July 26 2016 TPP Intellectual Property Rights IPR Background IP Chapter The Trans-Pacific Partnership TPP is a proposed free trade agreement FTA among the United States and 11 Asia-Pacific countries that would reduce and eliminate tariff and non-tariff barriers on goods services and agriculture and establish trade rules and disciplines including on IPR protection which expand on World Trade Organization commitments “WTO-plus” The IP chapter aims to support technological innovation to benefit both producers and users while promoting a balance of rights and obligations It is enforceable through dispute settlement It includes phase-in periods for some countries to implement certain provisions General obligations include upholding international agreements and not discriminating against foreigners on IPR Specific provisions are discussed below IP—creations of the mind embodied in physical and digital objects—are a key source of U S comparative advantage IPR are time-limited rights that governments grant to inventors and artists to exclude others from using their inventions and creations without permission Advancing IPR protection globally has been a U S trade negotiating objective since 1988 P L 100-418 first reflected in the North American Free Trade Agreement NAFTA and WTO Agreement on Trade-Related Aspects of Intellectual Property Rights TRIPS The 2015 Trade Promotion Authority TPA P L 114-26 includes prior U S trade negotiating objectives for U S trade agreements to “reflect a standard of protection similar to that found in U S law” “TRIPS-plus” and new objectives to combat cyber theft and protect trade secrets TPP and IPR debate focuses on how to protect and enforce IPR to incentivize innovation while also securing public benefits from these innovations The TPP area is a mix of developed countries historically IP generators and developing countries historically IP importers but now are growing sources of innovation The region presents a range of IPR challenges Fig 1 such as high counterfeiting and piracy rates including in the digital environment and weak enforcement of IPR laws TPP potentially could address IPR concerns in the broader region including with respect to China and India Figure 1 TPP Countries’ IPR Regimes Source U S Trade Representative 2016 Special 301 Report Selected IPR Provisions in TPP A number of provisions in TPP reflect new or updated issues for a U S FTA including in the following areas Biologics Contains provisions on data exclusivity period for biologics large-molecule drugs developed from living organisms Copyright balance Provides for incorporation of “fair-use” exceptions in country’s law Internet Service Providers ISPs Requires “notice and takedown” to address ISP liability while allowing alternative systems for certain countries e g “notice and notice” Geographical indications GIs Requires administrative procedures for recognizing and opposing GIs and specific GI commitments in international agreements Trade secrets Requires criminal procedures and penalties for trade secret theft including cyber theft clarifies that stateowned enterprises SOEs are subject to trade secret obligations Enforcement Extends enforcement to the digital environment Patents Patents protect new innovations such as pharmaceutical products chemical processes business technologies and computer software TPP aims to establish consistent and harmonized patent regimes in the region Some provisions specific to pharmaceuticals aim based on U S trade negotiating objectives to “encourage innovation and access to medicine ” Yet stakeholders disagree on whether TPP appropriately incentivizes research and development for new medicines while also allowing affordable access to medicines through market entry of generic medicines Patent rules include Patent protection of new products and processes as well as new uses methods or processes of a known product based on TRIPS’s 20 years of minimum protection Adjustments of patent terms for “unreasonable” delays in the patent examination or regulatory approval processes— with phase-in periods for Brunei Malaysia and Vietnam Protection of test data data innovators submit for regulatory approval on which generics may later rely Chemical-based small-molecule drugs Five years of data exclusivity for new drugs and three years for new formulations of existing drugs https crsreports congress gov TPP Intellectual Property Rights IPR Biologics Eight years of data exclusivity or five years plus “other measures” to deliver a “comparable outcome ” The appropriate period of exclusivity for biologics remains among the most controversial issues in the consideration of TPP Fig 2 Figure 2 Data Exclusivity in TPP Countries Source CRS Notes Country does not differentiate data exclusivity for biologics and small-molecule drugs but has five-year period for the latter Notification system and procedures e g judicial or administrative proceedings to assert patent rights or to challenge a patent’s validity More flexible than patent linkage regulatory authority cannot grant marketing approval to a generic without the patent holder’s permission which is common to many prior U S FTAs Copyrights and Related Rights Copyright provides creators of artistic and literary works with