Agreements

'The Rise of Nonbinding International Agreements: An Empirical, Comparative, and Normative Analysis' by Curtis A. Bradley, Jack Goldsmith and Oona A. Hathaway in (2023) 90(5) University of Chicago Law Review comments 

The treaty process specified in Article II of the Constitution has been dying a slow death for decades, replaced by various forms of “executive agreements.” What is only beginning to be appreciated is the extent to which both treaties and executive agreements are increasingly being overshadowed by another form of international cooperation: nonbinding international agreements. Not only have nonbinding agreements become more prevalent, but many of the most consequential (and often controversial) U.S. international agreements in recent years have been concluded in whole or in significant part as nonbinding agreements. Despite their prevalence and importance, nonbinding agreements have not traditionally been subject to any of the domestic statutory or regulatory requirements that apply to binding agreements. As a result, they have not been centrally monitored or collected within the executive branch, and they have not been systematically reported to Congress or disclosed to the public. Recent legislation addresses this transparency gap to a degree, but substantial gaps remain. 

This Article focuses on the two most significant forms of nonbinding agreements between U.S. government representatives and their foreign counterparts: (1) joint statements and communiques; and (2) formal nonbinding agreements. After describing these categories and the history of nonbinding agreements and their domestic legal basis, the Article presents the first empirical study of U.S. nonbinding agreements, drawing on two new databases that together include more than three thousand of these agreements. Based on this study, and on a comparative assessment of the practices and reform discussions taking place in other countries, the Article considers the case for additional legal reforms

Plant Breeders

'Propagating materials and harvested materials: clarifying the scope of plant variety or breeder’s rights' by Charles Lawson in (2023) 18(9) Journal of Intellectual Property Law & Practice 655–672 comments 

Plant breeding faces the inherent problem of ensuring that there are no disincentives that might hamper breeders from delivering improved plant varieties to growers and bringing superior produce to consumers. Plant variety or breeder’s rights is one means of addressing these concerns, regulating for an incentive for plant breeders to develop these improved varieties. The International Convention for the Protection of New Varieties of Plants done, most recently, at Geneva on 19 March 1991 (UPOV 1991) provides a framework agreement consistent with the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights. UPOV 1991 provides for exclusive rights (variously called a variety right or a breeder’s right) for ‘propagating material’ and then extends this to ‘harvested material’ and the products of ‘harvested material’. The key effect of these regulated exclusive rights is to facilitate a royalty on new varieties by limiting the dealings with that variety as a reward and incentive to breed improved varieties — the virtuous cycle facilitating new and better varieties into the market for the benefit of consumers. The problem addressed by this article is the extension of the exclusive rights for ‘propagating material’ to ‘harvested material’ and the products of ‘harvested material’. This is essentially an issue about the meaning of ‘harvested material’, and specifically, that ‘harvested material’ that is also ‘propagating material’ should be considered ‘propagating material’ per se for the purposes of UPOV 1991 and national implementing laws.

'Access to biodiversity for food production: Reconciling open access digital sequence information with access and benefit sharing' by Brad Sherman and Robert J Henry in (2021) 14(5) Molecular Plant comments 

Over the last 40 years or so, a complex web of international legal agreements was developed that regulate the access, transfer, and use of plant genetic resources. These include the Convention on Biological Diversity (CBD), the Nagoya Protocol, and the International Treaty on Plant Genetic Resources (Figure 1). In developing these legal regimes, policy makers struggled to balance a number of conflicting demands. These included ensuring that access providers share in the benefits that arise from the use of their genetic resources; that users who value-add to genetic resources can protect their innovations via intellectual property; and, at the same time, that scientists and breeders have ongoing access to genetic resources. While there are problems with the existing regimes, they have reached an uneasy compromise of sorts. 

