This posting contains Part II of "Shaping the Trident: Intellectual Property Rights under NAFTA, Investment Protection Agreements and at the WTO," which first appeared in 1997 in Volume 23 of the Canada-United States Law Journal, 261. The article was part of the Proceedings of the Canada-United States Law Institute Conference on NAFTA Revisited. The views expressed were those of the author in his personal capacity, not those of the Government of Canada. This article is current up to May 1996. Parts I and III-VI appear in other postings on this website.
For international intellectual-property protection a new era began with the entry into force on January 1, 1994 for Canada, the United States, and Mexico of NAFTA, and on January 1, 1995 for WTO Members of the Uruguay Round Final Act, including the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which is administered and enforced by the WTO. All WTO Members must be TRIPS Parties because the Uruguay Round was based on the concept of the "single undertaking."
Although otherwise enjoying transition periods of varying duration, all WTO Members (other than least-developed countries) were on January 1, 1995 bound by "standstill," i.e. an obligation to ensure that any changes in domestic laws during TRIPS transition periods do not result in a lesser degree of consistency with TRIPS provisions.
Developed countries like Canada had to apply all TRIPS provisions by January 1, 1996, when developing and least-developed countries were also bound by the requirement to provide MFN and national treatment. However, developing-country WTO Members (and any WTO Member in transformation from a centrally-planned into a free-market economy) do not have to apply other TRIPS provisions until January 1, 2000. At that time, developing countries, which have yet to extend product-patent protection to all technology areas, may further delay such protection's domestic application to any area yet to be covered (e.g., pharmaceuticals) until January 1, 2005. A least-developed country may delay the application of TRIPS provisions until January 1, 2006, at which time it may ask the TRIPS Council for a further extension of the transition period.
Marrying Intellectual Property to International Trade
The 1986 Punta del Este Ministers' meeting of the Contracting Parties of the General Agreement on Tariffs and Trade (GATT) decided to include intellectual property rights (IPRs) within the scope of the Uruguay Round of Multilateral Trade Negotiations. According to the September 20, 1986 Ministerial Declaration:
In order to reduce the distortions and impediments to international trade, and taking into account the need to promote effective and adequate protection of IPRs, and to ensure that measures and procedures to enforce IPRs do not themselves become barriers to legitimate trade, the negotiations shall aim to clarify GATT provisions and elaborate as appropriate new rules and disciplines.This Punta del Este decision was a turning point, because it allowed for the creation of the WTO framework in which it became possible to marry trade obligations to IPRs.
The special position IPRs occupy in the WTO has been described by the former Director of the WTO Secretariat's Legal Affairs Division, Frieder Roessler who said:
TRIPS is the only WTO Agreement that establishes positive standards for the conduct of domestic policies . . . . All other agreements on domestic policy matters annexed to the WTO Agreement establish negative standards. The Agreements on Technical Barriers to Trade and on the Application of Sanitary and Phytosanitary Measures, for example, do not oblige any WTO Member to adopt domestic regulations to protect the health or safety of its citizens. They oblige WTO Members to observe certain rules if they choose to adopt any technical regulation or sanitary measure. The essential purpose of these rules is thus not to promote domestic policy goals but merely to ensure that market access rights are not undermined through technical regulations and sanitary measures that are in fact disguised restrictions on trade.
Effective Dispute Settlement for Intellectual Property
The principal IPRs achievement of NAFTA and TRIPS is simply that, for the first time, these treaties subject international IPRs standards to truly effective dispute settlement, i.e. compulsory third-party arbitration, including a final ruling requiring treaty compliance and a procedure to enforce decisions. Dealing with State-to-State dispute settlement, NAFTA Chapter 20, including Annex 2004: Nullification and Impairment, applies to Chapter 17: Intellectual Property. As an "investment," IPRs are also protected as "intangible property" under Chapter 11: Investment, which -- in addition to the possibility of State-to-State dispute settlement under Chapter 20 -- offers the IPRs owner as investor the possibility of bringing the host State to binding international arbitration. Similarly, TRIPS, Article 64: Dispute Settlement, provides for consultations and settlement of TRIPS disputes under the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes, which in turn specifically applies to TRIPS.
Highlighted here must be one of the principal advances of the WTO over the old GATT. Namely, under the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes, a defendant WTO Member no longer has the ability to block the adoption of a WTO panel report:
One of the elements . . . that Canada pushed for was an improved method of settling trade disputes. The old method used by the WTO's predecessor, the GATT, often did not resolve the problems. Panel investigations dragged on for ages, and decisions often gathered dust while the parties in the conflict continued to argue. When a ruling went against a country, the country could block adoption of the panel decision by denying the needed consensus. Smaller countries were often left fuming when the United States used this tactic to delay unfavourable decisions indefinitely.
Intellectual Property at the International Court of Justice
The pre-existing jurisdiction of the International Court of Justice (ICJ) must also be examined to assess fairly what NAFTA and TRIPS have added to IPRs dispute settlement. The Statute of the International Court of Justice is an integral part of the United Nations Charter. An article allowing a Party to bring a dispute to the ICJ is found in each one of the Universal Copyright Convention; the Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations; and the current Acts of the Paris Convention for the Protection of Industrial Property and the Berne Convention for the Protection of Literary and Artistic Works.
