Into the void – The lack of interaction of IP and competition law internationally

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Competition law is well recognized and enforced either regionally or nationally in a large part of the modern world. However, quite surprisingly, there is no comprehensive international agreement, which would regulate competition law in any great substantive detail. An international agreement has certainly been discussed, but even today there is no global agreement, which could be compared e.g. to the Paris or Berne Conventions or TRIPS. The role of competition law has also been discussed within the framework of the WTO dispute resolution mechanism, but it has not won any significant ground within the system.
Even though there is no comprehensive international treaty on competition law, there certainly are important individual provisions on competition law in international treaties (mainly) covering other areas, such as, e.g., TRIPS. Moreover, there are bilateral trade agreements, which include fairly comprehensive regulation in the area of competition law. Parties to TRIPS may have concluded such bilateral trade agreements (e.g., the EU-CARIFORUM EPA). Since competition law could have an effect on the use of IP, an interesting query is whether such external bilateral trade agreements could have an interpretive effect on a WTO agreement in a WTO dispute? This question should probably be answered in the negative de lege lata. This is not due to the substance of the trade agreement, but rather due to the bilateral nature of such a treaty (i.e. the fact that not all WTO states are members of the bilateral trade agreement). In the EC-Biotech Products case, the WTO Panel resorted to the Vienna Convention in the Law of Treaties and concluded that only agreements to which all WTO members were parties could be taken into account in the interpretation of WTO agreements. Bilateral agreements do not by nature fulfill this prerequisite. Ergo, if the WTO Panel’s decision in EC-Biotech Products on the notion of “the parties” is followed, such treaties will not be relevant in the interpretation of a “covered agreement”, like e.g., TRIPS. Furthermore, the dispute settlement rules of the WTO (“DSU”) clearly emphasize the importance of focusing on the “covered agreements” in a WTO dispute. Based on the DSU, the provisions of an external bilateral trade agreement could theoretically play some role in the interpretation of TRIPS only if the rights and obligations of TRIPS are not diminished. Therefore, it can be concluded that external competition law provisions in a bilateral trade agreement have no role, or at most a very limited one, e.g., in the interpretation of TRIPS in a WTO dispute.

The status quo could be different if a WTO Panel or (preferably) the Appellate Body would hand down a decision with an amended view on the notion of “the parties”. The question was addressed in the Appellate Body Report in EC and Certain Member States – Measures Affecting Trade in Large Civil Aircrafts, but the Appellate Body did not consider it necessary to establish a final position on the notion of “the parties”, even taking such a position could have clarified the interpretation of the Vienna Convention. The Appellate Body did however obiter dicta take a less definitive stance to the notion of “the parties” compared to the Panel in the EC-Biotech Products case. The status quo could of course also change if there would be a comprehensive international agreement on competition law, which would be applied within the WTO dispute settlement mechanism.

If you find the above subject interesting, I recommend you to read my article “Can “external” bilateral competition law provisions have an interpretative effect within the framework of the WTO dispute settlement system?” published in issue 10 of the European Competition Law Review this year. Please find a link to the article on Westlaw here: https://login.westlaw.co.uk/maf/wluk/app/document?access-method=toc&src=toce&docguid=I96D9EF80748B11E6BAB7870894837AD7&crumb-action=append&context=8

Vilhelm Schröder

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