USTR positions in China WTO TRIPS dispute at odds with talking points on ACTA flexibility

Use of Article 1.1 of the TRIPS in the US/China WTO dispute over the enforcement of intellectual property rights

USTR claims that Article 1.2.1 of ACTA provides the flexibility to overlook inconsistencies between US law and ACTA. Below is the text from both Article 1.2.1 of ACTA, and Article 1.1 of TRIPS:

ACTA ARTICLE 1.2: NATURE AND SCOPE OF OBLIGATIONS
1. Each Party shall give effect to the provisions of this Agreement. A Party may implement in its domestic law more extensive enforcement of intellectual property rights than is required by this Agreement, provided that such enforcement does not contravene the provisions of this Agreement. Each Party shall be free to determine the appropriate method of implementing the provisions of this Agreement within its own legal system and practice.
TRIPS: Article 1 Nature and Scope of Obligations
1. Members shall give effect to the provisions of this Agreement. Members may, but shall not be obliged to, implement in their law more extensive protection than is required by this Agreement, provided that such protection does not contravene the provisions of this Agreement. Members shall be free to determine the appropriate method of implementing the provisions of this Agreement within their own legal system and practice.

In a dispute between the United States and Canada over the enforcement of intellectual property rights, Article 1.1 of the TRIPS played an important role. See: WTO DISPUTE DS362, China — Measures Affecting the Protection and Enforcement of Intellectual Property Rights.

In the US/China WTO dispute, the USTR took the position that parties have an obligation to "give effect to the provisions of the Agreement," and that "Article 1.1 deals with the method by which a Member implements TRIPS Agreement obligations, not whether or to what extent a Member should implement them in the first place."

One United States pleading in this dispute mentioned Article 1.1 of the TRIPS 15 times:

ANNEX A
SUBMISSIONS OF THE UNITED STATES

ANNEX A–2
Executive summary of the ORAL STATEMENT OF THE UNITED STATES AT THE FIRST SUBSTANTIVE MEETING

WT/DS362/R
Page A-14

1. China also appears to argue that Article 1.1 and Article 41.5 permit it to "define" the standards of Article 61 based on its own method of implementation and its own enforcement resource constraints. Article 1.1 deals with the method of implementing China's TRIPS Agreement obligations, not whether they should implement them in the first place. Article 41.5 is concerned with similar issues. Articles 1.1 and 41.5 do not alter the obligations in Article 61, and China must implement Article 61 in a way that respects its terms.

ANNEX A–3

Closing Oral Statement Of The United States At The First Substantive Meeting

WT/DS362/R
Page A-19

7. We would commend in particular to the Panel the views expressed by a number of the Third Party WTO Members that the minimum enforcement standards established by Article 61 for all WTO Members are not modified by Article 1.1 or Article 41.5 of the TRIPS Agreement. To the contrary, the United States recalls the language of the first sentence of Article 1.1; that China must "give effect" to the obligations of Article 61.

ANNEX A–4
EXECUTIVE SUMMARY OF THE REBUTTAL SUBMISSION
OF THE UNITED STATES

WT/DS362/R
Page A-24

14. Second, China's purported context for interpreting Article 61 is also unavailing. China's argument that Articles 1.1 and 41.5 allow China to define for itself the obligations of Article 61 is contrary to plain text of these provisions. First, as made clear by the text of the final sentence, Article 1.1 deals with the method by which a Member implements TRIPS Agreement obligations, not whether or to what extent a Member should implement them in the first place. While during the TRIPS negotiations, WTO Members expressed diverse views on various draft provisions of the TRIPS Agreement, the negotiators coalesced around the final text of the TRIPS Agreement. The first sentence of Article 1.1 states that Members shall "give effect to these provisions" and therefore because Article 1.1 does not alter the obligations in Article 61, China must implement Article 61 in a manner that reflects its terms.

WT/DS362/R
Page A-29

42. China's attempts to use TRIPS Article 1.1 to argue for the acceptability of its rigidly constrained disposal regime are unavailing as Article 1.1 does not exempt China from complying with these provisions of the TRIPS Agreement. China's references to other Members' copyright and trademark laws are similarly misplaced as this dispute concerns China's measures, not other Members' laws, and further, substantively, these laws do not resemble in any respect the problematic disposal hierarchy used by China.

ANNEX A–5

EXECUTIVE SUMMARY OF THE ORAL STATEMENT OF THE UNITED STATES AT THE SECOND SUBSTANTIVE MEETING

China's Criminal IPR Thresholds for Criminal Procedures and Penalties

WT/DS362/R
Page A-36

6. Third, China now agrees that Article 1.1 and Article 41.5 do not allow WTO Members to ignore explicit TRIPS obligations. Moreover, the second sentence of Article 61 does not change how the first sentence should be interpreted; it only addresses the relative severity of the criminal remedies that must be available, whereas the first sentence addresses the floor ("on a commercial scale") of what must be criminalized in the first place. Fourth, while China claims that criminal penalties must be actually applied to fulfill the first sentence of Article 61, US practice is not at issue in this dispute, nor does it constitute "subsequent practice" in the application of the TRIPS Agreement by WTO Members. Similarly, whether or not China chooses to actually prosecute relatively smaller cases of wilful trademark counterfeiting or copyright piracy "on a commercial scale" is not at issue here.


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