Do Developing Countries Have a Say? Bilateral and Regional Intellectual Property Negotiations with the EU
Do Developing Countries Have a Say? Bilateral and Regional Intellectual Property Negotiations with the EU
Anke Moerland 0
0 A. Moerland (&) Assistant Professor of Intellectual Property Law, Maastricht University , Maastricht , The Netherlands
Bilateral and regional agreements concluded with the European Union (EU) and the United States are extensive and include high levels of IP protection and enforcement standards. Such protection is crucial to enhance their competitiveness, but it does not seem to be a priority for developing countries (DCs). This paper analyses how DCs should best address trade negotiations in which high standards of IP protection and enforcement are sought and few balancing (safeguard and flexibility) provisions, or such that can stimulate technology transfer, are on offer. The Max Planck Institute for Innovation and Competition's ''Principles for Intellectual Property Provisions in Bilateral and Regional Agreements'' cover many issues that are worth discussing as to how these can be incorporated in the negotiating process. Data collected from the CARIFORUM region when negotiating the EU-CARIFORUM Economic Partnership Agreement reconfirm the Principles' main recommendations; so do the experiences from India, Central American countries, Colombia and Peru in negotiations with the EU. The argument made here, however, is that a crucial factor in achieving more favourable outcomes for DCs is through an increase of their bargaining power. It will be examined what structural factors influence bargaining power and how this impacts the use of negotiating strategies.
The Caribbean; CARIFORUM; Union; Regionalism; TRIPS-plus; Developing countries; European
Developing countries1 (and less so least-developed countries) regularly negotiate
international trade agreements, both among each other but also with developed
countries, such as the United States (US) and the European Union (EU). In
negotiations with the US or the EU, developing countries (DCs) must be prepared,
among others, to negotiate extensive chapters that contain high levels of intellectual
property (IP) protection and enforcement standards.2 While strong IP protection and
enforcement is key for developed countries,3 it does not seem to be a priority of
trading partners that are DCs. Depending on the level on which they make use of the
IP system and offer IP protection,4 these countries might rather want to focus on
safeguard provisions, flexibilities, limitations to intellectual property (IP) rights,
provisions reinforcing technology transfer and cooperation with companies in
partner countries. Arguably, it is under these conditions that they are able to benefit
most from IP protection and enforcement. However, these areas are not prominently
addressed in recent bilateral and regional agreements (BRAs).
This article analyses how DCs should best address negotiations in which high
standards of IP protection and enforcement are sought and few balancing (safeguard
and flexibility) provisions, or such that can stimulate technology transfer, are on
offer. The Max Planck Institute for Innovation and Competition’s ‘‘Principles for
Intellectual Property Provisions in Bilateral and Regional Agreements’’ (hereinafter
‘‘Max Planck Principles’’)5 cover many issues that are worth discussing as to how
they can be incorporated in the negotiating process. In Part 2, the article first
analyses the main challenges that DCs face when negotiating the IP chapters of
recent BRAs with the EU. It is only after 2006 that the EU has started to include
TRIPS-plus provisions in its BRAs; compared to the US, its approach is similarly
aggressive and still on going in several negotiations with third parties. In Part 3, the
recommendations suggested by the Max Planck Principles are discussed in the light
of the CARIFORUM6 region’s experience when negotiating the CARIFORUM-EC
Economic Partnership Agreement (EPA). The data on which the analysis is based
was collected mainly through semi-structured interviews with approximately 30
state and non-state actors in the Caribbean region in 2010. Finally, the author argues
1 Acknowledging that a general definition of developing countries is lacking, yet commonly used, I chose
to use the term as a proxy for referring to countries that overall do not yet make full use of the intellectual
property system and/or have weak IPR protection. Such countries are likely to fall under the World Bank
income groupings low, lower-middle or upper-middle income group, which generally may come under
the term developing countries. Yet, a clear delineation is not possible as for some areas, even high income
countries could have chosen to offer a relatively low level of IP protection, on which they face pressure
during trade negotiations. The findings of the paper therefore are largely directed towards developing
countries, but could also be relevant for specific IP areas or industries for developed countries.
2 Hassan et al. (
), p. xiii.
3 European Commission (
), p. 2.
4 US Chamber of Commerce (2017).
5 Max Planck Institute on Innovation and Competition (2013).
6 CARIFORUM stands for the Caribbean Forum of African Caribbean and Pacific states and includes 15
that a crucial factor in achieving more favourable outcomes for DCs is through an
increase of their bargaining power. The examination will address which structural
factors influence the bargaining power of negotiating partners, their influence on
negotiating strategies, and which lessons have been learnt from the negotiations
between the EU on the one hand, and India, Central American countries, Colombia
and Peru as well as CARIFORUM countries on the other hand.
2 IP Provisions in Recent EU Bilateral Trade Agreements
During the last 20 years, the IP landscape in bilateral and regional agreements has
been dominated by two main developments. First, the US has pursued the most
aggressive approach in bilateral negotiations on IP protection. Not only the content
of the IP chapter in its free trade agreements (FTAs), but also the process of
negotiations is not comparable with the approach of any of the other major actors,
such as the EU, Japan and members to the European Free Trade Agreement. In
terms of content, the IP chapter contained in US FTAs sets out the highest standards
of IP protection in most areas of IP covered by the Agreement on Trade-Related
Aspects of Intellectual Property Rights (hereinafter TRIPS), the exception being the
protection of geographical indications. The provisions relating to the protection of
public health and to the access to digital works have been described as the most
farreaching obligations.7 But also the rules on patent protection for plants and animals
and the enforcement provisions hardly leave its negotiating partner any room for
choosing the appropriate method of implementation. Regarding the negotiating
process, the US applies a disputed ‘‘certification process’’ that assesses to what
extent the standards agreed upon in the FTA are also implemented by their
negotiating partner.8 Thereby, the influence of the US does not stop at the
negotiating table, but extends to the implementation phase.
The other development that characterizes the bilateral and regional IP
landscape is the recent shift in the EU’s IP policy towards third countries. The
policy has changed with regard to at least two aspects. First, a shift has occurred
from regulating IP protection primarily through multilateral treaties to using the
instrument of bilateral trade agreements for achieving the desired level of IP
protection abroad. EU bilateral trade agreements concluded before 2006 contain
only a few provisions on IP protection, an exception being the agreements on
trade in wine and/or spirits. Instead of identifying specific obligations for
different fields of IP protection, European ‘‘old generation’’ bilateral trade
agreements refer to standards of protection indirectly by setting out a list of
multilateral agreements with which negotiating partners need to comply or to
which they are required to accede. One exception to the EU’s multilateral
approach is the area of geographical indications (GIs) and traditional
expressions, in which the EU has offensive interests. EU bilateral agreements
concluded before 2006 set out specific obligations which require a higher level
7 Abbott (2004); Morin (
); Rossi (
8 Moerland (
), p. 103; Roffe (
), p. 23.
of protection than the US.9 Since 2006, bilateral agreements contain detailed
bilateral standards of protection for the various IP rights individually.
Second, the level of protection asked for by the EU has increased considerably.
