2.1 The Panel’s Interpretation of TRIPS Article 1.1: A Strict Territorial Approach

The Panel’s treatment of Article 1.1 in China–IPRs Enforcement (EU) is marked by a careful, text-and-contextual reading that culminates in a territorially bounded conception of members’ obligations under TRIPS.Footnote ¹⁵ At the outset, the Panel reads the first sentence of Article 1.1, ‘Members shall give effect to the provisions of this Agreement’, in its ordinary meaning as an obligation to ‘make operative’ or to implement the Agreement within a member’s domestic legal system,Footnote ¹⁶ this textual conclusion is reinforced by reference to the French and Spanish texts and to established dictionary definitions.Footnote ¹⁷

Building on that textual foundation, the Panel places decisive weight on the immediate context provided by the second and third sentences of Article 1.1, which respectively (i) permit members to adopt more extensive protection than TRIPS requires ‘in their law’, and (ii) permit members to determine the appropriate method of implementation ‘within their own legal system and practice’.Footnote ¹⁸ From this configuration, the Panel draws the normative inference that Article 1.1 imposes a domestic implementation duty, i.e. that member countries are obligated to ensure that the minimum standards of Part II are given effect within their own legal order, but it does not mean that these member countries are legally obligated to monitor how other member countries implement TRIPS in their territories.Footnote ¹⁹

The Panel further situates this conclusion within the architecture and object of the TRIPS Agreement. Noting that Part II establishes minimum standards for the availability, scope and use of IP rights and that many substantive provisions articulate private rights requiring domestic measures,Footnote ²⁰ the Panel treats Article 1.1 as clarificatory rather than expansive: it removes any doubt that members must adopt whatever domestic measures are necessary to render TRIPS operative at home, but it does not convert Article 1.1 into a rule that allocates responsibility for the effectiveness of IP protection across jurisdictions.Footnote ²¹

The Panel expressly considered and rejected arguments that Article 1.1 should be read through the general principle of pacta sunt servanda or a broad ‘good faith/abus de droit’ constraint to prohibit measures that would undermine other members’ ability to give effect to TRIPS.Footnote ²² While acknowledging the relevance of good-faith principles in international law, the Panel emphasized that invoking such principles cannot displace ordinary treaty interpretation: customary interpretive methods yield no textual or contextual support for an extraterritorial obligation under Article 1.1.Footnote ²³ In short, the Panel accepts that a member cannot adopt domestic measures that wholly negate the minimum standards within its own system, but it declines to treat Article 1.1 as a free-standing cross-border duty to protect IP in foreign territories.

When the Panel turned to Article 1.1 read in conjunction with Article 28.1 (the ‘rights conferred’ clause for patents), it applied the same territorial lens. The Panel held that Article 1.1, together with Article 28.1, requires a member to ensure that, within its own legal system, patents confer the exclusive rights listed in Article 28.1, but do not require a member to refrain from adopting measures that affect the exercise of those rights in another member’s territory.Footnote ²⁴ Thus, although the European Union characterized certain Chinese anti-suit injunction (ASI) practices as interfering with patent owners’ ability to exercise rights abroad, the Panel found no basis in Article 1.1 as well as Article 28.1 to hold a member responsible for the territorial exercise of another member’s patent rights.

This interpretation has three doctrinal consequences of direct relevance to the territoriality debate. First, it reaffirms that TRIPS is principally a treaty about domestic implementation of minimum IP standards rather than a set of rules imposing affirmative extraterritorial obligations on members. Second, it circumscribes the circumstances in which effects in foreign jurisdictions can ground a TRIPS violation: absent a clear textual hook, mere interference with the incentives of a private party to assert rights abroad does not transform into a State’s international responsibility under Article 1.1. Third, the Panel’s approach underscores that alleged cross-border regulatory spillovers must be assessed by reference to the specific provisions invoked (e.g., Article 28.1, Article 41, Article 63), not by a generalized ‘anti-undermining’ gloss on Article 1.1.

In sum, the Panel adopts a restrained, structurally informed reading of Article 1.1: it confirms an affirmative duty of domestic implementation while denying that Article 1.1, on its own, creates a broad obligation to prevent measures that may impede the operation of IP rights in another member’s territory. This territorial reading thus channels disputes about extraterritorial effects back to the particular substantive provisions of TRIPS and to the evidence establishing a cognizable measure for review.

