TRIPS copyright dispute settlement after the transition and moratorium: Nonviolation and situation complaints against developing countries

Samahon, Tuan N

I. INTRODUCTION: PRELUDE TO TRADE WAR

January 1, 2000 inaugurated open season on developing countries in the World Trade Organization (WTO) . Under the Uruguay Round Multilateral Agreement on Trade-Related Aspects of Intellectual Property Rights, Including Trade in Counterfeit Goods (TRIPS),1 a five year transition period for developing countries to enforce intellectual property regimes expired simultaneously, and most auspiciously, with a five-year moratorium on far-reaching nonviolation and situation complaints.2 TRIPS responds to developed countries' concerns that developing countries' indifference to intellectual property rights prejudices copyright-, patent , and trademark based industries' ability to trade abroad.

The end of the developing country transition period means that inadequate substantive intellectual property laws or inadequate enforcement measures will become actionable before the WTO's dispute settlement body (DSB).3 For anxious intellectual property owners, the occasion will prove the WTO's mettle because adequate intellectual property protection in developing countries represents a long-awaited bargained for exchange for favorable tariff concessions in developed countries.4 In 1996 alone, U.S. copyright holders lost twenty to twenty two billion dollars to foreign copyright piracy.5 The formal passage of new laws alone, however, will not remedy trade distortions. At present, most property losses do not result from a lack of codified laws or enforcement provisions. Instead, most losses result from an absence of `on the ground' enforcement.6

Actual, on the ground enforcement, however, will prove difficult to secure. Although TRIPS obligates WTO member states to provide new enforcement tools in combating piracy, sovereign discretion in employ ing those tools raises the specter of bad faith implementation. What happens after January 1, 2000, when developing country WTO members have appropriate intellectual property measures and enforcement provisions on their books, but limited or no actual enforcement occurs? May a developing country reply to a TRIPS violation claim that its statutory enactments fulfill WTO obligations and that actual enforcement of its laws is uniquely a matter of prosecutorial or judicial discretion? When developing countries invariably fail to enforce their new intellectual property codes to the liking of developed countries, the United States Trade Representative (USTR) and other national trade representatives will almost certainly request dispute settlement consultations, alleging that TRIPS requires actual enforcement, not mere codification of enforcement provisions.7 Very likely, the question of what is an inadequately enforced TRIPS enforcement provision, as opposed to a good faith exercise of state discretion, will pit developed country against developing country in a contest over national sovereignty and the extent of TRIPS obligations.

When the disputes arise, the WTO's dispute settlement mechanism will govern resolution of the trade controversies. Initially, injured states must seek consultation with the offending state. But, if these consulta tions fail, the controversy becomes the subject of a binding dispute settlement process before the WTO. A panel of trade experts or the Appellate Body hears each party's allegation and complaints. In anticipation of this flood of TRIPS activity, this Note outlines three varieties of complaints that countries might allege during WTO dispute settlement violations, nonviolations, and situations-and reviews the difficulties inherent in claims of inadequate on the ground enforcement.

Although this Note's analysis may apply broadly to all intellectual property, this Note specifically examines complaints for inadequate copyright protection. Part II places copyright enforcement dispute settlement in the context of the Agreement's enforcement requirements as well as the tradeoffs made during TRIPS negotiation. Part III reviews the three complaints available under the 1947 General Agreement on Trade and Tariffs (GATT), as incorporated into the WTO system, and examines how they might function in hypothetical copy right disputes, including what defenses developing countries will likely raise. Part IV considers the desirability of panel deference to state discretion. This Note argues that the distinction between laissez-faire GATT obligations and TRIPS affirmative regulation suggests that WTO panels should avoid micromanaging developing country TRIPS enforcement by excluding certain categories of evidence from their consideration. Finally, Part V examines the "carrot" of TRIPS Council and World Intellectual Property Organization technical assistance as an alternative to the "stick" of nonviolation and situation complaints.

II. MARRYING INTERNATioNAL TRADE AND INTELLECTUAL PROPERTY

Copyright infringement and piracy create significant trade distortions by denying authors their creative comparative advantage and a fair return on their labor.8 Piracy thus creates economic disincentives for enterprise because it decreases a rightholder's revenue and diminishes expected returns on research and creative undertaking.9 As long as competitors can freely duplicate authors' works, authors cannot profit fully from their intellectual products.10

Many developing countries, however, have strong incentives to underenforce intellectual property laws. Differences in information and media technology development contribute to the present enforcement apathy among developing countries. Unlike the European Union and United States, who increasingly rely on export based revenues from copyright licensing, many developing countries continue to rely on the production of consumable goods.11 Although some commentators have suggested that a country's general lack of copyright protection leaves foreign and indigenous authors on equal footing, and thus is not a direct barrier to international trade,12 this "equal footing" argument assumes that all countries have equally valuable copyright industries that piracy would harm. If many developing countries lack robust copyright-based businesses, such as a computer software industry, the absence of copyright enforcement will have a disparate effect on foreign nationals, effectively permitting trade discrimination against non-nationals. Thus, in the TRIPS setting, the developing world will likely be on the receiving end of TRIPS enforcement.13

For developing countries, then, accession to the WTO represented a Faustian bargain: In exchange for present GATT tariff concessions on goods, developing countries agreed to adequately protect intellectual property in the future. To that point, the United Nations' World Intellectual Property Organization (WIPO) had been the developing countries' forum of choice for technical assistance on intellectual property. WIPO's intellectual property-only design, as well as its lack of a sanctioning mechanism, meant that developing countries avoided any truly binding and enforceable obligations to respect intellectual property.14 In contrast, under the Uruguay Round's linkage of intellectual property, goods, and services, a new cross-sectoral WTO system emerged,15 upstaging WIPO's "a la carte" trade approach.16 Under the Uruguay system, developing countries promised developed countries future intellectual property protection under TRIPS while receiving the immediate benefits of lower GATT tariff bindings on their export goods.

Although the Berne Convention is the international standard for substantive copyright law,17 no international copyright law as such exists. Convention signatories agree to offer copyright protection under domestic law, but Berne itself provides no effective remediesexcept litigation before the International Court of Justice-for copy right infringement.18 TRIPS fulfills this need by mandating the creation of enforcement mechanisms in domestic law and by adding the teeth of WTO's dispute settlement machinery.

Unlike binding tariffs, in which member states can negotiate a broad range of tariff rates, the Berne Convention's copyrightable subjectmatter provisions-the substantive linchpin of TRIPS copyright protection that enumerates what is fit for copyright protection-conceptually admit few tradeoffs.19 Because effective protection requires an internationally consistent property rights regime, Berne copyrightable subject matter and accompanying enforcement provisions would not adequately protect copyright if they were diminished.20 Therefore, it was agreed that, as a threshold requirement for TRIPS compliance, WTO members must adopt Berne-compliant copyright codes and enact civil, border, and criminal measures consistent with TRIPS Articles 41-61.21 Thus, unable to negotiate many substantive compromises, the developing countries negotiated procedural ones. Developing countries won a five-year transition period before their TRIPS obligations entered into force, while the least developed countries (LDCs) received a ten year transition.22 In addition, all WTO members received a five year TRIPS procedural moratorium before nonviolation and situation complaints could be brought.23

As the transition period and moratorium conclude, however, developing countries may feel the bite of their new obligations. Although the inclusion of TRIPS under the WTO umbrella means lower tariff bindings for developing countries, the WTO's multisectoral scope also means that trade-in-goods and trade-in-services sanctions are now recognized retaliatory measures when a country fails to fulfill its TRIPS obligations.24 Part III now examines the WTO dispute settlement system and the complaints that developing countries will confront under their TRIPS enforcement obligations.