On acceding to the 1967 Act of the Paris Convention and to the 1971 Act of the Berne Convention, a country has the option to declare that it does not consider itself subject to the ICJ's relevant jurisdiction. This Paris and Berne option to reject the ICJ's compulsory jurisdiction has been used only by some developing countries, of which thirty (including China) have opted out with respect to Paris and sixteen with respect to Berne. The possibility of compulsory third-party adjudication of IPRs disputes has, therefore, been available to almost all developed countries for copyright since 1948, for neighbouring rights since 1961, and for industrial property rights since 1967.
Despite the reference to the ICJ in key IPRs treaties, the Court has never been used to litigate an IPRs case for reasons which are not entirely clear. The ICJ's contentious jurisdiction is available exclusively to States, which are the only entities permitted to be parties to cases before the Court. Therefore, the easy answer would be that the ICJ has not had an IP case simply because States have preferred not to use the Court for this purpose. States have historically been reluctant to embark on international adjudication. On the one hand, questions of vital national interest are seen as too important to be left to judges. On the other hand, many other issues are imagined to be "too trivial to be the subject matter of formal procedures of settlement." Is it possible that States have perceived IPRs to be in the "trivial" category?
Another explanation for the failure to use the ICJ points to the Paris Convention's very general provisions which are said to make a justiciable dispute unlikely. For example, the Paris Convention establishes some minimum requirements for domestic patent systems, but nowhere specifically requires each Party to provide a patent system in its domestic law. This lack of precision contrasts with NAFTA and TRIPS which explicitly require that patents be "available for any inventions, whether products or processes, in all fields of technology . . . ."
However, the Paris Convention's generality is not entirely shared by the Berne Convention which tends to have obligations that are more precise and demanding. For example, in Berne Union countries, authors are specifically to enjoy inter alia "the rights specially granted by this Convention." Subject to certain exceptions, the Berne Convention also requires a minimum copyright term lasting the author's lifetime plus fifty years. This contrasts significantly with the Paris Convention which does not set a minimum patent term. Whether or not Berne obligations are better adapted to judicial settlement, the ICJ has not been asked to settle a dispute under the Berne Convention. In this regard, could it be relevant that the United States -- the world's premier producer of copyright product -- did not accede to Berne until 1989?
Easier to dismiss is the suggestion that IPRs are subject matter too specialized for the ICJ. In many countries, the domestic system does not maintain special courts for IPRs disputes and the ordinary judges generally lack IPRs expertise. Furthermore, it is well-known that the ICJ has in several cases handled highly technical subject matter, e.g., the delimitation of maritime boundaries.
Specific Performance not available at the International Court of Justice?
The failure to use the ICJ for IPRs disputes probably can best be explained with reference to judicial remedies at trial. In other kinds of cases, the ICJ has fully demonstrated its capacity to conclude its examination of the merits with a declaratory judgment or a final award to compensate for wrongs and illegal acts. However, a State which is unhappy with another State's failure to comply with a multilateral IPRs treaty like the Berne Convention is generally seeking not damages, but rather would want an order that the delinquent State conduct itself in conformity with the treaty's specific requirements. For example, the goal would be to have the delinquent State withdraw or amend a domestic measure which is Berne inconsistent because of a failure to extend national treatment. Can the ICJ help in this regard? No, because outside the area of interim measures of protection, the ICJ does not order States to behave in a particular way. According to Shabtai Rosenne:
It seems that the most it can do is to state whether the actual or intended conduct of a State . . . is or is not in conformity with international law, including treaty-law, binding on the States before it. That is not a form of decision likely to afford adequate satisfaction to a State whose interests are injured by non-performance or malperformance of a treaty by its contracting partner or partners. For a plaintiff successfully suing for breach of contract, the common law provides inter alia the possibilities of an award for damages or, in some circumstances, "specific performance," i.e. a court order that the defendant perform or complete the contractual obligations. To remedy the consequences of breach of treaty or another internationally wrongful act, specific performance is theoretically available under public international law in the form of an order for restitutio in integrum which seeks "as far as possible, to wipe out all the consequences of the illegal act and to re-establish the situation which would, in all probability, have existed if that act had not been committed." However, in international practice, restitutio in integrum is seldom applied and pecuniary reparation (damages) is ordered instead.
Describing the "essential weakness of the international legal process for the settlement of an international dispute," Shabtai Rosenne observes:
The ICJ is unable to deal with a treaty obligation in all its aspects, and to give judgment for "specific performance" (to use a common law term). . . . The International Court is thus constitutionally incapable of laying down positively how a treaty is to be performed.This revealing comment is essential for understanding Claude Masouye's otherwise obscure remark about the possibility of ICJ dispute settlement under the Rome Convention: "Judgments of the Court never condemn either party; they simply pronounce on the law, leaving the States to make of the judgment what they will."
Although the ICJ is unable to offer specific performance, GATT was a "worldwide code of conduct" with effectiveness largely due to the availability of the complaint for violation of a GATT obligation. This highlights one of the principal contributions which GATT-style dispute settlement brings to IPRs in the WTO context. Ab initio, GATT dispute settlement was oriented to regulating the relevant behaviour of the Contracting Parties.
The primary function of violation complaints is to secure compliance with GATT obligations by a legally binding, collective ruling of the GATT Contracting Parties on the disputed meaning of the GATT rule concerned and on the legal obligation to bring the offending measure into conformity with GATT law.The non-conforming law or practice must be withdrawn, because a GATT-inconsistent domestic measure is prima facie presumed to nullify or impair the complainant's benefits under the agreement.
