3.2.3.1 The Promotion of Technological Innovation

The first element, ‘the promotion of technological innovation’, is a subcategory of a traditional utilitarian argument in favour of the protection of IPRs. IPRs are protected in order to incentivise innovation and its positive outputs (e.g., progress, prosperity, well-being, or welfare). In its shortest form, the argument is often described as the IP bargain, especially with respect to patents.Footnote ⁵⁸ As Slade writes, Article 7 of TRIPS ‘operates to facilitate equilibrium between the intellectual property system’s incentivizing capacity and the negative impacts of monopolistic rights’.Footnote ⁵⁹ The following sections will come back to the philosophical and empirical dimensions of this utilitarian argument.

Specifically, the three concepts used in this part of Article 7 of TRIPS deserve a brief discussion. The first concept, ‘promotion’, makes clear that the conditionality prescribed by Article 7 of TRIPS is not particularly demanding. It does not stipulate that the protection and enforcement of IPRs should directly contribute to the guarantee or strengthening of technological innovation. It only requires that they contribute to the promotion of this output.

The second concept, ‘innovation’, indicates a specific output when considering a complete value-creation chain.Footnote ⁶⁰ Importantly, innovation is not equivalent to an invention, which is narrower than innovation.Footnote ⁶¹ The use of innovation suggests that Article 7 of TRIPS conditionality is most relevant for marketable products or services.Footnote ⁶²

The third concept qualifies this innovation – which can be of different types – by focusing on ‘technological’ innovation. Following Maskus, a technology could be defined as ‘the information necessary to achieve a certain production outcome from a particular means of combining or processing selected inputs’.Footnote ⁶³ This definition recalls that a technology can be codified (formulas, blueprints, drawings) or not (informal know-how of individuals). This thematic focus reflects the positions of developing countries that were particularly afraid of being excluded or left behind from technological innovations. The Draft International Code of Conduct on the Transfer of Technology was under negotiation at UNCTAD between 1975 and 1985 and at the time developing countries invested political resources into making sure that they could keep pace with technological evolutions.Footnote ⁶⁴ In general, the Code of Conduct was rather transfer-oriented than competition-oriented (as part of a trade approach).Footnote ⁶⁵ This transfer-approach is visible in Article 66(2) of TRIPS and in the second part of Article 7 of TRIPS. The lessons learnt from the interpretation of the ‘promotion’ aspect of Article 7 of TRIPS is that the explicit focus placed on promoting ‘technological’ innovation should not be understood as an exclusive focus, but rather as a way to specify a particular priority.

The Doha Ministerial Declaration confirms this reading of the concept. In instructing the Council for TRIPS to review the implementation of the Agreement (in accordance with Article 71(1) of TRIPS), the Member States underline that the objectives and principles set out in Articles 7 and 8 of TRIPS shall guide the work.Footnote ⁶⁶ This review effort must include the relationship between TRIPS and the Convention on Biological Diversity (CBD), the protection of traditional knowledge and folklore, and other relevant new developments raised by Member States. This demonstrates that the technological innovation in Article 7 of TRIPS is not exclusive. There is room here to consider IP protection related not strictly to technological issues, although technological innovation should remain a priority.

3.2.3.2 And to the Transfer and Dissemination of Technology

The second element of the first set of conditionalities raises similar structural questions as the first by capturing an important part of the main justification for IPRs in the form of a ‘goal’. In addition to the promotion of technological innovation, the protection and enforcement of IPRs should contribute to the transfer and dissemination of technology. This provision raises an empirical debate structurally like the previous element.

However, unlike the first element, this second element has no intermediate concept similar to ‘promotion’ discussed earlier. It is not about the promotion of the transfer and dissemination of technology, but directly about the transfer and dissemination. As the desired goals are more direct, this identifiable output makes for a more demanding conditionality. The transfer and dissemination of technology were a crucial part of the bargain that developing economies were eventually willing to accept.Footnote ⁶⁷

The two concepts of ‘transfer’ and ‘dissemination’ are linked but not equivalent.Footnote ⁶⁸ There is no international definition of technology transfer.Footnote ⁶⁹ According to an influential definition, it refers to ‘any process by which one party gains access to a second part’s information and successfully learns and absorbs it into his production function’.Footnote ⁷⁰ The concept of ‘transfer’ indicates that the IPR holder still plays an active part in the activities.Footnote ⁷¹ There is a form of partnership, for instance, through licensing or voluntary transactions in a specific market. This concept of ‘transfer’ will be important in a combined reading of Article 8(2) and Article 66(2).Footnote ⁷²

By contrast, the concept of ‘dissemination’ focuses on the dispersal of information and knowledge for an undetermined number of possible users by different types of mechanisms.Footnote ⁷³ This dissemination includes the general bargain underlying the disclosure requirement in granting patents. Patents are guaranteed under the condition that the relevant knowledge is disseminated.Footnote ⁷⁴ Dissemination can also include explicit efforts to make information and knowledge available to a broader audience as in, for instance, developing countries.

As for the promotion of technological innovation, the focus on technology in the context of transfer and dissemination should arguably not be understood exclusively.Footnote ⁷⁵ The transfer and dissemination of technology is a key priority, and developed economies should be evaluated based on their adherence to this obligation, in accordance with Article 66(2) of TRIPS. However, the transfer and dissemination can be analysed from the broader perspective of the general bargain underlying the IP regime.Footnote ⁷⁶ The focus on IP-protected technology does not negate the possibility of having non-technological, IP-protected knowledge and of applying to it, by analogy, the objective to transfer and disseminate more widely. Kur and Levin defend this idea in their proposal for a new paragraph of Article 7 of TRIPS focusing more clearly on calibrating IP in order to contribute to society.Footnote ⁷⁷

3.2.3.3 In a Manner Conducive to Social and Economic Welfare

Structurally, this provision describes one objective of the IP protection system.Footnote ⁷⁸ In this specific sense, the provision is part of the general bargain upon which IP protection relies. The function of this part of Article 7 of TRIPS is to recall the public objectives that IP protection pursues.

The grammatical construction of Article 7 of TRIPS makes its reading more confusing than its source of inspiration, the proposal submitted by developing economies and found in text ‘b’ in the Anell Report. To recall, this article (Article 8B) of the Anell Report reads as follows: ‘8. Principles: 8B.1 PARTIES recognize that intellectual property rights are granted not only in acknowledgement of the contributions of inventors and creators, but also to assist in the diffusion of technological knowledge and its dissemination to those who could benefit from it in a manner conducive to social and economic welfare (…).’

