https://orcid.org/0000-0001-6496-9660
![Sample our Law journals, sign in here to start your FREE access for 14 days]({"type":"image" , "src" : "/sda/5942/TOC-Subject-Sample-2021-Law.jpg"})
ABSTRACT
The pivotal role of science, technology, and innovation (STI) in the global economic framework has brought the Asia-Pacific region into sharp focus, given its unique blend of burgeoning and mature economies. Historically, International Investment Agreements (IIAs) were designed to protect investors, but the rapid ascendancy of STI necessitates a recalibration of these accords. This article embarks on a detailed comparative analysis of IIAs in the Asia-Pacific, exploring the nuances of STI provisions therein. While some IIAs incorporate STI considerations, a holistic integration remains noticeably lacking. The Organization for Economic Cooperation and Development provides frameworks to quantify technological capabilities, emphasizing the transition to a ‘knowledge economy’. Meanwhile, Intellectual Property Rights emerge with dual roles: fostering innovation while potentially hindering technological proliferation. The discussion delves into the necessity for IIAs, especially Bilateral Investment Treaties, and Free Trade Agreements, to fully embrace STI for maximizing global investment potential. The article's structure sequentially examines the ‘New Economy’, typologies of STI in IIAs, and the need for their incorporation, concluding with insights on the challenges and prospects of such integration.
Acknowledgements
The authors would like to acknowledge the valuable feedback and insights provided by the three anonymous peer reviewers. Additionally, we extend our gratitude to the editorial office at Asia Pacific Law Review and Taylor & Francis for their exceptional management and processing of this article. The views expressed in this study are those of the authors and do not necessarily reflect the opinions of the Zhejiang Province Social Science Foundation.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 Elhanan Helpman, Marc J Melitz and Stephen R. Yeaple, ‘Export Versus FDI with Heterogeneous Firms’ (2004) 9(1) American Economic Review 300.
2 Individually, these components can be defined in the following ways. Science is a body of knowledge concerned with the physical and natural world and its occurrences, intending to uncover universal truths and the operations of natural laws. Unbiased observations and rigorous experimentation utilizing the scientific method are required for the production of scientific knowledge. UNCTAD, Science Technology & Innovation Capacity Development Course, Module 1 – Innovation, Policy and Development. See <https://unctad.org/system/files/official-document/dtlstictinf2019d1_en.pdf> accessed 8 October 2023; see also Oslo Manual: Guidelines for Collecting and Interpreting Innovation Data, The Measurement of Scientific and Technological Activities (OECD Publishing 2005) <https://doi.org/10.1787/9789264013100-en> accessed 8 October 2023; See also Kyla Tienhaara, Rachel Thrasherb, Alexander Simmonsand and Kevin P Gallagher, ‘Investor-State Disputes Threaten the Global Green Energy Transition’ (2022) 376 Science 701.
3 Harvey Brooks, ‘The Relationship between Science and Technology’ (1994) 23 Research Policy 477.
4 See Julien Chaisse and Pasha L Hsieh, ‘Rethinking Asia-Pacific Regionalism and New Economic Agreements’ (2023) 31(2) Asia Pacific Law Review 451–68 (The article further contrasts various economic models. Specifically, the authors critique the Washington Consensus, a model that advocates for trade deregulation and privatization, as having deepened Latin America's economic struggles and dependence on the Northern hemisphere. In contrast, newly industrialized Asian economies have embraced a different approach. These nations have seen remarkable economic growth by employing state-guided industrial strategies, emphasizing exports, judiciously liberalizing imports, and channelling investments into high-tech sectors. This is evident in their dominance in the semiconductor chip industry, a critical component for automotive and information sectors. Such prowess has shifted the balance of dependence, making major Western enterprises reliant on these Asian economies, thereby redefining traditional economic power structures); See also Neha Mishra and Ana Maria Palacio Valencia, ‘Digital Services and Digital Trade in the Asia Pacific: An Alternative Model for Digital Integration?’ (2023) 31(2) Asia Pacific Law Review 489–513.
