7 Expropriation

Subject(s):

Intellectual property — Expropriation — Investor

This chapter studies a third principal standard of treatment for foreign investors: protection from unlawful expropriation. An expropriation constitutes an interference with the existing proprietary position of a foreign investor. Protection against expropriation is a core guaranty of international investment law. The chapter then analyses the standards for direct and indirect expropriation in relation to intellectual property (IP) rights. It reviews the basic principles of expropriation under international investment law, treaty practice concerning expropriation, and investor–state dispute settlement (ISDS) cases where claims of expropriation were asserted for IP-based investments. The chapter also examines compulsory licences with respect to patents, although an investment case has not yet arisen. Not least in the context of the COVID-19 pandemic, the question arises whether compulsory licences under patents constitute an expropriation within the meaning of international investment agreement (IIA) and what role Article 31 of the TRIPS Agreement plays in this context. In addition, ISDS disputes had to address to what extent anti-smoking legislation constitutes an indirect expropriate of tobacco companies' trademarks.