For the past few years, I have been conducting moot court simulations of DS/362, the WTO US-China IPR “enforcement case” with students and colleagues at Fordham University and elsewhere. The heart of DS/362 was the US’s argument that, by establishing prosecution and conviction thresholds that were too high, China did not provide an adequate criminal remedy to address commercial scale counterfeiting and piracy. The WTO panel determined that the United States had not made out an adequate case that China did not, in fact, provide such protection. The U.S. argued that China had not complied with an earlier request, under “Article 63” of the TRIPS Agreement, to provide additional data (including cases) about its IPR enforcement system that would have been germane to the case, while the panel believed that such data would not have been difficult to obtain.
What, indeed, would have been the result of a case where the United States made a renewed request under “Article 63” to provide such information? The simulation from my class this year at Fordham, in conjunction with Prof. Carl Minzner’s Chinese Law class here at Fordham last month, provided some interesting insights and arguments, which also took into account China’s own efforts to improve transparency of its courts and administrative system.
First, the argument that China should be afforded flexibility in addressing these requests, in light of its own developing country status and the flexibilities afforded different legal systems seems weaker with each passing year. Students were generally both articulate and passionate that China “got its end of the bargain” in WTO acession, and US IP rights should be protected. Moreover, they argued that flexibilities might apply to an enforcement regime, but they had little relevance to WTO transparency and dispute settlement practices.
Second, most students found the original Article 63 request, which demanded copies of all of China’s IPR cases overly broad. Nonetheless, we all struggled to articulate a more limited but appropriate request. If the request were only for U.S. cases, then it would not afford a basis to make “most favored nation” comparisons with other foreign countries. If it excluded Chinese rights holders’ cases, then it would be difficult to make “national treatment” comparisons. Most students and colleagues seemed to believe that the type of statistical data China provided, by itself, was not satisfactory and that there needed to be another means to achieve a greater level of depth in evaluating a country’s IPR system.
Third, there was also a general consensus that the need for transparency in IPR enforcement is much more acute than in other WTO matters, and that this transparency should be more readily available when the case is criminal in nature, as it involves decisions which are actually being made by the state, utilizing its law enforcement authority. Civil matters often settle, and many cases may not provide reasoned decisions. However, criminal cases do not settle in the same manner, and the nature of the final disposition is known to the government. Moreover, compared to other trade-related cases, there was a greater challenge in determining how IPR cases are actually being enforced within a country’s borders, which distinguishes such cases from Customs or other trade cases which may be enforced at the border only and are known to traders who must comply.
Fourth, at least one student was of the belief that the burden of persuasion to produce cases and materials that are germane to a case, particularly if the dispute involved issues of national or most favored nation treatment, should fall to the party making the request. That is, the requesting party should obtain information from its rights holders or other sources to demonstrate that there was at least a possibility of a significant issue. Such an approach, she thought, would be compatible with WTO practice in other areas.
The questioning from my colleagues revolved around China’s own increasing demands for transparency and the differences between those nascent rules and desires and the WTO process. Can the WTO ask more of a member state in transparency than its current rules already provided? Do those rules establish a floor upon which WTO members can build? Do, in fact, the WTO transparency rules act as a disincentive – the more transparent you are, the more likely you are to be (successfully) sued? Moreover, if a member state is not obligated to produce the data, how successful can any litigant ever been in making a case that that a member is in compliance with WTO practice?
While there seemed to be near unanimity in the belief that the relevant WTO articles were vague and could be interpreted to undercut expectations of transparency, the overriding requirement to implement treaties in good faith and in accordance with their purposes, suggested that there might be room to request something more of China, perhaps in the form of a more narrow request, or a way of cooperating that insures that China’s enforcement system is better understood in the West, in accordance with our needs and not merely China’s desires to show that it is interested in protecting IP.
If you would like a copy of the moot court simulation, please email me at: firstname.lastname@example.org.