For more than a decade, the EU demanded that third countries abide by the TRIPS
Agreement. Since 2006, however, the protection included in bilateral trade
agreements has become of a TRIPS-plus nature.10
The EU’s new external IP policy seems to follow, in many aspects, the aggressive
stance taken by the US in its FTAs.11 The changes are both reflected in policy
documents as well as in recent ‘‘new generation’’ agreements. They are in line with
the goal set out in the ‘‘Global Europe’’ strategy12 of using IP provisions in bilateral
trade agreements to foster Europe’s competitiveness. Already the scope of the IP
chapters in the ‘‘new generation’’ bilateral trade agreements reflects the new focus
on IP issues. For the first time, bilateral agreements contain specific chapters on the
protection of intellectual property (and innovation). These chapters are very detailed
as they deal with each IP right individually. The IP chapters consist of
approximately 33 articles. This level of detail in regulating IP in bilateral trade
agreements reflects an alignment with the style used by the US: the scope of
protection contained in US FTAs is equally specific and detailed. The level of
protection in the ‘‘new generation’’ agreements is achieved through a mixed
approach. While the EU continues to ask its partner countries to accede to or comply
with particular multilateral IP treaties, the new IP chapters now also and even
predominantly address the various areas of IP individually, through specific
provisions. This new approach by the EU, which follows the US approach, is
presented according to four points in more detail below.
2.1 IP Provisions as Part of a Package Deal in Trade Negotiations
IP protection is not only an area of protection addressed at the periphery of trade
negotiations between countries. A considerable amount of BRAs concluded
worldwide contains IP provisions. A recent study conducted by the WTO
Secretariat in 201413 has identified how many agreements of the ones notified to
the GATT/WTO14 include some content relating to IP protection and
enforcement. Accordingly, from the 245 BRAs reported to the GATT/WTO until
February 2014 and that are still in force, 174 agreements contain some type of
IP provisions.15 It is particularly the agreements that entered into force after
2000 that have IP content: more than 80% of those include IP provisions, of
9 Moerland (
), p. 142 ff.
10 Moerland (
), p. 185 ff.
11 Maskus (
), p. 460.
12 European Commission (
), p. 2.
13 Valde´s and McCann (
14 BRAs notified to the WTO include free trade agreements, customs unions or partial scope agreements
in the areas of goods and services. They include the notifications made under Art. XXIV GATT 1994,
Art. V GATS, the Enabling Clause, as well as accessions to existing RTAs.
15 Valde´s and McCann (
), p. 21.
which the vast majority refers to specific IPR types.16 These agreements do not
only deal with IP issues. They take the form of FTAs, addressing various areas
of trade and allowing for so-called ‘‘package deals’’.17 Research has shown that
enhanced IP protection and enforcement is often accepted by one negotiating
partner as a trade-off for concessions by the other party in other areas: ‘‘Deals
are driven by export interests and other objectives external to the IP system
rather than the common goal to achieve a mutually advantageous, balanced
regulation of IP among the parties.’’18
Therefore, when IP standards are included in agreements, there is a real danger
that countries accept less apt standards to their system in order to gain more in other
areas, particularly when no impact assessment has been carried out.
2.2 Prescriptive and Complex IP Rules with Little Regard for Flexibilities
The IP provisions included in recent BRAs are more extensive than multilateral
standards agreed upon in the Paris Convention for the Protection of Industrial
Property, the Berne Convention for the Protection of Literary and Artistic Works
and the TRIPS. The latter agreements strike a balance between minimum standards
of IP protection and enforcement on the one hand, and flexibilities and ceilings on
the other hand.19 This balance is mostly absent in bilateral and regional
In fact, IP provisions have become more detailed and prescriptive: they transplant
specific protection and enforcement standards from the domestic IP system of the
IP-demanding country. In particular, in recent EU agreements, most of the
enforcement provisions (rules on evidence, provisional and precautionary measures,
remedies, damages) included in the CARIFORUM-EC EPA, the EU-Colombia-Peru
FTA and the draft India-EU BTIA (as proposed by the EU) are literally taken from
the Enforcement Directive 2004/4821 and the Customs Regulation 1383/2003.22
Also in the area of GIs, the EU has chosen to insert or propose identical provisions
to those contained in the EC Regulation 510/2006 on the protection of GIs for
agricultural products and foodstuffs to recent negotiating partners. In particular, the
Regulation’s provisions addressing the level of GI protection,23 exceptions,24 as
16 Valde´s and McCann (
), p. 21.
17 Valde´s and McCann (
), p. 26.
18 Max Planck Institute on Innovation and Competition (
), principle 1.
19 Such a balance is not necessarily incorporated in other multilateral agreements. Examples of treaties
that include substantial standards of protection are the International Convention for the Protection of New
Varieties of Plants, as revised in Geneva on 19 March 1991, the WIPO Copyright Treaty and the WIPO
Performances and Phonograms Treaty.
20 Max Planck Institute on Innovation and Competition (
), principle 4.
21 See Arts. 7, 9–13 Enforcement Directive 2004/48.
22 See Art. 2 Customs Regulation 1383/2003.
23 See Art. 13.1 EC Regulation 510/2006.
24 See Art. 3.2 EC Regulation 510/2006.
well as the relationship with trade marks25 have found their way into the agreements
concluded with CARIFORUM countries, Colombia-Peru and that being negotiated
with India.26 Similarly, in the area of copyright protection, provisions identical to
those used in EU legislation have been transposed into some ‘‘new generation’’
bilateral trade agreements. The Information Society Directive 2001/29 contains
protection for technical protection measures, rights management information,27 and
the rights on reproduction and communication to the public.28 Provisions thereon
have been copy-pasted into the IP chapter proposed to India.29 Finally, the
obligations in the area of design protection in recent bilateral trade agreements also
show very similar language to that used in the EC Directive 89/71 on the legal
protection of designs. In particular, its provisions on the definition of a design,30 the
definition of the constituting element ‘‘individual character’’,31 and the term of
protection32 have informed the equivalent rules in the agreements with
CARIFORUM States and Central American countries, and the IP chapter proposed
Legal transplants (these are identical or almost identical provisions stemming
from the internal legislation of the originating country) reflect the domestic
preferences of the originating jurisdiction, in this case the EU. They are not
necessarily adapted to the preferences of the receiving jurisdiction. As the
prescriptive language used does not leave much policy space for adaptations during
the implementation phase, the effect is that the provisions may stay extraneous to
the system, and thereby not addressing domestic needs. This is particularly a
challenge for DCs who have less capacity to address and mitigate the most
pernicious effects of legal transplants.
In contrast to the detailed legal transplants regarding the IP obligations, it is
important to note that the exceptions, limitations and other checks and balances
present in the EU domestic system are mostly not transcribed into the BRA. The
effect is that the country facing IP demands is left with a higher level of IP
protection and enforcement than the IP-demanding country itself if its domestic law
25 See Art. 14 EC Regulation 510/2006.
26 On the level of protection, see Art. 210.1 EU-Colombia-Peru FTA; Art. 9.4 2010 draft IP
chapter India-EU BTIA, as proposed by the EU (note that the area of GI is not addressed in the 2013 draft,
therefore the earlier draft of the EU-India BTIA from July 2010 has been used). On the exception
addressing GIs that are identical to the name of a plant variety or animal bread, see Art. 145.C.2
CARIFORUM-EC EPA; Art. 9.3.2 2010 draft IP chapter India-EU BTIA, as proposed by the EU. On the
relationship with trademarks, see Art. 211.1 EU-Colombia-Peru FTA; Art. 9.7.1 and 5 of the 2010 draft IP
chapter India-EU BTIA, as proposed by the EU.
