Equity Legitimacy and the Rule of

Two modes of negotiation over equitable access to, and use of, knowledge resources - rules-based and result-oriented - have been distinguished. These correspond roughly with the notions of 'patterned' and 'non-patterned' forms of justice identified by Nozick (1974). But an attainable, practical equity that can be universally accepted may need to blend both these aspects - striking precise, effective bilateral understandings that optimize the interests of both user and access provider, yet comply with overarching standards of procedural fairness and distributive equity. A requirement to set outcome-oriented negotiations within a rules-based context is found in the CBD. Article 19 requires 'measures to promote and advance priority access on a fair and equitable basis . . . to the results and benefits arising from biotechnologies based upon GR provided . . .' but stipulates that such access 'shall be on mutually agreed terms'. The common challenge in negotiating knowledge resources is to find a legal framework that provides external, objective and non-discriminatory guarantees of equity at the international level, while providing for practical and workable bilateral agreements that meet local needs and diverse cultural and developmental contexts. Ideally, such a legal framework could, in itself, be the collective good that the invisible hand of a robust international market of ideas delivers when self-interested trade negotiators pursue specific sectoral interests. Given procedural fairness and balanced negotiating conditions between resource providers and users, could the accumulation of discrete bilateral settlements, over time, yield a robust body of equitable rules? Stated otherwise, should the international framework evolve as a kind of organic common law, or are overarching civil law rules required? Is a hybrid form of 'equity' not merely desirable but inevitable? A libertarian analysis would suggest that no third party (at least a government authority) could question the distributive justice of a bilateral agreement freely entered into (Nozick, 1974). But the notion of justice invoked by treaty references to fairness and equity evidently goes beyond mere guarantees of procedural fairness, and entails expectations of distributive equity. Contemporary negotiations over the dispensation of knowledge resources inevitably involve many factors that a simple bilateral model cannot accommodate: asymmetric bargaining power, lack of well-defined property rights, overlapping claims, the public stake and polyvalent qualities of many knowledge resources, and the political reality that rules governing the equity of outcomes will be required as a safety net.

Broad principles such as equity and legitimacy, and abstract conceptions of balance between opposing interests, help structure the policy matrix and inform the international jurisprudence that together set the framework for access to, and use of, knowledge resources. A general conception of equity is apparent in the 'fair and equitable sharing' of benefits from the use of GR under both the CBD and the FAO, and the requirement in the CBD for 'equitable sharing of the benefits arising from the utilization of [traditional] knowledge, innovations and practices'. One mechanism for specifying and determining such distributive equity is through the dispensation of IPRs that define agreed use of, and allocate benefits from, innovations and other derivative products making use of knowledge resources (Tobin, 2002). Apart from this instrumental function of IP titles in equitable benefit-sharing, the international IP regime itself deals relevantly with knowledge-related international trade, invoking cognate notions of equity, balance, fairness and legitimacy. The Paris Convention expresses a notion of commercial fairness, with an international trade dimension, in requiring the suppression of '[a]ny act of competition contrary to honest practices in industrial or commercial matters', which is construed as not being 'limited to honest practices existing in the country where protection against unfair competition is sought' but also 'honest practices established in international trade' (Bodenhausen, 1968).

TRIPS invokes a conception of 'legitimate trade' (in the sense of its form and normative logic, TRIPS is analytically, but not of course politically, closer to a fair trade agreement than a free trade one), and provides that IPP should be 'conducive to social and economic welfare' (suggesting a distributional form of justice, or a right to development) and 'to a balance of rights and obligations' (equity as balance). The hybrid quality and conceptual tensions of trade negotiations driven by perceived interests in a knowledge economy are most evident in TRIPS. It articulates an indefinite, almost aspirational, standard of regulatory fairness and balance in stating the objectives of IPP, while setting specific substantive standards for IP laws, leaving open the question of how these two should be conceptually reconciled. For instance, a consistent reading of the decision by TRIPS negotiations to fix the minimum patent term at 20 years would imply that this specific duration gives partial effect to the intended broader equitable balance between producers and users of technology that is expressed in art. 7, so that a 20-year patent term is effectively deemed equitable. The panel in the landmark case of Canada's pharmaceutical patents (WTO, 2000a,b) considered, but did not adopt, a broader conception of 'effective patent term', by which the actual patent term would need to be adjusted to take into account the regulatory requirements that upset the principle that it would be fair for a patentee to enjoy a certain period of exclusivity; this would have deepened the notion of equitable balance implicit in the 20-year term. On matters such as exceptions to patent rights, the linkage between the policy objectives of protection and the shape of specific standards may be more difficult to characterize directly than the concept of a fair patent term, but is no less important. That is why the practical, sustained delivery of equity in a knowledge economy entails the construction of a systematic and robust jurisprudence of TRIPS that bridges between the principles and objectives (and the broader sources of law and policy direction they invoke) and the precise standards of specific TRIPS provisions. This integration is perhaps most coherently effected, surprisingly, in Part III (on enforcement), which articulates broad standards of procedural fairness, safeguards against abuse of enforcement measures, and protection of legitimate trade, and then applies these standards in detailed provisions governing the operation of enforcement measures in domestic law. The Doha Declaration on the TRIPS Agreement and Public Health (WTO, 2001), in restating the existing law of TRIPS, elaborated a notion of balance that had been implicit; it underscored the enabling effect of black letter law by explicitly recognizing the need to make 'effective use' of the public policy remedy of compulsory licensing, one of the policy tools classically considered as part of the equitable balancing of interests in municipal patent law.

