The recent panel report in Saudi Arabia – Measures Concerning the Protection of Intellectual Property Rights, the first intellectual property dispute where a WTO panel examined the security exception in Article 73 of the TRIPS Agreement, has now been appealed by Saudi Arabia ‘into the void‘. This means that the WTO’s dispute settlement body cannot adopt the panel report until the appeal is resolved. However, as the WTO’s Appellate Body is currently non-functional, this appeal cannot be dealt with until the crisis regarding the appointment of members to the Appellate Body is resolved. In the meantime, the panel report remains just that, a non-binding panel report. This will also be another first in the context of intellectual property disputes at the WTO.
While Saudi Arabia was partially successful in its invocation of the security exception in Article 73(b)(iii) of the TRIPS Agreement, in its notification of appeal, Saudi Arabia expressed its dissatisfaction with several aspects of the panel report including the panel’s finding regarding the invocation of Article 73(b)(iii) of the TRIPS Agreement. To be clear, in this post, I am not questioning Saudi Arabia’s motivation for launching this appeal. That is of no interest to me because I understand that there is a broader context behind this particular dispute that transcends the WTO. However, as Saudi Arabia and Qatar are both currently not part of the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) set up by the EU and some other states pursuant to Article 25 of the DSU, it is not clear when this particular appeal will be resolved. In any case, at the moment, less than a quarter of WTO members have signed up to the MPIA, so it is perhaps understandable if this is not an option for both Saudi Arabia and Qatar.
So, what does this mean for the international intellectual property system? What exactly is the point of initiating a dispute now at the WTO if the losing party can simply appeal ‘into the void’? But what if the losing party is genuinely unhappy with a panel report, is it supposed to just suck it up because the Appellate Body is non-functional and it does not want to join the MPIA? Moreover, is this a positive or negative development for weaker/less powerful countries? In other words, are developing countries better off with a dysfunctional dispute settlement system at the WTO? Will the successor of the current DG of the WTO be able to resolve this impasse? These are all questions that need to be carefully considered.