2.2 The MPIA arbitrators’ Interpretation of TRIPS Article 1.1: A Functional and Effects-Sensitive Approach

The Panel’s reasoning, as analyzed in the previous section, rests on a territorial conception of Article 1.1: obligations under the provision arise only when a member is exercising enforcement authority within its own territory. This reading generated a narrow understanding of ‘give effect’ and led the Panel to conclude that TRIPS imposes no obligations with respect to conduct taking place outside a member’s borders, even where such conduct undermines the protection or enforcement of IP rights in another member’s territory. Having clarified the logic and limitations of the Panel’s approach, this section turns to the MPIA arbitrators’ reasoning. The Tribunal systematically revisits each step of the Panel’s interpretation, identifies the analytical errors embedded in the Panel’s territorial premise, and reconstructs Article 1.1 within the textual and systemic structure of TRIPS.

The MPIA arbitrators begin by setting out the Panel’s key conclusion; namely, that Article 1.1 obliges members only to implement TRIPS provisions within their domestic legal systems and does not regulate conduct that affects protection or enforcement of IP rights in another member’s territory.Footnote ²⁵ The Tribunal does not agree with this premise and identifies the Panel’s reading as having introduced into Article 1.1 a territorial limitation that finds no basis in the text.Footnote ²⁶

To determine the meaning of ‘give effect’, the Tribunal turns to the ordinary meaning of the phrase, noting dictionary definitions such as ‘to render operative’ or ‘to make operative’.Footnote ²⁷ It concludes that the first sentence of Article 1.1 imposes an active, continuing duty to make TRIPS provisions operative, rather than a narrow obligation of domestic implementation.Footnote ²⁸ The Tribunal then considers the second and third sentences of Article 1.1 as immediate context and explains that the flexibility they grant does not alter the nature of the obligation contained in the first sentence.Footnote ²⁹

At this juncture, the Tribunal shifts from textual analysis to the broader context of the TRIPS Agreement, and paragraph 4.60 functions as the pivotal moment of reasoning. The Tribunal emphasizes that the ‘national systems’ for protection of intellectual property rights established by individual members ‘do not exist in isolation’.Footnote ³⁰ Instead, the TRIPS Agreement provides for cooperation among members, and therefore envisages that national systems will interact in order to ensure effective and adequate protection.

This contextual observation directly undermines the Panel’s assumption that obligations under Article 1.1 are territorially confined; if TRIPS is structurally premised on cooperation among interacting systems, obligations cannot be understood as applicable solely when enforcement authority is exercised within a member’s own territory.Footnote ³¹ Drawing on this systemic context, the Tribunal then examines the practical consequences of the Panel’s reading. It notes that, under the Panel’s interpretation, a member could take measures outside its territory that nonetheless frustrate the protection or enforcement of IP rights in another member’s territory, yet such conduct would fall entirely outside TRIPS disciplines.Footnote ³² The Tribunal considers this outcome implausible and inconsistent with the object and purpose of the Agreement, including the balance of rights and obligations articulated in Article 7.Footnote ³³

The Tribunal thus concludes that the Panel misconceived the role of Article 1.1 by transforming it into a limiting clause containing an implied territorial trigger.Footnote ³⁴ It finds no support in the text, context, or systemic design of TRIPS for inserting such a requirement. In its final observations, the Tribunal clarifies that the obligation to ‘give effect’ to the Agreement entails that members must do so without frustrating the functioning of other members’ systems of protection and enforcement. Accordingly, it reverses the Panel’s finding in paragraph 7.231 and holds that Article 1.1 cannot be read as allowing measures, whether taken inside or outside a member’s territory, that undermine the operability of those systems.Footnote ³⁵

Moreover, as opposed to the interpretative method in panel’s report, the Tribunal’s reasoning redefines Article 1.1 through a distinctly functional and effects-sensitive lens. Rather than treating territoriality as an implicit structural constraint on members’ obligations, the Tribunal anchors its interpretation in the operation and impact of State conduct on the enjoyment of TRIPS-protected rights. In this framework, what matters is not where a measure is adopted or enforced, but whether it functionally impairs the effectiveness, value, or enforceability of intellectual property rights within another member’s system.Footnote ³⁶ By foregrounding systemic interaction, cross-border cooperation, and the practical realities of modern IP enforcement, the Tribunal positions Article 1.1 as a provision that disciplines effects-producing conduct irrespective of geographic boundaries. This marks a decisive methodological shift away from the Panel’s territorially bounded conception and toward a dynamic, transnational understanding of TRIPS obligations, one in which the protection of IP rights depends on their functional operability across interconnected legal systems.

2.3 Interim Conclusion

The preceding analysis reveals that the Panel and the MPIA arbitrators proceed from fundamentally different interpretive approaches to TRIPS Article 1.1, producing not merely divergent doctrinal outcomes but incompatible conceptions of how TRIPS obligations operate within the multilateral IP system.

