Balancing Acts: The Impact of Bilateral Investment Treaties on TRIPS Flexibility

Abstract

Bilateral Investment Treaties are powerful tools to protect foreign investment from the arbitrary actions of the host states. However, the broad and unqualified clauses in Bilateral Investment Treaties have expanded their scope to challenge the states’ regulations. Therefore, through the investor-state arbitration mechanism in Bilateral Investment Treaties, a legitimate regulation can be invalidated if it adversely affects the value of investment or expected future profit. Furthermore, in the absence of general or specific exceptions, limiting the broad scope of Bilateral Investment Treaties threatens the well-established Trade-Related Aspects of Intellectual Property Rights, flexibilities incorporated to safeguard developing countries’ development concerns. In the evolving jurisprudence, Trade-Related Aspects of Intellectual Property Rights may constitute an act of indirect expropriation. Therefore, the stringent Intellectual Property protection in most modern Bilateral Investment Treaties may undermine Trade-Related Aspects of Intellectual Property Rights flexibility. In such a situation, a delicate balance needs to be struck between the rights of the states and investors to reduce Bilateral Investment Treaties’ far-reaching implications on Trade-Related Aspects of Intellectual Property Rights flexibility to safeguard public health imperatives. This article analyzes the legal issues surrounding Intellectual Property protection under Bilateral Investment Treaties and its potential effects on the flexibility of Trade-Related Aspects of Intellectual Property Rights, suggesting mechanisms to ensure BITs do not undermine essential public health policies.