Research On The Issues Of Application Of Compulsory Licenses To International Investment

The Article 31 of TRIPS provides a series of conditions for compulsory licenses and Developing countries are struggling to cope with the public health crisis caused by infectious diseases such as AIDS,malaria and tuberculosis,faced with high monopoly patent drug prices and the inability to obtain medicines to tackle the public health crisis,and developing countries paid a great many.In active struggle of the developing countries in the multilateral system,the Doha Declaration,Decision on the Implementation of paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health,Amendment of the TRIPS Agreement have been adopted under the multilateral system,providing that public health right is priority over the intellectual property rights of the drug patentees,and a new system of compulsory licenses is re-established for developing countries,and the protection of intellectual property rights is convenient to developing countries.Then,the developed countries push the protection of intellectual property rights to the regional or bilateral and improve the protection of intellectual property standards.In the area of international investment,higher the compulsory protection standard is mainly through the specific restrictions on the conditions stipulated in Article 31 of the TRIPS Agreement,reducing its flexibility,linking the compulsory licenses system to indirect expropriation,application of the blurry principle of fair and equitable treatment to compulsory licenses,and investor claim to investment arbitration mechanism for the dispute arising from host countries' authorization of compulsory licenses to protect its investment.Higher standards of intellectual property protection are achieved indirectly,which is mainly through the protection of its object as the "investment" and the application of international investment rules to it.In the field of international investment,Higher standards of compulsory licenses would offset the convenience of the newly established compulsory licenses system for the developing countries since Doha Declaration under multilateral system and once again create imbalance between the public health rights and intellectual property rights;High standards of compulsory licenses creates a global ratcheting effect through the most-favored-nation treatment principle,and eventually establishes a higher standard of compulsory licenses system at the multilateral level;High standard of compulsory licenses under the bilateral or regional levels conflict with the compulsory license stipulated under Article 31 of the TRIPS Agreement.In response to the problems arising from the application of compulsory licenses in the international investment,China should specifically be cautious of targeted provisions about the object of compulsory licenses,indirect expropriation,fair and equitable treatment,and investor-host dispute settlement mechanisms.In addition to the Introduction and Conclusion,the thesis is divided into five parts.The first part is about the basic issue of the compulsory licenses in the international investment which illustrates the basic conceptual characteristics of compulsory licenses,and the relevant provisions of the international conventions on compulsory licenses.The object of compulsory licenses is the "investment" of the investment agreement,and the compulsory license is protected by "investment" and applied to international investment rules.Directly pointing out the issues on the application of compulsory licenses to the field of international investment is that International Investment Agreements directly restrict conditions for compulsory licenses and derogates from the terms of authorization of compulsory licenses under article 31 of the TRIPS Agreement;Application of the international investment rules of indirect expropriation,fair and equitable treatment and investment arbitration mechanism to compulsory licenses thus indirectly leads to higher standards of the protection of intellectual property.The second part is about restrictive application of the substantive rules of International Investment to compulsory licenses.This part analyzes the applications of indirect expropriation and fair and equitable treatment to compulsory licenses.In light of indirect expropriation,this part analyzes that the compulsory license may constitute indirect expropriation by analyzing the three criterions for indirect expropriation of international investment agreements,which are that it has serious impact on the economy,it violates the reasonable expectation of the investors and what is about the nature of the government behavior.From the aspects of the impact of compulsory licenses combining with requirement of the indirect expropriation about whether the level of deprivation constitutes a taking,whether it raises to the level of indirect expropriation and what is the character or purpose of government' regulation,we can conclude the conditions about compulsory licenses constituting indirect expropriation.From the aspect of the fair and effective treatment,this part analyzes that how the matter of reasonable expectation about investors,the transparency of regulations and rules of hosting country,and compensation are applied to compulsory licenses.The third part is about the restrictive application of investors-the host country dispute settlement mechanism to compulsory licenses.Owing that the object of compulsory license is "investment" and the article 31 of the TRIPS Agreement also regulates directly the compulsory license,there is the conflict of jurisdiction between the investment arbitration mechanism and the WTO dispute settlement mechanism.When the investment arbitration mechanism analyzes the application of compulsory license to indirect expropriation and fair and equitable treatment,they often refer to restrictive rules and regulations in investment agreement,instead of the article 31 of the TRIPS Agreement as the standard to explain,which would improve the applicable standards of compulsory licenses.At the same time,the application of compulsory license to the field of international investment would reduce policy space of developing countries under the TRIPS Agreement and ignore the need for developing countries to respond to the public health crisis.The fourth part is about the challenge toTheTRIPSAgreement on application of the compulsory license to the field of international investment.This part illustrates the application of compulsory licenses to international investment,owing that the developed countries can not get higher standards of compulsory licenses under multilateral system since Doha Declaration and then turn to regional or bilateral system,which will offset the victory since Doha Declaration which provides that the newly established compulsory licenses system on Public health rights are superior to intellectual property rights,resulting that developing countries once again carry on higher standard of patent protection and are unable to cope with public health crisis.This high standard of protection,through the most favored nation treatment principle,would result in the formation of ratcheting effect,and will eventually lead to a new round of higher standards of international intellectual property protection.Such a high standard of compulsory licenses also conflicts with the Article 31 of the TRIPS Agreement.The fifth part is about suggestions to China on the application of compulsory licenses to international investment.Through the above analysis on the application of compulsory licenses to the object of “investment”,indirect expropriation,fair and equitable treatment principles,investors-host dispute settlement mechanism,and reference to the improved proposal in current new negotiating free trade agreements and investment agreements,the essay recommends that China should pay attention to the restrictive application of objects of “investment”,indirect expropriation,fair and equitable treatment,investors-host dispute settlement mechanism to compulsory licenses.