Addressing inadequate intellectual property protection in the Uruguay round

Business America, Sept 25, 1989 by Dana Williamson

Intellectual property, along with services and investment, is one of the "new" issues in the current round of multilateral trade negotiations held under the auspices of the General Agreement on Tariffs and Trade (GATT), the so-called "Uruguay Round," scheduled to conclude at the end of 1990. In April 1989, GATT members agreed to a negotiating framework which allows for conclusion of a comprehensive agreement to govern the trade-related aspects of intellectual property (TRIPs), thus breaking the deadlock which had stalled progress in the negotiations for months. The TRIPs Uruguay Round negotiations have begun a new, more detailed phase and the United States is assigning them our highest priority.

The United States is a major advocate for addressing through the GATT framework current deficiencies in the protection of intellectual property rights (IPR) that result in distortions of trade. The U.S. objective in the TRIPs group is negotiation of a comprehensive agreement on IPR which would include: 1) adequate substantive intellectual property standards; 2) effective means for enforcement of such standards--both at the border and internally; and 3) effective and expeditious dispute settlement procedures. As envisioned by the United States, at a minimum, the agreement should embody the highest levels of protection yet agreed to multilaterally. Moreover, it should be comprehensive in that it will cover the five IPR areas identified by the United States, i.e., patents, copyrights, trademarks, trade secrets, and semiconductor chip mask works.

The United States pushed for the GATT TRIPs negotiations in large part because of the lack of adequate IPR protection in existing international agreements administered by the World Intellectual Property Organization (WIPO), a specialized agency of the United Nations, and other international organizations. Of the multilateral agreements governing IPR, the most important treaties under the auspices of the WIPO are the Paris Convention for the Protection of Industrial Property (covering trademarks and patents) and the Berne Convention for the Protection of Literary and Artistic Works (covering copyrights).

The lack of adequate international standards for both patents and trademarks under the Paris Convention has caused considerable problems for U.S. business. For example, the Paris Convention does not even set a minimum term for patent protection and allows signatories to exclude whole sectors from protection. The United States believes this failure to provide adequate standards contributes to significant trade losses and distortions. Standards for copyrights as set down by the Berne Convention--which the United States joined on March 1, 1989--are viewed as generally adequate with some clarification. However, neither the Berne Convention nor the Paris Convention are subject to an effective dispute settlement mechanism, further contributing to trade distortions.

The United States in the earlier Tokyo Round of multilateral trade negotiations supported the conclusion of a GATT agreement covering border measures to address trademark counterfeiting, but now views a more comprehensive approach as essential to address the entire spectrum of IPR protection issues which negatively affect trade.

The United States, with its October 1987 submission, was the first participant to put a proposal on the table in the TRIPs negotiating group. An elaboration of the original U.S. paper was then submitted in October 1988. The U.S. proposal sets specific standards of protection for each of the five areas identified by the United States at a level which we believe will address many of the trade distortions. For example, in the area of patent standards, the United States is seeking (1) exclusive rights for a term of at least 20 years from filing, and (2) comprehensive subject matter coverage, with compulsory licenses only issued in narrow circumstances upon providing adequate compensation.

The U.S. proposal also clarifies what we believe would be effective enforcement of all intellectual property rights, i.e., an effective court system that is accessible to foreign rights holders, appropriate remedies that will include criminal sanctions in some areas, and customs procedures that give officers authority to seize infringing goods. Effective enforcement must also include safeguards against arbitrary action or abuse of procedures which could be used to interfere with legitimate trade.

For the developed countries, protection of intellectual property on an international scale is a high priority and there exists considerable consensus on what measures and disciplines need to be adopted. In addition to the United States, the European Community, Switzerland, the Nordic countries (led by Norway), Japan, Canada, and Australia have each submitted negotiating proposals. India is the only developing country that has provided written contributions on standards and enforcement to the TRIPs group.

When the Uruguay Round began in 1986, U.S. negotiators met exceptionally strong opposition from developing countries to the inclusion of TRIPs on the negotiating agenda. This was not surprising since developing countries view IPR as a factor affecting economic development and have fought to keep control of it in international institutions such as the WIPO.