5 Aerospace, pharmaceuticals, computers, office machinery, communication equipment, and scientific (medical, precision, and optical) instruments are among the high-tech industries. They are classified as science-based enterprises that produce goods while doing above-average R&D (Commission on Strategic Development Executive Committee, ‘Development of High Technology Industries in Hong Kong’, CSD/EC/6/2007 <https://www.pico.gov.hk/en/CSD_2005-2007/csd_ec_6_2007.pdf> accessed 19 August 2023). These industries are ranked as the most R&D intensive for OECD nations, while the United States (US) uses a similar technique to identify them as the most R&D intensive (National Science Board, Science and Engineering (S&T) Indicators, 2006 (National Science Foundation) <https://www.nsf.gov/nsb/publications/landing/nsb0601.jsp> accessed 19 August 2023). The high-tech industry on the mainland refers to businesses that are both knowledge- and technology-intensive.
6 There are multiple definitions of the term ‘knowledge economy’ provided by different international organizations like OECD definition ‘the role of knowledge (as compared with natural resources, physical capital, and low skill labor) has taken on greater importance. Although the pace may differ all OECD economies are moving towards a knowledge-based economy’ OECD, The Knowledge-based Economy (OECD 1996) <http://www.oecd.org/dataoecd/51/8/1913021.pdf> accessed 10 August 2023; See also DTI definition ‘ … one in which the generation and exploitation of knowledge has come to play the predominant part in the creation of wealth. It is not simply about pushing back the frontiers of knowledge; it is also about the most effective use and exploitation of all types of knowledge in all manner of economic activity’ (DTI Competitiveness, Our Competitive Future: Building the Knowledge Driven Economy (House of Commons–Trade and Industry, White Paper 1998) <www.dti.gov.uk/comp/competitive/main.htm> accessed 10 August 2023; and ESRC definition ‘economic success is increasingly based on upon the effective utilisation of intangible assets such as knowledge, skills and innovative potential as the key resource for competitive advantage. The term “knowledge economy” is used to describe this emerging economic structure’ (Economic and Social Research Council (ESRC), Knowledge Economy in the UK (ESRC 2005) <http://www.esrcsocietytoday.ac.uk/ESRCInfoCentre/facts/UK/index4.aspx?ComponentId=6978&SourcePageId=14971#0> accessed 10 August 2023).
7 Julien Chaisse, ‘‘The Black Pit:’ Power and Pitfalls of Digital FDI and Cross-Border Data Flows’ (2023) 22(1) World Trade Review, 73–89.
8 See Roberto Mangabeira Unger, ‘The Knowledge Economy’ (2019), <https://www.oecd.org/naec/THE-KNOWLEDGE-ECONOMY.pdf.> accessed 10 August 2023.
9 Ermias Tekeste Biadgleng, ‘IP Rights Under Investment Agreements: The TRIPS Plus Implications for Enforcement and Protection of Public Interest’ (South Centre, Research Paper No. 8, 2006).
10 Rachel A Lavery, ‘Coverage of Intellectual Property Rights in International Investment Agreements: An Empirical Analysis of Definitions in a Sample of Bilateral Investment Treaties and Free Trade Agreements’ (2009) 6 Transnational Dispute Management 2.
11 Alexander Ferguson, ‘A Reply to: Chorzów Factory – Intellectual Property and the Continuity of International Law in Investor-State Dispute Settlement’ (2021) 11(4) Queen Mary Journal of Intellectual Property 505–10.
12 Ivan Stepanoy, ‘Economic Development Dimension of Intellectual Property as Investment in International Investment Law’ (2020) 23 The Journal of World Intellectual Property 736.
13 Ruth L Okediji, ‘Is Intellectual Property “Investment”? Eli Lilly v. Canada and the International Intellectual Property System’ (2014) 35 University of Pennsylvania Journal of International Law 1121, 1122.
14 Priscilla Schwartz, ‘Capitalism, International Investment Law and the Development Conundrum’ (2013) 6(2) Law and Development Review 217.