[graphic omitted] 

In recent years, dramatic changes in the life sciences have threatened to undermine this complex and fragile balance (Unamba et al., 2015). These changes have been facilitated by new genomic technologies such as gene editing and synthetic biology (McDaniel and Weiss, 2005), by improved and cheaper sequencing technologies (Shaffer, 2007) that rapidly increased the availability of DNA sequence data, and advances in whole-genome sequencing (Figure 1). Genomics is now a major source of data, rivalling big data disciplines like astronomy in the pace of data acquisition, storage, and analysis (Stephens et al., 2015). Open access international data repositories, such as GenBank, the DNA Databank of Japan, and European Molecular Biological Laboratory, that house a huge amount of DNA sequence-related data (estimated at over 1.5 billion sequences) (WiLDSI, 2020) facilitate the sharing and use of digital sequence information (DSI) (Ad Hoc Technical Group on Digital Sequence Information, 2020). The scientific value of public databases largely comes from the aggregation of data that allow scientists to identify patterns across the stored sequences (WiLDSI, 2020).

Regulation

'Regulatory Issues of Data and Algorithms for the Data-Driven Economy' by Kung-Chung Liu in (2023) GRUR International comments 

Data and algorithms are the lifeblood of the data-driven economy. Big data and big algo are bringing new challenges and legal issues to the fore. This article deals with some aspects of these issues and tries to put forward an analytical framework for typifying, securing access to and use of data, and ultimately maximizing the generation and flow of data. This article then deals with algorithms and endeavours to propose six principles for auditing algorithms and a brand new international governance framework for algorithms and their auditing via a treaty and relevant mechanisms. ... 

With the ubiquitous take-up of digital technology and the digitization of products, services, and business processes, we find ourselves in a data-driven economy whose two pillars are data and algorithms. Data and especially big data generated and collected by netizens and machines (devices) connected via the internet of things (IoT) are essential elements of the development of new products or services, business models and competition. Another even more important pillar of the data-driven economy is algorithms, as they decide the collection, compilation and analysis of data, and shape the final decision-making of artificial intelligence (AI). Controversies are on the rise about algorithms being biased or even designed to distort competition and harm consumers, whether algorithm-driven market interactions call traditional economic models of competition law into question (explicit versus tacit collusion1), and whether and how new regulations for algorithms must be developed. How can we best regulate data and algorithms to boost the data-driven economy? How can we overcome the intellectual property (IP) hurdles, copyright and trade secrets in particular, of data and algorithms that might hinder the data-driven economy? 

This article is dedicated to the clarification of some of the regulatory issues of data and algorithms ‒ no solution can be offered as it is not targeted at one specific national legal regime – with the concerns for the data-driven economy. It will first focus on data by discussing its typology (identifying three types of data), protection, access and use. The second focal point of this article deals with algorithms and their auditing, and endeavours to propose six principles for auditing algorithms and a new treaty and mechanisms to tackle these issues from the perspectives of global governance.

Regulation

'The right to regulate and the interpretation of the WTO Agreement ' by Andrew D Mitchell in (2023) Journal of International Economic Law comments 

International investment treaty arbitrators have long recognized the existence of a State’s right to regulate under international law—independent of the treaty text itself—that ought to be factored into their analysis of whether a State violated its treaty obligations. The precise contours of such a right, and its interaction with the substantive disciplines of the treaty in question, have varied considerably across international investment law disputes. Indeed, some adjudicators have taken the approach that, although such a right absolves a State of acting unlawfully under the treaty, it does not absolve the State from paying compensation under it, perhaps nullifying the right’s practical import. Nonetheless, this represents a minority view, and perhaps in response to those approaches, States have increasingly codified the proposition in the text of their international investment treaties that there exists a sovereign right to regulate to be factored into adjudicators’ interpretation of their substantive disciplines. Recent major non-World Trade Organization (WTO) plurilateral trade agreements have also explicitly recognized the existence of an inherent ‘right to regulate’ in the public interest. 

