Order Code RL33205
CRS Report for Congress
Received through the CRS Web
Intellectual Property and the Free Trade
Agreements: Innovation Policy Issues
December 21, 2005
John R. Thomas
Visiting Researcher
Resources, Science and Industry Division
Congressional Research Service ˜ The Library of Congress

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Intellectual Property and the Free Trade Agreements:
Innovation Policy Issues
Summary
The United States has recently entered into a number of Free Trade Agreements,
or FTAs, with Australia, Chile, Singapore, and other trading partners. Negotiations
are currently ongoing with respect to the establishment of additional FTAs. In
keeping with a congressional directive established in the Bipartisan Trade Promotion
Act of 2002, P.L. 107-210, one objective of forming the FTAs is to establish “a
standard of [intellectual property] protection similar to that found in United States
law.” As a result, most of the FTAs stipulate minimum levels of protection with
respect to copyrights, data protection, patents, trademarks, and other forms of
intellectual property. These standards relate to such provisions as the term of
protection, scope of rights, and mechanisms by which these intellectual property
rights are acquired and enforced.
The different FTAs vary in their comprehensiveness and level of detail. Each
of these agreements has nonetheless been drafted in a manner that complies with
current U.S. law. As a result, the effect of each FTA is to obligate signatories to such
agreements to amend their intellectual property laws to match or resemble those of
the United States.
The FTAs have been described as an effective mechanism for advancing U.S.
interests in securing intellectual property protection. Increased levels of intellectual
property protection with respect to computer software, music, motion pictures, and
pharmaceuticals may promote a more favorable balance of trade for U.S. industry,
decrease domestic prices for innovative goods and services, and serve other policy
goals. The FTA framework has at times proven to be a more advantageous forum for
achieving the intellectual property goals of the United States than multilateral
settings.
Nonetheless, concerns have arisen over the intellectual property provisions of
the FTAs. Some observers believe that certain FTA provisions may lock the United
States into current intellectual property policies, inhibiting opportunities for future
reform. Other commentators are concerned that under existing multilateral
agreements, in particular those of the World Trade Organization, the intellectual
property obligations found within one FTA may extend beyond that particular treaty
partner. Finally, some observers perceive the FTAs to be an inappropriate and unfair
vehicle for international intellectual property reforms due to the strong bargaining
position of the United States. The scope of these potential consequences counsels
continued congressional attention towards the FTAs that the United States has
already formed, as well as those FTAs that are planned for the future.

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Contents
Intellectual Property Fundamentals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
The TRIPS Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Copyrights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Data Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Other Intellectual Property Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Effective Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Debate on the TRIPS Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Intellectual Property and Free Trade Agreements . . . . . . . . . . . . . . . . . . . . . . . . 12
Copyrights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Data Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Other Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Innovation Policy Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
U.S. Interests in the FTA Intellectual Property Provisions . . . . . . . . . . . . . 17
Potential Lock-In Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Extent of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Fairness Concerns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Concluding Observations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
This report was funded in part by a grant from the John D. and Catherine T.
MacArthur Foundation.

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Intellectual Property and the Free Trade
Agreements: Innovation Policy Issues
Congressional interest in the intellectual property laws, including patents,
copyrights, and trademarks, has been reflected in recent Free Trade Agreements
(FTAs) to which the United States is a signatory. Congress stated in the Bipartisan
Trade Promotion Act of 20021 that an overall negotiating objective of such
agreements was to encourage our treaty partners to agree to “a standard of
[intellectual property] protection similar to that found in United States law.”2 In
keeping with this mandate, the United States has entered into numerous FTAs that
have required their signatories to conform to stipulated standards of intellectual
property protection.3 Because the FTAs are drafted in a manner that complies with
current U.S. law, their effect is to obligate U.S. treaty partners to amend their
intellectual property laws to match or resemble those of the United States.4
FTAs have been described as an effective mechanism for advancing U.S.
interests in ensuring intellectual property protection.5 Nonetheless, concerns have
arisen over the intellectual property provisions of the FTAs. Some commentators
have suggested that certain FTA provisions may lock the United States into current
intellectual property policies, inhibiting opportunities for future reform.6 Others are
concerned that under existing multilateral agreements, in particular those of the
World Trade Organization (WTO), the intellectual property obligations found within
one FTA may extend beyond that particular treaty partner.7 Finally, some observers
1 P.L. 107-210, 116 Stat. 993 (2002).
2 19 U.S.C. § 3802(b)(4)(A)(i)(II) (2004).
3 See generally Free Trade Agreements: US Strategies and Priorities (Jeffery J. Schott, ed.,
2004).
4 See Russell J. Anderson, Jr., “Return of the Guilds: A Reflection on the Domestic and
International Implications of Eldred v. Ashcroft,” 12 University of Baltimore Intellectual
Property Law Journal (2003), 49.
5 See Peter K. Yu, “Currents and Crosscurrents in the International Intellectual Property
Regime,” 38 Loyola of Los Angeles Law Review (2004), 323.
6 See Carlos M. Correa, “Investment Protection in Bilateral and Free Trade Agreements:
Implications for the Granting of Compulsory Licenses,” 26 Michigan Journal of
International Law (2004), 331; CRS Report RL32375, The U.S.-Australia Free Trade
Agreement: Provisions and Implications, by William H. Cooper.
7 See Maria Julia Oliva, “Intellectual Property in the FTAA: Little Opportunity and Much
Risk,” 19 American University International Law Review (2003), 45.

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perceive the FTAs to be an inappropriate and unfair vehicle for international
intellectual property reforms.8
This report offers a broad overview of the intellectual property components of
the FTAs. It begins by offering a brief introduction to the global intellectual property
system. Next, this report considers the subject matter of the different free trade
agreements themselves. It then reviews perceived concerns with respect to the free
trade agreements and closes with concluding observations.
Intellectual Property Fundamentals
The term “intellectual property” refers to the subject matter of the laws that give
rise to proprietary interests in creations of the mind. Significant legal intellectual
property disciplines include copyright, which concerns artistic and literary works;
patent, pertaining to pragmatic innovations; trademark, relating to commercial
symbols; and data protection, concerning pharmaceutical and agricultural test data.9
A brief review of each of these legal regimes, as they exist in the United States, will
aid subsequent analysis.
Copyrights provide protection for original works of authorship. The types of
creations addressed by copyright range from traditional works of art, including
literature, music and visual art, to such modern forms of artistic expression as sound
recordings, motion pictures and even computer software.10 Copyright protection
arises automatically, as soon as the work has been fixed in tangible form.11 Authors
may register their works with the U.S. Copyright Office, a component of the Library
of Congress. If an author chooses to register his work, he obtains certain procedural
and substantive advantages during copyright enforcement.12 The copyright law
affords authors the exclusive right to reproduce, adapt, and publicly distribute,
perform, and display the protected work, subject to limitations such as the fair use
privilege.13 The term of copyright is ordinarily the life of the author plus 70 years.14
8 See, e.g., Frederick M. Abbott, “Intellectual Property Rights in Global Trade Framework:
IP Trends in Developing Countries,” 98 American Society of International Law
Proceedings (2004), 95.
9 See generally Roger E. Schechter and John R. Thomas, INTELLECTUAL PROPERTY: THE
LAW OF COPYRIGHTS, PATENTS AND TRADEMARKS (2003).
10 Id.
11 Id.
12 17 U.S.C. § 408 — 412 (2004).
13 17 U.S.C. § 106, 107 — 122 (2004).
14 17 U.S.C. § 302 (2004).

