INTRODUCTION I. Theories of International IP A.

Territoriality Every nation has the jurisdiction to enact laws that are valid and binding within its own territory (can make laws outside your territory too [see effects doctrine], but they will laugh at you). 1. Not expressly required as a legal standard in IP agreement B. Nationality Principle every nation has the jurisdiction to enact valid and binding laws with respect to its own nationals wherever in the world they may be located C. Effects Doctrine under some circumstances, a nation can enact valid and binding laws with respect to conduct outside of its territory that has a substantial effect within its territory(this doctrine is controversial, and is a last resort)

IP Rights Exemptions Arguments Developing Nations Developed Nations Original fault lies with developed nations Need ROI (colonization) Modernization has global/universal benefit Potential for theft/exploitation Morality of profits vs. people Discourage innovation/research (expensive) Undue burden (affordability) Why invest in low-tech country when global competition (businesses) demands high tech, high protection
II. Principle of Territoriality in a TRIPS world A. National IP Laws Territorial in Scope 1. Subafilms, LTD v. MGM-PATHE Communications CO (1994). a. F: Plaintiffs were the producers (JV between Subafilms and Hearst). In 1967 the producers agreed with UA that UA would distribute and finance the film. In 1980s UAs successor company, MGM/UA, over the producers objections, authorized its subsidiary, MGM/UA Home Video, to distribute the film on VHS in US. MGM/UA also told Warner that the film was cleared for international distribution. Warner, through its subsidiary Warner Home Video agreed with 3rd parties to distribute VHS internationally. i. : VHS distribution, both domestic and international, violated the copyright. ii. :1967 copyright agreement: right to distribute film (AND VHS), in US AND abroad b. Authorization of Extraterritorial Acts of Infringement (no Copyright Act violation) i. Peter Starr (A) Acts entirely outside the US: no violation (B) Illegal authorization (of international exhibitions) that takes place in US: violation ii. Court disagrees with Peter Starr (A) When a party authorizes an (infringing) activity, the authorizing party cannot be held liable as an infringer. Direct infringement is a prerequisite to 3rd party liability

(B) No liability for contributory infringement unless the authorized or otherwise encouraged activity itself could amount to infringement (C) H: Cant have secondary infringement without direct infringement; here, the direct infringement occurred outside the US (thus not illegal under US law -> copyright law does not extend to extraterritorial acts),so it doesnt count. c. Extend Copyright Act extraterritorially? (NO) i. Its up to Congress to make these exceptions. No good reason to extend the statute here; dont want to subvert foreign sovereignty. ii. Aramco/Massey presumption against territoriality (A) The presumption generally does not apply where the failure to extend the scope of the statute will result in adverse *domestic+ effect BUT (B) the decisive factor is that the presumption is particularly appropriate when it serves to protect against unintended clashes between our laws and those of other nations that could result in international discord iii. H: Aramco presumption must be applied (extraterritoriality denied) because it would in all likelihood disrupt the international regime for protecting IP that Congress described as essential to furthering the goal of protecting the works of American authors abroad d. Reasons against extraterritoriality i. Disrupt Congressional effort to secure a more stable international IP regime unless Congress has clearly expressed its intent ii. Contrary to spirit of Berne (A) Might offend other member nations by effectively displacing their law iii. Undermine Congressional objective of effective and harmonious copyright laws among nations iv. Undermine Congressional objectives in joining the Berne convention (A) Strengthening US credibility in trade negotiations with countries with piracy (B) Raising the likelihood that other nations will enter the convention e. HOLDING i. The mere authorization of acts of infringement that are not cognizable under US laws (because they occur outside the US) does not give rise to a claim for infringement under the US Act. In other words, if I tell someone its ok to violate US law outside the US, the US owner cannot sue me (roughly). f. Note: if there had been an actual infringement in the US first, say by copying and then e-mailing to France, the court can reach out and grab any profit made in France. There is no damages firewall. B. Territoriality and Exhaustion of IP Rights 1. Exhaustion/ First sale doctrine a. Relates to termination of distributional and importation rights over a lawfully sold item that is protected by IP b. Exhaustion applies to the particular material objects sold by the IP owner, not to the IP owners general exclusive rights of IP

c. Rationale i. IP owner has reaped the benefit of the economic exploitation of the particular product from the first sale of the item and allowing the IP owner to control further sales of the same item would be anticompetitive d. Three types (some countries may have different approaches) i. National exhaustion (A) Only domestic first sales give rise to exhaustion ii. Regional exhaustion (A) All authorized first sales within a region give rise to exhaustion iii. International exhaustion (A) All authorized first sales anywhere give rise to exhaustion e. TRIPS i. Art 6: Nothing in this Agreement shall be used to address the issue of exhaustion of IP rights f. Question to ask i. Did the sale of goods in the foreign country, Country B, exhaust Xs distributional rights over those goods in Country A g. Factors to consider i. Place of first sale (primary) ii. Affiliated corporate entities? iii. Under common control? iv. Nature of IP right (patent, trademark, copyright?) v. Existence of K/license that limits subsequent sales? (A) May not be enforceable h. Avoiding international exhaustion for TM if national exhaustion for copyright i. Manufacture overseas (Switz) using US copyright, distribute globally ii. Therefore, the sales in US would not be made by the copyright owner and without his authority -> first sale provides no defense C. IP Treaties and TRIPS 1. Paris convention a. Applies to patents, trademarks, and industrial property 2. Berne convention a. Applies to copyrights b. Does not cover neighboring or related rights 3. Both Paris and Berne a. Administered by WIPO b. Non-self-executing treaties c. Require national treatment d. Require certain minimum IP standards (Paris fewer than Berne) 4. TRIPS a. Expressly links IP to trade issues b. Requirement of WTO entry

Art 9 - Incorporates Arts. 1-21 of Berne Art 2 incorporates Arts. 1-12, 19 of Paris Covers neighboring rights Art. 14 Enforcement (primary achievement) i. Subject to Dispute Settlement Body (WTO) ii. Penalty of trade sanctions under WTO g. First treaty to establish minimal substantive standards for i. Copyrights ii. Trademarks iii. GIs iv. Industrial designs v. Patents vi. Integrated circuit designs vii. Trade secrets h. Also requires national treatment Art 3(1) 5. Two types of treaties a. Self-executing i. Treaty itself establishes federal law in US ii. Court is applying international law in the treaty that has been adopted as federal law b. Non self-executing i. Court is applying federal statutory law (implementing legislation) c. Determination i. Examine intent of states that are parties to the treaty (A) See if the language of the treaty indicates whether it is aimed at (1) The courts (whenever it operates of itself) OR (2) Congress (treaty terms import a contract to be executed) d. Treaty vs. congressional-executive agreement i. Treaty: approved by 2/3 of Senate ii. C-E Agreement: majority of Congress (A) US considers TRIPS as C-E Agreement III. National treatment A. Found in 1. TRIPS (not self-executing; CEA) a. Art 3(1) i. Each member shall accord to the nationals of other Members treatment no less favorable than that it accords to its own nationals with regard to the protection of intellectual property. 2. Berne (Art. 5,6) 3. WIPO (Art. 3, Incorp. Berne 2-6) 4. Rome (Art. 2/4) 5. Paris (Art. 2)

c. d. e. f.

B. Characteristics 1. Applies without condition of reciprocity 2. Sole inquiry a. Whether Country B accords foreign nationals at least the same level of protection that it accords to its own nationals 3. Does not require national courts to apply or interpret foreign law C. Phil Collins 1. Facts a. Marketing in Germany of a CD containing the recording, made without singers consent, of a concert given in US. b. German law allows German nationals to prohibit illegal copying irrespective of the place of performance c. BUT nationals cannot use that provision if the performance was given outside Germany. 2. German law would protect Germans in this situation. So, the law doesnt treat non-nationals as well as nationals. Neither the disparities between the national laws relating to the protection of copyright and related rights nor the fact that not all Member States have yet acceded to the Rome convention can justify a breach of the non-discrimination principle. H: German law violates Article 7. 3. Note: German court doesnt have to do what ECJ says; if they dont, Phil must go to EU and ask them to get Germany to change their laws. 4. Note: Rome convention wouldnt work for Phil because (1) US isnt a member, and (2) Rome has no enforcement mechanism. 5. Note: If Collins was American, hed lose this case because he wouldnt be a EU national. But TRIPS would work D. Problem 1-4 1. No violations, the treatment is not no less favorable (in fact, more favorable to foreigners) IV. Most Favored Nation Principle A. TRIPS - MFN status to all members, automatic grant of benefits gained 1. Art. 4 a. With regard to the protection of intellectual property, any advantage, favor, privilege or immunity granted by a Member to the nationals of any other country shall be accorded immediately and unconditionally to the nationals of all other Members. b. Exceptions i. Art 4(a) international agreements on judicial assistance and law enforcement of a general nature and not particularly confined to the protection of IP ii. Art 4(b) items expressly not subject to national treatment under Berne and Rome iii. Art 4(c) rights of performers, producers, and broadcasters not specifically provided under TRIPS (Art. 14) (A) Traditionally accorded lower esteem to these rights iv. Art 4(d) - Obligations in prior international IP agreements that were in force before WTO, provided that such agreements are notified to the Council for Trade-Related

Aspects of IP and do not constitute an arbitrary or unjustifiable discrimination against nationals of other Members B. US Section 211 Omnibus Appropriations Act of 1998 1. 211 US cant enforce a trademark owned by a designated national or successor-ininterest (read: Cuba) unless obtain permission of the original owner. 2. Thus, non-designated nationals do not have get permission. This distinction is a violation of TRIPs. Yet, US has done nothing in response. V. Choice of Law A. May use a strict territorial approach (applying the law of the protecting country to all issues raised for the IP claim recognized by that countrys IP law) B. Itar-Tass Russian News Agency v. Russian Kurier 1. F: a group of Russian newspapers sued a Russian newspaper in NYC, who admitted to copying the Russian newspapers. 2. I: should the court analyze these facts under Russian law or US law? 3. R: in resolving a conflicts of law issue, the law that governs depends on where the acts took place. Berne is not self-executing, so the court first looks to the Berne Implementation Act. But, the answer isnt there, so they go to Restatement 2d Conflict of laws. 4. A/C: Russian law determines ownership (created by Russian nationals and first published in Russia), and US determines whether there was infringement in the US (US is place of tort and is US corp.). The newspapers dont own a in the articles b/c Russia doesnt have a work made for hire law for newspapers. But TASS is the state owned press organization, and therefore they get work made for hire protection, and so defendant must stop infringing, and may be liable for damages. 5. Note: other scholars and jurisdictions disagree with this approach because it appears to violate national treatment. (Russian national treated differently by applying Russian ownership law. If determined under US ownership law, ownership would have existed)

