TPP: Intellectual Property Rights (IPR)

TPP: Intellectual Property Rights (IPR)

July 26, 2016
TPP: Intellectual Property Rights (IPR)
Background
IP Chapter
The Trans-Pacific Partnership (TPP) is a proposed free
The IP chapter aims to support technological innovation to
trade agreement (FTA) among the United States and 11
benefit both producers and users, while promoting a
Asia-Pacific countries that would reduce and eliminate
balance of rights and obligations. It is enforceable through
tariff and non-tariff barriers on goods, services, and
dispute settlement. It includes phase-in periods for some
agriculture, and establish trade rules and disciplines,
countries to implement certain provisions. General
including on IPR protection, which expand on World Trade
obligations include upholding international agreements and
Organization commitments (“WTO-plus”).
not discriminating against foreigners on IPR. Specific
provisions are discussed below.
IP—creations of the mind embodied in physical and digital
objects—are a key source of U.S. comparative advantage.
Selected IPR Provisions in TPP
IPR are time-limited rights that governments grant to
A number of provisions in TPP reflect new or updated issues for
inventors and artists to exclude others from using their
a U.S. FTA, including in the fol owing areas:
inventions and creations without permission. Advancing
IPR protection globally has been a U.S. trade negotiating
Biologics. Contains provisions on data exclusivity period for
biologics, large-molecule drugs developed from living organisms.
objective since 1988 (P.L. 100-418), first reflected in the
North American Free Trade Agreement (NAFTA) and
Copyright balance. Provides for incorporation of “fair-use”
WTO Agreement on Trade-Related Aspects of Intellectual
exceptions in country’s law.
Property Rights (TRIPS). The 2015 Trade Promotion
Internet Service Providers (ISPs). Requires “notice and
Authority (TPA, P.L. 114-26 ) includes prior U.S. trade
takedown” to address ISP liability while allowing alternative
negotiating objectives for U.S. trade agreements to “reflect
systems for certain countries (e.g., “notice and notice”).
a standard of protection similar to that found in U.S. law”
Geographical indications (GIs). Requires administrative
(“TRIPS-plus”), and new objectives to combat cyber theft
procedures for recognizing and opposing GIs, and specific GI
and protect trade secrets. TPP and IPR debate focuses on
commitments in international agreements.
how to protect and enforce IPR to incentivize innovation,
Trade secrets. Requires criminal procedures and penalties for
while also securing public benefits from these innovations.
trade secret theft, including cyber theft; clarifies that state-
owned enterprises (SOEs) are subject to trade secret
The TPP area is a mix of developed countries, historically
obligations.
IP generators, and developing countries, historically IP
Enforcement. Extends enforcement to the digital environment.
importers, but now are growing sources of innovation. The
region presents a range of IPR challenges (Fig. 1), such as
high counterfeiting and piracy rates, including in the digital
Patents
environment, and weak enforcement of IPR laws. TPP
Patents protect new innovations, such as pharmaceutical
potentially could address IPR concerns in the broader
products, chemical processes, business technologies, and
region, including with respect to China and India.
computer software. TPP aims to establish consistent and
harmonized patent regimes in the region. Some provisions
Figure 1. TPP Countries’ IPR Regimes
specific to pharmaceuticals aim, based on U.S. trade
negotiating objectives, to “encourage innovation and access
to medicine.” Yet, stakeholders disagree on whether TPP
appropriately incentivizes research and development for
new medicines while also allowing affordable access to
medicines through market entry of generic medicines.
Patent rules include:
Patent protection of new products and processes, as well
as new uses, methods, or processes of a known product
(based on TRIPS’s 20 years of minimum protection).
Adjustments of patent terms for “unreasonable” delays in
the patent examination or regulatory approval processes—
with phase-in periods for Brunei, Malaysia, and Vietnam.
Protection of test data (data innovators submit for
regulatory approval on which generics may later rely):
Chemical-based (small-molecule) drugs: Five years of

data exclusivity for new drugs, and three years for new
Source: U.S. Trade Representative, 2016 Special 301 Report.
formulations of existing drugs.
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TPP: Intellectual Property Rights (IPR)
Biologics: Eight years of data exclusivity or, five years
Trademarks
plus “other measures” to deliver a “comparable
Trademarks protect distinctive commercial names, marks,
outcome.” The appropriate period of exclusivity for
and symbols. TPP, among other things, provides trademarks
biologics remains among the most controversial issues
with a renewable, 10-year period of protection (as in U.S.
in the consideration of TPP (Fig. 2).
law) and removes administrative requirements to enable
easier protection and enforcement of trademarks.
Figure 2. Data Exclusivity in TPP Countries
Geographical Indications (GIs)
GIs are geographical names that protect the quality and
reputation of a distinctive product from a region (e.g.,
Champagne, Florida oranges). The United States aims to
address GI protections that can improperly constrain U.S.
agricultural market access in other countries by protecting
terms viewed as “common.” TPP has procedures for
recognizing and opposing GIs, guidelines for determining
when a name is common, and transparency requirements
for GI protection in international agreements.
Industrial Designs

