GIMC: Semi-finalists - Respondents
Short Description
GIMC: Semi-finalists - Respondents - NLSIU...
Description
TEAM CODE: 134
BEFORE THE PANEL ESTABLISHED BY WTO/DSB ____________________________________________________________________________________________________ ____________________________________________________________________________________________________
WINGARDIUM — MEASURES CONCERNING DOMESTIC SOURCING OF SOLAR CELLS & PLAIN PACKAGING OF CRYSTALLINE SILICON CELLS ______________________________________________________________________________________________________________________________
COMPLAINANT: LEVIOSA WT/DSXXX ____________________________________________________________________________________________________ ____________________________________________________________________________________________________
WRITTEN SUBMISSION ON BEHALF OF THE RESPONDENT ____________________________________________________________________________________________________ ____________________________________________________________________________________________________
8TH GNLU INTERNATIONAL MOOT COURT COMPETITION 2016
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TABLE OF CONTENTS
LIST OF ABBREVIATIONS .................................................................................................................. 5 INDEX OF AUTHORITIES ................................................................................................................... 7 STATEMENT OF FACTS ................................................................................................................... 12 MEASURES AT ISSUE ...................................................................................................................... 14 SUMMARY OF PLEADINGS .............................................................................................................. 15 LEGAL PLEADINGS ......................................................................................................................... 18 I. WG/SM/P-1 does not contravene Art. 2.1, TRIMS or Art. III, GATT ................................ 18 [A]. Art. III: 4, GATT is not violated ................................................................................ 18 [B]. The Measure does not violate Art. III: 5, GATT ........................................................... 20 II. The program being one for Government procurement, is exempted from the provisions of Art. III. ...................................................................................................................................... 20 [A]. It is a procurement by the government .......................................................................... 21 [B]. Not for Commercial Purposes ....................................................................................... 22 III. Local content requirements were agreed to by the Leviosan government .......................... 22 [A]. Parties can contract out of obligations to the WTO ...................................................... 22 [B]. The principles of customary international law are applicable ....................................... 23 [C]. Leviosa is estopped from objecting to Local Content Requirements ............................ 23 IV. The measure is exempted under Art. XX(B) ...................................................................... 24 [A]. The labelling requirements are exempted under XX(b). ............................................... 24
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[C]. The measures were applied in conformity with the requirements under the introductory clause of Art.XX. .................................................................................................................. 26 VI. State aid by a developing country ....................................................................................... 26 [A]. Obligation to notify ....................................................................................................... 26 [B]. No objections by Leviosa within 30 days. ..................................................................... 27 VII. The Wingardian measure does not apply marks of origin requirements inconsistent with Art. IX:4 of the GATT .............................................................................................................. 27 [A]. The Wingardian measure does not lead to any damage to the product, serious or otherwise. .............................................................................................................................. 28 [B]. Material Reduction in Value.......................................................................................... 28 [C]. No unreasonable increase in cost................................................................................... 28 VIII. WG/SM/P-1 does not violate the SCM Agreement. ........................................................ 28 [A]. The FIT Scheme is not a subsidy .................................................................................. 29 IX. The Directive of the Wingardian Ministry of Health does not violate Art. 2.2 of the TBT Agreement ................................................................................................................................. 32 [A]. The directive is beyond the scope of Art. 2.2. ............................................................... 32 [B]. The Directive pursues a legitimate objective ................................................................ 32 [C]. Necessary to fulfil the objective in light of harms of non-fulfilment. ........................... 33 [D]. It is not more trade restrictive than is required .............................................................. 34 X. Wingardium is not derogating the rights of registered trademark holders. ......................... 35 [A]. Art. 16 does not grant positive right to use a trademark ............................................... 35 [B]. Wingardium Trademark Act does not recognize right to use trademark. ..................... 36 [C]. Steps taken in consonance with WTO provisions and Wingardium Law ..................... 37 [D]. No confusion or functional derogation of trademarks ................................................... 37
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XI. Plain packaging rules do not unjustifiably encumber the use of trademarks for Crystalline Silicon Cells in the course of trade through special requirements ............................................ 38 [A]. Prohibitions do not constitute “special requirements” in the “course of trade” ............ 38 [B]. Notwithstanding, such restrictions are justifiable.......................................................... 38 XII. Procedural Infirmities in dispute raised by Leviosa .......................................................... 42 [A]. The dispute have not been raised as per the Energy Cooperation Agreement .............. 42 [B]. Nothwistanding the above, consultations were not adequate ........................................ 44 [C]. Terms of Reference, and the request for establishment of panel aren’t precise enough. ............................................................................................................................................... 44 REQUEST FOR FINDINGS ................................................................................................................. 45
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LIST OF ABBREVIATIONS
1
&
And
2
AB
Appellate Body
3
ADA
Anti-Dumping Agreement
4
Annex.
Annexure
5
Art.
Article
6
Arts.
Articles
7
CLI
Consortium of Leviosan Investors
8
C-Si
Crystalline Silicon
9
Dir.
Directive
10
DoHW
Department of Health, Wingardium
11
DSB
Dispute Settlement Board
12
DSM
Dispute Settlement Mechanism
13
DSU
Dispute Settlement Understanding
14
EC
European Communities
15
ECA
Energy Cooperation Agreement
16
FCTC
Framework Convention on Tobacco Control
17
FIT
Feed-in Tariff
18
GATT
General Agreement on Tariffs and Trade
19
GoW
Government of Wingardium
20
ITA
Indian Trademarks Act
21
LCR
Local Content Requirements
22
New York Convention/NYC
United Nations Conventions on the Recognition and Enforcement of Foreign Arbitral Awards
23
NGO
Non-Governmental Organization
24
PAoW
Power Authority of Wingardium
25
PC
Paris Convention
26
PIL
Public International Law
5
27
PV
Photo-Voltaic
28
Redondo
Republic of Redondo
29
SCM
Agreement on Subsidies and Countervailing Measures
30
Sec.
Section
31
TBT
Agreement on Technical Barriers to Trade
32
TF
Thin-Film
33
TM
Trademarks
34
TRIMS
Agreement on Trade Related Invested Measures
35
TRIPS
Agreement on Trade Related Aspects of International Property Law
36
UNCITRAL
United Nations Commission on International Trade Law
37
UNCITRALAR
United Nations Commission on International Trade Law Arbitration Rules
38
UNCREFAA
United Nations Conventions on the Recognition and Enforcement of Foreign Arbitral Awards
39
VCLT
Vienna Convention on the Law of Treaties
40
Wingardium
Republic of Wingardium
41
WMRE
Wingardium Ministry of Renewable Energy
42
WNSM
Wingardium National Solar Mission
43
WTA
Wingardium Trademarks Act
44
WTO
World Trade Organization
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INDEX OF AUTHORITIES
WTO Appellate Body Reports
Appellate Body Report, Brazil – Measures Affecting Imports of Retreaded Tyres, ¶ 145, WT/DS332/AB/R (Dec. 17, 2007).
Appellate Body Report, Brazil – Measures Affecting Imports of Retreaded Tyres, ¶ 144, WT/DS332/AB/R (Dec. 17, 2007).
Appellate Body Report, Canada – Measures Relating to the Feed-In Tariff Programme, WT/DS412/AB/R, WT/DS426/AB/R (May 6, 2013).
Appellate Body Report, European Communities – Trade Description of Sardines, ¶ 189, WT/DS231/AB/R (Oct. 23, 2002).
Appellate Body Report, European Communities—Measures Affecting Asbestos and Asbestos Containing Products, WT/DS135/AB/R (Apr. 05, 2001).
Appellate Body Report, Korea—Measures Affecting Imports of Fresh, Chilled and Frozen Beef, ¶ 13, WT/DS161/AB/R (Dec. 11, 2000).
Appellate Body Report, United States – Certain Country of Origin Requirements, WT/DS384/AB/R, WT/DS386/AB/R (June 29, 2012).
Appellate Body Report, United States – Certain Country of Origin Requirements, WT/DS384/AB/R, WT/DS386/AB/R (June 29, 2012).
Appellate Body Report, United States – Certain Country of Origin Requirements, WT/DS384/AB/R, WT/DS386/AB/R (June 29, 2012).
Appellate Body Report, United States – Measures Affecting the Production & Sale of Clove Cigarettes, WT/DS406/AB/R (Apr. 4, 2012).
Appellate Body Report, United States – Measures Affecting the Production & Sale of Clove Cigarettes, WT/DS406/AB/R (Apr. 4, 2012).
Appellate Body Report, United States – Standards for Reformulated and Conventional Gasoline, ¶ 17, WT/DS2/AB/R (Apr. 29, 1996).
Appellate Body Report, United States—Section 211 Omnibus Appropriations Act of 1998, ¶ 186, WT/DS176/AB/R (Feb. 1, 2002).
WTO Panel Reports
Article 25 Arbitration Report, United States — Section 110(5) of US Copyright Act, WT/DS160/ARB25/1 (Nov. 09, 2001).
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Panel Report, Canada – Measures Relating to the Feed-In Tariff Programme, WT/DS412/R, WT/DS426/R (Dec. 19, 2012).
Panel Report, Canada – Measures Relating to the Feed-In Tariff Programme, ¶ 7.223, WT/DS412/R, WT/DS426/R (Dec. 19, 2012) [hereinafter Canada – Feed-In Tariff Programme Panel Report].
Panel Report, European Communities—Protection of Trademarks and Geographical Indications for Agricultural Products and Foodstuffs, ¶ 210, WT/DS174/R (Mar. 15, 2005).
Panel Report, United States – Measures Containing the Importation, Marketing and Sale of Tuna and Tuna Products, ¶ 7.455, WT/DS381/R (Sep. 15, 2011);
Panel Report, United States – Measures Containing the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/R (Sep. 15, 2011).
Panel Report, United States –Procurement of a Sonar Mapping System, GPR.DS1/R (Apr. 23, 1992).
Panel Report, United States –Procurement of a Sonar Mapping System, GPR.DS1/R (Apr. 23, 1992).
Panel Report, United States –Procurement of a Sonar Mapping System, GPR.DS1/R (Apr. 23, 1992).
Books
A.TANCREDI, INTERNATIONAL LAW AS THE LAW OF THE EUROPEAN UNION 231 (Enzo Cannizzaro et al eds., 2011).
ADAM LIBERMAN
ET AL.,
INTERNATIONAL LICENSING
AND
TECHNOLOGY TRANSFER:
PRACTICE AND THE LAW (2011).