III. WTO DISPUTE SETTLEMENT CAUSES OF ACTION

The WTO Dispute Settlement Understanding (DSU) provides both the procedure and causes of action that states may invoke during disputes arising under any of the WTO's agreements.25 This integrated dispute resolution permits the empanelling of a single dispute settlement panel to handle claims arising under TRIPS, GATT, and the General Agreement on Trade in Services (GATS).26

In cases involving TRIPS, there are two threshold issues to address before reviewing the complaints themselves. Who may be proceeded against after January l, 2000? What quantum of harm must occur before a state may ask a panel to examine the dispute? Whether a country may be proceeded against after January 1, 2000 depends on whether that country has classified itself as developed, developing, or LDC. Nowhere in TRIPS is the basis of this categorization clarified. As a result, some states could be expected to balance the World Bank's per capita income classification method against the United Nations' multifactoral determination, and employ whichever system ranks the country lower in economic development. This would then qualify that country for LDC status, and thus, the LDC transition period.27 No WTO panel has yet addressed the problem of economically developed countries self-classifying as developing countries,28 as no state has sought a dispute settlement consultation on the point. Because developing and developed countries alike must now fully abide by TRIPS after January 1, 2000, the issue is likely moot. Yet, it remains possible that a country that ought to be categorized as developing, and hence subject to the expired January 1 deadline, will claim classification as an LDC to avail itself of the longer ten year transition period. Injured countries might seek to challenge such a practice were it to become widespread.29

Second, because most (but not all) copyright piracy involves private conduct rather than state action, it must be determined at what point inadequate government copyright protection triggers TRIPS dispute settlement. TRIPS itself is silent as to the threshold of inadequate enforcement required before a complaint may be brought to a WTO dispute settlement body.30 Most countries will likely not waste their resources bringing a complaint for a single breach of a TRIPS obligation. Because the goal of TRIPS is to provide for generally adequate intellectual property enforcement,31 the TRIPS framers probably envisioned dispute settlement for systemic inadequate enforcement and not as an appeals system for one failure to provide adequate copyright protection.32

National governments and their constituents are not likely to be content with the loss of control inherent in a binding adjudicative dispute settlement.33 Moreover, dispute litigation, with its attendant uncertainties and demands on resources, makes adjudication even more unattractive to a defendant state.34 At the same time, however, the threat of panel litigation may create greater incentives for states to settle during pre-panel consultation. Below, this Note reviews violation, nonviolation, and situation complaints that may motivate state parties to negotiate improved copyright enforcement regimes.

A. Violation complaints

A violation complaint results when a state asserts that benefits accruing to it are nullified or impaired by "the failure of another contracting party to carry out its obligations under this Agreement."35 Violation complaints involve breaches of literal Agreement provisions. For example, a state that failed to enact mandatory substantive and enforcement provisions would be subject to a complaint for prima facie TRIPS violation. In fact, to date, all TRIPS cases have been simple violation complaints where a state simply failed to enact the Berne minimum subject-matter standards for copyrightability.36

In the copyright enforcement context, failure to enact TRIPS enforcement provisions will result in a violation. Suppose that a hypothetical developing country, Bravatia, has amended its substantive copyright laws before January 1, 2000 and provided for appropriate subject matter protection. Bravatia, however, has no criminal enforcement measures on the books. While the state provides for civil remedies in its courts, there are no criminal provisions for copyright piracy on a commercial scale, which TRIPS Article 61 requires.37 As promised, USTR seeks relief through WTO dispute resolution. Violation cases provide that "the failure of another contracting party to carry out its obligations" under TRIPS would be actionable, just as any lacuna in a substantive copyright protection.38 Here, Bravatia's failure to adopt copyright enforcement provisions required by the TRIPS text approaches black and-white adjudication. Bravatia might assert that certain existing provisions cover its TRIPS requirements, but the state will not be able to deny a prima facie case of nullification and impairment if criminal procedures equivalent to Article 61 simply do not exist.

Beyond the failure to enact adequate substantive provisions, government piracy might also be proceeded against as a TRIPS violation. Although not the biggest area of loss for the copyright industry, government piracy would be easily remedied, as presumably the TRIPScontracting government exercises direct control over its own agencies' illicit use of pirated software.39 To illustrate, suppose that Bravatia purchases a single license for Microsoft Windows 2000 and equips all of its agencies' computers. USTR challenges Bravatia's practices and seeks relief in a WTO dispute resolution. Where a party that itself agreed to provide copyright enforcement under TRIPS has violated its promise of protection, a violation complaint for nullification or impairment of TRIPS benefits might be found. When private parties pirate, the government cannot always guarantee full enforcement. However, a government has immediate control over its own agencies. Fellow WTO members could expect the offender to meet its own obligations. Thus, where a country simply lacks a TRIPS mandated provision on its law books or where a national government itself is the copyright pirate, an injured party might bring a WTO dispute settlement violation claim.

B. Nonviolation complaints

With the end of the moratorium, nonviolation complaints become available for use in TRIPS disputes. In contrast to a violation case, a nonviolation complaint does not require any literal breach of a TRIPS provision. Article 23 (1) (b) defines nonviolation as that which nullifies or impairs TRIPS objectives resulting from the "application by another contracting party of any measure, whether or not it conflicts with the provisions of this Agreement."40 Thus, conduct that does not violate any rule of any WTO agreement may still be deemed to nullify trade benefits that members reasonably expected to obtain.41 It is perhaps because of the broad scope of nonviolation complaints that India and the European Union struck last minute agreements42 to add TRIPS Articles 64(2) and 64(4), placing a five year moratorium on such complaints.43 Generally, nonviolation complaints require: (1) airmative government action, such as an offending member state's applica Lion of a measure offsetting any trade benefit it had conceded;44 (2) the complaining member state's justified reliance on the nonoccurrence of the applied measure or event;45 and (3) actual injury.46 In claiming that the offending state applied a nullifying or impairing measure, the injured state must point to a specific measure applied by the offending state.47 In addition, the application of the measure must have not been "reasonably anticipated at the time that specific rights and obligations of market access were negotiated."48 ff the alleged actions were in fact objectively unforeseeable at the time of negotiations, a reviewing panel will implicitly recognize the claimant state's expectations as legitimate.49 Below, an examination of nonviolation complaints in two hypothetical scenarios-judicial discretion for injunctive remedies and inadequate damage awards-illustrates what arguments parties will likely advance for nullification and impairment of TRIPS benefits.

1. Judicial discretion in granting seizures, criminal sentences, etc.

Suppose Bravatia's judges have never ordered pirated goods destroyed under TRIPS Article 46 and never sentenced smugglers for Article 61 criminal commercial piracy. Although Bravatia's judges are authorized to grant these remedies, its judges, as a matter of judicial discretion, have systematically denied plaintiffs injunctive and prosecutorial remedies.50 In the case of failure to enforce TRIPS provisions on the ground, USTR might allege a nonviolation complaint where a justified reliance on actual copyright enforcement was not met and actual injury resulted. But in this particular example, no state will have applied a measure that creates a nullification and impairment. Instead, the defendant country has presumably failed to apply a measure not negotiated in TRIPS, such as granting injunctive relief for copyright enforcement in courts. Moreover, would such a nonviolation complaint extend to discretionary measures? TRIPS provides that "the judicial authorities shall have the authority" to order injunctive measures, but nowhere are judges required to grant these remedies.51 In fact, TRIPS Article 43(2) notes that judges "may" grant the remedy, indicating that TRIPS contemplates judicial discretion.52 Bravatia protests that it cannot simply force its judges to adjudicate as USTR desires53 and notes the exceptional conditions under which injunctive relief is granted.54 In short, Bravatia argues that recognizing this nonviolation complaint will create new obligations not undertaken at accession to WTO/ TRIPS.55

