THE OAS AND INTELLECTUAL PROPERTY:
A PRACTITIONER’S VIEW
John M. Richardson[*]
Since the late nineteenth century «industrial property», largely devoted to patents, designs and marks, has become «intellectual property» through the addition of copyright in literary and artistic works. The latter have taken many new forms such as recordings and films or computer programs. More recently, the development of the Internet and digital commerce has given us a new grammar for everyday use in virtually all languages.
As little as thirty years ago, the practitioner charged with obtaining or protecting intellectual property in the Americas outside the U.S.A. or Canada faced considerably more difficulty than in similar activities in Europe or Japan. The first, reflexive question upon being given a patent or trademark application to file was whether the country in question was a member of the Paris Convention or perhaps one of the inter-America conventions so that priority might be claimed (it is only in the last ten years that, at last, all the OAS member states have become members of the Paris Convention). A second question would have focused on the special formalities to be complied with in order to get a filing date. A third question perhaps would have been what is the substance of the protection available. The difference between common law and civil law legal systems was not only particularly evident in dealing with acquisition of trademark rights but extended as well to the reliability of precedent in decisions of the courts and the way in which litigation was conducted in general.
Overall, the task of protecting intellectual property, with a few exceptions, was viewed as different and more difficult and relatively expensive compared with U.S. or Canadian norms, except in those countries which were so called «British practice» countries or in which protection extended directly or indirectly from existing European rights. An occasional alert was that the meaning of words or slogans in one language becomes something completely different in another, sometimes with unforeseen consequences in the marketing or goods and services.
The situation has slowly improved in the patent and copyright fields but remains the least satisfactory in the trademark arena because of difficulties with formalities such as legalization, uncertain protection of well-known marks, discriminatory regulation of licensing, and the lack of developed, reliable doctrine and jurisprudence to make enforcement more predictable. Delay is also an important factor both as to obtaining protection and enforcing rights once obtained, whether the delay is in court enforcement or through seizure of counterfeit goods by Customs & Excise authorities based on trademarks registered with a Customs service. Unevenness and lack of reliability in enforcement takes away from the best intentioned laws and treaties.
The international focus on intellectual property is quite exceptional today and now inextricably linked to promotion of free and fair trade and economic development, but it is the economic benefits of free trade not the scope of intellectual property rights per se which drives the harmonization process. The apparent economic successes of the Treaty of Rome, the North American Free Trade Agreement («NAFTA»), and the Uruguay Round of trade reform and tariff reductions have caused governments to continue to press for harmonized intellectual property protection to support the process of economic growth. This process has critics who are opposed politically to the dominance of market economies and who reject the premises of globalization; for example, broader patents rights or longer terms for intellectual property, such as pharmaceutical compositions and genetically engineered crops, are particular targets.
The current favor enjoyed by intellectual property in legislatures reflects something of a cyclical phenomenon, as illustrated by the experience in the United States from the 1940s to the 1960s when intellectual property was not particularly favored. For example, it was reported by Chief Patent Examiner Federico that in the period 1948-54 at least sixty seven percent (67%) of the U.S. patents litigated were invalidated. The U.S. Department of Justice and the Federal Trade Commission are currently holding hearings on the policy issues in the relationship between competition law and intellectual property law, prompted in part by the patenting of business methods and genetic material. It is also perhaps noteworthy that the Supreme Court of the United States has very recently agreed to decide a copyright question about the meaning of «limited times» in the constitutional grant to Congress of the right to protect the works of authors and inventors.
The regime currently envisaged by the Free Trade Area of the Americas («FTAA») is quite extraordinarily different from the past. The draft FTAA agreement has an Intellectual Property Section with 106 pages of small print whereas the original U.S. – Canada Free Trade Agreement effective in 1989 had insignificant reference to intellectual property and the somewhat more substantial provisions of the NAFTA have not been of great significance. In order to provide «adequate and effective protection and enforcement of intellectual property rights», an objective of considerable importance, the parties to the FTAA agreement will be required to anchor their commitment by giving effect to the provisions of up to sixteen (16) international agreements which exist or are in negotiation [Article XX. International Agreements, Section 3.] as well as giving their best efforts to ratify or accede to four treaties directed to some form of global protection of intellectual property, PCT on patents, Madrid Protocol on trademarks, Hague Agreement on designs, and Budapest Treaty on deposits of microorganisms [Article XX. International Agreements, Section 5.].
