Fostering Dynamic Innovation, Development and Trade: Intellectual Property as a Case Study in Global Administrative Law

• Jurisdiction: South Africa
• Author: Rochelle Cooper Dreyfuss
• Citation: 2009 Acta Juridica 237
• Pages: 237-282
• Date: 15 August 2019
• Published date: 15 August 2019

Fostering Dynamic Innovation,

Development and Trade: Intellectual

Property as a Case Study in Global

Administrative Law

ROCHELLE COOPER DREYFUSS*

New YorkUniversity

I INTRODUCTION

The World Trade Organisation (WTO) is currently suffering from a

lawmaking def‌icit. Reliance on consensus-based decision-making has

stymied the political process. At the same time, lawmaking through the

Understanding on Dispute Settlement (DSU)

1

suffers from concerns

about the legitimacy of law created through ‘adjudication’ rather than

party agreement.

2

Less well understood are the special problems that this

def‌icit poses for TRIPS, the intellectual property portion of the WTO

Agreement.

3

Admittedly, a great deal of attention has focused on the

question of making essential medicines available in the developing

world.

4

However, that issue barely scratches the surface of the problems

that the creative community is facing.

* Pauline Newman Professor of Law, New York University School of Law. I would like to

thank Graeme Dinwoodie, Robert Howse, Katherine Strandburg, Andreas Lowenfeld, and

Louise Teitz for their very helpful comments and the Filomen D’Agostino and Max E.

Greenberg Research Fund for its f‌inancial support.

1

Understanding on Rules and Procedures Governing the Settlement of Disputes (15 April

1994), Marrakesh Agreement Establishing the World Trade Organisation [hereinafter: WTO

Agreement], Annex 2, Legal Instruments – Results of the Uruguay Round, 33 I.L.M. 1125

(1994) [hereinafter: DSU].

2

See, for example, C D Ehlerman & L Ehring ‘The authoritative interpretation under

Article IX:2 of theAgreement Establishing the World Trade Organisation: current law,practice

and possible improvements’ (2005) 8 Journal of International Economic Law 803 [hereinafter:

Authoritative interpretation]; C D Ehlerman & L Ehring ‘Decision-making in theWorld Trade

Organisation’(2005) 8 Journal of International Economic Law 51; and D C Esty ‘Good governance

at the supranational scale: globalising administrative law’ (2006) 115Yale Law Journal 1490. See

also C E Barf‌ield Free Trade, Sovereignty, Democracy: The Future of the World Trade Organisation

(2001); T Broude International Governance in the WTO: Judicial Boundaries and Political Capitula-

tion (2004).

3

Agreement on Trade-Related Aspects of Intellectual Property Rights (1994), WTO

Agreement, Annex 1C, Legal Instruments-Results of the Uruguay Round, 33 I.L.M. 1197

[hereinafter: TRIPSAgreement orTRIPS].

4

See World Trade Organisation, Ministerial Declaration of 14 November 2001,

WT/MIN(01)/DEC/1, 41 I.L.M. 746 (2002), available at http://www.wto.org/english/

thewto_e/minist_e/min01_e/mindecl_e.htm [hereinafter: Doha Declaration]; Declaration on

the TRIPS Agreement and Public Health, WT/MIN(01)/DEC/2 (14 November 2001),

available at http://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_trips_e.htm [herein-

after: Declaration on Public Health]. See generally F M Abbott&JHReichman ‘The Doha

237

2009 Acta Juridica 237

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As Andreas Lowenfeld and I suggested when the Uruguay Round

ended, f‌itting intellectual property into a trade agenda distorted percep-

tions about the structure of intellectual property law.

5

While domestic

regimes strive to strike a balance between the interests of producers in

earning a return from their intellectual investments and the interests of

users in accessing new knowledge, the WTO’s concern was with creating

‘trading chips’ – with commodifying information streams and turning

knowledge products into articles of commerce. As a result, the TRIPS

Agreement deals almost exclusively with proprietary interests. It obliges

members to recognise a series of intellectual property rights (patents,

trademarks, copyrights, as well as rights over trade secrets, geographic

indications, layouts of integrated circuits, and industrial designs); it

specif‌ies the minimum contents of these protective regimes (the duration

of protection, the scope of exclusivity, limits on defences to infringement,

and such); and sets out required methods of enforcement (including

specif‌ic judicial procedures and forms of relief). Unlike other intellectual

property instruments, which similarly focused on right holders’ interests,

TRIPS makes these obligations subject to international dispute resolu-

tion. While the Agreement also claims that its goal is to balance propri-

etary and access interests and includes ‘f‌lexibilities’ that give members

authority to support the public interest,

6

these provisions are highly

circumscribed.