In response, USTR will argue that the TRIPS nonviolation and situation complaint moratorium express a specific intent to eventually recognize such claims,56 perhaps in the context of a steady pattern of copyright nonenforcement.57 Although a certain degree of nonenforcement is inherent in all legal systems,58 USTR argues that the country's enforcement record suggests a widespread problem requiring resolution.59 Moreover, nonviolation cases may arguably result from both state affirmative action, such as occurs in the application of a measure, as well as inaction, such as failing to enforce copyright enforcement provisions.60 The Article 63 transparency requirements that states publish both final judicial decisions and administrative rulings may help to demonstrate that the systematic denial of remedies is an abuse of discretion violative of TRIPS.61

2. Judicial discretion in granting civil damage awards

Suppose Bravatia provides its judges with the authority to grant money damages for copyright infringement. In the exercise of their discretion, however, Bravatia's judges typically grant damages equivalent to no more than a few hundred days of minimum wage.62 USTR seeks consultations with Bravatia before requesting a dispute settlement panel alleging that the damage awards are not a sufficient deterrent and constitute a nonviolation nullification of TRIPS.63 USTR argues that, at the time of the TRIPS negotiations, it was reasonably expected that the defendant state's damage awards would be adequately high to deter future copyright violations. It was not foreseeable that the developing country would grant such low damage awards for copyright infringement. USTR also presents evidence estimating the actual injury U.S. copyright industries have suffered because of the offending country's inadequate remedies. USTR alleges that the developing nation's unusually low damage awards constitute a nonviolation offense.

In reply, Bravatia claims that damage awards are open to prosecutorial and judicial discretion and that USTR's nonviolation complaint amounts to judicial micro-management and an expansion of the defendant's TRIPS obligations in direct contravention to DSU Article 3(2). Moreover, the developing country argues that USTR had no reasonable expectation of a particular range of damages as the TRIPS text itself leaves the award of damages to adjudicators. Finally, the developing country argues that USTR evidence of nonviolation prior to January 1, 2000 should be expunged because noncompliance during the developing countries' transition period is itself nonactionable.65 Recognizing nonenforcement evidence from the transition period, Bravatia argues, would frustrate the TRIPS goal of allowing developing countries an opportunity to become compliant without liability. Thus, nonviolation complaints, from Bravatia's perspective at least, risk undermining TRIPS guarantees of judicial discretion and the independence for which developing countries bargained.

C. Situation complaints

The third, broadest, and rarest claim in WTO/GATT jurisprudence is a situation complaint. Like nonviolation complaints, situation complaints allege no literal breach of a TRIPS obligation. Rather, a situation complaint may be brought when "the existence of any other situation" nullifies or impairs any benefit accruing directly or indirectly under WTO agreements or that impedes the attainment of any objective of any WTO agreement.66 To date, no situation case has ever come before the WTO or its GATT predecessor,67 thus, no panel has had the opportunity to elaborate on the standard for a successful situation claim. It is clear, though, that in the hands of an activist WTO panel, such an ill-defined and broad cause of action risks the creation of new duties not literally assumed during WTO accession.68 Professor Frieder Roessler, former Director of the WTO Secretariat's legal affairs division, offered his view that the only "situation" actually covered under the DSU is one "an identifiable WTO member is capable of correct ing."69 Thus, under this definition, Article 23(1) (c) only applies if the situation complained of results from a WTO member's failure to apply a measure not required by TRIPS. This is different from the active application of a measure that undermines TRIPS, either literally, as in violation cases under Article 23 (1) (a), or extratextually, as in nonviolation cases under Article 23(1) (b).70 As a standard for situation complaints, Professor Roessler suggested that future panels determine "not only whether there was a reasonable expectation that the situation would not occur but also whether there was a reasonable expectation that the government would intervene to correct this situation."71 Such a standard would constrain the meritless application of situation complaints to events outside the contemplation of TRIPS parties while preventing governments that are acting in bad faith from failing to correct situations within their control.

To demonstrate how a situation complaint might function, consider again the case of Bravatia, which is notorious for its generally inadequate judicial system. In Bravatia, copyright enforcement, like divorces, takes years to process72 and filings are frequently lost. As a developing country, Bravatia's judicial budget is tight, and the country takes literally the TRIPS Article 41 (5) limit on creation of new courts and allocation of resources. Because adjudication is so slow and the courts are generally inadequate, copyright enforcement, as could be expected, also lags. No specialized intellectual property courts exist and the length for copyright litigation is as protracted as any other cause of action. Nonetheless, Bravatia diligently enacted a comprehensive copyright code including provisions for enforcement. The USTR, unsatisfied with Bravatia's paper tiger copyright law, pursues consultations under a situation complaint.

The United States alleges that benefits accruing to it are nullified or impaired by a situation that Bravatia alone is capable of correcting.73 The present situation, USTR alleges, results from Bravatia's failure to provide an adequate judicial system for copyright enforcement, a measure not literally required by TRIPS, but nonetheless a situation that Bravatia can correct. USTR claims it reasonably expected that Bravatia would improve its inadequate judicial process for copyright enforcement and remedy this situation.

In response to U,S. allegations, Bravatia notes that TRIPS does not guarantee protection of copyright more effectively than other rights.74 Even after the five year transition period, it is simply not realistic to have immediately effective TRIPS implementation.75 Furthermore, Bravatia argues that the Uruguay Round negotiators adopted India's proposal that added Article 41(5) to TRIPS.76 Article 41(5) provides that TRIPS enforcement does not create any obligation to put in place a judicial system for the enforcement of intellectual property rights distinct from that for the enforcement of laws in general, nor does it affect the capacity of Members to enforce their law in general. "Nothing ... creates any obligation with respect to the distribution of resources as between enforcement of intellectual property rights and the enforcement of law in general. ,77 Bravatia claims that it does not have to create a special intellectual property court; Article 41(5) creates no obligation distributing resources between general law enforcement and copyright enforcement.

USTR counters that, under Article 41 (5), the restriction on judicial resources does not apply where reform requires no demonstrable resource increase to implement an obligation, as in superior filing procedures which avoid misplaced filings.78 Furthermore, Article 41 (5) does not allow a judiciary to maintain a system or tradition unless availability of resources is at stake.79 The judiciary may not have to spend more money than it currently spends, but it may have to reallocate how it spends that money. USTR argues that Bravatia does not suffer simply from a "TRIPS-irrelevant incapability," but from a "TRIPS-relevant unwillingness ... as regards implementation of the provisions of the Agreement."80

III. DEFERENCE TO NATIONAL GOVERNMENTS

The above hypothetical situations suggest that, with the addition of nonviolation and situation complaints, TRIPS might become increasingly invasive of national sovereignty. Below, this Note examines why WTO panels might defer to national sovereignty in the TRIPS setting, focusing particularly on the affirmative character of TRIPS obligations, the private behavior regulated, and the outcome-based nature of TRIPS.