27 See Art. 6 and 7 Information Society Directive.
28 See Art. 2 and 3 Information Society Directive.
29 See Art. 7.4bis, 7.5, 7.7 and 7.8 draft IP chapter India-EU BTIA, as proposed by the EU.
30 See Art. 1(a) EC Directive 89/71.
31 See Art. 5.1 EC Directive 89/71.
32 See Art. 10 EC Directive 89/71.
33 See Art. 146.B.3 and 146.E.1 CARIFORUM-EC EPA; Art. 8.5 EU-Central America FTA; Art. 12.2
draft IP chapter India-EU BTIA, as proposed by the EU.
does not provide for these safeguards.34 This is particularly so in the area of GIs and
Examples of omitted exceptions are two TRIPS exceptions35 in the area of GIs
that are included in EU internal legislation.36 These concern the use of generic terms
(EU-Colombia-Peru FTA and draft IP chapter India-EU BTIA) and homonymous
GIs (EU-Colombia-Peru FTA, EU Central America AA). Important TRIPS
flexibilities and safeguards, which can also be found in the Enforcement Directive,37
have been omitted from recent ‘‘new generation’’ agreements. These are the general
principle on freedom of implementation,38 the safeguards relevant to rules on
preserving evidence39 as well as provisional40 and corrective measures.41
2.3 Lack of Transparency and Public Participation
The process of negotiating bilateral and regional agreements has been criticized by
scholars, civil society organizations and society at large.42 The criticism specifically
focuses on the lack of transparency, inclusiveness and equal participation of
stakeholders and the public. One important consequence of this is that information
on the content of the agreement is not available. Such secrecy can be in the interest
of both negotiating partners, e.g. where a public debate on contentious issues is
unwanted, neither within the EU nor among domestic actors in the partner country.
But where the negotiating partner would be interested in sharing information but is
not allowed to do so,43 the lack of available information makes it almost impossible
to receive relevant information and advice from third parties in order to adjust their
negotiating strategy. For several DCs, advice from third parties is crucial as
34 Max Planck Institute on Innovation and Competition (
), principle 7.
35 Art. 23.3 and 24.6 TRIPS Agreement.
36 Art. 6.2 and 6.3 Regulation 1151/2012.
37 Art. 7 Enforcement Directive on the preservation of evidence; Art. 9.3, 9.5 and 9.6 Enforcement
Directive on provisional measures and Art. 10.3 on the proportionality of corrective measures.
38 See Art. 41.5 TRIPS Agreement. It has been omitted in the draft IP chapter India-EU BTIA, the
CARIFORUM-EC EPA and the EU-Central America AA. The provision has been included in Art. 234.4
39 Art. 153 CARIFORUM-EC EPA and Art. 229 EU-Colombia-Peru FTA. Only Art. 19 draft IP
chapter India-EU BTIA (as leaked in September 2013) and Art. 262 EU-Central America AA do.
40 Art. 156 CARIFORUM-EC EPA, Art. 232 EU-Colombia-Peru FTA, and Art. 22.1 draft IP
chapter India-EU BTIA (as leaked in September 2013) do not include the safeguards set out in Art. 50.3,
50.6 and 50.7 TRIPS Agreement and Art. 9.3, 9.5, 9.6 and 9.7 Enforcement Directive 2004/48. They
relate to the power of judicial authorities to require additional evidence from the applicant, to provide a
security, to honour a request to revoke the provisional measure if no proceedings on the merits had been
started and to grant appropriate compensation to the defendant. Only Art. 265 EU-Central America AA
41 Art. 157 CARIFORUM-EC EPA, Art. 241 EU-Colombia-Peru FTA do not include the need to secure
proportionality when imposing corrective measures, as set out in Art. 46 TRIPS Agreement. On the other
hand, Art. 23 draft IP chapter EU-India BTIA and Art. 266.1(b) EU-Central America AA provide for this
42 BIOTHAI (
), p. 28; Kuanpoth (
), p. 29; Oxfam America (2003), p. 6; Vivas-Eugui (2003),
43 El-Said (2007), p. 170.
domestic constituents often lack the necessary expertise.44 Official information is
either not made public at all or merely in summary version just before or after the
agreement has been signed. The EU in fact makes negotiating mandates available,
but not the negotiating texts. In many cases, such draft negotiating texts may be
leaked via channels that have not been authorized by the negotiating partners.45
However, these texts are not always leaked in time for stakeholders to react to them.
Furthermore, the exact date from which they stem is often unknown and one cannot
rely on such information to correctly reflect the state of negotiations at that stage.
Another consequence is that preferences of only particular stakeholders are heard
and discussed during the process of negotiations. As a result, the final text of the
agreements will not be the outcome of a process where different interests prevalent
in society compete with each other for influence. It is, however, this latter struggle
for influence that should inform policy choices on both sides of the negotiating
table. This is ever more relevant where the text of the agreement contains legal
2.4 Few Concrete Provisions on Licensing and Cooperation Arrangements
In light of the strong IP protection present in the chapters, the absence of
complementary rules on licensing or cooperation arrangements impacts the
possibility for technology transfer negatively. In particular, legal obligations
surrounding licensing are hardly or with little commitment included in such
agreements. This is problematic as the control of adverse licensing practices
often can inhibit technology transfer. The same is true for cooperation
arrangements between industries from the EU and in partner countries: they
are either absent or unspecific and non-binding. Even though it is difficult to
ensure industry support, bilateral and regional trade agreements are excellent
opportunities to specify the obligations firms from the EU could take up, e.g. in
terms of funding for specific transfer of technology programs.47 The absence of
such concrete commitments has also been lamented with regard to the
implementation of Art. 66.2 TRIPS, which without concrete obligations do not
create meaningful results for transferring technology. The same destiny will
apply to BRAs that lack concrete commitments.
The CARIFORUM-EC EPA provides an example where efforts have been made
to address issues of technology transfer, cooperation arrangements and licensing
practices.48 However, while these attempts have been appreciated as being the first
to suggest bilateral provisions on technology transfer, at the same time, they have
been criticized for not being specific enough and merely including soft obligations,
for example, the exchange of views, the sharing of information and using language
44 Moerland (
), p. 576.
45 An example are the draft versions of the Anti-Counterfeiting Trade Agreement.
46 Max Planck Institute on Innovation and Competition (
), principle 10.
47 Abbott (
), p. 168.
48 See Art. 134, 135.2.(d) and (f), 142.1 and 142.3 CARIFORUM-EC EPA.
such as ‘‘promoting’’ partnerships for research and development activities and
‘‘facilitating’’ support for technical assistance.49
According to Art. 142.3 CARIFORUM-EC EPA, the European Union shall
promote and facilitate the use of incentives for technology transfer to all
CARIFORUM States. While the technical negotiator of IP issues Malcolm Spence
stresses that it has been an interest of CARIFORUM States to (1) extend the use of
incentives, rather than incentives as such, to (2) all CARIFORUM States, rather
than to least developed countries only, the provision loses some of its strength
because of the type of obligation agreed upon: the EU shall ‘‘facilitate and promote’’
the use of such incentives and is not obliged to provide them.
