A Discussion of Patent Protection of Pharmaceutical Drugs and Plant Varieties under a Bilateral Investment Treaty

• Main Authors: Fei-Chen Hsiao, 蕭斐甄
• Other Authors: Chang-Fa Lo
• Format: Others
• Language: en_US
• Published: 2004
• Online Access: http://ndltd.ncl.edu.tw/handle/76912025786426519155

碩士 === 國立臺灣大學 === 法律學研究所 === 92 === “Most [bilateral investment treaties] are between developed and developing countries, with Europe and Asia having signed the largest share. But a full quarter are now brokered between developing countries themselves. In essence, these deals set up rules for the entry, protection and exit of investments between two countries – and ‘investment’ in these treaties specifically includes intellectual property. Parties are expected to open their borders to foreign investments, provide the ‘highest international standards’ of [IPRs] protection for them in their domestic territories under the mantra of ‘national treatment’ and ‘Most Favoured Nation’(MFN) principles …. This is frightening in and of itself because the terms of the treaties are imprecise and open-ended. It’s not clear whose law or whose standards are being referred to or are meant to apply. It’s not even clear whether these BITs cover established investments or potential investments. With respect to intellectual property, the sky seems to be the limit.” Not only the standard of IPRs protection as pinpointed by the GRAIN in cooperation with the South Asia Network for Food, Ecology and Culture (SANFEC) is a concerned issue, but also the fact that the developed country required the host developing countries to indirectly accelerate their compliance with the standard provided by the Agreement on Trade-Related Aspects of Intellectual Property Rights (thereafter is called, “the TRIPS Agreement “) in a number of bilateral investment treaties (thereafter is called “BITs”) deserves attention. These subjects highlight the problems that are not only revealed in the negotiation of a BIT during which a country of the strong bargaining power controls the pace and tension, but they are also shown in the very results of the negotiation process in which each contracting party persists to consolidate their national developments and promote economic progression. Based on the very imbalanced bargaining powers of both contracting parties to a BIT, the power to choose the standard of IPRs protection for its domestic markets, to a certain extent, is influenced. Although the nature of a BIT is bilateral and it is certain that the inclusion of the phrase “highest international standards” of the IPRs protection is subject to the intention of the contracting parties, the application of the phrase may be vague. It is because the phrase may refer the TRIPS Agreement or the standard as expected by the developed countries. In addition, there are some implications underlied by such a phrase, and one of the implications indicates that under the most-favoured nation treatment clause, the host developing country is usually supposed to provide the same level of protection for the investor’s IPRs as the investor would enjoy in his home country. Although that implication indicates certain expectation of a technologically-advanced and wealthy home country and the conclusion of a BIT is subject to the intentions of both parties there are doubts on what the phenomena of this type of BIT (a number of them are patterned on a similar model text) tends to imply. In spite of the reference to the “highest international standards” in the BIT, the references specifically to plant breeders’ rights as incoming investments to a developing country, accession to the International Convention for the Protection of New Varieties of Plants (thereafter is called “the UPOV”), patentable inventions (products or processes that are not under formal legal protection anywhere yet) and implement the TRIPS Agreement in full far earlier then the end of the transition period have also been considered under the BITs concluded by the developing and developed countries. On the face of the BITs, it seems that there is nothing wrong with the incorporation of those provisions, taking into consideration the need to stimulate creative process for future technological and innovative developments. Nevertheless, after one perceives deeply the potential harms that may cause to the nationals of the developing countries with respect to their wellbeing in health and to farmers who assist in giving life, then the aforesaid references become problematic. In other words, although the extent of application of these references is not limited to patent protection and there may be the generation of adverse consequences from implementing the higher standard of protection of other IP-related rights, human life relies mostly on two main ingredients, essential medicines and plants - and therefore the strategies in patenting drugs and plants are in need of thorough planned, especially in poor developing countries and least-developed countries. However, with the increasing protection on the foreign investors for their IP model of investments, the situations on how the nationals of developed countries, developing countries and least-developed countries can respectively benefit from such ways of incorporation of the IPRs provisions in the BITs and respectively benefit from the BITs as a whole, become even more complicated. In addition to those aspects, the references to the MFN treatment and the national treatment, as mentioned in BITs, imply a need to look for a balance of benefits and costs with respect to the related issues on patenting drugs and plants by each player (contracting parties to a BIT and a third party who is not party to the bilateral treaty). It is noted that there are 147 Members of the World Trade Organization. By being the Members of the WTO, they have to comply with the provisions of the TRIPS Agreement. In effect, the TRIPS Agreement requires those Members to implement IPRs measures not lower than its standard. They have to comply with the provisions of the TRIPS Agreement that provides the minimum requirements. Upon keeping the core issues as pinpointed in the previous paragraphs in mind, if the contracting parties to a BIT are the Members of the WTO, then the inclusion of the IPRs provision in the standard higher than that of the TRIPS Agreement in the BITs may pose an essential question in relation to the reference of the authorities. For example, should the provisions of the TRIPS Agreement be considered as an authority to govern the practices of the IPRs provisions as incorporated under the BITs by the contracting parties, or should those IPRs provisions under the BITs be binding the contracting parties over the provisions provided by the TRIPS Agreement? This paper is, therefore, designed to answer the concerned issues that were stated in the previous paragraphs and that may be encountered by the contracting parties to those specific types of BITs. Exploring the following questions listed as follows should be able to answer these issues: 1. What are the reasons for IP to be protected specifically under a bilateral investment agreement? 2. Can BITs solve the problems of the IP model of investment (patent in particular)? Are the multilateral agreements on IPRs helpful to solve the problems, such as the health protection and the protection of the farmers’ rights? 3. Should there be IPR provisions in a BIT? Should there be a division of IPR provision to be incorporated in a BIT, i.e. the incorporation of a separate exclusion phrase with respect to patent protection on drugs and plant varieties? 4. Can the TRIPS Agreement solve the problems effected by applying the IP model of investment? 5. Can the TRIPS Agreement strike a balance on patent protection? 6. Finally, will it be possible to incorporate some provisions with respect to investment-related patent issues in the TRIPS Agreement?