Patent Rights and Local Working Under the WTO TRIPS Agreement: An Analysis of the U.S.-Brazil Patent Dispute

Abstract

A recent WTO dispute between the United States and Brazil revives an issue that was not definitively resolved in the TRIPS agreement, i.e., the legality of local working requirements for patents. For centuries, states have required patentees to manufacture or "locally work"-inventions patented in their territory as a means of achieving economic development and technology transfer. In past treaties, countries have agreed to provide compulsory licensing as the remedy for 'failure to work" During the TRIPS negotiations, the parties advanced several options for the future of local working provisions. Unfortunately, the final agreement was essentially arbitrated on that issue, and the understanding of the respective parties regarding local working remained unclear. Ultimately, the Brazil case was settled for political reasons, but the U.S. reserved its right to re-litigate the issue and has warned that it will "aggressively engage" any other countries that seek to utilize local working. Thus, it is inevitable that the legality of local working will continue to be questioned This Article analyzes the historical rationale of local working requirements, the treatment of local working in the travaux preparatoires of the TRIPS Agreement, and the canon of treaty interpretation, in order to ascertain whether local working is or is not legal under the TRIPS Agreement. The Article concludes that it is, and that the interpretation proposed by the U.S. constitutes a significant normative departure from international practice that is unsupported by the text or travaux preparatoires of the TRIPS Agreement.