The Panel’s strict territorial approach conceptualizes TRIPS as a treaty whose obligations are anchored in the domestic legal orders of members. Under this approach, Article 1.1 functions primarily as a domestic implementation clause: it requires members to ensure that TRIPS standards are made effective within their own territory, and it limits international responsibility to failures of internal regulatory design. Territoriality operates here as a structural constraint, and cross-border spillovers are legally irrelevant unless a specific provision expressly addresses them.

By contrast, the MPIA arbitrators’ functional and effects-sensitive approach repositions Article 1.1 as a provision that governs not only the internal implementation of TRIPS obligations but also the external effects of State conduct on the operability of other members’ IP protection systems. It adopts an interpretive lens in which the impact of a measure, rather than the geographical locus of enforcement authority, determines whether TRIPS obligations are engaged. Territoriality is treated not as a limiting principle but as a background presumption that may be displaced where the real-world functioning of rights is affected.

These two approaches diverge along three methodological dimensions. First, they differ in their orientation: the Panel’s approach is inward-looking, focused on what a member must do inside its own legal system, whereas the Tribunal’s approach is outward-looking, centered on how one member’s conduct affects the protection of intellectual property rights within another member’s jurisdiction. Second, they differ in their trigger for responsibility: the Panel requires a territorial anchor, an exercise of authority within the member’s own borders, while the Tribunal requires a functional link between the measure and its effects on TRIPS-protected rights, regardless of where the measure originates. Third, they differ in their conception of systemic coherence: the Panel maintains TRIPS as a treaty primarily coordinating the domestic implementation of intellectual property protection among Members, whereas the Tribunal reframes TRIPS as a partially integrated, cross-border regulatory regime that can discipline extraterritorial impacts without explicit text. It should be acknowledged that a territorially restrained interpretation of Article 1.1 does not necessarily prevent domestic courts from adopting judicial practices with cross-border implications, such as determining global licensing rates for multinational patent portfolios or considering foreign patent rights in complex transnational disputes. The Panel’s reasoning does not affirmatively endorse such practices, rather it reflects the institutional limits of the TRIPS Agreement, which regulates domestic implementation of minimum standards rather than harmonizing the full jurisdictional reach of national courts. By contrast, the MPIA arbitrators’ effects-oriented interpretation potentially subjects such practices to scrutiny under TRIPS.

The result is a deep structural tension. The Panel’s approach reflects a jurisdictionally restrained reading of TRIPS, limiting the Agreement’s obligations to the domestic implementation of intellectual property protection. The Tribunal’s approach, by contrast, introduces a transnational dimension to Article 1.1 obligations, thereby expanding the reach of WTO IP adjudication into situations shaped by cross-border enforcement practices. This divergence in interpretive method, rather than any single textual disagreement, is the true source of the doctrinal rift in China–IPRs Enforcement (EU). The next section assesses whether the Tribunal’s functional and effects-sensitive reading can be justified under the accepted interpretive framework of the Vienna Convention and within the systemic structure of the TRIPS Agreement.

3.1 Textual Interpretation: The Ordinary Meaning Does Not Support an Effects-Based Reading

In its textual analysis, the Tribunal focused almost exclusively on the verbs ‘give’ and ‘implement’ in Article 1.1, while overlooking the semantic and structural significance of ‘effect’. This omission is consequential. The ordinary meaning of ‘effect’, particularly when read in its singular form, denotes ‘the state or fact of being operative or in force’, according to the Oxford English Dictionary.Footnote ³⁷ This meaning points to legal operability, not to economic impacts or cross-border spillover consequences. The French version echoes this view. In authoritative French dictionaries, an authentic language of the Agreement, effet is defined primarily as the ‘résultat attendu de l’action d’un acte, conçu ou utilisé à cette fin’, namely the expected result of an action undertaken in order to bring something into operation.Footnote ³⁸ This meaning captures the idea of legal activation, not the downstream economic or competitive consequences that may arise in foreign markets. Even the more general definition – ’résultat, conséquence de l’action d’un agent’ – focuses on the fact that a rule or measure becomes operative rather than on any extraterritorial market impacts.Footnote ³⁹ These meanings reinforce that, in the phrase ‘give effect to’ the operative term effect refers to ensuring that TRIPS obligations function within a member’s legal system; it cannot be reinterpreted to impose an obligation to regulate based on cross-border economic effects.