The same is true regarding the cooperation arrangements in the
CARIFORUMEC EPA: while Art. 134 identifies the relevant programmes under which
CARIFORUM firms could participate, the obligation is one of facilitating and
promoting such use. Accordingly, Art. 134 of the CARIFORUM-EC EPA requires
parties to facilitate and promote the participation of CARIFORUM States in existing
and future framework programmes,50 specific programmes and other activities of
the European Union. Even though the obligation is rather soft, so far, no other
bilateral partner country was able to obtain access to such programmes for its firms.
In addition, it identifies the relevant programmes clearly enough for CARIFORUM
firms to rely upon them. This obligation has to be read in conjunction with the
caveat that such access is granted only in so far as it is permitted by each party’s
internal rules governing the access to these programmes and activities.51
With regard to licensing practices, the CARIFORUM-EC EPA requires EPA
parties to take measures to prevent and control certain licensing practices or
conditions pertaining to intellectual property rights.52 The licensing practices that
are meant to be controlled are those that may adversely affect the international
transfer of technology, and may constitute an abuse of intellectual property rights by
right holders, or an abuse of obvious information asymmetries in the negotiation of
licenses. According to Malcolm Spence, the technical negotiator of IP issues during
the EPA negotiations, this provision is meant to avoid certain situations that have
arisen in the past in CARIFORUM States. Small firms in developing countries
found themselves in situations in which licensing agreements had already been
concluded before the product was protected by a form of intellectual property in
CARIFORUM States’ markets. Another scenario was that licensing agreements had
still been concluded even though the product was running out of protection and was
about to enter into the public domain. Furthermore, CARIFORUM States were
eager to prevent agreements in which innovations made by the licensee become the
49 Abbott (
), p. 168; Shabalala (2008); Third World Network (
), p. 9.
50 These refer to the so-called Seventh Framework Programmes (FP7) which are aimed at encouraging
51 In the FP7 programmes, only firms established in disadvantaged and outermost regions of the
European Union, as well as those established in neighbouring states which participate in the European
Neighbourhood Policy, are eligible for participation. As Malcolm Spence pointed out during the
negotiations, CARIFORUM States indeed are neighbouring states to the French Caribbean Overseas
Regions and other EU territories in the Caribbean and should therefore benefit from participation.
52 See Art. 142.2 CARIFORUM-EC EPA.
property of the right holder.53 To a certain extent, this goal has been achieved as
parties are obliged to prevent and control these practices and because the provision
addresses the issue of information asymmetries.54 On the other hand, the provision
has been criticized because it fails to set up specific rules on how to address these
practices.55 Nevertheless, even though the rules are not clearly defined yet, they
provide room to address specific actions in the future.
Also the draft IP chapter of the India-EU BTIA falls short in dealing with the
transfer of technology, licensing and cooperation arrangements in a convincing way
as its provisions so far are not concrete enough to be meaningful. The EU and India
have already agreed to exchange views and information on policies and practices
that affect the transfer of technology and to pay attention to the training and
development of human capital.56 Furthermore, the parties may control licensing and
other contractual practices under certain circumstances and the EU shall facilitate
and promote the use of incentives for institutions and enterprises to engage in
transfer of technology in India.57 Overall, the draft IP chapter of the India-EU BTIA
contains even less concrete commitments than that concluded with CARIFORUM
States or Central American countries.58
To sum up, several features of the negotiations of IP chapters in recent EU
bilateral and regional trade negotiations have been identified to be unfavourable for
DCs. They concern the context of trade negotiations (allowing for trade packages),
the process of negotiating (lack of transparency and equal stakeholders’
involvement) and the outcome in terms of the IP content (transfer of technology and
licensing arrangements). Hence, DCs need to be wary on how to address these
circumstances in a way that allows them to make best use of IP protection. The next
part will focus on substantive, strategic and structural factors that they should take
into consideration when negotiating a BRA with the EU.
3 What Can Developing Countries Do to Ensure More Technology Transfer
Enhancing Provisions Are Included in the Agreements?
A group of academics has carried out research at or in collaboration with the Max
Planck Institute for Innovation and Competition on IP provisions in bilateral and
regional trade agreements. They have drafted a set of Principles for Intellectual
Property Provisions in Bilateral and Regional Agreements. The Max Planck
Principles not only present an account of what the guiding principles are when IP
53 Interview with Malcolm Spence, 8 April 2010, Bridgetown.
54 This mandatory requirement is an improvement compared with the equivalent TRIPS provision:
Article 40.2 of the TRIPS Agreement merely establishes a voluntary possibility for WTO Members to
install measures against abusive licensing practices and does not yet talk about information asymmetries.
55 Musungu (
), p. 26.
56 See Art. 5 draft IP chapter India-EU BTIA.
57 The latter two provisions are very similar to the CARIFORUM-EC EPA.
58 The latter refers to concrete programmes in which their respective nationals or firms wish to
participate. See Art. 231.3 and 231.4 of the EU Central America AA.
chapters in bilateral trade agreements are negotiated, concluded and implemented.
Importantly, they provide practical recommendations as to how countries involved
in the negotiations of such agreements, both IP-demanding countries and countries
facing IP demands, should approach the phases before negotiations start, the
negotiations themselves, the negotiating outcome as well as the interpretation and
implementation of the final IP provisions.
3.1 Coherence Between the International IP System and Other International
Negotiating partners are well advised to address one of the developments that is
aggravated by specific and complex IP provisions in BRAs, namely the creation of a
spaghetti bowl of laws that address interrelated subject matters. This problem occurs
at two levels: (1) between various systems of international law, and (2) within the
international system of IP law. The drafters of the Max Planck Principles propose to
use tools available in IP law and general international law to take these interfaces
Between the various systems of international law, different obligations and rights
are created at the multilateral, plurilateral, regional and bilateral level that address
the same subject matter. Treaties on public health, environment, biological
diversity, food security, access to knowledge, human rights and others deal with
issues that interconnect with and affect IP laws. Under public international law,
countries are required to ensure the consistency between obligations they have
entered into in order to avoid conflicts of law.60 As a consequence, when countries
commit to specific IP obligations in BRAs, they need to respect their international
obligations in other international regimes.61 One way of taking earlier treaties into
account when negotiating new treaties is by including exceptions and limitations
that give effect to the concerns expressed in earlier treaties. One option is an
Art. XX GATT 1994-type of general exception, which has been included in the
CARIFORUM-EC EPA.62,63 It lists several public interest situations in which a
breach of an obligation can be justified under certain circumstances. Contrary to the
same provision in the GATT 1994, this Article is also applicable to the protection
and enforcement of IP, which makes it an interesting example. Furthermore, the
provisions of a new treaty will be interpreted and implemented in accordance with
other relevant rules of international law.64 Relevant earlier treaties will hence
influence how the IP provisions in the treaty shall be interpreted.
Within the IP law regime, the drafters of the Max Planck Principles recommend
countries to sufficiently take into account the concerns expressed in other IP treaties.
The public interest-related flexibilities included in TRIPS reflect these concerns and
59 Grosse Ruse-Khan (
), p. 208.
