Adjudication of Intellectual Property under Investor-State Dispute Settlement: A Swift Analysis of the Good, the Bad, and the Ugly - ARIA - Vol. 34, No. 4

Zyad Loutfi is an élève-avocat at Quinn Emanuel Urquhart & Sullivan LLP (Paris office) where he focuses on international commercial arbitration and disputes settlement. He is specialized in intellectual property law, investment law, and international arbitration. His work involves advising and representing companies, states, and state-owned entities in a wide range of industries. He is admitted to practice in Egypt and in the state of New York and holds a PhD in private law from the University of Paris City. He is also a graduate of Cornell Law School (where he was President of the Cornell International Arbitration Society), the University of Paris Descartes, the University of Paris-Est Créteil, and Cairo University.

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Originally from The American Review of International Arbitration (ARIA)

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Recent trends in the adjudication of intellectual property (“IP”) under investor‐state dispute settlement (“ISDS”) highlight the most salient and conspicuous evolution of international investment law in the last decade. The growing trend toward recycling IP violations into investment treaty claims is unveiling—and confirming—the propensity of IP-owning investors to bypass and circumvent the inherent IP dispute settlement mechanism of the World Trade Organization (“WTO”). A driving catalyst behind favoring the ISDS path is the access that ISDS gives to an additional layer of treaty protection and to more lucrative remedies, which are unavailable in trade disputes. Nonetheless, despite its allure, this novel path of IP enforcement bears with it worrying ramifications for IP and its underlying policies.

In line with Clint Eastwood’s iconic quote, “Every gun makes its own tune” from the classic Western film “The Good, the Bad & the Ugly,” this article invites the reader to swiftly explore the ‘Good,’ to spot the ‘Bad,’ and to acknowledge and attempt to avoid the ‘Ugly’ effects of adjudicating IP disputes outside the dispute settlement body (“DSB”) of the WTO. Just as no two guns are identical, this article proceeds from the premise that the enforcement vehicles analyzed herein—ISDS and WTO—are not alike, possess divergent facets, and certainly do not produce the same ‘tune.’ However, despite ringing the alarm bells, their symphonies can be aligned or, at least, synchronized.

This article highlights the intricacies of both enforcement vehicles and encourages the reader to carefully listen to the ‘tune’ played by each mechanism. The article also offers insights on how certain vexing issues regarding the interpretation and application of IP treaties could, or should, be addressed by ISDS tribunals to avoid hindering the regulatory autonomy of host States, to sustain the policies of the knowledge economy and to remedy the risks of fully reconceptualizing IP as an investment asset. The article submits that if the ‘Good’ can partially justify the ‘Bad,’ pondering about the ‘Ugly’ should prompt calls for greater harmony between the trade and investment realms.