COPYRIGHT I. Introduction A. Definition 1. Bundle of exclusive rights granted to authors, allowing them to control and prevent different uses of their works by others 2. Works fixed in a tangible medium of expression, with some modicum of creativity B. Rights of authors 1. Two traditions a. Copyright (US view) i. Utilitarian approach ii. Authors rights (A) Copyrights granted to serve a larger end for the public good

(B) Providing financial reward to authors through copyrights is secondary to the ultimate goal of creating incentives for the production of new works for the public iii. Rights of performers (A) Same general rubric of copyright (although sound recording may receive more modest protection) (B) Still must be fixed under US copyright law b. Authors Right i. Natural rights theory approach ii. Authors rights (A) Authors are entitled to their creation as a matter of natural right (B) Some countries recognize moral rights of authors inherent rights (1) Moral right of integrity a. Right to prevent others from changing their works in way that would prejudice the authors honor or reputation (2) Moral right of attribution a. Right to require attribution for his or her works (3) IN some countries these moral rights are perpetual and inalienable iii. Rights of performers (A) Considered neighboring or related rights (1) True authors: flesh-and-blood creators who imbue their personality in their creations (2) Performers do not satisfy the true authors standard (3) Do not deserve the same recognition/merit as authors iv. US rejects this view (A) Prevents alienability (B) Restricts freedom to modify c. TRIPS is consistent with both theories i. Countries are not forced into either ii. Doesnt take the position whether performers rights are to be treated as copyrights or neighboring rights C. International Agreements: TRIPS, BERNE, ROME 1. TRIPS a. Incorporates Berne convention b. Like Berne (by incorporation) focuses on foreign works c. Covers rights in sound recordings and broadcasts (neighboring rights) Art 14 2. Berne a. Art. 1-21 b. Not concerned with domestic works, only works that have a foreign country of origin c. Does not cover neighboring rights in sound recordings and broadcasts 3. Rome a. Applies to

i. performers, ii. producers of phonograms (sound recordings) iii. broadcast organizations 4. Future & WIPO a. WIPO Copyright Treaty i. Art. 11 - provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by authors in connection with the exercise of their rights under this Treaty or the Berne convention and that restrict acts, in respect of their works, which are not authorized by the authors concerned or permitted by law b. WIPO Performances and Phonograms Treaty i. Incorporates Romes national treatment standard ii. More expansive minimum standards for neighboring rights than Rome II. Foreign Nationals Acquiring Copyrights and Neighboring rights A. Points of attachment and national treatment for copyright 1. BERNE Art. 3 (incorporated in to Art. 9 TRIPS, provides main POA) a. (1) The protection of this Convention shall apply to: i. (a) authors who are nationals (1) Nationality of the author matters, work automatically protected in member states (2) Doesnt matter if the work was published or where it was created ii. (b) authors who are not nationals (1) non-national, non-habitual residents of member states are only protected if work is published in a member country or simultaneously in a member country (2) Backdoor to Berne b. (2) habitual residence (rare scenario), i. habitual resident treated as if a national of that country (no interp. as to def. of habitual resident) (A) Assimilated to nationals of that country c. (3) published works i. Publication requires (A) consent of the author(s) (B) availability has been such as to satisfy the reasonable requirements of the public (1) Having regard to the nature of the work ii. Whatever may be the means of manufacturing of the copies iii. Somebody downloading and printing a copy: (A) publication (B) But whats the country of origin? And is just the upload itself a publication? iv. Exceptions: The performance of a dramatic, dramatico-musical, cinematographic or musical work, the public recitation of a literary work, the communication by wire or

the broadcasting of literary or artistic works, the exhibition of a work of art and the construction of a work of architecture shall not constitute publication. d. (4) published simultaneously i. Has been published in two or more countries within 30 days of registration e. Problem 2-2 i. Yes, nationality ii. Yes, publication iii. Yes, habitual residence iv. Yes, nationality 2. BERNE Art. 4 (provides additional POA) a. Applies (even if no Art. 3 POA) i. (a) authors of cinematographic works (1) protected if headquarters or habitual residence in one of the countries of the Union ii. (b) works of architecture (A) protected if located in a member country (or incorporated in a structure located in member country) 3. BERNE Art. 5 (national treatment + COO) a. Art. 5(1) National treatment i. Authors shall enjoy, in respect of the works for which they are protected under this Convention, in countries of the Union other than the country of origin, the rights to which their respective laws do now or may hereafter grant to their nationals, as well as the rights specially granted by this Convention ii. Once a POA exists, automatically receive copyright under the domestic copyright law of every other country under Berne iii. national treatment + minimum standards provided by the convention may treat own nationals worse than foreigners b. Art. 5(2) (Independent treatment + abolishes formalities) i. The enjoyment and exercise of rights [under the Berne convention] shall not be subject to any formality; such enjoyment and exercise shall be independent of the existence of protection in the country of origin of the work. 4. Berne Art. 6 (restrictions) a. Allows Union countries to penalize a non-Union country that fails to protect in an adequate manner the works of authors who are nationals of the countries of the Union: b. 6(1) i. Allowed to restrict the protection given to works of authors who are, at the date of first publication thereof, nationals of the non-Berne country provided that a notice of such restriction is filed with WIPO Director General B. Berne Prohibition on Formalities (only COO can impose) 1. Berne Art. 5 a. Prohibition

(2) The enjoyment and exercise of these rights [under the Berne convention] shall not be subject to any formality b. these rights applies to i. (1) in respect of the works for which they are protected under this Convention, in countries of the Union other than the country of origin c. (4) Country Of Origin shall be considered to be: COO BUT (a)Published in Union country That country (a)Published simultaneously country whose legislation in Union countries grants shortest protection (b)Published simultaneously outside Union and inside Union (c)Unpublished works Union country

i.

Country of the Union of which the author is a national

Cinematographic works: makers headquarters or habitual residence in Union country Architecture: erected in country of the Union (located for incorporated artistic works)

(c)First published in nonUnion (Without simultaneous publication in Union)

Country of the Union of which the author is a national

Cinematographic works: makers headquarters or habitual residence in Union country Architecture: erected in country of the Union (located for incorporated artistic works)

2. U.S. requires the registration of copyright for US works before a copyright infringement suit can be commenced. 17 U.S.C. 411. 3. Problem 2-3 a. US Copyright: Publish in US or publish the work in any Berne country (could also potentially establish habitual residence in US) b. Internet distribution:

i. Whatever may be the means of manufacturing of the copies ii. Somebody downloading and printing a copy: publication, iii. But whats the country of origin? And is just the upload itself a publication? 4. Problem 2-4 a. She has a US copyright by the virtue of publishing in a Berne country -> national treatment gets a US copyright in US. 5. Problem 2-5 a. Yes, she should be entitled to the copyright protection as Z is a foreign COO. Not compliant with Berne b. Denied copyright: domestic country (X) is the COO, can require registration. Not in violation of Berne: not country other than COO 6. Problem 2-6 a. No, Alan is not required to comply with the formalities. The COO is not his home country Y, but Z, a Berne Union country, because the work was first published there. Y has to respect the copyright without formalities. C. Berne Retroactivity (Public domain) 1. BERNE Art. 18 a. (1) Applies to all works, which, at the moment of coming into force, have not yet fallen into the public domain in the country of origin i. BERNE applies to all works protected in COO (drags works out of public domain for new members where the work is in the public domain there, but is still protected in COO) b. (2) If expired and is thus in public domain in country where protection is sought, will not be protected anew c. (3) Application subject to international agreements and implementing natl leg. d. (4) Applies in cases of new ascensions to the Union and to cases in which protection is extended by the application of Article 7 or by the abandonment of reservations 2. TRIPS Art. 70 a. (3) There shall be no obligation to restore protection to subject matter which on the date of application of this Agreement for the Member in question has fallen into public domain b. (2) Exception i. Obligations in respect of all subject matter existing at the date of application of this Agreement for the Member in question, and which is protected in that Member on the said date, or which meets or comes subsequently to meet the criteria for protection under this Agreement. ii. Copyright with respect to Existing works (A) Incorporates Berne Art. 18 iii. Rights of producers of phonograms and performers in existing phonograms (A) Berne Art. 18, as applicable under TRIPS Art. 6, 14. iv. Therefore, country that newly joins Berne must extend copyrights to (A) Future works from Union countries AND

(B) All existing foreign works from Union countries that are still under copyright in the country of origin (or at least not in public domain there due to protection expiration) 3. Rome follows same principle 4. Dam Things A/K/A Troll Company v. Russ Berrie & Company, Inc. a. 17 U.S.C. 104A i. Automatic restoration of copyright for an original work of authorship (A) Is protected under (a) -> term of protection = what would have received if the work had never entered the public domain in the US [has not expired in its source country] (B) Not in the public domain in COO through expiration of term of protection (C) Is in the public domain in US due to (1) Noncompliance with formalities imposed by US copyright law (failure of renewal, lack of proper notice, or failure to comply with any manufacturing requirements (2) Lack of subject matter protection in the case of sound recordings before 1972 OR (3) Lack of national eligibility AND (D) Has at least one author or rightholder who was at the time the work was created a national or domiciliary of an eligible country and not published in the US during the 30-day period following publication in such eligible country ii. Reliance parties (A) American authors who copied the restored works while they were in the public domain in US. 104A(d)(2)-(3) (B) One year to sell the now infringing works after being given a notice of intent to enforce by author. 104A(d)(2) iii. Safe harbor (A) Mandatory license for authors of derivative works (1) Allowed to continue to exploit that derivative work for the duration of the restored copyright if the reliance party pays to the owner of the restored copyright reasonable compensation (B) Mitigates reliance on a work that people legitimately thought was safe to copy from (C) Thus, Can compel Dam things to obtain a license and keep manufacturing the dolls in exchange for fees/royalty b. FACTS = Danish Troll owner sought prelim-I against Russ due to alleged restoration of foreign s as a result of passage of 104A which sought to restore foreign s invalidated for failure to comply w/ formalities (improper lack of a mark). Original Copyright in Denmark: always in effect. However, failed to meet the formalities of the US copyright -> became public domain in US. Russ begins to manufacture dolls (and variations ) under that assumption.

