In brief 6 min read
On 15 November 2020, Australia, China, Japan, Korea and New Zealand joined the Association of Southeast Asian Nations (ASEAN) to sign the Regional Comprehensive Economic Partnership (RCEP), currently the largest free trade agreement (FTA) in the world covering a market of 2.2 billion people and almost 30% of the global GDP. RCEP incorporates areas and disciplines not previously covered in existing FTAs between ASEAN and non-ASEAN countries.
This Insight focuses on some of the key intellectual property requirements introduced by RCEP.
How does this affect you?
- RCEP's significance for Australia lies in the alignment of IP laws between the parties to RCEP, and particularly those that are not signatories to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
- This alignment includes expansion in the types of signs that can be protected as trade marks, procedural harmonisation in the filing, prosecution and maintenance of trade marks and patents, and a substantive uplift in the protections offered to registered and unregistered IP rights.
- The final version of RCEP dropped some of the more controversial provisions in the earlier leaked draft.
Background
The RCEP Agreement was signed on 15 November 2020 by ASEAN countries including Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam, and ASEAN's free trade agreement partners, comprising Australia, China, Japan, New Zealand and Korea. The RCEP Agreement will help to build access for Australian businesses in the Indo-Pacific region while improving export access and supply chain opportunities for Australian businesses with the signatories.
When will RCEP enter into force?
RCEP will come into force 60 days after six ASEAN signatories and three non-ASEAN signatories have ratified the Agreement. The Australian Government intends to ratify the RCEP in 2021. For some countries and in respect of certain IP obligations, there is a transitional period of up to 15 years for changes to be implemented.
Upward ratchet?
All WTO members are members to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), so it is viewed as the international baseline on IP. As with most FTAs, the IP chapter of RCEP contains some provisions that go beyond TRIPS, otherwise known as 'TRIPS-plus' provisions. Because IP treaties and FTAs generally require signatories to implement a minimum standard of protection and enforcement for IP rights, as a country signs each successive treaty or FTA, its obligation with respect to the protection and enforcement of IP rights tends to increase over time, the so-called 'upward ratchet'.
Based on a negotiation draft of RCEP leaked in 2015, it appeared that the RCEP would seek to introduce a number of controversial provisions that were significantly TRIPS-plus. However, the vast majority of these TRIPS-plus provisions do not appear in the signed RCEP agreement, representing a more balanced approach between the rights of IP holders and those of IP users.
As Australia is generally already compliant with, or provides a higher standard of, the protections set out in RCEP, ratifying RCEP will not require Australia to make any significant changes to its IP laws and procedures. Generally, the final signed RCEP goes no further than the CPTTP, so it also does not increase the obligations on signatories that are also party to the CPTTP (Australia, Brunei, Japan, Malaysia, New Zealand, Singapore and Vietnam). Rather, its significance for these countries is in requiring the other signatories of RCEP to harmonise towards the CPTPP standard. This will benefit Australian stakeholders by ensuring improved and more consistent protection and enforcement regimes across member countries of RCEP.
Key provisions
Some of the key provisions in the RCEP include:
- Relation to TRIPS – RCEP provides that, if there are any inconsistencies between TRIPS and RCEP, the provisions of TRIPS prevail, but the fact that RCEP requires a higher level of protection is not an inconsistency.
- Broadcasts – RCEP introduces significant rights for broadcasters. It requires countries to grant to broadcasting organisations the exclusive right to prohibit rebroadcasting and introduce a right to remuneration or royalties for direct and indirect use of phonograms for commercial broadcastings. Although Australian copyright law already deals with broadcasts, neither TRIPS nor CPTPP deals with rights of broadcasters. These developments are notable as they pre-empt the multilateral initiative underway at WIPO to update the provisions of the 1961 Rome Convention relating to broadcasters' rights.
- Digital protections and enforcement – The provisions in the RCEP on circumvention of effective technological measures and protection for electronic rights management information closely track the WIPO Copyright Treaty (WCT) and WIPO Performances and Phonograms Treaty (WPPT), rather than the more detailed provisions that the US had sought in the initial Trans-Pacific Partnership. There is separately a provision on enforcement in the digital environment but (unlike in the 2015 leaked draft) it is very short, only confirming that the civil and criminal enforcement provisions of RCEP are applicable to copyright and trade mark infringement in the digital environment.
- Trade marks – RCEP requires that 3D shapes and sound are registrable, and removes the flexibility for countries to require that registrable marks are visually perceptible (that is, that a mark must be capable of being perceived by the sense of sight). However, the proposal to require that scents are registrable did not make it into the final version. There are also requirements to strengthen trade mark filing and examination procedures, including a requirement to implement electronic trade mark systems, and a requirement to adopt a classification system which is consistent with the Nice system.
- Patents – The patents section of RCEP was particularly controversial when earlier drafts were leaked because of the significant increase in patent protection that was proposed. These have, for the most part, been removed in the final version. For example, the proposal to require member countries to prohibit the use of pharmaceutical test data when applying for authorisation of a second drug ('data exclusivity') would have delayed the availability of cheaper generics. The final version did not adopt many of these proposals, and tracks TRIPS more closely than CPTPP. It specifically preserves the limitations and exceptions in TRIPS, which include the Doha Declaration amendments relating to generic medicine. RCEP does, however, strengthen requirements for procedural transparency and fairness, which is likely to be beneficial for Australian patent applicants who are applying for patents in RCEP member countries.
- Geographical indications (GIs) – The focus of the GI section of RCEP is on limiting the impact of GI protection on users and other IP holders. These mainly reflect the CPTPP, requiring transparency and an opportunity to oppose the protection of the GIs. RCEP also limits a member state's ability to protect new GIs automatically through signing new treaties with third states – clearly aimed at the European Union. Member countries have the option of continuing to protect GIs through the trade mark system, as permitted by TRIPS. Conversely, members are required to ensure signs that may serve as GIs are capable of protection under the trade mark system. Trade marks must be protected where they 'predate', in the relevant jurisdiction, GIs, in accordance with TRIPS.
- Confidential information in proceedings – RCEP includes a specific provision requiring protection for the misuse of confidential information that is disclosed in civil IP proceedings. This is an Australian initiative, and mirrors provisions already in the Australia-US FTA and CPTPP. This is a norm-setting 'win' for Australia and will benefit Australian rights holders who conduct IP litigation in the RCEP countries.
- Safe harbours: Unlike TRIPS and CPTPP, the RCEP does not require safe harbours for internet service providers of any kind.
Actions you can take now
- Consider your international IP protection strategies in RCEP countries in light of the anticipated changes.
- Speak to a member of the Allens IP team if you have any questions about the changes introduced by RCEP.