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Patents provide exclusive rights to inventors of new, useful and nonobvious
inventions.15 The patent law concerns hard technologies, including chemical,
electrical and mechanical products and processes, as well as other pragmatic
innovations in fields ranging from biotechnology to business methods.16 An inventor
may obtain a patent by filing a patent application with the United States Patent and
Trademark Office (USPTO). Such an application must completely describe and
precisely claim the invention.17 Patents issued confer the right to exclude others from
making, using, selling, offering to sell or importing into the United States the
patented invention.18 The term of a patent is ordinarily 20 years from the date the
application was filed.19
Trademarks consist of any word or symbol used by a merchant to identify its
goods or services, and to distinguish them from those of others.20 To be subject to
protection under the trademark laws, a mark must successfully distinguish the origins
of its associated goods, and not be confusingly similar to marks used by others or
merely describe the characteristics of those goods.21 Trademark rights arise under
state law as soon as the mark is used on goods in commerce.22 However, trademarks
may be registered with the USPTO, a step that affords significant substantive and
procedural advantages.23 Trademark law also protects the appearance of product
packaging and, in some cases, the actual physical configuration of the goods, if these
serve as brand identifiers. A trademark owner may prevent others from using any
mark that creates a likelihood of confusion as to the source or sponsorship of the
associated goods or services.24 Trademark rights persist so long as the mark
continues to be used and retains its distinctiveness.25
Another intellectual property right concerns the protection of pharmaceutical
and agricultural chemical test data. Most national governments regulate the
marketing of pharmaceuticals and agricultural chemicals in the interest of public
health.26 This oversight includes a required showing that these products are safe and
effective before they can be distributed to the public. Such evidence is not generated
by government laboratories, however. Rather, national governments require sponsors
15 35 U.S.C. §§ 101, 102, 103 (2004).
16 35 U.S.C. § 101 (2004).
17 35 U.S.C. § 112 (2004).
18 35 U.S.C. § 271 (2004).
19 35 U.S.C. § 154(a)(2) (2004).
20 See RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 9.
21 Id.
22 Id. at § 18.
23 17 U.S.C. § 1051 (2004).
24 See RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 20.
25 Id. at § 30.
26 See CRS Report RL30989, The U.S. Drug Approval Process: A Primer, by Blanchard
Randall IV.

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of new drugs and agricultural chemicals to submit test data that evidence their safety
and efficacy.27
Because the required test data may be very costly to generate, sponsors of new
pharmaceuticals and agricultural chemicals often do not disclose test data to the
public. Otherwise the sponsor’s competitors could avoid the expenses of developing
this data for themselves. Sponsors also desire government agencies that receive the
test data to maintain the data in confidence.28 In addition, brand-name
pharmaceutical and agricultural chemical firms often seek to limit the ability of
generic competitors to rely upon the data in order to obtain marketing approval of
their own products, even if they cannot actually view the data themselves.29
In the United States, federal legislation limits the ability of generic competitors
to reference data generated by the manufacturers of brand-name pharmaceuticals and
agricultural chemicals. With respect to pharmaceuticals, these “marketing
exclusivities” consist of a period of time during which the Food and Drug
Administration (FDA) protects an approved drug protection from competing
applications for marketing approval. Under the Hatch-Waxman Act,30 drugs that
qualify as a “new chemical entity”31 may obtain five years of marketing exclusivity.32
The Hatch-Waxman Act also provides for a three-year marketing exclusivity awarded
to a drug sponsor that conducts new clinical studies upon a drug that does not qualify
as a new chemical entity.33 The Federal Insecticide, Fungicide, and Rodenticide Act
of 1978,34 also provides for data protection for agricultural chemicals under
somewhat different certain terms and conditions.35
A number of rationales explain the intellectual property laws. Some legal
experts assert that intellectual property laws are needed to encourage individuals to
27 See G. Lee Skillington & Eric M. Solovy, “The Protection of Test and Other Data
Required by Article 39.3 of the TRIPS Agreement,” 24 Northwestern Journal of
International Law and Business (2003), 1.
28 See James T. O’Reilly, “Implications of International Drug Approval Systems on
Confidentiality of Business Secrets in the U.S. Pharmaceutical Industry,” 53 Food & Drug
Law Journal (1998), 123.
29 See Adrian Zahl, “Pharmaceuticals and the Law: As Patent Laws Converge, Attention
Shifts to ‘Data Protection,’” 13 Metropolitan Corporate Counsel no. 2 at 24 (Feb. 2005).
30 P.L. 98-417, 98 Stat. 1585 (1984).
31 21 U.S.C. §355(c)(3)(E)(ii) (2004) (with respect to §505(b)(2) applications); 21 U.S.C.
§355(j)(5)(F)(ii) (2004) (with respect to ANDAs).
32 Some authorities refer to this sort of exclusivity as new molecular entity, or NME
exclusivity. See Gerald J. Mossinghoff, “Overview of the Hatch-Waxman Act and Its
Impact on the Drug Development Process,” 54 Food & Drug Law Journal (1999), 187.
33 21 U.S.C. §355(c)(3)(E)(iii)-(iv) (2004); 21 U.S.C. §355(j)(5)(F)(iii)-(iv) (2004).
34 P.L. 95-396, 92 Stat. 819 (1978) (codified as amended at 7 U.S.C. §§136-136y (2004)).
35 See Aaron Xavier Fellmeth, “Secrecy, Monopoly, and Access to Pharmaceuticals in
International Trade Law: Protection of Marketing Approval Data Under the TRIPS
Agreement,” 45 Harvard International Law Journal (2004), 443.