The diffusion and dissemination of knowledge are subparts of the more general objective of increasing social and economic welfare. The final version of Article 7 of TRIPS has imbricated ‘the mutual advantage of producers and users of technological knowledge’ in the middle of the sentence. However, this does not invalidate the fact that the reference to welfare serves a similar functional purpose. As Taubman explains, ‘the IP system is a tool of public policy: generally, it is intended to promote economic, social and cultural welfare by stimulating creative work and technological innovation, and by enabling their benefits to reach the public’.Footnote ⁷⁹

That being said, the concept of ‘social and economic welfare’ brings its own interpretative challenges. Firstly, the concept of welfare is a key concept of economic and social science scholarship.Footnote ⁸⁰ For the time being, it seems fair to say that mainstream IP law has addressed this definition of welfare as being mainly an economic, quantifiable objective.Footnote ⁸¹ Buccafusco and Masur discuss the US IP regime and identify three distinct understandings of welfare: the satisfaction of individual preferences (mainstream economic definition of welfare), objective approaches (such as those focusing on a set of goods deemed necessary for a decent life), and hedonic approaches (focusing on individual happiness).Footnote ⁸²

Secondly, beyond methodological disputes, referring to the concept of welfare raises the claim of empirical measurability. As Yu notes, ‘social and economic welfare’ and ‘a balance of rights and obligations’ provide ‘a strong textual basis for less-developed countries and intergovernmental organizations to demand the establishment of impact studies on development’.Footnote ⁸³

Thirdly, the mention of two axes of welfare (social and economic) is also important. For Correa, the use of ‘social welfare’ clearly indicates the ambition to go beyond economic data and aim at fulfilling higher values.Footnote ⁸⁴ In order to define what social welfare refers to, one needs to formulate values to identify targets of measurement.Footnote ⁸⁵ Social welfare and its potential metrics presuppose a definition of human well-being, which in turn relies upon certain normative guidelines. For Correa, these normative guidelines rely upon or point towards related legal regimes, such as human rights or the protection of the environment. As for the definition of a sufficientarian threshold, the normative question of what is due to a human being is the structuring element. Accordingly, the reference to ‘social and economic welfare’ represents an integrative concept that operationalises links to related legal regimes. For Grosse Ruse-Khan, ‘Article 7 thereby becomes a relevant tool for integrating the interests and objectives pursued in other international Agreements and for facilitating mutual coherence between their norms and TRIPS.’Footnote ⁸⁶

3.2.4.1 Mutual Advantage of Producers and Users of Technological Knowledge

In general terms, this part of Article 7 of TRIPS can be read as a reframing of the general IP bargain. IPRs are granted to right-holders (who seem to be the ‘producers of technological knowledge’ here) under the condition that these rights also benefit a wider audience (defined here as ‘users’).Footnote ⁸⁷ This reading presupposes a broad understanding of ‘producers’ and ‘users’.Footnote ⁸⁸ Users comprise consumers and other producers using a technology, including public institutions as well.

The idea of mutuality is especially interesting while also difficult to interpret. For Yu, it suggests that both types of interests should be considered equally important.Footnote ⁸⁹ Correa has a similar reading of ‘mutual’ as meaning ‘of equal importance’. For him, this reinforces the idea that IPRs should not erect a barrier to the use of protected knowledge.Footnote ⁹⁰ This focus on the capacity to use protected knowledge concretely should be read in conjunction with the objective of disseminating this knowledge. Only disseminated knowledge can truly be made use of by others.

3.2.4.2 To a Balance of Rights and Obligations

This last part of Article 7 of TRIPS captures a further condition to be fulfilled by IP protection systems. This condition should be achieved by any arbitrage as a matter of interpretation of TRIPS or of domestic implementation.

The requirement to make sure that any arbitrage represents a ‘balance of rights and obligations’ goes to the core of the idea that an IP protection system relies upon a balance of interests. The proposition by developing economies as seen in the Anell Report and which has served as inspiration for Article 7 of TRIPS has a clear analogue for this specific passage: ‘(…) agree that this balance of rights and obligations inherent in all systems of intellectual property rights should be observed’.

Though ‘inherent in all systems of IPR’ has been erased, the remaining part of Article 7 of TRIPS reiterates clearly that IPRs are not an end in themselves.Footnote ⁹¹ In Canada – Patent Protection, Canada argued for the due consideration of the requirement specified by Article 7 of TRIPS for the purposes of interpreting Article 30 of TRIPS.Footnote ⁹² In contrast, the EC argued that the TRIPS negotiations had ensured the balancing of these elements and that it would be contrary to this outcome to require an additional balancing process.Footnote ⁹³ Significantly, the Panel’s report did not address this part of the argument. Slade notes that this balancing of rights and obligations has been ‘conspicuously absent from the reasoning of the WTO tribunals’.Footnote ⁹⁴

Beyond the general requirement of balancing different rights and obligations, the exact determination of the bearers of those rights and obligations is still open. As Grosse Ruse-Khan notes in his interpretation of the negotiation history of this provision, the focus is not on the rights of States, but on the owners of IPRs,Footnote ⁹⁵ who should have rights and obligations.Footnote ⁹⁶ As he writes, Article 7 of TRIPS ‘mandates an understanding of individual TRIPS provisions – to the extent allowed by the provision’s ordinary meaning and its interpretative context – where WTO members have discretion to balance the interests of IP owners with the promotion of public interests in their implementation of TRIPS’.Footnote ⁹⁷ The origin of this provision can be found in the Anell Draft, which in turn (regarding this point) relies upon India’s submission. Under the heading ‘Balance of rights and obligations’, India’s submission proposed that ‘international conventions on intellectual property rights clearly recognise the basic principle that there must be a balance between the rights and obligations of the owner of intellectual property’.Footnote ⁹⁸ During the negotiations over TRIPS, developing countries had suggested that the obligations of IP owners be specified as part of the future Agreement.Footnote ⁹⁹ They feared that potential abuses and detrimental imbalances of power would result from the rights prescribed by the TRIPS.Footnote ¹⁰⁰

The TRIPS lays out what rights should be granted to IP creators, under what conditions, and with what types of enforcement measures. While these provisions are detailed, the same cannot be said for the provisions addressing the ‘obligations’ of the same right-holders. The proposition that developing countries formulated during the TRIPS’ negotiations identified four obligations: to disclose the invention, to inform about foreign applications, to work the patent in the territory of the country granting it, and to refrain from engaging in abusive licensing practices.Footnote ¹⁰¹ These obligations are not to be found in the final text except for Article 29 of TRIPS, which describes the best mode for disclosing an invention. Article 8 and Article 40 of TRIPS mention the prevention of abuses of rights. Anti-competitive practices, the abuse of rights, promotion of technology transfer, and special and differential treatment for the least developed countries are all mentioned in the TRIPS but are not delineated as precisely as the rights foreseen for IPR owners. The concrete obligations that flow from these general obligations are not made explicit.Footnote ¹⁰²

In the context of the issue of abuse of rights, the Panel in US – s211 described this ‘balance of rights and obligations’ as ‘a form of the good faith principle. (…) One application of this principle, the doctrine widely known as the doctrine of abus de droit, prohibits the abusive exercise of a State’s right’.Footnote ¹⁰³ According to Slade, this linkage to the doctrine of good faith is significant because of the further links it makes possible. For instance, Slade works on the idea that the doctrine of abus de droit could be drawn upon as part of the good faith principle.Footnote ¹⁰⁴

However, Grosse Ruse-Khan is sceptical of this idea of good faith and instead welcomes the fact that the AB did not refer to this idea of good faith in its decision.Footnote ¹⁰⁵ As pointed out before, he argues that the ‘rights and obligations’ refer mainly to the IP owners and not to Member States. For these Member States, the principle of good faith only recalls the general obligation to fulfil the treaty’s obligations (pacta sunt servanda), an obligation that Article 1 of TRIPS already makes clear.

In addition to this hypothesis where ‘the balance of rights and obligations’ targets IPR owners, the mention of Article 7 of TRIPS should nevertheless be interpreted with respect to Member States’ rights and obligations.Footnote ¹⁰⁶ By definition, Member States are the relevant actors for an international Agreement like the TRIPS. They are under obligation to craft and adapt their national legislation to comply with TRIPS obligations (Article 1(1) of TRIPS).

