante compliance. The credibility of the threat is established by reference to the WTO Agreement that is targeted. The suspension of Trade-Related Aspects of Intellectual Property Rights (TRIPS) obligations, in particular, holds great promise. The probability of the threat depends on the likelihood of the Dispute Settlement Body (DSB) authorization to suspend concessions, the outcomes of previous threats, and actions to operationalize cross-retaliation. WTO jurisprudence has fleshed out the requirements of Article 22.3 of the Dispute Settlement Understanding (DSU), allowing relatively safe assumptions as to the likelihood of DSB authorization to suspend concessions across agreements where significant economic disparities exist between the disputing parties. Previous cases featuring the threat of cross-retaliation reveal a modest influence on the policies of disputing parties. Finally, the operationalization of cross-agreement retaliation pursuant to the TRIPS Agreement is riddled with legal and policy problems, mainly in connection with the personal and territorial scopes of the suspension, the justiciable nature of intellectual property (IP) rights, the quantification of the suspension, the continuous supply of IP-dependent goods, and the consistency of the suspension with other, non-WTO international obligations. However, these problems do not prohibit developing countries from reaping the benefits of asymmetric information, so long as they create the impression of carefully structured retaliation plans that are ready to be triggered in the event of DSB authorization. A reasonable probability is the only certainty. Edgar Watson Howe (1853-1937)

The structure of global intellectual property law as incorporated in the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is implicated in the current lack of COVID-19 vaccines, medical equipment, medicines and diagnostics (hereafter, ‘health-technologies’), which are needed to combat the pandemic. Although equitable access to vaccines is in the moral, political and economic interests of the global public and requires global solidarity, the phenomenon of COVID-19 ‘vaccine nationalism’ has brought into sharp relief the misalignment of current legal and financial incentives to produce and distribute vaccines equitably. The crisis further demonstrates the failure of high-income countries (HICs) to realise the promise they made at the time of the TRIPS negotiations in 1994, that by agreeing to the terms of TRIPS, lower and middle-income countries (LMICs) would benefit from technology transfer and the building of productive capacity. As such, the current crisis is revealing not only of inadequacies of how to deal with global emergencies, but also of deficiencies within the international ‘patent bargain’ itself. This paper elucidates the legal issues surrounding the ‘TRIPS waiver’ proposal initially put forward by India and South Africa in October 2020, which, as of May 2021, is supported by more than 60 states, and which has received statements of support from the World Health Organisation (WHO). We analyse the different intellectual property rights relevant to the proposal – focusing primarily on patent rights and trade secrets – which are most relevant to the present COVID-19 vaccine context. We explain why the existing TRIPS flexibilities around compulsory licensing are incapable of addressing the present pandemic context adequately, both in terms of procedure and legal substance.The extent of the current health crisis posed by COVID-19 is as undeniable as the current global response is untenable. Given the ongoing absence of sufficient engagement by the pharmaceutical industry with proposed global mechanisms to share intellectual property rights, data and know-how to address the pandemic, we argue that mandatory mechanisms are needed. The TRIPS waiver is an essential legal instrument in this context for enabling a radical increase in manufacturing capacity, and hence supply, of COVID-19 vaccines, creating a pathway to achieve global equitable access. We make two arguments to this effect: first, the TRIPS waiver is a necessary and proportionate legal measure for clearing intellectual property (IP) barriers in a direct, consistent and efficient fashion, enabling the freedom to operate for more companies to produce COVID-19 vaccines and other health technologies without the fear of infringing another party’s IP rights and the attendant threat of litigation; and second, the TRIPS waiver acts as an important political, moral and economic lever towards encouraging solutions aimed at global equitable access to vaccines, which is in the wider interest of the global public.

Over the past few years the WTO Council for Trade-Related Aspects of Intellectual Property Rights recognized the growing concern over an imbalance between intellectual property and public interest. With regard to health technologies in particular, without sufficient use of balancing exceptions and limitations, patents and related monopoly rights primarily serve to protect corporate interests of the pharmaceutical industry. The broadest possible use of compulsory licenses is one of the essential measures that can contribute to increase in responsiveness to public interest considerations in defining the boundaries of the IP-related components that determine access to medicines. Another instrument is the process of interpretation and implementation of the Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS), which aims not only at clarifying the meaning of the provisions or determining the intentions of the parties to this treaty, but sets sights on reconciling its competing objectives. The need to interpret and implement the TRIPS Agreement in a way that protects public interest is confirmed by the obligation of acting “in a manner conducive to social and economic welfare” under Article 7 of the Agreement. Moreover, Article 8 allows to adopt “measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development”. Therefore, in the context of the problem of access to medicines, the important role of human rights as an instrument for the prevention of abuse of intellectual property rights and the restoration of their balance, taking into account the interests of both the beneficiaries of protection and the general public, should be emphasized.

The World Trade Organization's agreement on Trade-Related Aspects of Intellectual Property Rights set global minimum standards for the protection of intellectual property, substantially increasing and expanding intellectual property rights, and generated clear gains for the pharmaceutical industry and the developed world. The present review elaborates all aspects of Intellectual Property Rights in detail, along with their protection criteria.

Learning outcomes The objectives of the case study are to provide an overview of intellectual property rights and intellectual property rights in Indian context; understand the intellectual property rights implementation and challenges for implementing it in emerging economies; understand what would be the best approach that companies can adopt when the companies face backlash in such circumstances; and explore the scope for redefining the intellectual property rights in the changing global environment. Case overview/synopsis In December 2021, the Protection of Plant Varieties and Farmers’ Rights Authority (PPV&FRA) in India revoked the plant variety protection (PVP) certificate granted to PepsiCo India Holding (PHI) for its Lays variety potato (FL-2027, known as FC-5). The FC-5 variety possessed low moisture content which made it suitable for making potato chips. The controversy started with Pepsi suing the small and marginal farmers of Gujarat for alleged patent infringement and cultivating the patented variety. Pepsi’s legal suit against nine marginal potato farmers in Gujarat initiated the dispute over how intellectual property (IP) rights are used to intimidate small, marginal farmers and its infringement of farmers’ rights. But, on the other side, the interesting aspect was how IP infringement could be a setback for the companies that made the capital investment to develop the variety. The case study discusses the backlash Pepsi faced due to this IP rights legal suit and the punitive aspects of IP rights (IPR) law. Moreover, in the context of the global pandemic, the case study helped discuss the need to redefine the intellectual property rights regime keeping in mind global welfare. Complexity academic level The case is intended for use in postgraduate-level management courses in agricultural marketing, agribusiness, international business and economics. This study can help management students understand how IPR is defined, the apparent complexities associated with it and the adverse effect of it on small and marginal farmers in emerging economies. Supplementary materials Teaching notes are available for educators only. Subject code CSS 5: International business.