3 Investor–State Dispute Settlement and Review of New IP-Related Investment Cases

Subject(s):

Intellectual property — Investor — Treaty provisions — Arbitration

This chapter reviews the basic mechanism of investor–state dispute settlement (ISDS), including consent, jurisdiction, and options for investors to bring their cases. The ISDS framework introduces a different type of enforcement mechanism for intellectual property (IP) owners engaged in foreign investment. For a claim arising from government conduct that has a harmful impact on the IP-based investment, legal grounds may exist under an international investment agreement (IIA) to support a claim that may be brought directly against the host state in investor–state arbitration. The vast majority of IIAs, whether bilateral investment treaties (BITs) or regional free trade agreements (FTAs) containing investment protection chapters, include ISDS provisions in which governments have given their consent that, should an investment dispute arise with a private investor from another contracting state, they will submit to international arbitration. The chapter then looks at non-IIA options for investors and explores pre-arbitral steps and the relationship between IP-specific proceedings on a national level and the ‘fork in the road’ clauses in IIAs, along with newly proposed appellate mechanisms for ISDS and the costs of ISDS proceedings. It also considers the four IP-based investment cases that have emerged at the time of writing. Finally, the chapter highlights the overlapping points of IP rights and IIAs in this new multidisciplinary arena of intellectual property.