TPP, RCEP and TISA will entail some amount of IP norm-setting that shifts the balance established in the TRIPS towards rights-holders.
Courtesy: Sebastiaan ter Burg/CC BY 2.0
Several recent bilateral and regional Free Trade Agreements (FTAs) appear to be exporting standards of IP protection that extend well beyond those prescribed by the Agreement on Trade-Related Intellectual Property Rights (TRIPS). These FTAs include the Trans-Pacific Partnership (TPP), the Trade in Services Agreement (TISA), the Regional Comprehensive Economic Partnership (RCEP) and the Transatlantic Trade and Investment Partnership (TTIP).
In this piece, I have scrutinised the TPP, TISA and RCEP that deal with IP and the digital economy vis-a-vis the current Indian legal standard for compliance with their provisions. For most of the IP section, I have assumed that the current Indian standard is TRIPS-compliant (e.g. with respect to data exclusivity), and therefore used the TRIPS standard interchangeably with the current Indian position. Below, I have discussed those provisions in these agreements that generate new international obligations for India. These include obligations that Indian legislators have already foreseen and complied with (such as the legal backing for TPMs), as well as obligations that would require a modification of the prevailing Indian standard.
Summary of findings
| TPP | TISA | RCEP | TRIPS/Current Indian Standard |
E-commerce | |||
| Zero customs duty on digital products | Similar to TPP | — | TPP-compliant |
| Non-discrimination for foreign digital products | Government procurements exempt | — | None, as far as government procurement of software is concerned |
| Personal information protection | Similar to TPP | — | TPP-compliant |
| Cross-border information flow | Similar to TPP, unless HK proposal is accepted by negotiators | — | Possibly non-compliant with TPP, depending on an interpretation of “legitimate public policy objective” in TPP Article 14.11.3 and TISA E-commerce Annex Draft Art. 2.4. Indian law requires the data recipient to comply with Indian data protection standards as a bare minimum. |
| Prohibition on server localisation | Similar to TPP, may be more expansive if “or investing in its territory” is accepted by negotiators | — | None |
Intellectual property | |||
| — | — | Commitment to accede to the WCT/WPPT/Beijing Treaty/UPOV | N/A |
| Non-visual trade marks | — | Similar to TPP, with opposition for scent marks | TPP-compliant in respect of sound marks, possibly non-compliant in respect of smell marks. RCEP-compliant if IN opposition is accepted by negotiators. |
| No rights for prior users of registered marks | — | Prior users protected | TPP non-compliant; RCEP-compliant. |
| Expansive definition of patentable subject matter | — | Similar to TPP, but may have changed in a more recent draft | TPP non-compliant — specifically with respect to evergreening and software patents. |
| Patent term adjustment for processing delays, and specific term adjustment for pharmaceutical marketing approval | — | Similar to TPP | TPP/RCEP non-compliant |
| 10 year data exclusivity for agrochemicals | — | — | TPP non-compliant |
| Five year data exclusivity for drugs | — | Identical to TPP | TPP non-compliant |
| Eight year data exclusivity for biologics | — | — | TPP non-compliant |
| Patent linkage | — | — | TPP non-compliant |
| Life plus 70 copyright term | — | — | TPP non-compliant |
| Anti-circumvention measures | — | Similar to TPP | Possibly TPP non-compliant — mens rea requirement |
| Presumption in favour of patent/trademark/copyright validity | — | — | Possibly TPP non-compliant, especially with respect to patents |
| Criminal sanctions for trade secret misappropriation | — | — | TPP non-compliant |
“Who cares?”
This piece flags the most concerning elements of these treaties as they stand today, in terms of the IP obligations that India would import as a consequence of signing up.
But first — why must we concern ourselves with the implications of FTAs that we are (barring the RCEP) not even a party to?
There exists a three-fold answer: first, there is a growing perception that international standard-setting, at least in the IP space, is increasingly moving away from traditional multilateral regimes such as the TRIPS, and entering the turf of treaties styled as investment or free trade agreements. A passive approach to FTAs (especially those that bind significant portions of the world’s economic muscle) is today equivalent to a passive approach to international IP norm-setting. Line-drawing exercises in international law inherently entail distributive effects, and therefore are bound to benefit the interests of participants in these processes.
