Recently, President Donald Trump has withdrawn the United States from the Trans-Pacific Partnership (TPP), an international agreement negotiated among twelve countries including Canada, the United States, Mexico, Peru, and Chile in the Americas; Japan, Malaysia, Singapore, Vietnam and Brunei in Asia; and Australia and New Zealand in Oceana. President Trump withdrew the U.S. from the TPP as the fulfillment of one of his major campaign promises.
Over the years, the TTP provided more open markets in the member states in exchange for adopting certain intellectual property, cybersecurity/privacy, labor, and environmental protections.
Inside Counsel sat down with Joshua Rich, partner at Chicago-based IP law firm McDonnell Boehnen Hulbert & Berghoff LLP, to discuss how Trump’s move will impact the intellectual property landscape.
According to Rich, in withdrawing the U.S. from the TPP, President Trump kept a promise to his supporters, but diminished the rights of IP owners. According to him, the withdrawal will not only mean that the U.S. won’t have any role in the implementation of IP rights, but also that it will not be part of the community ensuring the enforcement. As a result, Rich said, U.S. owners of all forms of IP rights – patent, trademark, copyright and trade secrets – will have less protection against overseas infringement.
“Specifically, as a candidate, Trump had argued that TPP was a ‘bad deal’ because it would cost American blue collar workers their jobs,” Rich explained. “Like any trade agreement, certain domestic industries would have benefitted from the TPP and others would have been harmed by greater competition; then-candidate Trump argued that the net result of the TPP would have been harmful, especially to the heavy manufacturing industries that have already been battered by globalization.”
However, withdrawal from the TPP exacts a cost, according to Rich, especially to the IP rights of U.S. companies. In fact, the Obama administration had pushed hard for the TPP to require its member states to provide greater protection for the intellectual property owned by the citizens of other members.
First, the member states had to commit to treating IP from the other members states on the same footing as its own domestic IP. And, the agreement called for significant strengthening of IP rights across the board – from requiring criminal prohibition on trade secret misappropriation, to making sure that copyrights lasted for certain minimum terms, to allowing patents on numerous forms of inventions. Now, according to Rich, those protections do not have to be extended to US-based companies’ IP rights - and if the TPP falls apart, will not be required in some of the member states at all.
Further, the U.S. withdrawal from the TPP may have major global implications for IP rights. As the TPP was being negotiated, the Regional Comprehensive Economic Partnership (RCEP) was slowly progressing in the background. The RCEP is a Chinese- and Indian-led alternative to TPP that includes all seven of the Asian and Oceanic states in TPP, plus South Korea, Laos, Myanmar, Indonesia, the Philippines, Thailand, and Cambodia.
“But the RCEP is almost certain to provide less protection for IP rights – especially pharmaceutical patent rights – than the TPP would have,” Rich said. “India and China are traditionally hostile to strong pharmaceutical patent protections of the type found under U.S. law, calling such patent protections ‘evergreening.’ “So, the rejection of the TPP is likely to allow an alternative, less protective paradigm for international IP rights to arise in its place.”