c. HOLDING = Ct. grants restoration b/c: insufficient evidence to show that Dam Things ever intended to abandon its registration, d.ct. erred in a general comparison of the troll dolls to determine similarity i. If P1, published in Denmark -> COO is foreign, still in copyright in Denmark, and due to failure to comply with formalities copyright should be restored ii. If P4, published in US -> US is COO, fails the 4th requirement 5. US Strategy a. US wants strong protection for US copyright holders abroad i. Compromise: restore copyright, but provide narrow safe harbor [some US businesses will suffer, but this stronger foreign protection outweighs] ii. Sends a message that serious about protection 6. Retroactivity and 1st Amendment a. Copyright clause of the US Constitution (Art. I, 8, cl. 8) does not prohibit Congress from taking works out of the public domain (Golan v. Holder) i. First amendment requires no further scrutiny 7. UK Implementation of Art. 18 a. if a person has incurred any expenditure or liability in connection with the act of using a foreign work not before subject to UK copyright, the person retains the right to exploit that work even after it has been subject to a restored UK copyright because of the implementation of Berne Art. 18 b. Safe harbor (savings clause) i. Applies to reliance parties (A) Who used the foreign works in good faith before the foreign countrys accession to Berne (B) Who made in good faith effective and serious preparations to use the foreign works when therey were not subject to UK copyrihts ii. Rights of reliance parties (A) Subject to buy-out provision (1) Copyright holder can pay the reliance party compensation to forgo using the work (2) If the parties cannot agree on reasonable compensation, either party can refer the matter to arbitration D. Points of Attachment and National Treatment for Neighboring Rights 1. Berne a. Does not speak directly to right for performers or their sound recordings b. Leaves it up to each country to decide whether to include performers rights under copyright i. If yes, such rights are subject to Berne convention (including national treatment) ii. If no, simply doesnt apply 2. Rome a. Basics i. Broader protection than TRIPS Art. 14

b.

c.

d.

e.

f.

g.

ii. Lacks WTOs strong enforcement mechanism iii. Like Berne, concerned with foreign protection (A) Treatment of foreign performances, recordings, broadcasts in other contracting States (B) In practice, unlikely that Rome country does not provide equivalent domestic protection ROME Art. 2 (natl treatment): extends to i. (a)Performers, who are its nationals, as regards performances taking place, broadcast, or first fixed, on its territory [Art. 7] ii. (b)producers of phonograms, who are its nationals, as regards phonograms first fixed or first published on its territory [Art. 10] iii. (c)broadcasting orgs, which have their headquarters on its territory, as regards broadcasts transmitted from transmitters situated on its territory [Art. 13] ROME Art. 3 (definitions) i. (a)Performer: actors, singers, dancers, musicians, and other persons who act, sing, deliver, declaim, play in, or otherwise perform literary or artistic works ii. (b)Phonogram: exclusively aural fixation of sounds or of a performance or other sounds iii. (c) Producer of phonograms: person or legal entity which first fixes the sounds (A) If in course of employment: corporation is producer iv. (f) Broadcasting: wireless transmission for public reception of sounds or of images and sounds ROME Art. 4 (performance POA) i. (a)Performance takes place in a member state ii. (b)Performance incorporated in a phonogram which is protected under Art. 5 iii. (c)Performance, not being fixed on a phonogram, carried by a broadcast which is protected under Art. 6 ROME Art. 5 (phonogram producer POA) i. Conditions (A) Producer is a national of another contracting State (nationality) (B) First fixation of the sound was made in another Contracting State (fixation) (C) Phonogram first published in another member country (publication) ii. First published in non-contracting State but published within 30 days in Contracting state, considered as first published in Contracting State iii. By means of notification deposited with Sec-Gen of UN, any Contracting state may declare that it will not apply the criterion of publication or criterion of fixation. ROME Art. 6 (broadcast POA) i. Broadcast HQ in member country ii. Broadcast was transmitted from transmitter situated in another contracting state ROME Art. 7 (Protections) i. 7(1) Member countries required to give performers the possibility of preventing certain prohibited acts that parallel those now designated in TRIPS Art. 14

3.

4. 5.

6.

ii. Does not explicitly create an exclusive right, but gives countries flexibility to enforce protection through criminal laws h. ROME Art. 10 (Producer rights) i. The right to authorize or prohibit the direct or indirect reproduction of their phonograms (A) Same under TRIPS 14(2) (B) TRIPS 14(4) rental right for producer i. ROME Art. 12 (performer and/or producer right) i. Equitable remuneration for public performances ii. US law does not recognize right of public performance for sound recordings (except digital transmissions) j. ROME Art. 13 (Broadcast org rights) i. Exclusive rights (A) Unauthorized rebroadcasting (B) Unauthorized fixation (C) Unauthorized reproduction of the broadcast WIPO Phonograms treaty a. Recognizes exclusive rights for both performers and producers i. Reproduction ii. Distribution iii. Rental iv. Right of making available fixed performances v. Right of public performance (A) Art. 15 right to remuneration for broadcasting and communication to the public (1) 15(1) - Shall enjoy the right to single equitable remuneration for the direct or indirect use of phonograms published for commercial purposes for broadcasting or for any communication to the public a. Optional for countries Nationality suffices for broadcasters/producers; not so in the case of performers Problem 2-9 a. No, nationality is insufficient. Have to give performance in Rome country -> not contracting state, therefore no POA b. Yes, performance is in a Rome country c. Yes, the broadcaster has the rights, and the performer piggybacks on the broadcasters rights d. Yes, the producer is a national of a Rome country: POA Bruce Springsteen a. FACTS = Neighboring rts. in Springsteens live LA show in 1992 assigned to a DE company, distributed by s on CD from a recording at the show in the US. NOT copied from the broadcast of the concert. Sued by band member (UK natl) b. HOLDING = Inf. of DE law

i. ii.

iii. iv. v.

Performance fixed on a phonogram is always protected if the producer of the phonogram enjoys protection A transmitted performance (except for that fixed on a phonogram) is always protected if the broadcasting organization arranging the transmission enjoys protection Rome: US is NOT party to Rome convention, therefore no national treatment required (performance did not take place in contracting state). Sue under Berne? does not apply -> Berne covers copyright, not neighboring rights; In sum, even though the performance was not in a contracting state, the performer, by virtue of being a national of a K state, can still get protection if producer or broadcaster get protection. Broadcasters get protection here because HQ was in contracting state, and thus performer piggybacks under 4(c).

PATENTS I. Introduction a. Rights of inventors i. Economic incentive rationale 1. Receive compensation for labor and investment -> encourage innovation and technological development ii. Common features of modern patent systems 1. Novelty (or new) 2. Sufficient inventiveness 3. Useful and reduced to practice 4. Patent application a. Review of the invention b. Provides the public with the essential know-how that people can freely use and build on, once the patent expires (exclusive rights in exchange for disclosure) 5. Limited term a. TRIPS Art. 33 20 years from the filing of the application iii. FTC recommendations 1. Establish opposition procedures by which 3rd parties can challenge the validity of patents after granted by the Patent Office 2. Lower the burden of proof to challenge from clear and convincing to preponderance of the evidence (now codified) iv. Utility models 1. Less onerous requirements (no inventive step) 2. Speedy registration 3. Typically much shorter (7-10 years) 4. TRIPS does not address this

b. International Agreements (TRIPS, PARIS, PCT) i. Paris convention 1. Covers industrial property 2. No substantive minimum standards (doesnt speak to subject matter, validity, rights or term) a. Want to have control over where to file patent 3. Lacked enforcement mechanism a. Art. 28 allows ICJ jurisdiction, but members can declare themselves not bound by the proceedings 4. Created (for patents) a. National treatment (Art. 2, 3) i. Cannot discriminate against foreign inventors by imposing more onerous requirements than those that apply to domestic inventors ii. Still retains the power to make its own determination on whether to grant the patent iii. Art. 2 - Nationals of any country of the Union shall, as regards the protection of industrial property, enjoy in all the other countries of the Union the advantages that their respective laws now grant, or may hereafter grant, to nationals; all without prejudice to the rights specially provided for by this Convention b. Right of priority/Paris priority i. Gives patent holder a certain period of time in which he can file foreign applications and can still receive the filing date of the original national filing ii. Art 4 within one year from first filing c. Art. 4bis independent treatment of patents for the same invention in different countries both as regards the grounds for nullity and forfeiture, and as regards their normal duration i. Territorial ii. Unlike Berne, no rile of shorter term 5. Formalities: presupposes patent systems in which patents are applied for a. Patents are not justified under natural rights theory, more industrial/commercial b. National treatment (under Paris) does not overcome the limitations imposed by the territoriality principle and does not obviate the need to make a separate application for a patent in each national legal system ii. TRIPS 1. Art 2(1) - Incorporates Arts. 1-12, 19 of Paris (but goes beyond) 2. Substantive minimum requirements

a. Must allow for patenting of processes and may not deny patents based on field of technology b. Delineates what exclusive rights a patent must entail (for how long) c. Limits When countries may enact exceptions or compulsory licenses 3. Art 27 Patentable subject matter (p.314) a. (1) Patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are i. New ii. Involve an inventive step (non-obvious) iii. Capable of industrial application (useful) Patents shall be available and patent rights enjoyable without discrimination as to the place of invention, field of technology, and whether products are imported or locally produced b. (2) May exclude if prevention within their territory of the commercial exploitation which is necessary i. To protect public order or morality 1. Including a. To protect human, animal, or plant life, or health b. Avoid serious prejudice to the environment ii. As long as such exclusion is not made merely because the exploitation is prohibited by law c. (3) Other exclusions i. Diagnostic, therapeutic, and surgical methods ii. Plants and animals other than microorganisms d. Just because something is patentable in one country, it is not necessarily true for other countries -> still quite a bit of discretion/autonomy e. Art 70(3) Nonretroactivity 4. No obligation to restore protection to subject matter which on the date of application of this Agreement for the Member in question has fallen into the public domain c. Patents and Economic Development (North-South debate) i. Issues (scope and role of patents) 1. Access to medicines and compulsory licenses on patented drugs 2. Developed: narrow focus on legal doctrine (protect legally given rights) 3. Developing: creating more exceptions to patents or shorter terms ii. International economics and IP rights 1. Developed countries: a. If stronger protection patents around the world, then the developed countries benefit immediately (short-term) i. [Encourages exports/technology transfer]