The concept of ‘obligations’ can also refer to the duties of Member States that do not focus on the owners of IPRs. These obligations can therefore refer to all obligations that the States have accepted, and which impact the functioning of the IP protection system in question. As Dinwoodie and Dreyfuss state, ‘the rights of users, which were largely implicit in the older instruments and were primarily effectuated through the exercise of national flexibilities, must now be articulated in equivalent detail to those of authors and producers’.Footnote ¹⁰⁷ More generally, the parameters prescribed by Article 7 of TRIPS concern the societal objectives that the State should consider when crafting its domestic IP regime. As shall be argued later, different types of human rights play an important role in more clearly defining the obligations of Member States in their domestic implementation of the TRIPS.Footnote ¹⁰⁸

Importantly, the condition of ‘balance of rights and obligations’ can be relevant in a more fundamental way. I will investigate later how the justification of IPR already needs to integrate societal interests and, in that sense, mirror a balance of rights and obligations. Property in general, and intellectual property in particular, are legal instruments that intrinsically rely upon the fulfilment of societal objectives. In that sense, the balance of rights and obligations is not only an expectation for States in their domestic IP regime, but also an intrinsic feature of IP protection as such.

3.2.5.1 Competition in WTO and TRIPS

As declared by the first Recital of the WTO Preamble, the objective of international trade is to raise the standards of living and ensure full employment by means of improved economic activities and trade relations (by, among others, ‘expanding the production of and trade in goods and services’), under specific conditions (such as the objective of sustainable development). This might be called the general argument in favour of an international regulation of trade.Footnote ¹¹⁰

As part of this general argument, the international regulation of IP as part of WTO law has a similar objective: to establish commonly agreed upon rules of competition when it comes to the use of intellectual artefacts.Footnote ¹¹¹ According to the first recital of the TRIPS, IPRs need to be regulated through an international Agreement such as the TRIPS because of the impact on trade that non-existent or failed IP protection systems could have.Footnote ¹¹² Without these rules, economic actors dealing with knowledge-based products or services would systematically run the risk of suffering disadvantages. This is especially true for IP-related products and services which, by their very nature, can easily be copied or otherwise acquired, used, and sold.Footnote ¹¹³ In this knowledge economy, the free circulation and exchange of intellectual creations have become a crucial feature of trade relations. According to Grosse Ruse-Khan, this increased importance highlights from a different perspective the necessity to perceive the international IP regime not only as an IPRs’ protection regime, but as a balanced regime addressing all stakeholders involved in intellectual creations:Footnote ¹¹⁴ ‘IP exclusivity must exist in balance with a strong public domain that safeguards the access, use and dissemination of the existing building blocks of knowledge.’Footnote ¹¹⁵

James labels this general argument the ‘fair competition’ argument.Footnote ¹¹⁶ As he explains, ‘the very content of our ideas of “fair competition,” and the degree to which we should “level the playing field,” if at all, depends on aims and principles associated with the particular sort of competitive interaction going on’.Footnote ¹¹⁷ The interpretation of the objectives of a competition is essential to assessing its key parameters. In this regard, Member States have chosen to establish a type of competition whose objectives are defined by Article 7 and Article 8 of TRIPS.Footnote ¹¹⁸

Three elements stand out as especially significant here. Firstly, the TRIPS is part of the WTO legal framework, and its interpretation should be able to integrate general objectives of WTO law. In this sense, Article 7 of TRIPS prescribes a type of competition that should be compatible with the type of competition prescribed by the WTO as a whole.Footnote ¹¹⁹

Secondly, Article 7 of TRIPS calls for a kind of competition that acknowledges that the protection of IPRs is inherently connected to the societal objectives that this protection should fulfil. IPRs are protected for the sake of fulfilling further objectives (e.g., those of technology transfer or the promotion of social and economic welfare). We shall come back to this point in the next subsection when addressing the legal-philosophical justification of IP and interpreting in more detail the content of Article 7 of TRIPS in republican-sufficientarian terms.

Thirdly, the type of competition prescribed by Article 7 of TRIPS might be characterised as an integrative competition. The ‘balancing’ method described previously has an important integrative effect on different levels. The varying conditionalities of Article 7 of TRIPS (both its ‘goals’ and its ‘conditions’) and the method of balancing they require are meant to secure the capacity of Member States to respond to national specificities and consider their relevant stakeholders.Footnote ¹²⁰ As discussed above, the formulation of the objectives of Article 7 of TRIPS makes this article the locus for integrating environmental, social, and economic concerns.Footnote ¹²¹ As Grosse Ruse-Khan puts it, Articles 7 and 8 of TRIPS represent the ‘IP-specific expressions of the sustainable development objective and its principle of integration’.Footnote ¹²² By their very existence, the objectives of Article 7 of TRIPS address the links between these different concerns and offer a normative entry point for their integration into the TRIPS. This integrative effect has a republican dimension in enlarging the types and numbers of relevant groups whose interests are considered. Furthermore, they have a sufficientarian dimension in highlighting that specific concerns should be prioritised (those which are below a normative threshold).

3.2.5.2 The Function of a Legal-Philosophical Justification of IP

The formulation of the object of Article 7 TRIPS (‘the protection and enforcement of intellectual property rights’) presupposes the existence of IPRs. Article 7 TRIPS (and to a lesser extent Article 8 of TRIPS) describes the general conditions and parameters that an IP protection regime should fulfil. However, the Agreement remains silent on the issue of the core justification: why should there be IPRs in the first place?Footnote ¹²³ Legal-philosophical reflections on IP give us insight into which justifications of IPRs in the context of the TRIPS should be made explicit.Footnote ¹²⁴ As I will show, the parameters from the analysis of Article 7 of TRIPS can inform different justifications for IPR.

This work adopts an overlapping consensus approach by linking the different philosophical justifications to the Article 7 of TRIPS-prescribed parameters. As Frankel notes, we should be cautious not to discard non-utilitarian justifications, even if the utilitarian justification can be considered the main one.Footnote ¹²⁵ As she writes, Panels and the Appellate Body have used the travaux préparatoires of the Berne Convention in order to interpret TRIPS obligations, thereby indirectly referring to distinct justifications for IPRs.Footnote ¹²⁶ One should therefore include in their reflections ‘the entire ambit of justifying intellectual property protection in order to encourage the proliferation of creative and innovative practices and products’.Footnote ¹²⁷ As mentioned in the introduction, the main focus is on patent and copyright, although many insights mentioned here might be used to justify further IPRs.Footnote ¹²⁸

3.2.5.3 Instrumental Justification

The first and arguably best-known justification for IPR protection is an instrumental one.Footnote ¹²⁹ Property rights (and more specifically IPRs) are guaranteed for the sake of fulfilling broader objectives, in effect, their ‘social function’ as Geiger explains.Footnote ¹³⁰ These objectives are often formulated in economic terms of utility and incentives.Footnote ¹³¹ Structurally, this account needs to: (1) pinpoint which objectives are valuable and (2) establish an empirical link between IPR protection and these objectives. The first element is a normative argument about the value of an objective (e.g., social and economic welfare), while the second is empirical (focusing on the link between this objective and IPR protection).Footnote ¹³²

As evidenced by ongoing and persistent debate, there is no clear consensus among economists, social scientists, and political scientists that the effects of TRIPS- prescribed IP protection (and not, for instance, in a national context) serve these objectives (e.g., welfare defined as the satisfaction of individual preferences).Footnote ¹³³ The empirical component of the justification is not satisfactorily supported by empirical findings.Footnote ¹³⁴ For the present argument, there is no requirement to reject once and for all the possibility of the instrumental argument’s validity (whether in general or for specific economic domains).