A. GATT and TRIPS compared: Affirmative versus passive obligations

Unlike goods trade, trade in intellectual property requires governments to regulate in order to protect trade rights. For instance, in the copyright context, TRIPS commands states to actively regulate in order to secure authors the limited monopoly that is inherent in copyright.81 These affirmative TRIPS obligations require state action, unlike GATT's passive obligations to not regulate or tariff goods. Consequently, TRIPS intellectual property protection cuts deeper into national sovereignty because TRIPS obligations involve affirmative commands to governments to act to protect and enforce. Whereas trade barriers to goods typically involve active prevention or delay of entry into a market, trade barriers for copyrighted goods involve a lack of government action, namely inadequate copyright enforcement, that permits the free or below-cost exploitation of foreign goods. Therefore, TRIPS, unlike GATT, seems to require more government intervention and regulation in order to prevent nongovernment action, such as commercial piracy. These positive obligations in the TRIPS context require pervasive regulation in a way that lowering tariffs on trade-in-goods does not.82 Funds must be allocated to pay for police raids, prosecutors, and perhaps jails. Notwithstanding Article 41 (5)'s limitation on the creation of new courts, a duty to regulate may implicate the actual functioning of a state's judicial system. For example, a state's backlog in all cases, not just copyright suits, might require a revamping of the judicial system-or perhaps the invention of speedy justice for copy right owners-in order to avert a situation complaint.

The difficulty in controlling nonstate conduct is related to the affirmative obligations to regulate under TRIPS. Because only governments set tariffs on goods, it is a small task for states to lower these trade barriers. Achieving effective intellectual property protection, however, requires policing nongovernmental entities.83 Whereas WTO members comply with the trade in goods regime by simply reducing tariff barriers, objects uniquely under their control, TRIPS mandates state action against private, third party pirates, objects not easily under their control.84 Unlike borders where states have a continual and vigilant presence, internal enforcement may lack an effective state presence.85 These differences in TRIPS-affirmative obligations to regulate nonstate conduct-suggest a basis for allowing sovereigns the latitude to execute their regulatory and prosecutorial discretion.

B. Ends versus means: Criteria for panel evidence

As stated previously, the third, and most important, phase under the TRIPS copyright regime is enforcement on the ground-the actual state enforcement of border and criminal penalties-and civil court judgments against copyright infringers. For example, the International Intellectual Property Alliance (IIPA)86 has suggested types of evidence a state disputant might introduce before a WTO panel to prove alleged deficiencies in "on the ground" enforcement.87 This evidence includes piracy rates; dollar losses; the number of bootleg seizures and raids; police and prosecutorial action, delay, and success; and the number of arrests, convictions, and sentences imposed or served.88 Each proposed evidentiary category reflects IIPA's judgment of what states ought to be doing to achieve TRIPS' goal of copyright enforcement.

But to select criteria that require a certain number of raids, etc. is to decide not only what end TRIPS ultimately requires-adequate copy right protection-but also what means should be used in attaining that end. It might be argued that TRIPS requires trickle down regulation. Effective intellectual property protection is the end to be achieved and TRIPS provides some direction to states as to implementation by requiring the availability of certain enforcement tools. Ultimately, though, actual enforcement is left to individual states to accomplish.89 After all, TRIPS Article 1 (1) establishes that "Members shall be free to determine the appropriate method of implementing the provisions of this Agreement within their own legal system and practice. "90 Even the apparently mandatory TRIPS provisions on enforcement are not directly applicable, with language noting that "Members . . . shall ensure," "Members shall make available," or "Members shall provide for" the provisions.91

On this account, the appropriate evidentiary criteria for infringement disputes are ends-based. TRIPS aims for diminished piracy, as might be illustrated in evidence on dollar losses, piracy rates, etc. Conversely, panels assessing TRIPS claims should be less concerned with how many raid warrants judges grant than the overall reduction in piracy levels. Although states must mandatorily provide TRIPS enforcement measures, state sovereignty and discretion enter when actually executing the provisions.92 In the Bananas case, the European Union traversed the threshold between sovereign discretion and abuse when it responded to an unfavorable WTO appellate body decision by only cosmetically changing its banana regime and then claiming the regime WTO-consistent.93 The challenge, then, for WTO panelists is to balance appropriately state discretion with multilateral treaty obligations, such as panelists will do in deciding what categories of evidence are relevant in TRIPS adjudication.

IV. OTHER REMEDIES FOR NONENFORCEMENT

A. TRIPS Council review of nonviolation and situation complaints

For developing countries, the TRIPS agreement's greatest obstacle will be the costs of education, administration, and implementation of a copyright enforcement regime.94 Some countries have encouraged creative enterprise and innovation outside of the copyright paradigm, and, therefore, copyright enforcement to them is a new and foreign undertaking.95 Given these obstacles to TRIPS implementation, the WTO might consider the "carrot" in improving developing country copyright enforcement in addition to the usual "stick" of dispute settlement. One response to situation and nonviolation complaints might include making technical resources available to developing countries under TRIPS Article 67.96 Decisions to assist developing countries in this way might be made during a TRIPS Council Article 68 compliance review of whether a particular member provides adequate intellectual property enforcement.97 The Council might then be better positioned to decide what assistance it could offer a developing country suffering from a generally inadequate justice system. Because many enforcement inadequacies will be related to actual enforcement, the Council could also concurrently examine TRIPS nonviolation and situation complaints in accordance with its Article 64(3) mandate. In such a capacity, the TRIPS Council might collaborate with WIPO to provide the technical assistance that is WIPO's specialty.

B. Renegotiation: A possible trade off?

Outside of TRIPS Council assistance, WTO members might consider renegotiating, or at least clarifying, existing TRIPS obligations. Both developed and developing countries have concessions to offer the other because of the difficulties inherent in marrying international trade and intellectual property.

1. Cross-Sectoral Remedies Against Goods, Against Intellectual Property

It must still be decided what remedies may be granted if a WTO member prevails on its TRIPS copyright enforcement claims against a developing country. The remedies typically available include withdrawal of the offending measure, or maintaining the measure but offering compensatory benefits or suffering retaliation.98 Yet, remedies pose a particular difficulty in the WTO/TRIPS copyright context. One of TRIPS' greatest strengths-permitting countries with intellectual property industries to retaliate across sectors against violators in physical goods areas-also proves to be one of its greatest liabilities. Under the WTO, retaliation is generally disfavored-parties should first seek to suspend concessions in the same trade sector (e.g., copyright retaliation for copyright infringement) . If that is not practicable, such as when the offending country has no copyright industry, then states may retaliate against other sectors under the same agreement (e.g., patent retaliation for copyright infringement). If that retaliation is still not possible, then retaliation may proceed under other agreements (e.g., goods retaliation for intellectual property) .99

Although goods sector retaliation for wrongs in the intellectual property sector appears to effectively goad transgressors100 retaliation does not work in the reverse, where retaliation occurs in the intellectual property sectors for misbehavior under the trade-in-goods GATT agreement.101 Unlike the right to trade in goods, which is merely a functional right (one can always take one's goods elsewhere and sell them if denied market access), copyright is a property interest.102 Suspending copyright protection during retaliation is problematic because it is akin to expropriating a foreign national's private property.103 The Council for TRIPS might consider that, under WTO adjudication, private copyright holders are never compensated for their actual past losses because TRIPS relief for copyright holders is always prospective.104 Although concessions and retaliation may have been an appropriate remedy for loss of functional rights to trade abroad, the remedy seems incomplete for actual property loss. Moreover, the level of retaliation is supposed to be equivalent to the level of nullification or impairment.105 But with intellectual property, it is difficult to only "take" a discrete amount of the property interest.106 The WTO's dispute settlement body might find it necessary to tightly monitor cross-sectoral remedies, ensuring that they occur only when truly practicable. In fact, assuming non-intellectual property states consent, the Council for TRIPS might find it necessary to limit retaliation in the intellectual property context. For legal cultures where copyright is a new concept, it may be insuperably strange to have copyright one day and none the next, only to reinstate it sometime in the future. Instead, provided developing countries give their consent to correct this beneficial asymmetry, the Council for TRIPS might simply require TRIPS offenders to remove or remedy the offending practices or provisions.

