(Il)legitimacy of international intellectual property regime?

Abstract

The recent Covid-19 global health crisis not only brings into sharp relief the current problems afflicting the international intellectual property regime (IIPR) but also calls into question its legitimacy as an international authority. Against this backdrop, the article aims to launch an investigation into the legitimacy of the IIPR, as an international co-ordinative authority, designed to protect IP rights without prejudice to international trade norms. Drawing on Raz’s service conception of authority, it explores whether the IIPR lives up to its promises by enabling co-ordination between states over IP rights without undermining the initial balance on which it is founded, struck between developing and developed countries, as well as between international protection of IP- cum-trade rights and domestic regulatory autonomy. It does so by classifying the historical evolution of the IIPR under three different phases: (i) its foundation, (ii) before, and (iii) after the TRIPS-plus. Upon showing the legitimacy challenges inherent in its undemocratic foundation, the article points to the success of the regime in finding a balance between conflicting interests before the TRIPS-plus era. Later, it underlines the many challenges that come with linking the IIPR to the investment regime and argues that the FTAs and frequent regime-shifting activities put further pressure on the authority and legitimacy of the regime. Stressing the importance of democratic participation for the legitimacy of any co-ordinative authority, the article casts doubt on the IIPR’s legitimacy and concludes by raising some points to overcome the ongoing legitimacy challenges.

1. Introduction

The recent Covid-19 global health crisis brought into sharp relief the current problems afflicting the international intellectual property regime (IIPR). ¹ Although developing and least-developed countries are legally allowed to use the TRIPS flexibilities ² and a proposal advanced by South Africa and India to waive the IP rights of pharmaceutical companies received significant support, ³ it is fair to admit that the IIPR failed to meet expectations. For once, the current ‘cumbersome rules, political and economic pressures and a lack of transparency’ have led the IIPR to contribute to the global health crisis and inequalities. ⁴ That impugns the legitimacy of the IIPR, an international authority whose ultimate purpose is to promote public welfare through the use of private rights, as worded in Article 7 of the TRIPS Agreement:

The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.

Authority is legitimate, according to Raz, only if it does better than what an individual would do by itself. ⁵ In other words, states or individuals have recourse to authority with the expectation that it helps them better achieve their objectives. The IIPR, an international authority that renders the co-ordination of IP rights possible, supplies states with a key service impossible to attain it its absence. ⁶ Further, the IIPR, resting on a compromise between developing and developed countries, made possible the establishment of the WTO and the creation of an international trade regime. Less developed countries are entitled to access the markets of developed countries on the condition that they concede to protect the IP rights at least over the minimum standards set globally. ⁷ The WTO-TRIPS compromise is held to increase trade, promote public welfare, enable technology transfer from developed to developing countries; and disseminate scientific, technological, and cultural knowledge. This underlying idea on which the IIPR is founded constitutes the main reason for states to delegate their right to regulate to an international authority, leaving at the same time considerable discretion to them in accordance with their national autonomy. As argued by Dinwoodie and Dreyfuss, the TRIPS is to be assessed, not as ‘a comprehensive code’ based on the logic of harmonization, but as a neo-federalist compromise that ‘gives states autonomy to address the complexity, diversity, and historical contingency of intellectual property law, but it requires them to act within the overlay of a coordinated international intellectual property regime’. ⁸

The form international intellectual property law has taken today is highly complex. As a regime whose historical origins may be traced back to the late nineteenth century, when the Bern and Paris Conventions were signed, protecting respectively industrial property and copyrights, ⁹ it has undergone significant transformations in the last three decades. The first transformation occurred when the IIPR was married with the international trade law (ITL) through the adoption of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) as part of the WTO agreement in 1994 in Marrakesh. ¹⁰ The mushrooming of bilateral, plurilateral trade and investment agreements, marking a turn away from multilateralism to minilateralism and bilateralism, ushered in the beginning of the second transformation (TRIPS-plus) around the mid-2000s. ¹¹ As a result, the IIPR today is a highly complex regime (regime complex) ¹² that covers different norms originating from distinct international regimes (investment, trade, health, food, environment). Even if it is under the pressure of other regimes, it has so far been successful in protecting IP rights, even increasing their level of protection, first from incentives to commodities and then from commodities to assets. ¹³ Contrary to the common-sense assumption that the force of a legal order rests on its unity and coherence, ¹⁴ the IIPR has so far fared well, even though it stops woefully short of being a full-fledged legal order and falling under the category of regime complex. ¹⁵ In a nutshell, the IIPR, as an authority, does fulfil the expectations, yet whether it does so in a legitimate way is yet to be addressed.

To address these questions, the article benefits from Raz’s service conception of authority, according to which authorities are legitimate only if they provide us with better service than we may do ourselves. ¹⁶ In doing so, it is concerned not with the legitimacy of an international court ¹⁷ or an administrative body, but with the legitimacy of a regime, established through international treaty and converged around a court. ¹⁸ Further, it approaches the regime from a historical perspective to shed light on the tensions on which its legitimacy is founded and to show the challenges which it encountered. ¹⁹ The IIPR is an authority whose legitimacy rests on it being a better service provider than its alternatives, be it other regimes or domestic legal orders. The concept of legitimate authority is apt to provide a better framework than its alternatives, say, constitutionalism, in addressing the problems plaguing the regime. Further, it allows us to approach the IIPR with conceptual clarity and thereby avoid using the term constitutionalism in a negative and pejorative sense, as it is done with the new constitutionalism. ²⁰ Against this backdrop, the article first explores what it takes to be a legitimate authority in the international realm (Section 2). Then, upon examining the IIPR through its evolution with a particular emphasis on the TRIPS era (Section 3.1), the article shows how the TRIPS-plus puts further pressure on the legitimacy of the IIPR (Section 3.2). Upon evaluating the legitimacy of the IIPR at its foundation (Section 4.1), before (Section 4.2) and after the second transformation, the article concludes with the latent challenges to the IIPR’s authority legitimacy and offers some institutional and adjudicative solutions apt to ward off those challenges (Section 5). In short, it argues that even though the IIPR’s undemocratic foundation poses a significant challenge to its legitimacy, it did well in providing states with authoritative guidance and being responsive to their initial reasons after its problematic foundation. Nevertheless, there remain latent challenges to its authority and legitimacy under the TRIPS-plus era.

2. Legitimate authority beyond nation-states

2.1 The concepts of legitimate authority

There exist two main approaches that account for the legitimacy of political institutions. If legitimacy is approached descriptively, it focuses on how authority is perceived and believed by people as legitimate without any normative yardstick to assess it externally. ²¹ In contrast, when legitimacy is explained normatively, an authority’s legitimacy depends on the extent to which it meets some external and normative criteria. ²² Though the two are conceptually separate, it is hard to separate the sociological/subjective from the normative/objective account of legitimacy. In Hart’s primitive society, for instance, the authority of law relies on its being accepted as an authority by the participants of a community-based legal order. ²³ Raz also draws attention to the importance of acceptance, though it fails to shoulder the justificatory burden of an authority, by noting that acceptance is apt to increase the overall effectiveness of the government. ²⁴ When considered further that effectiveness, at least to a certain extent, is one of the necessary properties of legitimate authority, the functional connection between sociological and normative accounts of legitimacy becomes apparent, ²⁵ even though they rest in conceptually separate worlds.