The main point to take for the general argument presented here is that the ‘goals’ listed in Article 7 of TRIPS are crucial parameters for an instrumental justification. An attempt to instrumentally justify IPR as prescribed by the TRIPS must refer to these parameters (the promotion of technological innovation, the transfer and dissemination of technology, and social and economic welfare). Those parameters represent the benchmark to assess empirical evidence linked to specific IPR protection. These objectives are at the core of the instrumental justification matrix.

3.2.5.4 Lockean Justification

The second type of justification encompasses a set of positions linked to Lockean theories of intellectual property.Footnote ¹³⁵ Common to all these positions is the idea that the IPR holders have a justified claim to protection because of the labour they have put into their creations. Producers invest time and energy (i.e., labour) into the existing body of knowledge (the public commons) and create something arguably new and whose protection is deemed as serving a higher objective (such as prosperity). This investment of time and energy, the novelty created, and the system of protection created for the sake of a higher purpose are the three essential features of this type of justification.Footnote ¹³⁶ For the present argument, we leave aside specific difficulties regarding the transition from an individual claim (a single inventor) to the claim that groups or companies raise.

There are several variations of this argument, with the three mentioned essential features characterised by nuance.Footnote ¹³⁷ A specific element of the Lockean justification is of particular interest: the idea of distinct provisos as conditions put upon an IPR’s justification. In its structure, the proviso brings to light the conditionality at the core of a Lockean justification. This conditionality could be interpretable from the perspective of the parameters of Article 7 of TRIPS.

This conditionality might be of different types.Footnote ¹³⁸ Firstly, the classical understanding of this proviso is as a ‘sufficiency proviso’. For property rights to be justified, enough of the public common should remain available to third parties.Footnote ¹³⁹ This initial understanding was most important for real estate property justification. A claim to the private appropriation of a piece of land could have highly detrimental consequences for third parties depending on the land in question (e.g., if it was used for subsistence). This first understanding might be considered less relevant for IP protection, as the intellectual public common remains largely available.Footnote ¹⁴⁰ However, it may be relevant for cases in which an IPR creates an advantage upon which third parties become strongly dependent (such as a technological device or undisclosed information).Footnote ¹⁴¹

Secondly, the proviso could be understood as a ‘spoilage proviso’. The main idea here is to avoid misuse of the IPR, where misuse might be defined as appropriation without any productive use, for instance claiming and obtaining an IPR for no further purpose than simply having it.Footnote ¹⁴²

Thirdly, the proviso might be seen as a ‘charity proviso’. In brief, people in desperate need have a claim to assets which prove necessary for them to survive. This proviso might be seen as a variation of the ‘sufficiency proviso’, but it goes beyond having ‘enough’ not to starve in its focus on the resources crucial to the capacity to live a decent life.Footnote ¹⁴³ For example, ongoing debates about access to medications during the AIDS or COVID-19 crises may be interpreted through the perspective of the ‘charity proviso’.

For Lockean approaches, these objectives (e.g., ensuring subsistence or that property rights serve a productive purpose) justify the proviso and, in fine, condition the justification of the IPR. Importantly, these provisos do not function as external constraints which would necessitate an act of balancing with already existing IPRs.Footnote ¹⁴⁴ On the contrary, the provisos are a conditionality built into the justification of the rights themselves. In other words, if the provisos are not fulfilled, there is no justified IPR in the first place.Footnote ¹⁴⁵

As for the instrumental justification, this means that the general objectives mentioned by Article 7 of TRIPS gain a specific momentum if one defends a Lockean justification. The parameters prescribed by Article 7 of TRIPS are at the core of the justification of IPRs in the form of provisos. For instance, the goal of ‘social and economic welfare’ must be referred to in clarifying one’s position on the proviso at play in the assumed Lockean justification matrix (this occurring independently of the exact justification defended).

3.2.5.5 Locating the Functions of the Parameters of Article 7

Overall, Article 7 of TRIPS (and Article 8 as will be shown later) entail essential normative resources for the justification of TRIPS, both as resources to define the type of competition and as resources to address the philosophical justification of IPRs as such.

Firstly, the type of competition should be aligned with the objectives of Art. 7 TRIPS (‘should contribute to…’) and should make room for the parameters prescribed by Article 7 of TRIPS. Secondly, both instrumental and Lockean justifications are claimed to refer to the conditionalities prescribed by Article 7. Those are essential parameters of the internal matrix of justification for IPRs. For the time being, the focus has been put on the function of these parameters in the distinct justifications. The next subsection will provide a more detailed definition of the substance of these parameters.

3.2.6.1 Focus on Technology

From a republican perspective, the focus on technology and technological innovation appears normatively consistent for developing States.Footnote ¹⁴⁶ In brief, the ability to develop and use technologies gives public or private actors a decisive advantage that they can then utilise to arbitrarily interfere with others. The type of domination that technology enables is specific because of two features. The first is linked to the aggregative nature of scientific research and development.Footnote ¹⁴⁷ New technologies usually emerge out of R&D teams with high and significant resources. Without these competencies and resources, innovations in highly specialised domains would not be possible. This means that outsiders – such as R&D institutions in less wealthy States – should first catch up in terms of know-how, infrastructure, and resources.Footnote ¹⁴⁸ The ability to catch up, however, is itself structurally dependent on new resources or on the support of well-funded R&D institutions.

The second feature concerns the opportunities enabled by technologies, which affect various sectors of society. From the perspective of the capacity to exercise domination, the most relevant field is defence and the capacity of the State to use technologies to secure military domination over its potential opponents. This is a key field where States can exercise arbitrary interference upon others.

Besides defence, technologies are key for business development and, ultimately, the successful participation in a WTO rules-based knowledge economy.Footnote ¹⁴⁹ Several of the adopted Recommendations under the WIPO Development Agenda (2007) deal with technology as an important parameter of IP domestic and international policy.Footnote ¹⁵⁰

The best contemporary example is probably the capacity to develop, control, and use digital AI-powered technologies. These technologies usually require key types of infrastructure – such as network infrastructures and data centres – but also a relevant set of regulations, such as data protection laws. The nature of current data-based technologies, summarised under the concept of algorithms or AI-powered technologies, worsens the imbalance of power because it gives extra and durable power to entities that can gather considerable quantities of data in order to develop specific applications and tools.Footnote ¹⁵¹

Being left behind in the context of technology is a major risk in terms of suffering present and future domination. The mitigations to that risk can be firstly expressed in a sufficientarian way. The main objective here is to bring all States to a threshold defined in terms of their capacity to develop, control, and use technologies. Article 66(2) of TRIPS stipulates that the objective is to create a sound and viable technological base, the idea of which exactly conveys a sufficientarian objective.Footnote ¹⁵²

Nevertheless, this first answer remains unsatisfactory. Even if developing economies obtain satisfactory scientific and technical competencies, the key challenge is to address the structural preconditions for keeping pace with research and innovation processes.Footnote ¹⁵³ Expressed in republican terms, the risk of domination is built into the nature of these processes and the missing capacity of developing economies to keep up. As we will see later, the human right to science has promising potential when it comes to addressing these structural weaknesses beyond the sufficientarian ambition of securing a minimum.