7

In disputes over their scope, WTO adjudicators have

proved wary of expansive interpretations.

8

As a consequence, WTO

members at all points along the development spectrum are now con-

cerned that they lack the leeway they need to support creative produc-

tion, keep the law responsive to a changing technological landscape, and

safeguard the interests of consumers of intellectual goods.

In truth, the def‌icit in lawmaking is not only a function of WTO

involvement in the intellectual property system. Because intellectual

property law is expressly aimed at fostering dynamic innovation, the

responsiveness of lawmakers to the information sector is an issue at the

national level as well. For example, the Internet has revolutionised how

copyrighted material is distributed and, in some cases, produced. Where

patents were once associated with individual products, they map onto

information technology in entirely new ways; manufacturers must now

Round’s public health legacy: strategies for the production and diffusion of patented medicines

under the amended TRIPS provisions’(2007) 10 Journal of International Economic Law 921.

5

R Dreyfuss & A Lowenfeld ‘Two achievements of the Uruguay Round: putting TRIPS

and dispute settlement together’ (1997) 37 Virginia Journal of International Law 275.

6

Articles7&8ofTRIPS.

7

See, for example, Articles 13 (limitations permitted to copyright protection), 17 (trade-

mark), 26 (industrial designs), 30 (patents) and 31 (conditions for permitting compulsory patent

licences) of TRIPS.

8

See, for example, G B Dinwoodie&RCDreyfuss ‘Intellectual property law and the

public domain of science’(2004) 7 Journal of International Economic Law 431 at 442.

238 GLOBAL ADMINISTRATIVE LAW

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assemble a multiplicity of patents before they can bring products to

market. By the same token, international travel, global distribution, and

Internet marketing broaden consumers’ knowledge base and call the

territoriality of trademark protection into question. Equally important,

the differential impact of new technological opportunities on various

creative sectors has altered the political economy.As demonstrated by the

continuing diff‌iculty in adopting an EC-wide patent system and reform-

ing the US Patent Act, domestic lawmaking is also at something of an

impasse.

9

Just as the WTO has, essentially, def‌lected lawmaking to DSU adjudi-

cators, several countries have tried to solve their various lawmaking

problems with specialised courts. The process is particularly well

advanced for patents, where something of a crisis has been produced by

the critical nature of the subject matter (medicines are a good example),

abstruse science (e.g. biotechnology), shifts in the organisation of the

technological enterprise (including university spin-offs and private/

public joint ventures), and changes in the way that patents are utilised

(e.g. defensive patenting and trolling).

10

Trial-level patent courts have

enjoyed considerable success in practitioner circles, in large part because

expert judges are better at understanding the technological complexity of

the facts with which they are presented. But trial courts do not make, or

def‌initively interpret, law. In the United States, the decision was therefore

made to experiment with an appellate court with exclusive authority over

patent law. Unfortunately, in its 25 years of existence, the Federal Circuit

has proved somewhat disappointing. Although it has managed to make

patent law more uniform and predictable, the substance of its lawmaking

has been heavily criticised.

11

To many, this experience suggests that new lawmaking mechanisms are

needed. Because patents are issued only after applications are reviewed by

technically trained examiners presumably familiar with both the appli-

cable law and relevant scientif‌ic developments, there is growing interest

in placing primary responsibility for administering patent law in the

agencies that issue patents. For example, the US Patent and Trademark

Off‌ice (US PTO) has enacted a series of guidelines on both procedural

and substantive issues.

12

Similarly, the European Patent Off‌ice (EPO)

13

9

Cf D R Cahoy ‘An incrementalist approach to patent reform policy’(2005–2006) 9 NYU

Journal of Legislation & Public Policy 587 (describing various approaches to reform).

10

See, for example,A B Jaffe & J Lerner Innovation and its Discontents (2004).

11

See, for example, ibid; National Research Council A Patent System for the 21st Century

(2004); Federal Trade Communication ToPromote Innovation: The Proper Balance of Competition

and Patent Law and Policy (2003).

12

See, for example, 60 Fed. Register 36263 (14 July 1995) (utility guidelines); 71 Fed. Reg.

48 (3 January 2006) (continuation rules). There is, however, considerable doubt that the US

PTO has authority to engage in substantive rulemaking, see In re Fisher 2005 (421) F.3d1365

239FOSTERING DYNAMIC INNOVATION,DEVELOPMENT AND TRADE

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