Compared to international investment law arbitrators, WTO adjudicators confronted with arguments about an inherent right to regulate that applies to WTO Agreement obligations have typically been dismissive. For instance, in China—Raw Materials, China argued that it possessed a right to regulate trade as an ‘inherent right’, and ‘not [as] a “right bestowed by international treaties such as the WTO Agreement”’, and that this inherent right should inform adjudicators’ understanding of China’s substantive commitments under the WTO Agreement. The USA, Mexico and European Union argued that China had exercised its inherent right to regulate trade when it acceded to the WTO Agreement, and any ability to deviate from its substantive disciplines can be found only in the WTO Agreement itself. Both the panel and the Appellate Body (‘AB’) agreed with the USA, Mexico and the European Union and declined to consider the existence of an inherent right to regulate outside of the WTO Agreement. 

Along these lines, WTO adjudicators have traditionally framed a State’s right to regulate as essentially residual in character. In other words, upon accession to the WTO Agreement, whatever inherent right to regulate States have had under international law is transmuted into deference for their regulatory autonomy under WTO disciplines, rather than remaining an inherent WTO right as such. A key consideration in this regard has been the existence of standalone exceptions clauses that provide policy-based exceptions to substantive disciplines in major instruments of the WTO Agreement, such as Article XX of the General Agreement on Tariffs and Trade (‘GATT’)10 and Article XIV of the General Agreement on Trade in Services (‘GATS’). Moreover, WTO Agreement drafters have explicitly cross-applied these policy-based exceptions to some other WTO instruments, such as the Agreement on Trade-Related Investment Measures. 

The existence of clauses providing for policy-based exceptions has led WTO adjudicators to eschew policy-based considerations in their interpretations of substantive disciplines, such as non-discrimination articles, even where there might be a textual or contextual basis for doing so. For example, the fourth preambular recital of the GATS ‘[r]ecogniz[es] the right of Members to regulate, and to introduce new regulations, on the supply of services within their territories…to meet national policy objectives’. The AB in Argentina – Financial Services nonetheless found this recital irrelevant to the interpretation of non-discrimination provisions in the GATS, given the codification of a more limited set of policy-based considerations through the exceptions clause of Article XIV. For the AB, the existence of policy-based exceptions meant that ‘regulatory concerns’ were excluded from the substantive disciplines. The AB reached the same conclusions under the GATT in EC—Seal Products. 

Thus, in characterizing a State’s right to regulate as essentially residual in character, WTO adjudicators have traditionally emphasized that a State must either find a basis in the text of an instrument under the WTO Agreement that explicitly justifies a regulatory action16 or pursue only those regulatory actions that are consistent with the substantive disciplines of the WTO Agreement. Accordingly, unlike in international investment arbitrations, a State’s right to regulate has not been viewed as a standalone component under the interpretive analysis in WTO dispute settlement. Instead, policy-based considerations have been integrated only to the extent that they find expression in the ordinary sources of treaty interpretation, namely, the provision’s plain text and context in light of the treaty’s object and purpose. 

This general approach has presented challenges concerning instruments under the WTO Agreement (‘Covered Agreements’) that omit any policy-based exception clauses. On occasion, WTO adjudicators have sought to overcome such challenges by cross-applying a policy-based exception clause to another instrument with a clear textual basis for doing so,19 but they have generally avoided this approach. 

This article explores how WTO adjudicators have engaged in the interpretive process in cases involving a public policy-based measure when no policy-based exception clause has been available. This question has arisen recently in a diverse array of cases under the Agreement on Subsidies and Countervailing Measures (‘SCM Agreement’) (section II), the Agreement on Trade-Related Aspects of Intellectual Property Rights (‘TRIPS Agreement’) (section III) and the Agreement on Technical Barriers to Trade (‘TBT Agreement’) (section IV). As I will show, WTO adjudicators have proactively made selective interpretive choices to recognize States’ right to regulate under these instruments, even where this may seem contrary to their plain text and the orthodox approach described earlier. While I do not take issue with the ultimate outcomes reached by WTO adjudicators, their attempts to situate a State’s right to regulate within the ordinary tools of treaty interpretation have resulted in approaches that are, at first glance, unclear and uncertain. Nevertheless, I argue in The right to regulate as a principle of regulatory autonomy? section that, while such unorthodox approaches appear ungrounded in ordinary interpretive principles, they can be explained in terms of each WTO instrument’s unique text, structure and purpose. By making more explicit reference to these legislative characteristics in their analyses, WTO adjudicators might be able to acknowledge a right to regulate at the WTO explicitly—not as an inherent and unfettered right at international law—but as a principle of regulatory autonomy that is derived explicitly or implicitly from the text of the Covered Agreements. This characterization would provide a firmer basis for WTO bodies to either reinforce or peal back policy-based considerations on a case-by-case basis.