3.2.6.2 A Two-Stage Definition of Social and Economic Welfare

The concept of welfare is compelling because of the overall justificatory function that it plays for an instrumental approach. But this general goal begs the question of what kind of welfare and how much of it is required. The capacity to define and measure it is hence key for the overall justification of IPRs. The main hypothesis defended here is about understanding the phrase ‘conducive to social and economic welfare’ as referring to a two-stage definition of welfare. In the first stage, welfare should be understood as objectively defined elements required for a decent life (threshold). In the second stage, the definition of welfare beyond the threshold should be oriented towards individual preferences.

As already indicated above, the use of the two adjectives ‘social’ and ‘economic’ seems to clarify how the Agreement relies upon a broad understanding of welfare.Footnote ¹⁵⁴ While economic analysis and Law & Economics approaches to the WTO use the concept of welfare to capture the general impact of trade liberalisation on Member States,Footnote ¹⁵⁵ the focus is put here on the normative question related to the definition of welfare.Footnote ¹⁵⁶

Following the work by Buccafusco and Masur in the context of IP policy, we can distinguish between three understandings of welfare. The first and most mainstream approach is described as ‘preferentist’, focusing on a definition of welfare as the satisfaction of individual preferences.Footnote ¹⁵⁷ For Buccafusco and Masur, all economists working on IP and a majority of IP legal scholars subscribe to a version of this preferentist approach of welfare.Footnote ¹⁵⁸ The value of an IP-protected creation is directly linked to individual preferences mediated through market mechanisms. This definition tends to incentivise products and services that are widely popular on the market and guarantee a high return on investment.

This approach is the object of two types of criticisms.Footnote ¹⁵⁹ On the one hand, there is a philosophical criticism. The upshot of this line of argumentation is that there should be more than individual preference satisfaction in accounting for individual welfare and, aggregately, for social welfare. One option is to adopt a more objective definition of welfare, for instance, alongside the capability approach mentioned previously. On the other hand, there is a psychological and behavioural literature focusing on the limits of individual preference satisfaction to account for increased individual welfare. Individuals are not always best judges of their own interests and what could satisfy their needs; their preferences are often distorted.Footnote ¹⁶⁰ An IP system might incentivise the creation of products and services that do not increase social welfare.Footnote ¹⁶¹ This conclusion indeed begs the question of an alternative definition of welfare. Both lines of criticisms make a plausible case for an understanding of welfare that is not limited to preferences satisfaction.

The second understanding of welfare that Buccafusco and Masur identify consists of a set of loosely related definitions attempting a more objective definition. These attempts try to develop an objective definition of welfare via a set of capabilities, needs, or activities that human beings must obtain for a decent or flourishing life.Footnote ¹⁶² To measure welfare, then, is to measure whether human beings have the capacity to achieve these elements (potentially irrespective of whether they want it or not). These approaches attempt to mitigate the distributional blindness of an aggregate utility approach (e.g., measuring the GDP of a country without considering how this welfare is distributed across the population).Footnote ¹⁶³ As discussed above when dealing with sufficientarianism, these objective approaches face well-known challenges pertaining to the justification of a specific set of capabilities/features. Theorists defending an objective account of welfare argue that there is an important overlap in terms of content among the different accounts discussed.Footnote ¹⁶⁴

Buccafusco and Masur describe the third understanding as based upon a measurement of happiness or hedonic experiences.Footnote ¹⁶⁵ Increase of welfare is identified by an increase in the subjective experience of an individual’s quality of life. A perceived happiness-oriented IP policy would then not try to maximise the individual preferences mediated through market mechanisms but would instead select the kind of goods that will likely increase individual wellbeing. To do so requires a normative view about which goods fall in this category but, in contrast to objective approaches, the happiness approach is empirically informed by individual happiness measurements and relies more on empirical data. This approach inevitably faces challenges pertaining to the discrepancy between individual hedonic mental states (happiness) and social welfare, the possibility to measure happiness in a reliable way, and the dangers of a paternalistic public policy.Footnote ¹⁶⁶

Buccafusco and Masur’s mapping helps map out the different understandings of welfare and the normative and empirical challenges each understanding must face. This book’s republican-sufficientarian approach is inclined towards a two-stage definition of welfare: one below the threshold of sufficiency and one above. The first stage is linked to the objective approaches in that it defines a normative threshold of sufficiency expressed in terms of human capabilities needed for a decent life. This first stage can be specified in the context of a focus on technologies, many of which are deeply linked to the capabilities required to lead a decent life (e.g., accessible vaccines).Footnote ¹⁶⁷ At the same time, basic capabilities (such as health and minimal financial resources) are prerequisites for a sustainable technological capacity-building programme.Footnote ¹⁶⁸

To avoid strong paternalistic criticisms, this account is flexible enough to acknowledge that the objective components of the threshold are achievable in different ways, according to the socio-economic-institutional context. This also explains why preferences and hedonic approaches are not completely out of the picture.Footnote ¹⁶⁹ Relying upon the two other approaches could help in accounting for whether a specific capability is achieved in a specific context. However, the general framework is inspired by an objective approach (thin conception of the decent life) which will be specified in the next chapter by drawing upon the relevant human rights in interpreting the TRIPS.

The second stage relates to the question of what happens beyond the threshold. The definition of welfare beyond the threshold should be oriented towards individual preferences. This individual’s focus is meant to avoid challenges linked to paternalism in a global context in which individual values and convictions are deeply diverse, In the meantime, this definition should not sanctify individual preferences mediated through market mechanisms. Individuals do not always choose what increases their individual welfare and the market does not always offer the products and services that increase social welfare. To help address this line of criticism, the link to the previously mentioned research on happiness should be encouraged. This body of research illuminates potential distortions of individual preferences and allows individuals to become better aware of how to improve their own welfare. As Tur-Sinai notes, this might implicitly argue for less incentivisation of luxury goods or electronic gadgets not directly relevant to what makes decent life possible in the first place (but may be relevant with respect to actual individual preferences).Footnote ¹⁷⁰

Three challenges warrant mention before proceeding further. The first one is about measurement. This two-stage definition of welfare implies two types of measurement challenges, the first requiring the capacity to identify basic capabilities and to measure whether they are fulfilled for the whole population of a given country. Every contribution to this objective is a contribution to social and economic welfare understood in sufficientarian terms. The second part is linked to more traditional attempts by economists to evaluate the impact of IP laws on social and economic welfare defined as preference satisfaction.Footnote ¹⁷¹ These measurement challenges should be acknowledged not only as technical issues that can be settled by an improved methodology. The strengths and weaknesses of every single measurement method become part of the structural debate about the TRIPS and its impact, because the way the empirical evidence is collected and presented (what tends to be highlighted or hidden) is itself an important element in the overall discussion on the justification of the TRIPS and its framing.Footnote ¹⁷²

The second challenge is a normative question about the amount of welfare required by Article 7 of TRIPS. In other words, we need to qualify the concept ‘conducive to’ used in the relevant part of Article 7 of TRIPS. ‘Any contribution at all’ arguably constitutes a very low threshold. Virtually any policy choice can be shown to be somewhat conducive to social and economic welfare. This understanding seems to be defendable only for States that have already reached a satisfactory level of welfare (first part fulfilled). For other States, it seems legitimate to consider that the standard of Article 7 of TRIPS requires more than any contribution to social and economic welfare. Intellectual property policy choices of the State, but also of its partners (e.g., in the context of a bilateral trade policy), should be assessed considering its impact on the fulfilment of the first part of the welfare’s definition. How important this contribution should be in order to legitimate the whole construct is indeed a complex normative question. Drawing upon the States’ obligations as a matter of international human rights law will help specify this benchmark.