AMANDA MICHAELS, A PRACTICAL GUIDE TO TRADE MARK LAW (3d ed. 2002).
BRUCE OSWALD ET AL., DOCUMENTS ON THE LAW OF UN PEACE OPERATIONS 43 (2010).
CORREA YUSUF & CARLOS M, INTELLECTUAL PROPERTY AND INTERNATIONAL TRADE: THE TRIPS AGREEMENTS 13 (2008).
CORREA YUSUF & CARLOS M, TRADE RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS: A COMMENTARY ON THE TRIPS AGREEMENT (2007).
DANIEL GERVAIS, THE TRIPS AGREEMENT: DRAFTING HISTORY AND ANALYSIS 116-17 (2d ed. 2003).
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DAVID PALMETER & PETROS C. MAVROIDIS, DISPUTE SETTLEMENT IN THE WORLD TRADE ORGANISATION (2d ed. 2004).
DEVELOPING COUNTRIES IN THE WTO LEGAL SYSTEM (Chantal Thomas et al. eds., 2009).
DISPUTE RESOLUTION IN THE WTO (James Cameron et al. eds., 1st ed. 1999).
ISABELLE VAN DAMME, TREATY INTERPRETATION
BY THE
WTO APPELLATE BODY 123
(2009).
JOHN H. JACKSON, SOVEREIGNTY,
THE
WTO,
AND
CHALLENGING FUNDAMENTALS
OF
INTERNATIONAL LAW (2006).
K.C. KAILASAM & RAMU VEDARAMAN, LAW
OF
TRADE MARKS & GEOGRAPHICAL
INDICATIONS (2d ed. 2005).
K.C. KAILASAM & RAMU VEDARAMAN, LAW OF TRADEMARKS AND GEOGRAPHICAL INDICATORS 4 (2nd ed. 2005).
MAX PLANCK INSTITUTE OF COMPARATIVE PUBLIC LAW AND INTERNATIONAL LAW, WTO—INSTITUTIONS AND DISPUTE SETTLEMENT 570 (Rüdiger Wolfrum et al. eds., 2009).
MAX PLANCK INSTITUTE OF COMPARATIVE PUBLIC LAW AND INTERNATIONAL LAW, WTO—TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS 346 (PeterTobias Stoll et al. eds., 2009).
MENDELSON, FORMATION OF CUSTOMARY INTERNATIONAL LAW 266 (1998).
MITSUO MATSUSHITA ET AL., THE WORLD TRADE ORGANISATION 123 (3rd ed. 2015).
NUNO PIRES DE CARVALHO, THE TRIPS REGIME OF TRADEMARKS AND DESIGNS 424 (2nd ed. 2011).
PETER GALLAGHER, GUIDE TO THE WTO AND DEVELOPING COUNTRIES (2000).
PYNDYCK AND RUBENFIELD, MICROECONOMICS, 203 (7th ed. 2009).
RAVINDRA PRATAP, INDIA AT THE WTO (2004).
RAVINDRA PRATAP, INDIA AT THE WTO DISPUTE SETTLEMENT SYSTEM 68 (2004).
THE WTO AND INTERNATIONAL TRADE LAW / DISPUTE SETTLEMENT (Petros C. Mavroidis et al. eds., 2005).
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YANG GUOHUA, BRYAN MERCURIO & LI YONGJIE, WTO DISPUTE SETTLEMENT UNDERSTANDING: A DETAILED INTERPRETATION 123 (2005).
Articles
Appellate Body Report, United States—Countervailing Duties on Certain CorrosionResistant Carbon Steel Flat Products from Germany, ¶ 157, WT/DS213/AB/R (Dec. 19, 2002).
Crawford Moodie et al., Plain Tobacco Packaging: A Systematic Review, UK Centre for Tobacco Control Studies (Jan. 09, 2016 11:00 AM), http://phrc.lshtm.ac.uk/papers/PHRC_006_Final_Report.pdf.
Crawford Moodie et al., Plain Tobacco Packaging: A Systematic Review, UK Centre for Tobacco Control Studies (Jan. 09, 2016 11:00 AM), http://phrc.lshtm.ac.uk/papers/PHRC_006_Final_Report.pdf.
D. Hammond et al., Impact of the Graphic Canadian Warning Labels on Adult Smoking Behavior, 12 Tobacco Control 390, 391-395 (2003) (discussing the effectiveness of health warning labels in Canada)
Daniel K.N. Johnson & Kristina M. Lynbecker, Challenges to technology transfer: A literature review of the constraints on environmental technology dissemination, SSRN (Jan. 13, 2016 10:00 AM), http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1456222.
Ernst-Ulrich Petersmann, The WTO and Regional Trade Agreements as Competing Fora for Constitutional Reforms: Trade and Human Rights, in REGIONAL TRADE AGREEMENTS AND THE WTO LEGAL SYSTEM 281, 282 (Lorand Bartels et al. eds., 2006).
Government’s Role in the Electricity Sector, Organization of American States (Jan. 10, 2016 01:00 PM), http://www.oas.org/dsd/publications/unit/oea79e/ch08.htm.
Hao Chen, Photovoltaic in China: what to expect, a recession or a breakthrough?, Princeton University China Energy Group (Jan. 11, 2016 5:30 PM) http://www.princeton.edu/~puceg/perspective/solar_cell1.html
Mark Davison, The Legitimacy of Plain Packaging under International Intellectual Property Law: Why there is no right to use a trademark under either the Paris Convention or the TRIPS agreement, SSRN (Jan. 13, 2015 10:00 AM), http://ssrn.com/abstract=2009115.
Nascimento et al., Avoidance of Smoking: The Impact of Warning Labels in Brazil, 17 Tobacco Control 400, 405-409 (2008) (discussing the effectiveness of health warning labels in Brazil).
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Richard N. Langlois, External Economies and Economic Progress, 66 The Business History Review 5, 12 (1992) (discussing the external economies of scale).
Vincent Dalpe, Canada - Feed-in Tariff: Are FITs Desirable, or even Legal? A Case Comment, 27.1 Revue quebecoise de droit international 87, 100 (2014) (discussing the appropriate market for solar power producers).
Agreements and Conventions
Agreement on Subsidies and Countervailing Measures, Apr. 15, 1994, 1869 U.N.T.S. 14.
DSU, Dispute Settlement Rules: Understanding on Rules and Procedures Governing the Settlement of Disputes, Art. 10, 1869 U.N.T.S. 401, 33 I.L.M. 1226.
General Agreement on Trade and Tariff Apr. 15, 1994, 1867 U.N.T.S. 187, 33 I.L.M. 1153.
United Nations Conference on Trade and Employment Third Committee: Commercial Policy, WTO (Jan. 10, 2016 8:00 PM), https://www.wto.org/gatt_docs/English/SULPDF/90190239.pdf.
Miscellaneous
Agreement on Technical Barriers to Trade, Art. 2.2, Jan. 1, 1995, 1868 U.N.T.S.120, 18 I.L.M. 1079;
Appellate Body Report, United States – Certain Country of Origin Requirements, WT/DS384/AB/R, WT/DS386/AB/R (June 29, 2012).
Brenner v. Manson 383 U.S. 519, 534-35 (1966).
Canon Kabushiki Kaisha v. Metro-Goldwyn-Mayer Inc., I-05507 E.C.R. (1998).
Siderugica Mendes Junior S.A. v. Ice Pearl, 6 W.W.R. 411 (1996).
UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT—INTERNATIONAL CENTRE FOR TRADE AND SUSTAINABLE DEVELOPMENT, RESOURCE BOOK ON TRIPS AND DEVELOPMENT: AN AUTHORITATIVE AN PRACTICAL GUIDE TO THE TRIPS AGREEMENT 237 (2005).
Webster’s College Dictionary (1991).
World Trade Organisation, Ministerial Declaration of 13 December 1996 https://www.wto.org/english/docs_e/legal_e/33-dnotf.pdf 11
STATEMENT OF FACTS
BACKGROUND Wingardium is a country with a large population which with a huge portion of its population still under the poverty line, and more than 65% people living in rural areas, with no access to electricity. However, the fast pace of development, largely through a booming manufacturing and services sector, took its toll on the environment. Wingardium began to suffer from high levels of air pollution due to high concentrations of particulate matter. This was largely due to its reliance on fossil fuel based conventional sources of electricity. As a result of this, there was a need to shift to renewable energy to meet its growing power requirements. To this end, the Wingardium National Solar Mission (WNSM) was initiated, which would encourage producers to embrace solar based energy by offering attractive prices, which were contractually fixed for a definite period. The scale of the WNSM attracted the attention of investors in another country.
Leviosa is a developed country which has a very advanced solar technology industry, which specializes in the production of Crystalline-Silicone based solar cells. The industry consortium approached the Leviosan government collectively seeking cooperation with the Wingardian government in the execution of the WNSM, seeing it as an excellent business opportunity.
After various negotiations, the two countries entered into an energy cooperation agreement. Under this agreement, relaxations were given to local sourcing requirements in exchange of transfer of technology.
THE DISPUTE CLI sought the elimination of the LCRs by the Wingardian government. The Wingardium government first chose to respect the request by the Leviosan president, but was soon forced to reinstate the LCR’s to 50%, pending widespread layoffs and unemployment.
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These large layoffs gave significant momentum to the campaign of members of the opposition, who began exerting a great deal of pressure on the government and stalling decision making. This policy paralysis negatively impacted the country image as an investment destination. The President of Leviosa conveyed his displeasure and threatened to bring a dispute before the WTO dispute settlement Board, for violating its obligations under the WTO and the ECA. After this, Wingardium enter into a similar ECA with Redondo for the supply of thin-film based solar technology in order to expand its market.
It soon turned out that Crystalline Silicone cells posed significant health risks, leading to allergic reactions and possibly cancer due to use of toxic gases and heavy metals at the manufacturing stage, and accordingly introduced a series of measures including Plain Packaging Requirements to discourage the use of such cells. This further depleted the market share of the Leviosan investors to 10% of the market from 75% three years earlier.
THE PANEL In March, 2016, Leviosa approached the DSB without either exhausting all legal remedies under Wingardian Law, and in violation of the exclusive arbitration clause under the Energy Cooperation Agreement. The panel was established by the DSB. The following violations were alleged by Leviosa in its request to establish the panel:
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MEASURES AT ISSUE
I.