Whether the implementation of international agreements such as the Uruguay Round agreement on Trade-Related Aspects of Intellectual Property Rights («TRIPS») will be effective in all of the OAS countries remains in doubt. For example, the Andean Court of Justice recently handed down a patent decision which not only threw out «use» claims in patents but also asserted the supremacy of Andean Community law over treaties and international agreements such as TRIPS (Andean Secretariat v. Republic of Peru, Case No. 89-AI-2000, September 28, 2001).
There are two major forces which are working to make harmonized intellectual property law possible. First, the requirements of industry and commerce for simpler, less expensive procedures for obtaining intellectual property protection and for more certainty built on internationally agreed norms for substantive protection of intellectual property. Secondly, the intellectual and diplomatic debate promoted by such organizations as The World Intellectual Property Organization («WIPO») or The World Trade Organization («WTO») provides a legal framework for all of the countries of the world to try to harmonize formalities and substance - WIPO now routinely hosts diplomatic conferences of 150 countries to negotiate new agreements affecting intellectual property.
Although the OAS member countries have recently completed the task of joining some of the older intellectual property agreements such as the Paris Convention of the Berne Convention for the Protection of Literacy and Artistic Works, the real task of harmonization for OAS countries still lies ahead. The FTAA agreement would require a sea change to the extent so many international agreements on intellectual property would have to be adopted and given effect in OAS countries, but the result would be a welcome one. Only Trinidad and Tobago, and the U.S.A., have joined the Trademark Law Treaty which deals with formalities in trademark applications. Only Antigua and Barbuda, and Cuba, have joined the Madrid Arrangement or its Protocol for international registration of trademarks.
There is, however, substantial uniformity on trademark classification, even though only nine OAS member countries are party to the Nice Agreement; this international classification of goods and services in respect of trademarks (Canada has no classification system) is used by most countries of the group. The Patent Law Treaty on formalities has been signed by 54 countries (of which only five are OAS members) but is not yet in force. A substantive Patent Law Treaty will be negotiated starting later this year under the auspices of WIPO. In addition to these treaties, WIPO has standing committees which deal with some issues of particular importance for OAS countries, namely: Protection of Well-Known Marks, (Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks (pub. 833. PDF, September 1999)), and Requirements for Licensing of Trademarks, (Draft Joint Recommendation Concerning Trademark Licenses, document SCT/5/4, September 2000). Both of these Recommendations are included in the FTAA list of sixteen agreements which are to be given effect.
There are signs of better cooperation and coordination among Patent Offices in the OAS group and worldwide. In November 2001, the heads of the Intellectual Property and Copyright Offices of 19 Latin American countries met in Quito, Ecuador, to discuss closer cooperation and coordination of policy. This sort of inter-Office coordination is also seen in the tripartite activities of the U.S., European and Japanese Patent Offices where there is talk of an eventual «one stop shopping» system where one office will search and examine a particular technical field for an application and the others would accept the result.
Despite arguments about the scope of patentable subject matter or, for example, the future of the «territoriality» principle in intellectual property law, there is quite clearly a considerable amount of agreement that practitioners and intellectual property experts can reach on the principled definition of such things as prior art, novelty, or inventive step (non-obviousness) in patent law or, for example, subject matter, use, or infringement of trademarks. Issues such as parallel imports of trademarked goods from countries within a free trade area, or so called «gray goods» from within or without the area, may present threshold issues as to whether they are preempting trade or competition issues on the one hand or intellectual property issues on the other, but ultimately a large free trade area is going to put pressure on the rigid territoriality theory of intellectual property and require some adjustments. «Exhaustion»of intellectual property rights is one aspect of this problem. It has provoked extensive litigation in the European Union as to «internal market exhaustion» of rights in goods put on the market within the internal free-trade areas compared with ‘‘international exhaustion», i.e., applied to goods wherever first marketed outside of the internal free trade area (Article XX., Exhaustion of Rights, in the draft FTAA agreement addresses this point and offers a principle of «regional exhaustion»).