The structure of the TRIPS Agreement reinforces this interpretation. When TRIPS intends to regulate economic consequences, it adopts explicit effects-based terminology.Footnote ⁴⁰ Article 40, for example, provides that specific licensing practices ‘may have adverse effects on trade and may impede the transfer and dissemination of technology’. Here, ‘effects’ (in plural) expressly refer to market distortions and trade implications.Footnote ⁴¹ The deliberate shift from ‘effects on trade’ in Article 40 to ‘give effect to’ in Article 1.1 indicates that the latter concerns legal implementation of obligations, rather than the economic consequences of private conduct across borders.Footnote ⁴²

This distinction is further supported by internal linguistic contrasts within the TRIPS negotiating drafts and related IP instruments. Draft provisions tabled by the United States,Footnote ⁴³ the European Communities,Footnote ⁴⁴ and JapanFootnote ⁴⁵ used formulations, such as ‘effective and adequate protection’, which describe the quality of protection rather than the jurisdictional reach of enforcement. Article 1.1’s requirement to ‘give effect to’ diverges from this usage. As a matter of ordinary meaning, ‘effective’ describes how well protection functions, whereas ‘effect’ in the expression ‘give effect to’ refers to bringing legal norms into force.Footnote ⁴⁶ The Tribunal’s effects-based interpretation collapses this distinction by reading ‘effect’ as if it imported ‘effects on trade’, a meaning that appears elsewhere in TRIPS only when expressly stated.

The text therefore provides no basis for recasting ‘give effect to’ as an instruction to capture extraterritorial commercial consequences. The ordinary meaning, read in its grammatical and intra-textual context, supports a strictly territorial understanding of Article 1.1.

3.2 Contextual Interpretation: Article 1.1 within the Structure of TRIPS Reinforces Territoriality

A contextual reading of Article 1.1 further reinforces the territorial understanding of Members’ obligations under TRIPS. The provision appears at the outset of Part I, where it establishes the general duty of Members to ‘give effect to the provisions of this Agreement’. In context, this duty functions primarily as a domestic implementation requirement: it ensures that the substantive standards set out in Parts II and III become operative within each Member’s own legal system.Footnote ⁴⁷ Nothing in the surrounding provisions suggests that Article 1.1 was intended to regulate Members’ domestic activities because the effects of their activities could extend beyond their territories. The MPIA arbitrators’ contextual interpretation overlooks this structural placement and treats Article 1.1 as though it were an open-ended regulatory clause, rather than a gateway provision anchoring obligations to domestic legal systems.

Parts II and III confirm this view. Throughout these sections, TRIPS frames Members’ obligations in terms of their ‘national systems’, ‘domestic implementation’, ‘national legal remedies’, and ‘procedures’ for enforcement.Footnote ⁴⁸ The repeated anchoring of obligations in domestic institutions indicates that TRIPS was designed around territorial legal systems, not around the regulation of cross-border spillover effects.Footnote ⁴⁹ Even when Part III requires Members to provide ‘effective means of enforcement’, the term ‘effective’ is used in a legal-operational sense, i.e., that enforcement mechanisms must function within the domestic system, rather than that of the prevention of economic impacts felt abroad.Footnote ⁵⁰ This interpretation accords with the ordinary meaning of ‘effect’ in Article 1.1, which, when used in the singular, denotes legal operability rather than economic consequences.

The structure of the Agreement provides further confirmation. TRIPS contains no general mandate for extra-territorial application.Footnote ⁵¹ Where Members were intended to address cross-border challenges, they did so through specific, negotiated mechanisms, including cooperation arrangements, technology-transfer provisions (such as Articles 66.2 and 67), or disciplines on anti-competitive practices in Article 40.Footnote ⁵²

The preamble reinforces this architecture. While Members desire to ‘promote effective and adequate protection of intellectual property rights’ and to ensure that enforcement procedures are ‘effective’, these clauses consistently tie the required effectiveness to national legal systems.Footnote ⁵³ The same preambular language explicitly recognizes the ‘underlying public policy objectives of national systems’ and the ‘special needs’ and ‘flexibility’ required in domestic implementation by least-developed Members.Footnote ⁵⁴ Thus, even at its highest level of abstraction, TRIPS conceives of IP protection as embedded within territorially bounded legal orders, not as an obligation to avoid economic consequences in other Members’ markets.Footnote ⁵⁵

This contextual and structural evidence supports a clear inference: had the drafters intended Article 1.1 to impose obligations relating to extraterritorial effects, they would have adopted explicit language to that effect, such as a requirement that domestic measures did not adversely affect the enjoyment of IP rights in other Members’ territories. No such language exists. Instead, the Agreement is constructed carefully around domestic implementation, leaving cross-border coordination to targeted provisions and cooperative mechanisms. The MPIA arbitrators’ approach therefore constructs a ‘context’ the treaty does not provide, reading cross-border implications into a provision where a textual and structural setting is designed precisely to avoid such expansion.

Taken together, the textual, structural, and preambular context confirms that Article 1.1 was designed as a domestically triggered obligation. The absence of any explicit extraterritorial mandate, combined with the overall territorial architecture of TRIPS, indicates that the Tribunal’s effects-based interpretation of Article 1.1 extends well beyond the contextual boundaries originally established by the treaty.