In the absence of a mutually agreed solution, the first objective of the dispute-settlement mechanism is usually to secure the withdrawal of the measures concerned if these are found to be inconsistent with the provisions of any of the covered agreements.NAFTA, too, places a premium on regulating the conduct of the Parties. Wherever possible, resolution of a NAFTA dispute shall be non-implementation or removal of a non-conforming domestic measure.
Enforceability of International Court of Justice Decisions?
In addition to the absence of specific performance as a final judgment, effective enforcement remains a significant problem because the binding quality of an ICJ decision appears practically to depend on the concerned States' willingness to comply with the judgment.
Albania refused to pay reparations to Great Britain in Corfu Channel, Iran disregarded the Court's order to refrain from nationalizing a British corporation pending a final judgment of the Court or agreement between the parties in Anglo-Iranian Oil Co., Iceland refused to obey an order not to enforce a fifty-mile fishing zone until the Court ruled on suits brought by West Germany and the United Kingdom in Fisheries Jurisdiction, Iran rejected the Court's Order and Judgment that it release the American hostages in Diplomatic and Consular Staff.Furthermore, nothing has been paid pursuant to a fourteen-to-one decision holding the United States responsible to make reparation for all injury caused by certain military and paramilitary activities in and against Nicaragua.
Although of little practical importance, the ultimate remedy for noncompliance is provided by the United Nations Charter. According to Article 94(2): "If any Party to a case fails to perform the obligations incumbent upon it under a judgment rendered by the Court, the other Party may have recourse to the Security Council, which may, if it deems necessary, make recommendations or decide upon measures to be taken to give effect to the judgment." An attempt to get the Security Council to enforce an ICJ decision relating to IPRs is not likely. However, still worth noting is the veto available to China, France, Russia, the UK and the USA as Security Council permanent members. For example, a Soviet veto would probably have stopped any Security Council enforcement of the ICJ's 1980 judgment in United States Diplomatic and Consular Staff in Tehran. Is availability of a Security Council veto pertinent to evaluating the ultimate utility of any recourse to the ICJ for the persistent difficulties between the United States and China over copyright?
Because securing compliance with ICJ decisions has been a problem, there is potentially great significance in the NAFTA and TRIPS application to IPRs of dispute settlement, including the ability ultimately to enforce panel decisions via the suspension of equivalent NAFTA or WTO trade concessions or other benefits. The alternative to such institutionalized rule-based enforcement of judgments is to fall back on the unilateral measures (self-help) which would have been available in the absence of compulsory jurisdiction leading to a binding award by a judicial tribunal.
Well-known is the absence from customary international law of a compulsory judicial or arbitral procedure for the settlement of treaty disputes. Accordingly, for the enforcement of judgments, the rule is the same as that for treaty disputes in general, i.e. the aggrieved Party is entitled to terminate or suspend the operation of all or part of a treaty as a consequence of the other Party's breach. This classic position is articulated in the 1969 Vienna Convention on the Law of Treaties, where Article 60(1) says: "A material breach of a bilateral treaty by one of the Parties entitles the other to invoke the breach as a ground for terminating the treaty or suspending its operation in whole or in part." How this principle operates with respect to material breach of a multilateral treaty is set out in Article 60(2).
Retaliating Against Intellectual Property?
This customary law principle has not had much practical effect with regard to IPRs because the subject matter does not easily lend itself to retaliation. In conformity with the international IPRs regime, domestic legislation generally accords IPRs on the basis of national treatment. Although domestic provisions to enforce U.N. sanctions or WTO decisions may be broad enough to embrace IPRs statutes, the complexity of temporarily suspending domestic IPRs protection is formidable.
For example, domestic regimes follow the Paris Convention for the Protection of Industrial Property in according patent applicants priority for a twelve-month period following first filing in another Paris Party. If filing within twelve months is precluded by the application of temporary domestic sanctions, the foreign inventor might thereafter be unable to obtain a patent, e.g., because of his invention's disclosure at home or abroad.
The suspension or revocation of existing IPRs might be tantamount to expropriation under any applicable investment-protection agreement. If so, would foreign IPRs owners be compensated for lost royalties? Temporary suspension of enforcement rights could allow unauthorized third parties to start exploiting the unprotected subject matter. Would such third-party use be grandfathered on expiry of the relevant sanctions or would the domestic regime indemnify for the economic harm arising from the revival of the intellectual property owner's rights?
The many difficulties that would be caused by imposing sanctions with respect to IPRs can be further explored by the analogy of the fate of IPRs in wartime. For example, IPRs may lapse because wartime payments of industrial-design, trademark, and patent fees by an enemy alien may be deemed to be unlawful intercourse. Under the 1939 U.K. Trading with the Enemy Act, an enemy-owned trademark could properly be vested in the Custodian of Enemy Property with full authority to assign.
During the First World War, a similar provision in United States law caused the German-owned "Bayer" trademark for aspirin to be assigned to an unrelated United States company. For international trade, this posed a problem which lasted until 1994 when Bayer AG purchased the company owning the United States trademark rights lost in 1917. At the end of the Second World War, Belgium confiscated the German-owned "Hag" coffee trademark which was assigned to an unrelated Belgian company. The latter's ability to use trademark rights to block coffee imports from Germany's Hag AG was affirmed by the European Court of Justice in 1990.