Article 2.1 of the TRIMS Agreement, because they appear to be trade-related investment measures that are inconsistent with the provisions of Article III of the GATT 1994.
II.
Article III:4 and III:5 of the GATT 1994 because they appear to be laws, regulations or requirements affecting the internal sale, offering for sale, purchase, transportation, distribution, or use of equipment for renewable energy generation facilities that accord less favourable treatment to imported equipment than that accorded to like products originating in Wingardium.
III.
Article III:1 of the GATT 1994 because the measures appear to require the mixture, processing or use of equipment for renewable energy generation facilities supplied from Leviosa in specified amounts or proportions, being applied so as to afford protection to Wingardian production of such equipment.
IV.
Articles 3.1(b) and 3.2 of the SCM Agreement because it appears a subsidy in the form of financial contribution or income or price support and ensuing benefit is to be provided “contingent … upon the use of domestic over imported goods”
V.
Article 20 of the TRIPS Agreement, because Wingardium unjustifiably encumbers the use of trademarks for Crystalline Silicon Cells in the course of trade through special requirements.
VI.
Article 16.1 of the TRIPS Agreement, because Wingardium prevents owners of registered trademarks from enjoying the rights conferred by a trademark under the Wingardian Trademark Act.
VII.
Article IX:4 of the GATT 1994, because Wingardium imposes requirements relating to the marking of imported Crystalline Silicon Cells which materially reduce their value and/or unreasonably increase their cost of production.
VIII.
Article 2.2 of the TBT Agreement, because Wingardium imposes technical regulations that create unnecessary obstacles to trade and are more trade-restrictive than necessary to fulfil a legitimate objective taking into account the risks that non-fulfilment would create.
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SUMMARY OF PLEADINGS I. WG/SM/P-1 DOES NOT CONTRAVENE ART. 2.1, TRIMS OR ART. III, GATT.
Art. III:4, GATT is not violated To establish a violation of Art. III:4, there must be two like products subject to a law or regulation such that the imported product is treated less favorably. However, in this case there is no violation of Art. III:4 as the domestic and imported products are not like, since the efficiency of the Wingardian and Leviosan producer differ so significantly. Further, compliance with the local content is not mandatory to seek entry to the FIT, one may use thin film and be subject to no such restriction. Further, due to the physical properties of PV cells, imported solar cells will not be treated less favorably. The measure does not violate Art. III:5. The measure does not violate Art. III:5 as the purpose of Art. III:5 was to prevent measures requiring specific proportions of domestic materials in a product. It was thus meant to apply to the components of a product, and not the end uses of the products. Therefore the measure is not in violation of Art. III:5.
II. IT IS A PROGRAM FOR GOVERNMENT PROCUREMENT Assuming the measure is in violation of Art.III:4 or III:5, the measure is exempted by Art.3:8(a) as the measure governs the procurement of products for government purposes and consumption, and there is no commercial motive or nature in the transactions.
III. THE LOCAL CONTENT REQUIREMENTS WERE A PART OF THE ENERGY COOPERATION AGREEMENT Leviosa consented to be bound by such a clause by agreement. Further, under the principles of public international law, Leviosa is now estopped form denying the validity of the treaty it entered into and complied with for three years.
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IV. THE MEASURE IS EXEMPTED UNDER ART. XX(B). For a measure to seek an exemption under Art. XX(b), it must be shown that the objective is legitimate, further the measure must be necessary and must not violate the principle enshrined in the chapeaux of the WTO. Assuming, the measure is in violation of GATT, the measure is exempted as it has been undertaken to protect human health which is a legitimate objective.
V. STATE AID FOR A DEVELOPING INDUSTRY Art. XVIII:C:13 allows a developing country to provide assistance to particular industry to aid I its development. While there is a requirement to notify other parties likely to be effected by such a move, it is argued that in light of past GATT practice the exception ought to be allowed.
VI. THE MEASURE DOES NOT APPLY MARKS OF ORIGIN INCONSISTENT WITH ART. IX. The impugned measure is not inconsistent with the provisions of Art. IX:4, GATT as there is no material damage to the product in complying with the requirement. Additionally, the producers need not bear extra-ordinary costs to comply with the measure. Even if costs are incurred they apply equally to imported and domestic goods.
VII. WG/SM/P-1 DOES NOT VIOLATE THE SCM AGREEMENT The impugned measure is not a violation of the SCM Agreement. To establish a violation of the SCM agreement, it must be established that the measure is a subsidy and that a benefit has been conferred as a result.
VIII. THE DIRECTIVE OF WMOH DOES NOT VIOLATE TBT. The impugned measure does not violate the TBT agreement as the interpretation given to the term ‘restrictive’, indicates its application solely to cases where international trade is involved and imported products are discriminated against. Since, the measure is equally applicable to both the imported and domestic products, the measure is beyond the scope of the term trade restrictive.
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Further, the objective pursued is legitimate and the measure is necessary to achieve the identified objective. Therefore, assuming it is a trade restrictive measure, it is still not violating the TBT.
IX. WINGARDIUM IS NOT DEROGATING FROM THE RIGHTS IF REG. TRADEMARK Under Art. 16, registered trade mark holders have the right not to use a trademark but the right to deny third persons the use of the same. Even the rights under the TRIPS agreement are framed as negative rights and not positive rights. This interpretation is also given weight by the fact that the only exceptions made are in favor of third parties.
X. PLAIN PACKAGING RULES DO
NOT UNJUSTIFIABLY ENCUMBER THE RIGHTS OF TRADE MARK HOLDERS
The rights of trademark holders are not abridged as the prohibitions in this case do not constitute special restrictions in the course of trade. Further, solar cells as intermediary goods are not ‘traded.’ Even assuming the rights were abridged, the action is justified under Art. 20 of TRIPS.
XI. PROCEDURAL INFIRMITIES BY LEVIOSA Leviosa entered into a binding arbitration agreement with Wingardium to have all disputes settled through arbitration modelled on the UNICTRAL Model Laws. Leviosa failed to abide by this agreement and wrongfully ousted the jurisdiction of the arbitral tribunal. Further, the consultations entered into between Wingardium and Leviosa, were inadequate in so much as the DSB was resorted to without fully exhausting all options between the two countries. In light of the above, the proceedings before the DSB are vitiated by various procedural infirmities unbecoming of the WTO dispute settlement system.
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LEGAL PLEADINGS
I. WG/SM/P-1 DOES NOT CONTRAVENE ART. 2.1, TRIMS OR ART. III, GATT 1.
The basic principles of Art. III prevent discrimination and domestic protectionism. In
establishing a violation of GATT Arts. III and XI, compliance with Art. 2.1 of TRIMS can simultaneously be tested. WG/SM/P-1 doesn’t violate GATT or TRIMS as there is no violation of Art. III: 4[A] or Art. III: 5[B] of GATT. [A]. 2.
Art. III: 4, GATT is not violated
Art. III: 4 is violated, if the imported and domestic products are like products[1]; if the
measure is a requirement affecting their internal sale and distribution[2] and if the imported products are less favorably treated[3] .1 [1]. THE IMPORTED AND DOMESTIC C-SI CELLS ARE NOT LIKE PRODUCTS 3.
In analyzing the likeness of two products, two factors must be considered, its properties,
nature and quality[i]; consumer perceptions in relation to the two products [ii]. (i) Imported and domestic C-Si cells are qualitatively different. 4.
Leviosa agreed to transfer the technology used in the production of C-Si cells and
substantial ‘know how’ 2 behind the production processes. However, Leviosa did not provide training in its adoption and use3, resulting in a difference in productive efficiency, cost and consequently, prices. Every production process operates with a specific production function which outlines the cost of producing a given quantity of a product. The production of solar cells is capital
1
Appellate Body Report, Korea—Measures Affecting Imports of Fresh, Chilled and Frozen Beef, ¶ 13, WT/DS161/AB/R (Dec. 11, 2000). 2 Annexure II, Art. II, Fact on Record. 3 Daniel K.N. Johnson & Kristina M. Lynbecker, Challenges to technology transfer: A literature review of the constraints on environmental technology dissemination, SSRN (Jan. 13, 2016 10:00 AM), http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1456222.
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intensive,4 and requires abundant skilled labor, leading to high training requirements and a steep learning curve5 (further exacerbated by labor intensive nature). The Leviosan C-Si manufacturing industry is highly specialized with multiple firms 6, leading to external economies of scale and an industry wide reduction in cost 7. Coupled with the better skilled workforce (and higher labour productivity), Leviosan firms are more cost efficient than their Wingardian counterparts. 8 The aforementioned differences in production efficiencies affect the competitive relationship between products.9 The substantial price differences make the two panels unlike products. (ii) Perceptions of Consumers about the Products 5.
Consumer perceptions affect likeness. The Leviosan firms being pioneers in the C-Si
market enjoy market dominance. The associated brand recognition and price competitiveness distinguish them and their products from the newly emerged producers, for quality and not only price are relevant purchase factors for power producers. [2]. IT IS NOT A REQUIREMENT UNDER ART. III:4. 6.
Assuming, the products are ‘like’, compliance must be a must for the measure to be a
requirement. This is not the case with the impugned measure, for if a producer does not comply with the requirement, he can still enter the FIT by using thin film based technology 10. [3]. IMPORTED CRYSTALLINE SILICONE CELLS ARE NOT TREATED UNFAVORABLY 7.
Solar panels are connected in series to maximize output. If one panel has a lower efficiency
than the others, the others produce at this lower efficiency. Therefore, employing a conjunction of imported and domestically produced C-Si cells having different efficiencies, the apparatus’
4
Hao Chen, Photovoltaic in China: what to expect, a recession or a breakthrough?, PRINCETON UNIVERSITY CHINA ENERGY GROUP (J AN. 11, 2016 5:30 PM) http://www.princeton.edu/~puceg/perspective/solar_cell1.html. 5
Daniel K.N. Johnson & Kristina M. Lynbecker, supra note 3. ¶ 10, Fact on Record. 7 PYNDYCK AND R UBENFIELD, MICROECONOMICS, 203 (7th ed. 2009). 8 Richard N. Langlois, External Economies and Economic Progress, 66 THE BUSINESS HISTORY REVIEW 5, 12 (1992) (discussing the external economies of scale). 9 Appellate Body Report, European Communities—Measures Affecting Asbestos and Asbestos Containing Products, WT/DS135/AB/R (Apr. 05, 2001). 10 Art. 5, ¶ 6, Fact on Record. 6
19
efficiency is limited to the less efficient domestically produced cells. Thus, the output of a domestic C-Si Panel and an apparatus consisting of a mix of the two panels will be the same. Producers will not purchase only domestic cells. Imported panels of a similar or superior quality will always be cheaper or of a similar price respectively. The ‘requirements’ apply irrespective of location of production. Purchase of only domestic
8.