2. A Standard of Review for Nonviolation and Situation Complaints

Developing countries are unlikely to agree to eliminate cross-sectoral retaliation against intellectual property unless offered concessions. To strike this bargain, developed countries might offer the addition of a standard of review for nonviolation and situation complaints. Because nonviolation and situation cases create nontextual obligations, they have the potential of expanding member countries' obligations beyond those originally negotiated107 and encroaching on national sovereignty.108 A standard of review has been used elsewhere. For example, to control pushes toward greater obligation, WTO members adopted a standard of review in Articles 17(6) (i) and 17(6) (ii) of the Antidumping Agreement,109 which defined the point to which panels should respect national government determinations.110 Akin to the Chevron case,111 Article 17(6) (i) requires WTO panels to consider first whether a provision in question allows more than one interpretation under the rules of construction of customary international law. Second, under Article 17(6) (ii), panels must ask whether a national interpretation is within a set of permissible interpretations. If an interpretation is within a permissible set, the state may exercise its discretion. For example, in the copyright enforcement context, a state may offer an interpretation of TRIPS Article 61's criminal remedies that does not require a judge to ever send a defendant to jail, provided the judge has authority to do so. If the panel finds that Article 61 admits of multiple interpretations, then the panel inquires whether the state's interpretation is permissible. Because both nonviolation and situation claims have the potential to expand state obligation considerably, particularly developing state's obligations, developed countries might offer this token as a quid pro quo for a ban on retaliation against intellectual property. A standard of review provision might balance the expansive character of extratextual obligations by granting states some permissible interpretations of TRIPS obligations.112 Because the TRIPS Council's `built in' agenda provides for a review of the scope of nonviolation and situation complaints, a negotiation to add a TRIPS standard of review for nonviolation and situations complaint might occur during the TRIPS Council's deliberations.113

Failing a successful trade off, both developed and developing countries could exploit the TRIPS Agreement's flaws to their advantage. Developed countries could allege nonviolation or situation complaints, thereby creating additional obligations for developing countries. In turn, developing countries could retaliate against intellectual property and effect a wholesale taking of developed countries' intellectual property. To keep TRIPS well-functioning in the post transition, postmoratorium WTO, both developed and developing countries should consider negotiating.

V. Comclusion

This Note outlined three varieties of complaints-violations, nonviolations, and situations-that WTO member countries might allege during dispute settlement and reviewed the difficulties inherent in actions for a member's inadequate `on the ground' enforcement. This Note argued that the distinction between passive and affirmative obligations suggests that WTO panels avoid micromanaging developing countries' TRIPS enforcement, particularly when selecting the appropriate criteria for panel evidence to establish a nonviolation or a situation. Beyond dispute settlement remedies, WTO members might also resort to the "carrot" of TRIPS Council and WIPO technical assistance as an alternative to the "stick" of nonviolation and situation complaints. To avoid impasse in the WTO, developing and developed countries alike might consider the possibility of renegotiating: Developed countries conceding on a standard of review for nonviolation and situation complaints; developing countries surrendering the ability to seek cross-sectoral sanctions against intellectual property.

1. See Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, Marrakech Agreement Establishing the World Trade Organization [hereinafter WTO Agreement], Annex 1C, tn RESULTS OF THE URUGUAY ROUND OF MULTILATERAL T12ADE NEGOTIATIONS I (1994) [hereinafter RESULTS of THE URUGUAY ROUND] 365 (1994), 33 LL.M. 1197 [hereinafter TRIPS].

2. Sx id. art. 65(1), at 898, 33 LL.M. at 1222 (providing all WTO members a one year transition period from the January 1,1995 entry into force of the WTO agreement); id. art. 65 (2) , at 898,33 88 LL.M. at 1222 (granting developing countries an additional four year transition period); id. art. 64(2), at 898, 88 LL.M. at 1221 (mandating that nonviolation and situation complaints will not apply to TRIPS dispute settlement for a period of five years from the January 1,1995 entry into force).

3. Because of the premature conclusion of the Seattle Ministerial, WTO member states were unable to address developing country proposals to extend either the transition period or the TRIPS nonviolation-situation complaint moratorium. The discussion of the proposals has been postponed and the members of the General Council have an understanding "that all Members will exercise restraint on the matters under consultation so as not to prejudice further fruitful

discussion and decisions on these matters." Press Release by the World Trade Organization, General Council Defers Post-Sea#le Dicussion Until Early 2000, i 9 (Dec. 17, 1999) . This understanding, however, is not legally binding, adversely affected member states could still assert their rights against developed countries under TRIPS.

4. See INTERNATIONAL INTELLECTUAL PROPERTY ALIANCE, IIPA Letter to Mr. Papovich, in 1999 SPECIAL SOl RECOMMENDATIONS 1, 2 ( 1999) (noting that copyright, with foreign sales and exports of $60.18 billion, led all major industry sectors, including agriculture, autos, and aircraft).

5. See id 6. See id.

7. To that end, Joseph Papovich, Assistant United States Trade Representative, promised to commence filing WTO dispute resolution cases in January 2000 for those developing nations that fail to adequately enforce their intellectual property laws. See U.S. Awaits Coming of `Millenttium Roured'of W Negotiatons, 16 Int'l Trade Rep. (BNA) 103 (Jan. 20, 1999).

8. See Ted L. McDorman, Unilaleralism (Section 301) to Multilateralism (GATT): Settlement of Intenwdimnal Intal Pfnpcrty Disputes After the Uruguay Round, in INTERNATIONAL TRADE AND INTELLECTUAL PROPERTY: THE SEARCH FOR A BALANCED SYSTEM 119,120 (George R Stewart et al. eds., 1994).

9. See Gail E. Evans, Intellectual Ptoperty as a Trade Issue-The Making of the Agreement o Trade Aspects of lntellectual Property Rights, 18 WORLD COMPETITION L. & ECON. REV. 137, 144 (1994).

10. See Jerome H. Reichman, Intellectual Property in International Trade: Opportunities and Risks of a GATT Connection, 22 VAND. J. ThAC.SNAT'L L. 747, 801 (1989).

11. See id.

12. See, e.g., Rochelle C. Dreyfuss & Andreas F Lowenfeld, Two Achievements of the Uruguay Round: Putting TRIPS and Dispute Settlement Together, 37 VA. J. INT'L L. 275, 279 ( 1997).

13. The trade distortions, however, are not limited to the developed world. Arguably, weak intellectual property protection also hurts developing countries. See, e.g., Joy-irt H. JACKSON ET nA.., LEGAL PROBLEMS of INTERNATIONAL ECONOMIC RELATIONS 849 n.7 (3d el. 1995) (noting that "[w]eak intellectual property laws can be a double-edged sword . . . they stifle domestic innovation and may even have adverse effects on the rate of innovation abroad which will hurt consumers in the developed and developing nations alike."); Eric H. Smith, Wor/ide Copyright Protection Under the TRIPS Agreement, 29 VAND. J. TRANSNAT'L L. 559, 563 ( 1996) (noting that domestic works are usually the first to be pirated). For example, India may come to view intellectual property protection in its own interest because it encourages local innovation. See Marco C.EJ. Bronckers, The Impact of TRIPS: Intellectual Property Protection in Developing Countries, 31 COMMON MxT. L. REv 1245, 1248 (1994) (noting that India is beginning to view intellectual property protection as a means of stimulating local innovation); Kathy Chen et al., China Can't Silence Its American Critics Despite Reforms as Clinton Starts Trip, ASIAN WALL ST. J., June 24, 1998, at 1, available in 1998 WL-WSJA 12980938 (quoting Greg Mantel, vice president of the Economic Strategy Institute, as saying, "China has realized it's in their interest to enforce the rules . . . . Nobody is going to develop Chinese-based software programs if they think they will be pirated."). Thus, although a lax copyright regime may be a regulatory subsidy to a domestic pirate industry, weak copyright laws and enforcement also harm legitimate domestic authors. Cheap, pirated foreign and domestic works compete at an unfair advantage with the legitimate products of domestic authors, thus creating disincentives for investment in creative innovation. But see Ruth L. Gana, Prospects for

Developing Countries Under the TRIPS Agreement, 29 VAND. J. TRANSNAT' L. 735, 740 ( 1996) (arguing that intellectual property protection creates a disproportionate burden on developing countries without tangible development benefits).