Under GATT 1947, Contracting Parties gradually became accustomed to evolving dispute-settlement procedures directed towards preserving the balance of benefits a Party might reasonably have expected at the time of the agreement's negotiation. Pursuant to a panel recommendation, the GATT Council might require a Contracting Party to withdraw an inconsistent trade measure or provide compensation with respect to a measure which, although GATT consistent, was nonetheless found to nullify or impair a benefit anticipated when GATT was negotiated. With respect to such a non-violation complaint, and ultimately as the final recourse to a finding of a violation, the GATT Council could authorize the successful complainant to suspend trade concessions enjoyed by the defendant. And, since trade concessions can be quantified, there was no reason why failure to perform in one trade area could not be compensated by the suspension of benefits in another. This is the key concept of cross-retaliation which has proven essential for applying GATT-style dispute settlement to IPRs.
Both NAFTA and TRIPS envisage the possibility of cross-retaliation against a Party failing to meet its IP obligations. According to NAFTA, a complaining Party should first seek to suspend benefits in the same sector as that affected by the offending measure. However, if the complaining Party considers that it is not practicable or effective to suspend benefits in the same sector, it may suspend benefits in other sectors. Subject to the authorization of the WTO Dispute Settlement Body, cross-retaliation is also available under the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes.
The Draft WIPO Dispute Settlement Treaty
The significance of cross-retaliation can be illustrated by the World Intellectual Property Organization's current efforts towards a Draft Treaty on the Settlement of Disputes Between States in the Field of Intellectual Property. This process is running out of steam for several reasons. WIPO could provide much of the panel machinery already familiar from dispute settlement under GATT 1947 and the (now suspended) Canada-United States Free Trade Agreement (FTA) which preceded NAFTA. However, as a stand-alone treaty without any links to international trade, a WIPO dispute-settlement instrument could not be armed with the cross-retaliation teeth needed for a truly effective procedure.
As revealed in the Uruguay Round negotiations, some countries would probably not want a possible WIPO dispute-settlement treaty to have such cross-retaliation teeth. Sovereign States are seldom willing to accept binding dispute settlement. This suggests that, if the proposed WIPO treaty could be made an instrument of truly effective dispute settlement, that fact alone would probably ensure that relatively few States would be prepared to become Party to the instrument.
Fear that conflicting interpretations would emanate from WTO and WIPO panels is another factor generating opposition to a possible WIPO dispute-settlement treaty. TRIPS incorporates, and the WTO renders amenable to WTO dispute settlement, the main provisions of WIPO's two key treaties, i.e., the 1967 Stockholm Act of the Paris Convention for the Protection of Industrial Property and the 1971 Paris Act of the Berne Convention for the Protection of Literary and Artistic Works. For this reason, there are concerns that WIPO dispute-settlement panels might produce legal interpretations of the Paris and Berne Conventions differing from and even conflicting with interpretations emerging from WTO panels. This possibility causes some developed countries to resist a possible WIPO dispute-settlement treaty. They wish to see TRIPS interpreted by the WTO and not by WIPO. For example, the United States has clearly stated that it will not become Party to any WIPO dispute-settlement treaty.
As net importers of technology and copyright product, some developing countries might welcome the notion of a WIPO dispute-settlement treaty as an anodyne alternative to binding settlement of TRIPS disputes by the WTO. They perhaps hope to see a constellation in which the 1994 WTO Understanding on Rules and Procedures Governing the Settlement of Disputes and a subsequent WIPO dispute-settlement instrument could be characterized as successive treaties relating to the same subject matter for the same Parties. In an appropriate case, this chronology would allow the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes to be overridden by any WIPO dispute settlement treaty as lex posterior.
To preserve the integrity of their WTO rights, some developed countries are thus wary of the possible WIPO dispute settlement treaty. Furthermore, developed countries are unhappy because the present treaty draft denies the complainant the right to choice of forum and fails to incorporate the possibility of pleading litis pendence and res judicata as objections to a WIPO panel's jurisdiction.
Trade Offs with other Sectors
Naturally very different were the prospects for bringing effective dispute settlement to IPRs within the framework of NAFTA and the Uruguay Round. Both NAFTA and the Round presented the prospect of a very big and diverse package, including a degree of guaranteed access to the world's most significant markets. Such guaranteed access was a key consideration for developing countries seeking to attract foreign investment and to increase their exports to rich markets in developed countries. However, the developing countries were generally cool to IPRs which were seen to favour some developed countries as net exporters of technology and copyright product.
Without the tempting carrot of market access, there would have been very little to induce developing countries to accept both the substantive TRIPS standards and the accompanying WTO dispute-settlement procedures. In other words, going to Marrakesh to sign the Uruguay Round Final Act, a great many States knew they were swallowing the bitter pill of IPRs with effective dispute settlement in return for access to a range of benefits in trade in goods. NAFTA and TRIPS consequently provide Parties with a very strong incentive to fulfill their IPRs obligations, since they know that failure to perform may lead to suspension of valuable trade concessions because of an adverse panel finding.