60 See Art. 31(3)(c) Vienna Convention on the Law of Treaties.
61 Max Planck Institute on Innovation and Competition, 2013, principle 20.
62 Moerland (2013), p. 292 ff.
63 See Art. 224 CARIFORUM-EC EPA.
64 See footnote 60.
should therefore be maintained.65 Some IP provisions in BRAs have limited the
grounds for invoking compulsory licenses for patents or have extended the term of
protecting a patent.66 Such provisions had a negative impact on the ability of
signatories to protect public health domestically and, in particular, to rely on the
Doha Declaration on the TRIPS Agreement and Public Health.67 Only recently
concluded free trade agreements have acknowledged the latter Declaration to its full
extent.68 More generally, the Max Planck Principles indicate that the interpretation
and implementation of IP provisions in BRAs should be based on the balance that
Arts. 7 and 8 of TRIPS seek to maintain. In practice, when countries implement
provisions that serve the interests of right holders, they shall also maintain the right
to draft exceptions, limitations or safeguards that aim at restoring the balance
foreseen in Art. 7.69 An example is the power of judicial authorities to order the
seizure of suspected goods that infringe an IP right. At the same time, the judicial
authorities should be granted the power to request a security by the applicant as to
protect the defendant and prevent abuse.70
3.2 Appropriate Balance Within the International IP System
An important part of the Max Planck Principles addresses the power asymmetry
between developed and developing countries when negotiating IP rights and
obligations. This was certainly the core of the debate as to whether developing
countries were effectively able to negotiate IP issues during the Uruguay Round.
Without proper knowledge of the issues underlying IP rights and a lack of resources
to develop expertise in all of the relevant areas, meaningful negotiations cannot take
place. Some developing countries felt that this is exactly what happened during the
Clearly, the situation today is different from what it was 20 years ago, but many
of the constraints in terms of resources, knowledge and expertise are still relevant
for many smaller DCs.71 Research on the CARIFORUM-EC EPA negotiations
) has shown that capacity constraints and partly a lack of knowledge
among national policy-makers and non-state actors is still very common in these
countries.72 In order to alleviate this power asymmetry, both IP-demanding
countries and countries facing IP demands need to adapt their behaviour.
65 Max Planck Institute on Innovation and Competition (2013), principle 21.
66 For extensions of the patent term, see Art. 14.7.6(a) US-Bahrain FTA; Art. 15.9.6(a) US-CAFTA-DR;
Art. 17.9.6 US-Chile FTA. For a restriction of grounds to invoke compulsory licenses, see Art. 17.9.7
USAustralia FTA; Art. 4.20 US-Jordan FTA; Art. 16.7.6 US-Singapore FTA.
67 WTO Ministerial Conference (2001).
68 Art. 147.B CARIFORUM-EC EPA; Art. 13 draft IP chapter India-EU BTIA; Art. 3 EU-Canada
CETA; Art. 185 EU-Georgia AA; Art. 15.12 US-Panama TPA and Art. 16.13 US-Peru TPA.
69 Max Planck Institute on Innovation and Competition (
), principle 24.
70 While the EU Enforcement Directive provides for this safeguard within the EU, recent EU agreements
with third countries have not included it. See Art. 9.6 Enforcement Directive 2004/48.
71 Jones (
72 Moerland (
), p. 532 f.
3.2.1 Levelling the Playing Field
The Max Planck Principles recommend levelling the playing field in so far as that is
possible. For that, IP-demanding countries are urged to take international principles of
development cooperation, the recommendations of the WIPO Development Agenda and
the level of development of their negotiating partner into account when formulating their
demands.73 This is what the EU has asserted to do already in its 2006 Global Europe
Strategy and recently re-confirmed in the revised ‘‘Strategy for the protection and
enforcement of IP rights in third countries’’.74 However, these policy documents do not
further explain or provide examples how the BRAs incorporate the level of development
when pursuing the stated goal of increasing competitiveness. Also, when examining the
content and scope of the IP obligations in the EU’s ‘‘new generation’’ bilateral trade
agreements, no major differences are apparent in agreements with emerging economies
on the one hand or with developing country partners on the other hand.75 Therefore,
whether the EU already addresses this need sufficiently is doubtful.
IP-demanding countries should also refrain from influencing the implementation
of IP obligations. They should provide unconditional financial and impartial
technical support for implementing IP obligations, and cede to use unilateral
certification or other assessment processes, or the threat to withdraw benefits.76 The
latter process has been used by the US, the ‘‘scrutiny and vetting’’ of negotiating
partners’ implementing laws. Accordingly, the US executive branch unilaterally
determines whether the laws are satisfactory in order for the agreement to enter into
force. Finally, the negotiated text should include (a) appropriate transitional periods
and (b) a review clause whereby the impact of its implementation, in particular its
effects on all stakeholders, is comprehensively assessed.77 The latter should include
the option of renegotiating IP provisions in light of the assessment.
3.2.2 National and Most Favoured Nation Treatment for Flexibilities
Finally, the Max Planck Principles offer a line of reasoning that aims at balancing
the interests of right holders against those of users, competitors and the general
public. The TRIPS requires WTO Members to grant national treatment and most
favoured nation treatment for the protection of IP. In other words, treatment no less
favourable than accorded to (1) its own nationals and (2) any other WTO Member
must be applied to the nationals of all other WTO Members.78 The concept of
‘‘protection of intellectual property’’ is further defined in footnote 3 of TRIPS to
include matters affecting the availability, acquisition, scope, maintenance and
enforcement of IP rights as well as those matters affecting their use. The Max
73 Max Planck Institute on Innovation and Competition (
), principle 11.
74 European Commission (2012), p. 8 and 15; European Commission (
), p. 12; European
), p. 15.
75 Heron and Siles-Bru¨gge (2012).
76 Max Planck Institute on Innovation and Competition (
), principles 27 and 29.
77 Max Planck Institute on Innovation and Competition (
), principle 22.
78 See Art. 3 and 4 TRIPS Agreement.
Planck Principles suggest that this concept is not limited to strictu sensu obligations.
Rather, it encompasses also exceptions, limitations and other safeguards balancing
the interests of right holders, users, competitors and the public at large.79 Hence,
where IP-demanding countries have agreed to specific exceptions or limitations in
other BRAs, a negotiating party should also be able to rely on these concessions.
Such analogy, however, can only be drawn if it is at a similar state of development
as the country that benefited from these flexibilities under the other BRA.
While it is unclear whether such interpretation of the national treatment and most
favoured nation treatment obligations is legally bulletproof, negotiating partners can
use such flexibilities agreed elsewhere as a bargaining tool. An example where such
a strategy has been used are the provisions on the transfer of technology agreed
upon in the CARIFORUM-EC EPA.80 Subsequent negotiating partners of the EU, in
particular India and Central American countries,81 have used the CARIFORUM-EC
EPA as a source of inspiration and proposed these provisions on technology transfer
for the agreement under negotiation.
3.3 Flexibility in IP Provisions in BRAs
In view of the fact that the IP provisions in BRAs tend to erode the policy space
provided for in TRIPS, parties to these BRAs are less able to draft IP laws that
reflect domestic preferences and that are able to adapt to changing circumstances.82
In order to avoid this situation, the IP provisions included in BRAs should respect
the following principles.
First, provisions demanding strong IP protection should be sufficiently flexible to
take into account the socio-economic situation and needs of both parties.83 This is
imperative where legal norms from the domestic system of the IP-demanding country
are included in the BRA. An example of making obligations more flexible are ‘‘best
endeavour’’ obligations. These rather soft obligations will set out that parties should
strive to fulfil the obligation, rather than an obligation to fulfil it. They are commonly
used in the context of obligations to accede to multilateral agreements.84 However, if a
party does not achieve this goal, it is not necessarily in violation of its respondent under
the agreement. Should a party be challenged on this point, it is the complainant who
has to prove that the respondent failed to endeavour, e.g. acceding to the multilateral
agreement. This could be rather difficult to prove.