The third challenge is about the embedding of this welfare requirement into a reflection on the environment broadly understood (e.g., plants, animals, climate, ecosystems, etc.). If IP protection should be conducive to social and economic welfare, it is necessary to investigate whether our concept of welfare could and should make room for environmental protection. Good environmental conditions are a key part of welfare, particularly when linked to basic, objective human capabilities. A sufficientarian approach can offer insights on where to start.Footnote ¹⁷³ On the other hand, welfare defined as an expression of our economic and societal activities could indicate a threat to the environment by conveying the environmental costs of our human activities and the limits that should be enacted on such activities.

In terms of impact on IPRs, this general concern about the environment could be taken in two different ways.Footnote ¹⁷⁴ The first is more negative in tone by excluding some inventions from the realm of IP protection (e.g., patents) because they are detrimental to the environment. Article 27(2) of TRIPS could provide grounds for such an exclusion as part of morality or ordre public provisions (‘to avoid serious prejudice to the environment’).Footnote ¹⁷⁵ The second way is more positively oriented in trying to stimulate and incentivise inventions that are beneficial to the environment. The challenge here is to design preferential treatments compatible with the general ambition to be technology-neutral (for patents, Article 27(1) of TRIPS). For now, the main point is to see that these arguments can be integrated into the chosen welfare definition.

Overall, this sufficientarian understanding of welfare should be read as part of the general qualification of Article 7 of TRIPS as a protection mechanism. Achieving this minimum is connected to a certain normative urgency. It could, for instance, reinforce the norms that deal with the specific situation of LDCs. LDCs can be defined as falling below the threshold of minimal social and economic welfare and should be allowed to implement their obligations in a way that secures a minimal standard of social and economic welfare.

3.2.6.3 Mutual Advantage as Normative Relationship

This first analysis has examined the two goals entailed by Article 7 of TRIPS (the general focus on technology and the search for social and economic welfare). This subsection focuses on the two conditions foreseen by Article 7 of TRIPS. The general hypothesis defended here is that the two conditions discussed above display similar structural features. Both the ‘mutual advantage’ and the ‘balance of rights and obligations’ point to a normative relationship between different groups.

In the first condition, the key concept to be interpreted is ‘mutual’. The concept of mutuality suggests that there are at least advantages on the sides of both the producers and the users of technological knowledge. Mutual advantage does not hold if one party has no advantage at all. But the relation of mutuality requires more than the mere existence of some advantages on both sides. Otherwise, it would be enough to stipulate ‘to the advantage of producers and users of technological knowledge’, without referring to the idea of mutuality.

The concept of mutuality indicates that the advantages of the two groups must stand in a specific normative relationship.Footnote ¹⁷⁶ Different understandings of this normative connection are possible. Firstly, the idea of mutuality can be linked to a procedural reflection on the justifiability of the advantages in question and the way the two groups share these advantages. To exemplify this idea, we can use a Rawlsian scheme of justifiability illustrated by the device of the veil of ignorance. In a hypothetical situation without information about one’s own group (user or producer), would one agree to the definition and distribution of advantages? This idea is interesting for trying to capture the content of mutuality defined as mutually justifiable among equal participants. Similarly, ‘mutual’ can be perceived in a republican manner as guaranteeing that both groups have their interests considered and that no single group can exercise domination over the others.

Secondly, the concept of mutuality can be interpreted as requiring a threshold, akin to the understanding of welfare as also necessitating a minimal welfare requirement. The relation of mutuality is given under the condition that the two groups have advantages that fulfil a minimal condition. If one of the parties does not enjoy minimal advantages – commonly agreed upon in the form of a threshold – the relation of mutuality is not given. As for welfare, the party below the threshold has a specific claim based on the urgency of its needs. If both parties are above the threshold, the relation of mutuality could be considered fulfilled a priori.

Thirdly, the concept of mutuality can posit a further criterion to be met in the relationship between the two sets of advantages. For instance, this relationship could be interpreted as one of fairness. The question is not anymore whether both parties have minimal advantages, but whether their advantages can be grasped as fair. This fairness criterion appears less demanding than equality. Article 7 of TRIPS does not entail a provision stipulating that TRIPS should produce or aim at the equal advantage of producers and users of technological knowledge, using instead the term ‘mutual advantage’. The idea of fairness is best equipped for grasping the idea that the two sets of advantages should not be driven apart. If producers have a huge advantage and users only a small one (notwithstanding the minimal requirement threshold), it is difficult to speak of a ‘mutual advantage’. The third understanding puts a limit on the qualitative and/or quantitative differences between the advantages enjoyed by producers and by users. The question of how to define fairness is obviously not settled. Interestingly, this could be connected to the first understanding of mutuality as justifiability. A fair mutual advantage would then be an advantage that is justifiable.

Overall, the claim is that as part of a republican-sufficientarian account of Article 7 of TRIPS both the procedural and substantive dimensions of mutuality should be considered. The procedural dimension connects to the ambition to prevent domination from happening by making sure that both producers and users are being considered when it comes to assessing their respective advantages. The substantive dimension is understood in a sufficientarian manner by identifying a threshold below which either group should not be found. As for welfare, drawing upon further legal resources such as human rights can clarify the definition of this threshold.

3.2.6.4 Balance of Rights and Obligations: States and IP Owners

The second condition raises two main challenges. As explained above, there is an initial challenge to interpret who is the bearer of the requirement to guarantee this balance (States and/or IP owners) and a second challenge to make sense of the content of the norm.

With respect to the bearer, the two possibilities (IP owners and/or States) can be considered and accounted for from a republican-sufficientarian perspective. For the argument to come, I will adopt a broad position on who could be the bearer of these rights and obligations.

To start with, the State is the main actor in the context of an international Agreement such as the TRIPS. For the State, rights and obligations are both parts of a potential double balance. The first balance is internal to IP protection: it is about calibrating IP domestic regulations in considering the parameters of the internal justification discussed above (such as the requirement to be conducive to social and economic welfare). The second balance is found between its public policy objectives (such as those mentioned by Article 8 of TRIPS) and its international obligations as prescribed by Article 1(1) of TRIPS (inter alia the protection and enforcement of the IPRs). As explained below in dealing with Article 8 of TRIPS, interpretation of the TRIPS makes room for the State’s justice obligations. This understanding of the balance deploys an integrative function: the crafting of IP domestic regulations becomes the locus of integration of very diverse interests and obligations by the State.

In the meantime, IP owners – focusing here on private companies – can also be bearers of rights and obligations in the sense of Article 7 of TRIPS. For these IP owners, rights (mainly IPRs) and obligations (mainly a negative obligation not to abuse these rights, but also to respect the conditions foreseen to acquire and use these rights, or obligations related to technology transfers) can be defined.Footnote ¹⁷⁷

As such, this raises the question of the responsibility of private companies.Footnote ¹⁷⁸ On the one hand, the State must consider private companies as potential bearers of rights and obligations and should, accordingly, draft domestic regulations that duly make room for them to fulfil these obligations. Domestic regulations prohibit, allow, or incentivise specific behaviours of private companies. This is a relevant constellation with which to interpret Article 66(2) of TRIPS.Footnote ¹⁷⁹ On the other hand, as shown in the next chapter, private companies have their own direct obligations as bearers of responsibilities for human rights. This could be relevant in the context of the abuse of rights but also regarding remuneration in case of compulsory licences.

