TRIPS Enforcement Rules

Recent Jurisprudence and other developments

42
nd
World Intellectual Property Congress
AIPPI Paris 3-6 October 2010
Wolf MEIER-EWERT
World Trade Organization
Wolf.Meier-Ewert@wto.org
No views or analysis to be attributed to
the WTO, its Secretariat or any of its Members
2
Structure
WTO Jurisprudence on TRIPS Enforcement Rules
Background
China IPRs (DS362)
Article 51 scope of Section 4 of Part III
Article 59 shall have the authority
Article 59 and 46 release into the channels of commerce
Relationship between Article 41.1 and 41.5
Article 61 meaning of commercial scale
Pending consultations
EU Goods in transit (DS408 & 409)
Enforcement-related Discussions in the TRIPS
Council
Cross-retaliation under the TRIPS Agreement
3
I.
WTO Jurisprudence on
TRIPS Enforcement Rules
4
WTO Dispute Settlement Statistics
Overall figures (04/2010)
Requests for consultations 405
Mutually agreed solutions: 95
Panels established: 173/214
Panels composed: 146/182
Panel reports adopted: 124
Appellate Body reports adopted: 78
Compliance panels: 29
Appeals of compliance panels: 19
Arbitrations on "retaliation" : 19
Authorizations to "retaliate" : 17
5
WTO Dispute Settlement Mechanism
Trends in the Use of the System (04/2010)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
As complainants
Developing
Developed
6
WTO Dispute Settlement Mechanism
Most frequent complainants/respondents (04/2010)
14 Korea
12
Thailand
14 Mexico
13
Japan
14 Brazil
14
Korea
15 Canada
15
Argentina
15 Japan
21
Mexico
16 Argentina
18
India
17 China
24
Brazil
20 India
33
Canada
83 EC
81
EC
109 US
93
US
No of cases defended Member No of cases initiated Member
7
GATT 1994
37%
Subsidies
10%
Agriculture
8%
Licensing
4%
TBT
5%
SPS
4%
Other
15%
Safeguards
4%
TRIPS
5%
Anti-Dumping
10%
WTO Dispute Settlement Mechanism
Consultations according to Agreement at issue
(04/2010)
8
TRIPS Dispute Settlement Cases (1)
Few cases of relevance for IPR enforcement in
the past
Cases subject to amicable settlement:
US vs. Denmark (WT/DS 83)
US vs. Sweden (WT/DS 86)
US vs. Greece/EC (WT/DS 124 and 125)
US vs. Argentina (WT/DS 196)
Panel reports in which enforcement played a
marginal role:
EC vs. US (WT/DS 176)
US/Australia vs. EC (WT/DS174 & 290)
9
TRIPS Dispute Settlement Cases (2)
China - Measures affecting the Protection and
Enforcement of Intellectual Property Rights
(WT/DS362):
Claims by the United States regarding:
Thresholds for criminal procedures and sanctions
Disposal of IPR-infringing goods confiscated by Customs
authorities
Denial of copyright and related rights protection and
enforcement to works that have not been authorized for
publication / distribution within China
Panel Report adopted on 20 March 2009 no
appeal
Implementation period expired 20 March 2010
10
DS362: Customs Measures
US claims
Measures at issue:
Regulations on Customs Protection of IPRs
Measures for the Implementation of the Customs IPR Regulations
Public Notice No. 16/2007 notified by the General Administration of
Customs
Disposal options under the Customs Measures are
Donation
Sale to the right holder
Auctioning off according to law, after eradicating the infringing
features
Destruction (if infringing features cannot be eradicated)
11
Claims:
None of the disposal options (other than
destruction) provided for by the Customs Measures
complies with the principles of Art. 46
Measures create a mandatory sequence regarding
customs disposal options for infringing goods, so that
Chinese customs authorities cannot exercise their
discretion to order destruction of the goods as
required by Art. 59, but must give priority to other
disposal options
DS362: Customs Measures
US claims
12
DS362: Customs Measures
Panel findings
Article 51 TRIPS
Suspension of Release by Customs Authorities
Members shall, in conformity with the provisions set out below,
adopt procedures (13) to enable a right holder, who has valid
grounds for suspecting that the importation of counterfeit
trademark or pirated copyright goods (14) may take place, to
lodge an application in writing with competent authorities,
administrative or judicial, for the suspension by the customs
authorities of the release into free circulation of such goods.
Members may enable such an application to be made in respect
of goods which involve other infringements of intellectual
property rights, provided that the requirements of this Section are
met. Members may also provide for corresponding procedures
concerning the suspension by the customs authorities of the
release of infringing goods destined for exportation from their
territories.
(13) It is understood that there shall be no obligation to apply such procedures
to imports of goods put on the market in another country by or with the consent
of the right holder, or to goods in transit.
13
DS362: Customs Measures
Panel findings
Acknowledges that China applies TRIPS plus, as
border measures are applied
not only to counterfeiting and piracy, but also in
respect of patent violations etc.
not only to imports (0.15% of seized goods), but also
to exports (99.85% of seized goods)
Interpreting Art. 51, the panel finds that Art. 59
only applies to goods suspended on export
14
Article 59 TRIPS
..competent authorities shall have the authority to order the
destruction or disposal of infringing goods in accordance with the
principles set out in Article 46..