New International Case Law for Intellectual Property
Enough has been said about dispute settlement to make it clear that TRIPS and the WTO Dispute Settlement Body will in many respects likely be the most important features of the new international IPRs system. For developed countries, almost all TRIPS provisions will be applicable and subject to WTO dispute settlement as of January 1, 1996. For developing countries, almost all TRIPS provisions will be applicable and subject to dispute settlement as of January 1, 2000. Accordingly, the WTO Dispute Settlement Body will probably soon be producing panel decisions which will be the international IPRs regime's first experience in the development of something approximating "case law." As part of public international law, GATT/WTO law does not incorporate the formal common law doctrine of stare decisis which makes judicial precedents binding. However, the way in which WTO panels will interpret TRIPS will probably fill in the outlines of the TRIPS obligations of WTO Members.
For the interpretation of the Paris and Berne Conventions, authoritative answers will thus emerge to some difficult questions which have been long debated in the academic literature. There will also be WTO jurisprudence about some new IPRs questions which have yet to be imagined. Thus, a future edition of the GATT Analytical Index is bound to be an essential tool for internationally establishing the meaning and scope of IPRs.
NAFTA too has an important part to play in developing the international IPRs regime. With respect to IPRs, NAFTA generally tracks the language of the 1991 Dunkel draft of the TRIPS negotiating text. Therefore, TRIPS and NAFTA Chapter 17: Intellectual Property are textually close enough to ensure that, in many cases, interpretations of the meaning of the one would be directly relevant to the elucidation of the other. IPRs-related findings of eventual NAFTA panels may, therefore, powerfully influence TRIPS interpretation and vice versa.
13. Setting the mandate for the Uruguay Round, the 1986 Punta del Este Ministerial Declaration affirmed as a general principle that "the launching, the conduct and the implementation of the outcome of the negotiations shall be treated as parts of a single undertaking." See John Croome, Reshaping the World Trading System: A History of the Uruguay Round 34, 320-23, 383 (1995). At Marrakesh, it was agreed that there would be acceptance of all the various WTO agreements and understandings as a whole. Accordingly, The Agreement Establishing the World Trade Organization, Article XIV(1), stipulates that a Contracting Party's "acceptance shall apply to this Agreement and the Multilateral Trade Agreements annexed hereto." The appended "List of Annexes" specifically includes "Annex 1C: Agreement on Trade-Related Aspects of Intellectual Property Rights." Correspondingly, Article XV(1) says any "withdrawal shall apply to this Agreement and the Multilateral Trade Agreements."
14. TRIPS, art. 65(5).
15. TRIPS, art. 65(1).
16. TRIPS, arts. 65(2), 66(1). Notwithstanding transition periods, any WTO Member without patent protection for pharmaceutical and agricultural chemical products is required from January 1, 1995 to make available means by which such patent applications can be filed. See TRIPS, art. 70(8).
17. TRIPS, art. 65(2).
18. TRIPS, art. 65(4).
19. TRIPS, art. 66(1).
20. Punta del Este Ministerial Declaration, reprinted by Croome, supra note 13, at 389.
21. Id., at 120-21, 130-38.
22. Frieder Roessler, "Diverging Domestic Policies and Multilateral Trade Integration," (Mar. 22, 1995), unpublished conference paper, at 23-24.
23. Investor/State dispute settlement under NAFTA's Investment Chapter is without prejudice to Canada, Mexico, and the United States' rights and obligations with respect to State-to-State dispute settlement under Chapter 20: Institutional Arrangements and Dispute Settlement Procedures. See NAFTA, art. 1115.
24. NAFTA, ch. 11: Investment, sec. B-Settlement of Disputes Between a Party and an Investor of Another Party, arts. 1115-1138.
25. See WTO Understanding on Rules and Procedures Governing the Settlement of Disputes, art. 1(1) and Appendix 1(B), which specifically refers to Annex 1C: TRIPS as one of the covered "multilateral trade agreements."
26. WTO Understanding on Rules and Procedures Governing the Settlement of Disputes, art. 17(14). With respect to dispute settlement under the old GATT, see Jackson, supra note 9, at 99. "Of the panel reports forwarded to the Contracting Parties, most were 'adopted.' Some others were merely 'noted,' or otherwise were not explicitly approved (although none were explicitly rejected), and several are still pending. The procedure of 'adoption' by the Contracting Parties is one of the most troublesome parts of the current procedure, since the losing contracting party can generally block acceptance by refusing to join in a 'consensus' decision to accept."
27. Madelaine Drohan, "Canada Can Take Heart From Earlier WTO Ruling," Globe & Mail, (Toronto), Mar. 13, 1996, at A8.
28. Universal Copyright Convention, 1952, 1971, art. 15; Rome Convention, art. 30; Paris Convention, art. 28; Berne Convention, art. 33. In this regard, see Claude Masouye, WIPO Guide to the Rome Convention and to the Phonograms Convention pt. 1, 82 (1981); G.H.C. Bodenhausen, BIRPI Guide to the Application of the Paris Convention for the Protection of Industrial Property as Revised at Stockholm in 1967 216-17 (1968); Claude Masouye, WIPO Guide to the Berne Convention for the Protection of Literary and Artistic Works: Paris Act, 1971 137-38 (1971); Stewart, supra note 8, at 139-40.
29. Paris Convention, art. 28(2); Berne Convention, art. 33(2). There is no opting out from the ICJ's compulsory jurisdiction under Rome Convention, art. 30.
30. See WIPO Doc., supra note 2, at 4-9.
31. 1948 Brussels Act of the Berne Convention. With respect to copyright, Lebanon and New Zealand are not subject to the ICJ's jurisdiction under the Berne Convention because all their obligations remain at the level of the 1928 Rome Act of the Berne Convention which lacks a clause offering a Party the possibility of bringing a dispute to the ICJ's predecessor, the Permanent Court of International Justice. See WIPO Doc., supra note 2, at 7-9.
