After 5 years of negotiations between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and the United States, the text of the Trans Pacific Partnership (TPP) has been released to the public.
This article contains a brief summary of the provisions of the TPP relevant to intellectual property (IP), excluding matters directly covering the pharmaceutical industry which will be discussed separately.
Intellectual property provisions
The IP chapter of the TPP seeks to supplement existing international agreements in order to harmonise IP laws between the parties. Outside of criminal provisions for trade secrets it is unlikely that the chapter will require substantial changes to Australia’s legislative framework.
Australia’s existing robust regimes for patents, copyright and trade marks will not require significant amendments. The terms of protection currently afforded to rights holders under each regime is already consistent with the TPP proposals.
The legal position of online pirates, which has recently made headlines owing to the legal battle over Dallas Buyers Club, does not change significantly – criminal sanctions have not been proposed for illegally downloading movies. The TPP does however require parties to implement laws to encourage ISPs to cooperate with copyright owners to deter copyright infringement, by limiting the liability of ISPs for direct infringement. Of note, ISPs are required to quickly remove or disable access to material upon receiving notification that material which infringes copyright resides on their networks.
To the likely dismay of brand owners, the IP Chapter does not require Australia to introduce restrictions on parallel importation. The ‘international exhaustion’ of IP rights is left up to each TPP country.
Litigants may, on the other hand, seek comfort in article 18.71(3), which requires that parties ensure that IP enforcement procedures are not “unnecessarily complicated or costly, or entail unreasonable time-limits or unwarranted delays”.
Other notable provisions of the IP Chapter include the requirements that parties:
- “subject to its law” endeavor to make information made public regarding applications and the registration of patents, designs, trade marks, designs, GIs and plant breeders’ rights, available online;
- co-operate to facilitate the sharing and use of search and examination work of the other parties and attempt to reduce differences in patent office procedures;
- provide procedures for the transparent resolution of country code top level domain name disputes based on the ICANN Uniform Dispute Resolution Policy. The TTP may also provide additional scope for remedies where domain names are identical or confusingly similar to registered marks;
- provide that any person that “knowingly, or having reasonable grounds to know” circumvents without authority any effective technological protection measures is subject to a civil penalty regime; and
- accept applications for protection of Geographical Indications without requiring the government to intervene on behalf of its nationals.
Investor State Dispute Settlement provisions
The Investor State Dispute Settlement (ISDS) provisions enable corporations from member countries to bring claims against states in which they have made investments, for breaching the Investment Chapter of the TPP. The provisions do not provide foreign investors with the right to enforce the IP Chapter. If the TPP is enacted, the ISDS may still however have an impact on IP rights, for example by providing IP owners with an additional avenue to challenge the introduction of labelling regulations or patent office decisions. This has occurred under the existing ISDS regime under the North American Free Trade Agreement - Eli Lilli brought an investor challenge against Canada after the courts rejected the validity of its patents.
The ISDS provisions are highly controversial. The Australian government obtained an exemption to prevent tobacco companies from being eligible to use the ISDS provisions. However other industries which raise public-interest concerns have not been carved out.
According to DFAT, the ISDS provisions promote investor confidence by enabling foreign investors to seek compensation for certain breaches of a host state’s investment obligations. This is of significance in countries with less developed legal systems. Australian based companies have used ISDS provisions in proceedings against other countries to protect their investments, for example White Industries Australia Ltd successfully used ISDS processes against the Republic of India for failing to enforce a costs award under which it was to receive $4.08 million.
The potential financial costs to taxpayers of the ISDS are significant, as governments are required to defend actions brought by aggrieved companies. From a judicial perspective, the Council of Chief Justices of Australia has raised concerns that these arbitral processes may be used to question the processes and decisions of Australian courts on the basis that such decisions breach investment treaties.
ISDS provisions are nothing new – there are over 2,700 international agreements that currently include ISDS provisions, with Australia party to over 20 ISDS provisions under existing trade and investment agreements. The only time the provisions have been used against the Australian government was by Phillip Morris Asia over the tobacco plain packaging laws.
Other chapters of note
The Telecommunications Chapter aims to ensure the neutrality of regulation across different technologies, helping to ensure freedom to innovate. Whilst the Electronic Chapter aims to ensure the free flow of data on the Internet, prevent the spread of ‘forced localization’ of technologies and servers and help guarantee privacy and security online.
Before it comes into force, the TPP agreement will need to be ratified by all 12 countries. If and when this does occur it is unlikely that it will have a significant impact upon domestic IP rights holders.
If you have any further questions or require expert advice, please don't hesitate to contact us.