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create new works of authorship, inventions, and other innovative subject matter. It
is believed that absent a system of proprietary rights, free riders could readily exploit
these works without having to bear the costs of creating them. Individuals would in
turn possess diminished incentives to devote their efforts to being authors or
inventors.36 In addition, intellectual property rights are said to facilitate market
mechanisms by creating discrete, well-defined property interests that decrease
transaction costs and encourage commercial exchanges.37
On the other hand, intellectual property laws have been subject to criticism.
Some assert that intellectual property rights are unnecessary due to market forces that
already suffice to create an optimal level of creative activity. The desire to become
famous, or to gain a lead time advantage over competitors, may well provide
sufficient inducement to write or to invent without the need for further incentives.38
In an era where information can be readily transmitted around the globe, the notion
that an innovation can be an object of possession has also been challenged.39
Each of these contentions has a varying degree of persuasiveness. As of yet,
however, no conclusive study has demonstrated that the social benefits of the
intellectual property laws outweigh the costs. As a result, the justifications and
criticisms of intellectual property remain open to challenge.40
The TRIPS Agreement
At present time, no unified legal regime governing intellectual property rights
exists on an international basis. There is no global copyright, patent or trademark.
Innovators must secure and enforce these rights within the particular jurisdiction
where they desire protection.41
In addition, the varying national laws that establish intellectual property rights
often differ in important respects. Such factors as the works subject to protection, the
scope of rights, and the duration of protection are among the factors that may vary
36 See, e.g., Rebecca S. Eisenberg, “Patents and the Progress of Science: Exclusive Rights
and Experimental Use,” 56 University of Chicago Law Review (1989), 1017.
37 See, e.g., Henry H. Perritt, Jr., “Property and Innovation in the Global Information
Infrastructure,” 1996 University of Chicago Legal Forum (1996), 261.
38 See Frederic M. Scherer & David Ross, Industrial Market Structure and Economic
Performance (Rand McNally & Co., 3d ed. 1990).
39 John Perry Barlow, “The Economy of Ideas,” Wired 2.03 (March 1994).
40 See Congressional Research Service Report for Congress, CRS Report RL31951,
Innovation, Intellectual Property, and Industry Standards, by John R. Thomas.
41 See, e.g., Opinion of the Comptroller General, 159 USPQ 298, 301 (1968) (“It is a
fundamental concept that territorial limitations of sovereignty preclude a country from
giving extraterritorial effect to its patent laws.”).

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widely in different jurisdictions.42 Absent some obligation, a particular nation is not
required to provide intellectual property rights that resemble those of the United
States, or even to establish such laws at all.43
Since the nineteenth century, however, many nations in fact have committed to
provide certain standards of intellectual property protection via bilateral and
multilateral international agreements.44 The most significant of these is the WTO
Agreement on Trade — Related Aspects of Intellectual Property Rights, commonly
known as the TRIPS Agreement.45 Domestically, the Uruguay Round Agreements
Act in 1995 made significant amendments to U.S. intellectual property laws in an
effort to comply with the TRIPS Agreement.46 As discussed below, the TRIPS
Agreement required each WTO member state to provide minimum substantive
standards of intellectual property protection and enforcement.
General Provisions
The TRIPS Agreement requires each WTO member state to observe the
standards of “national treatment” and “most-favored-nation” with respect to its
intellectual property laws.47 Following the national treatment principle, WTO
members agree to treat foreign inventors no worse than domestic inventors in their
patent laws, so long as these foreign inventors are nationals of a WTO member state.
It would be impermissible, for example, for the USPTO to charge nationals of a
WTO member state a higher application fee than is required of U.S. citizens, or to
provide a shorter patent term for such inventors than is granted to U.S. inventors.
Under the most favored nation provision, with limited exceptions, any privilege
granted to nationals of one WTO member state must also be afforded to nationals of
all WTO member states.48
The TRIPS Agreement also requires each WTO member state to comply with
certain provisions of earlier international agreements pertaining to intellectual
42 See Graeme W. Austin, “Valuing ‘Domestic Self-Determination’ in International
Intellectual Property Jurisprudence,” 77 Chicago-Kent Law Review (2002), 1155.
43 See Evelyn Su, The Winners and the Losers: The Agreement on Trade — Related Aspects
of Intellectual Property Rights and Its Effects on Developing Countries, 23 HOUSTON
JOURNAL OF INTERNATIONAL LAW 169 (2000).
44 See Frederick Abbott et al., The International Intellectual Property System: Commentary
and Materials (1999).
45 Agreement on Trade — Related Aspects of Intellectual Property Rights, Apr. 15, 1994,
Annex 1C, 33 I.L.M. 1197 (1994) [“TRIPS Agreement”].
46 P.L. 103-465, 108 Stat. 4809 (1994).
47 TRIPS Agreement, Art. 4.
48 See Kevin J. Nowak, “Staying Within the Negotiated Framework: Abiding by the Non-
Discrimination Clause of TRIPS Article 27,” 26 Michigan Journal of International
Law (2005), 899.

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property.49 These treaties include the Berne Convention,50 which relates to
copyrights; the Paris Convention,51 which concerns patents and trademarks; and the
Treaty on Intellectual Property in Respect of Integrated Circuits,52 concerning
semiconductor chip topography designs.
Copyrights
The TRIPS Agreement obligates each WTO member state to provide a term of
copyright protection of no less than 50 years from the death of the author.53 The
TRIPS Agreement additionally requires WTO member states to protect computer
programs as literary works.54 Protection must also be accorded to data compilations
that, by virtue of their selection or arrangement, constitute “intellectual creations.”55
The TRIPS Agreement also calls for “rental rights” — the right to authorize or
prohibit the commercial rental to the public of a protected work of authorship — with
respect to computer programs and cinematographic works.56
Patents
Following the TRIPS Agreement, each WTO member state agreed to allow
patents to issue on inventions “in all fields of technology, provided that they are new,
involve an inventive step and are capable of industrial application.”57 The TRIPS
Agreement includes some exceptions to this broad principle, however. Certain
methods of medical treatment, plants and animals other than microorganisms, and
inventions that violate the “ordre public or morality” may be excluded from
patentability at the option of the member state.58
WTO member states also agreed that patentees shall have the right to exclude
others from making, using, offering for sale, selling, or importing the patented
invention,59 subject to limited exceptions.60 The TRIPS Agreement further stipulates
49 TRIPS Agreement, Arts. 2, 9, 35.
50 Berne Convention for the Protection of Literary and Artistic Works, Sept. 9, 1886, 828
U.N.T.S. 221.
51 Paris Convention for the Protection of Industrial Property, Mar. 20, 1883, 13 U.S.T. 1.
52 May 26, 1989, I.L.M. 1477.
53 TRIPS Agreement, Art. 12.
54 Id. at Art. 10.
55 Id.
56 Id. at Art. 11.
57 Id. at Art. 27(1).
58 Id. at Art. 27(2).
59 Id. at Art. 28.
60 Id. at Art. 30.