32. 1967 Stockholm Act of the Paris Convention. With respect to industrial property rights, the Dominican Republic, Iran, Nigeria, and Syria are not subject to the ICJ's jurisdiction because all their obligations remain at the level of an earlier Act which lacks a clause offering a Party the possibility of bringing a dispute to the Permanent Court of International Justice. See WIPO Doc., supra note 2, at 4-6.
33. Statute of the International Court of Justice, art. 34(1).
34. D.W. Greig, International Law 521 (2d ed. 1976).
35. See G.H.C. Bodenhausen, supra note 28, at 25-26.
36. NAFTA, art. 1709(1) and TRIPS, art. 27(1).
37. Berne Convention, art. 5(1), which should be compared with the much vaguer language in Paris Convention, art. 2(1).
38. Berne Convention, art. 7.
39. NAFTA, art. 1709(12), specifically requires each Party to provide a patent term "of at least 20 years from the date of filing or 17 years from the date of grant." TRIPS, art. 33, requires no less than twenty years from the filing date.
40. Delimitation of the Maritime Boundary in the Gulf of Maine Area, 1984 I.C.J., at 246-390.
41. On declaratory judgments, see Christine D. Gray, Judicial Remedies in International Law 96-111 (1987).
42 Id., at 77-95. For States accepting the ICJ's compulsory jurisdiction, the Statute of the International Court of Justice, art. 36(2)(d), specifically recognizes the ICJ's jurisdiction over all legal disputes concerning "the nature or extent of the reparation to be made for the breach of an international obligation." Breach of treaty is a direct wrong which, in an appropriate case, is compensable via an ICJ award of damages. See D.W. Greig, supra note 34, at 596-98. See also Ian Brownlie, Principles of Public International Law 457-65 (4th ed. 1990).
43. On the possibility of an international award for specific performance of a treaty obligation, see Peru's unsuccessful arguments in the 1925 Tacna-Arica Arbitration discussed in Sir Hersch Lauterpacht, Private Law Sources and Analogies of International Law 290-93 (1927). For a current, longer, and more negative assessment of specific performance's role, see Gray, supra note 41.
44. Statute of the International Court of Justice, art. 41(1), gives the ICJ the power to indicate provisional measures required to preserve the rights of either party to the dispute. With respect to specific performance as an interim measure of protection, see Gray, supra note 41, at 69-77.
45. With the possible exception of the 1980 Iranian Hostages case, the ICJ has never made a final judgment ordering a State to conduct itself in a specific manner. See id. at 64-66. However, Gray concedes that a declaration can be cast in a form that renders it substantially equivalent to a mandatory order. Id. at 67. See Brownlie, supra note 42, at 460: "In the  case concerning United States Diplomatic and Consular Staff in Tehran the judgment of the International Court included several declaratory prescriptions involving the termination of the unlawful detention of the persons concerned. In the  Nicaragua case the judgment at the Merits phase contained an injunctive declaration 'that the United States is under a duty immediately to cease and refrain from all such acts as may constitute breaches of the foregoing legal obligations'."
46. Shabtai Rosenne, Developments in the Law of Treaties 1945-1986 62 (1989).
47. P.S. Atiyah, An Introduction to the Law of Contract 274 (2d ed. (1971)): "As a general principle a person who complains of a breach of contract cannot compel the actual performance of the contract by the other party, but must rest content with compensation in terms of money. In certain circumstances, however, mere damages would be an inadequate remedy, and in these cases the Court may grant a decree of specific performance or injunction, ordering the defendant to do, or abstain from doing, the very thing he agreed upon. The main sanction behind these decrees is the threat of imprisonment for contempt of Court . . . ."
48. Although domestic systems may delineate more clearly between contract law and tort law, public international law regards the consequences of breach of treaty to be primarily a question of State responsibility which is analogous to tort law. However, the disappointed Party has the option of a treaty law remedy in Vienna Convention on the Law of Treaties, art. 60, which deals with "termination or suspension of the operation of a treaty as a consequence of its breach." On breach of treaty in the law of State responsibility, see Shabtai Rosenne, Breach of Treaty 45-84 (1985).
49. Chorzow Factory (Indemnity) Case (1927) P.C.I.J., Ser. A, No. 17, at 47.
50. See Brownlie supra note 42, at 462: "Restitution in kind, specific restitution, is exceptional, and the vast majority of claims conventions and compromis (agreements to submit to arbitration) provide for the adjudication of pecuniary claims only. Writers, and from time to time, governments and tribunals assert a right to specific restitution, but, while it is safe to assume that this form of redress has a place in the law, it is difficult to state the conditions of its application with any certainty." See also Sabine D. Thomsen, "Restitution," in 10 Encyclopedia of Public International Law 375-78, at 377 (1987): "Until recently, a consensus prevailed that restitutio in integrum is the normal remedy in the case of an internationally wrongful act, notwithstanding the fact that in reality claims for damages considerably outnumber those for restitution." Encyclopaedic Dictionary of International Law 341 (Clive Parry et al. eds., 1986) [hereinafter Dictionary of International Law]: "Restitutio in integrum is the primary form of reparation, pecuniary reparation only applying where restitutio is not possible. However, apart from this theory of primacy, restitutio is not generally applied, injured individuals and their governments preferring pecuniary reparation." On the practical difficulties of restitutio in integrum as a remedy in international law, see Gray, supra note 41, at 14-16.