C-Si panel is not preferable, being economically unsound due to their lesser efficiency. As the panels are being produced in Wingardium under a transfer of technology, the technology is alien to Wingardium manufacturers, who need to perfect the process over time and move forward on the learning curve11. The Leviosan firms being more efficient offer cheaper, and better (if not similar) quality panels. There has been no effect to factors relevant for purchase decisions. Producers would not change buying preferences. Hence, there is no clear disadvantage to imported panels. [B]. The Measure does not violate Art. III: 5, GATT 9.
To violate Art. III: 5, a measure must require the use of a specified quantity of materials
from domestic sources. The same doesn’t cover issuance of directions on use of finished products12. The measure prescribes the manner of using finished solar cells, and not the process of manufacture or component mixing.13 Therefore, the same is beyond the scope of Art. III:5 of GATT.
II. THE PROGRAM BEING ONE FOR GOVERNMENT PROCUREMENT, IS EXEMPTED FROM THE PROVISIONS OF ART. III.
10.
To be protected by Art. III: 8(a), it must be procurement for government purposes[A] and
not for a commercial purpose[B].
11
PYNDYCK AND R UBENFIELD, supra note , at 347. United Nations Conference on Trade and Employment Third Committee: Commercial Policy, WTO (Jan. 10, 2016 8:00 PM), https://www.wto.org/gatt_docs/English/SULPDF/90190239.pdf. 13 General Agreement on Trade and Tariffs, Art. III:5, Apr. 15, 1994, 1867 U.N.T.S. 187, 33 I.L.M. 1153. 12
20
[A]. It is a procurement by the government 11.
With government procurement being undefined, guidance can be taken from the context in
which it is used 14.
Government Procurement refers to products for immediate or ultimate
consumption in government use through procurement by governmental agencies for governmental purposes. ‘Product’ includes both the product purchased, and the equipment required to generate the power15. A non-exhaustive but instrumental list of factors are: Payment by government(i), governmental use or benefit of product(ii), governmental control over its purchase(iii).16 (i) Payment by government 12.
Payment for procurement government or its agencies/instrumentalities, is a strong
indication of government procurement. The power authority under the WNSM is similar to the one in Ontario FIT Scheme, a wholly owned and controlled agency of the Ontario government. Power purchases are in behalf, and an exercise of the authority, of the government.17. 13.
Usage of government funds is another indicator, for title in goods so purchased rests with
the government (real owner) and no other private entity18 (ostensible owner). Although not a prerequisite, a transfer of title to the government strongly indicates government procurement. (ii) Governmental use or benefit 14.
The GoW is performing its basic function of providing essential services, 19 by supplying
electricity20 to the people, especially the large rural unconnected population. It therefore satisfies, for ‘government purposes’ within Art. 3:8(a). Government purpose has been interpreted to include
Panel Report, United States –Procurement of a Sonar Mapping System, GPR.DS1/R (Apr. 23, 1992). Panel Report, Canada – Measures Relating to the Feed-In Tariff Programme, WT/DS412/R, WT/DS426/R (Dec. 19, 2012). 16 Panel Report, United States –Procurement of a Sonar Mapping System, GPR.DS1/R (Apr. 23, 1992). 17 Art.5, ¶ 6, Fact on Record. 18 Panel Report, United States –Procurement of a Sonar Mapping System, GPR.DS1/R (Apr. 23, 1992). 19 Government’s Role in the Electricity Sector, O RGANIZATION OF AMERICAN STATES (Jan. 10, 2016 01:00 PM), http://www.oas.org/dsd/publications/unit/oea79e/ch08.htm. 20 BRUCE OSWALD ET AL., DOCUMENTS ON THE LAW OF UN PEACE OPERATIONS 43 (2010). 14 15
21
government consumption, or distribution in discharge of its public functions 21 like supplying electricity within its territory. (iii) Government control over product procurement. 15.
Power in setting conditions for entrance to FIT demonstrates governmental control over
the procurement of electricity, a strong indication of government procurement. [B]. Not for Commercial Purposes 16.
The arrangement between GoW and FIT members is not commercial. The purpose is to
encourage production of solar power by way of incentives to purchase of solar panels, and not to profit. The aims and objects of the program reveal no such purpose;22 aiming at reducing dependence on conventional sources, rural electrification (through off-grid power supply) and developing indigenous capabilities, 23 in line with achieving a socialistic society. III. LOCAL CONTENT REQUIREMENTS WERE AGREED TO BY THE LEVIOSAN GOVERNMENT [A]. Parties can contract out of obligations to the WTO 17.
The WTO, like other International law, is heavily premised on consent for both entry and
adherence. The same is reflected in the dispute resolution procedure,24 and in the term ‘contracting parties’, recognizing the agency of contracting parties. Having acknowledged this, it is only reasonable that the WTO recognize the ability to contract bilaterally in order to bestow greater preferential treatment than covered under the diluted provisions of the WTO. The GATT recognizes this ability,25 and the VCLT allows parties to enter into a successive treaty altering rights and obligations under the first treaty amongst themselves.
Appellate Body Report, Canada – Measures Relating to the Feed-In Tariff Programme, WT/DS412/AB/R, WT/DS426/AB/R (May 6, 2013). 22 Art. 1.1, ¶ 5, Fact on Record. 23 Art. 1.1, ¶ 5, Fact on Record. 24 DSU, Dispute Settlement Rules: Understanding on Rules and Procedures Governing the Settlement of Disputes, Art. 10, 1869 U.N.T.S. 401, 33 I.L.M. 1226. 25 General Agreement on Trade and Tariffs, Art. XXIV, Apr. 15, 1994, 1867 U.N.T.S. 187, 33 I.L.M. 1153. 21
22
18.
The ECA is a preferential trade agreement and one must view the provisions and intentions
of the parties whilst contracting. The Leviosan government aimed at securing a competitive advantage for its firms over those of other nations 26, and safeguard the interests of Leviosan investors by specifying the forum for resolution of disputes.27. 19.
The WTO has conceded on the ability to contract out of WTO obligations by allowing out
of court settlements, not fully consistent with AB reports or DSB Rulings.28 The dispute between Wingardium and Leviosa is hence a contractual one, centered around interpretation of the ECA. It hence would rightly be decided by institutions so designated by the parties in the agreement itself. [B]. The principles of customary international law are applicable 20.
The body of jurisprudence surrounding the WTO is a part of the broad framework of public
international law29, and principles of PIL can therefore be applied to it. Even the AB in its first report observed that no treaty exists in clinical isolation from the general principles of IL,30 such as estoppel. Where a country has consented to a particular agreement, and has even complied with it for substantial period of time, it cannot later backtrack. The parties have relied on and acted on this agreement, under customary international law, the rule becomes opposable to it by way of estoppel, and the validity of the rule cannot be disputed. [C]. Leviosa is estopped from objecting to Local Content Requirements 21.
Leviosa consented to the application of local content requirements, and having complied
with it for a substantial period of time, cannot then assail the validity of the obligations imposed on it under the agreement31.
26
¶ 11, Fact on Record. Art. 5, Annex. II, Fact on Record. 28 A.TANCREDI, INTERNATIONAL LAW AS THE LAW OF THE EUROPEAN UNION 231 (Enzo Cannizzaro et al eds., 2011). 29 Ernst-Ulrich Petersmann, The WTO and Regional Trade Agreements as Competing Fora for Constitutional Reforms: Trade and Human Rights, in REGIONAL TRADE AGREEMENTS AND THE WTO LEGAL SYSTEM 281, 282 (Lorand Bartels et al. eds., 2006). 30 Appellate Body Report, United States – Standards for Reformulated and Conventional Gasoline, ¶ 17, WT/DS2/AB/R (Apr. 29, 1996). 31 MENDELSON, FORMATION OF C USTOMARY INTERNATIONAL LAW 266 (1998). 27
23
IV. THE MEASURE IS EXEMPTED UNDER ART. XX(B) 22.
Art. XX, GATT recognizes the need to accommodate non-economic/non-trade aims such
as promotion and protection of public health. It allows imposition of measures which otherwise are violative of the GATT, like in the illustrated purposes.32 [A]. The labelling requirements are exempted under XX(b). 23.
It must be shown that the policy implemented by the measures were to protect human
health.[1] and that the same was necessary [2], and that application was in conformity of requirements under the introductory clause of Art. XX[3]. [1]. THE OBJECTIVE IS THE PROTECTION OF HUMAN HEALTH. 24.
Countries have the right to individually determine policy goals. 33 GoW aims at increasing
consumer knowledge and promoting human health34 by discouraging use of C-Si cells by mandating display of health hazards, enabling the customer to pick the safest alternative. [2]. THE MEASURES ARE NECESSARY 25.
Necessity under Art. XX(b), mandates that it must contribute to the achievement of the
objective(i), must be based on scientific data(ii) and should be the most reasonable alternative.(iii) (i) It contributes to the objective. 26.
The aim is to prevent and warn of adverse consequences to human health. In hudging the
contribution, there must be a direct link between the end and the means adopted. The decrease in consumption lowers the associated risks. Therefore, there is a direct link between the decreased use of C-Si and protection of human health.
32
General Agreement on Trade and Tariffs, Art. XX, Apr. 15, 1994, 1867 U.N.T.S. 187, 33 I.L.M. 1153. Appellate Body Report, United States – Standards for Reformulated and Conventional Gasoline, ¶ 30, WT/DS2/AB/R (Apr. 29, 1996). 34 Annex. VIII, Fact on Record. 33
24
(ii) It is based on scientific data collection and risk assessment. 27.
The impugned measure was adopted on the basis of studies by the Wingardian Health
Initiative and the DoHW. The presence of conflicting studies, that too in Leviosa, doesn’t derogate protection. The AB has held that where there are divergent scientific opinions, a contracting party can in good faith, rely on a report by a qualified and respected person35. There arises no need to evaluate conflicting evidence, based on a preponderance of probabilities 36. (iii) It is the most reasonable alternative. (a) Contributes to the end pursued. 28.