ii. Forces developing countries to pay royalties (estopped from making unauthorized copies) 1. US would be the primary benefactor $5.8B 2. Developing countries: a. More long term outlook i. Increased technology transfer/trade/FDI 3. Is this really a good deal for developed countries? Trade immediate windfall for future incentives (potential investment) a. Especially considering that TRIPS is mandatory for WTO members i. No real choice to not join the WTO 1. Includes goods as well as IP -> need to join to enjoy preferential tariff rates 4. IPRs and economic growth a. IPRS encourage growth more readily in economies that are open to international trade and investment i. Competition from abroad encourages domestic firms to invest in technology and product quality ii. Firms are more likely to undertake the costs of technology transfer and adaptations b. Other characteristics that affect IPR effectiveness i. Patents have positive impact on investment and R/D spending ii. Human capital and skilled labor d. Transitional provisions for developing countries i. TRIPS 1. Art 65 (1,2) developing countries get extra 5 years 2. Art 65(4) developing countries that had previously denied patents to certain fields of technology, such as pharmaceuticals, an additional 5 years 3. 65(1) - Least developed countries now extended to July 1, 2013 4. 2001 Doha least developed countries an extra 10 years (Jan. 1, 2016) to pharmaceutical products without prejudice to the right of least-developed country members to seek other extensions of the transition periods as under 66(1) 5. TRIPS Art 70.8 - Mailbox a. Where a member does not make available as of the date of entry into force of the WTO Agreement patent protection for pharmaceutical and agricultural chemical products commensurate with its obligations under art 27, the member shall: i. Notwithstanding provision of Part VI, provide as from the date of entry into force of the WTO Agreement a means by which applications for patents for such inventions can be filed

II.

ii. Apply to these applications, as of the date of application of this Agreement, the criteria of patentability as laid down in this Agreement as if those criteria were being applied on the date of filing in that Member, or where priority is available and claimed, the priority date of the application iii. Provide patent protection as from the grant of the patent and for the remainder of the term, counted from the filing date in accordance with Article 33 for those applications that meet the 70.8(b) criteria 6. Requirements for means (India-Patent Protection for Pharmaceutical And Agricultural Chemical Products) a. Must allow for the entitlement to file mailbox applications and the allocation of filing and priority date to them b. Sound legal basis to preserve both the novelty and the priority of application as of the relevant filing and priority dates i. TRIPS 1.1 1. Members shall be free to determine the appropriate method of implementing the provisions of this Agreement within their own legal system and practice ii. TRIPS council 1. Art 68, 71 a. Monitors the member countries compliance/implementation with TRIPS 2. Art 63 a. Member nations have to notify the Council of the laws and regulations of their nation that implement their obligations under TRIPS b. Council reviews the implementing laws and identifies problems Ownership and formalities a. Problem 3-2 (universal patent) i. Language choice: may be offended if English is chosen, translation problems, which language is to be given priority (cost, enforcement problems) b. Two approaches i. First to file (most common) 1. America Invents Act - US is now a first-to-file system (March 16, 2013) a. Modified first-to-file ii. First to invent c. Paris Priority i. Art 4. Has been incorporated into TRIPS: every WTO country is entitled to Paris priority ii. Two main benefits

1. Can claim the benefit of the original filing date in priority disputes with other inventors claiming the same invention in a competing patent application a. The first application establishes the original filing date b. The second and subsequent application, if filed within one year, is entitled to claim the benefit of the original filing date as the effective filing date of the second application 2. Applicant is protected against certain acts committed by herself and 3rd parties after the Paris priority date that would otherwise invalidate the patent iii. Art 4. 1. A(1) Any person who has duly filed an application for a patent in one of the countries of the union, shall enjoy, for purpose of filing in the other countries, a right of priority during the periods hereinafter fixed 2. A(2) Any filing that is equivalent to a regular national filing under the domestic legislation of any Union country or under treaties concluded between countries of the Union shall be recognized as giving rise to the right of priority 3. A(3) defines regular national filing any filing that is adequate to establish the date on which the application was filed in the country concerned, whatever may be the subsequent fate of the application 4. B Any subsequent filing in any of the other countries of the Union before the expiration of the periods referred to above shall not be invalidated by reason of any acts accomplished in the interval, in particular, another filing, the publication or exploitation of the invention, and such acts cannot give rise to any 3rd party right or any right of personal possession. Rights acquired by 3rd parties before the date of the first application that serves as the basis for the right of priority are reserved in accordance with the domestic legislation of each country of the Union. a. All subsequent acts of the inventor or third parties within the 1-year Paris period totally irrelevant to measuring the novelty of the invention 5. C(1) 12 months for patents and utility models, 6 months for industrial designs and trademarks iv. Disclosures 1. AIA, 3(b) a. One year grace period before the filing of the application i. Not considered prior art if 1. (A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or joint inventor OR

v.

vi.

vii.

viii.

2. (B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or joint inventor 2. European Patent Convention Art. 55 a. 6-month grace period for non-prejudicial disclosures i. (1) unauthorized disclosures that constitute an evident abuse in relation to the applicant ii. (2) authorized disclosures of the invention at an official international exhibition falling within the terms of the Convention on international exhibitions Independent treatment 1. Like Berne, not concerned with the effect or validity of rights under domestic law a. Berne is concerned with domestic treatment of foreign works, and Paris is also concerned with how domestic law treats foreign patents 2. Requirement (Art. 4(D)(1)) a. File an application under the national law of a Paris Union country i. regular national filing b. Make a declaration in other Paris countries invoking priority 3. Whether the patent is granted or denied in the first country is of no importance in determining whether it receives Paris priority (Art. 4(A)(3)) 4. Provisional patent applications (some countries) 1. Can later be converted into a regular filing that would entitle the applicant to the original date of the provisional filing 2. US law a. provisional patent application is NOT Regular national filing b. No Paris priority Patent prosecution 1. Examiner reviews the application 2. Review of prior art to determine whether the claimed invention is already disclosed in the prior art a. If disclosed, then invention is not novel and doesnt qualify 3. Inventor can defend/amend application (Prosecution history) a. Relevant to determine scope of claims granted Problem 3-3 1. Anton. Under Art 4(A)(3), the application rejection is irrelevant. The 9/5/12 application will receive Paris Priority of 9/5/11, thereby beating Bs date of 8/1/12

d. Patent Cooperation Treaty i. Specialized agreement, outside WTO, have to join separately (Art. 19 of Paris convention) ii. Reduces the burden an inventor faces seeking patents around the world 1. Extends the time period before an inventor must file national applications in other countries, while still preserving Paris Priority 2. Establishes common, uniform, patent application form that must be accepted by every PCT country (reduces administrative burden/cost) iii. Extends the priority period to a total of 30 months (18 in addition to 12 from Paris) 1. To decide whether to pursue national patents 2. Countries allowed to fix time limits which expire later than 30 months iv. Two phases 1. International a. File international application with one of national patent offices that have been designated as an International Search Authority i. Priority date 1. Paris Priority based on a prior national filing within past 12 months (most common route) OR a. 18 months on top of 12 2. If no Paris priority, date of PCT filing a. 30 months total ii. 2004 Regs international application now automatically identifies all PCT states as designated states for purposes of application. PCT Rule 4.9 iii. US, European Patent Office, Australia, Japan, Korea, China, etc. b. International Search Authority patent office search i. Conducts an international prior art search related to claimed invention (PCT Art. 16) ii. ISA 1. National patent office of any member country that has been designated to conduct prior art searches under PCT iii. Prepares non-binding international search report iv. Prepares written opinion on the patentability of the invention 1. Whether the claimed invention appears to be novel, to involve an inventive step (to be nonobvious), and to be industry applicable. Rule 43bis v. 9 months after priority date or 3 months after receipt of search copy (whichever is later) vi. Transmits report & opinion to WIPO and applicant

1. Search report and application published by WIPO promptly after 18 months after priority date 2. Written opinion is confidential until the end c. IPE demand i. Applicant decides whether to demand international preliminary examination of the patentability 1. 3 months after receipt of search report or 22 months after priority date (whichever is later). Rule 54bis 2. Under current procedure the report is prepared anyway ii. Demand requires fees but allows to make amendments to application and to communicate with IPEAuthority (issues IPEReport) 1. If IPEA != ISA, IPEA may elect to issue its own opinion a. Notify International Bureau at WIPO b. Must take into account ISAs opinion iii. Non-binding Report completed by 28 months after priority date. Rule 69.2 iv. Report is transmitted to IB of WIPO and applicant 2. National a. Once applicant filed national patent applications, WIPO communicates the international patentability report to the national patent offices elected by the inventor b. Filing date if no Paris priority i. PCT Art. 11 1. Application that is accorded an international filing date shall have the effect of a regular national application in each designated State as of the international filing date, which date shall be considered to be the actual filing gate in each designated State a. PCT priority date of the international application becomes the national filing date v. Problem 3-4 1. November 30, 2011 a. The international application is entitled to the filing date of 11/30/11 b. US national filing can claim the international filing date (5/30/14 is barely within 30 months from 11/30/11) e. European Patent Convention

i. Establishes 1. Common application procedure for obtaining patents in multiple European countries 2. Single prior art search condcucted by EPO at the Hague ii. Doesnt displace national law -> parallel, optional, system (not a Directive) iii. Process 1. Files European patent application with EPO in Munich, designating all member countries where it seeks to patent its invention 2. EPO review the application and conducts a prior art search 3. EPO has authority to grant or deny a European patent (EPC Art. 97) iv. European Patent (piecemeal approach0 1. Functions as a collection of national patents of the member European countries 2. Once granted, national courts(agencies) in designated countries may require translations, filing fees and may later evaluate the validity of the patent under its own national law

TRADEMARKS I. Introduction A. The rights in marks for goods and services 1. Trademark a. Function i. Traditionally (A) identify the source of the product, which creates certain expectations on behalf of the consumers [consumer confusion] ii. Not necessarily an exclusive right e.g., Deluxe: cars/chocolate (A) Used in commerce/industry -> associated with product/service b. Justifications i. Protect the consuming public ii. Business ethics iii. Reduce search costs of consumers iv. Prevent free-riding c. Creates goodwill brand recognition/loyalty - trust in the quality and consistency in meeting expectations of the brand d. Primary attribute is distinctiveness e. Analogy i. Form of tort of unfair competition ii. Form of property 2. GI geographical indications a. TRIPS