Second, the public interest-related flexibilities included in TRIPS should not be
undermined.85 These flexible norms provide policy space in domestic
implementation or limit IP protection through so called ‘‘ceilings’’. Ceilings are the opposite
79 Max Planck Institute on Innovation and Competition (
), principle 25.
80 See Art. 142.2 and 142.3 CARIFORUM-EC EPA.
81 See Art. 5.2 and 5.3 draft IP chapter India-EU BTIA; Art. 231.3 und 231.4 EU-Central America AA.
82 Max Planck Institute on Innovation and Competition (
), principle 6.
83 Max Planck Institute on Innovation and Competition (
), principle 18.
84 For example, CARIFORUM countries shall endeavour to accede to the Madrid Protocol or the
Singapore Treaty. See Art. 144.E CARIFORUM-EC EPA.
85 Max Planck Institute on Innovation and Competition (
), principle 21.
of ‘‘floors’’, the latter being very common in agreements where minimum standards
are agreed upon. A ceiling provides a (binding) maximum level of protection that
countries can offer in their national law.86 Examples are contained in the limitation
of the scope of protected subject matter (Art. 9.1 of the TRIPS that excludes ideas
from copyright protection), (mandatory) exceptions to exclusive rights (Art. 10.1 of
the Berne Convention makes it an obligation to make quotations permissible) or
indirect limitations of right holders’ rights by granting a right of coexistence to other
signs (trade mark holders in the EU sui generis GI system must accept a limitation
of their rights).87
3.4 Inclusiveness in the Negotiating Process and Legitimacy of the Negotiating
Finally, the Max Planck Principles highlight the importance of ensuring the
participation of multiple stakeholders in the negotiating process. They should be
provided with meaningful and equal opportunities to influence the negotiated
outcome.88 The lack of such inclusiveness has been criticized by the general public
in several negotiations of BRAs.89 It is, however, through non-discriminatory
participation by all stakeholders and meaningful and equal opportunities to
comment on draft texts (including publicly elected bodies) that a country can ensure
an open and transparent process.90 Such a process, together with an impact
assessment, is more likely to produce an outcome that reflects important interests in
society and that can create legitimacy. Legitimacy of course also depends on how
negotiators are able to bargain for e.g. flexible IP provisions, respect for the
publicinterest-related flexibilities in the TRIPS, package deals favourable to their country
and appropriate transition periods. Only in combination, society is most likely to
accept the negotiated outcome and also respect it.
3.5 Influencing Negotiations Is About Increasing Bargaining Power
In order to follow and adopt the above recommendations on the interaction with the
other negotiating partner, negotiators of DCs need to be able to exercise a certain
bargaining power during the negotiations with the EU and the US. It is not
selfevident that they dispose of such bargaining power seen the power asymmetry
between them and the EU or US. The remainder of this article will address structural
factors that can influence negotiators’ bargaining power in international, in
particular in bilateral and regional, negotiations and the negotiation strategies they
86 Kur and Grosse Ruse-Khan (
), p. 16.
87 Kur and Grosse Ruse-Khan (
), p. 20.
88 Yu (
), p. 26.
89 See Part 2.3.
90 Max Planck Institute on Innovation and Competition (2013), principles 14 and 15.
91 This part is mainly based on the research carried out for an earlier published book, Moerland (
3.5.1 Structural Factors
The underlying theoretical framework that allows us to hypothesize about the
bargaining power92 of negotiators combines liberal theories of international
relations with the logic of two-level games. Liberal approaches to international
relations, in particular society-centred theories, emphasize that the preferences of
domestic actors are crucial to explain why countries coordinate their policies on
specific issues at certain times.93 Accordingly, states are no unitary actors with a
single actor at the top making final decisions, but composed of actors with varying
preferences, who share power over decision making.94 Individuals and groups in
this process do not have equal influence on state policy;95 rather, government and
political institutions are captive to special interest groups and will create a bias in
favour of certain actors and particular preferences.96 As preferences of domestic
actors are likely to differ from each other, it is a matter of domestic politics to
determine which preferences of which actors will prevail in the final policy choices
on particular issues.97
The structure of domestic preferences plays an important role for the negotiator’s
negotiating autonomy and bargaining power.98 Putnam’s two-level game approach
established that domestic preferences and the institutional set-up influence
negotiating partners’ bargaining power.99 Putnam—and subsequent research that
follows his model—presume that domestic political institutions enable domestic
preferences to shape policymaking. While his assumptions may hold true in most
cases of ‘‘advanced industrial states’’,100 the same does not necessarily apply in
other contexts, such as developing countries. The possibility for domestic
constituents to participate in policymaking, the political accountability of
policymakers and more generally, the level of democracy of a country therefore matter
when applying the two-level approach.101 Most of the countries in the Caribbean
region reveal a relatively high level of participation of domestic constituents and
political accountability of policy-makers.102
92 Bargaining power is hereby understood as the ability of a negotiator to exert influence over another
party in a negotiation in order to achieve an outcome that is closest to his maximum negotiating position.
93 Milner (
), p. 9.
94 Milner (
), p. 11.
95 Moravcsik (
), p. 518.
96 Milner (
), p. 45.
97 Meunier (2007), p. 45.
98 Milner (
), p. 11.
99 Putnam (1988).
100 Patterson (
), p. 143.
101 Relevant indicators are the International Country Risk Guide (ICRG) indicator ‘‘voice and
accountability’’ that includes measures for ‘‘military in politics’’ and ‘‘democratic accountability’’ (0–1)
and the Democracy Index that measures the state of democracy in 167 countries (scale 1–10), http://www.
102 On average, in 2007, the seven, respectively six, covered Caribbean countries scored 0.7 on the ICRG
voice and accountability indicator and 6.25 on the Democracy Index.
Putnam’s analytical framework can be best illustrated by a metaphor of two
separate tables that symbolize the interaction between domestic politics and
international negotiations. When a negotiator is at the international table bargaining
with her/his foreign counterparts, (s)he can only give as much as the constituents at
the domestic table will accept. At the same time, any amendment made at the
domestic table must be signed by all negotiators at the international table.
According to the two-level game logic, the position of the international
negotiator is determined by her/his domestic ‘‘win-set’’. The domestic win-set is
defined as the set of all possible international agreements that can gain the necessary
majority among the domestic constituents.103 Putnam’s basic argument is that the
size of the domestic win-set determines the likelihood of reaching an international
agreement.104 An international agreement is only possible where the domestic
winsets of all negotiating parties overlap. The bigger their sizes, the more likely it is that
The second basic argument presented by Putnam is that the size of the domestic
win-set determines the degree of negotiating autonomy, which in itself has an
impact on the bargaining power of the negotiator.105 In the case of a small domestic
win-set, the negotiator is tied to few acceptable outcomes for an agreement. Since
(s)he cannot compromise much, her/his small negotiating autonomy can be a
bargaining advantage at the international table, even though this finding may be
counterintuitive at first sight. In other words, the smaller the win-set and the
negotiating autonomy of a negotiator, the bigger her/his bargaining power. The
structural constraint of few acceptable outcomes becomes a bargaining advantage.