15 Lukas Vanhonnaeker, ‘Intellectual Property Rights as Foreign Direct Investments: From Collision to Collaboration’ (2015) 56 Indian Journal of International Law 537–42.
16 Giorgio Sacerdoti, ‘The Protection of Intellectual Property Rights under International Investment Law’ (2021) 24(3) Journal of International Economic Law 679.
17 Flavia Marisi and Julien Chaisse, ‘Is Intellectual Property ‘Investment’? Formation, Evolution, and Transformation of the Intellectual Property Rights: Foreign Direct Investment Normative Relationship’ (2019) 34(1) Ohio State Journal on Dispute Resolution 97–152; Pratyush N Upreti, ‘The Role of National and International Intellectual Property Law and Policy in Reconceptualising the Definition of Investment’ (2021) 52(2) International Review of Intellectual Property and Competition Law 103.
18 Antonietta D Blase, ‘Intellectual Property Protection in Investment Agreements and Public Concerns’ in Giorgio Sacerdoti (ed), General Interests of Host States in International Investment Law (Cambridge University Press 2014) 197.
19 Christophe Geiger, ‘Intellectual Property and Investment Law: An Introduction’ Center for International Intellectual Property Studies Research Paper No. 2019-10.
20 Flavia Marisi and Julien Chaisse, ‘Part I: Giving Effect to International Trade Agreements – History and Procedure, Chapter 3 – The History of Investment Tribunals and the Protection of IPRs Under’, in Christopher Heath and Anselm Kamperman Sanders (eds), Intellectual Property and International Dispute Resolution (Kluwer Law International 2019) 43. The existing literature also examines the treatification of international investment law and the struggle for investment to find a position in the multilateral system, with reference to ongoing WTO initiatives, see e.g. Pratyush N Upreti, ‘Intellectual Property, Investment and the World Trade Organization (WTO): A Historical Account’ in Christophe Geiger (ed) Research Handbook on Intellectual Property and Investment Law (Edward Elgar Publishing, 2020).
21 They look into the role of investment treaties, which frequently include intangible assets (and hence trademarks) as a type of protected foreign investment, and the investor-state mechanism, which allows foreign businesses to sue host countries promptly. See e.g. Julien Chaisse and Puneet Nagaraj, ‘Changing Lanes: Intellectual Property Rights, Trade and Investment’ (2014) 37(2) Hastings International and Comparative Law Review 223.
22 Prabhash Ranjan, ‘Compulsory Licences and ISDS in Covid-19 Times: Relevance of the New Indian Investment Treaty Practice’ (2021) 16(7) Journal of Intellectual Property Law and Practice 748.
23 Munkh-Ochir Tsogoo, ‘Enforcement of Intellectual Property Rights through Investor-State Arbitration and Relevance and Irrelevance of TRIPS’ (2010) 8(3) German Arbitration Journal 151; James Gathii and Cynthia Ho, ‘Regime Shift of IP Law-making and Enforcement from WTO to the International Investment Regime’ (2017) 18 Minnesota Journal of Law, Science and Technology 427.
24 Peter K Yu, ‘The Investment-Related Aspects of Intellectual Property Rights’ (2016) 66 American University Law Review 829, 910 (Texas A&M University School of Law Legal Studies Research Paper No. 16-3, 2017).
25 Vivian Daniele, Rocha Gabriel and Alebe Linhares Mesquita, ‘Repacking Intellectual Property Protection in International Investment Law: Lessons from the Philip Morris v. Uruguay Case’ (2018) 49 Georgetown Journal of International Law 1117.
26 See Christophe Geiger, ‘Intellectual Property and Investment Law: An Introduction’ in Christophe Geiger (ed.) Research Handbook on Intellectual Property and Investment Law (Edward Elgar Publishing 2020).
27 Teis Hansen and Lars Winther, ‘Innovation, Regional Development and Relations between High- and Low-Tech Industries’ (2011) 18 European Urban and Regional Studies 321.