Art. 22 definition -indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation, or other characteristic of the good is essentially attributable to its geographical origin ii. Art. 24(1) requires members to engage in further negotiations on GIs (A) Be willing to consider the continued applicability of these provisions to individual geographical indications whose use was the subject of such negotiations b. Basics i. Treated as trademarks in US (e.g., Florida Orange Juice) ii. For US, IP is synonymous with technology (used to reward innovation, creativity) -> GIs are a product of luck, rather than innovation iii. Most countries are first-to-file, with no use requirements c. Paris convention i. Art. 10 (A) Prohibits the importation of goods that use a false indication of the source of the goods d. Madrid Agreement for GIs (special agreement under Paris Art. 19) i. Art. 4 forbids countries from deeming GIs for wines to be generic e. Lisbon agreement i. Attempts to establish an international registration system for GIs ii. Requires countries to protect GIs that have been registered B. International Agreements: TRIPS, Paris Convention, Madrid Protocol 1. Paris Convention a. Art 2- national treatment with respect to protection of industrial property, which includes patents and trademarks b. Art 4 - Paris priority i. 6 months for TMs, 12 months for patents c. Art 6(3) i. Requires countries to allow registration of marks independent of whatever protection may exist for the same mark in different countries d. Art 6quinquies(A)(1) - Telle quelle/As-is provision i. Small exception to the independence principle ii. Once a mark is duly registered in the country of origin, other countries are supposed to register the mark as is not questioning any aspect of the form of the mark e. Art. 6sexies - Service marks i. Expressly allows countries the discretion whether or not to have registration for service marks f. Art. 19 treaties and special agreements i. Allows members to enter into special agreements for the protection of industrial property (as long as they do not derogate from the convention) 2. TRIPS

i.

a. Art 2(1) - Incorporates Arts. 1-12, 19 of Paris i. BUT adds own minimum standards (A) TMs: TRIPS Art. 15-21; GIs: 22-24 b. Service marks i. Same status as TMs, must allow for registration ii. Art. 15, 16 treat service marks as marks for goods, both fall under trademark 3. Madrid Agreement & Madrid Protocol a. Special agreements under art. 19 of Paris b. Madrid Protocol: drafted as codicil to Agreement c. Common international registration system II. Trademarks A. Formalities, Registration, and Use Requirements 1. Two approaches a. First-to-register i. Civil law ii. No requirement of use b. Prior use of a mark in commerce i. Common law ii. No requirement of registration c. U.S. law additional benefits upon registration i. Predominantly use-based, but intent-to-use makes it closer to registration system ii. Registration can defeat the claims of all subsequent/junior users of the mark iii. Registration Establishes constructive notice and use of the mark (A) Conferring a right of priority, nationwide in effect, on or in connection with the goods or services specified in the registration 15 USC 1057(c). 2. TRIPS a. Art 15 (requires a registration system) i. Any sign or any combination of signs capable of distinguishing the goods or services of one undertaking from those of other undertakings shall be capable of constituting a trademark. Where signs are not inherently capable of distinguishing the relevant goods, Members may make registrability depend on distinctiveness acquired through use [secondary meaning]. Members may require, as a condition of registration, that signs be visually perceptible ii. Members may make registrability depend on use. However, actual use of a trademark shall not be a condition for filing an application for registration. An application shall not be refused solely on the ground that intended use has not taken place before expiry of a period of 3 years from the date of application. (A) This allows applications for registration of trademarks based on the intent to use the mark in commerce (B) U.S. law (1) If intent to use -> must use the mark within a specified time to perfect the registration

(2) Nonuse for 3 consecutive years is prima facie evidence of abandonment (3) Applications based on prior foreign applications from the country of origin are entitled to registration in the US, without any requirement of use or statement of use. iii. Nature of the goods/services shall in no case form an obstacle to registration of the trademark b. Art 19 Requirement of use i. If use is required to maintain a registration, the registration may be cancelled only after an uninterrupted period of at least three years of non-use, unless valid reasons based on the existence of obstacles to such use are shown by the trademark owner. Circumstances arising independently of the will of the owner of the trademark which constitute an obstacle to the use of the trademark, such as import restrictions on or other government requirements for goods or services protected by the trademark, shall be recognized as valid reasons for non-use ii. While subject to the control of its owner, use of a trademark by another person shall be recognized as use of the trademark for the purpose of maintain the registration c. Art 20 other requirements i. Use of a trademark in the course of trade shall not be unjustifiably encumbered by special requirements, such as use with another trademark, use in a special form or use in a manner detrimental to its capability to distinguish the goods and service of one undertaking from those of other undertakings. This will not preclude a requirement prescribing the use of the trademark identifying the undertaking producing the goods or services along with, but without linking it to, the trademark distinguishing the specific goods or services in question of that undertaking. 3. Paris Conv. a. Art 6 (one of the two ways to register trademark in country that is not COO) i. (1) Conditions for the filing and registration of trademarks shall be determined in each country of the Union by its domestic legislation ii. (2) However, an application for the registration of a mark filed by a national of a country of the Union in any country of the Union may not be refused, nor may a registration be invalidated, on the ground that filing, registration, or renewal has not been effected in the country of origin iii. (3) A mark duly registered in a country of the Union shall be regarded as independent of marks registered in the other countries of the Union, including the country of origin (A) E.g, a Paris country cannot refuse to register a mark of a foreign national of another Paris country just because the mark has not been registered in the country of origin iv. An applicant is not required to register a trademark first in its country of origin in order to register that trademark in another country of Paris Union B. Paris priority and registering trademarks in different countries

1. Paris Priority Article 4 a. SCM Corp. v. Langis Food i. Facts (A) Dates (1) March 28, 1969 L files 3TMs in Canada (2) May 15, 1969 SCM uses LT trademark (3) Sept 19, L files in US for 3TMs (B) Concept (1) Foreign national filed a trademark application in its home country without prior use of the trademark in any country (2) Foreign national subsequently filed a timely application to register the trademark in the US based upon the earlier application in its home country (3) Foreign national used the trademark in its home country, but not in US prior to filing its US application (4) Domestic corporation used the trademark in US after the foreign nationals home country application was filed but before the foreign nationals US application was filed ii. Lanham Act 15 USC 1050 (A) Section 2 (15 USC 1052(d)) (1) No trademark *+ shall be refused registration on the principal register on account of its nature unless it (2) (d) Consists of or compromises a mark which so resembles a mark or a trade name previously used in the US by another and not abandoned, as to be likely, when applied to the goods of the applicant, to cause confusion or to cause mistake, or to deceive iii. Section 44(d) (implements Paris priority) (A) (d)Trademark application filed by foreign national Shall be accorded the same force and effect as would be accorded to the same application if filed in the US on the same date on which the application was first filed in the foreign country (B) Clear implication is that section 44 recognizes registration based on something other than use in commerce, namely, a foreign registration (C) Grants a foreign applicant which has used the trademark in its home country after the foreign filing but prior to the actual US filing a constructive use date as of the date of the foreign filing (D) Applicant is now required to state that the applicant has a bona fide intention to use the mark in commerce. (1) But such an applicant (with Paris priority) is exempted from requirements of filing a verified statement of use iv. H: foreign corporation, Langis, is entitled to federal trademark registration (A) Need to read Lanham act in conjunction with Paris priority (1) Previously in section 2(d) means before the filing date in the Convention country

(B) Here, Langis filed within the 6 months priority date, so the US application gets a constructive use date of the date of foreign filing (March 28, 1969). v. Problem 4-2 (A) EU is first-to-file, therefore, the sept. 10th date of use is irrelevant, and the date of the application Jan 25th is what matters. (B) Therefore, June 17th is within the 6 months priority period. The rejection of the registration is irrelevant. 2. Paris Telle Qulle/As is: Article 6quinquies a. Requirements i. A. Every trademark duly registered in the country of origin shall be accepted for filing and protected as is in the other countries of the Union (A) The particular form of the mark cannot be questioned by another country or used as a basis for denying the registration (B) COO test: where the applicant has a real and effective industrial or commercial establishment, or if he has no such establishment within the union, the country of the Union where he has his domicile, or if he has no domicile within the Union, but is a national of a country of the Union, the country of which he is a national ii. B. Three basis to deny the mark under this provision (A) The mark infringes the rights of a party in the country where protection is claimed (B) The mark lacks distinctive character, or consists exclusively of signs or indications which may serve, in trade, to designate the kind, quantity, quality, intended purpose, value, place of origin, of the goods, or the time of production, or have become customary in the current language or in the bona fide and established practices of the trade of the country where protection is claimed (C) The mark is deceptive or contrary to morality or public order (D) These 3 bases are subject to Article 10bis iii. C. (A) (1) In determining whether a mark is eligible for protection, all the factual circumstances must be taken into consideration, particularly the length of time the mark has been in use. (B) (2) No trademark shall be refused in the other countries of the Union for the sole reason that it differs from the mark protected in the country of origin only in respect of elements that do not alter its distinctive character and do not affect its identity in the form in which it has been registered in the said country of origin. iv. D. (A) No person may benefit from the provisions of this Article if the mark for which he claims protection is not registered in the country of origin. v. E.

