Turning Trips on Its Head: An "IP Cross Retaliation" Model for Developing Countries

Abstract

The biblical David vs. Goliath paradigm plays out very frequently in international trade disputes. In 2003, a tiny island state, Antigua and Barbuda (hereafter Antigua) took on the United States (hereafter U.S.) in a WTO (World Trade Organization) dispute, alleging that the U.S. violated the General Agreement on Trade in Services (hereafter GATS) obligations by effectively foreclosing its borders to overseas internet gambling services. It won at both the panel and the appellate levels. However, to this date, it has been unable to secure compliance by the U.S.This paper considers “cross retaliation" by suspending intellectual property rights under the Trade Related Intellectual Property Rights Agreement (hereafter TRIPS) as a viable remedy for developing countries such as Antigua that often find themselves at the receiving end of WTO inconsistent measures maintained by countries that are economically more powerful.Towards this end, it proposes a “Tiered IP suspension model," where certain kinds of Intellectual Property (hereafter IP) are targeted first for suspension before others, depending on the ease of objectively ascertaining the harm caused by the unauthorized use of such IP and/or the potential to induce compliance by the defaulting state. Illustratively, copyrights over sound recordings that have established rates for public performance are targeted first. If working with this tier of IP subject matter does not yield desired results, then the complaining state moves on to other IP where it is relatively more difficult to compute the loss caused to the IP owner (such as pharmaceutical patents) but which may be a more powerful tool to induce compliance. Such a model could be useful for a large number of developing countries, such as India and Brazil, that often find that, despite WTO victories, scofflaw states such as the U.S. and EU fail to comply. Towards this end, this paper offers a very concrete “development" oriented international trade law remedy.