Human Rights at Sea

'Geneva Declaration on Human Rights at Sea: An Endeavour to Connect Law of the Sea and International Human Rights Law' by Natalie Klein in (2022) 53(2)-(3) Ocean Development and International Law (forthcoming) comments 

The Geneva Declaration on Human Rights at Sea was officially launched on 1 March 2022. The document was produced by the non-governmental organization, Human Rights at Sea, and responds to an undoubted need to prevent human rights violations at sea and to provide redress to victims of such abuses. Connecting the international human rights regime with the law of the sea has been one of many challenges to respond to this issue. This article explores the content of the Geneva Declaration and its alignment with existing law of the sea. Beyond the jurisdictional complexities presented, it is important to consider how this informal instrument holds relevance for international lawmaking. While there are obstacles, the Geneva Declaration creates a needed opportunity to bring attention to and clarity around the legal protections of human rights at sea. 

 Klein argues 

It is estimated that 30 million people are present in the ocean every day. The range of activities undertaken is varied, as is the allocation of responsibilities for the conduct of those activities. Rather than a vast, blue, limitless expanse, the oceans are divided into a series of zones wherein States have different rights and responsibilities in relation to the people who are present in those zones. Yet the immensity of ocean space has allowed States to neglect the rights owed to certain individuals. People at sea may be victims of sexual assault, indentured in modern forms of slavery, fleeing persecution in unseaworthy vessels and yet face limited opportunities to assert their rights or to seek remedies for violations of those rights. 

Part of the reason for the lack of protection of human rights at sea is an apparent disconnect between human rights law and the law of the sea. Human rights law has traditionally focused on land-based activities where there is relative clarity as to which State has responsibility to uphold human rights. Moreover, human rights violations on land have usually been easier to detect and expose, and mechanisms are more likely to exist to seek redress for those violations. At sea, the responsibilities of a coastal State diminish across the maritime space extending away from it, and obligations at sea are possibly shared among more than one State depending on the activity and location of any vessel. These jurisdictional complexities have hindered a ready application and enforcement of human rights law at sea. The law of the sea has rarely gone beyond exhortations that ‘considerations of humanity’ apply. However, increasing awareness of the risk and reality of human rights violations at sea has been prompting greater efforts to read these areas of law together. 

The Geneva Declaration on Human Rights at Sea (Geneva Declaration) is the latest endeavour to affirm the applicability of human rights at sea and to provide greater clarity as to when States are responsible for upholding human rights and remedying their violation. It was drafted and launched under the auspices of the non-governmental organisation (NGO) Human Rights at Sea. This informal instrument is thus an NGO-led initiative and potentially aligns with other law-making efforts of civil society actors that have led to the adoption of a treaty. A short overview of the Geneva Declaration is set out in Section 2. 

The Geneva Declaration prompts a series of questions as to how it connects international human rights law with the law of the sea. The main lines of enquiry explored in the study below consider, in Section 3, how the Geneva Declaration allocates responsibilities to States to uphold human rights in different maritime zones and the ways it aligns (or not) with existing jurisprudence on human rights responsibilities. Section 4 addresses the interaction of the Geneva Declaration with the existing law of the sea as a possible source of international law, and in the context of international law-making. While the journey ahead is not without challenges, the Geneva Declaration has the potential to bring attention to, and clarity around, the legal protection of human rights at sea.