3.3 Object and Purpose: TRIPS as a Minimum-Standards Regime not a Supranational Enforcement System

In its object-and-purpose reasoning, the MPIA arbitrators rely heavily on the opening preambular recitals and Article 7 of TRIPS to argue that Article 1.1 must prevent one Member from ‘frustrating’ the enjoyment of IP rights granted in another Member’s territory.Footnote ⁵⁶ According to the Tribunal, the aims of reducing trade distortions, promoting ‘effective and adequate protection’, and securing a ‘balance of rights and obligations’ imply that TRIPS obligations cannot be confined to domestic implementation, because the effectiveness of each national IP system depends on the absence of measures that impede the exercise of IP rights abroad.Footnote ⁵⁷ On this basis, the Tribunal presents the object and purpose of the Agreement as supporting an effects-based interpretation of Article 1.1.

However, this reading stretches these provisions beyond their intended function. The preamble and Article 7 articulate the internal policy objectives of domestic IP systems, not a mandate to regulate extraterritorial effects, and operate within a treaty architecture that establishes TRIPS as a minimum-standards regime anchored in territorial implementation.Footnote ⁵⁸ Nothing in these provisions suggests that aspirational goals, such as ‘effective protection’ or ‘balance’, were meant to generate cross-border obligations. By treating programmatic language as a source of extraterritorial duties, the MPIA arbitrators recast TRIPS into a supranational enforcement system that WTO Members never negotiated. The following section clarifies why neither Article 1.1, the preamble nor Article 7 can sustain such an effects-based expansion of TRIPS obligations.

Firstly, The MPIA arbitrators’ reliance on the preamble and Article 1.1 to justify an effects-based obligation misunderstands the function of both provisions within the architecture of TRIPS. The preamble does not supply an autonomous mandate to police cross-border spillovers; rather, as the panel in Canada–Pharmaceutical Patents observed, it is merely one interpretative indicator of the Agreement’s object and purpose.Footnote ⁵⁹ Read together with Article 1.1, the preamble confirms that TRIPS is structured as a minimum-standards regime to be implemented domestically, not as a supranational system guaranteeing the unhindered enjoyment of IP rights across borders. This understanding is firmly grounded in both scholarly commentary and negotiating history. Carlos Correa’s seminal analysis underscores that, despite producing a degree of harmonization, TRIPS ‘does not give rise to a uniform supranational IP regime’, but instead establishes a set of common elements implemented through national legislation grounded in territoriality.Footnote ⁶⁰ Article 1.1 operationalizes this design by instructing Members to ‘give effect’ to TRIPS standards through their own domestic legal systems, while leaving them ‘total discretion’ over issues not addressed in the Agreement and ‘significant room’ to interpret and apply its provisions in light of domestic policy objectives.Footnote ⁶¹ This is the opposite of the supranational obligation the MPIA arbitrators infer.

The travail confirms this domestic-implementation model. Every major draft – the 1990 Draft, the US proposal, and the Swiss proposal – identifies the obligation to protect IP rights as a matter of domestic laws and practices, not as a cross-border regulatory duty. The US draft requires Members to ‘provide for protection of intellectual property rights under their domestic laws’,Footnote ⁶² while the 1990 Draft similarly states that Members ‘agree that they will provide for protection of intellectual property rights under their domestic laws and practices’,Footnote ⁶³ emphasizing that compliance is rooted in domestic legal systems. Other proposals reinforce this principle. The 1988 European Community draft stressed that negotiations should aim only for a ‘basic degree of convergence’ regarding the principles and features of protection, and explicitly stated that the negotiations ‘should not aim at the harmonization of national laws’, preserving Member States’ regulatory autonomy.Footnote ⁶⁴ In 1989, the Australian delegation similarly emphasized that TRIPS should determine standards ‘appropriate to avoid inadequate or excessive protection’ rather than pursuing the highest possible standards.Footnote ⁶⁵ The 1988 Swiss draft allowed governments flexibility to adopt the IPR laws they considered suitable, constrained only by a limited set of practices that would nullify or impair GATT rights.Footnote ⁶⁶ Reflecting developing countries’ perspectiveFootnote ⁶⁷, India stressed in 1989 that ‘this freedom of host countries should be recognized as a fundamental principle and should guide all of the discussions in the Negotiating Group’, underscoring that national discretion was central to the entire negotiation process.Footnote ⁶⁸ Not one draft contains language suggesting that Members must avoid measures affecting the enjoyment of IP rights in another Member’s territory. Taken together, the negotiating record reflects a clear consensus: rather than imposing transnational regulatory duties, TRIPS obligations were conceived as territorially rooted, domestically executed minimum standards, leaving Member States wide discretion over design, enforcement, and policy. This minimum-standards architecture was also deliberately chosen to accommodate the vastly different levels of development, institutional capacity, and technological advancement among WTO Members. Any interpretation that dilutes the territorial nature of TRIPS would therefore undermine – not advance the very purpose of allowing Members to calibrate IP protection in line with their developmental needs.