On the other hand, where the domestic win-set and the negotiator’s autonomy are
large, the negotiator’s bargaining power will be small. Even though the negotiator
has much more autonomy as to which tactics and strategies to apply in the
international negotiations, the large negotiating autonomy allows the other party to
push her/him around by asking several concessions.
Research carried out on the negotiations of the EC-CARIFORUM EPA showed
that the IP negotiator for CARIFORUM countries had a large negotiating autonomy
due to a large domestic win-set.106 In that case, the analysis of non-state actors’
preferences on IP protection in the EPA had shown that there were only very few
non-state actors that had an interest in IP issues regulated through the EPA. In
addition, among those few interested actors, only less than half had specific interests
in various fields of IP protection. These interests mostly did not conflict with each
other. Overall, these factors allowed for a classification of the win-set as large. At
the same time, the negotiating autonomy of the negotiator was also classified as
being large, due to the following factors: (1) a lack of non-state actors’ preferences
on IP issues; (2) a strong reliance on the expertise of the negotiating team in all
stages of the policymaking process; (3) an asymmetry of knowledge between the
103 Putnam (1988), p. 432 and 437.
104 Putnam (1988), p. 437.
105 Putnam (1988), p. 440.
106 Moerland (
), p. 409.
experts in the negotiating team and CARIFORUM officials; and (4) a strong
personality of the technical negotiator for IP issues.107
Judging from the final provisions, CARIFORUM States supposedly had a strong
bargaining power with regard to the link of innovation and IP, the transfer of
technology, the protection of plant varieties, genetic resources and traditional
knowledge. On the other hand, in the areas of design protection and enforcement
matters, CARIFORUM countries were less able to preserve their interests. These
results are not entirely in conformity with the expectations derived from Putnam’s
second hypothesis. Since the domestic win-set of the negotiator was large in
general, one would have expected a small bargaining power in general.
What could explain the strong bargaining power in the areas innovation, transfer
of technology and the protection of genetic resources and traditional knowledge are
the negotiator’s new and innovative concepts, which the EU had not expected. The
strong bargaining power in the area of plant variety protection, on the other hand,
may be explained by the preferences and influence of a regional actor (the West
Indies Central Sugar Cane Breeding Station), who was the only non-state actor that
has communicated his specific and strong preferences to the regional negotiating
team. Finally, the weak bargaining power in the area of enforcement standards is
one example in which the hypothesis seems to fit: very few preferences existed in
the area of enforcement, therefore the negotiator’s negotiating autonomy was large
and his bargaining power small.
3.5.2 Negotiating Strategies
Where domestic win-sets are large enough, international negotiators have some
negotiating autonomy to use negotiating strategies that are meant to increase their
bargaining power. Strategy in that sense means ‘‘a set of behaviours or tactics that
are observable in principle and associated with a plan to achieve some objective
In most cases, negotiators use a mixed strategy that combines elements that seek
a common solution to the problem at hand (value-creating) with actions that place
little emphasis on joint gains (value-claiming). Examples of value-creating actions
are sharing information relatively openly, proposing to exchange concessions, or the
agreement to treat partial agreements as provisional until all issues are settled.109
Examples of value-claiming elements are high demands, refusing all concessions,
exaggerating one’s minimum needs, manipulating information or making threats.
Issue linkage and making side payments are frequently used courses of action
found in almost every strategy and negotiation. This is so because there are very few
agreements that pertain to only a single issue.110 A prominent example of an issue
linkage in the area of IP protection is the inclusion of the TRIPS into the GATT
framework. The US used a clearly value-claiming strategy to agree on international
107 Moerland (
), p. 587.
108 Odell (
), p. 15.
109 Odell (2000), p. 34; 2006, p. 16.
110 Odell (
), p. 37.
standards of IP protection that would become part of the then founded WTO.
Particularly developing countries only accepted this inclusion in return for the
liberalization of trade restrictions on textiles and clothing exports from developing
countries.111 But also DCs can use issue linkage in their advantage, as the adoption
of the Doha Declaration on the TRIPS Agreement and Public Health has shown.
The strategy of ‘‘tying hands’’112 is sometimes used by negotiators when the
domestic win-set is large and they choose to provide strategic misinformation about
the size of the win-set. At the same time, such a strategy runs the risk of provoking a
stalemate if the pretended point of resistance (that is the point where a
nonagreement becomes more valuable than an agreement) goes beyond the ability of
the other to concede.113 In practice, little evidence exists that this strategy is used
effectively by governments.114 One of the few examples where the strategy is
successfully used is the case of EU negotiators, which have been reported to
increase their bargaining power by referring to their complicated structure of
competences.115 DCs are therefore well advised to be aware that their partners may
misrepresent their true point of resistance in order to increase their bargaining
power. At the same time, they themselves could make use of this mechanism by
making domestic constraints explicit in negotiations in order to push the other party
closer to one’s own preferences.
A very powerful tool to increase one’s bargaining power is to commission an
independent impact assessment, the outcome of which can be used as part of the
negotiating strategy ‘‘tying hands’’. Such an impact assessment would assess what
implications the IP demands will have for (1) public interests, (2) the realization of
human rights, and (3) the financial burdens and implementation costs they entail.116
Accordingly, negotiators are able to hide behind the independent report when
demands are made to which the assessment clearly relates severe consequences for
public interests; it would not be possible for them to justify a concession that may
have severe consequences towards the domestic public. The EU traditionally carries
out such sustainability impact assessments for the agreements to be concluded, even
though IP protection does not always receive a lot of attention;117 this is far less the
case for the negotiating partners of the EU.118
A more concrete course of action that has proven successful in negotiations of
highly technical areas such as intellectual property protection is to develop a
proactive IP agenda through consultations with domestic stakeholders and impact
111 Bayne and Woolcock (2003), p. 39.
112 Campbell (1976), p. 62.
113 Schelling (1960), p. 28.
114 Evans (
), p. 399. Peter Evans concludes that the eleven case studies, which were supposed to
explore Putnam’s two-level game logic further, provided evidence that the strategy of ‘‘tying hands’’ ‘‘is
infrequently attempted and usually not effective.’’.
115 Meunier (2007), p. 53.
116 Max Planck Institute on Innovation and Competition (
), principle 16.
117 European Commission (
118 Neither CARIFORUM States nor India has carried out any impact assessment on the possible
implications of the IPR chapter in the bilateral agreement negotiated with the EU.
assessments.119 Defining one’s own offensive interests is necessary in order to know
what to give and what to take in negotiations. They define the negotiating position,
allow countries facing IP demands to confront their negotiating partner with their
own demands, and to enable a dialogue between the two sides. Research carried out
on the negotiations of the CARIFORUM-EC EPA showed that in the areas where
CARIFORUM countries had identified offensive interests, the outcome of the
agreement was more often in line with their interests than in areas of defensive
interests.120 This outcome is similar for the negotiations between the EU and India:
India has taken a firm stance on several IP areas negotiated in the EU-India BTIA,
such as enforcement standards, plant variety protection, GIs and the protection of
traditional knowledge, and so far has been lenient to accept provisions that would go
against that negotiating position.