BioGenome

'Ethical, legal, and social issues in the Earth BioGenome Project' by Jacob S Sherkow, Katharine B Barker, Irus Braverman, Robert Cook-Deegan, Richard Durbin, Carla L Easter, Melissa M. Goldstein, Maui Hudson, W. John Kress, Harris A. Lewin, Debra J H Mathews, Catherine McCarthy, Ann M McCartney, Manuela da Silva, Andrew W Torrance, and Henry T Greely in (2022) 119(4) PNAS e2115859119 comments 

The Earth BioGenome Project (EBP) is an audacious endeavor to obtain whole-genome sequences of representatives from all eukaryotic species on Earth. In addition to the project’s technical and organizational challenges, it also faces complicated ethical, legal, and social issues. This paper, from members of the EBP’s Ethical, Legal, and Social Issues (ELSI) Committee, catalogs these ELSI concerns arising from EBP. These include legal issues, such as sample collection and permitting; the applicability of international treaties, such as the Convention on Biological Diversity and the Nagoya Protocol; intellectual property; sample accessioning; and biosecurity and ethical issues, such as sampling from the territories of Indigenous peoples and local communities, the protection of endangered species, and cross-border collections, among several others. We also comment on the intersection of digital sequence information and data rights. More broadly, this list of ethical, legal, and social issues for large-scale genomic sequencing projects may be useful in the consideration of ethical frameworks for future projects. While we do not—and cannot—provide simple, overarching solutions for all the issues raised here, we conclude our perspective by beginning to chart a path forward for EBP’s work. 

The Earth BioGenome Project (EBP) is an audacious endeavor, an attempt to obtain whole-genome sequences from specimens of every eukaryotic species on Earth—land, sea, sky, or underground. We know of about 2 million such species ranging in size from the blue whale to a single-cell plankton in the class Mamiellophyceae; it is estimated that about another 7.5 million currently unknown eukaryotic species exist. The knowledge generated by EBP may “lead to new food sources, revolutionary bio-inspired materials, and innovations to treat human, animal, and plant diseases”. Also, “[i]f successful, the EBP will completely transform our scientific understanding of life on earth and provide new resources to cope with the rapid loss of biodiversity and habitat changes that are primarily due to human activities and climate change”. 

The scientific and technical problems of finding, sampling, sequencing, databasing, and analyzing these eukaryotic genomes are enormous, but so too are the ethical, legal, and social challenges associated with the project. This perspective highlights and categorizes many of the ethical, legal, and social issues currently confronting EBP and suggests a path forward. At the same time, we recognize that the problems inherent in the complexity of interests in a project like EBP are myriad, that solutions to some of these issues may be controversial or currently unavailable, and that resolving disputes over individual sequencing projects will likely require further input, not only of EBP and its members but also the broader public as well. It is nonetheless our belief that these problems can be managed well enough to enable EBP to proceed—and to succeed—equitably and fairly for all of humanity and the biosphere. 

Legal Issues 

EBP’s goal of sequencing representatives from all extant Eukarya raises a number of significant international and national legal challenges. These concern basic legal obligations on the part of researchers, such as proper sample collection and permitting, but also more complex requirements, such as the Nagoya Protocol’s requirements regarding access and benefit sharing (ABS) for the utilization of genetic resources. Beyond these obligations, EBP and its member projects face difficult questions pertaining to rights and responsibilities regarding intellectual property (IP), sample collecting practices, accessioning rules for collected samples, and biosafety and national security restrictions. ... 

Sequencing a genome often requires a tissue sample from the species, and most countries have regulations governing the collection of biological samples for research. EBP’s work, by its nature, is international in scope; a great number of species are endemic to only a single country or very few. This means that EBP researchers, at least today, are frequently tasked with collecting samples in one jurisdiction and preparing and sequencing them in another. As discussed later in this paper, fostering the sequencing of species in the country in which they are found is a future project goal. 

Many countries have biological permitting restrictions for engaging in species sample collection, some of which are the consequence of international treaties, while others are entirely domestic in nature. The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) is perhaps the best-known of such international treaties in this regard and regulates the import, export, and reexport of International Union for Conservation of Nature (IUCN)-listed endangered species and derived materials without prior permitting from their respective source countries. Beyond CITES, a number of other legal frameworks operate similarly, including the Migratory Bird Treaty Act (implementing separate conventions among Canada, Mexico, Japan, and Russia), the Marine Mammal Protection Act, and the African Elephant Conservation Act. 