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that the term of patent protection available shall not end before the expiration of a
period of 20 years counted from the filing date.61
The TRIPS Agreement places some limits upon the ability of WTO member
states to award compulsory licenses for the use of another’s patented invention.62
Among the most detailed provisions of the TRIPS Agreement, Article 31 in part
imposes the following restrictions upon the issuance of compulsory licenses:
! Each application for a compulsory license must be considered on its
individual merits.
! The proposed user must have made efforts to obtain authorization
from the patent owner on reasonable commercial terms and
conditions and must demonstrate that such efforts have not been
successful within a reasonable period of time. However, this
requirement may be waived in the case of a national emergency or
other circumstances of extreme urgency.
! The compulsory license must be revocable if and when its
motivating circumstances cease to exist and are unlikely to recur.
! The patent owner must be paid adequate remuneration in the
circumstances of each case, taking into account the economic value
of the authorization.
! The legal validity of any decision relating to the authorization of
such use shall be subject to judicial or other independent review.
! Any such use shall be authorized predominantly for the supply of the
domestic market of the member authorizing such use.
Many nations considered the last of the restrictions noted above — requiring
that any compulsory license be authorized predominantly for local use — to be a
burdensome standard. Some countries may lack the technological or financial
capabilities to manufacture advanced products, including certain pharmaceuticals
needed to combat AIDS or other epidemics. The WTO ministerial conference held
in Doha, Qatar in 2001 recognized this concern when it issued a “Declaration on the
TRIPS Agreement and Public Health.”63 The result was a 2003 decision of the WTO
General Council that limited the domestic supply requirement with respect to
61 Id. at Art. 33.
62 A “compulsory license” constitutes a statutorily created license that allows individuals to
pay a royalty and use the invention without the patentee’s permission. Black’s Law
Dictionary 938 (Bryan A. Gardner, ed., 8th ed. 2004).
63 See CRS Report RS21609, The WTO, Intellectual Property, and the Access to Medicines
Controversy, by Ian F. Fergusson.

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pharmaceuticals needed to address public health problems.64 Under the 2003
decision, any least developed country, as well as any other country that certifies it has
insufficient manufacturing capabilities to manufacture a patented drug, may issue a
compulsory license that allows for domestic public health needs to be satisfied
through importation.65 On December 6, 2005, WTO members agreed to incorporate
the language of the 2003 decision directly within the TRIPS Agreement itself.66
Trademarks
The TRIPS Agreement provides that “[a]ny sign, or combination of signs,
capable of distinguishing the goods or services of one undertaking from those of
other undertakings, shall be capable of constituting a trademark.” The TRIPS
Agreement further requires that a trademark owner, with some exceptions,67 “shall
have the exclusive right to prevent all third parties not having the owner’s consent
from using in the course of trade identical or similar signs for goods or services
which are identical or similar to those in respect of which the trademark is registered
where such use would result in a likelihood of confusion.”68 Trademarks that have
become well-known in a particular country are entitled to additional protection.69
Trademarks are subject to a minimum term of 7 years, which may be renewed
indefinitely.70 The TRIPS Agreement further stipulates that compulsory licensing of
trademarks shall not be permitted.71 Under this rule, legal requirements that foreign
marks be used in conjunction with local marks are, as a general matter, prohibited.
Data Protection
The TRIPS Agreement requires each WTO member state to establish
protections for pharmaceutical and agricultural chemical test data under certain
conditions. Although this obligation is stated succinctly in Article 39.3 of the TRIPS
Agreement, it has proven controversial. Article 39.3 specifically provides:
Members, when requiring as a condition of approving the marketing of
pharmaceutical or of agricultural chemical products which utilize new chemical
entities, the submission of undisclosed test or other data, the origination of which
64 See http://www.wto.org/english/tratop_e/trips_e/implem_para6_e.htm.
65 See also Frederick M. Abbott, “The WTO Medicines Decision: World Pharmaceutical
Trade and the Protection of Public Health,” 99 American Journal of International Law 317
(2005).
66 See World Trade Organization, “Members OK amendment to make health flexibility
permanent,” (Dec. 6, 2005) (available at http://www.wto.org/english/news_e/pres05_e/
pr426_e.htm).
67 TRIPS Agreement, Art. 17.
68 Id. at Art. 16.
69 Id.
70 Id. at Art. 18.
71 Id. at Art. 21.

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involves a considerable effort, shall protect such data against unfair commercial
use. In addition, Members shall protect such data against disclosure, except
where necessary to protect the public, or unless steps are taken to ensure that the
data are protected against unfair commercial use.
Many commentators have observed that, in contrast to the more specific wordings of
many other TRIPS Agreements provisions, Article 39.3 establishes broad parameters
using vague language.72 In particular, terms such as “new chemical entities,”
“considerable effort,” and “unfair commercial use” receive no further definition
within the TRIPS Agreement. As a result, the precise nature of the obligations
Article 39.3 imposes upon WTO member states is not entirely clear.73
Other Intellectual Property Rights
The TRIPS Agreement also establishes minimum standards of substantive
protection with respect to a number of other intellectual property rights. WTO
member states must protect certain geographical indications, which are defined as
“indications which identify a good as originating in the territory of a Member, or a
region or locality in that territory, where a given quality, reputation or other
characteristic of the good is essentially attributable to its geographical origin.”74
They must also protect industrial designs, which consist of a shape, configuration,
pattern, or ornament applied to an article manufacture.75 In addition, they must also
provide a cause of action for the misappropriation of trade secrets.76
Enforcement
Along with other commitments made by WTO member states, TRIPS
Agreement obligations are subject to enforcement through the WTO Dispute
Settlement Body (DSB).77 If one WTO member state believes that another member
state is in violation of the TRIPS Agreement, the member states may enter into
consultation through the DSB. If the member states cannot resolve their
disagreement, the DSB will convene a panel to hear and resolve the dispute. Panel
72 See Lorna Brazell, A world united? The US approach to the protection of regulatory data
(Jan. 12, 2005) (available at www.bilaterals.org).
73 Compare G. Lee Skillington & Eric M. Solovy, “The Protection of Test and Other Data
Required by Article 39.3 of the TRIPS Agreement,” 24 Northwestern Journal of
International Law & Business (2003), 1, with Carlos Maria Correa, “Unfair Competition
Under the TRIPS Agreement: Protection of Data Submitted for the Registration of
Pharmaceuticals,” 3 Chicago Journal of International Law (2002), 69.
74 TRIPS Agreement, Art. 22.1.
75 Black’s Law Dictionary 791 (Bryan A. Gardner, ed., 8th ed. 2004).
76 TRIPS Agreement, Art. 39. A trade secret has been defined as a “formula, process,
device, or other business information that is kept confidential to maintain an advantage over
competitors.” See James Pooley, Trade Secrets §1.01 (1998).
77 Understanding on Rules and Procedures Governing the Settlement of Disputes, Apr. 15,
1994, WTO Agreement, Annex 2, Legal Instruments — Results of the Uruguay Round vol.
31, 33 I.L.M. 1226 (1994).

