[A2k] [Ip-health] FT: Apple import veto risks undermining patent protection push

Baker, Brook b.baker at neu.edu
Mon Aug 5 08:49:04 PDT 2013


Trade agreement investment clauses that directly or indirectly include
intellectual property rights permit Samsung to bring a private arbitration
claim against the US for having violated minimum standards of treatment,
engaging in indirect expropriation, and favoring domestic companies over
foreign ones.  The US is already bound to an investment clause in its FTA
with South Korea and is seeking to impose similarly investor rights in
current negotiations of the Trans-Pacific Partnership Agreement.  As a
South Korean corporation, Samsung could proceed directly to arbitration or
S. Korea could go to bat for Samsung.  Eli Lilly has brought a similar
claim against Canada under NAFTA - as $500 million claim challenging the
invalidation of two of Lilly's pharmaceutical patents that failed to
satisfy Canada's promise/disclosure "utility" requirements.
Parenthetically, Myriad could choose the same route with respect to the
"new law" the U.S. Supreme Court established in invalidating its patents
on naturally occurring genes.

The danger of investment clauses and investor-state dispute settlement is
that countries get locked into an IP ratchet - IP rights can always be
expanded, but they can't be corralled or reduced because of expectations
of profit arising from pre-existing IP standards. Sometimes governments
seem to forget that corporate power in investment clauses is a
double-edged sword - it can cut both ways.


Professor Brook K. Baker
Northeastern U. School of Law
Affiliate, Program on Human Rights and the Global Economy
400 Huntington Ave.
Boston, MA 02115 USA
Honorary Research Fellow, University of KwaZulu Natal, Durban, S. Africa
Senior Policy Analyst Health GAP (Global Access Project)
Alternate NGOs Board Member UNITAID
(w) 617-373-3217
(cell) 617-259-0760
(fax) 617-373-5056
b.baker at neu.edu






On 8/5/13 1:43 AM, "Thiru Balasubramaniam" <thiru at keionline.org> wrote:

><SNIP>
>
>³If open technology standards benefiting the public interest are the rule
>for smart phones, why not for life-saving pharmaceuticals? Why not for
>other innovations that would improve the lives of billions of people
>around
>the world?,² asks Adam Hersh, an economist at the left-leaning Center for
>American Progress.
>
>
>³The decision shows the untenability of stringent IPRs to which so many US
>trading partners have objected on social welfare grounds. The onus is now
>on [Mr] Froman to explain why this is good for American consumers, but not
>for the rest of the world,² Mr Hersh added.
>
>--
>
>August 4, 2013 6:02 pm
>
>Apple import veto risks undermining patent protection push
>
>By James Politi in Washington and Richard Waters in Los Angeles
>
>President Barack Obama¹s move to overturn a looming import
>ban<http://www.ft.com/intl/cms/s/0/7321bf0a-fc6b-11e2-95fc-00144feabdc0.ht
>ml>
>on
>older iPhone and iPad models ­ favouring
>Apple<http://markets.ft.com/tearsheets/performance.asp?s=us:AAPL>
> over 
>Samsung<http://markets.ft.com/tearsheets/performance.asp?s=kr:A005930> in
>a long-running legal battle ­ risks undermining the US administration¹s
>aggressive push for stricter intellectual property regimes around the
>world.
>
>
>The office of the US trade representative announced the decision on
>Saturday, reversing a ruling by the International Trade Commission, a
>government agency which in June had found that Apple had infringed a
>Samsung technology patent.
>
>
>Michael Froman, USTR, said the
>veto<http://www.ustr.gov/sites/default/files/08032013%20Letter_1.PDF>
>by
>the White House ­ the first of its kind by a president since 1987 ­ came
>after a review of ³the effect on competitive conditions in the US economy
>and their effect on US consumers².
>
>
>The decision ­ which allows Apple to keep selling cheaper versions of the
>iPhone4 and iPad2 in the US ­ is striking because it comes as the US has
>embarked on a big push to tighten rules on patents in global trade
>negotiations.
>
>
>³I think it¹s likely the decision will be used as an excuse by other
>countries that don¹t want strong patent enforcement,² said Bill Reinsch,
>president of the National Foreign Trade Council, a business lobby group
>that champions trade liberalisation. ³The circumstances are different - in
>particular, the US has employed an extensive legal process, and Samsung
>can
>continue to pursue the matter in court - but other countries are likely to
>ignore the differences,² Mr Reinsch said.
>
>
>The US is pushing for tougher intellectual property rules in regional
>trade
>talks with 11 other Pacific Rim countries known as the Trans Pacific
>Partnership, but also in bilateral discussions with large emerging market
>nations including China and India where US business has complained about
>lax protection of IP rights.
>
>
>Some of the leading US technology companies are worried that Washington¹s
>support of Apple could hurt their own interests around the world. It would
>be seen in China and elsewhere as an excuse to disregard US intellectual
>property rules, warned
>
>
>Horacio Gutierrez, chief patent attorney at Microsoft, who was speaking in
>the run-up to this weekend¹s decision.
>
>
>Ron Cass, a former vice-chairman of the ITC, said that overturning the
>agency¹s ruling would ³come to be seen as a mistake ­ it undermines
>protection for intellectual property.²
>
>
>The action would only have been justified if the technology was key to
>national security or the country¹s communications infrastructure, he said.
>³The least justifiable time to intervene is when you have two commercial
>players who are direct competitors fighting over standard consumer
>products.²
>
>
>In response, a US official on Sunday pointed to a section of Mr Froman¹s
>statement on Saturday. ³The administration is committed to promoting
>innovation and economic progress, including through providing adequate and
>effective protection and enforcement of intellectual property rights,² Mr
>Froman wrote.
>
>
>Some intellectual property experts in Washington said they did not believe
>the Apple import ban veto by Mr Obama would have a big impact. ³Given how
>egregious IP theft is many other nations and how central it to their
>industrial strategies, I don¹t believe that the administration¹s action
>will have significant negative effects on our efforts to get these nations
>to respect intellectual property rights,² said Rob Atkinson, president of
>the Information Technology and Innovation
>Foundation<http://www.itif.org/people/robert-d-atkinson>
>.
>
>
>But critics of the Obama administration¹s approach to intellectual
>property
>in trade negotiations say the White House¹s case has grown weaker and
>lacks
>consistency.
>
>
>³If open technology standards benefiting the public interest are the rule
>for smart phones, why not for life-saving pharmaceuticals? Why not for
>other innovations that would improve the lives of billions of people
>around
>the world?,² asks Adam Hersh, an economist at the left-leaning Center for
>American Progress.
>
>
>³The decision shows the untenability of stringent IPRs to which so many US
>trading partners have objected on social welfare grounds. The onus is now
>on [Mr] Froman to explain why this is good for American consumers, but not
>for the rest of the world,² Mr Hersh added.
>
>
>Meanwhile, some in Washington were concerned about the message the Apple
>decision sent on foreign investment.
>
>
>³US and international patent laws play a critical role in global
>competition. However, it is crucial to ensure that the president¹s
>prerogative is used when the merits of the case warrant, and not to simply
>advantage a US company over a foreign competitor,² said Nancy McLernon,
>president of the Organization for International Investment, which
>represents US subsidiaries of foreign companies, including Samsung.
>
>
>The Obama administration¹s move to side with Apple comes little more than
>two months after the smartphone giant faced heavy
>scrutiny<http://www.ft.com/intl/cms/s/0/c1a2383a-c228-11e2-ab66-00144feab7
>de.html>
>on
>Capitol Hill over its tax structure ­ in particular its use of
>subsidiaries
>in Ireland to minimise its global tax bill. But the attacks on Apple were
>largely confined to the Senate subcommittee that investigated the tech
>group, and the White House refrained from criticism of a company that is
>seen as a beacon of US innovation.
>_______________________________________________
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