Supranational jurisdictions, such as the European Union, have a host of similar limitations among their respective member nations. In addition, biological samples sourced from Antarctica, specifically, are subject to governance under the Antarctic Treaty System, which encompasses not only the Antarctic Treaty, which came into force in 1962 and now has 54 members, but also over 200 separate requirements, including those in the Protocol on Environmental Protection to the Antarctic Treaty. Marine samples have yet further sampling and permitting restrictions, governed in many instances by the United Nations Convention on the Law of the Sea (UNCLOS) or, in the special case of cetaceans, the International Convention for the Regulation of Whaling (ICRW). 

Some jurisdictions, meanwhile, have purely domestic permitting requirements for species of significant national interest, such as the United States Bald and Golden Eagle Protection Act, and yet others may institute special national permitting processes for foreign researchers regardless of the particular species to be collected. In addition, some permitting processes may include requirements pertaining to vouchering—requiring a third party to maintain an archetypal specimen in an accessible collection. 

Assessing compliance with this web of legal obligations is complex, but necessary, and EBP researchers will need to take a systematized, species-by-species, sample-by-sample, and jurisdiction-by-jurisdiction approach to ensure compliance with these laws. The costs, in terms of researcher time and effort, are likely to be nontrivial. Nonetheless, many of the protections instituted in the above laws were put in place precisely to avoid the exploitation of biological resources that is currently contributing to the global decimation of biodiversity. Others, meanwhile, are geared to share the benefits of biodiversity as a solution to extractive biocolonialism. A principal goal of EBP is to halt, if not reverse, the global decline in biodiversity; circumventing restrictions on sample collection, aside from being illegal, may be counterproductive in the context of creating benefits for society and human welfare.

Further

Data and DSI 

Woven throughout the issues raised above are complexities regarding the generation and sharing of the sequence data, known under the CDB and Nagoya Protocol as DSI. DSI, like all other digital material, is easily shared across borders. This complicates how DSI is, and should be, considered under the Nagoya Protocol’s ABS principles, and there are conflicting views regarding unrestricted access to genomic data and the rights and interests of nations, Indigenous peoples, and local communities to control such data. A meeting last year between representatives from the European Union and China summarized the potential conflict concerning DSI and Nagoya’s DSI requirements this way: “Open data [are] a key component of the smooth functioning of science globally. However, open access may restrict options to address benefit sharing and the challenge is to generate a different approach that maintains the efficiencies of the current model in delivering societal monetary and non-monetary benefits arising from activities within the current system”. 

Assessing whether this conflict is real or hypothetical lies in the details of any DSI sharing regime. Much of the difficulty lies in narrowly conceiving of the benefits contemplated as primarily arising from a “payment for data” regime, even while there are greater opportunities for collaboration around other value-generating activities. At the same time, there are models where open data have produced monetary rewards for its generators, such as providing data hosting, developing analysis tools, or selling derivative products from such data. One relevant example might be the establishment and support of local sequencing capacity within source nations currently deprived of it and furthering training in the area. The COVID-19 pandemic has demonstrated the need to expand sequencing capacity globally. Researchers from sequencing-capacity-rich nations whose sequencing efforts will primarily focus on source nations without such resources should commit to generating solutions for this gap in sequencing capacity. Depending on how they are deployed, open data and a call for benefit sharing may not be in conflict but such a result will require careful analysis of how to provide meaningful benefits.

ISDS and COVID

'Compulsory licences and ISDS in Covid-19 times: relevance of the new Indian investment treaty practice' by Prabhash Ranjan in (2021) 16(7) Journal of Intellectual Property Law & Practice 748–759 comments 

As the world grapples with the Coronavirus disease (Covid-19)—the worst pandemic in the last 100 years—war-like efforts are being made to find a vaccine or a cure for the disease.  Indeed, a few newly developed Covid-19 vaccines have already been approved for public use.  At the same time, given the concerns of vaccine nationalism—countries pushing to get first access to Covid-19 vaccines —many are filled with consternation about the timely and equitable access to medicines and vaccines. This concern has been outlined by countries like India and South Africa who in their recent proposal to the World Trade Organization (WTO) state: ‘As new diagnostics, therapeutics and vaccines for COVID-19 are developed, there are significant concerns, how these will be made available promptly, in sufficient quantities and at an affordable price to meet global demand.’ 