In addition to this discussion about the bearers of the obligation to ensure a balance between rights and obligations, we secondly need to address the definition of the ‘balance’. The key normative question is about pinpointing which requirements imply the normative relationship of a ‘balance’: under what conditions are rights and obligations intertwined in a satisfactory relationship that we would qualify as ‘balanced’? Above all, assessing the balance requires considering the relevant stakeholders’ interests. This preliminary step already bears interesting potential with respect to its anti-domination effect. The idea of the balance itself bears an integrative force.

To provide an illustration, we can draw upon the arguments presented by Canada and the EC in Canada – Patent Protection.Footnote ¹⁸⁰ To recall, Canada argued that this requirement specified by Art. 7 TRIPS was to be duly considered when interpreting Article 30 of TRIPS. The EC claimed that the balance was already guaranteed by the TRIPS itself.Footnote ¹⁸¹ This controversy illustrates the requirement to define the rights and obligations at stake. As the Panel Report mentioned, Canada identified mainly the IPRs created by the Agreement (as rights) and the socio-economic policies of governments (as obligations). Canada argued that the competence to define the balance belonged to States within the margin prescribed by the TRIPS (especially Article 8 of TRIPS). This competence does not mean that Canada must take a one-sided view on the issue of the balance. Rather, the integrative force of the balance requires Canada to consider the position of IPR owners but also domestic and international stakeholders of the TRIPS regime. This does not mean that Canada should adopt their positions, but that these positions need to be identified and considered. The same integrative force should guide how Panels and the AB interpret the TRIPS. As Howse argues, this was, for instance, not the case in the reading of the condition of ‘legitimate interests’ of Article 30 of TRIPS by the Panel.Footnote ¹⁸² The Panel rather focused on the rights of IP owners without considering rights and obligations of other stakeholders (despite the explicit requirement of Article 30 of TRIPS to do so).

Beyond the results of the dispute, the main point is to see the requirement of the balance as an obligation to engage in a mapping of the different rights and obligations considered relevant in a specific case. In addition, we need to address the substantive requirement of a ‘balance’.Footnote ¹⁸³ A balance requires that rights or obligations of all the relevant parties can co-exist to a minimal extent. As the AB writes in Brazil – Retreated Tyres, the interpretation of the balance in Art. XX of GATT is about marking out a line of equilibrium that should ensure that ‘neither of the competing rights will cancel out the other and thereby distort and nullify or impair the balance of rights and obligations constructed by the Members themselves in that Agreement’.Footnote ¹⁸⁴ The point is not to compare Article 7 of TRIPS and Article XX GATT, which are constructed very differently, but rather to see that the balance is incompatible with the rights or obligations of a party being cancelled out.Footnote ¹⁸⁵

Going beyond this basic point, the requirement of the balance is akin to that of ‘mutuality’. As for mutuality, a republican-sufficientarian understanding posits two elements. Firstly, the idea of the balance entails an implicit threshold defined in sufficientarian terms. Expressed negatively, a relationship cannot be balanced if one party is below a defined threshold. Secondly, beyond this substantive requirement, the idea of the balance can be understood in a republican way as an anti-domination mechanism. All relevant stakeholders must be able to make their interests heard while no single stakeholder should be able to exercise domination upon the others. Obligations such as not engaging in anti-competitive practices, not abusing rights, promoting technology transfer, or engaging in special and differential treatment for the least developed countries, can all be understood through a republican-sufficientarian perspective.

3.3.1.1 General Structure of First Paragraph

Firstly, the word ‘may’ requires further investigation into how it protects an option for Member States. A minimal, option-protecting understanding of ‘may’ has been confirmed by the Doha Declaration in its Paragraph 4.Footnote ¹⁹² As Kur and Levin point out in their ‘Intellectual Property Rights in Transition (IPT)’ project (outlining potential revisions of the TRIPS’ text), this ‘may’ could be contrasted with a ‘should’ and a ‘shall’.Footnote ¹⁹³ Thinking about these two hypothetical options arguably helps sharpen our understanding of ‘may’.

According to Kur and Levin, a ‘shall’ could have the beneficial effect of clearly stating the importance of the public policy objectives at stake. Alternatively, Kur and Levin consider the term ‘should’ to be an interesting fit. They consider the ‘moral duty’ of governments vis-à-vis their own populations at stake in Article 8 of TRIPS to be ‘better marked by exchanging the word “may” by the somewhat stronger “should”’.Footnote ¹⁹⁴ As I shall argue at length later, the word ‘may’ should indeed by conceived as the bearer of a State’s obligations of justice for its own population. However, this shift from ‘may’ to ‘should’ does not require any change in the text: the ‘may’ enables the ‘should’.

Secondly, the list of grounds that Member States can refer to is formulated very broadly.Footnote ¹⁹⁵ The text deals firstly with the protection of ‘public health and nutrition’ before considering the ‘public interest in sectors of vital importance to their socio-economic and technological development’. Article 8(1) of TRIPS uses the verb ‘to promote’ and as pointed out in the analysis of Article 7 of TRIPS, this verb reinforces the wide margin of appreciation that Member States enjoy.

The version that developing States proposed, found in the Anell Report, was formulated in the following way: ‘8B.2 In formulating or amending their national laws and regulations on IPRs, PARTIES have the right to adopt appropriate measures to protect public morality, national security, public health and nutrition, or to promote public interest in sectors of vital importance to their socio-economic and technological development.’ Public morality and national security were explicitly mentioned as grounds. While they have disappeared in the final version, the open formulation of the last ground of ‘sectors of vital importance’ can be used to pursue almost any public policy objective.Footnote ¹⁹⁶

The structure of Article 8(1) of TRIPS seems to indicate that public health and nutrition are recognised as being especially important and are complemented by the general mention of all the other relevant sectors of vital importance to socio-economic and technological development. On health and nutrition, there is no mention of the ‘public interest’; the provision is more directly formulated. The ‘public interest’ for the other sectors is important in circumventing the dimension of public policy that is considered in Art. 8 TRIPS (and not, e.g., private interests). According to Correa, there is no doubt that the definition of what constitutes ‘public interest’ is a domestic issue.Footnote ¹⁹⁷ Furthermore, the qualification of ‘vital importance’ suggests a threshold of relevance that the sector must fulfil. This ‘importance’ should be defined with respect to its development reality by a Member State. Beyond the exact definition of ‘vital importance’, the concept of ‘development’ brings forth similar normative questions as the concept of ‘welfare’ debated above. Development is also not only an economic, but a socio-economic and technological concept. We shall address later how to interpret this concept.