The measure contributes to the objective of reducing C-Si use by drawing attention to the
ill-effects of C-Si cells. Due to the plain packaging requirement, marketing gimmicks cannot be used to distract the consumers’ attention from health hazards 37. (b) It is not difficult to implement 29.
The information required to be disclosed is clearly laid out and is readily available with the
manufacturers of cells and modules and no additional studies are needed to comply with the requirement. (c) The trade impact of the alternative is not less than the impugned measure. 30.
An absolute prohibition most drastically curbs the health concerns, but is very trade
restrictive as it would lead to a curb on imports and domestic production of the product and would distort trade to a very high degree which the impugned measure does not do.
Appellate Body Report, European Communities – Measures Affecting Asbestos and Asbestos-Containing Products, ¶ 177, WT/DS135/AB/R (Mar.12, 2001). 36 Appellate Body Report, European Communities – Measures Affecting Asbestos and Asbestos-Containing Products, ¶ 178, WT/DS135/AB/R (Mar.12, 2001). 37 D. Hammond et al., Impact of the Graphic Canadian Warning Labels on Adult Smoking Behavior, 12 TOBACCO CONTROL 390, 391-395 (2003) (discussing the effectiveness of health warning labels in Canada); Nascimento et al., Avoidance of Smoking: The Impact of Warning Labels in Brazil, 17 TOBACCO CONTROL 400, 405-409 (2008) (discussing the effectiveness of health warning labels in Brazil). 35
25
[C]. The measures were applied in conformity with the requirements under the introductory clause of Art.XX. 31.
GATT allows measures taken to protect any objectives laid out under Art. XX (a)-(f) to
comply with the chapeau of Art.XX and prohibits arbitrary methods of discrimination, and disguised restrictions on international trade. 38 C-Si technology en mass is sought to be discouraged and not only imported C-Si cells under the measure, and no effort is being made to encourage the purchase of domestic thin film cells over imported ones. Plain packaging of solar cells was notified to protect human health and safety, and they are exempted from the scope of Art. III or IX, by Art.XX (b). VI. STATE AID BY A DEVELOPING COUNTRY 32.
The GATT recognizes the need to develop particular industries 39, and economic
development is in line with its goals.40 GATT Art.XVIII was introduced as an exemption for such industries. The measure requiring local content forms state aid to the Wingardian crystalline silicon cell industry, and isn’t subject to Art. III. In so much that it affected the imports of crystalline silicon cells, it is a measure within the meaning of the proviso to para 14 of Art. XVIII 41. There however, are pre-qualifications for exemption under Art. XXIV. [A]. Obligation to notify 33.
Parties desirous of protections of Art. XVIII must notify such measures. Its interpretation
is different than what a plain reading of the text would indicate. A GATT panel reviewing certain measures implemented by Sri Lanka upheld the argument that the same were undertaken with a belief that all parties will concur with their actions. Failure to notify wasn’t used to hold violative the actions of Sri Lanka and only a requirement for notification of any subsequent measures was imposed.
38
General Agreement on Trade and Tariffs, Art. XX, Apr. 15, 1994, 1867 U.N.T.S. 187, 33 I.L.M. 1153. General Agreement on Trade and Tariffs, Art. XVIII:C, Apr. 15, 1994, 1867 U.N.T.S. 187, 33 I.L.M. 1153. 40 General Agreement on Trade and Tariffs, Report of the Review Working Party on Quantitative Restrictions, L/332/Add.3/Corr.1 (Mar. 4, 1955). 41 General Agreement on Trade and Tariffs, ¶ 14, Art. XVIII, Apr. 15, 1994, 1867 U.N.T.S. 187, 33 I.L.M. 1153. 39
26
34.
The contracting parties agreed on notification requirements under the various treaties in a
Decision on Notification Requirements.42 It classifies both obligations under Art. XXIV and XVIII under the same head. Therefore, the significance of these requirements to notify can be considered as more or less identical within the WTO Framework. Therefore, when the requirement to notify has been relaxed once, the same can be done in other similar cases. Hence, a Wingardian claim under Art. XVIII can’t be struck down merely on a failure to
35.
notify the same, for it would amount to creation of a legalistic roadblock to the facilitation of trade and development. Further, the authoritative value of the provision has been diminished post the in the Ceylon case. Therefore, implementation can be taken as notice, and is applied to FTAs by the WTO. No FTA not notified in accordance with Art. XXIV, has been struck down by the Committee on Free Trade Areas. [B]. No objections by Leviosa within 30 days. 36.
Any country impacted by Art. XVIII, must seek consultations or raise a dispute within 30
days from notification. An exemption from the notification requirement isn’t unfair, as Leviosa was itself a party to an agreement executed in pursuance of the measure providing government assistance. Leviosa complied with the provisions for a significant period and is estopped from now challenging the validity of these measures. It is a valid restriction on the rights of parties under the WTO. VII. THE WINGARDIAN MEASURE DOES NOT APPLY MARKS OF ORIGIN REQUIREMENTS INCONSISTENT WITH ART. IX:4 OF THE GATT
37.
Any laws or regulations of a contracting party dealing with the labelling of imported
products must not require their marking in such a way that seriously damages the product [A], materially reduces their value[B] or unreasonably increases their cost[C]
42
World Trade Organisation, Ministerial https://www.wto.org/english/docs_e/legal_e/33-dnotf.pdf
Declaration
of
13
December
1996
27
[A]. The Wingardian measure does not lead to any damage to the product, serious or otherwise. 38.
In complying with the packaging requirement the products are not directly adversely
impacted or damaged, as it involves no change to the product itself, but only to the its packaging. [B]. Material Reduction in Value 39.
Identification of the product based on origin will not cause any reduction in the material
value of the product, for producers aren’t forced to mark goods in a way that jeopardises their value. Plain packaging requirements are not in contravention of Art. III of the GATT, for it does not discriminate between domestic and imported goods. The requirements cover both domestic and imported panels, as well as both C-Si panels and thin film based panels.43
[C]. No unreasonable increase in cost
40.
The impugned measure does not create any unreasonable increase in the cost of the panels
to producers or to end customers. While the manufacturers are required to print additional information to comply with the new requirements, these apply equally to domestic and imported C-Si cells.
VIII. WG/SM/P-1 DOES NOT VIOLATE THE SCM AGREEMENT. 41.
The enabling document of WNSM sets up a Feed-in-Tariff (“FIT”) scheme, akin to the
Ontario Feed-in-Tariff scheme.44 A 30% LCR is imposed for firms using C-Si technology based cells. It is submitted that the aforementioned FIT programme does not violate the provisions of the SCM Agreement as it is not a “subsidy”[A] Further, assuming it is a subsidy, it is not contingent on the use of domestic over imported goods[B].45
43
Annex. VIII, Fact on Record. Art. 5, ¶ 6, Fact on Record. 45 Agreement on Subsidies and Countervailing Measures, Art. 3, Apr. 15, 1994, 1869 U.N.T.S. 14. 44
28
[A]. The FIT Scheme is not a subsidy 42.
To be a subsidy, a financial contribution must be made by a government [1]; and a benefit
must be conferred by such financial contribution [2]. [1]. THE FIT SCHEME IS A FINANCIAL CONTRIBUTION 43.
A financial contribution by a government can be in the form of purchase of goods by the
government.46 The FIT program involves payment by the government to power producers for the electricity produced. Although the government does not take physical possession of the electricity, it acquires title over the electricity produced. A three-step analysis is required to establish a government purchase.47 (i) There is a transfer of funds to producers. 44.
The Wingardian government pays the producers for the electricity supplied. Funds are
transferred to suppliers only for electricity delivered into the grid. There is no element of grant inherent in the design of the FIT scheme. (ii) Government obtains possession of the electricity 45.
The Government takes possession over the electricity produced on its purchase. Obtaining
possession here includes an entitlement over the goods, and not physical possession. Given the nature of electricity, physical transfer of possession is not possible. But a transfer of an entitlement from the producers to the government is a means of transferring possession of electricity. (iii) The transaction is one of procurement by purchase. 46.
The enabling documents and guidelines of the FIT scheme, being modelled on the Ontario
Feed-in Tariff scheme, provide for the purchase of power by a government owned power authority. Therefore, the FIT scheme is a financial contribution in the nature of a purchase of goods by the government, within the meaning of the SCM Agreement. 46
Agreement on Subsidies and Countervailing Measures, Art. 1.1(a)(1)(iii), Apr. 15, 1994, 1869 U.N.T.S. 14. Panel Report, Canada – Measures Relating to the Feed-In Tariff Programme, ¶ 7.223, WT/DS412/R, WT/DS426/R (Dec. 19, 2012) [hereinafter Canada – Feed-In Tariff Programme Panel Report]. 47
29
[2]. THE FINANCIAL CONTRIBUTION MADE UNDER THE FIT SCHEME DOES NOT CONFER A BENEFIT. 47.
In assessing whether a financial contribution is a benefit, the criteria of Art. 14 must be
established.48 Where the financial contribution is in the form of goods purchased or procured by the government, the assessment is based on the adequacy of the payment”. 49 To do so a benchmark is fixed in the appropriate market and the government’s remuneration is evaluated against the market standard. (i) The appropriate market for comparison is the solar power market. (a) Different methods of producing electricity have different costs 48.
The appropriate market for comparing the government’s remuneration is the solar power
market. The appropriate market cannot be that for electricity in general because different methods of producing electricity have different costs. The installation and operational costs in solar power is higher than conventional methods of producing electricity.50 The costs being different, the prices of electricity produced from these methods are consequently different. Therefore, a comparison of remuneration received across different sources of power is undesirable. (b) Power producers using different methods do not compete in the open market. 49.
Producers of electricity do not compete in the open market, unlike producers of consumer
goods.51 The government purchases electricity from producers and supplies it to the grid. Thus there is no market where solar power producers would come in competition with conventional power producers. Therefore, the government’s remuneration cannot be compared to that received by conventional producers of electricity in an open market scenario.
48
Agreement on Subsidies and Countervailing Measures, Art. 14, Apr. 15, 1994, 1869 U.N.T.S. 14. Agreement on Subsidies and Countervailing Measures, Art. 14, Apr. 15, 1994, 1869 U.N.T.S. 14. 50 Vincent Dalpe, Canada - Feed-in Tariff: Are FITs Desirable, or even Legal? A Case Comment, 27.1 REVUE 49
QUEBECOISE DE DROIT INTERNATIONAL 87, 100 (2014) (discussing 51
the appropriate market for solar power producers).