the exclusive right to authorize or prohibit other from reproducing communicating or distributing their works Debate exists over balancing copyright protections while protecting the free flow of information with digital trade raising new issues Building on TRIPS TPP includes Copyright terms of life plus 70 years or 70 years from publication for most works higher than the TRIPS baseline of life plus 50 years—with phase-in periods for Brunei Canada Japan Malaysia New Zealand and Vietnam Penalties for circumventing technological protection measures TPMs such as encryption “Fair use” directive to “endeavor to achieve an appropriate balance” between users and rights holders in their copyright systems including digitally through exceptions for legitimate purposes e g criticism comment news reporting teaching research Legal framework and “safe harbors” to allow legitimate online internet intermediaries to develop their business while providing enforcement against digital copyright infringement as well as “notice and takedown” to address intermediary liability while allowing alternative systems e g “notice and notice” in Canada U S law takes a “notice and takedown” approach Trade Secrets A trade secret is confidential business information e g formula customer list that is commercially valuable because it is secret TPP require criminal procedures and penalties for trade secret theft including through cybertheft and by state-owned enterprises SOEs Trademarks Trademarks protect distinctive commercial names marks and symbols TPP among other things provides trademarks with a renewable 10-year period of protection as in U S law and removes administrative requirements to enable easier protection and enforcement of trademarks Geographical Indications GIs GIs are geographical names that protect the quality and reputation of a distinctive product from a region e g Champagne Florida oranges The United States aims to address GI protections that can improperly constrain U S agricultural market access in other countries by protecting terms viewed as “common ” TPP has procedures for recognizing and opposing GIs guidelines for determining when a name is common and transparency requirements for GI protection in international agreements Industrial Designs Industrial designs are the ornamental or aesthetic aspects of a product The industrial designs section is new to U S FTAs It adds protections beyond TRIPS for designs embodied in a part of an article or a part of an article “in the context of the article as a whole ” It also has hortatory language on improving design registration systems Enforcement TPP includes commitments on civil criminal and other national enforcement for IPR violations such as copyright enforcement in the digital environment criminal penalties for trade secret theft and camcording ex-officio authority to seize counterfeit trademark and pirated copyright goods at the border The IP chapter is enforceable through TPP’s government-to-government dispute settlement provisions IP in Investment Chapter TPP’s investment chapter treats IP as a form of investment that benefits from protections such as non-discriminatory and minimum standard of treatment compensation for expropriation and investor-state dispute settlement ISDS to address alleged breaches of TPP parties’ obligations ISDS cases such as Philip Morris’ suit against Australia for a plain-packing tobacco requirement affecting its trademark dismissed for lack of jurisdiction and Eli Lilly’s suit against Canada for a patent utility standard invalidating its pharmaceutical patents pending have fueled debate over investor protections and governments’ regulatory ability Issues for Congress TPP raises a number of possible issues for Congress including whether it advances U S trade negotiating objectives and protects IP and other interests such as public health in the Asia-Pacific Treatment of biologics may be an especially prominent issue in congressional debate Other issues include implementation of IPR obligations by TPP parties and the agreement’s applicability to enhancing multilateral “rules for the road ” See CRS Report R44489 The Trans-Pacific Partnership TPP Key Provisions and Issues for Congress and CRS In Focus IF10033 Intellectual Property Rights IPR and International Trade Shayerah Ilias Akhtar Specialist in International Trade and Finance Ian F Fergusson Specialist in International Trade and Finance IF10442 https crsreports congress gov TPP Intellectual Property Rights IPR Disclaimer This document was prepared by the Congressional Research Service CRS CRS serves as nonpartisan shared staff to congressional committees and Members of Congress It operates solely at the behest of and under the direction of Congress Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role CRS Reports as a work of the United States Government are not subject to copyright protection in the United States Any CRS Report may be reproduced and distributed in its entirety without permission from CRS However as a CRS Report may include copyrighted images or material from a third party you may need to obtain the permission of the copyright holder if you wish to copy or otherwise use copyrighted material https crsreports congress gov IF10442 · VERSION 2 · NEW