A further distinction may also be made within the normative accounts of legitimacy. ²⁶ Some concentrate on the coercive use of power and examine the conditions under which the authoritative use of coercive power is justified. ²⁷ I will call this enforcement-based account of legitimate authority. The other (practical) account, however, places its emphasis on how authority changes the normative situations of its subjects and establishes a connection between authority and practical reasoning without placing much emphasis on the problem of enforcement. ²⁸ Those two different approaches have further implications for what it means to have a right to rule (claim, liberty, or power) and what the respondents’ (citizens) corresponding responsibility (duty of obedience, non-interference, liability) is. ²⁹ Joseph Raz who develops one of the best examples of the practical account of legitimate authority underlines that to understand what authority is, it is necessary to grasp how it presents itself. Raz’s explanation of Ladenson’s conception of authority may be illuminating in this regard:

Ladenson offers an explanation of legitimate authority in terms of de facto authority. It is justified de facto authority. De facto authority is then understood as some form of power over people. The analysis fails because the notion of a de facto authority cannot be understood except by reference to that of legitimate authority. Having de facto authority is not just having an ability to influence people. It is coupled with a claim that those people are bound to obey. ³⁰

What may be inferred from the foregoing is that how authority presents itself and how it claims to rule over people is an indispensable component of authority. As Raz argued, it is in the nature of law to claim legitimate authority, even though it may not possess it every time. Acknowledgement of law’s claim to legitimate authority does, therefore, allow us to approach authority from a different perspective by observing what it does through how it affects an individual’s practical reasoning. The enforcement-based account of legitimacy prioritizes the product of authoritative institutions over the process through which they impact individual practical reasoning. It is, therefore, concerned more with the justification of enforcement and coercion than how authority affects individual practical reasoning. However, the practical account of authority may allow us to sever the questions of how authority does from what authority does. ³¹ Thinking of authority through the claims it made and how it affects individuals’ practical reasoning opens a space in which we may account for many sorts of authorities that do not resemble the state and fall short of exercising comprehensive coercive power over its subjects. That is so because not all authorities have administrative mechanisms to ensure compliance, nor are the different functions of states (legislation, execution/administration, and adjudication) performed by one institution in the global realm. ³² Given the inherent compliance or enforceability problem afflicting international institutions, the practical account of legitimate authority appears highly promising. Even though Raz’s service conception is criticized for its inability to explain the interaction of authorities between legal orders, ³³ it, turning attention from the justification of coercive use of power towards how it affects an individual’s normative space, makes itself one of the most favourable standards for the legitimacy assessment of legal orders beyond nation states. ³⁴

2.2 Instrumental and conditional nature of legitimate authority

Authority demands obedience from individuals and expects them to follow its decisions without further inquiry. ³⁵ Since ‘those who apply rules are usually applying rules written by someone else’, ³⁶ whenever authority is invoked, it poses a challenge to individual autonomy. Raz introduces two different theses to overcome this problem. At the core of service conception sits the idea that authority ‘is more likely to act successfully on the reasons which apply to its subjects’ (the normal justification thesis (NJT)). ³⁷ The NJT emphasizes the conditional nature of authority, for it grounds the legitimacy of an authority on its service providing capacity, i.e., whether it helps individuals better reach their own objectives by acting as a mediator between their short-term interests and objective reasons. ³⁸

Further, he notes with his dependence thesis (DT) that ‘all authoritative directives should be based, in the main, on reasons which already independently apply to the subjects of the directives’. ³⁹ The DT is intended to underscore that the reasons why authorities are entrusted with decision-making power are also the limitations imposed on them as to how to use their power. The importance of the DT may be undervalued when seen from the perspective of states whose claim to authority is unlimited. ⁴⁰ Yet, when today’s functionally delineated global regulatory sphere is considered, the DT turns out to be a crucial tool in assessing the legitimacy of any authority using institution beyond nation-states. For instance, if the UN, as an international institution established to protect peace and security and promote human rights, acts in a way that contradicts these functional purposes, then it may be argued that this will run counter to the demands of the DT. ⁴¹ Although the DT presumes that authority’s reasons should echo the objective reasons embraced by individuals, what it does envision is ‘enhanced’ not ‘perfect conformity’. ⁴²

2.3 The co-ordinative legal authority and democratic co-ordination justification

Developed to explicate the nature of authority, the service conception, when applied to political institutions, ‘invites a piece-meal approach to the question of the authority of governments’ and admits that the scope of authority ‘varies from individual to individual and is more limited than’ ⁴³ it claims for itself. Owing to the instrumental and conditional nature of authority, it ‘all depends on the person over whom authority is supposed to be exercised’ as well as the capacity of government. ⁴⁴ Nevertheless, Raz also clearly states that when it comes to the co-ordination of collective interests, the scope of authority should be based on it ‘having legitimate authority over the population at large’ ⁴⁵ rather than on its individual-based piecemeal assessment. For this reason, it follows that an authority’s claim to legitimacy, when it provides non-fungible services like solving co-ordination problems, is warranted, insofar as a community at first has a reason to co-ordinate its actions. ⁴⁶ Put differently, the service that international authorities are supposed to deliver when they provide states with a framework for co-operation and co-ordination differs significantly from their other services such as curing volitional defects and alleviating the decision-making burden. ⁴⁷ Hence it is necessary to discover the conditions under which international authority supplies states with co-ordination-based services and meets the standards of what Besson calls ‘the coordination based justification of authority’. ⁴⁸

As this point bears significant importance for the global governance regimes whose main function is to solve collective action problems at the international level, it is not surprising that international lawyers have recently dwelled on this issue. ⁴⁹ Adams, for instance, develops an institutional conception of legitimacy, suggesting that legitimate institutions have a right to function without interference because this is the only way to solve meta-co-ordination problems. ⁵⁰ Besson, similarly, suggests reinterpreting the service conception of authority to ‘accommodate the way the law provides a whole class of subjects, and not each of them separately, with reasons for co-ordinated action over matters of justice and common concern’. ⁵¹ To this end, she argues that the NJT should contain ‘our epistemic disagreements and the need for co-ordination by a public authority as its primary feature’ ⁵² and should not be applied, at least under these circumstances, to the determination of authority in the first instance. In short, the existence of independent reasons for co-ordination among individuals narrows down the scope of the NJT and rules out its piece-meal effects on authority. Otherwise, an authority will fail to provide services when co-ordination is needed yet unachievable due to disagreement. The only condition introduced by Besson when there exist independent reasons for co-ordination between legal subjects is that it should be based on the basic principles of democratic political equality. ⁵³ In brief, the legitimacy of co-ordinative legal authority derives from this democratic co-ordination justification, as well as the co-ordination service it provides.

As rightly argued by Besson, the international organizations (the IOs) enable states a platform where their dual role under international law is mostly terminated because of the separation of officials from legal subjects. ⁵⁴ And they do so by creating permanent institutions entitled to improve law and accommodate it to new situations. Given the inherently co-ordination demanding nature of international law, the IOs may play a significant role in solving co-ordination problems between states by creating salient points over which they will seek to concert their behaviour. Owing to the predominantly horizontal nature of international law that lacks centralized law-making, law-applying, and law-enforcing institutions, the co-ordination-based justification of authority in international law is much more pressing than it is in domestic legal orders. ⁵⁵

What needs to be illuminated before moving on to the intellectual property regime is whether international law’s claims to authority differ from the domestic and comprehensive ones. This is a question bound up with the problem of the subject of international law. States are accepted generally as the primary subject of international law, yet it is also admitted that they are acting on behalf of their citizens and represent their interests. ⁵⁶ If individuals are accepted as the real beneficiaries of international law, then it should also be conceded that international law is most likely to claim limited authority. Because individuals, as the real subject of international law, are confronted with different authority claims emanating from various authoritative institutions (the WTO, the ICJ, the UN Security Council, the WIPO, the WHO), the claim to authority made by those authorities in the international realm cannot be comprehensive and unlimited. So, international law’s claim to authority should be understood as a claim to ‘relative authority’, meaning that the claimed legitimate authority ‘is relative to that of other authorities, including the state subjects themselves (qua authorities) as well as other competing and overlapping international regimes, rules or institutions’. ⁵⁷ Roughan affirms further that ‘whenever authority is shared or overlapping as a result of the subjects being shared or interactive, that authority is not independent and its legitimacy cannot be assessed as if it is’. ⁵⁸