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decisions are subject to review by the DSB Appellate Body. The WTO Agreement
calls for compensatory trade measures in circumstances where the DSB finds a WTO
member state to be in violation of the TRIPS Agreement, yet that member state does
not amend its laws. If the parties are unable to agree upon mutually acceptable
compensation, then the complaining state may impose limited trade sanctions, such
as heightened tariff rates commensurate with the determined injury resulting from the
offending practice, against the other member state.78
Effective Dates
The various patent portions of the TRIPS Agreement feature a variety of
effective dates. These dates depend upon whether the WTO member state designates
itself a developed, developing or least developed country. For WTO members other
than developing and least developed countries, the compliance date for all
requirements of the TRIPS Agreement was set to January 1, 1996.79
For signatory states designated as developing countries, the TRIPS Agreement
set the general compliance date as January 1, 2000. However, there is one exception
to this general date. If on January 1, 2000, a developing country did not extend
patent protection to all areas of technology within the meaning of Article 27, that
developing country may delay implementation of these provisions for an additional
five years. Prior to the TRIPS Agreement, for example, many developing countries
did not allow patents to issue on pharmaceuticals. The practical effect of this
additional transition period was that developing countries did not need to allow
patents concerning pharmaceuticals until January 1, 2005.
Least-developed countries are entitled to a lengthier transition period in
implementing TRIPS Agreement obligations. Effective dates with respect to least-
developed countries are found in the TRIPS Agreement itself, as well as the 2001
“Declaration on the TRIPS Agreement and Public Health” issued following the Doha
Ministerial.80 Following 2005 modifications to the text of the TRIPS Agreement, a
least-developed country may delay implementing the TRIPS Agreement until July 1,
2013. A showing of hardship may qualify least-developed countries for further
delays and other concessions.81 The Doha Declaration further excuses least-
developed country members from granting or enforcing patents on pharmaceuticals
through January 1, 2016, without prejudice to their ability to seek other extensions
of these transitions periods.
78 Mark Clough, “The WTO Dispute Settlement System — A Practitioner’s Perspective,”
24 Fordham International Law Journal (2000), 252.
79 TRIPS Agreement, Art. 65.
80 See supra notes 63-65 and accompanying text.
81 TRIPS Agreement, Art. 66.

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The TRIPS Agreement does not oblige its signatories to protect subject matter
that fell into the public domain prior to the time its obligations became effective.82
For example, suppose that a particular developing country (as compared to a
developed or least-developed country) traditionally did not allow patents to issue on
pharmaceuticals. If that developing country joined the WTO, it must amend its patent
law to authorize pharmaceutical patents. The TRIPS Agreement requires only that
patents be allowed on new products as of January 1, 2005, however, and does not
mandate that patents be granted retroactively. As a result, within that developing
country, patent protection need not be afforded to pharmaceuticals that were public
available prior to January 1, 2005, even if those pharmaceuticals were patented
elsewhere.
Debate on the TRIPS Agreement
The TRIPS Agreement has generated considerable controversy. Some
commentators believe that the TRIPS Agreement has led to large transfers of wealth
from poor countries to the developed world, and in particular to the United States.83
Others have contended that the introduction of strong intellectual property rights
protection into the developing world restricts sustainable development and
perpetuates their dependence upon developed nations.84 Still others believe that
deleterious public health consequences will result from the TRIPS Agreement
requirement that patents issue on pharmaceuticals.
Proponents of the TRIPS Agreement instead believe that the introduction of
full-fledged intellectual property laws around the globe will provide needed
incentives for investment and innovation.85 Such efforts could promote solutions to
problems that are particular to the developing world, including the provision of
nutritional needs and cures for diseases not common in the developed world.
Supporters also observe that the TRIPS Agreement was one component of a
multi-faceted WTO agreement, and believe that the developing world obtained trade
benefits in exchange for assuming obligations to protect intellectual property. Even
after a decade of experience with the TRIPS Agreement, the exchange of views about
possible reforms to the TRIPS Agreement continues at a brisk pace.
Intellectual Property and Free Trade Agreements
The TRIPS Agreement obligated each WTO member state to provide stated
levels of intellectual property protection. Although commentators broadly agree that
the TRIPS Agreement was a watershed event for international intellectual
82 TRIPS Agreement, Art. 70.
83 Abbott, supra note 8.
84 See A. Samuel Oddi, “TRIPS — Natural Rights and a ‘Polite Form of Economic
Imperialism,’” 29 Vanderbilt Journal of Transnational Law 415 (1996).
85 See Jean Raymond Homere, “Intellectual Property Rights Can Help Stimulate the
Economic Development of Least Developed Countries,” 27 Columbia Journal of Law & the
Arts (2004), 277.

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provision,86 many of its obligations nonetheless fell short of the level of intellectual
property rights available in the United States. For example, U.S. copyright law
provides for a term of protection of the life of the author plus 70 years,87 while a term
of life plus 50 years is acceptable under the TRIPS Agreement.88 U.S. patent law
allows patent term to be extended in order to account for long delays in Patent Office
acquisition procedures,89 but the TRIPS Agreement does not require such a measure.
The TRIPS Agreement allows WTO member states to disallow the registration of
trademarks that are not visually perceivable90 — an option that blocks protection for
such commercial symbols as sounds and scents — but no such blanket restriction
exists under U.S. law.
In enacting the Bipartisan Trade Promotion Act of 2002, Congress stated that
an overall negotiating objective of such agreements was to encourage our treaty
partners to agree to “a standard of [intellectual property] protection similar to that
found in United States law.”91 In keeping with this mandate, the United States has
entered into numerous FTAs that have required their signatories to provide higher
levels of intellectual property protection than are required under the TRIPS
Agreement.92 With respect to the intellectual property laws, each of the FTAs
stipulates standards that comply with current U.S. law. As a result, the United States
need take no action in order to comply with those provisions of the FTA. In contrast,
the U.S. treaty partner must often substantially amend its intellectual property laws
in order to comply with the FTA.93
This report next offers an overview of these FTA “TRIPS-plus”94 intellectual
property obligations. It should be noted that the intellectual property provisions of
most of these agreements are lengthy and detailed. Further, some of the FTAs
impose more significant obligations than others.95 As a result, if particular
86 See, e.g., Laurence R. Helfer, “Regime Shifting: The TRIPS Agreement and New
Dynamics of International Intellectual Property Lawmaking,” 29 Yale Journal of
International Law (2004), 1.
87 17 U.S.C. § 302 (2004).
88 TRIPS Agreement, Art. 12.
89 35 U.S.C. § 154(b) (2004).
90 TRIPS Agreement, Art. 15.1.
91 P.L. 107-210, 116 Stat. 993 (codified at 19 U.S.C. § 3802(b)(4)(A)(i)(II) (2004)).
92 See Amy Kapczynski et al., “Addressing Global Health Inequities: An Open Licensing
Approach for University Innovations,” 20 Berkeley Technology Law Journal (2005), 1031.
93 See Anderson, supra note 4.
94 Because the FTAs include obligations that exceed those of the TRIPS Agreement, they
are commonly referred to as “TRIPS-plus agreements.” See Haochen Sun, “The Road to
Doha and Beyond: Some Reflections on the TRIPS Agreement and Public Health, 15
European Journal of International Law (2004), 146.
95 See Frederick M. Abbott, “Toward a New Era of Objective Assessment in the Field of
TRIPS and Variable Geometry for the Preservation of Multilateralism,” 8 Journal of
(continued...)