Id., at 101.
30
(ii) The remuneration is adequate. (a) The market price of solar power is the same or higher. 50.
Solar power producers entered the market based on the incentives of WNSM. There exists
no independent market for such electricity in the absence of the WNSM, since Wingardium depended on fossil fuels for 95% of its energy needs prior to the WNSM.52 However, if such producers were to operate in the market without WNSM, the price charged would be the same or higher, due to the high cost of operations and maintenance of solar PV Panels. (b) In the absence of the WNSM, risks related with solar power projects would hike the prices of such electricity. 51.
The fixed revenue and long term contracts under the FIT Scheme have eliminated risks
which would have arisen in the open market. As a result, such producers would charge higher prices to cover these risks. Therefore, the remuneration being given to these producers is not more than what they would have received while operating independently in the open market. 52.
By extension, the remuneration received under the FIT scheme is not more than adequate.
On comparing it in the appropriate market, it is submitted that the remuneration received in that scenario would have been higher than that under the WNSM. Therefore, the FIT Scheme confers no benefit as envisaged under Article 1.1(b), read with Article 14 of the SCM Agreement. [3]. THE FIT SCHEME DOES NOT VIOLATE ART. III, SCM. 53.
Article 3 of the SCM Agreement prohibits any subsidy which is contingent upon the use
of domestic over imported goods. 53 However, the FIT Scheme is not a subsidy as it does not meet the requirements of a subsidy as laid down in the SCM Agreement. Although the FIT Scheme has a mandatory local content requirement provided under Articles 4 and 5 of the WG/SM/P-1, not being a subsidy, it does not fall under the purview of Article 3. Therefore, it is submitted that the FIT Scheme does not violate the provisions of the SCM Agreement.
52 53
¶ 1, Fact on Record. Agreement on Subsidies and Countervailing Measures, Art. 3, Apr. 15, 1994, 1869 U.N.T.S. 14
31
IX. THE DIRECTIVE OF THE WINGARDIAN MINISTRY OF HEALTH DOES NOT VIOLATE ART. 2.2 OF THE TBT AGREEMENT
54.
For a measure to violate the TBT, it must first be established as a technical regulation. It is
conceded that the Directive in question is in fact a technical regulation per Annexure 1.1. But the directive questioned herein cannot be brought under the scope of Art. 2.2.[A] If this contention is not accepted, it is then contended that having conceded that the directive is a technical regulation, it does not violate Art. 2.2, TBT[B] and that it is not more trade restrictive than necessary. 54[C] [A]. The directive is beyond the scope of Art. 2.2. 55.
Art. 2.2, TBT consists of two broad substantive sentences, the first a general principle, and
the second an explanation and aid to construction. 55 The two must be collectively interpreted to prevent any unnecessary obstacles to international trade. Therefore, Art. 2.2 only covers technical regulations which are trade restrictive and consequently create unnecessary obstacles to international trade. As trade restrictiveness is to be evaluated with reference to international trade56, the directive of the Wingardian Health Ministry is beyond the scope of Art.2.2 for it is applicable equally to domestically-manufactured cells, and imported ones57. The measure not distinguishing between domestic and imported products, is not ‘Trade Restrictive’, that is, one which forms a limitation on imports, or discriminates against imports or denies imports competitive opportunities 58. [B]. The Directive pursues a legitimate objective
Appellate Body Report, United States – Measures Affecting the Production & Sale of Clove Cigarettes, WT/DS406/AB/R (Apr. 4, 2012). 55 Appellate Body Report, United States – Measures Affecting the Production & Sale of Clove Cigarettes, WT/DS406/AB/R (Apr. 4, 2012). 56 Panel Report, United States – Measures Containing the Importation, Marketing and Sale of Tuna and Tuna Products, ¶ 7.455, WT/DS381/R (Sep. 15, 2011); Appellate Body Report, United States – Certain Country of Origin Requirements, WT/DS384/AB/R, WT/DS386/AB/R (June 29, 2012). 57 Annex. VIII, Fact on Record. 58 Panel Report, United States – Measures Containing the Importation, Marketing and Sale of Tuna and Tuna Products, ¶ 7.455, WT/DS381/R (Sep. 15, 2011); Appellate Body Report, United States – Certain Country of Origin Requirements, WT/DS384/AB/R, WT/DS386/AB/R (June 29, 2012). 54
32
56.
The TBT agreement exempts technical regulations that pursue legitimate objectives59 in
order to promote and further the legitimate objectives 60,61 of consumer awareness, knowledge, human health62 and reducing exposure to carcinogenic substances.63 The objects being legitimate, there is no violation of Art. 2.2. [C]. Necessary to fulfil the objective in light of harms of non-fulfilment. 57.
Necessity in an Art. 2.2 claim need not be justified. Rather, trade restrictiveness must be
examined to determine whether the impugned regulation was necessary to achieve the stated goal. The test to be employed is whether the objectives of protection of human health[1] and promotion of consumer awareness[2] could reasonably be achieved without the trade restrictive measure. [1]. PROTECTION OF HUMAN HEALTH 58.
Extensive testing has revealed that the C-Si panels, due to the nature of their production
process wherein the panel are coated with highly hazardous gases as part of the production process itself, are inherent dangerous. Their use results in allergies and high carcinogenic propensities. Further, this puts at risk the consumers as well as the workers 64 producing these cells in Wingardium. With such associated dangers, the risks of non-fulfilment are jeopardising the health and safety of countless citizens of Wingardium. The directive seeks to mitigate these risks in a manner which is least trade restrictive but at the same time takes into account the significant risks posed by the product, recognizing the need for regulation. The same has been done by increasing consumer awareness and knowledge as opposed to a ban.
59
Agreement on Technical Barriers to Trade, Art. 2.2, Jan. 1, 1995, 1868 U.N.T.S.120, 18 I.L.M. 1079; Appellate Body Report, United States – Measures Affecting the Production & Sale of Clove Cigarettes, WT/DS406/AB/R (Apr. 4, 2012). 60 Panel Report, United States – Measures Containing the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/R (Sep. 15, 2011). 61 Agreement on Technical Barriers to Trade, Art. 2.2, Jan. 1, 1995, 1868 U.N.T.S.120, 18 I.L.M. 1079; Appellate Body Report, United States – Measures Affecting the Production & Sale of Clove Cigarettes, WT/DS406/AB/R (Apr. 4, 2012). 62 Appellate Body Report, United States – Measures Affecting the Production & Sale of Clove Cigarettes, WT/DS406/AB/R (Apr. 4, 2012). 63 Appellate Body Report, United States – Measures Affecting the Production & Sale of Clove Cigarettes, WT/DS406/AB/R (Apr. 4, 2012). 64 Annex. VIII, Fact on Record.
33
[2]. MITIGATING THE DANGER POSED BY THE PANELS THROUGH CONSUMER AWARENESS. 59.
The directive seeks to mitigate exposure to C-Si panels by increasing consumer knowledge
by mandating a 90% display of associated health risks on product packaging. In conjunction with this, the use of customised branding and packaging has been done away with to inhibit the deceptive ability of packaging to attract customers by aesthetic qualities.65 [D]. It is not more trade restrictive than is required 60.
The TBT agreement gives contracting parties the freedom to determine what policy
objectives to pursue and the level thereof. 66 The suitability of the objective must not be adjudicated, rather the achievement of that objective, and its achievement in the least trade restrictive manner possible must be seen. The object of the Wingardian measure is to increase consumer knowledge and protect consumer health. Based on a study conducted by the DoHW it was determined that exposure to C-Si panels generated allergic reactions and was even carcinogenic. Given that there are no known health risks associated with thin film technology, it was in line with keeping with the objective of protecting human health to discourage the use of C-Si technology.
61.
By eliminating any role which can be played by graphical and pictorial representations,
branding or packaging and accentuating representations of health warnings and depictions of health related information, the policy is very much in line with the stated objective. It has also done so in the least trade restrictive manner. It is the least trade restrictive as there is no artificial interference with the supply of the product through quantitative or qualitative measures cutting its supply. It therefore ensures efficiency of the market and trade based on better information. Further, it has proved effective in other countries 67. Therefore, the directive is clearly not more trade restrictive than is required to fulfil its objectives especially in light of the likely adverse consequences of not adopting such a policy.
65
Crawford Moodie et al., Plain Tobacco Packaging: A Systematic Review, UK CENTRE FOR TOBACCO CONTROL STUDIES (Jan. 09, 2016 11:00 AM), http://phrc.lshtm.ac.uk/papers/PHRC_006_Final_Report.pdf. 66 Appellate Body Report, European Communities – Trade Description of Sardines, ¶ 189, WT/DS231/AB/R (Oct. 23, 2002). 67 ¶ 4, Annex. VIII, Fact on Record.
34
62.
While losses may accrue to manufacturers of C-Si cells, the AB has clearly stated that the
protection of human health ought to be the paramount.68 To ensure achievement of the objectives, it is necessary for the impugned directive to be applied.
X. WINGARDIUM IS NOT DEROGATING THE RIGHTS OF REGISTERED TRADEMARK HOLDERS. [A]. Art. 16 does not grant positive right to use a trademark 63.
Art. 16.1 of TRIPS provides a trademark owner with a guaranteed minimum protection 69
in the form of “exclusive rights” over use of trademarks, which earlier under Art. 10bis of the Paris Convention only safeguarded against unfair competition. 70 [1]. ART. 16 ONLY ALLOWS PREVENTION OF UNAUTHORIZED THIRD-PARTY USE OF TRADEMARK 64.
It provides “a ius excludendi alios”, i.e., the negative right to prevent third parties from
using the asset in question. The article provides remedy against unauthorized third-party usage of registered trademarks, and not right to use the trademark himself. Art. 16.1 recognizes a proprietary right to prevent loss of goodwill, or passing off with the aim of capitalizing on the established standards of quality. The word “exclusive” introduces a comparative aspect the right of usage. Art. 16.1 cannot hence be construed to confer positive rights to use, but must be interpreted as possibility of use without interference from others.
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[2]. EXCEPTIONS TO ART. 16 AND SIMILAR USAGE ONLY WITH REFERENCE TO THIRD PARTIES 65.