To ensure timely and equitable access to Covid-19 vaccines, drugs, and diagnostics, India and South Africa have proposed that, following Articles IX.3 and IX.4 of the Marrakesh Agreement establishing the WTO, certain provisions of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement6 be temporarily waived or suspended to allow the prevention, containment, or treatment of Covid-19. Such a temporary suspension of the application of the TRIPS Agreement would give complete regulatory freedom to countries to deal with the production and distribution of Covid-19 vaccines, drugs, diagnostics without being concerned about the enforcement and protection of intellectual property rights. This radical proposal stems from the assumption that intellectual property rights such as patents, in certain circumstances, could act as barriers to accessibility of drugs and medicines. Several least developed and developing countries have endorsed the proposal at the WTO, while developed nations are not in favour. 

Nonetheless, there is a consensus that countries need to collaborate to ensure timely and equitable distribution of drugs, vaccines and diagnostics for the treatment of Covid-19. To accomplish this objective various regulatory tools can be used in a manner that is consistent with the existing international law on intellectual property rights.  This is especially relevant because several patent applications have already been filed for Covid-19 vaccines. 

An important regulatory tool in this regard is a compulsory licence (CL)—the granting of a licence by a government to a third party to use the patent without the consent of the patent holder after paying a government-determined royalty to the patent owner.  The possibility of issuing a CL is significant flexibility in the patent regime, especially in the context of pharmaceutical patents, because it allows governments to address public health needs by ensuring the availability of patented medicines at low-cost prices to those who cannot afford them. 

Some countries have taken steps in this direction by adopting laws to expedite the issuance of CLs.14 Canada enacted a Covid-19 Emergency Response Act,  through which it amended the Patent Act to accelerate the process of issuing CLs for public health purpose.  Likewise, Chile adopted a resolution pronouncing that the Covid pandemic is a strong ground to validate the issuance of CL on Covid-19 related technologies.  Ecuador has also adopted a resolution requiring the national government to establish compulsory licences and adopt other measures to ensure free and inexpensive access to medicines and other medical technologies to combat the Covid-19 pandemic.  Germany, Europe's largest economy, has also passed legislation, the Prevention and Control of Infectious Diseases in Humans Act, which empowers the health ministry to issue government use authorization under the patent law, after the declaration of a national epidemic by Bundestag, German federal legislature’s lower chamber. Israel has already issued a CL for the importation of Kaletra (lopinavir 200 mg/ritonavir 50 mg) for the treatment of Covid-19 patients. 

In India too, several commentators have identified the prominence of CL for realizing public health objectives.  Already demands have been made for the issuance of CL on drugs like remdesivir to augment its accessibility for Covid-19 patients.  The potential use of CL as a regulatory tool in Corona times might go up further as Covid-19 vaccines become available. India, which is often called the pharmacy of the world, might have an important role to play in ensuring supplies of vaccines and drugs to various countries such as in Latin America. 

Given this background of the rising importance of CL, from the perspective of states, it is imperative to understand what kind of legal challenges they can face if they make use of this regulatory tool. This question becomes even more important because patent owners, when it comes to drugs and medicines, in a large number of cases, are pharmaceutical companies who zealously protect their intellectual property. 

One obvious option for these companies will be to challenge the issuance of such CLs under the domestic laws of the country concerned. Another choice that many foreign pharmaceutical companies might like to employ, under international law, is to challenge the issuance of such CLs before investor-State dispute settlement (ISDS) tribunals. These ISDS tribunals derive their authority from bilateral investment treaties (BITs)  or investment chapters of free trade agreements (FTAs). These BITs or investment chapters in FTAs allow foreign investors to directly bring claims against host States for alleged treaty breaches before ISDS tribunals—a three-member ad hoc arbitration tribunal—often without exhausting local remedies.  Intellectual property rights (IPRs) in these treaties are listed as investments.  Consequently, ISDS tribunals have jurisdiction over regulatory measures that impair the investor’s IPRs. This allows pharmaceutical companies to enforce their IPRs through the ISDS mechanism. 