(A) However, in no case shall the renewal of the registration of the mark in the country of origin involve an obligation to renew the registration in the other countries of the Union in which the mark has been registered. vi. F. (A) The benefit of priority shall remain unaffected for applications for the registration of marks filed within the period fixed by Article 4, even if registration in the country of origin is effected after the expiration of such period. b. US Section 211 Omnibus Appropriations Act of 1998 i. Section 211 (A) No transaction or payment shall be authorized or approved with respect to a mark, trade name, or commercial name that is the same or substantially similar to a mark, trade name, or commercial name that was used in connection with a business or assets that were confiscated unless the original owner of the mark or the bona fide successor-in-interest has expressly consented ii. Arg: Cannot require to get the consent of the owner, because Art 6quinquies gives protection as is iii. Meaning of as is (A) Under 6quinquies(A)(1) It appears that the other countries are obliged to protect the trademark in regards to its form (1) Does NOT encompass ALL the features and aspects of the trademark a. as is does not encompass matters related to ownership (2) Even if the country has different legislation as to the trademark form, as long as it was duly registered in the country of origin (3) This view hasnt been explicitly endorsed (4) Form does not mean use requirement iv. 211 is not an issue of form, its a matter of ownership. Therefore, cant force the US to respect the trademark in violation of 211 v. Cannot circumvent the use requirements of a particular regime by registering in the jurisdiction that does not impose use requirements c. Problem 4-3 i. Plausible argument: Smell is a matter of form? If yes, have to accept ii. However, TRIPS 15(1) allows members to require visually perceptible signs iii. If not form, then what is smell? Subject matter (what is eligible for trademarks)! Thus, can reject the trademark iv. Distinctiveness: 6quinquies has its own explicit exceptions: then lack of distinctive character is a permissible basis to deny the trademark [Art 6quinquies explicit exception] 3. Filing an international application under the Madrid System a. Two treaties (country can be member of both, one, or neither) i. Madrid Agreement ii. Madrid Protocol

b. Madrid system basics (extension of protection) i. Designated contracting states in which protection is sought do not issue national registrations for the trademark ii. Instead, Trademark is registered in the International Register (maintained by WIPO) iii. Single registration procedure -> designate the states in which you want protection. iv. Trademark is entitled to protection under national law as if the trademark had obtained a national registration in each of the designated countries (A) Each designated contracting state must extent protection under its national laws to an international registration of a mark under the Madrid System v. Subject to CENTRAL ATTACK c. Filing for international registration (Madrid Protocol) i. First domestic (A) Basic application OR (1) US Applicant files an international application with the USPTO on the basis of the pending US trademark application a. Can be filed at the same time (B) Basic registration (1) US Applicant files an international application with the USPTO on the basis of an existing U.S. registered trademark ii. Second international (A) International application (1) Mark and the owner must be the same as the mark and the owner of the basic registration (2) Must include a list of goods and services for the mark identical or narrow than that claimed in basic application (3) Designate states where protection is sought a. EU could be whole or individual nations (B) If International application is filed in US (1) USPTO examines whether the application contains the same info as contained in basic application or registration (2) USPTO certifies the application and forwards it to WIPO (3) Date of international registration (Art 3(4) a. WIPO receives within 2 months of the USPTO filing i. Date of receipt of international application in USPTO b. WIPO does not receive within 2 months of USPTO filing i. Actual date of receipt iii. International Bureau action (A) International Bureau reviews application to determine whether it meets Madrid System filing requirements (B) If yes, immediately registers in International Register and publishes in WIPOs Gazette of International Marks iv. Effect of registration

(A) Protection of the mark in each of the contracting parties concerned shall be the same as if the mark had been deposited direct with the office of that contracting party Art. 4(1) (B) States following examination system (1) Art. 5(1) where the applicable legislation so authorizes a contracting state is entitled to notify WIPO of its refusal to extend protection a. Madrid Protocol Art. 5(2) - Within a period of 18 months of the date the notice of extension of protection was sent by WIPO i. If not met, automatic extension of protection b. Madrid Agreement Art. 5(2) within 12 months of transmittal (2) WIPO forwards the notice of refusal to holder of international registration (3) Art. 5(3) same remedies under national law as if the holder had filed a national application directly in the contracting state refusing to extend protection (C) States without examination system (1) All trademark applications are automatically registered upon filing (2) Trademark authority does not examine the validity of the trademark and the issue of its validity does not arise until challenged (3) Therefore, trademark is entitled to protection immediately as of the ate of the international registration v. Unlike PCT, no national stage vi. Paris priority (A) Still available if subsequent application is an international application under Madrid system (B) 6 months for TMs vii. Duration and validity of international registration (A) Madrid Protocol (1) Art. 6(1), 7(1) a. 10 years (may be renewed indefinitely in 10 year periods) (B) Renewal applies to all countries where protection was obtained (single filing) (C) Applicant can later apply to extend the reach (D) Central attack (1) Madrid registration is based on application/registration from the home country (2) If basic application/registration is invalidated or fails at any time during the first 5 years of the international registration, entire international registration is cancelled. a. Office of origin request IB to cancel the international registration (3) If the basic application/registration is not invalidated or does not fail within the first five years, the international registration becomes independent of the home country basic application/registration (4) Remedies - Madrid Protocol Article 9quinquies

a. Applicant is allowed to transform the international registratipon into national applications b. Filing separate national applications in countries in which the international registration had effect c. Entitled to filing date as of the date of the (now invalid) international registration d. Provided that i. such application is filed within 3 months from the date on which the international registration was canceled AND ii. The national application is for goods or services already contained in the international registration in respect of the Contracting Party concerned AND iii. The national application complies with all requirements of the applicable law, including the requirements concerning fees viii. International searches (A) All applicants are required to do an international search with WIPO (1) Madrid agreement: Article 5ter ix. Madrid protocol: Article 5ter(1) d. Filing for international registration (Madrid Agreement) i. Basic registration only (not basic application) e. Problem 4-4 i. Second application is entitled to Paris priority of Dec 30, 2011. ii. Effective date is Sept. 3, 2012 (date received), not the Paris priority because 2 months have passed. Trademark rejected iii. If received on aug. 3, 2012 then entitled to Paris priority, the filing date of dec. 30, 2011 f. Problem 4-5 i. Central attack if the basic application or the basic registration, is invalidated or fails at any time during the first five years of the international registration, then the entire international registration is cancelled ii. She has 3 months from the date of invalidation to file an national application, then gets the priority, but only under the Madrid Protocol 4. Community Trade Mark (CMT) a. Pan-European trademark (not a basket of national trademarks) b. Remedy: pan-European injunction c. Co-exists with national trademarks d. Generally applies national law (unless order prohibiting from proceeding with infringing acts)

GEOGRAPHICAL INDICATIONS

I.

Basic approach: Rights and exceptions A. TRIPS 1. Art. 22 a. 1. Geographical indications are, for the purposes of this Agreement, indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin. b. 2. In respect of geographical indications, Members shall provide the legal means for interested parties to prevent: i. (a) the use of any means in the designation or presentation of a good that indicates or suggests that the good in question originates in a geographical area other than the true place of origin in a manner which misleads the public as to the geographical origin of the good; ii. (b) any use which constitutes an act of unfair competition within the meaning of Article 10bis of the Paris Convention (1967). c. 3. A Member shall, ex officio if its legislation so permits or at the request of an interested party, refuse or invalidate the registration of a trademark which contains or consists of a geographical indication with respect to goods not originating in the territory indicated, if use of the indication in the trademark for such goods in that Member is of such a nature as to mislead the public as to the true place of origin. d. 4. The protection under paragraphs 1, 2 and 3 shall be applicable against a geographical indication which, although literally true as to the territory, region or locality in which the goods originate, falsely represents to the public that the goods originate in another territory. 2. Art. 24 a. 3. In implementing this Section, a Member shall not diminish the protection of geographical indications that existed in that Member immediately prior to the date of entry into force of the WTO Agreement. b. 5. Where a trademark has been applied for or registered in good faith, or where rights to a trademark have been acquired through use in good faith either: i. (a) before the date of application of these provisions in that Member as defined in Part VI; or ii. (b) before the geographical indication is protected in its country of origin; measures adopted to implement this Section shall not prejudice eligibility for or the validity of the registration of a trademark, or the right to use a trademark, on the basis that such a trademark is identical with, or similar to, a geographical indication. c. 6. Nothing in this Section shall require a Member to apply its provisions in respect of a geographical indication of any other Member with respect to goods or services for which the relevant indication is identical with the term customary in common language as the common name for such goods or services in the territory of that Member. i. Doctrine of foreign equivalents (Otokoyama)

(A) Foreign word would be considered generic in the US if it is generic in the country of origin d. 7. A Member may provide that any request made under this Section in connection with the use or registration of a trademark must be presented within five years after the adverse use of the protected indication has become generally known in that Member or after the date of registration of the trademark in that Member provided that the trademark has been published by that date, if such date is earlier than the date on which the adverse use became generally known in that Member, provided that the geographical indication is not used or registered in bad faith. e. 8. The provisions of this Section shall in no way prejudice the right of any person to use, in the course of trade, that persons name or the name of that persons predecessor in business, except where such name is used in such a manner as to mislead the public. f. 9. There shall be no obligation under this Agreement to protect geographical indications which are not or cease to be protected in their country of origin, or which have fallen into disuse in that country. 3. Formalities a. TRIPS does not speak to any formalities or prerequisites for countries to impose 4. Problem 4-16 a. Big Apple is most likely in violation of TRIPS in regards to the coffee, although not really likely with respect to Cuban cigars and even less so with respect to Swiss cheese. All 3 trademarks contain GIs that are protected in the respective country of origin with respect to goods not originating in the territory indicated. The question is whether the use of such trademarks is of such a nature as to mislead the public as to the true place of origin under 22(3). With respect to the coffee, although the requirement is actual misleading, I dont think itll be difficult at all to prove that consumers think the country of origin of the coffee is actually Colombia the country. Moreover, the Colombian trademark gets no exemption from protection because under 22(4) the protection explicitly extends to GIs which are literally true as to the territory, region or locality in which the goods originate, yet falsely represent to the public that the goods originate in another territory. However, I dont think that people buying Cuban cigars from a food company outright actually think that those cigars are of the truly Cuban, and therefore illegal, variety. In regards to Swiss cheese, the US consumers understand that the moniker refers to the type of cheese, rather than origin and thus the GI is a common and generic term that satisfies the 24(6) exception. Potential for unfair competition under 22(2)(b) b. Exceptions? i. Yes, for all trademarks under 24(5) depending on when the provisions became applicable to the US and/or whether the GI was protected in its country of origin before Big Apples application/registration/use (as long as it was in good faith, which is doubtful with the Colombian trademark). In regards to Colombian Coffee, 24(5) does not prejudice eligibility simply on the basis that the trademark is identical