Even though her account is illuminating and theoretically inspiring, it is over-demanding and makes it almost impossible to assess the legitimacy of an international regime. ⁵⁹ For this reason, I will add two presumptions to make it applicable to current international regimes. First, though it is debatable whether states or individuals are the real legal subjects who benefit from the services of international authorities, ⁶⁰ we may assume that states act as proxy subjects that represent their citizen’s interests. ⁶¹ It should be kept in mind, however, that this is a rebuttable presumption accepted to make the analysis easier and thus is open to further necessary contextual analysis. So, I will take it at face value that states help their citizens to reach better their own objectives in the absence of any contrary evidence. One problem that comes with this view is that not all states are democratic and do not represent their citizen’s interests. As this may require further discussions as to the role of democracy in vesting international institutions with legitimacy, ⁶² I will not deal with this question here and assume that states are legitimate authorities that help their citizens attain their objectives better than they do by themselves.

Second, the legitimacy of international regimes can be assessed through the DT and from the perspective of an authority-subject relationship without much regard for inter-authority relationship. The latter is not, however, totally dismissed as irrelevant because states, as subjects of international law, have an authority-subject relationship with other regimes as well. The disregard of inter-authority relationship stems from a practical necessity because of the inherently complex nature of the IIPR. As the legitimacy of international authorities is conditional on and limited to their service-providing function, when their services extend beyond these legitimate boundaries (the DT) or cannot be delivered, then the main reason for deferring to authority does evaporate.

3. Evolutionary trajectory of the IIPR

It is beyond the scope of this article to present a comprehensive history of intellectual property which dates to the fifteenth century Venice when the first patent act specified the conditions of patentability, including innovation, social utility, and limited protection. ⁶³ As with many rights, IP rights rest on a tension between private and public interests, ⁶⁴ i.e., between the interests of IP holders in excluding public from the benefits of their innovation and the public interests to access the knowledge freely. This tension recurrently resurfaces under different historical, social, economic, and technological conditions. ⁶⁵ Even though intellectual property is principally territorial, ⁶⁶ the third industrial revolution coupled with the substantial increase in global trade volume prompted developed countries to find a way to prevent the distortion caused by the principle of territoriality. ⁶⁷ Shaped primarily by the competing interests of IP importing and exporting countries, ⁶⁸ the Berlin and Paris Conventions established three basic principles of the international IP regime ⁶⁹ and prescribed the minimum standards of protection to be accorded to the IP rights. ⁷⁰ Additionally, those treaties enshrined some exceptions for socio-economic rights (free uses of protected works) and allowed developing countries to enforce non-voluntary licensing. ⁷¹ This period, lasting roughly up until the ratification of the TRIPS agreement, witnessed also the institutionalization of the regime with the establishment of the WIPO (World Intellectual Property Regime). ⁷² The WIPO treaties (Berlin and Paris) were limited in scope as they are chiefly concerned with ensuring co-ordination between national IP systems through border measures and non-discrimination clauses. ⁷³ The principle of national autonomy is, therefore, the governing principle of this pre-TRIPS era. ⁷⁴

3.1 The first transformation: Institutionalization under the trade regime

The first transformation came after the WIPO failed in establishing a regime for the international protection of the IP norms in the face of technological developments. ⁷⁵ Following their disappointment, developed countries sought redress in the WTO by linking IP rights to the trade regime. ⁷⁶ The linkage between IP rights and the WTO marks a watershed moment for the IP regime simply because the existence of a dispute settlement mechanism before which states may bring their cases in case of non-compliance gave teeth to the IP norms, provided the IIPR with interpretive coherence, and increased the regime’s normative unity. ⁷⁷ Second, the TRIPS goes beyond the mere co-ordination logic of the previous WIPO Conventions and requires nation states to reorganize their internal administrative and judicial mechanisms and ensure the effective enforcement of international IP norms (Articles 41–50). So, they lost the ability to pursue a national IP policy in accordance with their own priorities and developmental strategy. ⁷⁸ Third, the TRIPS envisions ‘an inbuilt mechanism towards ever-increasing standards of protection’ ⁷⁹ because it sets the minimum international standards for the protection of IP rights, yet leaves states to go beyond those limitations through bilateral agreements.

Linking IP rights to trade regime infused trade logic into the IIPR since trade-related principles are used as interpretive tools in filling the gaps within the regime. ⁸⁰ The IP rights, once considered as a mere incentive in the service of public welfare, were then covered with rhetoric of right and treated as ‘a tradable commodity’ instead of ‘a barrier to trade’. ⁸¹ This mirrors also the underlying compromise upon which the WTO and the TRIPS are founded, for the IP rights, being essentially a barrier to the free flow of goods and products, acquired the status of ‘acceptable barriers’. ⁸² That also finds its expression in Article XX of the GATT, which considers ‘the protection of patents, trademarks and copyrights, and the prevention of deceptive practices’ as a necessary exception to the free flow of trade. As the protection of IP rights is conditional on whether it fosters innovation, expedites the global spread of scientific and intellectual knowledge and increases the volume of trade in the long term, it should be construed in a way that is consistent with trade logic. ⁸³ That is to say that overprotecting IP rights may function as a deterrent to the free flow of trade and run counter to the main objective of the TRIPS-WTO compromise. So, IP rights should not be protected more than necessary for spurring creative minds to innovation by, say, compensating for the time, money, and energy invested in creating something innovative.

As alluded to before, the TRIPS-WTO is a compromise ⁸⁴ that rests on diverging interests of the least developed (LDC), developing, and developed countries. To protect IP rights at the global level, a demand backed by developed countries is detrimental to developing and least developed countries because it puts a price on innovation and knowledge for which they are in crying need. In return, the minimum expectations of the LDCs were as follows: (i) an exemption from the TRIPS obligations; (ii) technical assistance; and (iii) effective technology transfer. ⁸⁵ In addition to being exempted from the obligations incurred by the TRIPS up until 2034, ⁸⁶ the LDCs are promised to receive technological support by developing countries pursuant to Article 66(2) of the TRIPS agreement. It is not misleading, therefore, to conclude that the LDCs obtained what they initially asked for from the TRIPS, despite their limited participation and representation.

