Lesson 4. International Business Law (International Trade Degree-ULE). Lesson 4  Introduction.

In this topic, we address the legal regime of varied types of intangible assets and rights. Such rights protect certain creations of the human mind: inventions, literary works, and symbols, etc. Please note that in most instances, the word used in English language is «Intellectual Property Rights» (IP Rights) encompasing both Derechos de Propiedad Industrial y Derechos de Propiedad Intelectual» (as we name them in Spanish Language)

• IP Rights are protected:
  • At the National level: as they are territorial rights. We find, for example, the Spanish Trademark Law, the Spanish Patent Law…
  • At the International level: The international protection of these rights is based in National «laws of conflict» and International Treaties (with conflic rules, procedural rules and material rules) .
  • At the European level: EU legislation has helped in harmonizing national laws. Also, it has created new rights of specific EU scope

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Common Principles of  Industrial Property Rights and Intellectual Property (IPR-IP)

• • Territoriality. – These rights are territorial in nature. Their protection is limited to the territory or territories of the State or States where they are recognized or granted.
    o Example: There are as many copyrights, or as many patents, as States recognize them. This rule is qualified when there are International Treaties.
  • Independence.-  Each State is free to establish the protection regime it deems most appropriate, regardless of the protection recognized by other States.
    This rule is qualified when there are International Treaties.
  • Limited temporal duration.  The economic component of Industrial and Intellectual Property Rights (IPR-PI) are recognized for a limited time, after which they become part of the «public domain»: this means that they can be freely used by the public. However, some components of some IP Rights are not limited in time.

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The basis for international protection. Common Aspects (IPR-PI): a combination of National Laws and International Treaties

1. The rule protection of Industrial and Intellectual Property is a direct consequence of territoriality. This is why National legislations grant material IP protection. Also, National Laws include conflic rules in the field of IP. Such   «conflict» rules are used to determine which National Law is applicable to the protection of IPR-PI in a given case (and to determine the competent Court to judge over them when there is a cross border element).
   • • • • • • Example: Lex loci protectionis If the right holder of a patent seeks protection of his/her patent in the territory of State A, the law of State A is lex loci protectionis. However, if his/her invention is not registered in State A, there is no legal basis at the level of substantive patent law to protect the claimant.
2. Some International Treaties determine the National Law which is applicable to IP («conflict regulations in International Treaties»).
   • • It is generally accepted that, at the international level, the most appropriate «conflict»  criterion is the application of the Law of the country for which protection is sought (lex loci protectionis).. However, as IP are territorial, if such right is not registered in that country, there is no protection, in principle.
     • This principle is recognized in International Treaties such as the Berne Convention for the Protection of Literary and Artistic Works (1886).The Berne Convention contains «conflict rules» and some «material rues» as well.
3. Other Treaties establish «substantive/material rules of protection». They create material or «substantial» rules. Examples: 

A. Paris Convention for the Protection of Industrial Property of 20th May 1883 (referring to Patents and Trademarks). The signatory states to this Convention make up the «Paris Union». The rules of the Paris Convention provide for some harmonization in the levels of protection of Member Countries, and for legal certainty for right holders. Among its Principles we find:

• • • • • • • • • • • Principle of National Treatment: the Contracting States must grant the nationals of the other member countries of the Convention the same protection as their own nationals (Art. 2).
                    • Right of Priority.   On the basis of the regular filing of an application for protection of an  IPR in one of the Member Countries of the Paris Union, the same applicant or his successor in title may for a specified period (6 months for trademarks and 12 months for patents) apply for protection for the same subject matter in all other Member Countries of the Paris Union. These applications enjoy a right of priority over other rights in the same trademark or invention filed after the date of the first application, and priority over subsequent acts (in order to seek a declaration of invalidity, for example, in the event of the sale or licensing of these rights)
                    • Independence:  The obtaining and maintenance of a trademark in a territory does not depend on the application, registration or renewal of the same trademark in its country of origin. However, this Principle is qualified in the field of Trade marks because Art. 6.5 allows for the protection of the mark «as is» . The protection of Trade Marks as they are allows the Trade Mark title holder to register it in all States , «as it is», whitout needing to adapt the distintive sign to the new country of registration. This protects owners and consumers by reducing the differences in the use of a trademark on the international market.
                    • Protection of well-known marks. Article 6bis of the Paris Convention obliges member countries to refuse or cancel the registration and to prohibit the use of a mark capable of creating confusion with another well-known mark in that member country. Well known trade marks are protected, even if not registered, to avoid unfair advantage.
          • PLEASE NOTE THAT Following the conclusion of the ADPIC/ TRIPS Agreement (Extended GATT/Uruguay Round), the provisions of the Paris Treaty are integrated into the enlarged GATT (within WTO).  So, the number of countries to which the principles of the «Paris Union» apply is increased. Also note that The Paris Union is administered nowadays by WIPO.

