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1 1 (September 19, 2019)

handle is hein.crs/govbbcz0001 and id is 1 raw text is: September 19, 2019 USMCA: Intellectual Property Rights (IPR) Background The United States-Mexico-Canada Agreement (USMCA) is a proposed free trade agreement (FTA) negotiated among the three parties to update and replace the 1994 North American Free Trade Agreement (NAFTA). On November 30, 2018, President Trump and the leaders of Mexico and Canada signed USMCA. Congress would need to pass the legislation to implement the agreement before it can enter into force. USMCA would make notable changes to NAFTA provisions on intellectual property (IP)-creations of the mind embodied in physical and digital objects. IPR are time-limited rights that governments grant to inventors and artists to exclude others from using their inventions and creations without permission. IP is a key source of U.S. comparative advantage; advancing IPR protection globally has been a U.S. trade negotiating objective since 1988 (P.L. 100-418). IPR trade agreement provisions were first included in NAFTA and, subsequently, the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The 2015 Trade Promotion Authority (TPA, P.L. 114-26) retains prior U.S. trade negotiating objectives for U.S. trade agreements to reflect a standard of protection similar to that found in U.S. law (TRIPS-plus), and adds new objectives to combat cyber theft and protect trade secrets. Select IPR Provisions in USMCA Several provisions in USMCA reflect new or updated issues not in current U.S. FTAs, including the following: Biologics. Requires a 10-year data exclusivity period for biologics, large-molecule drugs developed from living organisms. Internet Service Providers (ISPs). Establishes flexibilities to address ISP copyright liability. Geographical indications (GIs). Requires administrative procedures for recognizing and opposing GIs, which protect distinctive products from certain regions, including guidelines for determining common names. Also includes transparency and due process procedures for GIs that parties protect through international agreements. Trademarks. Extends trademark protection to sounds and collective marks and removes administrative requirements to enable easier trademark protection and enforcement. Trade secrets. Requires criminal procedures and penalties for trade secret theft, including cyber theft; clarifies that state- owned enterprises must protect trade secrets. Enforcement. Extends IPR enforcement to the digital environment. IP-intensive goods and services are an important part of U.S. trade with Canada and Mexico. The United States has expressed concern over certain IPR policies in both countries in recent years. IPR Chapter of USMCA The IPR chapter aims to support technological innovation to benefit both producers and users, while promoting a balance of rights and obligations. It is enforceable through government-to-government dispute settlement. General obligations include upholding international agreements and providing national treatment-not discriminating against foreigners on IPR. Some provisions in the IPR chapter have phase-in periods for Canada and Mexico. (IPR issues also arise in the USMCA investment chapter; as a form of investment, IPR benefits from USMCA investor protections. See CRS In Focus IF1 1167, USMCA: Investment Provisions, by Christopher A. Casey and M. Angeles Villarreal.) Patents Patents protect new inventions, such as pharmaceutical products, chemical processes, business technologies, and computer software. USMCA defines patentable subject matter as new products and processes, as well as new uses, methods, or processes of a known product. Under TRIPS, patented inventions must receive a minimum term of 20 years of protection. USMCA requires adjustments of patent terms for unreasonable delays in the patent examination or regulatory approval processes. Unreasonable delays include a delay of more than five years from the date of filing or three years after a request for examination of an application, whichever is later. USMCA includes a notification system and procedures (e.g., judicial or administrative proceedings) to assert patent rights or to challenge a patent's validity. These procedures are more flexible than patent linkage-a provision common to many prior U.S. FTAs whereby regulatory authority cannot grant marketing approval to a generic drug without the patent holder's permission. Regulatory Excusivities Some USMCA provisions specific to pharmaceuticals aim, based on U.S. trade negotiating objectives, to encourage innovation and access to medicine. Yet debate exists on whether USMCA appropriately incentivizes research and development for new medicines while also allowing affordable access to medicines through market entry of generic medicines. In USMCA, the debate has centered on regulatory exclusivity for biologic drugs-drugs made from living organisms (see figure below). Unlike most patented products, pharmaceuticals must go through a regulatory approval process before they can be marketed. Patent holders (generally, brand-name drug companies) must submit test data) to the regulatory authority-the Food and Drug Administration (FDA) in the United States-to make the case for a drug's safety and effectiveness. The market approval process runs concurrently with any applicable patent term. Thus, the

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