As regards developing countries, the TRIPS provide various possibilities depending on the relevant country’s level of technological growth and legal expertise. Initially, the TRIPS was believed to bring development, prosperity, and technology because it would create an additional incentive for domestic innovation, attract foreign investments, and galvanize the transfer of knowledge and innovation to developing countries. ⁸⁷ However, there are different ways to benefit from the TRIPS. For example, developing countries at their initial stage of technological development are predisposed to use the TRIPS flexibilities due to their lack of innovative capacity. A subset of developing countries like India, China or Taiwan has benefited remarkably from the IIPR by using flexibilities and exceptions enshrined in the TRIPS, as they are capable of absorbing technological innovations and imitating them in a legally confident way. ⁸⁸ Nevertheless, when they increase their technological innovation capacity, developing countries are not so much willing to exploit the TRIPS flexibilities as reaping the benefits of IP protection granted by the TRIPS. ⁸⁹ For there is ‘an inverted U-shaped relationship between TRIPS flexibilities and a country’s innovative capability: initially rising as a country acquires the capability to reverse engineer, but eventually falling after the country starts innovating’. ⁹⁰ The use of TRIPS’ flexibilities depends also on the subject matter at stake and its importance to general public. When it comes to issues related to public-related reasons such as the prevention of AIDS or granting licences for generic drug production, developing countries are less reluctant to use the TRIPS flexibilities. ⁹¹ India, for instance, took advantage of the flexibility clauses, and excluded some inventions from patentability by narrowing down the interpretation of the term ‘invention’. ⁹² In one of those cases that followed, the Indian Supreme Court upheld the rejection of the patent application made by Novartis in 2013 on the ground that it does not meet the invention step necessary for its patentability according to the Indian Patent Act, which was reformulated and amended in 2005 to render it compatible with the TRIPS Agreement. ⁹³

In short, the TRIPS-WTO compromise is not something bad in itself. It solved the co-ordination problem caused by the national protection of IP rights and gave states significant leeway in the implementation phase. ⁹⁴ The TRIPS exempts the LDSs from IP-related obligations and contains many exceptions and flexibilities available for developing countries, though their use demands technical and legal expertise. Seen in this light, it is not far-fetched to claim that the TRIPS achieved an equitable balance between international protection of IP rights and the state’s right to regulate, as well as, between developing and developed countries. The increase in the overall patent application made by developing countries in the last decade lends further credence to the view that the TRIPS package ‘was much more balanced than some TRIPS commentators assume’. ⁹⁵ The balanced nature of the TRIPS is also vindicated by those who participate as the representatives of developing countries in the treaty-making process. ⁹⁶ For instance, Jayashree Watal, the Indian representative to the TRIPS agreement, expresses his satisfaction about being part of a balanced deal and securing the patent exceptions enshrined in the agreement. ⁹⁷ To conclude, the TRIPS contains enough flexibilities for developing countries to exploit and find a balance between their domestic needs and international IP protection, not least when considered the interpretative potential of Articles 7 and 8 of the TRIPS, its Preamble and the Doha Declaration. ⁹⁸ However, it does not hold for the TRIPS-plus, as noted by El Said: ‘we have a considerable wealth of empirical research about the positive impact of TRIPS flexibilities use and the negative impact of TRIPS-Plus obligations’. ⁹⁹

3.2 The second transformation: An unhappy marriage

Unlike the first transformation that presents a picture of consolidation and convergence under the aegis of the WTO jurisdictional bodies, the second transformation was marked by pluralism and bilateralism due to the ever-increasing use of the FTAs that include exceedingly detailed and comprehensive IP chapters. ¹⁰⁰ It does, therefore, represent an example of regime shifting ¹⁰¹ because many developed countries dissatisfied with the performance of the WTO DSBs sought to remedy this by connecting the IIPR with IIR (international investment regime) to protect or increase the level of IP rights’ protection (TRIPS-plus) and exploit the deficiencies of the investment state dispute settlement (ISDS) mechanism. ¹⁰² The FTAs tailored mostly to increase the international IP protection at the expense of developing and least developed countries include provisions on: (i) patent term extension (Article 33); (ii) prohibition of adopting the system of international exhaustion that allows parallel imports (Article 6); (iii) limiting the scope of compulsory licences (Article 31 TRIPS); and (iv) data exclusivity protections that prevent the use of limitations enshrined with the Doha Declaration. ¹⁰³ As such, they curtail the TRIPS flexibilities and discount the possibility of them being used by developing countries. ¹⁰⁴

The frequent use of the BITs and FTAs at the expense of the multilateral TRIPS framework came as a response to what Gervail calls TRIPS 2.0, characterized by the idea that ‘TRIPS should be resisted and new norms developed’ either within or outside the IP regime. ¹⁰⁵ The Marrakesh VIP Treaty, signed in 2013, illustrates how the external resistance to the IIPR may help states and NGOs to soften the strict interpretation of the flexibilities. ¹⁰⁶ It was nothing more than one link in the chain, as developing countries use different regimes to soften the TRIPS requirements of IP rights, including human rights, biodiversity, public health, and plant genetic resources for food and agriculture. ¹⁰⁷ As already well documented, the Marrakesh Treaty, constructing a partial ‘ceiling on international IP law’, marks a paradigm shift in the balance between copyrights and disability rights and renders the former pregnable when confronted with the latter. ¹⁰⁸ As an example of the internal resistance to the strict interpretation of the flexibility clauses, we may give the WTO Doha Declaration on the TRIPS Agreement and Public Health. ¹⁰⁹ Developed as a reaction to the WTO Panel’s rather narrow interpretation of the TRIPS flexibilities, ¹¹⁰ the Doha Declaration laid the foundation of the interpretive turn. This interpretive turn in the regime, stimulated by the WTO Panel’s increasing reference to Articles 7 and 8 of the TRIPs, became visible only around the 2010s first with China—IPRs and then Australia—Plain Packaging. ¹¹¹ That, however, engendered a pushback and drove the IP-demanding states to search for new ways to circumvent the multilateral framework of the TRIPS. ¹¹² The FTAs have been the solution to these demands.

The more developed countries take advantage of FTAs to upgrade the IP right’s protection, the more the IIPR is subject to the pressure of investment regime. That has placed further burden on the coherence of IP norms, based on various balances such as between IP holders and user’s rights, private and public interests, and IP-exporting and -importing countries. Once married with trade gloss yet sustainable IP norms have now begun to be interpreted as investment rights before the ISDSs in a way that renders social and community-related aspects of the IP norms invisible. The second transformation has further resulted in the privatization/transnationalization of the IP regime, as multinational companies were entitled to bring their case against nation-states, mainly developing countries, before the ISDS without the support of their home countries. ¹¹³ The existence of an alternative court alongside the WTO DSBs has further contributed to the disintegration of the IIPR and complication of IP norms and brought in turn the possibility of adjudicative forum shopping in addition to regime shifting. ¹¹⁴

It is rightly argued that the foregoing transformations rendered the ‘evolving international IP norms less consistent, less coherent, and less equitable’ ¹¹⁵ and pushed it further from its underlying rationale, namely using private rights to promote public welfare. However, what is seen at first sight as an incoherent and unsystematic order turns out to be a well-organized and delicately designed ‘international IP system’, that is, ‘a combination of norms, institutions, and actors whose main aim it is to organise protection of IP rights in a cross-border context, primarily against infringements by third parties’. ¹¹⁶ The protection accorded to IP rights by different layers of norms morphed them into constitutional hedges ¹¹⁷ and made the success of any regulatory attempt initiated by developing countries highly unlikely. Because developing countries are subject to multiple obstacles in their fight against IP rights armed with trade and investment clauses, they are predisposed to eschew using flexibility clauses built in the IP regime. ¹¹⁸ As these multiple obstacles are operating collectively, any defence warranted in one regime does not ipso facto justify the infringement of IP rights and make the use of exceptions and limitations automatically legal. ¹¹⁹ The fact that states are struggling to fight an uphill battle on multiple fronts forces them to use their right to regulate cautiously ‘in a manner that fits under the defence mechanisms in all applicable regimes’. ¹²⁰ The cumulative negative effect of constitutional hedges on a state’s right to regulate is explained by Mylly and Griffith as such:

Investment treaty norms, property ownership as a fundamental right, and protective provisions of international IP treaties may be invoked complementarily even in a single case, as the recent disputes concerning cigarette plain packaging laws demonstrate. Overall, the identified constitutional hedges protect a strong form of IP exclusivity and could inhibit useful legislative renewals and court-created solutions. ¹²¹