28 Ibid; See also Neha Mishra and Ana Maria Palacio Valencia ‘Digital Services and Digital Trade in the Asia Pacific: An Alternative Model for Digital Integration?’ (2023) 31(2) Asia Pacific Law Review, 489–513.
29 Rod Falvey and Neil Foster, ‘The Role of Intellectual Property Rights in Technology Transfer and Economic Growth: Theory and Evidence’ (2006) Working Paper UNIDO.
30 Okediji (n 13); See also Yo Sop Choi and Ploykaew Porananond, ‘Competition Law and Policy of the ASEAN Member States for the Digital Economy: A Proposal for Greater Harmonization, (2023) 31(2) Asia Pacific Law Review, 358–79.
31 Valentina Vadi, ‘New Forms of Dialectics between Intellectual Property and Public Health: Pharmaceutical Patent-Related Investment Disputes’ (2015) 49(2) The International Lawyer 149.
32 Ibid.
33 Susan F. Stone, Soo Hyun Kim, and Lars Engen, ‘Science, technology, and innovation in international investment agreements in the Asia-Pacific region’ (2017) TIID Working Paper No. 03/17.
34 Ibid (n 8).
35 OCED, The Knowledge Based Economy: A Set of Facts and Figures (OCED 1999).
36 M. Ishaq Nadiri, ‘Innovations and technological spillovers’ (1993) NBER Working Paper No. 4423 (National Bureau of Economic Research, Boston).
37 Lawrence M Rausch, ‘High-Tech Industries Drive Global Economic Activity’ (1998) National Science Foundation 98 <https://www.nsf.gov/statistics/issuebrf/sib98319.htm#fn2> accessed 23 September 2023; See also Julien Chaisse and A. Marisport ‘Arbitration of FRAND Disputes in SEP Licensing: Towards Global Substantive and Procedural Rules’ (2021) 38(4) Intellectual Property Quarterly 264–79.
38 Ibid.
39 Milton Katz, ‘The Role of the Legal System in Technological Innovation and Economic Growth’ in The Positive Sum Strategy: Harnessing Technology to Economic Growth (National Academy Press 1986) 169.
40 Angeline Vere, ‘United Nations Economic and Social Council and United Nations Economic Commission for Africa’ Legal and Regulatory Frameworks for the Knowledge Economy: Concept Paper (2009) <https://repository.uneca.org/handle/10855/3452> accessed 23 September 2023.
41 HM Osano and PW Koine, ‘Role of Foreign Direct Investment on Technology Transfer and Economic Growth in Kenya: A Case of the Energy Sector’ (2016) 5 Journal of Innovation and Entrepreneurship. In this article, the authors address the role of FDI on technology transfer and economic growth in Kenya, with a focus on the energy sector in Nairobi focusing on the period between 2001 and 2014.
42 Deborah L Swenson, ‘Foreign Investment and Mediation of Trade Flows’ (2004) 12(4) Review of International Economics 609–29 (As countries grapple with the rise of digital economies, they are simultaneously confronted with the challenge of balancing data security concerns and the imperatives of an open economy. This balance is critical because businesses today factor in data regulations heavily when considering international investments. In essence, the regulatory environment around data has direct implications for a country's economic growth and trade patterns).
43 Keith E Maskus, ‘The Role of Intellectual Property Rights in Encouraging Foreign Direct Investment and Technology Transfer’ (1998) 9 Duke Journal of Comparative and International Law 109.
44 Groenbech M. Louise, ‘Technology Transfer Through Foreign Direct Investment to Developing Countries – The Role of Home Country Measures’ in Globalization of Technology (Encyclopedia of Life Support Systems, UNESCO)< https://www.eolss.net/Sample-Chapters/C15/E1-31-03-01.pdf> accessed 23 September 2023.
45 OCED, ‘Evolution of International Investment Agreements (IIAs) in The MENA Region’ (MENA-OECD Working Group, 2010) <https://www.oecd.org/mena/competitiveness/46581917.pdf> accessed 23 September 2023.
46 Fina Siegfried and Gabriel M Lentner, ‘The European Union's New Generation of International Investment Agreements and Its Implications for the Protection of Intellectual Property Rights’ (2017) The Journal of World Investment and Trade 271.