Industrial designs are the ornamental or aesthetic aspects of
Source: CRS.
a product. The industrial designs section is new to U.S.
Notes: *Country does not differentiate data exclusivity for biologics
FTAs. It adds protections beyond TRIPS for designs
and smal -molecule drugs, but has five-year period for the latter.
embodied in a part of an article, or a part of an article “in
the context of the article as a whole.” It also has hortatory
Notification system and procedures (e.g., judicial or
language on improving design registration systems.
administrative proceedings) to assert patent rights or to
challenge a patent’s validity. More flexible than patent
Enforcement
linkage (regulatory authority cannot grant marketing
TPP includes commitments on civil, criminal, and other
approval to a generic without the patent holder’s
national enforcement for IPR violations, such as copyright
permission), which is common to many prior U.S. FTAs.
enforcement in the digital environment, criminal penalties
for trade secret theft and camcording, ex-officio authority to
Copyrights and Related Rights
seize counterfeit trademark and pirated copyright goods at
Copyright provides creators of artistic and literary works
the border. The IP chapter is enforceable through TPP’s
with the exclusive right to authorize or prohibit other from
government-to-government dispute settlement provisions.
reproducing, communicating, or distributing their works.
IP in Investment Chapter
Debate exists over balancing copyright protections while
TPP’s
protecting the free flow of information, with digital trade
investment chapter treats IP as a form of investment
raising new issues. Building on TRIPS, TPP includes:
that benefits from protections such as non-discriminatory
and minimum standard of treatment, compensation for
Copyright terms of life plus 70 years, or 70 years from
expropriation, and investor-state dispute settlement (ISDS)
publication for most works, higher than the TRIPS baseline
to address alleged breaches of TPP parties’ obligations.
of life plus 50 years—with phase-in periods for Brunei,
ISDS cases such as Philip Morris’ suit against Australia for
Canada, Japan, Malaysia, New Zealand, and Vietnam.
a plain-packing tobacco requirement affecting its trademark
Penalties for circumventing technological protection
(dismissed for lack of jurisdiction) and Eli Lilly’s suit
measures (TPMs), such as encryption.
against Canada for a patent utility standard invalidating its
“Fair use” directive to “endeavor to achieve an
pharmaceutical patents (pending) have fueled debate over
appropriate balance” between users and rights holders in
investor protections and governments’ regulatory ability.
their copyright systems, including digitally, through
Issues for Congress
exceptions for legitimate purposes (e.g., criticism,
TPP raises a number of possible issues for Congress,
comment, news reporting, teaching, research).
including whether it advances U.S. trade negotiating
Legal framework and “safe harbors” to allow legitimate
objectives and protects IP and other interests such as public
online internet intermediaries to develop their business
health in the Asia-Pacific. Treatment of biologics may be an
while providing enforcement against digital copyright
especially prominent issue in congressional debate. Other
infringement, as well as “notice and takedown” to address
issues include implementation of IPR obligations by TPP
intermediary liability while allowing alternative systems
parties and the agreement’s applicability to enhancing
(e.g., “notice and notice” in Canada). U.S. law takes a
multilateral “rules for the road.” See CRS Report R44489,
“notice and takedown” approach.
The Trans-Pacific Partnership (TPP): Key Provisions and
Issues for Congress, and CRS In Focus IF10033,
Trade Secrets
Intellectual Property Rights (IPR) and International Trade.
A trade secret is confidential business information (e.g.,
formula, customer list) that is commercially valuable
Shayerah Ilias Akhtar, Specialist in International Trade
because it is secret. TPP require criminal procedures and
and Finance
penalties for trade secret theft, including through cyber-
Ian F. Fergusson, Specialist in International Trade and
theft and by state-owned enterprises (SOEs).
Finance
IF10442
https://crsreports.congress.gov

TPP: Intellectual Property Rights (IPR)

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https://crsreports.congress.gov | IF10442 · VERSION 2 · NEW