Leading Up To The GCIP: A Chat With Susan K. Sell

Click to read the blog post published on Global Congress page on December 12, 2015.

Profile: Susan Sell is a Professor of Political Science and International Affairs at George Washington University where her teaching focuses on theories of international politics, international political economy and relations between the North and South. She will be giving a keynote address during the inaugural plenary session scheduled for December 15th.

JMM: The Australian Government’s plain packaging legislation is being challenged by Philip Morris International under the Investment State Dispute Settlement provisions under the Australia-Unites States of America Bilateral Investment Treaty. The treaty under question is a purely investment treaty with no references to public interest or health pre-dating the TRIPS. What do you think will be the implications of adjudicating an intellectual property enforcement dispute at an investment tribunal? Further, such provisions are present in the recently concluded TPP as well even though an exception is carved out for tobacco. However TPP vide Article 18.6 affirms the party’s commitment to TRIPS and public health and explicitly states that parties have the right to determine what constitutes a national emergency and take measures to protect public health even if it conflicts with the obligations under the IP chapter. Do you think the presence of such an explicit undertaking will fundamentally alter the power dynamics within an investor State dispute settlement tribunal which is generally seen as a pro-corporate body?

SS: I think the implications are very troubling. One thing I have looked at a lot and continue to look at is the practice of forum shifting, where parties shift to different forums to try to get what they want and I look at Investor State Dispute Settlement (ISDS) as another forum that raises troubling implications. ISDS has become extremely popular over the last few years; in 1982 there was only one ISDS case, it rose to 50 in 2012 and now in 2015 we are up to 500 cases in 50 different countries. To me this is troubling because it represents a trend of deal making behind closed doors that circumvents democratic deliberation and public scrutiny.

IP is now being defined as an investment asset under the ISDS provisions. In 2014, Susy Frankel and R Dreyfuss wrote about this redefinition of intellectual property. In 2012 a multinational law firm Jones Day published a report arguing that ISDS was a new way forward for pharmaceutical firms to address the assault on their patents in the developing world. So this is a new strategy of intellectual property owners.

The ISDS provisions, by identifying intellectual property as an investment asset, are like getting a camel’s nose inside a tent. Once these issues get adjudicated under ISDS provisions it will open the floodgates for much more ISDS activity focused on IP. Now there is some interesting pushback against these provisions since ISDS is getting more scrutiny in Europe. Germany has gotten less excited about it, the EU is openly debating it and the Eli Lily case against Canada is gaining a lot of notoriety. A number of developing countries, especially in Latin America, who have been very hard hit by ISDS provisions in a number of sectors have requested that ISDS provisions, that they are party to, be formally annulled. Now that’s not going to happen but it is an important symbolic groundswell against ISDS provisions because they override sovereignty, they override decisions of the highest courts of the land, and they are not transparent and there is no appeals process.

To answer the second part of the question, I would love it if states could use the flexibilities in the TPP as a defense of their public health laws but I am a little skeptical about that happening. We have had the Doha Declaration for many years and it has not really stopped pharmaceutical companies from pushing for further protection and enforcement of intellectual property and intellectual property obligations. Therefore even though the language is in there, I doubt if it will change a lot of things in terms of power dynamics on the ground.

JMM: In one of your papers you make the claim that non-governmental organizations (NGOs) working towards lowering intellectual property standards in movements such as access to medicine are not all that different from big businesses that these organizations are fighting. The claim proceeds to argue that both parties are influenced by normative as well as instrumental objectives as opposed to belief that NGOs are only informed by normative objectives. Yet, how important do you think it is for the NGO movements such as Access to Medicine to maintain a distinction from the pharmaceutical companies they are fighting considering the fact that one of the major victories of the Access to Medicine movement was in relation to the HIV/AIDS crisis where the whole issue was framed as a moral life or death question?

SS: I think it is extremely important for the movement to maintain the distinction and the life or death framing of the issue was important too. I want to clarify that the comparison in the piece ‘Using ideas strategically’ between pharmaceutical companies and NGOs is only at the level of strategy. Both parties are very different in terms of resources, structural power, etc. Pharmaceutical companies have access to more resources and are more powerful structurally. Therefore the framing of issues becomes very important for the structurally weaker party.

There are big differences between NGOs in the access to medicine movement and pharmaceutical companies. However, that said, I think there are many representatives of pharmaceutical firms that really believe in the morality of their position – that you need protection to innovate the next generation of drugs. People from Monsanto, many of whom advocate for patents for seeds feel this is important because they believe that this can increase food security. They sincerely believe that the development of drought-resistant plants is something that is good for the world. So these people also make a moral claim whether or not you agree with it. The point is such claims are not purely cynical or instrumental on the part of such actors.

JMM: One of the major criticisms against the TPP has been the lack of transparency in negotiations with even Congressmen not being allowed to see the text till it was released earlier this month. You have spoken about how this is troubling from a legitimacy and accountability standpoint and insulates private players from scrutiny while pushing unpopular articles within the agreement. Yet, in the case of tobacco, an industry which is quite powerful in the US, the TPP has carved out an exception in relation to ISDS. Article 29.5 gives parties the right to elect to deny the benefits of ISDS in relation to tobacco control measures. The statement of United States Trade Representative Michael Froman explaining the exception reads “Developed following extensive consultations with Congress and with a wide range of American stakeholders – from health advocates to farmers, representing many views on whether and how to address tobacco-related health policy measures in a trade agreement”. Even as criticism abound on lack of transparency there seems to have been a surprising amount of transparency as far as this particular provision is concerned. What do you think explains this anomaly?

