What is right with EU trade agreements?

This Kat has recently defended her thesis, titled “Deconstructing EU IP norm-export to the Eastern European Neighbourhood”. It was written at the Universities of Alicante and of Strasbourg, under the EIPIN-IS research grant.

In this post, I would like to summarise some of the take-aways from my thesis, which looked into how European Union’s (EU) trade agreements shape intellectual property (IP) legislation in third (non-EU) countries.

Louis-Michel is a PhDKat now

Since mid-2000s, the EU has been including extensive IP chapters in its trade agreements with non-EU agreements. The EU/South Korea free trade agreement was the first such agreement to come into force. More recent examples include the EU/Japan Economic Partnership Agreement or the EU/New Zealand Trade Agreement. EU trade agreements commonly include norms, which require partner countries to implement the EU’s own approach to copyright, geographical indications, or civil and customs enforcement of IP rights.

This policy (also exercised by other “IP demanding” countries, such as the US or Canada) has raised the attention of scholars. They have criticised such trade agreements countries for disregarding the level of development of the EU’s partners and instead imposing norms, which only favour IP holders. Such policy would hinder a more balanced approach to enforcement, which had been achieved in the TRIPS Agreement.

In my thesis, I addressed this criticism, with a specific focus on IP enforcement provisions in the Association Agreements (AA) between the EU and, respectively, Georgia, Moldova, and Ukraine. These agreements were negotiated in parallel between 2007 and 2013, and entered into force in 2016-2017. The three AAs have their specificities, which are due to the fact that Georgia, Moldova and Ukraine also fall under the European Neighbourhood Policy, which implies a closer integration with the EU. Nevertheless, enforcement norms in the IP chapters of the three AAs are almost identical to other EU trade agreements, negotiated within the same timeframe.

Now, my research has shown that not all academic criticism was completely justified. The AAs’ IP enforcement norms (modelled on Directive 2004/48/EC, Regulation 608/2013, and Directive 2000/31/EC) did not only favour IP rightholders. They also brought a fairer approach to damages in civil lawsuits or safe harbours from liability for intermediary service providers. Most of the issues I did observe where caused by provisions located outside of the IP Chapters and due to the specific “approximation” objective of the three AAs.

Moreover, the AAs’ texts themselves differed between each other, showing that Georgia, Moldova and Ukraine could exercise their bargaining strength in areas of domestic preferences. I also reached similar conclusions with regards to design law in a parallel study.

At the same time, other criticism was indeed fair. For instance, the three AAs were negotiated in an untransparent way, as draft texts were not published during the negotiations. This prevented stakeholders, including scholars or local industry, from commenting on the content of obligations. In more recent negotiations, the EU started publishing its textual proposal after each negotiation round.

Nevertheless, the three AAs also allowed me to identify several additional issues with regards to EU trade agreements.

First, the three AAs shed light on some of the challenges faced by non-EU countries when implementing trade agreements with the EU. Moldova and Ukraine have been mostly copy-pasting the AA norms into their national laws (a pattern one can also observe in some EU Member States, when they implement EU Directives). AA norms, themselves based on deliberately vague provisions from Directive 2004/48/EC, were not written to be copied into a foreign legal order. Moreover, I have seen how, in many instances, local policy-makers were unable to grasp the exact aim of a given EU norm, thus failing to transpose it altogether. To make things worse, this often affected procedural guarantees of traders, intermediaries or users. In turn, Georgia has been “creative” in implementing AA norms into Georgian legislation, creating its own procedural guarantees, and adapting the legal drafting to its legal system.

Second, the three AAs drew my attention to the role of Court of Justice’s (CJEU) jurisprudence in non-EU countries. CJEU’s interpretative rulings on copyright or intermediary liability (sometimes seen as judicial activism) has been in the focus of EU scholars’ attention in recent years. What remains unresolved is how such rulings should be addressed by non-EU countries. For instance, the EU/Ukraine AA requires Ukraine to examine individual character of designs, as perceived by an informed user, without any definition of this concept.

Yet, the three AAs (and, generally, EU trade agreements) do not oblige non-EU countries to follow CJEU jurisprudence in any way. The only exception is the EU/Ukraine AA, which obliges Ukraine to “implement and apply” CJEU rulings, which are based on Directive 2000/31/EC on Electronic Commerce. This may remind some of our Northern readers about the “judicial homogeneity” clause under Art. 6 of the EEA Agreement.

The three countries approach CJEU IP case-law differently. The Moldovan Supreme Court adopted several decisions, requiring lower courts to apply a closed list of CJEU jurisprudence in trade mark and copyright law. Georgia and Ukraine use CJEU case-law as interpretative guidance, and not as a binding authority.

For countries outside of CJEU’s jurisdiction, relying on its case-law may present a handful of problems. CJEU rulings are often deliberately vague and ambiguous, so as to remain flexible for subsequent interpretations. Local judges in non-EU countries face issues with properly understanding CJEU case-law (which, admittedly, can be challenging even for seasoned EU lawyers). This is further aggravated by a language barrier, which hinders access not only to the ruling itself, but also to the Advocate General’s Opinions or legal commentaries. Moreover, relying on jurisprudence of a foreign court may eventually be recognised as unconstitutional by the local Constitutional Courts.

These could be improved through both legal and soft measures. One of the legal solutions I advance in the thesis is to include in subsequent trade agreements a provision, similar to the one included in AAs’ Competition Chapter: “relevant CJEU rulings have to be used as a source of inspiration” by third countries. This recommendation is advanced with caution. In my opinion, non-EU countries, which want to align their IP legislation with EU law, would be better advised to wait for codification of CJEU in subsequent Directives and Regulation (as has happened in copyright and trade mark law). Obviously, addressing these requires a thorough understanding of EU IP law and resources, which leads me to the soft solutions.

Non-EU countries need an increased institutional capacity to deal with EU IP law. This is partially tackled through EU-financed technical assistance in IP for civil servants and policy-makers. Yet, one answer that keeps returning throughout the thesis is the need for a stronger capacity of local IP academia in third countries. Local academia is not listed as a separate stakeholder in EU policy documents, such as the 2014 IP Strategy.

Additional efforts should be channelled by the EU to raise the level of local knowledge of EU IP law in those countries, which negotiate or apply EU trade agreements. This will pave the way for evidence-based research on IP, including for preparing impact assessments —recommended by scholars— of IP demands, of their implications for public interests, human rights, of the financial burdens and implementation costs they entail. This will also mirror the EU’s internal efforts to foster informed policy-making through the activities of the European Observatory on Infringements of Intellectual Property Rights.

In the end, the EU is exporting not only its norms, but also its problems. EU IP law, which later becomes the canvas of EU trade agreements, is not a ready-made law. Third countries, involved in trade negotiations, need to be aware of the internal dynamic of EU IP law. It is only through such familiarisation that, first, an informed negotiation and, second, an informed implementation of undertaken obligations can be achieved. The EU IP law is no international gold standard for enforcement, but, if approached correctly, it may be beneficial also for third countries.

And, before closing this year, I would like to thank my thesis supervisors, Aurelio Lopez-Tarruella, Christophe Geiger and Anke Moerland for teaching me the importance of a robust methodology, constantly pushing me outside of my comfort research zone, and providing me any support this research required. And being the Kat that I am, I would also like to thank my KatSupervisor Neil Wilkof for bringing into my writing much-needed clarity and conciseness!