NAFTA 2.0’s Impact on Intellectual Property

You may have heard that the United States, Canada and Mexico met on September 30th, 2018 to renegotiate and revise the North American Free Trade Agreement (NAFTA).  NAFTA was spearheaded by President Bill Clinton in January 1, 1994 and had not been changed until recently. President Trump had made renegotiating the NAFTA agreement as part of his pledge in his 2016 campaign for president. The Office of the United States Trade Representative published the “Summary of Objectives for the NAFTA Renegotiation” on July 17, 2017 with an 18-page list of objectives. The intellectual property objectives included: assurance that the provisions governing intellectual property rights would reflect a standard similar to that of U.S. law, providing strong standards of enforcement, preventing government involvement in the violation of intellectual property rights, and to secure fair and nondiscriminatory market access opportunities for U.S. persons that rely on intellectual property protection. NAFTA was considered the first internal trade agreement to protect intellectual property rights for the three NAFTA states. NAFTA 2.0 is historic to say the least, but what changes have been implemented? Continue to read if you want to learn more about the historic changes made in intellectual property and how they will impact the United States.

The new NAFTA has been given the name “USMCA”, which stands for United States Mexican Canada Agreement. This new term, USMCA, will now replace the old “NAFTA” we know. The NAFTA intellectual property section was originally drafted so that freedom of trade was allowed without obstacles as to clashing intellectual property laws in each member state. The most important changes to intellectual property rights in Chapter 20 of the USMCA include: a 10 year data protection for manufacturers of innovative drugs, participating countries are required to extend patent term restoration for unreasonable days in prosecution and issuance of a patent, the copyright term has been extended to the extent of the authors life plus seventy years after death, there is no liability for internet service providers if they take down pirated content when notified,  border measures for counterfeit and pirated goods are to apply to in transit shipments, and all countries are required to provide pre-established damages for trademark infringement.

Chapter 20 which is entitled “Intellectual Property Rights” is over sixty pages and begins by stating its objectives. The agreement cites Article 20.A.2, “The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.” NAFTA does the following for intellectual property in the three-member states: it establishes minimum standards of protection for the intellectual property, it enforces the property rights when it comes to imported products and advises on how the countries will settle for damages and sanctions if there is an infringement.

Under Chapter 20.B.3, a new committee on Intellectual Property Rights will be established and will deal with IP cooperation issues including: how to reduce infringement, strengthen border enforcement when it comes to IP rights, enhance procedural fairness in patent litigation and recognize and protect geographical indications. Chapter 20.E.2. provides guidelines for procedural fairness in administrative proceedings when it comes to opposing or seeking cancellations of geographical indications. Article 20.E.4. determines in its text whether a term is a customary one or common name for a product within the three-member states.

Chapter 20.G.2. cites a one a year grace period for a filing date for new industrial designs by the designer. Disclosures can also be made prior to the one-year grace period and this will not prevent the issuance of the design from being filed during the grace period. Chapter 20.G.4. certifies that protection for industrial designs is guaranteed for at least a fifteen-year period. Trade secrets are an extremely important issue, and Chapter 20. I.1. provides that a party cannot limit the term of protection for trade secrets and Chapter 20.I.7., disallows a party from discouraging the voluntary licensing or transfer of trade secrets.

When it comes to border control. Chapter 20.J.6 allows authorities to take suspected counterfeit or pirated goods in transit. Finally, the United States, Mexico and Canada have agreed to the new proposal and intellectual property changes but the agreement must be ratified in each of the members countries. While each of the three countries celebrated the deal, the new NAFTA deal must be approved by Congress here in the United States for its first steps to go into effect. Three presidents, Mr. Trump, Mr. Trudeau and Mr. Pena Nieto must sign the agreement, of which is planned to take place at the end of November. Only time will tell if we will see NAFTA 2.0 approved during President Trumps’ presidency.




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