51. See Rosenne, supra note 46, at 61-62. For an exhaustive discussion of the uncertainties surrounding the availability of restitutio in integrum and specific performance under international law, see Gray, supra note 41, at 12-14, 16-17, 64-68, 95-96, 152-60, 193-200.
52. Rome Convention, art. 30. See also Masouye, supra note 28, at 30. Masouye makes a similar observation with respect to Berne Convention, art. 33. See WIPO Guide to the Berne Convention (1978), at 138.
53. Ernst-Ulrich Petersmann, "Violation-Complaints and Non-Violation Complaints in Public International Trade Law," 1991 Ger. Y.B. Int'l L., 227.
54. Id., at 220.
55. World Trade Organization. 2 GATT, Analytical Index: Guide to GATT Law and Practice 655 (6th ed.(1995)) [hereinafter 2 GATT Index]. See WTO Understanding on Rules and Procedures Governing the Settlement of Disputes, art. 3(8) [hereinafter WTO Understanding]: "In cases where there is an infringement of the obligations under a covered agreement [e.g., TRIPS], the action is considered prima facie to constitute a case of nullification or impairment. This means that there is normally a presumption that a breach of the rules has an adverse impact on other Members parties to that covered agreement, and in such cases, it shall be up to the Member against whom the complaint has been brought to rebut the charge."
56. See WTO Understanding, supra note 55, art. 3(7). According to art. 22(1): "Neither compensation nor the suspension of concessions or other obligations is preferred to full implementation of a recommendation to bring a measure into conformity with the covered agreements."
57. NAFTA, art. 2018(2).
58. See D.W. Greig, supra note 34, at 688-90.
59. See Gray, supra note 41, at 100.
60. Mark Weston Janis, "Somber Reflections on the Compulsory Jurisdiction of the International Court," 81 Am. J. Int'l L., 144-45, (1987).
61. Nicaragua v. United States of America 1986 I.C.J., 14-546, at 149.
62. U.N. Charter, art. 23(1), 27(3).
63. 1980 I.C.J., at 3. The Security Council was not asked to enforce the ICJ's judgment, perhaps because the Soviet Union had earlier vetoed a proposal by the United States to impose an economic boycott on Iran. See Janis, supra note 60, at 134-36.
64. On October 15, 1992, China became Party to the 1971 Paris Act of the Berne Convention to which the United States had adhered on March 1, 1989. Neither country used Berne, art. 33(2), to opt out of the ICJ's compulsory jurisdiction over disputes concerning the interpretation and application of the Berne Convention. A U.S.-China copyright case at the ICJ is, therefore, theoretically possible. However, China's veto might be used to block a Security Council attempt to enforce any ICJ judgment arising from a case brought by the United States because of China's alleged failure to perform obligations under the Berne Convention. With respect to China-U.S. IP relations, see Agreement Regarding Intellectual Property, 34 I.L.M. 881 (entered into force Feb. 26, 1995) and Memorandum of Understanding on the Protection of Intellectual Property, Jan. 17, 1992, 34 I. L. M. 676.
65. See D.W. Greig, supra note 34, at 688.
66. See Rosenne, supra note 48, at 117-25.
67. For a discussion of the injured Party's rights of unilateral abrogation and retaliatory suspension of performance, see McNair, supra note 9, at 553-73.
68. See Sir Ian Sinclair, The Vienna Convention on the Law of Treaties, 188-92 (2d ed. 1984).
69. The European Community might not have the authority to retaliate against IP because the European Court of Justice ruled (1994) that the Member States share competence with respect to IPRs. See Marco C.E.J. Bronckers, "WTO Implementation in the European Community: Antidumping, Safeguards and Intellectual Property," 29 J. World Trade 94-95 (1995).
70. Canada's United Nation's Act, sec. 2, gives the Governor-in-Council broad authority to "make such orders and regulations as appear to him to be necessary or expedient for enabling" the effective application of a U.N. Security Council measure under article 41 of the U.N. Charter.
71. Canada's World Trade Organization Agreement Implementation Act, sec. 13(1)(b), gives the Governor-in-Council the authority to modify or suspend, pursuant to a WTO decision authorizing the suspension of concessions, the application of any federal law with respect to a WTO Member. For suspending benefits of equivalent commercial effect under NAFTA, the parallel provision is sec. 21(1)(b) of the North American Free Trade Agreement Implementation Act. Because virtually all of Canada's IPRs statutes are federal, it would be constitutionally possible for the Canadian government and Parliament to implement retaliation in the IPRs area.
72. Paris Convention for the Protection of Industrial Property, art. 4.
73. However, a very experienced government lawyer from a developed country told the author that exactly this consideration would make preclusion of filing a very effective form of retaliation against a technology exporting State like the United States.
