Use It or Lose It: Assessing the Compatibility of the Paris Convention and TRIPS Agreement with Respect to Local Working Requirements

To what extent should countries with different levels of social and economic development be treated differently; to what extent are existing international standards too high for developing countries and least developed countries? This article analyses a particular question of World Trade Organization law at the crossroads between legal and economic matters in a development context. It analyses the question of whether countries are (and should be) allowed to require local production in return for the grant of a patent right. An examination of relevant national legislation from a selection of WTO Member States sets the stage for an analysis of the question of how the Paris Convention and the Agreement on Trade-Related Aspects of Intellectual Property Rights—a priori establishing contradictory principles with respect to local working requirements—can be reconciled with the economic literature on point. The authors offer a rubric/checklist of elements to be considered in evaluating the benefits of local working requirements and suggest that below a certain threshold, which is malleable to the principle of graduation, exceptions to obligations under the TRIPS Agreement should be made.