14. See Frederick M. Abbott, The Future of the Multilateral Trading System in the Content of TRIPS, 20 HASTINGS INT'L & COMP. L. REV 661, 674 (1997).

15. See/ id at 679.

16. See Bronckers, supra note 13, at 1249.

17. See Berne Convention for the Protection of Literary and Artistic Works of Sept. 9, 1886, revised at Paris July 24, 1971, 102 Stat. 2858, 943 U.N.T.S. 194.

18. See id at art. 33.

19. TRIPS incorporates the Berne Convention's substantive copyright minima as well as a host of matching enforcement measures. See TRIPS, supra note 1, art. 9, at 370, 33 LL.M. at 1201 (incorporating by reference Berne Convention Articles 1 through 21, except Article 6bis regarding moral rights). See id. arts. 1-21, at 367-75, 33 LL.M. at 1198-1205.

20. See McDorman, supra note 8, at 120 (noting that "states are not going to be able to adopt the level and kind of intellectual property regime appropriate to their economic, social, or cultural situation; rather adherence will be required to a multilaterally-determined norm.").

21. The U.S. government implements TRIPS, like all WTO agreements, by statute and not by treaty. See generally Uruguay Round Agreement Act 315, Pub. L. No. 103-465, 108 Stat. 4809 ( 1994). Some commentators have expressed understandable concern at this circumvention of the Senate's advice-and-consent super-majority check on the treaty process. See, e.g., David Nimmer, TheEnd of Copright, 48 VAND. L. REV.1385,1397-98 ( 1995) (noting Laurence Tribe's opposition to statute-based WTO accession).

22. See Judith H. Bello, Some Practical Observations About WTO Settlement of Intellectual Property Disputes, 37 Vn. J. INT'L L. 357, 364 (1997).

23. See id at 365 (noting India and the European Union bargained for a five-year moratorium on nonviolation nullification or impairment challenges in exchange for changes in TRIPS semiconductor protection).

24. Su Ana Maria Pacon, What Will TRIPS Do for Developing Countries: ire fort GATT To TRIPS-THE AGREEMENT ON TRADE RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS 329, 352 (Friedrich-Earl Beier and Gerhard Schricker, eds.,1996). Special 301 permits the United States to retaliate with trade sanctions for unfair trade practices, such as inadequate copyright protection. See Trade Act of 1974, 301, Pub. L. No. 93-618, 88 Stat. 1978 (1974) (codified as amended at 19 U.S.C. 2411-20 (1994 & Supp. IV 1998) ).

25. See Understanding on Rules and Procedures Governing the Settlement of Disputes, Apt: 15, 1994, art. 23.1, WTO Agreement, Annex 2, in RESULTS OF THE URUGUAY ROUND, supra note 1, at 404, 425 (1994), 33 LL.M. at 1226, 1241 (1994) [hereinafter DSU].

26. See Karen D. Lee & Silke von Lewinski, The Settlement of International Disputes in the Field of Intelectual Property , in FROM GATT TO TRIPs-THE AGREEMENT oN TRADE RELATED AsPECTS of INTELLECTUAL PROPERTY RIGHTS, supra note 24, at 279, 295.

27. See Bronckers, supra note 13, at 1255-56. The UN system classifies on the basis of per capita income, quality of life, economic diversification, and structural characteristics. See id. at 1255 nn. 37-39. The states that would be counted as an LDC under the World Bank, but not UN, approach include: China, Egypt, Ghana, Honduras, India, Indonesia, Kenya, Nicaragua, Nigeria, Pakistan, Sri Lanka, and Zimbabwe. Se id. at 1257.

28. Israel, for example, has classified itself as a developing country, notwithstanding its developed country GNP. See World Trade Organization Singapore Ministerial Meeting. Hearings Before the Subcomm. on Trade of the House Comm. on Ways and Means, 104th Cong. 110 ( 1996) (testimony of Eric H. Smith, President, International Intellectual Property Alliance).

29. Were such a dispute to arise, USTR might make reference to the offending member state's past declarations and representations about its TRIPS obligations. Although probably largely a political choice, self-classification that contradicts earlier declarations might be viewed as being in bad faith and being a nonviolation nullification and impairment of TRIPS benefits accruing to the injured state. Because the USTR has limited resources to commit to WTO intellectual property enforcement, if the abuse of self-classification is isolated, the USTR might forego dispute resolution, concentrating its limited resources elsewhere, as eventually all WTO members, even LDCs, will be subject to the full extent of TRIPS obligations. See TRIPS, supra note 1, art. 66, at 39, 38 LL.M. at 1222.

30. See Frederick M. Abbott, WTO Dispute Settlement and the Agreement on Trade-Related Aspects of Intellectual Property Rights, in INTERNATIONAL TRADE LAW AND THE GATT/WTO DISPUTE SETTLEMENT SYSTEM 413, 415-16 (Ernst-Ulrich Petersmann ea., 1997).

31. See id. at 428. 32. See iD

33. See McDorman, supra note 8, at 132. The WTO Seattle Ministerial Conference and the violent demonstrations that occasioned it illustrate this discontent. Sx WT Gets Off to Rocky Start Amid Tear Gas, Protests, Dow Jones NEws $ERV., Nov 30, 1999. Prominent among the discontents were environmental and labor interests, who were protesting unpopular WTO decisions that emphasized free trade of products over regulation of objectionable processes that create the goods. See, e.g., WTO Panel Report, United States-Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R (Nov 6, 1998) (holding that an import prohibition on shrimps caught in nets without turtle extrusion devices violates GATT obligations).

34. See McDorman, supra note 8, at 139 n.77.

35. See General Agreement on Tariffs and Trade, Oct. 30, 1947, art. 23(1) (a), 61 Stat. A 11, TLA.S. 1700, 55 U.N.TS. 194 [hereinafter GATT 1947].

36. See Press Release by Office of the U.S. Trade Representative, Executive Office of the President, Press Release No. 98-106, USTR Barshefsky Announces Resolution of WTO Dispute with Sweden on Intellectual Property Protection, i 3 (Dec. 3, 1998) (noting Sweden's failure to comply with Article 50 by not providing judicial authorities with authority to order prompt and effective provisional remedies to prevent copyright infringements); Press Release by Office of the U.S. Trade Representative, Executive Office of the President, Press Release No. 97-113, U.S. Trade Representative Announces FavorableDecision for United States in WTO Dispute with lndia, i 2 (Dec. 23, 1997) (announcing India's settlement of a WTO dispute after an appellate body decision finding India failed to enact provisions for Article 70(8), 70(9)). One case resembled less an intellectual property protection case and more a trade-in-goods national treatment discriminatory taxation case. See Press Release by Office of the U.S. Trade Representative, Executive Office of the President, Press Release No. 97-108, US. Trade Representative Charlene Barshefsky Announces Resolution of WTO Dispute with Turkey on Film Taxes, i1 (Dec. 19, 1997) (reporting a dispute over a special tax on American films where no such tax applied to Turkish films).