Against this background, the MPIA arbitrators’ inference that Article 1.1 prevents a member from ‘frustrating’ IP rights granted abroad is inconsistent with both the textual design and the travail. The preamble’s reference to reducing distortions and impediments to trade was never intended to impose cross-border obligations but to ensure that domestic IP systems do not themselves operate as barriers to legitimate trade.Footnote ⁶⁹ Likewise, the requirement to ‘give effect’ cannot be expanded into a duty to safeguard the extraterritorial enjoyment of rights, because TRIPS entrusts each Member with establishing a functioning national system, not with guaranteeing the operability of other Members’ systems.Footnote ⁷⁰ Thus, the combined textual and historical evidence demonstrates that the MPIA arbitrators attribute to Article 1.1 and the preamble a supranational reach that the drafters expressly declined to create.

The other pillar of the Tribunal’s reasoning lies in its invocation of the ‘balance’ obligation in Article 7 of TRIPS. The Tribunal appears to assume that, because TRIPS mandates a ‘balance of rights and obligations’, this balance necessarily operates between Members.Footnote ⁷¹ On this reading, ensuring ‘effective and adequate protection’ cannot occur ‘in isolation’, and the very architecture of TRIPS becomes one in which Members must take into account the cross-border implications of their domestic regulatory measures. This, in turn, allows the Tribunal to argue that Members may not frustrate the enjoyment of IP rights granted abroad. Yet this interpretation misconceives both the function and the object of the balance contemplated in Article 7.

Nothing in the text or drafting history suggests that the balance mandated by Article 7 is interstate in character. On the contrary, the travail show a consistent and explicit understanding that the balance was to be struck within each Member’s domestic system, between the interests of rights holders and the broader public interest, including developmental, technological, social, and economic needs.Footnote ⁷² The 1990 Composite Draft makes this explicit: it affirms the ‘sovereign right of all States, when enacting national legislation, to ensure a proper balance between [developmental] needs and the rights granted to IPR holders’,Footnote ⁷³ and stresses that this balance enables each Member to determine ‘the scope and level of protection’ appropriate to its national circumstances. Likewise, the proposal from developing countries insists that ‘the balance of rights and obligations inherent in all systems of intellectual property rights should be observed’, again referring to the internal structure of domestic IP regimes, not to horizontal obligations across Members.Footnote ⁷⁴

Scholarly commentary confirms this understanding. As Daniel Gervais observes, the balance in Article 7 reflects ‘well-established principles of intellectual property law’ concerning the internal calibration of exclusive rights and user interests.Footnote ⁷⁵ The purpose of this balance is to shape how Members design and operate their own IP systems: how broad the rights should be, how exceptions and limitations should function, and how to reconcile innovation incentives with access and dissemination.Footnote ⁷⁶ It was never conceived as a mechanism allocating obligations among Members or imposing duties to preserve the operability of other Members’ IP systems. Moreover, WTO jurisprudence confirms this territorially structured understanding of TRIPS obligations. In China – Intellectual Property Rights, the panel interpreted Article 1.1 as permitting Members to determine the ‘appropriate method’ of implementing TRIPS obligations within their own legal systems, emphasizing that the Agreement does not prescribe uniform enforcement structures across jurisdictions.Footnote ⁷⁷ The panel also rejected the argument that TRIPS required China’s border enforcement regime to extend to exported goods. Observing that Article 59 refers only to imported goods, the panel concluded that TRIPS does not impose broader transnational enforcement obligations.Footnote ⁷⁸ This reasoning reinforces the view that TRIPS disciplines are directed primarily at the internal organization of domestic IP regimes rather than the regulation of cross-border spillovers between Members.