Given the diverse forms of regulation that govern knowledge resources and knowledge products, these questions of fairness and equity are also bound up in the legitimacy both of regulatory mechanisms and of the very objectives of regulation. Trade law characteristically imposes a necessity test on government intervention, on the model of GATT (art. XX); implicitly, trade is legitimate unless there are specific grounds for its restriction. TRIPS inverts this normative logic, so that the trading environment for knowledge products is legitimate only if it complies with a positive, minimum standard. Illegitimate (infringing) trade is to be addressed through the implementation of positive obligations under TRIPS and through cooperation 'with a view to eliminating' trade in infringing goods. Public policy exceptions to IPRs, and indeed other regulations that govern knowledge resources, are capped under WTO law by various tests that establish a composite standard of legitimacy of policy objectives. For instance, the Technical Barriers to Trade (TBT) Agreement provides that 'technical regulations shall not be more trade-restrictive than necessary to fulfil a legitimate objective'. TRIPS dispute settlement panels have dealt with the notion of 'legitimate interests' in the justification of exceptions to IPRs. This notion of legitimacy is an important vector for the application of broader international law and policy interests within the trade law system, and in particular for a systematic jurisprudence of TRIPS that coheres with overarching expectations of equity and fairness or legitimacy in inter national trade.

These general standards carry with them an expectation of equity and fairness, but this promise can only be fulfilled in an effective and robust way either through detailed substantive standards - by the black letter law - or through precise bilateral settlements within the overarching legal framework, especially in the contested and unstable environment of knowledge economy trade negotiations. Indeterminate or imprecise international law can have a chilling effect on national policymaking and impede the practical operation of equitable balances defined at the principle level. Thus, the Doha Declaration aimed to overcome imprecision and ambivalence by making explicit what the TRIPS negotiators had implicitly accepted, but had not positively articulated: a 'right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted', as one component of the overall equitable balance in the governance of the knowledge economy.

This requirement for clarity and predictability in international standards also arises in considering the permissible scope and basis of other exceptions and limitations on IPRs, as a contested area of domestic lawmaking seen as integral to the task of establishing an equitable balance. It is therefore unsurprising that the scope of such exceptions has been litigated twice under TRIPS, in cases which went to dispute settlement panels that considered the applicable, broadly drafted standards. In both cases, dispute settlement could be viewed as a natural extension of the original trade negotiations, as attempts to further codify or elaborate permissible exceptions had failed. These cases raised, among other legal issues, the question of legitimacy of third-party interests and the legitimacy of policy choices, leading to the invocation of broader international law and policy interests, and, in assessing legitimacy of policy goals, the argument that national policy choices were not justiciable:

[I]t is critical that a WTO Panel not judge the desirability of a country's public policy rationale for an exception. In an organization as diverse as the WTO, a Panel should not determine the acceptability of a Member's public policy objectives. There is no support in the TRIPS Agreement for a Panel to determine acceptable policy rationales for exceptions under Article 13 of TRIPS.

Through this accretion of international law and dispute settlement jurisprudence, more systematic conceptions of equity and legitimacy may develop over time. Still, it is more common in trade negotiations and disputes for these concepts to retain a circular and subjective quality. Hence, their invocation in international texts has not resolved the controversy over the legitimacy of trade in innovations based on GR and in products alleged to misuse GIs; the international agreement may merely validate a particular form of words in which to conduct discourse, so that disputes are phrased in terms of contending views of equity or fairness. Accordingly, these general formulations of equity may in practice need to be viewed more as a policy framework or as a common lexicon for negotiation rather than as firm, precise legal tests. Unless the negotiations are bilateral and specifically result-oriented, deliberate ambiguity or imprecision may have been a de facto choice by negotiators working around unresolved obstacles on which perceptions of legitimacy and fairness differ; equally, the very inclusion of a built-in negotiating agenda within TRIPS acknowledges continuing divergences on the fairness of regulating knowledge resource in the area of GIs (arts 23.4, 24.1 and 24.3) and biotechnological inventions (art. 27.3(b)), as well as an interest in moving GI regulation from a fix-rule approach to a result-oriented approach through the creation of a multilateral register (art. 23.4).

Major areas of uncertainty remain in the international legal instruments that set standards for fairness of access to, use of, and trade in, knowledge resources. Substantive provisions need to be interpreted consistently with broad statements of principle; bilateral dispensations need to be reconciled with multilateral standards; and conflict may arise between distinct international instruments. This uncertainty can, in itself, fuel contention and accentuate asymmetries in trade negotiations and dispute settlement, and creates hesitation on the part of policymakers and legislators as the contours and boundaries of legitimate policy space remain indeterminate. Yet, in principle, the conceptual strength of, and the collective interest in, this multilateral legal matrix is in the prospect of predictable, rules-based resolution of disputes over the equitable dispensation of innovators' interests, public welfare, and interests of providers of knowledge resources within national law, policy and administration. It offers the only systematic and sustainable way of resolving the disputed legitimacy of trade in imitative products (such as those based on the genetic content of traditional products they are derived from, or in some way allude to such products), in that it provides a counterweight to the contradictions and exclusions that result from a concretion of ad hoc settlements. Establishing a sound and defensible basis for broad notions of equity and legitimacy is both a practical administrative task and a matter of jurisprudential analysis and interpretation. In international law, this should yield a clear interpretative framework that would strengthen the basis for the resolution of disputes over violation of formal obligations and other claims of nullification or impairment of expected benefits. At the domestic level, this framework should provide positive policy guidance to support policymakers in attaining welfare and equity goals set for IPP, in contrast to an unworkable perspective that would reductively view international IP standards as a set of curbs or constraints, to be complied with formally or perfunctorily but to a minimal extent, in which international standards are viewed essentially as impediments to domestic policy goals rather than supplementary means to the broader goal of domestic welfare.

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