37. See TRIPS,,supra note 1, art. 61, at 395, 33 LL.M. at 1220.

38. See GATT 1947, supra note 35, art. 23(1) (a), 4 B.LS.D. at 39.

39. Perhaps, as an example, and possibly to avoid dispute settlement itself, the United States recently announced Executive Order 13103 banning administrative agencies from using illegally copied software. See Exec. Order 13,103, 63 Fed. Reg. 53,273 ( 1998). In support of its bid for WTO accession, China announced a similar directive to combat software piracy by its own government agencies. See Press Release by Office of the U.S. Trade Representative, Executive Office of the President, Press Release No. 99-32, China Issues New Directive to Fight Software Piracy (Apr. 7, 1999) (noting the "new high-level directive to all Chinese government entities directing that they use only legitimate computer software and that such software be used only as authorized").

40. GATT 1947, supra note 35, art. 23( 1) (b), 4 B.LS.D. at 39 (emphasis added). 41. See Bello, supra note 22, at 366.

42. See Lee & von Lewinski, supra note 26, at 289 n. 45.

43. See id at 289 (noting that Article 64 bans nonviolation cases under TRIPS until Jan. 1, 2000).

44. See Dreyfuss & Lowenfeld, supra note 12, at 283. 45. See id. at 284. 46. See id.

47. See Thomas Cottier & Krista N. Schefer, Non-Violation Complaints in WTO/GATT Dispute Sett(ement: Past, Present and Future in INTERNATIONAL TRADE LAW AND THE GATT/WTO DISPUTE Ss Sue, supra note 30, at 145,161.

48. Id at 162. 49. See id at 171.

50. See also INTERNATIONAL INTELLECTUAL PROPERTY ALLIANCE, supra note 4, at 153 (noting that Italian authorities do not give stiffer penalties allowed by law because of plea bargains entered as a matter of prosecutorial discretion); cf. Press Release by Office of the U.S. Trade Representative, Executive Office of the President, Press Release No. 99-41, USTR Announce Results of Special 301 Annual Reoiem (Apr. 30, 1999) (noting that Thailand's specialized intellectual property rights court has overturned all criminal convictions on appeal and that no pirate or counterfeiter has served time in prison for copying or selling protected goods).

51. S DANIEL GERVAIS, THE TRIPS AcRE: DRAFTING HISTORY AND ANALYSIS 204 (1998). 52. See id

53. Cf. Intellectual Pro/xrty: U. S. Begins Special 301 Case on Paraguay For Not Protecting Intellectual Properly, 15 Int'l Trade Rep. (BNA) 81 (Jan. 21, 1998) (The "executive branch cannot force the legislative and judicial branches to act as the United States wants.") (quoting the Paraguayan ambassador to the United States). But see Nimmer, supra note 21, at 1415 (noting that judges are a part of the government in United States and that the ECJ has also treated local courts as instruments of member state governments).

54. SCC MICHAEL BiENE, TRADE RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS: A CONcIsE GUIDE TO THE TRIPS AGREEMENT 126 ( 1996) (noting that Anton Piller ex parte applications for in camera orders to inspect a defendant's premises are to be used sparingly).

55. See DSU, supra note 25, art. 3(2), at 405, 33 LL.M. at 1227. In the transition period case, India-Patent Protection for Pharmaceutical and Agricultural Chemical Products, the Appellate Body rejected the below panel's interpretation of Vienna Convention Article 81's "good faith" standard. WTO Appellate Body Report, India-Patent Protection for Pharmaceutical and Agricultural Chemical Products, WT/DS50/AB/R, 45 (Dec. 19, 1997) [hereinafter India-Patent]. Instead, the Appellate Body stated that "the legitimate expectations of the parties to a treaty are

reflected in the language of the treaty itself." Id In reaching its decision, the Body cited the Dispute Settlement Understanding as the relevant governing law: The WTO adjudicative process "cannot add to or diminish the rights and obligations provided in the covered agreements." DSU, art. 3(2), at 405, 83 LL.M. at 1227. Reading a broad "good faith" requirement creates new obligations that were not agreed to during the course of negotiation. One commentator has read India-Patent as evidence of WTO deference to local law and strict construction of treaties. See Jerome H. Reichman, Securing Compliance with the TRIPS Agreement After US v. India, l J. INT'L EcoN. L. 585, 596 ( 1998). Because India-Patent was authored before the expiration of the nonviolation moratorium and transition, it is uncertain whether the case merely reflects the unavailability at the time of nonviolation complaints or whether it represents a WTO adjudicative rejection of nonviolation as a complaint.

56. See Dreyfuss & Lowenfeld, supra note 12, at 286. 57. See id, at 296.

58. See Abbott, supra note 30, at 430.

59. See Jerome H. Reichman, Enforcing the Enforcement Procedures of the TRIPS Agreement, 37 VA. J. INT'L L. 335, 348 (1997) (noting that a "salient characteristic of the prior law of state responsibility . . . was its reluctance to permit intervention in another state's affairs in the absence of a 'consistent pattern of gross violations' of the relevant international minimum standards.") (quoting 2 RESTATEMENT (THIRD) OF THE FOREIGN RELATIONS LAW OF THE LTN-ED STATES 711 (a) and cmt. c ( 1987) ).

60. See Cottier & Schefer, supra note 47, at 161 (arguing that nonviolation can result from either action or inaction). In Ammonium Sulphate, a trade-in-goods nonviolation case, the imposition of a subsidy for an interchangeable fertilizer was deemed a nonviolation nullifying an earlier benefit received from a tariff reduction. See GATT Dispute Panel Report on Australian Subsidy on Ammonium Sulphate, Apr 3,1950, 2 B.LS.D. at 188 (1952). In contrast, in German Import Duties on Starch, the Benelux countries negotiated tariff concessions on starch with Germany. Although Germany promised to establish lower tariffs, it did not take action for three years. See GATT Dispute Panel Report on German Import Duties on Starch and Potato Flour, Feb. 16, 1955, B.LS.D. (3d Supp.) at 77 (1955). Collier characterizes the case as a nonviolation. Failure to keep a promise to reduce tariffs, however, more closely resembles a violation case. Situation complaints, rather than nonviolation complaints, seem more appropriately concerned with governmental failure to act.

61. See TRIPS, supra note 1, art. 63, at 395, 33 LLM. at 1220.

62. Cf. INTERNATIONAL INTELLECTUAL PROPERTY ALLIANCE, supra note 4, at 173 n.1 (noting Mexico had only one conviction for piracy in 1998 and the defendant was fined the equivalent of 232 days of Mexican minimum wage and noting that Mexico has not fined a pirate more than US$1000).

63. Cf. Intellectual Property: United States Asks For WTo Panel in Dispute Over Irish Copyright Law, 15 Int'l Trade Rep. (BNA) 147 (Jan. 28, 1998) (noting U.S. complaint that criminal penalties for copyright violations under Irish law are too low to be deterrent). In response to U.S. demands, Ireland raised its criminal penalties. See Press Release by Office of the U.S. Trade Representative, supra note 50, at 17.

64. See, eg., TRIPS, supra note 1, art. 45, at 389, 88 LL.M. at 1215 ("The judicial authorities shall have the authority to order the infringer to pay the right holder damages adequate to compensate for the injury the right holder has suffered. . .").

65. Eric Schwartz terms this the "etch-and-sketch" approach to TRIPS compliance: Developing countries claim all evidentiary scribblings prior to January 1, 2000, during the transition period, are erased and developing countries start a fresh evidentiary slate at the millennium. Interview with Eric Schwartz, Counsel to the International Intellectual Property Alliance, in Washington, D.C. (April 9, 2000).