Seen against this background, the Tribunal’s reliance on Article 7 to justify a cross-border effects-based obligation is untenable. The fact that TRIPS includes cooperation mechanisms, such as Articles 69, 63.3, and 40.3, does not transform internal balancing into an interstate equilibrium. Instead, these provisions confirm that when TRIPS intends Members to engage with one another, it does so through structured cooperation, not unilateral duties grounded in the purported ‘balance’ of rights and obligations across Members.Footnote ⁷⁹ In short, Article 7 articulates a domestic balancing mandate, not a supranational one. By recasting it as an interstate obligation, the Tribunal attributes to Article 7 a legal function that both the negotiators and the text itself explicitly reject. Additionally, the structure of the Tribunal’s reasoning also approaches the logic of a non-violation complaint. By focusing on the systemic effects of a Member’s domestic regulatory structure on another Member’s expected TRIPS benefits, the analysis resembles a claim of impairment without the identification of a clearly breached obligation.Footnote ⁸⁰ Yet non-violation and situation complaints under the TRIPS Agreement have long been subject to a moratorium within the WTO system, a position most recently reaffirmed at the WTO 13th Ministerial Conference, where Members agreed to extend the moratorium until the Fourteenth Ministerial Conference.Footnote ⁸¹ To read Article 1.1 as implicitly disciplining such spillovers would therefore risk reintroducing, through interpretation, a category of obligations that Members have deliberately chosen not to activate.

In sum, the preamble, Article 1.1, and Article 7 collectively confirm that TRIPS was designed as a domestically implemented minimum-standards regime, not a supranational system policing cross-border effects. The preamble and Article 1.1 anchor obligations within each Member’s own legal system, while Article 7 frames ‘balance’ as an internal normative equilibrium between domestic policy needs and IP protection. Nothing in the text or travail suggests an obligation to safeguard the enjoyment of IP rights abroad. The Tribunal’s effects-based reading therefore extends TRIPS beyond its object and purpose.

3.4 Negotiating History: The Travaux Préparatoires Reject an Extraterritorial Mandate

A significant gap in the MPIA arbitrators’ analysis is its failure to engage with the travail préparatoires of TRIPS. As Adrian Otten, former GATT/WTO Secretariat official responsible for TRIPS matters, explains, the negotiation of the Agreement culminated in five comprehensive legal text drafts submitted in spring 1990 by the European Communities, the United States, Switzerland, Japan, and a joint coalition of 14 developing countries.Footnote ⁸² These formed the basis of the Chair’s composite text and represent the clearest evidence of what WTO Members intended TRIPS to require and, equally, what they consciously declined to include.Footnote ⁸³ None of these drafts contains any suggestion that Members must avoid domestic measures that ‘frustrate’ the enjoyment of IP rights in another Member’s territory.

The joint proposal by 14 developing countries expressly emphasized the need to recognize the ‘public policy objectives underlying national systems’ of IP protection, including developmental and technological priorities.Footnote ⁸⁴ This formulation assumes that the ‘balance’ inherent in IP systems is internal between domestic public interests and private rights holders, not a balance between Members requiring them to safeguard each other’s systems.Footnote ⁸⁵ The proposal’s structure confirms that obligations were envisaged as territorially rooted and domestically executed.

The US proposal, which heavily influenced the composite draft, likewise framed TRIPS as a regime implemented ‘under [each Member’s] domestic laws and practices’.Footnote ⁸⁶ Its architecture, minimum substantive standards paired with domestic enforcement rules, mirrors the final Agreement and contains no hint of a transnational obligation to avoid frustrating foreign IP rights.Footnote ⁸⁷ The JapaneseFootnote ⁸⁸ and AustralianFootnote ⁸⁹ texts similarly focus on internal administration, transparency, and cooperation mechanisms, not on cross-border regulatory constraints.

A particularly important piece of negotiating history, likewise overlooked by the MPIA arbitrators, is the treatment of ‘give effect to’ in the 1990 Brussels Draft. In that draft, Article 1.1 included a footnote specifying that when a Party gives effect to TRIPS ‘through participation in an intergovernmental arrangement’, it must take reasonable measures to ensure consistency between TRIPS and that arrangement.Footnote ⁹⁰ The very existence of this footnote is revealing; it shows that negotiators understood domestic implementation to be the default meaning of ‘give effect’. Cross-border or extra-national scenarios were treated as exceptional, requiring dedicated language. The deletion of this footnote in the final Marrakesh text does not broaden Article 1.1; rather, under standard interpretive principles, the omission confirms that Members intentionally declined to create any extraterritorial consistency obligation.Footnote ⁹¹ The travail therefore refute the MPIA arbitrators’ reconstruction of a latent duty to prevent domestic measures from undermining the ‘functioning’ of other Members’ IP systems.

Taken together, the negotiating history – draft proposals, structural design choices, and the Brussels Draft footnote – demonstrates a consistent and deliberate settling of TRIPS as a domestically implemented minimum-standards regime, not a supranational system allocating cross-border regulatory duties. The Tribunal’s effects-based reading of Article 1.1 finds no support in the travail and is fundamentally at odds with what Members negotiated.