SS: First of all, I am not very sure that there has been a lot of transparency in the tobacco discussions. I would need to find out more about the process. That statement alone from Michael Froman is not much to go by considering the fact that Stan McCoy before Michael Froman and now Michael Froman himself have always maintained that they have been consulting a wide range of stakeholders during the entire process of TPP negotiations. However the consulted stakeholders have only been their cleared advisors, most of whom are IP owners, major corporations, Wall Street players and the like. Consumers and public interest NGO’s have been shut out of this process. Therefore I am not aware, despite what Froman has said, that there has been an open public deliberation about tobacco provisions.

In fact right now, in the United States, there is a lot of pushback against the carve-out for tobacco in ISDS. This is a sticking point for Obama getting the deal through Congress. Tobacco firms are very upset about the carve-out. Similarly pharmaceutical companies are very upset that they did not get the 12 year data exclusivity on biologics. Senators and Congressmen from states that have a big pharmaceutical presence are saying that the deal must be renegotiated and the higher standards be put in place. So there is an interesting process going on now, but I am not aware of any open and public negotiations.

JMM: An exception to the global movement towards stricter IP regimes as evidenced by deals such as ACTA, TPP among others has been India. The patent law has set the bar pretty high for granting of patents and the Government hasn’t shied away from using tools such as compulsory licenses. What explains the Indian isolation to pressures of the western world, particularly the United States, and what are the lessons the Indian model has to offer to other developing countries?

SS: India is a really interesting case and I am a little nervous about recent statements made by Narendra Modi referencing the need to be open to stronger IP protection. India has a long history of standing up to pressure, for example being the leader of the Non-Aligned Movement, so it has a history of carving out its own path. It has been a pioneer with the passing of the Indian Patent Act, 1970, which allowed it to develop a highly robust and successful generic industry. The adoption of Section 3(d) of the Patents Act, which prevents the evergreening of patents, has been emulated by the Philippines in its Patent Act and is totally TRIPS compliant.

Some of the lessons of the Indian model are to use flexibilities under TRIPS and tailor IPR regimes to suit one’s national needs. Of course India has a large economy and that gives it a more power than some of the smaller developing countries. I think it is important that countries support each other’s rights to use these flexibilities and I would like to see more South-South corporation in drafting laws and offer some pushback against the relentless pressure to go over and above what is required by TRIPS.

JMM: At the turn of the 21^st century there was a move to evolve minimum standards of protection for IP which culminated in the TRIPS agreement. There was a feeling that that the TRIPS agreement was an unbalanced agreement with respect to the interests of the developing world and it was hoped that the Doha Declaration on Public Health and TRIPS would make the agreement more balanced. Added to this, the US trade policy of 2007 marked a shift in the approach of the United States towards IP by lowering standards of protection for the first time. However, recently agreements such as ACTA and TPP tip the balance in favour of developed countries and its MNCs by dismantling many of the inherent flexibilities in the TRIPS agreement. What, according to you, explains this latest shift to a more restrictive IP regime evident from bilateral and plurilateral agreements?

SS: I would argue that if you look back historically, the May 2007 amendment to the Trade Policy to allow for more flexibility in the area of public health is an anomaly. It is this anomaly that needs to be explained rather than the pressure for higher standards. The pressure for higher standards has been ongoing ever since the TRIPS negotiations were concluded. For right-holders the provisions in the TRIPS were always a floor, a bare minimum of protection whereas other parties saw it as ceiling considering their level of development and capacity. So when we see agreements like ACTA and TPP, they are consistent with what US trade policy has been and increasingly Europe as well in its bilateral and regional agreements. Firms have never stopped pushing for stricter standards and they are never going to.

I think one of the most concerning things is firms engaging in what I would call Private Power 2.0. We saw how private power was very instrumental in crafting and achieving the TRIPS agreement. What we see now, however, is less transparency and more anti-competitive conduct flourishing behind closed doors as evidenced by deals such as TPP and ACTA. I just read a manuscript by Natasha Tusikov titled ‘Choke Points’ in which she talks about the fact that even though the Stop Online Piracy Act and Protect Intellectual Property Act were shelved as a result of online activism and mobilization of opposition, that helped to unravel ACTA abroad and seemed like a very big victory. People were celebrating it as a David and Goliath story as it was the first time rights holders did not get what they wanted in a big way. However in reality the provisions of SOPA and PIPA are in practice after having been adopted through private contracts between Internet Service Providers and content owners. These contracts are entered into behind closed doors and the public is not privy to this. So if you are watching a 12 episode show on Netflix and after 8 episodes it is no longer available then you begin to wonder what happened. What happened is these private agreements behind closed doors where companies like eBay and Google are increasingly policing the rights of the right-holders and increasingly enforcing wishes of right-owners online. These are some of the worrying trends that need to be addressed.

One other issue is that the firms are still making the argument that they have always tried to get higher standards of protection and that this is about competitiveness and creating jobs. However recently, Irish company Amgen acquired Pfizer which was based in New York. It will be interesting to see how compelling the larger competiveness and jobs argument will be given that Pfizer will now be based in Ireland and no longer paying the United States tax revenue. The Pfizer spokesperson was saying that the acquisition is good for the United States and that’s a real puzzler. So this is a really interesting move that has happened and it undercuts the rationale these firms have been using to get the support of the US Government behind their preferences.

[1] Prof. Sell has written extensively on the politics behind the international IP rights regime most notably in her book “Private Power, Public Law, The Globalization of Intellectual Property Rights”. She is also the author of “Intellectual Property Rights: A Critical History” and “Power and Ideas: North South Politics of Intellectual Property and Antitrust”. Apart from the books, she has a number of publications dealing with and describing the forces that shape IPR regimes, the implications of the present IPR regime in relation to access to medicine, importance of developing a humanitarian conception of IPR among others.