66. GATT 1947, supra note 35, art. 23(1) (c), 4 B.LS.D. at 39.

67. See Frieder Roessler, The Concept of Nullification and Impairment in the Legal System of the World Tade Organization, in INTERNATIONAL TRADE LAW AND THE GATT/WTO DISPUTE SETTLEMENT SYSTEM, supra note 30, at 123, 139.

68. The DSU bars panel creation of new WTO obligations during dispute resolution adjudication. See DSU, supra note 25, art. 3(2), at 405, 33 LL.M. at 1227.

69. Roessler, supra note 67, at 139.

70. See id. 71. Id. 72. Cf. INTERNATIONAL INTELLECTUAL PROPERTY ALLIANCE, supra note 4, at 154 (noting Italy's "notoriously slow" six year avearge to reach copyright infringement decisions on the merits). 73. Cf. Roessler, supra note 67, at 139. 74. See Bronckers, supra note 13, at 1273.

75. Ser Thomas Dreier, TRIPS and the Enforcement of Intellectual Property Rights, in FROM GATT TO TRIPS-THE AGREEMENT ON TRADE RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS, supra note 24, at 248, 271.

76. Sae Enforcement of Tdo-Related Intellectual Projxrtay Rights, GATT Doc. MTN.GNG/NG11/ W/40, at 3 (Sept. 5, 1989) (communication from India).

77. TRIPS, supra note 1, art: 41 (5), at 387, 83 LL.M. at 99. 78. See GERVAIS, supra note 51, at 199.

79. See id.

80. Dreier, supra note 75, at 272.

81. See, eg., Greece-Enforcement of Intellectual Property Rights for Motion Pictures and Television Programs, Request for Consultations by the United States, WT/DS125/1, IP/D/14 (May 7,1998). IntuallPrope USTR Announces WTO CaseAgainst Greece Over TVPtracy in Spcial 301 Announcement, 15 Int'l Trade Rep. (BNA) 768 (May 6, 1998) (noting Greek action plan to combat broadcast piracy as requiring TV station licensing, denying licenses to pirates, and forcing unlicensed stations to close).

82. Sae WTO Panel Report, India-Patent Protection for Pharmaceutical and Agricultural Chemical Products, WT/DS50/R, i 7.55 (Sept. 5,1997) (noting, in the patent context, "positive" obligations on member states to protect intellectual property in addition to "negative" limitations).

88. See Thomas Cottier, Intual Property in Interntional Trade Law and Policy: The GATT Con 47 AusseNwrtnrscrmer 79, 83 (1992).

84. See David Hartridge & Arvind Subramanian, Intellectual Property Rights: The Issues in GATT, 22 VANo. J. TYtATTSNAT'L L. 893, 907 (1989). Strict border controls, however, increase concerns about unjustified discrimination against imported goods. See, e.g., Adrian Otten & Hannu Wager, Compliance uith TRIPS: The Emerging World View, 29 VAND. J. TYtnrrSNAT'L L. 391, 405 (1996) (preferencing fighting counterfeiting at its source rather than at borders so as to avoid discriminatory treatment of imported goods).

85. As a result, WTO panels might ultimately choose to grant states less deference when adjudicating member nonenforcement of border controls as opposed to internal controls. Vigorous border measure enforcement will become increasingly important for copyright holders as developing country intellectual property enforcement may ultimately force pirates to relocate to transition period LDC and non-WTO countries.

86. IIPA is an umbrella trade association representing the intellectual property interests of its members, including several associations representing copyright industries.

87. See generally INrexxnTCOtJm, INTL..CrIIAL PROPERTY At.t.tnrtce, supra note 4 (reporting on the status of worldwide copyright protection and recommending policy initiatives).

88. See id.

89. See Dreier, supra note 75, at 271 (noting the "result-oriented criteria of the TRIPs provisions.") 90. See TRIPS, supra note 1, art. 1(1). at 367, 33 I.L.M. at 84. 91. See Dreier, supra note 75, at 270 (emphasis added). 92. See id. at 271.

93. See Press Release by Office of the U.S. Trade Representative, Executive Office of the President, Press Release No. 99-31, WTO Finds EUBasana Regime Hurts U.S. Tade (Apr. 6, 1999) .

94. See Crana, supra note 13, at 774.

95. Cf. Cynthia V Stewart, Trademarks in Russia: Making and Protecting Your Mar, 5 Tt. IrrrEtz.. PRop. LJ. 1, 16 (1996) (noting Russian judges' lack of expertise with trademark law). Russia is presently seeking to accede to the World Trade Organization.

96. See Dreyfuss & Lowenfeld, supra note 12, at 526. 97. See Abbott, supra note 80, at 480.

98. SeJudith H. Bello, The WTODispute Settlement Understanding: Less is More 90 Aht. J. INT'L L. 416, 417 (1996).

99. See Dreyfuss 8c Lowenfeld, supra note 12, at 329.

100. See Proclamation No. 5885, 53 Fed. Reg. 41,551 (1988) (announcing tariff lines against Brazilian goods because of the country's inadequate patent protection).

101. See Lee & von Lewinski, supra note 26, at 316 (noting the possibility that developing countries may use cross-retaliation against developed countries' intellectual property sectors for bad behavior in the trade-in-goods areas).

102. See Barcelona Traction, Light and Power Company, Limited (Belg. v Spain), 1970 LC J. 4, 276 (Feb. 5,1970) (distinguishing between property rights and functional rights to trade).

103. SeeBronckers, supra note 18, at 1277. 104. See Abbott, supra note 30, at 429.

105. See Lee & von Lewinski, supra note 26, at 316.

106. See Abbott, supra note 30, at 433 (inquiring whether works enter the public domain during the period of copyright suspension; whether an unlimited quantity of the work can be produced and sold; and whether, once the suspension is lifted, copies produced during the suspension period may be recopied without obligation to the original copyright holder).

107. See Roessler, supra note 67, at 137.

108. Conversely, states also have an "incentive to erode [TRIPS] through interpretation." See Steven P. Croley & John H. Jackson, WTD Dispute Procedures, Standard of Reuiew, and Deference to National Governments, 90 AHt. J. INT'L L.193, 209 ( 1996) . By claiming large vistas of discretion, states could undermine WTO obligations, claiming that actual enforcement is uniquely the province of state sovereignty when, in fact, multilateral agreements require otherwise. DSU Article 3(2) acts to limit such erosion of the WTO agreements. "Recommendations and ruling of the DSB cannot . . . diminish the . . . obligations provided in the covered agreements." See DSU, supra note 25, art. 3(2) , at 405, 83 LL.M. at 1227 (emphasis added).

109. See Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade, Apt: 15, 1994, art. 17.6, WTO Agreement, Annex IA, in RES of THE URUGUAY RouND, supra note 1, at 168,193.

z,: y. ,.. ,.ry .;*I*II, 107 W,'3

112. See Bello, supra note 22, at 362 (arguing there is no TRIPS equivalent to the Antidumping Agreement's provisions for deference); Dreyfuss & Lowenfeld, supra note 12, at 324-21 (similarly noting an absence of any TRIPS provision analogous to the Antidumping Agreement Article 17(6)); Croley & Jackson, supra note 108, at 199 (noting that the limiting language on standard of review applies only to the Antidumping Agreement and not necessarily to other cases before WTO panels).

113. See Adrian Otten, Implentation of the TRIPS Agreement and Prospects for Its Further Development, 1 J. INT'L EcON. L. 523, 533 (1998).

TUAN N. SAMAHON*

*J.D., Georgetown University Law Center, May 2000. I would like to thank Eric Schwartz for his suggestion of the topic and his helpful comments. Special thanks to Justin Jones and my wife Lindsey for reviewing early drafts of this Note.

Copyright Georgetown University Law Center Spring 2000
Provided by ProQuest Information and Learning Company. All rights Reserved