Intellectual Property Rights and Free Trade Agreements: A Never-Ending Story

Beatriz Busaniche

Imagine that a group of highly concentrated transnational corporations in the knowledge industries such as pharmaceuticals, high-tech, and entertainment pack so much lobbying clout that they can convince the governments of the indus­trialized world to bully developing countries to “harmonize” their copyright, patent and trademarks laws into a global intellectual property regime. That is what happened in the 1990s when the bloc made up of the United States, Europe and Japan was able to incorporate intellectual property matters in the trade agenda. The signing of the Agreement on Trade Related Aspects of Intellectual Property, more commonly known as TRIPS, created a unified global intellectual property regime with minimum standards and established a dispute settlement system to ensure its application and compliance.

At first blush it is surprising that the developing countries would agree to treat intellectual property in the framework of the World Trade Organization (WTO) and not in the customary body for such matters, the World Intellectual Property Organization (WIPO). The larger, industrialized countries had their reasons for wanting this shift – namely, that the WTO has a dispute settlement mechanism that makes it possible to apply punitive measures against those countries that might violate the rules.    

In 2001, it appeared that developing countries might make some progress in trade policies that affect their economic development. In the “Doha Round” of negotiations hosted by the World Trade Organization, developing countries won the Doha Declaration on the TRIPS Agreement and Public Health, which urges governments to take advantage of the flexible terms of TRIPS to improve their citizens’ access to affordable medicines.

In response to the Doha Round, developed countries began to promote two types of treaties to advance their commercial interests: investment protection agreements and free trade agreements. Both seek to expand the scope of coverage and the duration of intellectual property monopolies, a legal approach that obviously benefits large film studios, publishers, record labels and information vendors. The two types of agreements also seek to add new legal provisions that reduce the flexibility of TRIPS provisions, to the detriment of developing countries.

The European Union and the United States are especially active when it comes to promoting the signing of free trade agreements. As of 2011, the United States had signed free trade agreements (FTAs) with 17 countries, while the European Union has FTAs with Chile, Mexico, and South Korea, among others, and is negotiating more with India, Asian bloc nations and the Mercosur (Mercado Común del Sur, or Common Market of the South). The treaties contain chapters expanding intellectual property provisions often known as “TRIPS-plus” clauses.

The free trade agreement signed in 2011 by the European Union and South Korea contains numerous examples of such clauses, among them:

  • Extending the duration of medicinal patents1 for as many as five years beyond the 20 years already provided for in the TRIPS. (The rationale: to compensate patent holders for the time needed to produce test data for marketing the drug in a given area.)
  • Exclusive protection for the “test data” on drugs and agrotoxics, a new form of protection that directly impedes generic drugs from entering the market.2 This legal provision did not exist in the TRIPS and was deliberately excluded in that negotiation, but was included in a US agreement with Central America and the Dominican Republic. The provision reduces the flexible terms of the TRIPS that otherwise make it possible for the countries to recognize test data to approve a generic drug.3
  • Adding new trade obligations such as protecting Digital Rights Manage­ment (DRM) that use technology to regulate the number of times a work in digital format may be used, and the conditions of use. Such restrictive technical measures can, for example, track usage to determine whether a work has been copied, loaned, read one or more times, shared, and even printed, in the case of texts. In some legal systems, such as the Digital Millennium Copyright Act of the United States4, evading these technical measures is a crime, even when done to exercise a right, such as access to works in the public domain, or fair use.
  • In addition, in the last few years FTAs have included new clauses that impose “secondary liability” on Internet service providers, search engines and other types of services. These FTAs impose joint liability on these services for the actions of Internet users and requires services to look into, monitor, and swiftly act in response to a report of a copyright violation (without specifying what type of report triggers the duty and without guaranteeing the involvement of a judge). Such clauses override domestic judicial systems, constitutional due process guarantees and the presumption of innocence, and constitute a direct threat to freedom of expression on the Internet.5
  • FTAs have been used as vehicles to reduce the flexibility that countries have in their right to regulate plant and seed varieties as they see fit (under sui generis legal regimes)6 and to allow farmers to re-use seeds. The FTAs require that each country ratify a 1991 Act and its amendments that expand the coverage of the varieties to be protected, expand the rights of the breeder and limit the uses of derivative varieties. These provisions threaten native seeds that peasant communities have been exchanging and improving over thousands of years. It means that in the future they’re going to have to stop conserving and redistributing their seeds and buy seed from the large corporations in each crop cycle.