Consequently, states seeking to justify their regulation, which is likely to interfere with the IP rights, must design such rules that are justifiable in all applicable regimes. The threat of legal retaliation, when coupled with the lack of enough legal and regulatory expertise, has driven the IP-importing countries towards a conservative attitude and engendered a subsequent regulatory chill. ¹²² In short, they shy away from exploiting the full potential of the TRIPS flexibilities. The main feature of this process lies in the fact that IP rights entrenched at the global level are partially immunized from domestic legal orders thanks to the multilevel protection provided by IP and investment regimes. Hence, there is a discordance between the level of protection accorded to IP rights and their exceptions and limitations simply because the IIPR does function as a floor not ceiling, eroding gradually the latter while protecting the former in multiple forums. ¹²³ We have global mandatory minimum standards for IP rights but not for a set of exceptions necessary for the protection and promotion of some public goods. ¹²⁴ This de facto constitutionalization of IP rights at the international level is thought to be an example of what is called new constitutionalism or constitutionalism 3.0. ¹²⁵ Mylly argues, for instance, that the relationship between IP rights and human rights is reversed under the Constitutional 3.0 because today’s constitutions are deprived of the power to tame IP rights and maintain a sustainable balance between IP and human rights. ¹²⁶

4. Legitimacy of the IIPR

The first thing to underline before moving on to the legitimacy analysis of the IIPR is that any legitimacy assessment is based on a comparative analysis, be it between authority and individuals or between different authorities. So, the comparison between feasible alternatives is a precondition for any legitimacy assessment, ¹²⁷ even if that does not suffice to ground an authority’s legitimacy. The IIPR should, therefore, be read against the backdrop of the collapse of the WTO Doha Development Agenda where a common ground between the opposing interests of developing and developed countries could not be found. ¹²⁸ In this light, the article follows in the footstep of the foregoing classification made between the first and second transformation in analysing the legitimacy of the IIPR. Thus, it will first zoom in on the birth of the TRIPS-WTO compromise, then consider whether it preserves the balance between developed and developing countries before and after the second transformation.

4.1 The birth of co-ordinative international authority and its democratic foundation

Let us first explain some of the important features of the IIPR. The IIPR presents a typical example of the co-ordinative legal authority, for it converges states under an international legal framework and sets basic standards to be complied with. As may be recalled, the IP rights are initially domestic. The pressure put by globalization does, however, make domestic protection of IP rights unrewarding. In response, states look for ways to ensure that domestically protected IP rights are recognized by other legal orders. This demand was first met with the Bern and Paris Agreements in the form of loose co-operation and later brought about the WTO-TRIPS compromise, which gives the IPPR ‘a relatively self-contained, sui generis status in the WTO’ ¹²⁹ regime.

Recall that the IIPR’s justification as a co-ordinative legal authority, given the essentially horizontal nature of international law, is easier than its domestic equivalents. Further, it is also stated that the scope of co-ordinative legal authority is wider than the service conception of authority. So, it is not piecemeal and fragmented. The first condition necessary for the justification of co-ordinative authority is it being originated through a process consistent with the basic principles of equal democratic participation. Democratic political equality among states bears particular importance to the co-ordinative authorities because they are designed to render authoritative decision-making possible even when states have diverging conceptions of justice, insofar as they share a common interest in shaping the world in which they are living by establishing rules and institutions. ¹³⁰

Democratic legitimacy echoes the idea that the rulings or decisions of an authority is legitimate as long as they flow from a fair and legitimate decision-making procedure. ¹³¹ Christiano introduces two conditions necessary for authority’s justification through democratic participation: (i) the principle of equal advancement of interests; and (ii) the requirement of publicity. ¹³² Even though it goes beyond the scope of this article what it takes to comport with those conditions, we may still imagine cases where they are seriously violated. One of those cases is what Christiano calls the asymmetrical (hard) bargaining condition. ¹³³ It denotes a situation where some states enjoy disproportionate bargaining power over others to such an extent that the reached agreement, though based on the consent of all the parties, appears intuitively problematic, at least from the perspective of morality. ¹³⁴ For it seriously undercuts the assumption that consent is given freely without any coercion and represents the interests of the parties.

One example given by Christiano in that regard is the process in which the world trade regime is constructed under the threat of US economic sanctions and through the marginalization of the interests of developing countries. ¹³⁵ Braithwaite and Drahos similarly contend that the legitimacy of authority through democratic participation requires that ‘all relevant interests must be represented’ ¹³⁶ under the conditions where parties have equal access to information about the negative and positive consequences of the agreement. That is in addition to the requirement that no party is allowed to coerce the others. The TRIPS, even though seems like a treaty based on equal participation and representation, was in fact prepared by the Intellectual Property Committee (the IPC) composed of 13 major US corporations, and thereby primarily ‘the output of a sophisticated form of private network governance’. ¹³⁷ Even though developing countries salvaged to make some allowances for their regulatory autonomy, they were pursuing a defensive strategy aimed at carving out exceptions to the document initially designed by the IPC. ¹³⁸ So many developing countries did not have much chance to probe the provisions and understand their possible ramifications. ¹³⁹ Put sharply, their information about the TRIPS was filtered by ‘a veil of ignorance’. ¹⁴⁰ While the IPC was pursuing an agenda of informal diplomacy by establishing ties with the companies having similar interests in other developed countries, it was also backed by the coercive economic power of the US through what is known as the ‘301 process’. ¹⁴¹ Against this backdrop, it is clear that the TRIPS falls woefully short of meeting the demands of democratic participation, as the negotiation process ‘were non-representative, based on misinformation and domination’. ¹⁴²

One further issue related to the birth of the IIPR regime and its problems with legitimacy concerns is the controversy around the technology transfer to the LDCs via major technology companies. The promised technology transfer remains to be materialized, as there is no monitoring mechanism to oversee whether developed countries discharge their responsibilities concerning this issue. ¹⁴³ Having said that, to argue that it poses a challenge to the legitimacy of the IIPR sounds somehow misleading as the LDCs are exempted from the obligations incurred by the regime and not benefiting from the services provided by international co-ordinative authority. One may still argue, likening the IIPR’s relationship with the LDCs to parental authority, that it is under the responsibility of facilitating technology transfer at least until the LDCs reach the level when they may exploit the TRIPS’ flexibilities. However, this argument brings up further questions about states’ regulatory autonomy and authority-autonomy relationship. Hence, I will brush aside this possibility.

It follows from the foregoing that the TRIPS deviates from the principle of political equality and fails to meet the democratic condition necessary for the justification of the co-ordinative legal authority. Yet, that is only one of the factors, though a very important one, that plays a role in the justification of co-ordinative authority. For this reason, we may look at other aspects of the IIPR to observe whether it achieved the requirements of democratic legitimacy (the principle of equal advancement of interests and publicity) in time, even though it lacked those in the beginning. In other words, it is also a question worthy of investigation whether the regime has succeeded in finding a balance between the interests of developed and developing countries and achieved a reasonable balance in furthering the interests of different stakeholders. To explore whether authority is faithful to the reasons on which it is founded, it is necessary to have a look at the DT and its implications for the regime.

