China, the TPP and Intellectual Property

IIC - International Review of Intellectual Property and Competition Law, Feb 2016

Peter Drahos

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China, the TPP and Intellectual Property

IIC China, the TPP and Intellectual Property Peter Drahos 0 0 P. Drahos (&) LLM; PhD Regulatory Institutions Network, Australian National University and Centre for Commercial Law Studies, Queen Mary, University of London , London , UK 1 See P. Drahos and J. Braithwaite, Information Feudalism , New Press: New York, 148-149 , USA 2 P. Drahos, The Global Governance of Knowledge: Patent Offices and their Clients, Cambridge University Press , Cambridge, 2010 The Trans-Pacific Partnership (TPP) may yet turn out to be the agreement that most transforms national regulatory systems, perhaps even more so than the Uruguay Round (1986-1994) that delivered the World Trade Organization (WTO) and agreements such as the TRIPS Agreement. Much depends on how soon China joins the TPP. There are two immediate objections to my opening paragraph. It assumes that the TPP will come into operation and that China is planning to join. A text of the TPP has been signed by twelve parties (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore, the United States and Vietnam), but each of these parties has to shepherd this text through its respective domestic treaty-making processes. The TPP does not need the approval of all its signatories to come into force. Six or more signatories making up at least 85 % of the combined gross domestic product (GDP) of the original signatories would be enough to give the TPP legal force. The US with its 18 trillion dollar GDP does have to be part of the six. In the US, politicians like Donald Trump will cast themselves as Horatius-like figures in the battle to save American jobs from the TPP. There will be drama and brinkmanship, just as there was with the WTO and the TRIPS Agreement. It tends to be forgotten that Intel in the final few days of the Uruguay Round led a successful charge against the entire package of agreements because it was not happy with the wording of the compulsory licensing provision in TRIPS (see the exception in Article 31(1)(c) for semiconductor chips).1 The US Biotechnology Industry Organization and the Pharmaceutical Research and Manufacturers of America, - discontent with provisions in the TPP that allow members to choose between a minimum eight-year data exclusivity term for new biologics or a comparable outcome via a five-year term plus some other measures, will probably try similar tactics. My own view is that because the TPP represents a huge opportunity to influence the direction of national regulatory policy in the Asia Pacific, especially in the field of intellectual property, enough business lobbies will support it to prod Congress into voting in its favour. The US biotech and pharmaceutical industry also know that countries can be persuaded bilaterally to move to the desired (at least for the moment) 12-year term for biologics. One only has to look at the way in which the data protection standard in TRIPS, which does not specify a period of protection, receded into history as countries were persuaded to adopt data exclusivity periods. The view that the US Congress will approve the TPP is plausible enough, but the claim that China is planning to join the TPP seems implausible. After all, it is one of the leaders in the Regional Comprehensive Economic Partnership (RCEP) negotiations, often depicted as the alternative to the TPP. A more likely scenario is that both the TPP and RCEP will emerge and these two agreements will over the decades becoming the stepping stones to a Free Trade Area of the Asia Pacific, such a free trade area having been proposed and discussed in the Asia Pacific Economic Forum since at least the 1990s. However, it is also worth considering a scenario in which China does the unexpected and joins the TPP. One can think of many reasons for China not to join: China cannot accept the TPP’s labour and environmental standards, its higher intellectual property standards or the entailed reforms of its state-owned enterprises. These objections all have weight, but perhaps not as much as might be first thought. China is no longer the lowest-cost location for labour and so comparatively modest provisions on labour standards are less of a problem. With the water in its major rivers not fit for human consumption and air pollution one of the biggest killers of Chinese people, tackling environmental problems has become a high priority for China.2 Tilting the metaphorical ‘‘balance’’ in intellectual property protection even further in favour of owners no longer holds fears for China. China’s warm embrace of intellectual property systems continues to be revealed by the cold statistics: its patent office is the largest in the world in terms of applications and since 2010 it has accounted for more than half the annual increases in global trade mark filing activity.3 China will also have to reform its state-owned enterprises if it wishes to create a dynamic internal market to which investors will continue to look through the th (...truncated)


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Peter Drahos. China, the TPP and Intellectual Property, IIC - International Review of Intellectual Property and Competition Law, 2016, pp. 1-4, Volume 47, Issue 1, DOI: 10.1007/s40319-015-0432-y