How FTAs are hostile to commons

The commons starts from the idea that knowledge (and the right to share and reproduce knowledge) is a basic human right that integrates three specific factors – common pool resources, a community of users organized around them and that community’s consensus-based rules and standards. It is clear that free trade agreements are hostile to this structure of governance and resource management. By imposing private intellectual property rights on collective knowledge and resources such as seeds and plant varieties, FTAs are in effect modern tools for enclosing the commons.7

Incursion on the public domain and the knowledge commons

The entire architecture of intellectual property law, which has expanded and become more restrictive since the late 1970s, has been furthering the process of enclosing the commons. This process has consisted of extending the terms of monopolies over knowledge, creative works, seeds, and medicines; ignoring the value of the public domain; and extending intellectual property rights to areas of life never before contemplated in copyright and patent law. If fifty years ago someone had said that a plant, a gene, a mathematical algorithm could be the private property of some person, we would have thought such ideas insane. Nonetheless, in 1980 the first patent was given on a microorganism8 – the same year that a patent was granted to a mathematical algorithm.9 Around this same time, the race to patent genes, plants, and seeds took off.

Monopolies over such living things have been consolidated by means of the dispute settlement systems used in trade disagreements. Just as in the WTO framework one country may take another before a panel to then impose retaliatory measures if the minimum standards are not applied, so in the case of investment protection agreements, companies themselves may take a country before the World Bank’s dispute tribunal, the International Centre for Settlement of Investment Disputes (ICSID), if they feel that their pursuit of profit has been impaired. Thus Phillip Morris once brought an ICSID complaint against Uruguay for its anti-smoking public health policy, claiming that Uruguay was indirectly expropriating without compensation an investment of Swiss origin protected by the agreement.10

Who sets the rules?

The rules and norms that communities adopt to manage their collective resources are essential for preserving, promoting and defending them. The present-day legal architecture and regulation of intellectual property in the FTAs and the IPAs do not reflect a consensus of the interests of communities directly involved. In essence, most negotiations of free trade and investment protection agreements occur behind closed doors, with pre-assembled negotiating documents, and with zero public access to the proceedings or policy documents.

Moreover, because negotiations also involve such issues as customs duties reductions, national procurement operations and investments, developing countries often regard intellectual property as a secondary concern to be used as a bargaining chip to obtain more favorable results on larger trade priorities. It is common for the countries that rely on the export of a specific commodity (such as copper in Chile and soybeans in Argentina) to make concessions in intellectual property policy in order to assure that their key exports have access to international markets.

FTAs have inherited from the GATT trade negotiations and the WTO the logic that nothing in the negotiation is closed until everything is closed. As a result, the negotiators close agreements step by step until they have a final document that the countries sign, with no possibility of new discussions. It is only then that the agreements go before the legislatures of the respective signatory countries, which are no longer able to introduce any change or amendment; they may only cast a “yes” or “no” vote on the texts negotiated as a complete package that cannot be reopened lest the whole negotiation break down. In other words, the regulations are left in the hands of the negotiators operating in secret to advance private commercial interests. Even the legislators of signatory countries have very little ability to influence the treaties.

The role of communities

It is clear that this system for establishing policies for intellectual property rights fails to allow communities to protect and preserve their commons. The entire process set up by the TRIPS and strengthened by the FTAs and investment agreements, largely prevents nation-states from defending collective non-market interests without suffering the penalties imposed by trade system’s dispute settlement mechanisms. One cannot expect the governments to defend and promote the commons if these same governments are promoting the signing of the trade agreements. Meanwhile, numerous communities and various commons have been dismantled or damaged by FTAs, and the affected commoners have little if any ability to affect trade negotiations.11 This globalized legal framework is equi­valent to expropriating the capacity to manage the commons. It destroys community spaces, privatizes the public domain and renders illegal many customary practices of communities, such as exchanging seeds and sharing culture.

