Does the WTO address "technology theft" as opposed to trademark and copyright infringement? In all of the text I came across involving intellectual property protection in the WTO about China we talk about trademark and copyright infringement, but we never mention patent or technology theft, why is that? Does the WTO have the mechanisms to address patent infringement and technology theft?
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1 Answer
Example of a WTO dispute settlement case about technology transfers
Cases of "unfair technology transfers" can indeed be raised through the WTO dispute settlement system. To answer this question, I'll focus on such a dispute raised by the European Union against China in 2018. The responsible commissioner of the EU is quoted in an EU news article on the matter:
Commissioner for Trade Cecilia Malmström said: "Technological innovation and know-how is the bedrock of our knowledge-based economy. It's what keeps our companies competitive in the global market and supports hundreds of thousands of jobs across Europe. We cannot let any country force our companies to surrender this hard-earned knowledge at its border. This is against international rules that we have all agreed upon in the WTO. If the main players don't stick to the rulebook, the whole system might collapse."
Formally, the EU sent this document to the WTO. In it, the EU argues:
The Regulations of the People’s Republic of China on the Administration of the Import and Export of Technologies ("TIER"), operating separately or together with other listed instruments, appear to be inconsistent with Article 3 (National Treatment) of the TRIPS Agreement, solely or in conjunction with Article 28.1(a) and (b), Article 28.2 and Article 39.1 and 39.2 of the TRIPS Agreement respectively, because China imposes restrictions on the rights of foreign intellectual property right holders, notably, on their right to freely negotiate and agree on market-based contractual terms in licensing and other technology-related contracts concerning the import of technology to China.
Article three refers to national treatment, Wikipedia describes that principle as follows:
In the context of international agreements, a state must provide equal treatment to citizens of the other states participating in the agreement. Imported and locally produced goods should be treated equally — at least after the foreign goods have entered the market.
At this point, the dispute is still in consultations, meaning, according to who.org:
Consultations typically take place in Geneva and are confidential (Article 4.6 of the DSU), which also means that the (WTO) Secretariat is not involved. The fact that they take place behind closed doors also means that their content remains undisclosed to any panel subsequently assigned the matter.
In practice, parties to a dispute often allow themselves significantly more time than the minimum of 60 days.
Why technology isn't addressed explicitly in WTO texts
In all of the text I came across involving intellectual property protection in the WTO about China we talk about trademark and copyright infringement, but we never mention patent or technology theft, why is that?
Basically, the WTO is three things:
- A negotiating forum
- A set of rules
- A way to settle dispute
The first step is to negotiate rules. Then, the second pillar is that there is a set of rules, those have been agreed by the WTO members. Then, the third option is a dispute settlement system.
The example I mentioned above takes place in that third option. For that, they will have to use the rules from point two based on prior negotiating in point 1.
Those rule tend to be rather general principles, but if there are unfair practices, you can relate those unfair practices to more general principles in the rules. So that's what happens in the EU-China dispute. As you can see, such a case can be brought by referencing today's laws on technology transfers and claiming they violate one of the agreed upon trade principles in one of the WTO treaties.
At the same time, there are discussions in point 1 since most countries will recognize the benefits of free trade. The difficulty in those discussions is that different countries will have different interests. And we saw that a few months ago with the EU China summit as well:
The EU strongly emphasised the need to advance negotiations for an ambitious EU-China Comprehensive Investment Agreement that addresses the current asymmetries in market access and ensures a level playing field.. Urgent progress is needed in particular on behaviour of State-Owned Enterprises, transparency on subsidies and rules tackling forced transfers of technology.
The Summit was also an opportunity to discuss the importance of the digital sector to economies and societies worldwide. The EU stressed that the development of new digital technologies must go hand in hand with the respect of fundamental rights and data protection. The EU also raised outstanding issues on cybersecurity, disinformation.
TL;DR
Does the WTO address "technology theft" as opposed to trademark and copyright infringement?
No, not directly.
In all of the text I came across involving intellectual property protection in the WTO about China we talk about trademark and copyright infringement, but we never mention patent or technology theft, why is that?
Because the agreed upon rules are phrased in general terms. Unfair technology transfers may be related to those rules, but they are not mentioned directly.
Does the WTO have the mechanisms to address patent infringement and technology theft?
They do have the mechanisms to facilitate trade negotiations for future rules and they do have the mechanisms to facilitate disputes under existing rules.
So, yes, to the extent that those two mechanisms can be used to address technology theft, such mechanisms are offered by the WTO.
But, no, it's not like you can point to a specific article which directly and unambiguously prohibits specific behavior like you might see in criminal law. The main difference here is that it's a multilateral agreement that all parties have agreed to. Of course, countries aren't going to agree to rules that they think are against their own interests.