4.2 Legitimacy of the IIPR before the second transformation

The legitimacy of co-ordinative legal authority relies on its success in ensuring co-ordination in its functionally defined policy area and preserving the initial balance struck between different constituencies having diverging interests in establishing an international authority. The IIPR as a co-ordinative authority is believed to ensure co-ordination between states over the governance of the IP rights without prejudice to international trade (the DT). Thus, the TRIPS must be thought together with the WTO for they are part of a compromise which echoes the reason why states created an international legal authority and delegated some of their competence. The DT, however, does not necessitate a perfect match between the reasons held by states and authority’s reasons. Rather, it is sufficient for authority to conform mostly (enhanced conformity) with the objective reasons that states already have. Because the IIPR is dependent on contested reasons that developed and developing countries have, it should observe the initial balance and preserve it at least to a significant extent. That is to say that it should respect the equilibrium between international free trade and international protection of IP rights and avoid imposing undue burden on developing countries and harming the free flow of international trade.

That developed and developing countries have contested reasons for creating the TRIPS finds its way to the flexibilities and exceptions enshrined in the IIPR. The flexibility clauses endow states with enough regulatory space in aligning their domestic policies with the IIPR norms, as well as putting a lid on the level of protection granted to IP rights and blocking their excessive and unjustified protection. ¹⁴⁴ That also mirrors the compromise that undergirds the TRIPS in that the protection of IP rights will have a positive impact on the overall international trade volume and contribute to global welfare. ¹⁴⁵ Hence, the protection of IP rights should be based on an economically efficient balance between rewarding innovation and diffusing knowledge. ¹⁴⁶ Here, the WTO, as a primary organ, has played a crucial role. ¹⁴⁷

As argued by many scholars, the WTO judicial system has succeeded in finding a delicate balance between the competing interests between, say, trade and environment or public health, distancing itself from political controversies plaguing the WTO regime and even expressing its concerns about the neoliberal deep integration in its rulings. ¹⁴⁸ That is also visible in the WTO’s interpretive turn away from strict to the wide construction of the IP rights within the IIPR. Additionally, the Marrakesh VIP Treaty and the WTO Doha Declaration on the TRIPS Agreement and Public Health have contributed to the interpretive turn of the WTO by providing an additional normative support for its interpretive turn. Even though its previous judgements are subject to many criticisms due to its strict interpretation of the flexibilities, it is not far-fetched to claim that it managed to strike a better balance in its subsequent rulings. Correa, for instance, notes that:

… the most recent panel report in Australia—Tobacco Plain Packaging shows the explicit acceptance of the concept of TRIPS flexibilities in WTO case law and their role in preserving the required policy space to pursue public policies such as public health. ¹⁴⁹

However, it should be noted that not many cases came before the WTO DSBs, many of which are related to disputes between developed countries. ¹⁵⁰ It remains to be seen how the WTO judicial bodies will respond to the demands of developing countries. All in all, if we put aside the problematic democratic base on which the IIPR is founded, it is probable to note that the WTO has so far fared well in preserving the balance between trade and IP rights. ¹⁵¹

4.3 Legitimacy of the IIPR after the second transformation

In the TRIPS-plus era, The IIPR has been subject to various criticism for, say, its failure to support developing countries and bowing to the interests of big companies and developed countries. Developed countries, it is argued, are unlikely to use the flexibility clauses that allow them to shield socio-economic and cultural rights because of the regulatory chilling effect of the multi-layered protection of IP rights. ¹⁵² It goes without saying that those developments have ramifications for the IIPR, yet it is still dubious whether they virtually work against the legitimacy of the regime. For this, it is necessary to explore whether the initial compromise between trade and IP rights are maintained (the DT).

Let us recall the TRIPS-WTO compromise. The TRIPS already runs counter to the main rationale of the trade regime as it prohibits states from making discrimination among products and services at their borders. ¹⁵³ In brief, the protection of IP rights is thought to be as ‘necessary but temporary evil that would incentivise innovation’. ¹⁵⁴ Even though the investment regime is mostly held to accord with the objectives of international trade, it creates another exception to the trade regime by endowing foreign investors with additional protections and contracting the regulatory space of nation states. ¹⁵⁵ It does so because the principle of non-discrimination in which the WTO-TRIPS compromise is grounded provides no guarantee for the effective protection of foreign investors. ¹⁵⁶ For this reason, the investment regime requires nation state to treat all foreign investors in a fair and equitable manner and compensate for their losses when their rights are infringed. ¹⁵⁷ In short, because it adds a further dimension to the TRIPS-WTO compromise by bestowing foreign investors with additional protection, we need to examine whether it runs afoul of the DT. The recent cases awarded before the ISDS Tribunals, including Philip Morris v. Uruguay, Eli Lilly v. Canada, and Bridgestone v. Panama, may help us to observe whether the TRIPS-plus does undermine the overall coherence of the IIPR.

As alluded above, many expressed their concerns about the TRIPS-plus era in which IP rights are prioritized over the limitations and exceptions in a way as to morph the former into properties or investment assets. ¹⁵⁸ No matter how warranted those critics are, it seems hard, from the perspective of legitimacy, to conclude that they pose a significant challenge to the unity and coherence of the IIPR. In Philip Morris v. Uruguay, ¹⁵⁹ for example, the Tribunal held that Uruguay’s regulation restricting the use of trademarks for protecting public health falls under the purview of the state’s right to regulate and does neither amount to expropriation nor contradicts the principle of fair and equitable treatment according to international investment law. Similarly in Eli Lilly v. Canada, ¹⁶⁰ the invalidation of patent rights by the Canadian Supreme Court due to its failure to meet the innovation step is found acceptable. Most strikingly, in Bridgestone v. Panama, the tribunal found reasonable the rulings of the Panamanian Supreme Court, holding that Bridgestone exercised its right to oppose the trademark (Riverstone) registration in bad faith, even though it ‘identified defects in that reasoning’. ¹⁶¹ Though the critics are right to claim that IP rights should not be treated as investment rights because of their negative impact on the private-public balance on which IP rights are founded. Yet, the rulings awarded by the ISDS tribunals appear to align with the previous judgements of the WTO. Hence, further evidence is needed to vindicate the claim that the TRIPS-plus era further undermines the regulatory autonomy of nation-states. ¹⁶² The risk posed by the TRIPS-plus is yet to be realized despite the chilling effects it created on domestic legal orders.

5. Latent challenges to the legitimacy of the IIPR

Even when we assume that the IIPR remains responsive to the initial balance founded between developed and developing countries as well as between trade and IP rights, the investment regime does still risk undermining the coherence and consistency of the IIPR. A quick glance at the institutional features of the investment regime is likely to reveal how different it is when compared to the trade regime. The first thing to underline about the WTO regime is that it is the most advanced and integrated regime in the international sphere. It has a ‘unified dispute settlement system’ converged under the authority of a second order court (the Appellate Body) with a compulsory jurisdiction, which differentiates it from its international counterparts, ‘since virtually all international tribunals are the equivalent of municipal courts of original jurisdiction’. ¹⁶³ In contrast, the investment regime is neither converged around a set of leading institutional bodies nor created by a multilateral treaty. ¹⁶⁴ Second, the investment regime creates a relationship of asymmetrical obligation between host states and foreign investors for the latter are conferred upon rights whereas the former are put under obligations. ¹⁶⁵ Third, unlike the exceptions and limitations enshrined in the TRIPS and GATT (Article XX), it does not contain a clause for the protection of human rights. ¹⁶⁶ Another point as important as those institutional features, is the way in which investment disputes are decided by the arbitrators. The investment arbitrators are steeped ‘in the arbitral legal culture’ and perceive their profession as a form of private dispute settlement controlled by the demands of the disputed parties. ¹⁶⁷ According to this legal culture, they need not to consider the public dimension of the dispute-settlement process such as the interest of the third parties, transparency requirements, and the further development of law. ¹⁶⁸ Equally they need not incorporate into their judgments norms not directly related to investment, such as environmental and human rights norms. ¹⁶⁹ Even though this legal culture has weakened in the last decades, the foregoing explanations do still pose significant problems concerning consistency and coherence of the investment regime. ¹⁷⁰

