The CP complies with TRIPs and solves better

Conversely, as international treaties relating to intellectual property law have become more prescriptive (particularly the TRIPS Agreement) there are increasingly calls to push for the use of the “flexibilities” permitted under those treaties. Utilising them means countries can have more control over what is protected by intellectual property laws and what is not. In other words, this flexibility enables the domestic law to reflect a country’s particular stage of development while still being compliant with international requirements.

If one concentrates on patent law alone, it is fair to say that, invariably, the various provinces, states or regions within a federation will be at very different stages of development when the federation is formed. And so, if the logic applied to TRIPs is applied more generally, this would suggest against a federal patent power, rather leaving it local governments to legislate for their own particular needs. For example, the Southern United States was predominately agricultural long after the industrialisation of the North. A state (rather than federal) patent law would have allowed flexibilities to exist to cater for this difference.

We know little of why patent law was reserved to Congress, it had been a matter for each of the thirteen colony before the revolution and James Madison in The Federalist when explaining the grant of the federal power say no more than the States could not make effectual provision for patents (or copyright). So why do national (federal) laws traditionally prevent local governments exercising flexibility to fit local needs? Some reasons are put forward below, but each must be discarded.

Simple reasons, such as patent law is too important to be left to the governments of constituent states are clearly nonsense. Many federations leave much more important and politically sensitive matters than patent law to those states. The divergence cannot be put down to the international elements of patent law. The United States avoided international entanglement in intellectual property for most of its first century—and of the other examples all but Australia predate any of the major intellectual property treaties. Neither can it be put down to the stages of industrial development when the constitutional powers are allocated. The role of patents in the newly independent United States must have been marginal at best; at least based on number of patents granted: fewer than 100 were granted annually before 1807 and it took until 1854 to top 1,000 a year (very similar figures to England in fact). These low numbers also point against another modern actor, namely, big corporations who are currently blamed for lobbying for international/federalisation so as to set uniform laws set at a ‘high’ protection standard. Not only were too few patents granted to have much effect on business overall but at this time patents were largely granted to individuals (indeed, the inventor has, until recently, had to personally apply for the patent in the US; and in the UK it was not until 1852 that a company could even own a patent).

Another reason might be that a federal power and rules avoid patent laws creating internal barriers to trade (and what would now be called the imposition of transaction costs). This could also extend to avoiding problems being created by needing to localise the patent under internal federal conflict rules so as to avoid multiple state laws applying to one incident. Thus avoiding these barriers and conflicts is more important than local development needs within the federation. This fits with the EU Commission’s reasoning for harmonisation, but it does not fit other federations. In the US, the law governing the sale of goods and the formation of corporations are state matters and, arguably, both put up more significant trade boundaries than patent law (so much so the former has led to the states adopting a Uniform Commercial Code). So why at the foundation of the United States would federal powers be allocated to avoid one type of trade barrier but not other more significant ones? So there must be another reason for this trend. Or is there? Maybe it has simply become a tradition to federalise intellectual property law-making.