B. Berne Convention for the Protection of Literary and Artistic Works, 1886. It deals with Intellectual Property (Copyright). Among its Principles, we can find:  Lex loci protectionis (as a conflict rule), but also  it contains harmonizing and/or unifying norms such as the Principle of National Treatment,  and minimum contents of the copyrights

C. Rome Convention for the Protection of Performers, Producers of and Broadcasting Organizations of 1961. It deals with Intellectual Property (neighbouring rights). It establishes Lex loci protectionis (as a conflict rule), but also it contains harmonizing and/or unifying norms such as the Principle of National Treatment,  and minimum contents of the neighbouring rights within its scope.

4. Other  group of International Treaties have a procedural nature, and their relevance lies in the fact that they centralize the registration of rights.  Their objective is to facilitate the possibility of registering a right in several countries simultaneously.

• • i. 1970 Washington Patent Cooperation Treaty (PCT System)
  • ii. Madrid Agreement Concerning the International Registration of Marks. 1891
  • iii. The Hague Agreement Concerning the International Deposit of Industrial Designs of 1925 last revised at Geneva in 1999 Hague Agreement Concerning the International Deposit of Industrial Designs of 1925 Last Revised at Geneva in 1999
  • etc

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International Organizations that deal with IP

• WTO. Industrial and Intellectual Property Rights were the focus of attention in the GATT Uruguay Round, thus concluding the TRIPS Agreement (ADPIC in Spanish). Its addressees are the Member States of the WTO. The WTO is not a UN Agency
  • TRIPS is administered by WTO. It has a mechanism for the resolution of conflicts among States. It can impose sanctions for States that fail to comply with this TRIPS Agreement.
  • TRIPS incorporated many provisions of other Treaties. But it also includes new provisions.
  • The States that sign the TRIPS International Treaty must comply with the main material rules of the Paris Union and the main material rules of the Bern Conventions for the Protection of Literary and Artistic works
  • TRIPS also introduced the obligation to protect computer programs and databases through Copyright Law -art 10-.
  • TRIPS introduced provisions for greater IPR-IP protection known as «TRIPS PLUS» that must be included in the negotiation of bilateral trade agreements between USA/Europe with less developed countries.

• INTERNATIONAL INTELLECTUAL PROPERTY ORGANIZATION . WIPO.  This is a specialized Agency of the United Nations
  • WIPO  administers the  Paris Union and the Berne Convention for the Protection of Literary and Artistic Works of 1886. It also administers the Rome Convention (jointly with ILO and UNESCO) on the Protection of Performers, Producers of Phonograms and Broadcasting Organizations (1961).
• EUROPEAN PATENT OFFICE. The EPO, based in Munich, was created by the Munich Convention of 1973. It manages the European Patent and currently the EU Unified Patent.
• EUIPO The Office for Harmonisation in the Internal Market, created in 1994, it  is a specialised body of the EU. It manages the EU Trade Mark and EU Design. Its headquarters are based in Alicante (Spain).

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IP in the EU Law

• Unification of certain rights, through the creation of new independent figures. The EU, in order to overcome the principle of territoriality and its negative effect on Community freedoms, it has opted (where possible) to create EU IP Titles, ie: European Trade Mark, European Design. Specific arrangements are made for a Unified Patent System (Spain does not participate in the Unified EU Patent System).
• Harmonisation. By means of Industrial Property Directives (particularly trademarks and intellectual property).

Also, the EU, through the ECJ has developed some specifically European Principles:

• Protection of Trade Marks «as they are» (see above)
• Principle of «Community exhaustion» (agotamiento comunitario). The holder of an industrial or intellectual property right cannot be allowed to oppose the importation of products lawfully marketed in another Member State by the holder or with his consent.This is a way of preventing the principle of territoriality from hindering the free movement of goods in the EU. See cases : Deutsche Grammophon (C-78/70 of 1974); Centrafarm (C-15/74 of 1974); Silhouette (C-355/96 of 1998) and Davidoff (C-414/99 of 2001)

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