The Trans-Pacific Partnership: will the exportation of our intellectual property regime help or hinder global innovation?

February 5, 2016

Without a doubt, the Trans-Pacific Partnership (“TPP”) is a very big deal. It is arguably “one of the most ambitious free trade agreements ever signed.” The TPP is a pact amongst twelve counties that aims to deepen economic ties by reducing and removing tariffs and by forging compromises on a wide range of trade related matters. The TPP, a near six-thousand page agreement, is divided into thirty chapters. The public has differing views on whether this extensive agreement is good or bad for their countries. They contrast most on the provisions in Chapter 18, the chapter focusing on Intellectual Property, which has received some of the most attention as of yet. The Office of the United States Trade Representative claims that the provisions in Chapter 18 “will make it easier for businesses to search, register, and protect IP rights in new markets” by creating strong enforcement systems that aim to protect the copyrights, patents, and the trademarks that will now be recognized by all of the twelve signatories.

But will free trade and the exportation of the United States’ corporate and intellectual property frameworks contribute to global innovation?

The United States is the largest global spender on research development, making up 32 percent of the global investment in R&D. Will U.S. corporations invest more if they have more access and protections in foreign markets?
Michael Czinkota, a former Deputy Assistant Secretary of Commerce in the United States Department of Commerce and Valbona Zeneli, a professor at the George C. Marshall European Center for Security Studies argue that the key benefits that will derive from these free-trade agreements is technological innovation, which he argues is a crucial element in future growth and development. Stating that the simplification of trade and investments relations offered by these agreements will contribute greatly to technological innovation.
Some believe that exporting intellectual property rights, reducing trade barriers, and exposing their economies even more to foreign companies will hurt innovation arguing that the framework of the TPP will disproportionally burden new innovative companies. Mr. Brenznitz, a co-director of the innovation policy lab at the Munk School of Global Affairs at University of Toronto, argues that the TPP disrupts innovation because he believes it adopted and forces an extreme version of the U.S. intellectual property regime on all the member countries that essentially doesn’t even allow other countries to make improvements to a patented item without the approval of all the other TPP members. Furthermore, a provision in the TPP, the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), sets a global floor on patents rules that will make it harder for foreign pharmaceutical companies to produce and sell generic drugs. Consequentially, the TPP may extinguish these pharmaceuticals’ bread and butter and hinder their ability to stay in business and develop new drugs. Additionally, opponents argue that the process of “evergreening”, a process in which drug companies can request patent extensions for new uses of old drugs, will allow such companies to permanently extend the life of their patents.
Those on the other end of the spectrum argue that the TPP will contribute greatly to innovation. Stephen Ezell, vice president for global innovation policy at the Information Technology and Innovation Foundation, has stated the TPP agreement “sets a high bar that will maximize the opportunity for [technological] innovation world” praising the new protections against trade secret theft and the intellectual property protections that he argues incentivize the “risk and expense of innovation.” If anything, Mr. Ezell recommends that the U.S. renegotiate for twelve years of data protection for biologic medicines, instead of the five-to eight-years of patent protection provided in the TPP, to spur global biomedical innovation. Others complement the provisions that give foreign countries and corporations additional rights that in turn will protect their investments in research and development abroad and also allow them to trade with companies in foreign nations without worrying about being forced out. The Information Technology Industry Council also praised the provisions ensuring the free flow of data and information across countries and the “strong and balanced intellectual property protections.” In addition, they argued that the intellectual property protections would contribute to innovation by creating “more predictability and certainty for technology companies.”
The twelve signatory nations have yet to ratify the agreement. Proponents and opponents both agree that if the TPP is ratified, the impact will be huge. This pact may bring forth an era of cooperation and innovation or it may bring forth a dystopian era where monopolies rule the world by crushing their competition. I guess we’ll have to wait and see.