Treaty Interpretation in WTO Dispute Settlement: The Outstanding Question of the Legality of Local Working Requirements

Abstract

This article explores treaty interpretation in dispute settlement at the World Trade Organization (WTO) by seeking to resolve the unanswered question of whether local working requirements – domestic provisions which allow the grant of a compulsory license when a patent is not “worked” in that country – are legal under the international trade regime. The issue remains in flux as local working requirements appear to be inconsistent with the Agreement on Trade-Related Aspects of International Property Rights (TRIPS) Article 27, which prohibits discrimination as to “whether products are imported or locally produced.” However, TRIPS Article 2.2 incorporates the substantial majority of the Paris Convention, including Article 5(A)(2), which may specifically allow working requirements. Analyzing the issue in strict adherence to the principles of treaty interpretation that guide decision-making in the WTO’s Dispute Settlement Body, we conclude that the incorporation of Article 5(A)(2) of the Paris Convention cannot be read down, and thus working requirements are consistent with the TRIPS Agreement. This Article is therefore intentionally and unapologetically a technical analysis which evaluates and resolves a legal conflict using all available sources of law and is not a discussion of the policy rationale behind local working requirements.

Keywords: WTO, TRIPS Agreement, patents, working requirements, treaty interpretation

JEL Classification: K33, K32, I18