Plain packaging and the interpretation of the TRIPs agreement.

• Author: Frankel, Susy
• Position: IV. Trademark Rights B. Use and Article 20 in Context 2. Exclusive Rights through VII. Conclusion, with footnotes, p. 1182-1214

2. Exclusive Rights

   Another element of Article 20's context is Article 16, which sets out trademark owners' exclusive rights against infringers. (143) As just mentioned, the absence of an explicit right to use a trademark only tells part of the story--namely, that there evidently is no absolute right to use, but that is far from a complete answer. First, the nature of property is such that it often utilizes the framework of rights to exclude in order to give parameters to what the property owner and others may or may not do. (144) Indeed, the ability to exclude others from the property is frequently a touchstone of what makes something property. (145) Second, the absence of an explicit right to use is a feature common to most property rights, whether the property is intellectual, personal, or real property. (146)

   The absence of an express statement in the TRIPS Agreement of a right to use has given rise to two simple but incorrect arguments about the TRIPS Agreement's interpretation. Broadly those arguments are:

   --All trademark rights and interests must be expressed in the text of the TRIPS Agreement. If they are not so expressed they must be implied. They cannot be implied so they do not exist. (147)

   --Because trademarks' exclusive rights can be characterized as negative rights, there can be no positive rights of trademark owners at all, including to use. (148)

   While it is correct that an interpreter of the TRIPS Agreement, or any international agreement, should not add to the text of it, (149) the problem with the first argument is that it seems to ignore the treaty interpretation rules of the VCLT in that it applies a literal, or black letter law, interpretation in complete isolation from context and object and purpose. In some instances, those analyzes may end up at the same place, but not always. What matters here is the interpretive process. This is one reason why international treaty interpretation rules are so important: if such rules are ignored, the rules-based system risks its very legitimacy.

   The TRIPS Agreement is an international agreement setting out minimum standards that must be enacted in domestic law. (150) Applying the customary rules of treaty interpretation, it should be interpreted as such. Put differently, the TRIPS Agreement is not a domestic law statute, and, therefore, one should expect that it is less detailed than a domestic statute. (151) If express words are missing from a minimum standards treaty, then the absence of express words should not be used to defeat the object and purpose of the treaty. Interpretation of ordinary meaning under the VCLT does not allow reading in words where they do not exist, but it does require interpretation in light of the context and object and purpose of the treaty. (152) That requires more than an exclusively literal interpretation of individual parts of the TRIPS Agreement.

   The problem with the second line of argument is that its simplicity ignores property law and theory in two key ways. First, the notion of negative rights (that is, the right to exclude others) is predominantly a definitional methodology of delineating property rather than a substantive means of defining what the owner of property may or may not do with the property. (153) Second, there is an inseparable relationship between rights to exclude (negative) and legitimate interests (positive). (154)

   In light of the above analysis, to argue, as some have done, that the legitimate interests of trademark owners are exactly the same as, and limited to, the Article 16 rights granted in the TRIPS Agreement--thereby excluding any legally cognizable interest in using their trademark--strikes the authors as unconvincing. (155) In sum, trademark rights matter in the plain packaging debate. The debate is more nuanced and complex than the simple (and in this Article's view inaccurate) suggestion that because trademark owners' rights against third parties are generally expressed as (negative) rights to exclude, trademark owners do not have legitimate and legally relevant interests (156) to use their trademarks beyond registration. This Article now looks deeper into the negative-rights argument.

   3. The Negative-Rights Argument in Context

   The rights in Article 16 make sense in light of their object and purpose--that is, when seen teleologically as allowing for the orderly use of trademarks in commerce. (157) This seems fairly obvious--How else would a consumer be confused if the legitimate owner does not use the trademark at some relevant point in time? As discussed above, this Article contends that people do not register trademarks to obtain a certificate from a government; they register them because they are using the trademark in commerce (or intend to) and will then need to maintain order.