The experience of the United States and the European Community, in areas where there has been long-standing difference of opinion and practice in intellectual property matters, is that there is much that ceases to be a real issue upon discussion and analysis. The United States accepts that international agreements will permit ethical exceptions to patentable subject matter for methods of treating the human or animal body, that trademark rights can be obtained in certain circumstances without prior use, and that copyright protection may be obtained without formalities. The argument for or against a grace period for disclosures by an inventor prior to filing a patent application was considered for many years to present an insoluble difference between the United States (12 month grace period) and Europe (no grace period). However, recent legislative activity by the European Union in the field of designs suggests that the12-month grace period has been accepted as a practical solution to a practical problem (inventors and designers are often required to publish quickly). The difference between first-to-file and first-to-invent rules in patent law is now generally recognized to be of minor impact in practice and therefore either sustainable without too much uncertainty or relatively easy to adjust by legislation.
The most likely sticking point in intellectual property negotiations between FTAA countries is the scope of patentable subject-matter. It is now perhaps too early to know whether that will remain a problem. The impact of biotechnology and business methods challenges the existing norms of patent law and that process will have to continue until consensus is achieved.
As for the difference between the common law and the civil law, we have had the benefit of the experience of the European Union where laws and directives in the intellectual property field are written in the civil law style and are often extremely well crafted. Old attitudes have changed in response to the need to make Community laws work. Common law judges on both sides of the Atlantic have spoken publically about the ever growing flood of case law decisions and its unfavorable impact on the ability to determine and follow precedent. English judges in particular have been more than willing to interpret civil law directives, to try to take account of decisions of other member state courts on the same points of law, and to send questions to the European Court of Justice. In the modern era most laws are statutory laws and the difference between the common law and the civil law has been reduced considerably; also, following the European model, protocols on interpretation can also be used to bridge the gap.
In conclusion, the U.S. government has made a public summary of its position on negotiations on intellectual property issues in connection with the proposed FTAA agreement. It is a surprisingly slim document:
•Under the heading Copyright it urges adoption of the WIPO Copyright and the Performances and Phonograms treaties as important in a digital network environment;
•Under Trademarks and Geographic Indications it urges elimination of requirements for registration of trademark licenses, adoption of the WIPO Joint Recommendation on Well-Known Marks and adoption of the Madrid Protocol; it also seeks to clarify the relationship between trademarks and geographical indications in favor of trademark owners;
•Under Patents, it wants to limit: the grant of compulsory licenses, the rights of generic pharmaceutical and agricultural chemical manufacturers to make or use or sell patented products other than for prospective marketing approval purposes, the categories of products or processes for which patents may be refused, the grounds for revoking a patent, and loss in patent term caused by administrative or regulatory delay (by granting term extensions);
•Under Trade Secrets, it seeks tighter protection against generic manufacturers using or relying on proprietary data submitted to governments in regulatory clearances of pharmaceutical or agricultural chemicals, as well as restrictions on the ability of such third parties in one country to rely on similar clearances obtained in another country; and
•Under Enforcement, it seeks better enforcement of intellectual property rights by compensation, recovery of profits, seizures of counterfeits, and criminal action and fines in cases such as counterfeiting.
The U.S. position is not particularly new but is a comprehensive, post-TRIPS statement of negotiating objectives with, the enforcement issues probably as important as any new or extended protection. This all suggests that the prospective parties to the FTAA may have been moving closer on intellectual property matters and, as expected, it is the trade and tariff issues which count more.
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[*]Mr. John M. Richardson is a partner at the law firm of Pennie & Edmonds LLP, 1155 Avenue of the Americas, New York, NY 10036-2711, .
Pennie & Edmonds was formed in 1884, the year Brazil joined the Paris Convention for the Protection of Intellectual Property. It has been continuously active in all phases of intellectual property protection and exploitation since then and began the solicitation of patents, trademarks and designs in Central and South America through its correspondents, at least as early as 1915. See: