A Collision Course between TRIPS Flexibilities and Investor-State Proceedings

Abstract

This article discusses an important, yet understudied threat to patent, as well as other intellectual property sovereignty under TRIPS: pending and potential challenges by companies under international agreements protecting investments. Although such agreements have existed for decades, Philip Morris and Eli Lilly are blazing a new path for companies to sue countries they claim interfere with their intellectual property rights through so-called investor-state arbitrations. These disputes seek hundreds of millions in compensation and even injunctive relief for alleged violations of internationally agreed intellectual property norms. The disputes fundamentally challenge TRIPS flexibilities at the very time the Declaration on Patent Protection and Regulatory Sovereignty under TRIPS, as well as the UN High Level Panel Report seek to encourage countries to utilize them. These disputes may have a chilling effect on countries that would otherwise consider following policy recommendations to better utilize TRIPS flexibilities. Given the importance of this threat to TRIPS and domestic sovereignty, this article analyzes the initial IP disputes and offers some proposals for how to promote TRIPS flexibilities and sovereignty.

Keywords: TRIPS, ISDS, investor-state, Eli Lilly, plain package tobacco, patent, trademark

JEL Classification: F20,F21, F29, I1,I30,O19, O31, O32, O34, O38, O39