The practice of relying on exceptions to construct the scope and meaning of the original
provision, is well settled under International Law. The exception to the right of exclusive usage as elucidated under Art. 17, allows third parties to make fair use of descriptive terms, and necessitates
Appellate Body Report, Brazil – Measures Affecting Imports of Retreaded Tyres, ¶ 144, WT/DS332/AB/R (Dec. 17, 2007). 69 Appellate Body Report, United States—Section 211 Omnibus Appropriations Act of 1998, ¶ 186, WT/DS176/AB/R (Feb. 1, 2002). 70 See AMANDA MICHAELS, A PRACTICAL GUIDE TO TRADE MARK LAW 123 (3rd ed. 2002). 71 PETER VAN DEN BOSSCHE, THE LAW AND POLICY OF THE WORLD TRADING ORGANISATION 123 (2005). 68
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that members balance the right of third parties against that of owners of trademark. Art. 16.1 hence delineates misuse by third parties, and is hence negative in nature. [3]. TRIPS AGREEMENT GENERALLY FRAMES TRADE MARK AND OTHER IPR AS NEGATIVE RIGHTS 66.
The general character of the TRIPS regulations are drafted as negative rights of exclusion,
instead of positive rights to exploit or use trademark. 72 This allows Members to pursue legitimate non-IP-related public policies such as promoting public health. They key question here is to what extent international trade mark law constrains public policy measures affecting the use of a trade mark.7374 TRIPS Agreement does not expressly provide for a ‘right to use a trademark’ in any provision. Accordingly, a provision that measures ‘shall not prejudice’, cannot be interpreted to provide for the right itself instead.75 [B]. Wingardium Trademark Act does not recognize right to use trademark. [1]. WTA DOES NOT RECOGNIZE RIGHT TO USE TRADEMARK. 67.
The Wingardium Trademarks Act has no provision which grants the right to use a
trademark upon the owner. No reliance can be made on artificial import, for the general wording of the section only aims at conferring rights against authorized use to the proprietor. The general recognition of proprietary rights under the Trademark act, and the arguable intent to empower trademarks cannot derogate public policy and societal interest. [2]. PROVISIONS ALLOWING FOR DEROGATION OF RIGHT TO USE 68.
The availability of right to exclude only arises upon registration, which itself has been
made optional76, shows that general mark holders can’t argue for the greater right of uninterrupted self-use. Any construction to the contrary can be extremely problematic for the registration of a
72
Panel Report, European Communities—Protection of Trademarks and Geographical Indications for Agricultural Products and Foodstuffs, ¶ 210, WT/DS174/R (Mar. 15, 2005). 73 Request for the Establishment of a Panel by Ukraine, Australia—Plain Packaging, WT/DS434/11 (Aug. 17, 2012). 74 Infra Section II. 75 THE WTO AND INTERNATIONAL TRADE LAW / DISPUTE SETTLEMENT 123 (Petros C. Mavroidis et al. eds., 2005). 76 K.C. KAILASAM & R AMU VEDARAMAN, LAW OF TRADEMARKS AND GEOGRAPHICAL INDICATORS 4 (2nd ed. 2005).
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trademark doesn’t confer any new right on the trademark holder, and the same would have the effect of extending absolute freedom to use any mark on any product without any restriction. Sec. 47 of the Wingardium Trademark act provides an exception to the general removal of mark on ground of non-use. Special Circumstances like restrictions imposed by any law or regulation on the use of the trademark in India would be excused.77 [C]. Steps taken in consonance with WTO provisions and Wingardium Law 69.
The derogation of the right to use on grounds of public health and policy has been
established by way of exception clauses in the TRIPS, the Marrakesh Agreement (which recognizes unique goals of developing countries), and the Doha round. The same is also recognized implicitly under Sec. 47 of the Wingardium Trademarks Act, 1999. The plain packaging requirements were with the aim of preventing disillusionment amongst unsuspecting consumers, and restricting sale of products harmful to public health. 78 [D]. No confusion or functional derogation of trademarks 70.
It has been argued that plain packaging renders ineffective the exclusive right of trademark
owners to use signs and diluting their distinctive character. Opponents proclaim that allowing differentiation of goods by way of trademarks is a pre-requisite to prevent misuse by third parties, for the restriction of usage has the same effects as imitation, which is creating confusion. This however is not true, for the restrictions are limited and only prevent trademarks from being used as tools of promotion, and not as conveyers of information. Further trademarks themselves haven’t been derogated, for solar cell manufacturers are free to use the trademarks for other purposes, like on letterheads and other products. 71.
The blurring of trademarks, do not meet the standard of confusion under Art. 16.1 79. The
term “likelihood of confusion” calls for a significant probability that consumers will be confused and a realistic chance that in normal course would inadvertently purchase goods of a competitor. 80
77
Id. at 11. EDWARD C. VANDENBURGH III, TRADEMARK LAW AND PROCEDURE 123 (2nd ed. 1968). 79 Canon Kabushiki Kaisha v. Metro-Goldwyn-Mayer Inc., I-05507 E.C.R. (1998). 80 UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT—INTERNATIONAL CENTRE FOR TRADE AND SUSTAINABLE DEVELOPMENT, RESOURCE BOOK ON TRIPS AND DEVELOPMENT: AN AUTHORITATIVE AN PRACTICAL GUIDE TO THE TRIPS AGREEMENT 237 (2005). 78
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The plain packaging requirements allows controlled printing of the brand name on the side of the product, and hence does not meet the above laid down standard. XI. PLAIN PACKAGING RULES DO NOT UNJUSTIFIABLY ENCUMBER THE USE OF TRADEMARKS FOR CRYSTALLINE SILICON CELLS IN THE COURSE OF TRADE THROUGH SPECIAL REQUIREMENTS [A]. Prohibitions do not constitute “special requirements” in the “course of trade” [1]. BAN ON USE OF NON-WORD TRADEMARKS ISN’T COVERED UNDER SCOPE OF ART. 20. 72.
The prohibition on the use of non-word trademarks isn’t covered under Art. 20, for they
don’t constitute ‘special requirements’. An encumbrance can only be some form of positive requirement about how a trademark is used, and not a total ban on use81. Nations retain the right to prohibit the commercialization of certain goods, but if they do not, then they cannot unjustifiable encumber use of trademarks. The same although counterintuitive, is consonant with the principle that nations can’t derogate the right of some. A total prohibition (grounds for which aren’t covered under TRIPS), does not discriminate amongst right holders, and hence plain packaging isn’t a “special” requirement, it being a complete prohibition.82 [2]. SOLAR CELLS BEING INTERMEDIARY GOODS, AREN’T “TRADED” 73.
Plain packaging requirements of solar cells themselves are not in the “course of trade”. The
word “trade” must be construed in its ordinary sense, and in line with the aim of regulation of final goods’ markets of TRIPS. Solar cells are inputs towards the production of solar panels, and hence aren’t traded in the open market. [B]. Notwithstanding, such restrictions are justifiable
81
Mark Davison, The Legitimacy of Plain Packaging under International Intellectual Property Law: Why there is no right to use a trademark under either the Paris Convention or the TRIPS agreement, SSRN (Jan. 13, 2015 10:00 AM), http://ssrn.com/abstract=2009115. 82 Philip L. Paarlberg & John G. Lee, Import Restrictions in the Presence of a Health Risk: An Illustration Using FMD, in THE WTO AND TECHNICAL BARRIERS TO TRADE 229, 240 (Spencer Henson et al. eds., 2005).
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74.
The Plain packaging requirements as relates to font and colour of trademark are justifiable
encumbrances on use of trademarks and are permitted by TRIPS language under Art. 20. 83 [1]. ONUS OF PROVING “UNJUSTIFIABLE” FALLS ON LEVIOSA 75.
The burden of proof rests upon Leviosa for it is the party, which has asserted the affirmative
of a particular claim. 84 Art. 20 of TRIPS imposes an obligation, rather than providing an exception.85 It has further been held that a responding Member’s law will be treated as WTOconsistent until proven otherwise. 86 Hence, Leviosa having claimed that Wingardium plain packaging measures are in violation of Art. 20, must prove that the measure is unjustifiable within the meaning of that provision:87 [2]. STANDARD OF “JUSTIFIABLE” 76.
Art. 20, or any other provision in TRIPS doesn’t provide a definition of “justifiable”. A
plain meaning interpretation refers to “that what is capable of being justified” 88, and is hence open ended. However, any external interpretation of “justifiable”, must be in consonance with WTO principles. (i) Flexibility of domestic policy in line with sovereignty 77.
A WTO member is free to impose special requirements in its pursuit to achieve just public
policy goals.89 The categorization of goals as being just or not, however, may differ across nations. Hence, although flexibility is given to a member to have national public policy goals, the same cannot be restrictive of international trade or other WTO principles. The plain packaging
83
JAYASHREE WATAL, INTELLECTUAL PROPERTY RIGHTS IN THE WTO AND DEVELOPING COUNTRIES, 252 (2001). Appellate Body Report, United States—Measure Affecting Imports of Woven Wool Shirts and Blouses from India, WT/DS33/AB/R (May 23, 1997). 85 CORREA YUSUF & C ARLOS M, INTELLECTUAL PROPERTY AND INTERNATIONAL TRADE: THE TRIPS AGREEMENTS 13 (2008). 86 Appellate Body Report, United States—Countervailing Duties on Certain Corrosion-Resistant Carbon Steel Flat Products from Germany, ¶ 157, WT/DS213/AB/R (Dec. 19, 2002). 87 See CORREA YUSUF & CARLOS M, TRADE RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS: A COMMENTARY ON THE TRIPS AGREEMENT (2007). 88 WEBSTER’S COLLEGE DICTIONARY (1991). 89 NUNO PIRES DE CARVALHO, THE TRIPS REGIME OF TRADEMARKS AND DESIGNS 424 (2nd ed. 2011). 84
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requirements are in line with Wingardium’s domestic public policy of enhancing production of electricity through green means, and the lack of complete ban instead of restrictions are to ensure that innocent employee’s aren’t suddenly affected. (ii) Justifiable is different from necessary as used under Art. 8 and proof of efficacy required 78.
