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 that have them as their object. 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)

• Such rights are the object of national recognition and protection. They are frequently exploited and sold at national and at international levels.
• The exchange and traffic of intangible goods and IP Rights have increased with new technologies.
• IP  Rights are exceptions to the freedom of the market since they recognize areas of «monopoly».
• IP Rights are regulated:
  • 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 regulation of these rights has contributed to the approximation (and sometimes the unification) of the content of these rights.
  • At the European level: EU legislation has helped in harmonizing their contents. Also, it has created new rights of specific EU scope

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.
    o Example: each State may have different requirements and content for copyright. 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.

The basis for international protection. Common Aspects (IPR-PI)

A The classical system: a combination of National Laws and International Treaties 

• The rule protection of Industrial and Intellectual Property Goods and Rights is a direct consequence of territoriality. National legislations grant protection with general character (in Spain the Art 10.4 Civil Code) and also by means of specific laws such as Patent Law, Trademark Law, Copyrights Law.
  • Art 10.4 Cci: 4. «Intellectual and industrial property rights shall be protected within Spanish territory in accordance with Spanish law, without prejudice to the provisions of International Conventions and Treaties to which Spain is a party».
• Traditional International Private Law,  «conflict» criteria are used to determine the law applicable to the protection of IPR-PI (and to determine the competent Court to judge over them when there is a cross border element). Such «conflict criteria» are found in National Legislation and also in some International Treaties.
• International Treaties and European Treaties and Secondary Legislation also regulate this matter (EU Harmonization and EU Unification of some rights)
  • 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). This principle means that a right can only be protected where it is recognized.
    • This principle is recognized, for example, at the global level for contractual and non-contractual (copyright) relations by the Berne Convention of 1886: The Berne Convention contains «conflict rules» and some «material rues» as well.
    • Also, this principle is recognized  (in Europe) for non-contractual relations by Commission Regulation 846/2007, known as the Rome II Regulation which is a «conflict Regulation». Rome II establishes that «The law applicable to a non-contractual obligation arising out of an infringement of an intellectual property right shall be the law of the country for whose territory protection is claimed». In accordance with the treaty of Berne and Rome II, the lex loci protectionis governs  the creation of the right, the content of the right, its extinction, its duration, the conditions for protection, ownership, transfer, rights over them, etc.; as well as the conditions that must be met for the right to be considered infringed.
  • Other Treaties establish «substantive/material rules of protection». They are  International  harmonizing  International Treaties. They create material or «substantial» rules
    • Paris Convention for the Protection of Industrial Property of 20th May 1883 (referring to Patents and Trademarks). It is said that 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 industrial property right in one of the member countries, 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. 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, qualified by «registration of trademarks as they are» (Art. 6, Paris Convention), 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 (such sentence reflects the principle of independence). However, Art. 6.5 of the same text allows the protection of the mark «as is» which allows the owner to register in all States the same distinctive sign in its formal aspect that is registered in its country of origin, without more. 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. Notoriety is 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 and the number of countries to which the principles of the «Paris Union» apply is increased.
      • Berne Convention for the Protection of Literary and Artistic Works, 1886. Last revised in Paris in 1971. 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
      • 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.
• The third 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
  • 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
  • iv. (At the level of Europe – but outside the EU): Munich Convention of 1973 which centralises the granting of patents at the European level since with the filing of a single application as many national patents can be obtained as European countries have been designated in the same application. EPO
  • v. Unitary patent System. UE, except Spain

B)  TRIPS/ADPIC Agreement. And other agreements (ACTA Treaty)
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 and TRIPS is administered by WTO. It has a mechanism for conflict resolution and allows for sanctions for States that fail to comply with this TRIPS Agreement.

• TRIPS incorporates provisions of other Treaties but it also offers new provisions. The states that sign TRIPS must follow the main material rules of the Paris Conventions for the Protection of Industrial Property and the main material rules of the Bern Conventions for the Protection of Literary and Artistic works that are thus,  applicable to all WTO countries. 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.

In addition, the US and Europe lead a group of states that concluded in 2010 the ACTA Treaty (Anti-Counterfeiting Trade Agreement) on combating counterfeiting and piracy for further strengthening IPRs.

C) Specialized international organizations***

• INTERNATIONAL INTELLECTUAL PROPERTY ORGANIZATION . WIPO is a specialized agency of the United Nations which administers the Berne Convention for the Protection of Literary and Artistic Works of 1886 and the Paris Convention for the Protection of Industrial Property of 1883. It also administers the Rome Convention (jointly with ILO and UNESCO) on the Protection of Performers, Producers of Phonograms and Broadcasting Organizations (1961).
• WORLD TRADE ORGANIZATION. The WTO was established in 1995. It is based in Geneva. Its official languages are English, French and Spanish. It is not part of the United Nations system.
• EUROPEAN PATENT OFFICE. The EPO, based in Munich, was created by the Munich Convention of 1973. It manages the European Patent and currently the 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).

D)  Specialities of European law (EU)

• 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 to note is the Principle of «Community exhaustion» (agotamiento comunitario). This is a way of preventing the principle of territoriality from hindering the free movement of goods. The ECJ has long developed the doctrine of so-called «Community exhaustion» whereby 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. The judgments of the ECJ 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) stand out in this field. This case law principle has been enshrined in national legislations.

Intellectual Property is intangible property resulting from creations. Its owners and holders have specific rights, as established by the Law. Please note the differences:

• (Propiedad Industrial) industrial property, ie: patents on inventions, designs and models, protected designations of origin;  new varieties of vegetal, etc
• (Signs), trademarks, registered trademarks, service brands etc
• (Propiedad intellectual) copyright and related rights, ie: music, literature, paintings, sculptures.
• Commercial strategies and other immaterial property rights: trade secrets, know-how, confidentiality agreements, or rapid production.

E) General contents and types of rights

Intellectual Property rights (IPRs) allow titleholders (inventors, creators, artists, or other rightsholders) – to decide how, when and where their creations are used and/or exploited. Such rights have a negative and a positive manifestation.IP protection varies from one IP right to another. In very general terms we say that:

• patents allow the holder to stop third parties from making, using or selling the holder’s invention for a certain period (maximum of years (20)
• trademarks  protect the  «hallmark» (signo distintivo) of protected product/service by preventing other business from the offering, etc  services/products under the same hallmark
• copyright / neighbouring rights.
  • moral or paternity contents
  • economic content,

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