with, or similar to, a GI as long as either of the timing requirements is met. This is mandatory, so Cuban cigars would have to receive protection regardless of the embargo. ii. All trademarks may also be protected under 24(9) if the respective GIs are no longer protected in the countries of origin or if they have fallen into disuse there. iii. Yes, for Swiss cheese under 24(6) if it is considered generic in the US. That is, if the relevant indication is identical with the term customary in common language as the common name for such goods in the territory of that Member. Discretionary on the part of US. iv. Long shot of 24(8) if persons names are Colombia, Swiss, Cuban but still mislead. c. Facts to consider: i. When did Big Apple register the trademarks? ii. Date of entry into force of the WTO agreement 24(3) iii. When were the GIs registered in the country of origin? 24(5)(b) iv. Still protected in country of origin? v. Fallen into disuse in country of origin? vi. Good faith in application/registration/use? B. GI regulation in EU 1. Consorzio del Proscoitto di Parma v. ASDA Stores a. The slicing/packaging is in the UK, not Italy, so may violate the PDO b. EEC 2081/92 and EC 1107/96 c. Art 29 of EC i. Prohibits all measures which have as their specific object or effect the restrictions of patterns of exports and thereby the establishment of a difference in treatment between the domestic trade of a Member state and its export trade, in such a way as to provide a particular advantage for national production or for the domestic market of the State in question d. Art 30 i. Art. 29 does not preclude prohibitions or restrictions on exports which are classified inter alia on grounds of the protection of industrial and commercial property ii. Therefore If the PDO restriction affects imports under 29, it must be justified under Art 30 e. This condition/restriction must be regarded as compatible with Community law despite its restrictive effects on trade if it is shown that it is necessary and proportionate and capable of upholding the reputation of the PDO f. Here, the risk to quality and authenticity of the PDO would is greater outside the region of production: specialized checks by experts that are unlikely to be effectively introduced in other Member States. i. Slicing and packaging operations carried upstream of the retail sale or restaurant stage constitute, because of the quantities of products concerned, a much more real risk to the reputation of a PDO, where there is inadequate control of the

authenticity and quality of the product than operations carried out by retailers and restaurateurs. [when the consumer has to assume that it was sliced in Parma] (A) Performed in front of the consumer -> consumer knows that the product is sliced outside the region of production. Or at least, the consumer can require that it is, in order to verify in particular that the ham bears the mark of origin g. H: The condition of slicing and packaging in the region of production, whose aim is to preserve the reputation of Parma ham by strengthening control over its particular characteristics and its quality may be regarded as justified as a measure protecting the PDO. The resulting restriction may be regarded as necessary for attaining the objective pursued, in that there are no alternative less restrictive measures capable of attaining it. 2. Problem 4-17 a. OK: sliced in front of the consumer, no confusion b. OK: still retail level, the consumer knows that slicing is occurring outside RoP c. Not OK: still done outside RoP, not subject to consortium or even consumer inspection or supervision d. OK: no one to blame but the consumer 3. FDR & Denmark v. Commission of European Communities a. Greek: can only call it feta if it comes from Hellenic republic i. Not Greek language origin ii. Other countries make it too iii. Doesnt refer to place b. Issue 1 geographical area i. Art 2 (A) 1. Community protection of designations of origin and of GI of agricultural products and foodstuffs (B) 2 (1) (a)Designation of origin: means the name of a region , a specific place, or in exceptional cases, a country, used to describe an agricultural product or foodstuff: Originating in that region, specific place/country AND The quality or characteristics of which are essentially or exclusively due to a particular geographical environment with its natural and human factors, and the production, processing, preparation of which takes place in the defined geographical area (2) (b) Geographical indication: means the name of a region , a specific place, or in exceptional cases, a country, used to describe an agricultural product or foodstuff: Originating in that region, specific place/country AND Which possesses a specific quality, reputation, or other characteristics attributable to that geographical origin and the production and/or

processing and/or preparation of which take place in the defined geographical area (C) 3. Certain traditional geographical or non-geographical names designating an agricultural product or foodstuff originating in a region or a specific place, which fulfill the conditions referred to in the second indent of paragraph 2(a) shall also be considered as designations of origin ii. H: Here, the mountainous nature, climate and botanical characteristics adequately indicate that the area has homogenous natural features which distinguish it from the adjoining areas (A) Thus, there is a connection between the geographical area and the specific characteristics of the product c. Issue 2 generic name? i. Art 3(1) names that have become generic may not be registered. (A) A name that has become generic Means the name of an agricultural product or a food stuff, which, although it relates to the pace or the region where this product or foodstuff was originally produced or marketed, has become the common name of an agricultural product or foodstuff (B) All factors, including (1) Existing situation in member state in which the name originates and in areas of consumption (2) Existing situation in other member States (3) Relevant national or community laws ii. H: no, not generic II. Heightened Protection for wines and spirits and exceptions A. TRIPS 1. Art. 23 a. 23(1)Applies even where a 3rd party attempts to use a disclaimer i. Even where the true origin of the goods is indicated or the GI is used in translation or accompanied by expressions such as kind type style imitation b. Under 23(2) countries are obligated to refuse or invalidate registration of any marks bearing the GI if the wines or spirits do not originate from the geographical region c. 23(3) homonymous GI for wines protected under 22(4) i. Each member shall determine the practical conditions under which the homonymos GIs in question will be differentiated from each other, taking into account the need to ensure equitable treatment of the producers concerned and that consumers are not misled 2. Art. 24 a. 24(4) grandfather provision i. Country can allowed continued use of a GI by nationals or who have used the GI on wines/spirits in a continuous manner with regard to the same related goods or services in the territory of that Member either (a) for at least 10 years preceding 4/15/94 or b) in good faith preceding that date

b. 24(6) with respect to products of the vine for which the relevant indication is identical with the customary name of a grape variety existing in the territory of that Member as of the date of entry into force of the WTO agreement 3. Art 32 FN 4-permits enforcement of GI by administrative action B. ATF Regulation 1. 3 categories a. Generic b. Semi-generic c. Non-generic 2. Prob. 4-19 a. (a) Yes, 24(6) b. (b) Seems to be in conflict with 23(1) even if true origin is indicated i. For EU probably not worth litigating: US is unlikely to enforce anyway c. (c) Not in TRIPS III. Unresolved Issues A. Negotiations 1. TRIPS a. Art. 23 in order to facilitate the protection of GI for wines, negotiations shall be undertaken in the Council for TRIPS concerning the establishment of a multilateral system of notification and registration of geographical indications for wines eligible for protection b. Art. 24 i. 1. Members agree to enter into negotiations aimed at increasing the protection of individual GIs under Art.23. The provisions of paragraphs 4 through 8 below shall not be used by a Member to refuse to conduct negotiations or to conclude bilateral or multilateral agreements. In the context of such negotiations. Members shall be willing to consider the continued applicability of these provisions to individual geographical indications whose use was the subject of such negotiations. ii. 2. The Council for TRIPS shall keep under review the application of the provisions of this Section; the first such review shall take place within two years of the entry into force of the WTO Agreement. Any matter affecting the compliance with the obligations under these provisions may be drawn to the attention of the Council, which, at the request of a Member, shall consult with any Member or Members in respect of such matter in respect of which it has not been possible to find a satisfactory solution through bilateral or plurilateral consultations between the Members concerned. The Council shall take such action as may be agreed to facilitate the operation and further the objectives of this Section. B. Better protection for GIs? 1. US Approach a. Minimalist no rights

b. All you get when you register is notification c. No enforcement 2. EC Approach a. Maximalist (favors clarity and legal certainty) b. First stage i. Members notify their domestic GIs together with regional, bilaterial, or multilateral agreements protecting such GIS and proof of compliance with the definition of GIs to the secretariat c. Second stage i. Secretariat notifies all Members of submission ii. 18 month period in which Members examine the submission (A) Four grounds for opposition (1) Non-compliance with general definition of GI (2) Absence of protection in country of origin (3) Genericness (4) Use of GI would be misleading iii. Then inscribed in the register. (A) Restrictions (1) No member can allege that protection does not fulfill the conditions demanded in the general definition (2) No member can allege that the goods although literally true as to the territory, region or locality in which the goods originate, falsely represent to the public that the goods originate in another territory (3) No member can allege that GI deals with a generic term (B) Benefits (1) Unconditional protection in the markets of all members (2) Prima facie compatible with the definition of Art 22.1 and consequently deserving of protection C. Extension to other products? 1. Supporters a. does not seek to require reappropriation of terms and indications considered generic b. Goal is to prevent GIs which are not generic, from becoming generic 2. Opposition a. Too premature b. Unnecessary obligations c. Significantly costly d. Limited benefits IV. Trademarks and GIs (concurrent use) A. Possible that 24(5) contemplates that both forms of protection could apply to identical or similar words B. 4(1)(A) of Directive 89/104

1. Proprietor of an earlier trade mark cannot obtain the cancellation of an identical later trademark designating identical goods where there has been a long period of honest concurrent use of those two trademarks where, that use neither has nor is liable to have an adverse effect on the essential function of the trade mark which is to guarantee to consumers the origin of the goods or services C. EC Protection of TM and GIs 1. Art 14(2) of EU Regulations a. Trademark, the use of which engenders one of the situations in Article 13, and which has been applied for/registered or established by use if that possibility is provided for by the legislation concerned in good faith within the territory of that community, before either the date of protection in the country of origin or the date of submission to the Commission in the application for registration of the designation of origin or GI may continue to be used notwithstanding the registration of a designation of origin or geographical indication, provided that no grounds for its invalidity of revocation exists under 89/104/EEC. b. Essentially, can register identical GI even if there is prior TM 2. 14(3) of EU Regs a. does not enable a grandfathered trademark holder to prevent ALL used of a similar or identical GI 3. TRIPS Art 17 a. Members may provide limited exceptions to the rights conferred by a trademark ,such as fair use of descriptive terms, provided that such exceptions take account of the legitimate interests of the owner of the trademark and of third parties 4. Q: is 14(2) Regs permitted under Art 17 of TRIPS a. Yes b. Limited = narrow c. Legitimate interest = something different from full enjoyment of those legal rights d. Only take account does not refer to unreasonable prejudice e. Where the likelihood of confusion is relatively high, the exception under 14(2) does not apply! f. Lesser standard of regard for the legitimate interests of the owner of the trademark is required INTERNATIONAL ENFORCEMENT OF IP RIGHTS I. MNEs A. Proper approach 1. First, register all IP rights (in every country where they seek to do business, may not be required but provides evidence of ownership) 2. Then License to subsidiaries a. Dont want any issues regarding ownership II. Commercial Piracy Litigation issues