47 Carlos M Correa, ‘Investment Protection in Bilateral and Free Trade Agreements: Implications for the Granting of Compulsory Licenses’ (2004) 26 Michigan Journal of International Law 331.
48 The US Model BIT 2012.
49 Amy Glass and Kamal Saggi, ‘Intellectual Property Rights, Foreign Direct Investment, and Innovation’ (unpublished manuscript, on file with the Duke Journal of Comparative and International Law, 1997).
50 Julien Chaisse and Cristen Bauer ‘Cybersecurity and the Protection of Digital Assets Assessing the Role of International Investment Law and Arbitration’ (2019) 21(3) Vanderbilt Journal of Entertainment and Technology Law 549–89; See also Correa (n 47).
51 Marie-France Houdei and Katia Yannaca-Smalli, ‘Relationships between International Investment Agreements’ OECD Working Papers on International Investment, No. 2004/01 (OECD Publishing 2004) <https://doi.org/10.1787/171461325566> accessed 23 September 2023.
52 Helpman, Melitz and Yeaple (n 1).
53 Keith E Maskus and Guifang Yang, ‘Intellectual Property Rights, Foreign Direct Investment, and Competition Issues in Developing Countries’ (1999) 17 International Journal of Technology Management.
54 Guimon Jose, ‘Promoting university-industry collaboration in developing countries’ (Innovation Policy Platform, OECD and World Bank, 2013) <https://doi.org/10.13140/RG.2.1.5176.8488> accessed 23 September 2023.
55 Tomas Havranek and Zuzana Irsova, ‘Estimating Vertical Spillovers from FDI: Why Results Vary and What the True Effect Is’ (2011) 85(2) Journal of International Economics 234, 244.
56 UNCTAD, ‘Scope and Definition’ in UNCTAD Series on Issues in International Investment Agreements II (2011) <http://unctad.org/en/Docs/diaeia20102_en.pdf.> accessed 23 September 2023; See also E Horváth and Severin Klinkmüller, ‘The Concept of ‘Investment’ in the Digital Economy: The Case of Social Media Companies’ (2019) 20(4) The Journal of World Investment and Trade 577–617.
57 See ‘For the purpose of this Agreement. The term “investment” shall mean every kind of asset and in particular, though not exclusively, includes: (d) intellectual property and industrial property rights as recognized by the law of the Contracting Party in whose territory the investment is made, know-how and goodwill’ (Democratic People's Republic of Korea-Thailand 2002).
58 See ‘For the purposes of this Agreement: (a) the term “investment” means every kind of asset owned or controlled, directly or indirectly, by an investor, including: (vi) intellectual property rights, including copyrights and related rights, patent rights and rights relating to utility models, trademarks, industrial designs, layout designs of integrated circuits, new varieties of plants, trade names, indications of source or geographical indications, and undisclosed information’ (Japan–Myanmar 2013).
59 Christopher Gibson, ‘A Look at the Compulsory License in Investment Arbitration: The Case of Indirect Expropriation’ (2010) 25 American University International Law Review 357, 407–08.
60 OECD, Services Trade Policies and the Global Economy (OECD Publishing 2017) <https://doi.org/10.1787/9789264275232-en> accessed 23 September 2023.
61 Carlos Correa and Jorge E Viñuales, ‘Intellectual Property Rights as Protected Investments: How Open are the Gates?’ (2016) 19 Journal of International Economic Law 91, 108.
62 Christopher S Gibson, ‘Latent Grounds in Investor-State Arbitration: Do International Investment Agreements Provide New Means to Enforce Intellectual Property Rights?’ (2010) Yearbook on International Investment Law and Policy 397.
63 Chang-fa Lo, ‘A Comparison of Bit and the Investment Chapter of Free Trade Agreement from Policy Perspective’ (2008) 3(1) Asian Journal of WTO and International Health Law and Policy
64 In 1996, the WTO established a working group dedicated to this interlinkage <https://www.wto.org/english/tratop_e/invest_e/invest_e.htm > accessed 23 September 2023.