A never-ending story

The outlook for the future of the commons in the context of trade negotiations could not be more discouraging. The dynamics described above can be seen in ongoing inter-regional negotiations between Mercosur and the European Union, and in bilateral treaties such as the one being negotiated between India and the EU, the one signed by South Korea and the EU in 2011 and in numerous bilateral treaties signed around the world. Despite the Doha Round of the WTO, which seemed to open the door to greater flexibility in protecting the commons, it is clear that the strategy of enclosure based on a TRIPS-plus standard, is moving forward step by step. If we are going to defend the commons from new enclosures and recover that which has already been expropriated from communities, we clearly must recover the concept of the commons as a strategic concern and begin the perhaps utopian yet essential task of removing the commons from the global trade agenda.

  • 1. See also the essay by Christine Godt, Christian Wagner-Ahlfs, and Tinnemann in Part 5.
  • 2. According to the European Generic Medicines Association, a generic is a medicine that contains the same active principle as a brand name product and acts identically on patients, respecting the regulatory controls of quality, safety, and efficacy. Generics can be produced once the patent on the brand name drug has expired, making possible competition and slashing the market costs of medicinal products.
  • 3. Article 39(3) of TRIPS makes reference to all information that the health authorities of a country require to approve the marketing of a given pharmaceutical or chemical product in the national territory. The text only requires protection against any use in unfair commercial use of the test data the origination of which entails a considerable effort. The article adds that the members will protect those data from any disclosure, except when necessary to protect the public or unless measures are adopted that guarantee protection of the data against unfair use. One example of a good practice in the area is Law 24,766, in force in Argentina, which takes full advantage of the flexibilities of the TRIPS in terms of allowing the sale of generic medicines with an administrative procedure to determine the similarity of the active ingredient of the drug, and without requiring the submission of new test data (which would considerably delay the time it would take for a generic to make it to market).
  • 4. Regulations of this sort, known as “anti-circumvention measures,” were established in 1996 in the Copyright Agreement and the Performances and Phonograms Treaty. The emblematic regulation of the implementation of such measures is the Digital Millennium Copyright Act of the United States, approved in 1998,
  • 5. These issues have been officially noted by the UN Special Rapporteur on the Promotion and Protection of the Right to Freedom of Opinion and Expression, Frank LaRue; the Special Rapporteur for Freedom of Expression of the Inter-American Commission on Human Rights, Catalina Botero Marino; the Representative on Freedom of the Media of the Organization for Security and Cooperation in Europe, Dunja Mijatovi; and the Special Rapporteur on Freedom of Expression and Access to Information of the African Commission on Human and Peoples’ Rights, Faith Pansy Tlakula, in their statement of June 1, 2011. See
  • 6. In the context of the intellectual property negotiations, a sui generis protection is a form of legal coverage implemented autonomously by a country. For example, India has its own law on seeds that is considered a sui generis framework.
  • 7. See also essays by Peter Linebaugh in Part 2 and Hartmut Zückert in Part 2.
  • 8. The first precedent is Diamond v. Chakrabarty (1980), available at http://supreme.justia. com/us/447/303/case.html.
  • 9. The first precedent is Diamond v. Diehr (1981), available at See also the history of software patents at
  • 10. For more information see the dossier, “Demanda Philip Morris a Uruguay en el Ciadi,” by Redes Amigos de la Tierra Uruguay [Friends of the Earth Uruguay], available at
  • 11. For example, in 2011, the Fundación Vía Libre of Argentina, the leading advocate for free software, wrote an official letter to the Ministry of Foreign Affairs of Argentina requesting information on the negotiations Mercosur maintains with the European Union for the signing of an FTA. The Argentine government did not respond.