Article 46 TRIPS
to order that goods that they have found to be infringing be,
without compensation of any sort, disposed of outside the
channels of commerce in such a manner as to avoid any harm
caused to the right holder, or, unless this would be contrary to
existing constitutional requirements, destroyed.
In regard to counterfeit trademark goods, the simple removal of
the trademark unlawfully affixed shall not be sufficient, other than
in exceptional cases, to permit release of the goods into the
channels of commerce."
WTO Dispute Settlement:
China Intellectual Property Rights (4)
15
DS362: Customs Measures
Panel findings
Interpreting Art. 59 the Panel finds that shall have the
authority to order the destruction or disposal
carries no obligation to exercise that authority,
is not exclusive or exhaustive;
requires the possibility to order destruction or disposal at any given
moment, until the goods are finally dealt with;
Can authority be conditioned?
no obligation to take action in the absence of an application or request
text suggests that conditions that allow destruction or disposal are
permitted
Panel finds disposal options not shown to be inconsistent
with Articles 46 sentence 1-3
No mandatory hierarchy of disposal options under the
Customs Measures
16
DS362: Customs Measures
Panel findings
Article 46, sentence 4 contains an independent
obligation for Members authorities regarding
release of goods into the channels of commerce
Disposal options under the Customs measures are
inconsistent with the principle in sentence 4 of Art.
46, as auction permits the release into the channels
of commerce after the simple removal of the
trademark in more than just exceptional cases.
17
US Claims
Criminal Law thresholds exclude classes of commercial activity
from criminal prosecution (thresholds of business volume, sales
or numbers of copies) inconsistently with Article 61
Issues raised
Article 41.5 no obligation to put into place a judicial system for
IP enforcement
Article 61 remedies .. to provide a deterrent .. consistently with
the level .. applied for crimes of a corresponding gravity
Article 61 Definition of Commercial Scale
DS362: Criminal Measures
18
Findings
Relationship Article 41.1 to 41.5
Requirements under Article 41.1 are general obligation
for Part III
Article 41.5 creates no discretion for Members
regarding substantive obligations
Article 61, sentence 2 relationship with penalties
applied for crimes of a corresponding gravity
DS362: Criminal Measures -
Panel Findings (1)
19
Findings
Commercial Scale
the magnitude or extent of typical or normal commercial
activity with respect to a given product in a given market
No violation proven, as no specific evidence with
regard to products and markets had been presented by
the United States
DS362: Criminal Measures -
Panel Findings (2)
20
Pending Consultations DS 408/409
Brazil and India challenging the EUs/NLs
practice of stopping pharmaceutical products in
transit on the basis of patent infringement
Compatibility with TRIPS obligations
Applicability of conditions / safeguards in the provisions on
border measures ?
Barrier to legitimate trade ?
Compatibility with the spirit of the Doha Declaration on
TRIPS and Public Health
Compatibility with GATT obligations
Article V - freedom of transit ?
21
II.
Enforcement-related Discussions in the
TRIPS Council
22
Work in the TRIPS Council (2)
Discussions on Enforcement (developed
countries)
EC Initiatives: June 2005 (IP/C/W/448); March 2006 (IP/C/W/468);
June 2006 (IP/C/W/471)
Joint Communication from EC/Japan/ Switzerland/US in October
2006 (IP/C/W/485)
US Communication in Feb.2007 (IP/C/W/488)
Swiss Communication in June 2007 (IP/C/W/492)
Discussions on Enforcement (developing
countries)
India and China proposed the Agenda item TRIPS Enforcement
Trends for the June 2010 TRIPS Council to discuss ACTA
developments and Goods in transit
23
III.
Cross-retaliation
under the TRIPS Agreement
24
WTO Dispute Settlement System:
Suspension of Concessions
Full implementation of Panels findings preferred
Suspension of concession or other obligations
(retaliation) can be authorized if a Member fails
to implement recommendations within the period
fixed or to offer acceptable compensation
Applicable principles Article 22.3 DSU
Normally suspension of concessions in the same sector
If not practicable or effective, the Member may seek to
suspend concessions in other sectors under the same
agreement
If not practicable or effective, the Member may seek to
suspend concessions under another covered agreement
(cross-retaliation)
25
WTO Dispute Settlement Mechanism
Arbitrations Art. 22.6 DSU
Variable amount based on a
formula / e.g. 147,4 millions
US$ for 2006
+
147,3 million US$ per year
31-08-2009 Brazil / United States
US Upland Cotton
(DS267)
US$21 mio/year 21-12-2007
Antigua and Barbuda /
United States
US Gambling
(DS285)
US$247,797,000 17-02-2003 Brazil / Canada Canada Aircraft (DS222)
Amount of the final decisions
and awards under 1916 Act
24-02-2004 EC / United States
US 1916 Act (EC)
(DS136)
Amount of disbursements
multiplied by a trade effect
coefficient
31-08-2004
Australia, Brazil, Chile,
European Communities, India,
Indonesia, Japan, Korea,
Thailand / United States
US Offset Act (Byrd
Amendment)
(DS217, 234)
Award
Date of the
Award
Parties Dispute
26
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