The foregoing clarifications reveal a concern about the IIPR’s capacity to protect the interest of developing countries vis a vis multinational companies and to preserve the flexibility clauses built in the IP regime that shield socio-economic and cultural rights within IP-lacking countries. ¹⁷¹ This concern pertains to both the authority and the legitimacy of the IIPR as a co-ordinative authority. Let us first focus on the authority aspect. Because de facto authority is an essential component of legitimate authority, we may easily conclude, if authority is wanting in effectiveness, that there is no authority to be legitimated. ¹⁷² Even though it is very hard to find a tipping point beyond which the subject’s non-compliance undermines authority’s effectiveness, Roughan proposes two cases that impair de facto authority irreversibly: failure in its (i) co-ordination function; and (ii) collectivization function (the role authority is supposed to play in subjecting individual desires to collective needs, such as the resolution of a dispute or a remedy for a common problem that cannot be remedied by individual actors alone). ¹⁷³

First, the recurrent regime shifting activities seemingly pose a challenge to the co-ordination function of the IIPR. The regime shifting would undermine the authority’s effectiveness, if it passes a certain threshold beyond which the service provided by the IIPR renders meaningless. In other words, its authority may be replaced by another international co-ordinative authority. As of now, it seems that states take advantage of regime shifting not to create a new international authority but to modify the interpretation of norms. Moreover, the recurrent practices of regime shifting make it explicit that some of the constituencies of the regime are not satisfied with the level of services offered by the IIPR. Nevertheless, the fact that an alternative co-ordinative authority has so far remained to be established is a testament to the resilience of the IIPR. Against this backdrop, it seems fair to conclude that the IIPR is still superior to its feasible institutional alternatives in providing states with authoritative guidance through its normative and institutional structure.

5.1 Legitimate authority and the rule of law

In respect to the collectivization function, which is associated with authority’s role in settling disputes finally and promoting coherence, the IIPR has suffered difficulties not least in the post-TRIPS period when IP rights are treated as investment rights. Circumventing the multilateral IP regime through the ISDS was instrumental in the disintegration of the IIPR and complication of IP norms. ¹⁷⁴ The presence of two different courts leaves open the possibility that the ISDS tribunals may award rulings and decide cases that escape the jurisdiction of the WTO jurisdictional bodies. ¹⁷⁵ Availability of multiple forums before which any state or company can bring its case may yield adjudicative forum shopping and weaken authority’s effectiveness in securing co-ordination. ¹⁷⁶

The possibility of adjudicative forum shopping has further implications for authority’s function of providing authoritative guidance to states. Those states and companies may raise their legal claims before different jurisdictional bodies that have no organizational connection risks undermining the effectiveness and interpretive coherence of the IIPR. This clearly impairs the basic principles of the rule of law (RoL) such as equality before the law, predictability, relative stability, and foreseeability. Even though it is a matter of dispute whether the RoL as a moral ideal can be relocated to non-systemic legal orders and may extend beyond its domestic habitat, ¹⁷⁷ we may still assume that bringing diverse interests under the governance of law help us curb arbitrary power of the stronger sides (dominant states) and protecting the interests of the weaker sides (non-dominant states). ¹⁷⁸ So, the principle of non-arbitrariness that lies at the core of the RoL has further implications for the legitimacy of a legal regime or an international authority. That is to say that when an international authority provides a framework for co-ordination, it also creates a legal regime that is somehow stable, predictable and foreseeable. Tasouilas summarizes this linkage between the principles of the RoL and legitimacy of an authority as follows:

There is a broad category of reasons bearing on the NJC that are formal or procedural in nature, many of which are captured by the familiar requirements of the Rule of Law: laws must be clear, publicly accessible, stable, non-retrospective in content and application, and official behaviour must be congruent with pre-existing legal norms. All these requirements reflect the idea that those subject to the law should be able to identify the law and conform with it. Other procedural norms include requirements of transparency, responsiveness, and even democratic accountability in law-making. ¹⁷⁹

In other words, for an international authority to be legitimate, it should be effective and capable of playing a role in states’ practical reasoning and guiding their behaviours. Yet to do so, it must increase its capacity to guide states’ behaviour by observing the principles of the RoL, the details of which are beyond scope of this article. It is clear, nevertheless, that the relative determinacy of rules and systemic coherence of a legal regime is vital for authority’s capacity to provide states with guidance and its overall effectiveness. Franck, for instance, draws attention to the connection between authority’s legitimacy and its capacity to generate ‘compliance pull’ and counts determinacy and coherence as the indicators of the legitimacy of an authority and its rulings. ¹⁸⁰ Hence, systemic coherence of norms, their consistent application and harmonious interpretation are all relevant to the legitimacy and authority of an international co-ordinative authority. The lack of a second order court under the investment regime and the possibility of adjudicative forum shopping remains a potent threat to the coherence of the IIPR, as it gets harder for the WTO jurisdictional bodies to correct misguided judgments and set precedents. ¹⁸¹

The importance of the last instance court is well-established in legal theory, as some called them primary organs whereas others draw attention to their function of the second order observation. ¹⁸² It is, therefore, telling to observe some suggestions aimed at overcoming the institutional and interpretive problems conducive to afflicting the coherence of the IIPR regime. Yu, for instance, underlines the need for establishing a dispute settlement mechanism composed of experts both from the IP and trade areas with a view to lubricating ‘the cross-fertilisation of international IP and investment norms’. ¹⁸³ He suggests that the arbitral panel should include ‘at least one arbitrator who has specialised expertise regarding TRIPS obligations’ ¹⁸⁴ in the cases where the IP and investment rights interact. Further, this should be supported by an Appeal Tribunal that provides stability within the IIPR and promotes its coherence with the ISDS. ¹⁸⁵ Moreover, when seen from the perspective of the DT, the IIPR still overlaps with the reasons that states have at the outset even though it is still a matter of concern whether it will remain so in the TRIPS-plus environment. In other words, the IIPR, as a functionally limited co-ordinative authority, should observe these functional boundaries if it is to preserve its legitimacy. ¹⁸⁶ However, the investment regime that lacks a primary organ to ensure predictability and legal security may jeopardize the coherence and legitimacy of the IIPR as it is dubious whether the regime remains faithful to its functional boundaries and respectful to the state’s legitimate regulatory autonomy.