3.3.1.2 Necessity Test of First Paragraph

Article 8(1) of TRIPS entails a necessity test. Member States may adopt measures ‘necessary’ to the promotion of the different policies mentioned above.Footnote ¹⁹⁸ Necessity tests exist in different WTO provisions, such as Article XX and XXI of the GATT and Article XIV GATS.Footnote ¹⁹⁹ According to a settled approach, the necessity test should be understood as making sure that the measure taken is the least trade-restrictive measure that is reasonable and available to the Member State and that is equally effective in achieving the desired policy objective.Footnote ²⁰⁰

As Correa argues, the necessity tests have been used strictly in WTO law, even in matters relating to public health.Footnote ²⁰¹ EC-Asbestos was the first major case to successfully apply the necessity test in a public health setting. In this case, the AB confirmed that Member States retain ‘the right to determine the level of protection [in relation to the relevant policy] that it considers appropriate in a given situation’.Footnote ²⁰² China – Raw Materials provides a detailed description of the foregoing in the context of public health regarding Article XX GATT, including the clear indication that Panels and AB are ‘not entitled to question a Members’ chosen level of protection’.Footnote ²⁰³

As Grosse Ruse-Khan argues, there is debate in the literature as to whether the same standard is applicable to the Article 8 of TRIPS necessity test as is applicable to the other necessity tests as part of general exception clauses.Footnote ²⁰⁴ The formulation and structure of Article 8(1) of TRIPS is very different. The policy space offered to Member States remains significant, mainly because of the use of the verb ‘protect’ and ‘promote’ and the open list of grounds. Similarly, the UNCTAD Resources book argues that ‘discretion to adopt measures is built into the agreement’.Footnote ²⁰⁵ As Pires de Carvalho points out, the necessity test entails at a minimum a requirement of causal connection between the measure at stake and the impact on public policy.Footnote ²⁰⁶

3.3.1.3 Consistency Test of First Paragraph

Article 8(1) of TRIPS entails a consistency test formulated in the following way: ‘provided that such measures are consistent with the provisions of this Agreement’.Footnote ²⁰⁷ This consistency test has been the subject of diverging interpretations in the literature. To start with, Article 8(1) does not amount to a general exception clause. The submission made by India in 1989 pointed towards the creation of a general exception rule constructed around the idea of the ‘primacy of public interest’.Footnote ²⁰⁸ While the broad list of policy objectives was maintained, the idea of a public interest-based general exception was not accepted during negotiations.Footnote ²⁰⁹

If Article 8(1) of TRIPS does not amount to a general exception clause, it must nevertheless have an effect. Two main interpretations of the consistency test and the corresponding function of Article 8(1) of TRIPS have been addressed in the discussion.Footnote ²¹⁰

The first interpretation considers Article 8(1) of TRIPS as a ‘light version’ of a public exception clause. For Yusuf, Article 8(1) of TRIPS should be understood as qualifying the type of harmonisation required by the TRIPS in national contexts where the minimum standards foreseen by the TRIPS are in tension with public policies such as public health.Footnote ²¹¹ The consistency test should be interpreted as requiring consistency with the Agreement as a whole, and not with every provision taken on its own. This overall interpretation of the TRIPS includes the preamble, the principles, and the objectives (including the general idea of a balance of rights and obligations). Correa proposes a similar idea in arguing in favour of this general exception clause in cases of conflicts.Footnote ²¹² If necessary, a State should have the right to give priority to its public interests, even if it comes at the cost of adopting a TRIPS-inconsistent measure.

However, this interpretation faces two challenges.Footnote ²¹³ Firstly, the text of Article 8(1) of TRIPS and the use of the plural (‘the provisions of this Agreement’) indicate that the consistency test does not only affect the Agreement as a whole, but also its provisions. Secondly, this interpretation might be challenging in practice because of the difficulty of evaluating a general consistency with the overall Agreement. Despite this challenge, the argument is correct in making clear that the consistency requirement cannot disregard Article 7 of TRIPS and the normative guidance it represents.Footnote ²¹⁴

This idea has been addressed by the Panel in the EC – TMs & GIs (Australia).Footnote ²¹⁵ In this case, the EU tried to argue that a general exception clause was missing in the TRIPS and that it should be possible to rely upon Article XX GATT (in casu, to justify a breach of the national treatment rule in TRIPS). Underlining that such a clause did not exist in the TRIPS, the Panel argued that the TRIPS was meant to protect negative rights to prevent certain acts. As it stated, ‘this fundamental feature of intellectual property protection inherently grants Members freedom to pursue legitimate public policy objectives since many measures to attain those public policy objectives lie outside the scope of intellectual property rights and do not require an exception under the TRIPS Agreement’.Footnote ²¹⁶ Accordingly, the Panel assumed that a general exception clause was not required because the TRIPS did not protect a positive right to commercialise or use protected subject matter.Footnote ²¹⁷ But, as Grosse Ruse-Khan argues, notwithstanding the qualification proposed by the Panel, this argument did not answer the question of the function of Article 8(1) of TRIPS.Footnote ²¹⁸ National policy objectives such as public health might collide with the protection of IPRs foreseen by the TRIPS, even if these rights are defined as negative rights.

The second interpretation considers Article 8(1) of TRIPS as having a mainly interpretative function. For Dinwoodie and Dreyfuss, this interpretative function is a purposeful substitute to the idea of a general exception clause.Footnote ²¹⁹ The interpretative guidance offered by Article 8(1) of TRIPS requires taking all the provisions of the Agreement into account.Footnote ²²⁰ The idea of consistency is broad and should be understood within the context of the TRIPS, which includes related WTO Agreements and annexes, but also subsequent Agreements and practices as foreseen by Article 31(3) of VCLT. In this context, the Doha Declaration plays an important role. Paragraph 4 thereof reads as follows:

This paragraph can be interpreted as specifying how to understand Article 8(1) of TRIPS, especially regarding its consistency requirement.

It is worth pausing for an excursus on the legal qualification of the Doha Declaration. Formally, the Doha Declaration can be qualified as an interpretation in the sense of a recommendation by the TRIPS Council based on Article IX:2 of the WTO Agreement. It is functionally equivalent to such an interpretation, as the language used by the Declaration clearly reflects an Agreement reached by the parties (‘we agree…’) and because the content clearly influences the way in which TRIPS should be understood.Footnote ²²¹ As Grosse Ruse-Khan explains, the Doha Declaration therefore falls under Article 31(3)(a) of VCLT as an interpretative resource.Footnote ²²²

This reading is reinforced by the interpretation chosen in Plain Packaging. In the Panel’s formulation,

This reading was confirmed by the AB, while not taking a position on the legal status of the Doha Declaration.Footnote ²²⁴

As to its content, the formulation of paragraph 4 of the Doha Declaration makes clear that Member States have the right to use the flexibilities of the TRIPS (assuming that, while doing so, they respect the consistency requirement). For now, we can assume a broad definition of these ‘flexibilities’ as a set of norms entailed by the TRIPS that allow a margin of appreciation in the fulfilment of the obligations foreseen by the treaty.Footnote ²²⁵ These norms give Member States a margin of appreciation in choosing how to develop and adapt their national regulations in order to fulfil their TRIPS obligations.Footnote ²²⁶

Considering the Doha Declaration, the function of Article 8(1) of TRIPS as an interpretative resource is reinforced.Footnote ²²⁷ Paragraph 4 of the Doha Declaration makes clear that there should in fact be no genuine conflict between TRIPS obligations and the right of Member States to protect their public health,Footnote ²²⁸ mainly because TRIPS should be understood as retaining enough flexibility to avoid this conflict. As Grosse Ruse-Khan puts it, ‘TRIPS does not and should not interfere with public health concerns – because it can and should be interpreted and implemented (by using its flexibilities) in a manner supportive to these concerns’.Footnote ²²⁹ According to Joseph’s analysis of Special Rapporteur Grover’s report, ‘it is up to States to utilize all available flexibilities, as needed, in order to ensure access to medicines domestically. The common failure to do so amounts to a violation of the right to health by the States concerned’.Footnote ²³⁰