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information about an individual FTA is needed, that instrument should be consulted
for a more detailed understanding of its contents.96
Copyrights
Several of the FTAs oblige their signatories to provide a copyright term equal
to the life of the author plus 70 years, twenty years longer than the standard set by the
TRIPS Agreement. Certain FTAs also include obligations that track those
established domestically by the Digital Millennium Copyright Act (DMCA) of
1998.97 In particular, FTA signatories agree to outlaw the circumvention of a
technological copyright-control measure, subject to certain exceptions.
Descrambling a scrambled work, decrypting an encrypted work, and bypassing a
technological measure without the authority of the copyright owner are among the
activities that would violate the DMCA. In addition, the FTAs also commonly
require their signatories to prohibit the removal or alteration of “rights management
information,” which is in turn defined to mean electronic information that identifies
a protected work and its author, as well as the terms and conditions of the use of the
work.
Patents
Several FTAs require their signatories to provide a one-year “grace period” to
patent applicants. Under these provisions, individuals are granted one year from the
date they publicly disclose their inventions to decide whether to file a patent
application or not.98 FTAs also commonly require their signatories to accede to the
Patent Cooperation Treaty,99 an international agreement that expedites multinational
patent acquisition procedures.100
Certain of the FTAs also call for patent term extension based upon
administrative delays. The TRIPS Agreement obligates all WTO members to
provide a patent term of twenty years from the date of filing.101 However, patent
applicants obtain no enforceable rights until such time as the patent actually issues.
As a result, extensive Patent Office delays could substantially diminish the period of
time in which the patent proprietor enjoys enforceable patent rights. Certain of the
95 (...continued)
International Economic Law (Mar. 2005), 77.
96 The text of each of the FTAs is available at the web site of the United States Trade
Representative, www.ustr.gov.
97 P.L. 105-304, 112 Stat. 2860 (1998).
98 E.g., U.S.-Australia FTA, Art. 17.9(9).
99 28 U.S.T. 7645 (June 19, 1970).
100 U.S.-Australia FTA, Art. 17.1(2).
101 TRIPS Agreement, Art. 33.

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FTAs therefore call for patent term extension in the event of “unreasonable delays
in a Party’s issuance of patents . . . .”102
Some FTAs also place additional conditions on the grant of compulsory
licenses, beyond the requirements of the TRIPS Agreement. For example the
Australia-U.S. FTA provides that a compulsory license may be issued only to remedy
an antitrust violation or in cases of public non-commercial use, national emergency,
or other circumstances of extreme urgency. In these latter instances, the FTA
signatory must limit use of the patented invention to the government or a
government-authorized entity and shall provide the patent proprietor with reasonable
compensation. Further, the patent proprietor is not required to provide additional
undisclosed information or technical know-how that is related to the patented
invention.103
Trademarks
A number of the FTAs also pertain to the trademark law. They stipulate that a
mark need not be visually perceptible in order to be registered as a mark, thereby
allowing sounds and scents to serve as marks.104 The FTAs also stipulate that
licenses for trademarks need not be publicly registered to be valid,105 and provide that
disputes over Internet domain names should be resolved through recourse to the
principles established in the Uniform Domain Name Dispute Resolution Policy.106
Data Protection
Certain FTAs require their signatories to provide five years of marketing
exclusivity for pharmaceuticals that utilize new chemical entities. For example,
Article 15.10:1(a) of the Dominican Republic-Central America-United States Free
Trade Agreement provides:
If a Party requires, as a condition of approving the marketing of a new
pharmaceutical or agricultural chemical product, the submission of undisclosed
data concerning safety or efficacy, the Party shall not permit third persons,
without the consent of the person who provided the information, to market a
product on the basis of (1) the information, or (2) the approval granted to the
person who submitted the information for at least five years for pharmaceutical
products and ten years for agricultural chemical products from the date of
approval in the Party.107
102 E.g., U.S.-Australia FTA, Art. 17.9(8)(a).
103 Id. at Art. 17.9(7).
104 Id. at Art. 17.2(2).
105 Id. at Art. 17.2(10).
106 Id. at Art. 17.3(1).
107 U.S.-Chile FTA, Art. 17.10(1).

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The term “new product” is generally defined as “one that does not contain a chemical
entity that has been previously approved in the territory of the Party.”108
Some of the FTAs additionally require their signatories to allow a three-year
term of marketing exclusivity in various circumstances for pharmaceuticals that do
not qualify as new products.109 Among them is the Australia-United States Free
Trade Agreement, which provides in part:
With respect to pharmaceutical products, if a Party requires the submission of:
(a) new clinical information (other than information related to bioequivalency)
or (b) evidence of prior approval of the product in another territory that requires
such new information, which is essential to the approval of a pharmaceutical
product, the Party shall not permit third persons not having the consent of the
person providing the information to market the same or a similar pharmaceutical
product on the basis of the marketing approval granted to a person submitting the
information for a period of at least three years from the date of the marketing
approval by the Party or the other territory, whichever is later.110
Other Provisions
The FTAs also address other intellectual property rights. For example, the U.S.-
Australia FTA requires both signatories to provide certain levels of protection to
“encrypted programme-carrying satellite signals.”111 In addition, the FTAs
commonly call for minimal standards concerning litigation proceedings, remedies,
and other intellectual property enforcement measures that exceed those of the TRIPS
Agreement.112 The FTAs also set out detailed procedures for the resolution of
disputes over compliance with their provisions.113
Innovation Policy Issues
Observers have acknowledged that the FTAs have been an effective mechanism
for advancing U.S. interests in intellectual property on the global stage.114 Concerns
have nonetheless arisen about the implications of the FTA intellectual property
provisions. This report considers three of these concerns: potential lock-in effects,
extent of FTA obligations, and the fairness of using FTAs as a mechanism for
international intellectual property reforms.
108 See, e.g., DR-CAFTA Art. 15.10:1(c).
109 See, e.g., U.S.-Bahrain FTA Art. 14.9(2)(a); U.S.-Jordan FTA Art. 22 n.10.
110 U.S.-Australia FTA, Art. 17.10(2).
111 Id. at Art. 17.7.
112 U.S.-Australia FTA, Art. 17.11.
113 See, e.g.., U.S.-Singapore FTA, Chapter 20.
114 Yu, supra note 5.