74. Arnold Duncan, Lord McNair, & Arthur D. Watts, The Legal Effects of War 293-96, 333 (1966).
75. Brian Milner, "Bayer Plans to Be Big Headache for Drug Firms," Globe & Mail,(Toronto), Jan. 13, 1995, at B1.
76. S.A. CNL-Sucal NV v. Hag GF AG (C-10/89)  C.M.L.R. 571-610.
77. See 2 GATT Index, supra note 55, at 658.
78. See Petersmann, supra note 53, at 175-229.
79. See Croome, supra note 13, at 134-35, 254, 313, 319, 323.
80. NAFTA, art. 2019(2)(a).
81. NAFTA, art. 2019(2)(b).
82. WTO Understanding on Rules and Procedures Governing the Settlement of Disputes, art. 22: Compensation and the Suspension of Concessions. According to art. 22(3)(b), if the complaining Party "considers that it is not practicable or effective to suspend concessions or other obligations with respect to the same sector(s), it may seek to suspend concessions or other obligations under the same agreement". For art. 22(3)(b) purposes, each of the TRIPS IP categories is deemed to be a sector. Art. 22(3)(c) says that the complaining Party may seek to suspend concessions or other obligations under another WTO agreement "if that party considers that it is not practicable or effective to suspend concessions or other obligations with respect to other sectors under the same agreement, and that the circumstances are serious enough."
83. The Draft Treaty is available in WIPO Document SD/CE/VII/2 (Feb. 10, 1995) Committee of Experts on the Settlement of Intellectual Property Disputes Between States, Seventh Session, Geneva, May 29 to June 2, 1995.
84. Canada and the United States exchanged two sets of letters (January 19 and December 30, 1993) explicitly constituting a bilateral understanding that the FTA be suspended for such time as the two countries are NAFTA Parties. This means that the FTA would resume if either country leaves NAFTA. See Jon R. Johnson, The North American Free Trade Agreement: A Comprehensive Guide 16 (1994).
85. For the TRIPS obligation to comply with the Paris Convention, arts. 1-12 and 19, see TRIPS, art. 2(1). TRIPS, art. 9(1), incorporates an obligation to comply with the Berne Convention, arts. 1-21, excluding art. 6 bis on moral rights.
86. The 1969 Vienna Convention on the Law of Treaties, art. 30(4)(a), stipulates that, as between States parties to both treaties, the earlier treaty applies only to the extent that its provisions are compatible with those of the later treaty. For a discussion of the problem of successive treaties, see Sinclair, supra note 68, at 93-98. "Conflict with specific obligations created by other treaties." See also McNair, supra note 9, at 218-24.
87. Litis pendence is a preliminary objection to a tribunal's beginning to hear a given case on the grounds that the same case is already being heard by another competent tribunal. See "Litispendance" in Union Academique Internationale, Dictionnaire de la terminologie du droit international 377-78 (1959). For further discussion of litis pendence, see also Dan Ciobanu, Preliminary Objections Related to the Jurisdiction of the United Nations Political Organs 102-34 (1975).
88. Id. at 135-49. See also Dictionary of International Law, supra note 50, at 339: "There is invariably in municipal legal systems a doctrine to the effect that once a matter is judicially determined that matter may not be litigated again by the same parties or parties in the same interest. This doctrine, commonly called res judicata, applies equally to international arbitral tribunals and judicial decisions."
89. See Croome, supra note 13, at 120-21.
90. On the common law doctrine, see Sir Rupert Cross, Precedent in English Law (3d ed. 1977), and Precedent in Law, (Laurence Goldstein ed., 1987). With regard to precedent and public international law, see Michel Virally, The Sources of International Law, in Manual of Public International Law 116-74, at 151, (Max Sorensen ed., 1968): "In certain municipal systems of law and notably in the common law countries, as a result of the application of the rule of stare decisis, decisions are creative of general rules of law. This rule or principle has no place in international law." See Shabtai Rosenne, Practice and Methods of International Law 91-92 (1984).
91. Precedent or practice has played an important role in interpretation of the GATT. See Jackson, supra note 9, at 89, 93-94. See also Ernst-Ulrich Petersmann, supra note 53, at 221: "In interpreting GATT rules, GATT panel reports take into account previous dispute settlement rulings and agreed GATT practice, and thereby enhance the predictability and acceptability of GATT law."
92. For the sense in which decisions of international tribunals are authoritative, but not binding, see Sir Hersch Lauterpacht, The Development of International Law by the International Court 9-22 (1958); J. L. Brierly, The Law of Nations: An Introduction to the International Law of Peace 63-65 (Sir Humphrey Waldock ed., 6th ed. 1963); Clive Parry, The Sources and Evidences of International Law 91-94 (1965).
93. For example, Berne Convention, art. 18, subject to certain exceptions, requires protection for all Berne Union copyright works existing on the treaty's entry into force. This provision's meaning may soon be elucidated by a possible WTO panel about sound recordings. TRIPS, arts. 14(6) and 70(2), apply Berne Convention, Article 18, mutatis mutandis to the rights of record producers of WTO Members. Japan's failure to apply a fifty-year term of protection retrospectively to the existing rights of WTO Member record producers for recordings first fixed in WTO Member countries as far back as 1946, prompted the USA to request (Feb. 9, 1996) consultations pursuant to the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes, art. 4: Consultations; GATT 1994, art. XXII: Consultation; and TRIPS, art. 64: Dispute Settlement. See Bhushan Bahree, "U.S., European Union Turn to WTO To Make Japan Extend Music Protection," Wall Street J., Feb. 12, 1996, at A10; "US, EU Complain About Music Piracy in Japan," Feb. 9, 1996, Reuters News Service, Geneva.
94. See GATT Index, supra note 55.
95. MTN. TNC/W/FA (Dec. 20, 1991) GATT Secretariat UR-91-0185.
Post a Comment