A. Difficult to serve papers and to require s to appear in court B. Counterfeiters are resourceful in disguising the origin of their goods, creating evidentiary problems C. Role of organized crime in commercial piracy 1. Need resources -> large scale D. Corrupt government officials E. Detection of counterfeiters and pirates is difficult III. Basics A. Copyright piracy 1. unauthorized copying of the content of some fixed medium of expression 2. Normally no attempt to disguise the unauthorized nature of the copy B. Trademark counterfeiting 1. Unauthorized copying of a trademark owned by another and placing the trademark of similar or identical goods 2. Consumer deception can be an element of trademark counterfeiting 3. Experts: most serious form of commercial piracy a. Not limited to a certain category of goods i. Contrast with copyright piracy: primarily in audio-visual products b. Only limited by whether the counterfeiter can make a profit by selling fakes C. Patent infringement 1. Unauthorized copying, manufacture, use, and sale of products protected by patents owned by another 2. May not be seen as commercial piracy a. Involve legitimate business disputes between legitimate competitors b. Heightened role medicine plays in health and saving lives D. All commercial piracy is driven by a strong economic incentive E. Estimating Market share 1. Assumption a. (Total products with trademark legitimately shipped)/Total products 2. Flaws in assumptions a. Parallel imports/horizontal movement of goods some of those products could very well be genuine i. Through subdistributors or other genuine sellers (perhaps even through individuals importing them from vacation) F. Estimating Losses 1. Assumption a. Corporation assumes that it lost the revenue that it would have otherwise earned per each product 2. Flaws in assumptions a. Not true that Consumers would have purchased the genuine product at retail price instead b. Many counterfeits cost a fraction of the price

c. Many consumers would not be willing or able to pay for genuine product d. Many actively seek out fakes, not genuine products e. Consumers are rarely deceived into purchasing a counterfeit when seeking to purchase a genuine product G. Problem 6-1 1. Cannot take the position of doing nothing (defeatist attitude) a. Reputation for non-enforcement means more pirates will migrate to your brand b. Not what the corporate culture (at least in America) wants 2. The corporate security department is too extreme (no unconditional check) a. Should have detailed financial analysis i. Focus on substitute goods, rather than just lower quality goods IV. Counterfeiting in China A. Reasons for size and scope 1. FDI and Advanced Technology a. Some of the knowledge transfer is diverted into illegitimate economy 2. State support of counterfeiting and local protectionism a. Local governments are either directly or indirectly involved in supporting the counterfeit trade (e.g., AIC) b. Illegal trade may support entire local economies i. Costs of crackdown (A) Unemployment, dislocation, social turmoil, chaos 3. Ineffective legal enforcement and lack of deterrence B. Organized crime, local protectionism, and the trade in counterfeit goods in China 1. AIC Administration of Industry and Commerce & CSCG a. After privatization, there is a conflict of interest i. Direct stake in the success of the market AND the responsibility to promote, regulate, and police commercial activity C. Anti-counterfeiting strategies of MNCs in China 1. Brand protection units a. Brand protection managers (members of the corporate security department) report to brand managers or general managers (members of the business or marketing department) i. Many take the position that every seized counterfeit product results in the recovery of a sale of an authentic product that would otherwise have been lost due to the sale of the counterfeit ii. Focus on short-term statistics b. Assist PRC authorities in enforcement i. Only PRC entities are allowed by law to engage in actual enforcement ii. BUT support by locating and identifying the counterfeiter (A) MNCs representatives (accompanied by PIs or outside lawyers) go directly to PRC to ask for a raid (B) Usually allowed to accompany PRC authorities

(C) Usually present at the raid to identify the counterfeit products 2. Private investigation companies and law firms a. Issues i. Technical legal matter: private companies are not allowed under PRC law to conduct investigations into illegal activity (engaging in police work) ii. Gray area of the industry (A) Unregulated, unlicensed, and in which abuses, such as giving bribes to government officials and extorting money from counterfeiters are common place iii. Highly lucrative and offers opportunities for wealth and advancement for persons with little formal education (A) Street guile is more important iv. Also, the enforcement companies report every good as a recovered sale (flawed assumption) b. Law firms i. May have private investigation departments ii. May hire these firms directly (A) But may insist on conducting the raids themselves (1) Seize evidence themselves (2) Collect higher fees from MNC clients 3. Problem 6-3 a. Backfire i. Can hurt the image of the MNE (A) Reputation for violence, lawlessness, etc. ii. More enforcement = more counterfeiters (A) No real consequences, so that counterfeiters are only going to be more agitated and will make more counterfeit goods (especially considering the lost profit from the temporary disruption of business) b. Perverse incentives for private enforcement industries i. Similar to AICs conflict of interest in local economy ii. No counterfeiting = no industry/income 4. Problem 6-4 a. US law FCPA violation b. Even if no FCPA i. Morally right choice: do not make payment, avoid setting precedent ii. Company loyalty (save own job): make payment (A) Chow: bad idea to make the payment; (1) nothing stopping from the counterfeiter to pay off the official (already clearly corrupt) (2) Bad precedent for reputation (brand image) c. Joint venture i. Not a good idea for the company

(A) Image of cooperation with criminals (reputation) (B) Counterfeiters are untrustworthy (C) Counterfeiter may not even agree (1) Profit incentive is higher in counterfeiting (2) If no consequences, then why subject self to more control/regulation of the legal way V. Enforcement obligations under TRIPS A. Art. 41 1. (1)Members shall ensure that enforcement procedures are available under their law as to permit effective action against any act of infringement of intellectual property rights covered by this Agreement, including expeditions remedies to prevent infringements and remedies which constitute a deterrent to future infringements. Applied as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse 2. (2)Procedures concerning the enforcement of IP rights shall be Fair and equitable. Not unnecessarily complicated or costly, or entail unreasonably time-limits or unwarranted delays 3. (3) Decisions on the merits of a case shall preferably be in writing and reasoned. They shall be made available at least to the parties to the proceeding without undue delay. Decisions on the merits of a case shall be based only on evidence in respect of which parties were offered the opportunity to be heard. 4. (4) Parties to a proceeding shall have an opportunity for review by a judicial authority of final administrative decisions and, subject to jurisdictional provisions in a Members law concerning the importance of a case, of at least the legal aspects of initial judicial decisions on the merits of a case. However, there shall be no obligation to provide an opportunity for review of acquittals in criminal cases. 5. (5) Does not create any obligation to put in place a judicial system for the enforcement of IP rights distinct from that for the enforcement of law in general, nor does it affect the capacity of Members to enforce their law in general. Nothing in this Part creates any obligation with respect to the distribution of resources as between enforcement of intellectual property rights and the enforcement of law in general. B. Civil/provisional remedies under TRIPS 1. Art 43 evidentiary presumption against defendants who destroy evidence 2. Art 44 make available injunctions that prevent the entry into commerce of imported infringing goods after customs clearance 3. Art. 45 provide damages adequate to compensate the right holder for infringement of IP rights 4. Art 46 create a mechanism for the disposal of infringing goods, materials, and implements used to create those goods outside the channels of commerce 5. Art 50 (injunction)(based on US law, analogous to FRCP 65) a. (1) Judicial authorities shall have the authority to order prompt and effective provisional measures

(a)to prevent an infringement of any intellectual property right from occurring, and in particular to prevent the entry into the channels of commerce in their jurisdiction of goods, including imported goods immediately after customs clearance ii. (b) to preserve relevant evidence in regard to the alleged infringement. b. (2)Judicial authorities shall have the authorities to adopt provisional measures inaudita altera parte where appropriate, in particular where any delay is likely to cause irreparable harm to the right holder, or where there is a demonstrable risk of evidence being destroyed c. (3) The judicial authorities shall have the authority to require the applicant to provide any reasonably available evidence in order to satisfy themselves with a sufficient degree of certainty that the applicant is the right holder and that the applicants right is being infringed or that such infringement is imminent, and to order the applicant to provide a security or equivalent assurance sufficient to protect the defendant and to prevent abuse d. (4) Where provisional measures have been adopted inaudita altera parte, the parties affected shall be given notice, without delay after the execution of the measures at the latest. A review, including a right to be heard, shall take place upon request of the defendant with a view to deciding, within a reasonable period after the notification of the measures, whether these measures shall be modified, revoked or confirmed e. (5) The applicant may be required to supply other information necessary for the identification of the goods concerned by the authority that will execute the provisional measures. f. (6) Without prejudice to paragraph 4, provisional measures taken on the basis of paragraphs 1 and 2 shall, upon request by the defendant, be revoked or otherwise cease to have effect, if proceedings leading to a decision on the merits of the case are not initiated within a reasonable period, to be determined by the judicial authority ordering the measures where a Members law so permits or, in the absence of such a determination, not to exceed 20 working days or 31 calendar days, whichever is the longer 6. Problem 6-6 (inconsistent with TRIPS) a. First, must have ex parte TRO -> preserve evidence (element of surprise) C. Criminal sanctions 1. TRIPS Art 61 a. Members shall provide for criminal procedures and penalties to be applied at least in cases of wilful trademark counterfeiting or copyright piracy on a commercial scale. Remedies available shall include imprisonment and/or monetary fines sufficient to provide a deterrent, consistently with the level of penalties applied for crimes of a corresponding gravity. In appropriate cases, remedies available shall also include the seizure, forfeiture and destruction of the infringing goods and of any materials and implements the predominant use of which has been in the commission of the offence. Members may provide for criminal procedures and penalties to be applied in other

i.

cases of infringement of intellectual property rights, in particular where they are committed willfully and on a commercial scale. b. Countries have discretion in other areas of IP infringement whether to impose imprisonment and/or monetary fines as long as sufficient to provide a deterrent, consistently with the level of penalties applied for crimes of a corresponding gravity 2. US law a. Criminal liability i. Trafficking in counterfeit goods or services. 18 USC 2320 ii. Willful copyright violations. 17 USC 506 3. Issues a. Obtaining imprisonment is difficult i. Must typically be brought by state prosecutor -> requires government to expend own resources ii. Conflict of interest 4. China-Measures Affecting the Protection and enforcement of IP rights a. US Arg: levels that China has set for commercial piracy are too high, so that counterfeiting on a commercial scale will be below the criminal threshold. b. H: US has not established that the criminal thresholds are inconsistent with Chinas obligations under Art. 61 i. Did not prove that the piracy was on a commercial scale below the set threshold for criminal penalties ii. The credibility and weight of evidence are critical because the claim is highly contested (A) Panel does not ascribe any weight to the evidence in the press articles (that US submitted)