5.2 Adjudicative autonomy, interlegality, and legitimacy

As the IIPR is under the pressure of investment logic, it is prone to lose its interpretive autonomy and protect its initial compromise between IP and trade rights, as well as between the IIPR and domestic regulatory autonomy. ¹⁸⁷ Against this backdrop, Yu suggests decoupling IP from investment rights and abandoning treating them as investment rights. ¹⁸⁸ Even so, that does not mean that IP norms are to be read in clinical isolation from other legal regimes, ¹⁸⁹ but means that its foundational rationale is to be protected from the domination of other regimes. Further, it is also crucial to develop interpretive strategies for overcoming the investment bias besetting the IIPR and providing coherence between the IP and investment regimes. One way of solving the norm conflicts likely to surface between those interacting regimes is to view the FTAs as contract-like treaties supposed to operate within a public law framework. ¹⁹⁰ It is apparent that they derive their legitimacy from states’ right to enter into a contract, yet it is doubtful whether they may violate the TRIPS agreement by hollowing out its limitations and exceptions. It is possible here to invoke the provisions of the Vienna Convention on the Law of Treaties and other principles used to resolve conflicts of norms such as lex specialis. ¹⁹¹

Another way of solving interpretive incoherence is to invoke external norms by benefiting from the rapports of epistemic authorities such as the WHO, the WIPO, and the UN Treaty Bodies General Comments. ¹⁹² Australia Plain Packaging is a case in point, ¹⁹³ yet the success of relying on external or peripheral norms is limited and contingent on many factors including how popular the case is and how it is advertised strategically by plaintiffs. ¹⁹⁴ However, as pointed out by Gervais, we are on the verge of a shift towards pluralist adjudicative approach, as the WTO DSBs are much more open to taking external norms seriously, not only as a fact or evidence in support of IP norms, but also as a norm having equal weight as the former. ¹⁹⁵

Here, the theory of interlegality, developed initially to explain the cases where norms originating from different legal orders come before a court, may prove highly useful, not only for managing conflicting norms emanating from the IIPR and other regimes, but also for the latter to maintain its legitimacy. ¹⁹⁶ Interlegality suggests, at its core, that when norms come into contact and conflict with each other in a concrete case, the courts should not disregard the external norms as mere facts and assign them normative weight, insofar as they are relevant to the case. ¹⁹⁷ For interlegal adjudication, it is of crucial importance that the law in interlegal cases is ‘composed of more than one system-sourced positive law’ and that ‘the law of one single legal regime might not have unconditional primacy’. ¹⁹⁸ It requires a case-based analysis and approaching the dispute from the perspective of the case, rather than of the relevant legal systems. ¹⁹⁹ Only then we may see the composite law ²⁰⁰ that emerges from the interconnection between legal regimes. Similarly, the IP scholars invite us to develop ‘rules of engagement’ that govern the interaction of norms originating from the investment and IP regimes ²⁰¹ by invoking international rules of interpretation, guidelines, and resolutions. ²⁰²

Seen from the perspective of interlegality, the problem lies not in the scarcity of interaction; on the contrary, IP rights, through their interaction with the investment norms, gained the status of constitutional hedges. Instead, the problem arises from the unidimensional nature of the interaction under the investment regime that disregards IP rights’ public dimension and prioritizes them over socio-economic reasons, not least through the frequent use of FTAs. Even though the ISDS tribunals have so far fared well in responding to the demands of IP rights, we should be vigilant against the cannibalizing pressure of the IP-cum-investment rights. ²⁰³ Against this backdrop, the interlegal reasoning may assist us in solving many conflicts between IP rights and socio-economic and cultural rights and guide the states in using the flexibility clauses enshrined in the TRIPS without the fear of reprisal.

Similarly, Raz has suggested that international authorities be ‘responsive to local needs and interests, to diversity in tastes and preferences, and to local traditions, ways of life, and ways of doing things’ ²⁰⁴ when interpreting universal standards or international human rights norms. The necessity to protect the value pluralism serves as a reason for limiting the authority of international institutions even when they can discharge their services and providing states and individuals with the services. For this reason, he suggests an interpretive approach that permits the legal coexistence of incompatible interpretations ‘at the same time and in the hands of the same court’. ²⁰⁵ At the core of what he calls simultaneous interpretive pluralism lies the idea that international authorities should be attentive to their local traditions and respectful to their own way of living when responding to the contested and conflicting reasons of its constituencies. That requires going beyond the instrumental and functional justification of international co-ordinative authorities and examining how they interact with domestic legal orders. Here, the use of flexibilities and exceptions to the international IP rights is vital for the legitimacy of international co-ordinative authorities, for they have multiple functions such as balancing the interests of developing and developed countries, balancing IP rights with socio-economic and cultural rights, and leaving states enough regulatory space necessary for protecting value pluralism and addressing the public and collective interests. ²⁰⁶

Even if it had met the democratic requirements of the international co-ordinative authority, the IIPR would still have faced various challenges, among which the recurrent regime shifting activities and the recently forged link between the IIPR and investment regime loom large. They seem to undermine the effectiveness of the regime by impairing its normative coherence and interpretive autonomy, as well as distorting the initial balance in which the IIPR is rooted. Whereas the former is prone to weaken the authority of the IIPR, the latter poses a challenge to its legitimacy. The principles of the RoL seem relevant to the legitimacy of an authority, as it plays a role in improving its function of providing states with authoritative guidance, as well as, in legitimizing the regime by contributing to the regime’s coherence and interpretive autonomy. Lastly, adjudicative theories such as interlegality and simultaneous interpretive pluralism seem highly crucial for the legitimacy of international authorities operating within a functionally delineated sphere. ²⁰⁷

6. Conclusion

The article made an assessment on the legitimacy of the IIPR, as an international co-ordinative authority that lays claim to legitimacy within a functionally delineated domain and concluded that it has difficulties satisfying the conditions of being a legitimate authority. First, it does not meet the democratic requirements necessary for international co-ordinative authority’s legitimacy. When its undemocratic base is brushed aside though, the IIPR, as a co-ordinative authority, has been doing well in providing states with services, even though it is subject to significant pressure from the regime shifting activities and the IP-relevant FTAs. Even though the IIPR’s linkage with the investment regime is pregnant to undermining its authority and legitimacy, it was shown that the concerns raised by many scholars are yet to be realized. Hence, it seems that the investment regime did not yet pose a significant challenge to the legitimacy of the IIPR. The article however uncovered also the dormant challenges to the IIPR’s authority and legitimacy that the investment regime’s institutional structure presents. In this regard, it showed that the investment regime risks undermining the interpretive autonomy and coherence of the IIPR and weakens its authority and legitimacy. In response to these latent challenges, the article offered some institutional and adjudicative suggestions, which are already developed by the IP scholars, underscored their importance for the authority and legitimacy of the IIPR.

From the perspective of justice, the IIPR is subject to many criticisms for it being blind to socio-economic and cultural rights and its inherent incentive-based utilitarian logic. Yet, it is misleading to expect everything from one international institution. The IIPR, founded to co-ordinate national IP regulations, promotes innovation and enables the global circulation of scientific knowledge without prejudice to trade, seems to fare well even though it is lacking a democratic foundation, and is faced with various challenges after its linkage with the investment regime. How fast the vaccines are developed in response to the COVID-19 virus reveals how important it is to allocate resources to research, development, and innovation, as well as, how effective the IIPR is as an international co-ordinative authority. ²⁰⁸ Though, the problem of distribution of vaccines and access to medicine still haunts the IIPR. It is also shown that one of the most important challenges to the IIPR’s legitimacy is regime shifting in that states dissatisfied with the services provided by the IPPR search for other fora that enable them to further their initial reasons. How important it is for a legitimate authority to preserve its de facto authority is vindicated by the phenomenon of regime shifting. The article also revealed that the institutional co-ordinative authorities should pay careful attention to the states’ underlying, initial reasons and strive for protecting and furthering their interests.

One innovative aspect of the study is that it examined the legitimacy of an international regime without directly analysing how it interacts with other legal regimes. However, it does so implicitly by exploiting the potential of the DT. An international co-ordinative authority should be responsive to other legal regimes because they are also authorities empowered by the same legal subjects for different reasons. The IIPR presents an informative example, as it requires an investigation into how it interacts with regimes such as human rights, trade, cultural heritage, environment and climate change, public health, etc. For this reason, the article looks at the IIPR’s legitimacy from an internal perspective that focuses less on inter-authority relationship than authority-subject relationship within the regime. The fact that the global realm is composed of multiple functional authorities responsible for providing services mostly to the same legal subjects (states as the representative of individuals) invites authorities to be respectful to other authorities if only because of the demands of the DT.