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U.S. Interests in the FTA Intellectual Property Provisions
The United States has for many years pursued a policy of encouraging our
trading partners to expand legal protection for intellectual property.115 Decreased
levels of intellectual property piracy with respect to computer software, music,
motion pictures, and pharmaceuticals may promote a more favorable balance of trade
for U.S. industry. As Professor J. Thomas McCarthy, a member of the faculty of the
University of San Francisco Law School, clearly stated: “We care because if no
intellectual property protection exists regarding technical and entertainment
information, then we have little to sell the rest of the world.”116
Enhanced levels of intellectual property protection around the world may also
serve other goals of the United States. For example, pharmaceuticals are often sold
at higher prices in the United States than in other nations.117 The previous
unavailability of patent protection for innovative pharmaceuticals in some foreign
jurisdictions is one factor that may have contributed to this price difference. The
introduction of patent protection for pharmaceuticals in developing countries will
potentially allow innovative drug companies to recover a portion of their R&D
expenses in foreign jurisdictions. In turn, because U.S. consumers will no longer be
responsible for funding such a large share of the R&D expenditures of innovative
drug companies on a global basis, the price of medications may decrease in the
United States. It is possible, however, that developing country markets may not
prove sufficiently profitable such that prices would be reduced for U.S. consumers.118
In comparison with larger multilateral settings, FTAs may provide a more
effective mechanism for advancing the intellectual property interests of the United
States. USPTO officials have, for example, expressed frustration over slow progress
in consultations over a proposed patent law harmonization treaty before the World
Intellectual Property Organization (WIPO).119 One recent USPTO news release has
stated that recent events at WIPO raise “serious questions as to whether WIPO is
even a viable forum for further meaningful patent discussions.”120 In contrast, the
FTAs have already resulted in significant patent law reforms for many U.S. trading
115 See Peter Drahos, “Intellectual Property and Pharmaceutical Markets: A Nodal
Governance Approach,” 77 Temple Law Review (2004), 401.
116 J. Thomas McCarthy, “Intellectual Property — America’s Overlooked Export,” 20
University of Dayton Law Review (1995), 809.
117 See CRS Report RL32271, Importation of Prescription Drugs Provisions in P.L. 108-
173, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, by
Susan Thaul and Donna U. Vogt.
118 See Rahul Rajkumar, “The Central American Free Trade Agreement: An End Run
Around the Doha Declaration on TRIPS and Public Health,” 15 Albany Law Journal of
Science & Technology (2005), 433.
119 The WIPO is a specialized United Nations agency that serves as a forum for intellectual
property. The WIPO website, www.wipo.int, provides more information about the agency.
120 USPTO, “Patent Law Harmonization Talks Stall: Brazil, Argentina, India Oppose
Compromise” (June 14, 2005), available at http://www.uspto.gov/main/
homepagenews/bak2005jun14.htm.

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partners. In addition, by establishing certain multinational intellectual property
norms with the assistance of a number of trading partners, the United States may be
better able to negotiate on a multilateral basis in the future.121
Potential Lock-In Effects
Although many observers have cited the merits of FTAs with respect to the
intellectual property interests of the United States, others have expressed concerns
about the effects or implications of these agreements. Some commentators have
expressed concern that the FTAs may potentially introduce complications to U.S. law
reform efforts, even in circumstances where modifications to domestic intellectual
property rules are considered desirable in the future.122 In particular, should the
Congress later wish to make changes to its laws that are inconsistent with the terms
of the FTAs, the United States would either have to renegotiate these agreements, or
face the possibility of violating their terms. A potential example of this situation
involves the importation of patented pharmaceuticals into the United States, a topic
that the Singaporean, Australian, and Moroccan FTAs address. For example, Article
15.9, paragraph 4 of the United States — Morocco FTA provides:
Each Party shall provide that the exclusive right of the patent owner to prevent
importation of a patented product, or a product that results from patented
process, without the consent of the patent owner shall not be limited by the sale
or distribution of that product outside its territory. [Footnote 10: A Party may
limit application of this paragraph to cases where the patent owner has placed
restrictions on importation by contract or other means.]
This provision impacts, among other topics, a practice commonly termed
“parallel importation”123 or “reimportation.”124 Parallel imports are authentic
products that are legitimately distributed abroad and then sold in the United States,
without the permission of the authorized U.S. dealer. These goods are legitimate in
that they are produced by the brand-name drug company or its authorized
representative. In particular, parallel imports are not generic versions of a brand-
name drug distributed by a different manufacturer, nor are they pirated copies that
form part of the “black market.” Because parallel imports disrupt the marketing
arrangements established by the brand-name drug company, however, they are
sometimes called “grey market goods.”125
121 Drahos, supra note 114.
122 Abbott, supra note 8.
123 See, e.g., Warwick A. Rothnie, Parallel Imports (Sweet & Maxwell 1993); Simon
Horner, Parallel Imports (Blackwell Science 1987).
124 See Ivette P. Gomez, “Beyond the Neighborhood Drugstore: U.S. Regulation of Online
Prescription Drug Sales by Foreign Businesses,” 28 Rutgers Computer & Technology Law
Journal (2002), 431.
125 See, e.g., Seth E. Lipner, The Legal and Economic Aspects of Gray Market Goods
(Quorum Books, Westport, Connecticut 1990).

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Under current judicial precedent,126 U.S. patents may be used to block imports
of proprietary pharmaceuticals. The fact that the patent proprietor or its
representative previously sold the drug outside the United States does not affect this
analysis. This rule rejects a principle termed “international exhaustion,” under which
a sale of a drug anywhere in the world exhausts the U.S. patent. The FTAs that
address this issue therefore comport with governing U.S. judicial opinions.
Proposed legislation before the 109th Congress would alter the current rules
concerning the parallel importation of patented pharmaceuticals. The proposed
Affordable Health Care Act (S. 16, Sen. Kennedy) would in part introduce the
following provision into the patent statute:
It shall not be an act of infringement to use, offer to sell, or sell within the United
States or to import into the United States any patented invention under section
804 of the Federal Food, Drug, and Cosmetic Act that was first sold abroad by
or under authority of the owner or licensee of such patent.127
If this bill, or a similar bill, were passed into law or enacted, the “international
exhaustion” principle would apply to foreign sales of patented pharmaceuticals. In
circumstances where the patent owner sold the patented pharmaceutical abroad, the
patent owner would no longer be able to block imports of these products into the
United States. This result appears to conflict with Article 15.9, paragraph 4 of the
United States — Morocco FTA, as well as the counterpart provisions of the
Singaporean and Australian FTAs.
Perhaps out of recognition of the impact of the FTAs on the parallel importation
issue, Rep. Northrup introduced an amendment to the Departments of Commerce and
Justice, Science, and Related Appropriations Act, 2006, P.L. 109-108. Section 631
of that bill provides:
None of the funds made available in this Act may be used to include in any new
bilateral or multilateral trade agreement the text of —
(1) paragraph 2 of Article 16.7 of the United States-Singapore Free Trade
Agreement;
(2) paragraph 4 of Article 17.9 of the United States-Australia Free Trade
Agreement; or
(3) paragraph 4 of Article 15.9 of the United States-Morocco Free Trade
Agreement.
This provision would apparently seek to prevent future FTAs from incorporating
language rejecting an “international exhaustion” rule for pharmaceuticals. This
provision does not address the existing Singaporean, Australian, and Moroccan
FTAs, however. This episode suggests that compliance with the FTA intellectual
property provisions may be an issue should Congress attempt to alter U.S. law in the
future.
126 See Fuji Photo Film Co. v. Jazz Photo Corp., 394 F.3d 1368 (Fed. Cir. 2005); Jazz Photo
Corp. v. United States International Trade Commission, 264 F.3d 1094 (Fed. Cir. 2001).
127 S. 16 at § 3(f).