Second, accession to these FTAs is never out of the question. Nor is the possibility that parties to existing FTAs may require equivalent commitments in bilateral negotiations with non-parties such as India. It would be extremely convenient, for instance, for the US to ask India to accept a data exclusivity commitment in a hypothetical future India-US FTA, simply by pointing out that a similar provision exists in the TPP, which regulates trade between the US and many other Asian countries.
Third, the risk of being required to absorb TPP-equivalent standards as a pre-condition in bilateral negotiations is much higher for still poorer countries, who need the TRIPS flexibilities more than India.
Methodology
Of the treaties surveyed, the only one whose final text (pertaining to IP and e-commerce, the focus of this piece) is available in the public domain is the TPP. A draft leaked in October 2015 is the latest text available for the RCEP, while the latest TISA documents were leaked in May 2016. In addition, the RCEP does not propose to legislate on e-commerce, meaning that only its effects on IP norms can be measured, while the TISA’s IP chapter is yet to be leaked, meaning that only its effects on e-commerce can be examined. I will be examining the impact of the TPP, and (where feasible) the RCEP and the TISA on IP and the digital economy. I have only highlighted those instances where these agreements create significant new international obligations for India, if we were to accede to them.
E-commerce
While an important element of the TPP’s Digital Two Dozen (D2D) core principles is the removal of customs duties on all digital products (Article 14.3), this does not create any new international obligation for India. This is because India is a party to the 1996 WTO Information Technology Agreement, which appears to already mandate this. The TISA contains a provision (Draft Art. 10 of the E-commerce Annex) that mirrors the TPP standard.
The TPP also requires, in Article 14.4, that parties practice non-discriminatory treatment of digital products originating from any other party. Draft Article 1.6 of the TISA’s E-commerce Annex contains a non-discrimination provision, but the crucial difference between the two obligations is that the TISA appears to provide a flexibility for government procurement, while the TPP limits exceptions to Article 14.4 to subsidies, grants and other government-sponsored benefits. To the best of my knowledge, India has no explicit non-discrimination legislation, but such a law would be redundant, since India would be compliant with Article 14.4 merely by virtue of refraining from treating foreign digital products discriminatorily. In addition, government policies such as preferential adoption of the Bharat Operating System Solutions (BOSS) Linux distro may fall foul of the TPP standard, given that mere adoption would not amount to a grant or subsidy.
Article 14.8 of the TPP and Art. 4 of the TISA draft both mandate the protection of personal information online. While it can be argued that these legal standards can be independently imposed on India through instruments such as the International Covenant on Civil and Political Rights, these will represent the first time India accepts a concrete international obligation to actualise the right to privacy over the internet.
Article 14.11 of the TPP mandates the free flow of information across national borders. This provision may have huge implications for businesses that base their revenue generation on big data and targeted advertising, and the thrust of Article 14.11.2 is that parties must allow businesses to transfer information (including personal information) across borders through electronic means. However, Article 14.11 is subject to two significant carve-outs. First, Art. 14.11.2 is only applicable to covered persons, a term that has been defined to exclude financial service providers. Second, Article 14.11.3 permits derogation from the free flow obligation to achieve “legitimate public policy objectives”, provided that measures derogating from the obligation are non-discriminatory and least-restrictive in nature. The TISA draft, in Article 2.1, contains a similar provision to Article 14.11 of the TPP. However, it is unclear whether the TISA definition of “service supplier” mirrors the TPP definition of “covered person.” If it is, then financial service providers will be similarly excluded from the TISA obligation. Otherwise, the TISA obligation would be wider than the one in Article 14.11 of the TPP. In the latest TISA draft, Hong Kong has proposed a lengthy prefix to Article 2.1 of the E-commerce Annex which exempts all measures taken by parties to protect the privacy of individuals from the cross-border data flow obligation. Indian compliance with the TPP obligation is doubtful, and would turn on an interpretation of the words “legitimate public policy objective” in Article 14.11.3. This is because under Rule 7 of the Information Technology (Reasonable security practices and sensitive personal data or information) Rules 2011, cross-border flow of personal information is permitted only in situations where the recipient of the information complies with Indian data protection standards as a bare minimum. Similarly, India would almost certainly be non-compliant with the TISA draft unless the Hong Kong proposal is incorporated into the final text of the agreement.
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