The test of justifiability isn’t constrained by legitimate interests of trademark owners, in
contrast to Art. 17, where these interests are expressly mentioned. 90 Further, justifiable is different from Art. 8.1, with there being no notions of “reasonability” and “proportionality” attached, like that is to necessity. Further, the three examples of special requirements given in Art. 20 are not necessarily unjustified and a contrary interpretation would rob the principle of any effectiveness. The mere presence of better alternatives does not mean that the steps taken by Wingardium are unjustified. [3]. RESTRICTIONS
WERE IN FURTHERANCE OF PUBLIC HEALTH AND IN LINE WITH ESTABLISHED
SCOPE OF PUBLIC POLICY.
79.
Plain packaging is necessary for the preservation of human life and health and is hence
both vital and important in the highest degree. 91 (i) Health issues surrounding C-Si panels 80.
The deleterious health effects of C-Si Cells have been established in multiple studies. Not
only does a possibility of possible cancer, and allergic reaction on contact exist, but the raw materials like Silica involved in the processing and manufacture of the cells can be carcinogenic. (a) Standard of proof with reference to health threat or evidence 81.
Legislatures are entitled to promote certain public interests and prevent the abuse of rights.
Intellectual property rights are, in effect, not absolute but subject to higher public interests.92 90
Id.at 441. Appellate Body Report, European Communities—Measures Affecting Asbestos and Asbestos Containing Products, ¶ 172, WT/DS135/AB/R (Apr. 05, 2001). 92 Brenner v. Manson 383 U.S. 519, 534-35 (1966). 91
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Moreover, IPRs are granted to serve public interests through inventors and creators and not just to benefit them. The TRIPS agreement, or the Doha Round do not place any standard or burden of proof required whilst availing exemptions on ground of public health.93 What is required is that there exist legitimate apprehensions about the possible ill effects of a particular product to warrant its control. In the given scenario, the government of Wingardium can place restrictions on sale of products pending conclusiveness and greater clarity on the health effects of C-Si cells. Notwithstanding the same, Wingardium actions aren’t in derogation of the WTO principles of unequal treatment, or discrimination depending upon origin for the requirements are based on type, and not country or producer. The disproportionate effect of the requirements on Leviosa is purely incidental, and cannot be grounds alone for the revocation of the requirements. (b) Consideration of special needs of developing nations. 82.
During the drafting of Art. 20, the right of developing countries to take extraordinary
measures to protect their fragile eco-systems and population had been recognized. 94 Given the precarious scenario of Wingardium, with the government being forced to procure alternate means of electricity generation in huge quantities due to pollution, the nation is justified in being overly cautious. Wingardium is further within its right to both engage and trade with Redondo in like manner as Leviosa. [C]. ADEQUATE SCOPE OF DIFFERENTIATION BETWEEN SOLAR CELLS 83.
There exists adequate scope of differentiation between different types of solar cells, and
accordingly manufactured solar panels. The plain packaging rules do not prohibit a manufacturer from identifying the type of solar panel it is, that is, TF or C-Si. There hence is no deliberate clouding, or blur between different types with a view to benefit the cheaper of the two; and hence no unfair competition as per common law has occurred. The lack of any health warnings on TF cells are a reflection of their better quality, and prevent any deception to the public with reference to health effects of different types of cells.
93
MAX PLANCK INSTITUTE OF COMPARATIVE PUBLIC LAW AND INTERNATIONAL LAW, WTO—TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS 346 (Peter-Tobias Stoll et al. eds., 2009). 94 DANIEL GERVAIS, THE TRIPS AGREEMENT: DRAFTING HISTORY AND ANALYSIS 116-17 (2d ed. 2003).
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[D]. NO DISCRIMINATION BASED ON COUNTRY OF ORIGIN 84.
The plain packaging requirements do not discriminate on the basis of country of origin of
a particular product. Any disproportionality in effect is purely incidental for the rules themselves don’t explicitly lay out preferential treatment for any on country, and neither do they prohibit manufacturers in Leviosa to manufacture TF cells, or vice-versa with Redondo. XII. PROCEDURAL INFIRMITIES IN DISPUTE RAISED BY LEVIOSA [A]. The dispute have not been raised as per the Energy Cooperation Agreement [1]. SPECIAL
TERMS AS PER THE
ENERGY COOPERATION AGREEMENT
ARE BINDING UPON THE
PARTIES.
85.
The ECA which Wingardium and Leviosa entered into forms a bilateral investment treaty,
and binds the countries in accordance with established principles of Public International Law. The Energy Pact is specialized vis-à-vis the agreements of the WTO, and extend a greater level of protection between parties. 86.
Being signatories to the New York Convention (UNCREFAA), both countries are required
to settle their disputes as per Art. 5 of ECA. The arbitration and exhaustion of local remedy clauses are valid and binding upon the parties, both because they are instruments with force equivalent to the WTO Agreements, and because a legitimate expectation of domestic first instance lies with Leviosa. (i) Arbitration under UNCITRALAR isn’t incompatible with the DSU 87.
The role of the dispute settlement mechanism are strictly limited to the agreements of the
WTO. International Law jurisprudence recognises a distinction in the WTO’s functioning as a legislative body, and as a forum of dispute resolution. Accordingly, the DSB has recognized and incorporated in some cases, special or additional rules under non-WTO agreements 95.
95
Panel Report, United States - Measure Affecting Imports of Woven Wool Shirts and Blouses from India, WT/DS33/R (Jan. 06, 1997).
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88.
The ECA does not guarantee any substantive rights over and above that what is granted to
it under the TRIPS and other WTO agreements. Even if additional protection related to trade was guaranteed, the same would be judiciable under the WTO as per the equal protection clauses of the Marrakesh Agreement. (ii) Mutually agreed arbitration clause is binding under Art. 25 89.
Art. 25.1 allows alternate means of dispute settlement instead of the dispute settlement
mechanism of the WTO. The same recognizes the inherent inflexibilities and infirmities with a court-like process of dispute resolution via the DSB, and hence recognizes the right of members to engage in mutually agreed arbitration outside the WTO. There are no limitations on the scope of arbitrations covered under Art. 25 96. Such an arbitral award is enforceable and binding. 97 90.
Both countries mutually agreed to settle the disputes using arbitration as per
UNCITRALAR principles, and the failure of Leviosa to conform to the provisions of the treaty is both a violation of public international law, and of Art. 25 of the DSU. [2]. ARBITRAL AWARD UNDER UNCITRAL IS BINDING UPON PARTIES AND EXCLUDES JURISDICTION OF THE WTO.
91.
As per Art. 32 which talks about Termination of Proceedings, the arbitral proceedings can
only be terminated by either a final award, or an order of the tribunal. UNCITRALAR has to be covered under the law of the state in which it is domiciled, which in this case is Wingardium. Further, Sec. 35 makes binding a final award of the UNCITRAL tribunal on any and all countries, and courts to which both Wingardium and Leviosa are signatories. 92.
The DSU can hence not proceed with the present dispute, for the same must be settled
through arbitration under UNCITRALAR. The challenge has been made in the first statement on the substance of dispute, and hence the right to arbitrate is not waived or estopped. 98
Article 25 Arbitration Report, United States — Section 110(5) of US Copyright Act, WT/DS160/ARB25/1 (Nov. 09, 2001). 97 MAX PLANCK INSTITUTE OF COMPARATIVE PUBLIC LAW AND INTERNATIONAL LAW, WTO—INSTITUTIONS AND DISPUTE SETTLEMENT 570 (Rüdiger Wolfrum et al. eds., 2009). 98 Siderugica Mendes Junior S.A. v. Ice Pearl, 6 W.W.R. 411 (1996). 96
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[B]. Nothwistanding the above, consultations were not adequate 93.
Panel procedure as per the principle of procedural economy and spirit of the WTO dispute
settlement is only the ultima ratio, and can only be used when Members are unable to find a negotiated settlement. 99 It is established that the measures in question form the subject of consultation between two countries before a request for resolution is made to the WTO. [1]. CONSULTATIONS AS PER ART 6.2 ENTAILS ARBITRATION UNDER UNCITRALAR. 94.
Wingardium has not been in contravention of Art. 3 and Art. 4 of the DSU, for adequate
attempts were not made by Leviosa to enter into bilateral consultations to reach a mutually satisfactory solution. This was valid as per the New York Convention, and the principles of the UNCITRALAR of which both countries are signatories, the manner of request of consultations should have followed serving of a notice as per UNCITRALAR. The same was a legitimate expectation of Wingardium which awaited a legal challenge under its domestic legal system as per Art. 5(3) of the ECA, and subsequently an arbitration notice, and Wingardium can’t be held at fault for not objecting to request for establishment of panel under the DSU. [C]. Terms of Reference, and the request for establishment of panel aren’t precise enough. 95.
The terms of reference aren’t adequate for Leviosa failed to account for the developing
nation status, and the benefits enjoyed therein before serving a notice, and requesting for establishment of panel. The terms of reference include an allegation of provision of “benefits to local producers”, without the same being briefly elucidated. The terms are vague and make it impossible for Wingardium to formulate a response to the same, and should hence be struck down.100
99
RAVINDRA PRATAP, INDIA AT THE WTO DISPUTE SETTLEMENT SYSTEM 68 (2004). Id. at 77.
100
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REQUEST FOR FINDINGS Wherefore in light of the Issues Raised, Arguments Advanced and Authorities relied on, the complainant requests this Panel to find that: a.
WG/SM/P-1 Does not violate Art. 2.1, TRIMS as it is not a trade related investment measure. Does not violate Art. III:4 as it is not a regulation which treats like imported products less favourably. Does not violate Art. III:5 as it does not require the use of a specified proportion of domestic materials in the product, and is therefore not against the principles of Art. III:1. Does not violate Art. 3.1(b) and 3.2 of the SCM Agreement because it is not a subsidy in the form of financial contribution or income or price support and no benefit is “contingent … upon the use of domestic over imported goods”. Does not violate Article IX:4 of the GATT 1994, because Wingardium does not impose requirements relating to the marking of imported Crystalline Silicon Cells which materially reduce their value and/or unreasonably increase their cost of production.
b. WG/SMEO/118 is not violative of Article 20 of the TRIPS Agreement, as it does not unjustifiably encumber the use of trademarks for Crystalline Silicon Cells in the course of trade. Article 16.1 of the TRIPS Agreement, because Wingardium does not prevent owners of registered trademarks from enjoying the rights conferred by a trademark under the Wingardian Trademark Act. Article 2.2 of the TBT Agreement, because Wingardium does not impose technical regulations that create unnecessary obstacles to trade.
All of which is respectfully affirmed and submitted,
Counsel for the Complainant,
134R.
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