Square-Off: Should U.S. Trade Agreements Be Renegotiated?
Running on a campaign to "Make America Great Again," Donald Trump pledged to tear up trade deals that he claimed hurt American companies and cost jobs for American workers. Since his election as president, his administration has swiftly pursued that agenda, stepping away from the Trans-Pacific Partnership and moving toward a renegotiation of the North American Free Trade Agreement. Is turning away from decades of free-trade policy a good thing or a bad thing from the perspective of U.S. corpo ..
Trade agreements often include detailed provisions on intellectual property that push our trading partners to conform to U.S. standards of protection. The Trans Pacific Partnership is just such an agreement.
When Donald Trump, in one of his first acts as president, directed the U.S. trade representative to withdraw the United States from the TPP, he fulfilled a campaign promise but also sacrificed the potential IP benefits that the TPP would have had for U.S. trade. As President Trump looks to renegotiate The North American Free Trade Agreement, or NAFTA — with its substantial IP provisions — it’s worth considering what might be lost if proper attention isn’t paid to IP.
The TPP devotes an entire chapter, of about 75 pages, to IP, with groundbreaking provisions that further U.S. IP objectives and priorities.
For example, a recurring issue in patent law has been ensuring that new, inventive uses of known products qualify for patent protection. The TPP requires countries to confirm that their legislation provides for such protection.
The treaty also requires countries to extend the duration of granted patents, as is the case in the United States, when there are unreasonable delays in processing patent applications or to compensate corporations for lengthy regulatory approval processes that prevent inventions from being marketed.
Moreover, the TPP requires member countries to adopt a U.S.-style grace period, which gives patent applicants a 12-month window to file a patent application in the event that applicants publicly disclose their inventions prematurely.
For trademarks, the TPP strengthens and broadens protection for brand owners. While the United States provides protection for all sorts of trademarks, some countries limit protection to only those marks that are visually perceptible.
The Pacific treaty also requires member countries to protect trademarks consisting of sounds and colors, and if countries have the proper data infrastructure, to extend protection to distinctive scents. At the same time, the TPP limits the scope of IP protection in the interests of U.S. food growers and manufacturers by preserving the right to use common food names.
The TPP also protects IP owners against unauthorized disclosures of trade secrets, not only to private entities but also by or to state-owned enterprises. And it’s the first multi-party agreement to require criminal sanctions for trade secret and cyber theft.
But perhaps the TPP’s most far-reaching IP provisions are those covering new pharmaceutical, agro-chemical, or biologic products. Reflecting the situation in the United States, the TPP requires member countries to protect undisclosed test data submitted to obtain regulatory approval.
For new pharmaceuticals, the duration of protection must be at least five years from the date on which regulatory approval was granted. For agro-chemicals, the same rule applies, but the duration of protection is 10 years. And for biologics, it’s at least eight years of protection, or five years if the country provides “other measures… to deliver a comparable outcome in the market.”
The TPP is the first US trade agreement to expressly include protection for biologics, a major negotiating accomplishment given the growing importance of biologic medicines.
The 2015 Bipartisan Congressional Trade Priorities and Accountability Act, which granted Congress trade promotion Authority, states that a principal negotiating objective of U.S. trade is “to further promote adequate and effective protection of intellectual property rights.”
Meeting that objective, according to the law, includes ensuring that agreements “reflect a standard of protection similar to that found in United States law.”
Therefore, the U.S. trade representative will no doubt want to include TPP-like IP provisions in the bilateral trade deals that the President has declared he would prefer.
Whether bilateral negotiations will result in similarly positive outcomes is unclear. But given the lengthy negotiation process, it’s unlikely that new agreements will emerge quickly.
U.S. withdrawal from the TPP may thus create a vacuum, possibly to be filled by other multi-party trade negotiations that don’t include the United States, such as the Regional Comprehensive Economic Partnership (RCEP), a trade agreement being negotiated among the 10 countries of the Association of Southeast Asian Nations (ASEAN), plus Australia, China, India, Japan, New Zealand, and South Korea.
If the negotiations succeed, analysts do not think that the RCEP will include IP as favorable to the US as those in the TPP.
As President Trump approaches renegotiation of NAFTA and other trade treaties, he and his team should consider what was given up in the TPP and act to preserve and strengthen the rights of U.S. owners of intellectual property.
Jay Erstling is an attorney with Thuente IP in Minneapolis. He advises businesses on protecting their intellectual property in global markets.