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Extent of Obligations
Most of the FTAs that the United States has joined are bilateral, although some
current or contemplated FTAs extend to a limited set of trading partners. On its face,
it would appear that U.S. obligations undertaken in a particular FTA would extend
only to its fellow signatory or signatories. Commitments undertaken in the TRIPS
Agreement may extend FTA obligations to a much broader range of U.S. trading
partners, however. In particular, every WTO member may in fact be entitled to enjoy
the benefits of the commitments made with a particular FTA due to the most-
favored-nation obligation imposed by Article 4 of the TRIPS Agreement. That
provision stipulates:
With regard to the protection of intellectual property, any advantage, favour,
privilege or immunity granted by a Member to the nationals of any other country
shall be accorded immediately and unconditionally to the nationals of all other
Members.
Although Article 4 of the TRIPS Agreement does provide four exceptions to this
most-favored-nation obligation, none of these exceptions seems applicable to the
FTAs.128
128 Article 4 of the TRIPS Agreement goes on to stipulate that:
Exempted from this obligation [of most-favored nation treatment] are any
advantage, favour, privilege or immunity accorded by a Member:
(a) deriving from international agreements on judicial assistance or law
enforcement of a general nature and not particularly confined to the protection
of intellectual property;
(b) granted in accordance with the provisions of the Berne Convention (1971) or
the Rome Convention authorizing that the treatment accorded be a function not
of national treatment but of the treatment accorded in another country;
(c) in respect of the rights of performers, producers of phonograms and
broadcasting organizations not provided under this Agreement;
(d) deriving from international agreements related to the protection of intellectual
property which entered into force prior to the entry into force of the WTO
Agreement, provided that such agreements are notified to the Council for
TRIPS and do not constitute an arbitrary or unjustifiable discrimination
against nationals of other Members.
As applied to the FTAs, these treaties do not appear to be general agreements concerning
judicial assistance or law enforcement. They also do not appear to have been carried out
under the auspices of the Berne or Rome Conventions, nor do they appear to be limited to
the rights of performers, phonogram producers and broadcasting organizations. Finally, the
three FTAs were completed after the WTO Agreement came into effect, rendering the final
exception seemingly inapplicable.

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In view of Article 4 of the TRIPS Agreement, some experts believe that a
particular FTA may extend U.S. obligations not just to its partner or partners to that
agreement, but to all WTO members as well.129 Other commentators differ, however,
stating that free trade agreements are exempted from most-favored-nation obligations
due to certain provisions of the General Agreement on Tariffs and Trade.130 One
possible consequence of the breadth of FTA obligations is that other trading partners
may be less willing to make concessions with respect to their intellectual property
laws, given that they may already be entitled to the full scope of commitments that
the United States made in existing FTAs.
Fairness Concerns
Some commentators have voiced the opinion that the intellectual property
provisions of the FTAs are unfair to the smaller trading partners of the United States.
As explained by trade attorney George Y. Gonzalez: “The process of ‘bilateral’
negotiation in a ‘multilateral’ world context favors the negotiating stance of the
affluent developed states over the wealth-constrained developing states.”131 Under
this view, access to the U.S. market for agricultural products, textiles, and other basic
goods is extremely important to less wealthy nations. As a result, U.S. trading
partners are readily willing to accede to the intellectual property proposals of the
United States during the FTA negotiation process. Some observers have criticized
the United States for allegedly taking advantage of its strong bargaining position and
superior intellectual property expertise when it completes FTAs.132
It should be appreciated, however, that many observers believe that the adoption
of robust intellectual property laws lies in the best interest of U.S. trading partners,
including developing nations. Commentator Jean Raymond Homere has concluded,
for example, that “developing countries with stronger [intellectual property] regimes
are in a better position to attract knowledge-related foreign direct investments (FDI)
flows.”133 The FTAs may also encourage greater innovation, as well as the
exploitation of creative works, within jurisdictions that previously lacked strong
intellectual property rights.134 It may also be appreciated that any international
129 See Frederick M. Abbott, “The WTO Medicines Decision: World Pharmaceutical Trade
and the Protection of Public Health,” 99 American Journal of International Law (2005),
317.
130 See Judy Rein, “International Governance Through Trade Agreements: Patent Protection
for Essential Medicines,” 21 Northwestern Journal of International Law and Business
(2001), 379 (stating that the Article XXIV “exception provided within the GATT, permitting
customs unions and free trade areas, will probably be applied to World Trade Organization
agreements.”).
131 George Y. Gonzalez, “An Analysis of the Legal Implications of the Intellectual Property
Provisions of the North American Free Trade Agreement,” 34 Harvard International Law
Journal (1993), 305.
132 See Oliva, supra note 7.
133 See Homere, supra note 85.
134 See Keith E. Maskus, “Intellectual Property Rights and Economic Development,” 32
(continued...)

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agreement necessarily involves an exchange of benefits and obligations among the
signatory states, and that the partners to a particular FTA may be best situated to
assess the advantages and disadvantages of entering into that agreement for
themselves.
Concluding Observations
Congressional interest in the FTAs as a vehicle for advancing the intellectual
property interests of the United States is fueled by a number of objectives. Among
them are combating high levels of intellectual property piracy overseas, supporting
research and development-based domestic industries, and establishing a more
favorable balance of trade. Although the FTAs are believed to be an effective
mechanism towards achieving these goals, concerns have arisen about both their
fairness, as well as their consequences in terms of U.S. obligations towards other
trading partners and their impact upon contemplated changes to domestic law. The
scope of these potential consequences counsels continued congressional attention
towards the FTAs that the United States has already formed, as well as those FTAs
that are planned for the future.
134 (...continued)
Case Western Reserve Journal of International Law (2000), 471.

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