Intellectual Property under the Scrutiny of Investor-State Tribunals

Author:Clara Ducimetière
Position:Is an Early Stage Researcher within the EIPIN Innovation Society European Joint Doctorate programme. She is a Researcher and PhD Candidate at the Centre for International Intellectual Property Studies (CEIPI), University of Strasbourg, and the Queen Mary University of London (QMUL). This paper was presented on 7 September 2018 at the 13th ...
Clara Ducimetière
Intellectual Property under the Scrutiny
of Investor-State Tribunals
Legitimacy and New Challenges
by Clara Ducimetière*
© 2018 Clara Ducimetière
Everybody may disseminate this ar ticle by electronic m eans and make it available for downloa d under the terms and
conditions of the Digital P eer Publishing Licence (DPPL). A copy of the license text may be obtain ed at http://nbn-resolving.
Recommended citation: Clar a Ducimetière, Intellec tual Property under the S crutiny of Investor-State Tribunals: Legitimacy
and New Challenges, 9 (2018) JIPI TEC 266 para 1.
Keywords: Investment protection; international investment agreements (IIAs); right to regulate; TRIPS
flexibilities; ICSID; NAFTA; investment court system (ICS); multilateral investment court (MIC);
European Union (EU)
tions that have to be fulfilled in order to bring intel-
lectual property claims in investment arbitration, by
touching upon the question of the definition of an
investment in theory and in practice. It also tries to
shed light on some of the implications of recent ar-
bitral awards touching upon this interaction between
intellectual property and investment protection, from
a legal and regulatory perspective. On the other hand,
the specific situation of the European Union is scru-
tinized, and in particular the project put forward by
the European Commission to adapt the dispute set-
tlement system for the protection of investments.
Abstract: In 2009, C.S. Gibson was suggesting
that: “With this early coverage of intellectual prop-
erty in BITs, it is perhaps surprising that there has yet
to be a publicly reported decision concerning an IPR-
centered investment dispute. Given the trajectory of
the modern economy, however, in which foreign in-
vestments reflect an increasing concentration of in-
tellectual capital invested in knowledge goods pro-
tected by IPRs, this could soon change” (Gibson, ‘A
Look at the Compulsory License in Investment Arbi-
tration’, 2009). A couple of years later, the first invest-
ment cases dealing with IP issues were made public.
In this context, this paper first addresses the condi-
Intellectual Property under the Scrutiny of Investor-State Tribunals
A. Introduction
“Until recently, […] few or no investment cases involved
claims that states had violated their investment obligations
with respect to intellectual property. There is still a relative
paucity of cases, but those we have are high-prole disputes
that implicate most of the controversial issues that beset
investment law today.”
Andrea K. Bjorklund1
While the system of investor-state dispute settlement
(ISDS) emerged in the 1950s as part of bilateral trade
and investment agreements,
it is still a quite recent
alternative dispute settlement mechanism in the
history of international law. As Professor Bjorklund
rightly pointed out, the emergence of investment
cases involving intellectual property (IP) matters
is even more recent, and the scrutiny of IP claims
by investor-state tribunals raises new questions
and challenges with regard to the legitimacy of this
Intellectual property rights (IPRs) are exclusive
rights granted to inventors and creators for a limited
time period. They are negative rights, since they are
rights to exclude others from using the invention
or creation without the owner’s consent, rather
than positive rights to use the protected work or
invention. Intellectual property rights were rst
developed as national, territorial rights, and are
becoming increasingly global assets, protected
in more countries. The entry into force of the
Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS) in 1995 marked a turning
point in the globalization of IPRs.3
Intellectual property ofces or domestic courts
usually deal with disputes arising from IPRs,
when it involves private parties. States also have
the possibility to challenge other States’ trade-
related measures, including IP, in the World Trade
* Clara Ducimetière is an Early Stage Researcher within
the EIPIN Innovation Society European Joint Doctorate
programme. She is a Researcher and PhD Candidate at
the Centre for International Intellectual Property Studies
(CEIPI), University of Strasbourg, and the Queen Mary
University of London (QMUL). This paper was presented
on 7 September 2018 at the 13th Annual Conference of the
European Policy for Intellectual Property association (EPIP)
hosted by ESMT Berlin.
1 Foreword from Andrea K. Bjorklund, in: Lukas
Vanhonnaeker, Intellectual Property Rights as Foreign Direct
Investments: from Collision to Collaboration (Edward Elgar
Publishing 2015).
2 The Germany-Pakistan BIT is often cited as the world’s
rst BIT and dates back to 1959. See: Marc Bungenberg,
‘A History of Investment Arbitration and Investor-State
Dispute Settlement in Germany’ (2016) CIGI ISA Paper No 12.
3 Daniel Gervais, The TRIPS Agreement: Drafting History and
Analysis (3rd edn, 2008).
Organization’s (WTO) Dispute Settlement Body.4
Since the 1950s, an alternative dispute settlement
mechanism allowing investors from one country to
sue the government of another country for breach
of its international trade and investment agreements
emerged on the international scene. While in the
rst decades of its existence, ISDS was not very
popular, with only a couple of cases per year, its
importance grew at the turn of the new millennium
with a cumulative number of 767 known ISDS
cases in 2016.
The United Nations Conference on
Trade and Development (UNCTAD) notes: “In 2015,
investors initiated 70 known ISDS cases pursuant to
IIAs, which is the highest number of cases ever led
in a single year”.6
ISDS is included in most international investment
agreements (IIAs), i.e. bilateral investment treaties
and trade agreements with investment provisions, as
a possibility for investors to challenge State measures
in breach of an IIA to which the host State and the
home State of the investor are parties. Traditionally
investment tribunals review claims based on the
breach of expropriation, national treatment, most-
favored-nation, or fair and equitable treatment
provisions. Recent cases involving Philip Morris
and Eli Lilly raised interesting issues in the eld of
intellectual property, as these companies brought
claims against Uruguay7 and Australia8 (Philip
Morris), and Canada9 (Eli Lilly), based inter alia on
the alleged violation of their IP assets.10
Intellectual property rights have usually been
included in investment chapters of IIAs, either
directly or indirectly,11 but this protection had
always remained rather theoretical. Indeed, already
in 1903, the US Friendship Commerce and Navigation
Agreement with China included copyright
4 This is subject to the requirement that the States are
members to the WTO, which is the case for 164 countries
since July 2016.
5 UNCTAD, World Investment Report 2017 Investor Nationality:
Policy Challenges, 2017) xi.
6 UNCTAD, World Investment Report 2016 Investor Nationality:
Policy Challenges, 2016) 104.
7 Philip Morris Brand Sàrl (Switzerland), Philip Morris Products
S.A. (Switzerland) and Abal Hermanos S.A. (Uruguay) v. Oriental
Republic of Uruguay ICSID Case No ARB/10/7, Request for
Arbitration (19 February 2010)Philip Morris Products S.A.
8 Philip Morris Asia Limited (Hong Kong) v. The Commonwealth of
Australia, Notice of Arbitration (21 November 2011).
9 Eli Lilly and Company v. The Government of Canada UNCITRAL,
ICSID Case No UNCT/14/2, Notice of Arbitration
(12 September 2013).
10 See section A.I.2. below.
11 Lahra Liberti, ‘Intellectual Property Rights in International
Investment Agreements: An Overview’ (2010) 01 OECD
Working Papers on International Investment 39 6.

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