For example, CARIFORUM countries were able to ‘‘surprise’’ the EU with the
idea to embed intellectual property in the context of innovation and therefore give
the IP obligations a different context. The rationale of linking intellectual property
to innovation is incorporated in Art. 131 of the EPA. Accordingly, the contracting
parties agree that the protection and enforcement of intellectual property plays a key
role in fostering innovation and creativity. Innovation and creativity, in their turn,
are crucial in achieving improved competitiveness and sustainable development.
According to CARIFORUM States, innovation had to be understood as a broad
concept which includes the creative industries in addition to science and technology,
thereby not limiting the concept to the EU’s reading of it, merely encompassing
science and technology. Next to securing this understanding of innovation, the main
objective in relation to innovation was to discuss IP protection only in the
framework of and as a quid pro quo for improving the levels of innovation in
specific areas of development interests to CARIFORUM States through concrete
measures.121 For example, the protection for designs was to be countered with a
provision on the establishment on design centres; commitments to comply with the
WIPO Internet Treaties were to be tied to market access in the area of services to
enable the small entertainer to benefit.122 In other words, their goal was ‘‘to ensure
an appropriate balance between the level of protection granted to intellectual
property rights and the level of development of CARIFORUM economies, in
particular the level of innovation.’’123
In this line of thinking, when setting higher standards of intellectual property
protection, the parties agreed that such IP standards must always be appropriate to
the parties’ levels of development.124 This statement acknowledges the need for
differentiated levels of protection, which take into account different levels of
119 Max Planck Institute on Innovation and Competition (
), principles 13 and 16.
120 Moerland (
), p. 557.
121 Spence (
), para. 17.
122 Spence (
), p. 2.
123 Spence (
), p. 2.
124 See Art. 131.2 of the CARIFORUM-EC EPA.
Another example of offensive interests is the provision on the protection of
traditional knowledge and genetic resources. The CARIFORUM-EC EPA is the first
European bilateral trade agreement that deals with the relationship between patent
protection and the protection for genetic resources traditional knowledge and
folklore. At the heart of the protection of genetic resources and traditional
knowledge lies the conflict that has arisen in the past between the implementation of
TRIPS patent rules and the rules on the protection of biodiversity in the Convention
on Biological Diversity. The conflict becomes evident when companies use
biological material or traditional knowledge as the basis for new inventions on
which they are granted patent protection. The countries of origin of this genetic
material or traditional knowledge feel that it is unjust that foreign companies can
obtain property rights on such inventions without displaying the origin of the
material, having asked for approval or sharing the benefits with them.
In Art. 150.3 of the CARIFORUM-EC EPA, the contracting parties of the
CARIFORUM-EC EPA agree to implement the patent provisions of the EPA and
the Convention on Biological Diversity in a mutually supportive way; in Art. 150.4,
the parties agree that they may require, as a necessary aspect of the administrative
requirements for a patent application, the identification of the sources of the
biological material used by the applicant. In this regard, the provision provides a
precedent of a bilateral commitment in addressing important issues related to the
protection of biological diversity and traditional knowledge, but it does not yet help
to find a general solution to the matter. In international fora such as the WIPO
Intergovernmental Committee on Intellectual Property and Genetic Resources,
Traditional Knowledge and Folklore, the possibility to require such disclosure is not
disputed. The legal problem with regard to the relationship between the TRIPS
Agreement and the CBD is about whether countries should be under an obligation to
adopt such procedures as a binding international obligation. Nevertheless, this first
welcomed attempt to addressing the matter bilaterally was taken up in the
EUColombia-Peru FTA and the proposed text by India used the CARIFORUM-EC
EPA and the commitments were taken a step further.125
The latter line of action should be part of a pro-active IP agenda: proposing
already drafted legal provisions from other EU agreements to the EU to be included
in the negotiated IP chapter as well. For example, Central American countries, Peru,
Colombia and India used, or are still using, this strategy in their negotiations with
the EU. They have put forward provisions in the areas of technology transfer,126
innovation,127 and the protection of traditional knowledge and genetic resources, as
explained above, which have been inspired by the CARIFORUM-EC EPA.
125 Art. 210 of the EU- Colombia-Peru FTA and Art. 10 of the draft IP chapter of the India-EU BTIA as
proposed by India elaborated these provisions even further.
126 Arts. 142.2 and 142.3 of the CARIFORUM-EC EPA have been included in Arts. 5.2 and 3.2 of the
draft IP chapter of the India-EU BTIA as proposed by India, as well as in Arts. 231.3 und 231.4 of the
EU-Central America AA.
127 Art. 1.1 of the draft IP chapter of the India-EU BTIA as proposed by India places intellectual property
in the context of innovation, creativity and competitiveness, identical to Art. 131 of the
Developing countries, when negotiating bilateral and regional agreements with the
US and the EU, are confronted with high demands regarding the protection and
enforcement of IP. In many cases, the process of negotiations and the power
asymmetries have a strong impact on the outcome of the agreement: the analysis of
recent EU agreements has shown that identical provisions to EU legislation are
included in the text, which leave very little policy space to take into account
domestic preferences. In certain cases, the scope of protection agreed upon even
goes beyond the protection the EU applies internally.
At the heart of this article was to provide substantive, procedural and contextual
recommendations as to how the challenges present in bilateral and regional
negotiations can be addressed by DCs. The context of trade negotiations easily
enables trade deals that trade IP standards against concessions in other areas of trade
that are perceived to be more important. DCs should therefore define upfront their
own proactive IP agenda and carry out impact assessments of the proposed IP
standards in order to strengthen their bargaining power.
Negotiations of bilateral and regional agreements are mostly carried out in
secrecy and without equal participation of all interested stakeholders in society. In
order to allow for meaningful input from and debate by society, negotiating partners
should ensure that sufficiently detailed and timely information on the content of the
agreement is made available through public sources. This is a precondition for
stakeholders to form their opinion on relevant issues. Furthermore, the process of
negotiations must be inclusive for all relevant stakeholders so that they have
meaningful and equal opportunities to influence the negotiated outcome.
The provisions included in IP chapters of EU bilateral and regional agreements
and US FTAs, often constitute legal transplants with little flexibility to take
domestic preferences into account. DCs are therefore well advised to preserve the
public interest-related flexibilities in TRIPS. Further, soft instead of hard
obligations, appropriate transitional periods and procedural safeguards should be
included where possible.
Following these recommendations strongly depends on countries’ bargaining
power and negotiation strategies that they make use of. In this article, the argument
was made that the bargaining power of DCs strongly depends on structural and to a
lesser extent on strategic factors. In particular, the structure of domestic preferences
determines the negotiating autonomy of the negotiator: if only few, hardly specific
and homogeneous preferences exist at the domestic level, the autonomy of the
negotiator is large as there is a rather wide range of possible international
agreements that will be supported by domestic constituents. However, a large
negotiating autonomy also means that the negotiator can be pushed around by his
counterpart (as there are many points to which he could be pushed to agree). Only if
(s)he is able to misrepresent the size of her/his domestic win-set to the other party,
can her/his bargaining power become bigger. DCs should be aware of these
structural constraints that affect both their own bargaining power and that of their
Also strategic behavior can contribute to increasing one’s bargaining power.
Developing a pro-active IP agenda, with clearly defined areas of offensive interests
and already drafted legal provisions that can be included in the IP chapter, has
proven to be effective in achieving the level of protection or the aimed for context as
defined in the offensive interests.
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