65 Stone, Kim, and Engen (n 33).
66 Alain Quinet, ‘The ‘New Economy’ (2002) 68 Recherches économiques de Louvain 257.
67 Harry G Broadman and others, ‘Capitalizing on the G7 Research Compact’ Science (2021) <https://www.science.org/doi/10.1126/science.abm4781> accessed 11 January 2022.
68 Michael J Ferrantino, ‘The Effect of Intellectual Property Rights on International Trade and Investment’ Weltwirtschaftliches Archiv (1993) 300, 322–23.
69 A Carlos, Primo Braga and Carsten Fink, ‘The Relationship Between Intellectual Property Rights and Foreign Direct Investment’ (1998) 9 Duke Journal of Comparative and International Law 163.
70 Rochelle Dreyfuss and Susy Frankel, ‘From Incentive to Commodity to Asset: How International Law is Reconceptualizing Intellectual Property’ (2015) 36(4) Michigan Journal of International Law 557.
71 Bertram Boie, ‘The Protection of Intellectual Property Rights through Bilateral Investment Treaties: Is There a TRIPS-plus Dimension?’ World Trade Institute, Working Paper No. 2010/19 (2010) <https://www.wti.org/research/publications/275/the-protection-of-intellectual-property-rights-through-bilateral-investment-treaties-is-there-a-trips-plus-dimension/> accessed 10 September 2023.
72 Julien Chaisse and Puneet Nagaraj, ‘Changing Lanes: Intellectual Property Rights, Trade and Investment’ (2014) 37(2) Hastings International and Comparative Law Review 223.
73 Jan Paulsson, ‘Arbitration Without Privity’ (1995) 10 ICSID Review 232.
74 Charles N Brower and Stephan W Schill, ‘Is Arbitration a Threat or a Boon to the Legitimacy of International Investment Law?’ (2009) 9 Chinese Journal of International Law 471, 479.
75 CME Czech Republic B.V. (The Netherlands) v. The Czech Republic (UNCITRAL), Partial Award, 13 September 2001, at Para. 419; Mobil Corporation, Venezuela Holdings, B.V. et al. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/07/27, Decision on Jurisdiction, 10 June 2010, at Para. 204.
76 MD Nolan, CJ Gaspar and K Aitelaj, ‘When Intellectual Property is the ‘Investment’: Arbitrating against Sovereigns’ (IAM) <https://www.iam-media.com/global-guide/the-guide-ip-arbitration/1st-edition/article/when-intellectual-property-the-investment-arbitrating-against-sovereigns> accessed 10 September 2023.
77 H Grosse Ruse–Khan, ‘Challenging Compliance with International Intellectual Property Norms in Investor-state Dispute Settlement’ (2016) 19 Journal of International Economic Law 241. Kyla Tienhaara and others, ‘Investor-State Disputes Threaten the Global Green Energy Transition, (2022) 376 Science 701.
78 UNCTAD, World Investment Report 2017: Investment and the Digital Economy (United Nations 2017).
79 Julien Chaisse, ‘Investor-State Arbitration in International Tax Dispute Resolution – A Cut above Dedicated Tax Dispute Resolution? (2016) 41(2) Virginia Tax Review 149–222.
80 UNCTAD, ‘Reforming Investment Dispute Settlement: A Stocktaking’ 1 IIA Issues Note (2019) <https://investmentpolicy.unctad.org/publications/1194/reforming-investment-dispute-settlement-a-stocktaking> accessed 10 September 2023.
81 UNCTAD, ‘UNCTAD’s Reform Package for the International Investment Regime (United Nations 2018).
82 Susy R Frankel, ‘Interpreting the Overlap of International Investment and Intellectual Property Law’ (2019) 19 Journal of International Economic Law 121.
83 Martin Srholec, ‘High-Tech Exports from Developing Countries: A Symptom of Technology Spurts or Statistical Illusion?’ (2007) 143(2) Review of World Economic 227.