   This Article also suggests that trademark rights are best viewed as a continuum. At one end of the spectrum would be an almost absolute positive right to use a protected mark in any context, an approach that is unrealistic and that this Article squarely rejects. At the other end of the spectrum is a total ban on the use of a mark. At that point, the (negative) (158) rights to exclude third parties are essentially irrelevant because (a) even the legitimate owner of the mark cannot use his or her own mark; and (b) a third party using the mark in relation to the relevant goods or services would also be violating the government-imposed ban.

   Looking at Section 2 of Part II of the TRIPS Agreement structurally, Article 16 provides the rights that the trademark owner has against third parties that use his or her mark without authorization, including counterfeiters. (159) Those rights are by no means absolute. For example, they are limited by the need to show consumer confusion. (160) Moreover, Article 17 allows WTO members to limit trademark owners' rights, particularly the rights contained in Article 16 (themselves already limited by the need to show confusion or deception). It also points clearly to the need to take account of the legitimate interests of trademark owners. (161) As discussed below, if all that was meant by legitimate interests was the express rights in Article 16, then Article 17 would likely have said so. Instead it uses the phrase legitimate interests.

   Articles 19 and 20 then provide limits on government-imposed use restrictions. Under Article 19.1, a ban on use cannot be used to cancel a registration, signaling that the ban may well be temporary. (162) Indeed, that is precisely why a trademark owner would want to maintain the registration. Then Article 20, which was examined in Part IV.A and Part IV.B, limits certain encumbrances. It lists three examples of such prima facie unjustified encumbrances by special requirement. (163) It is thus not unreasonable to examine encumbrances with this as the contextual backdrop.

   For now, this Article turns to the various rights in Article 16. It will return to the legitimate interests and Article 17 in the next subpart.

1. "Rights Conferred," Article 16.1, 16.2, and 16.3

   Article 16 as a whole is entitled "Rights Conferred." Article 16.1 sets out the minimum standards for actionable infringement of registered trademarks that members of the TRIPS Agreement must include in their domestic laws. (164) It is worth remembering that the plain packaging issue is not a third-party-trademark-infringement issue of the kind set out in Article 16. While it is not directly applicable to the issue of what amounts to unjustifiably encumbered, Article 16 is relevant context, however, for the interpretation of Article 20.

   From a country's standpoint, Article 16, or indeed any part of the TRIPS Agreement, is not a complete code; (165) it is a set of minimum standards that must be enacted in domestic law. (166) Therefore, when domestic regimes implement these minimum standards, they add to the exact words of the TRIPS Agreement in order to make the law function. (167) This does not change the nature of the international obligation as a minimum standard, but it indicates that a purely literal reading of the provision may not give the full picture. In part, that is why context and object and purpose are also part of the VCLT method of interpretation. (168)

   The essence of the negative-rights argument is that because trademark owners' Article 16 exclusive rights are rights to exclude, there is no right to use the trademark. (169) Therefore, part of this argument is that Article 17 is not directly relevant to plain packaging. (170) As discussed previously, whether or not both Articles 16 and 17 are directly applicable, they are part of the context, which is critical to a correct VCLT interpretation of Article 20. The proponents of the negative-rights argument do not give full, if any, weight to these aspects of context, and, consequently, when discussing Article 20, they seem to effectively dismiss any role for legitimate interests of trademark owners.

   This beguilingly simple interpretation of trademark rights being wholly negative in nature appears to ignore a wealth of literature and theory about the nature of property, the meaning of ownership, the meaning of rights to exclude, and even the specific notion of negative rights. (171) There is a leap in logic from saying that because Article 16 frames certain rights as exclusive rights against infringement (negative rights), therefore trademark owners have no rights to use (positive rights). For one thing, as noted above, they have a right to apply to register (subject to meeting requirements). This (positive) right is there for a reason, which the context easily explains: trademark owners register a mark to use it and maintain orderly use in commerce.

   Commentary about rights to exclude and what they entail arise in different legal contexts, including constitutional law, (172) property law, and contract law (173) to name a few. Most relevant here is property law. (174) It is the essence of a trademark right that it...