Indeed, in the last few years, foreign investors have employed the ISDS regime to challenge the host State’s regulatory measures relating to IPRs.  For example, Eli Lily, an American pharmaceutical company challenged the invalidation of its patent by a Canadian federal court on the ground of ‘inutility’.  Philip Morris, a tobacco company, challenged Australia’s legislation mandating plain packaging of tobacco products under the Hong Kong–Australia BIT.  Philip Morris also brought a similar claim against Uruguay under the Switzerland–Uruguay BIT. Accordingly, the possibility of pharmaceutical companies challenging the issuance of CL before ISDS tribunals is real, not conjectural. 

International investment lawyers have pointed out that foreign investors can challenge the issuance of CL before an ISDS tribunal on the ground that it amounts to an indirect expropriation of their investments. In other words, foreign investors can argue that the issuance of a CL has led to substantial deprivation of their investment, thus constituting indirect expropriation under international investment law. As Bryan Mercurio argues, the prospect of challenging the issuance of CLs as expropriation before an ISDS tribunal is an attractive proposition for a patent holder for several reasons.  First, it allows the patent holder to directly bring about a claim before an international tribunal bypassing the domestic courts of the host country. Secondly, if the claim were successful, it would provide higher compensation to the patent holder than what the host State would pay to her as remuneration for issuing the CL (see also Section II.2). 

Whether the foreign investor will succeed in such a claim will depend on various factors, such as the duration for which the CL has been issued, whether the royalty paid to the patent owner is satisfactory, what impact the issuance of the CL had on the patent owner’s overall investment in the host State, what is the language of the treaty provision on expropriation in the BIT, whether the treaty permits deviation from the substantive treaty provisions like expropriation for public health purposes etc.36 Nonetheless, since IPRs are recognized as investments in BITs, the critical point is that foreign investors can bring such claims before ISDS tribunals. Thus, ISDS tribunals will enjoy jurisdiction to decide whether the issuance of a CL amounts to indirect expropriation or not. Foreign investors can also contest the issuance of a CL as a violation of the fair and equitable (FET) provision—a ubiquitous clause present in all BITs or other substantive provisions like national treatment. 

The purpose of this article is to closely examine India’s investment treaty practice  to see whether it provides a safe haven for the issuance of CLs from foreign investor's claims for treaty breaches before an ISDS tribunal. In case a BIT or an investment chapter of an FTA exempts the issuance of CLs from the ambit of the substantive treaty standards, it would imply that the host State has greater regulatory autonomy to make use of CLs in the current times without worrying about ISDS claims. A survey of Indian BITs and FTA investment chapters shows that in the bulk of these treaties there is no specific mention of excusing the issuance of CLs from the application of the treaty's substantive standards. In other words, if a foreign investor contests the issuance of a CL as a breach of any of the substantive provisions of the BIT, the outcome of such a challenge will depend on the numerous factors mentioned before. 

However, there are some Indian BITs and FTA investment chapters that exempt the issuance of CLs from the application of the substantive treaty standards. In this article, we study such investment treaties by dividing the discussion into two parts. First, the article, in Section II, discusses those Indian BITs and FTA investment chapters where issuance of CL is outside the ambit of the expropriation provision. Next, the article, in Section III, focuses on the new Indian investment treaty practice, starting from the 2016 Indian model BIT,  which provides that issuance of CL is outside the scope of the entire BIT. Section IV concludes by arguing that India's recent treaty practice provides greater regulatory bandwidth to States in Covid-19 times to pursue public health objectives should countries wish to use CLs as the regulatory tool to increase accessibility of Covid vaccines and drugs. Thus, India’s new investment treaty practice holds some lessons for other countries to deal with ISDS claims challenging the issuance of CLs. However, before discussing the treaty practice, Section I provides an overview of the Indian patent law on the issuance of CLs.