3.5 Systemic Integration: WTO and International IP Law Consistently Resolve Spillover Problems via Institutional Design rather than Judicial Expansion

A systemic integration inquiry, grounded in Article 31(3)(c) of the Vienna Convention on the Law of Treaties,Footnote ⁹² which WTO adjudicators have consistently treated as permitting the consideration of relevant rules of international law,Footnote ⁹³ confirms that neither the WTO nor the broader international intellectual property regimeFootnote ⁹⁴ has ever addressed cross-border spillovers by enlarging the scope of domestic-implementation clauses. Instead, both systems treat territoriality as a structural premise and resolve extra-territorial coordination problems through institutional mechanisms, negotiated standards, and cooperative arrangements, an interpretive trajectory fundamentally incompatible with the MPIA arbitrators’ reading of Article 1.1.

The WTO agreements themselves embody this logic. Where Members anticipated that domestic measures could generate external effects, whether in the SPS,Footnote ⁹⁵ TBT,Footnote ⁹⁶ customs valuation,Footnote ⁹⁷ technical regulations,Footnote ⁹⁸ or competition policy context,Footnote ⁹⁹ they expressly crafted substantive disciplines, notification duties, and committee-based oversight to manage such spillovers. This systemic restraint is anchored in the consensual structure of WTO law: adjudicators may police the obligations Members actually negotiated, but may not read into open-textured provisions duties that expand the territorial reach of domestic regulatory authority.Footnote ¹⁰⁰

The same approach is even more explicit in the international IP regime from which TRIPS draws. Both the Paris Convention and the Berne Convention operate on a principle of strict territoriality: intellectual property rights are created, exercised, and enforced within national territories, and no provision obliges a State to structure its domestic enforcement system so as to guarantee the effective enjoyment of rights granted in another country.Footnote ¹⁰¹ To mitigate discriminatory distortions without imposing supranational enforcement, these Conventions rely on national treatment (Paris, Art. 2; Berne, Art. 5(1)), which requires domestic equality of treatment for foreign rights holders but does not extend to regulating their home system.Footnote ¹⁰² Similarly, subsequent revisions and the establishment of WIPO including the 1967 Stockholm revisions introduced minimum standards for substantive protection and enforcement; however, these standards are implemented domestically and do not create cross-border duties.Footnote ¹⁰³

Where potential spillovers arise, such as piracy, counterfeiting, or the circulation of infringing works, the Conventions rely on institutional mechanisms rather than extraterritorial enforcement. Paris and Berne provide for cooperation through information exchange, technical assistance, border measures, and administrative coordination (see, e.g., Paris Arts. 9, 10, 11; Berne Arts. 9, 10bis).Footnote ¹⁰⁴ These instruments demonstrate a carefully designed system for managing transnational effects without undermining territorial sovereignty or creating a supranational obligation to prevent the ‘frustration’ of foreign IP rights.Footnote ¹⁰⁵

TRIPS was intentionally drafted as an extension of this WIPO-based architecture.Footnote ¹⁰⁶ Its minimum standards, enforcement obligations, and cooperative provisions echo the same logic: cross-border concerns are addressed institutionally, not through a functional expansion of Article 1.1.Footnote ¹⁰⁷ Nothing in the text, structure, or pre-existing IP treaties supports a general effects-based obligation; systemic integration thus reinforces territorial implementation rather than diluting it. Viewed in this light, the MPIA arbitrators’ reading of Article 1.1 as a duty to preserve the operation of other Members’ IP regimes is inconsistent with the settled architecture of both WTO and international IP law.

4.1 The Nature of Territoriality in Intellectual Property Law

Intellectual property rights have historically been granted and enforced within the territorial jurisdiction of sovereign states.Footnote ¹⁰⁸ Although territoriality does not manifest identically across all forms of intellectual property protection,Footnote ¹⁰⁹ patent law has traditionally been regarded as the paradigmatic illustration of territoriality in intellectual property law.Footnote ¹¹⁰ At the same time, the international legal framework governing intellectual property, particularly the TRIPS Agreement, operates through obligations that require members to implement minimum standards within their domestic legal systems. Although these two dimensions of territoriality are analytically distinct, they have historically developed in parallel within the international intellectual property system. The territorial character of many intellectual property rights, particularly patents, helps illuminate why international agreements governing those rights, including the TRIPS Agreement, are primarily structured around obligations concerning domestic implementation rather than transnational enforcement.

Territoriality is not simply a default presumption or an outdated doctrinal relic, it is a structural feature of the international IP system, rooted in sovereignty, administrative feasibility, and the conceptual foundations of IP as a state-created entitlement.Footnote ¹¹¹ To understand why later sections of this article insist that TRIPS Article 1.1 must be read territorially, and why spillovers cannot justify an expansion of WTO obligations, it is necessary to situate territoriality within its deeper historical, theoretical, and institutional context.

Territoriality originates from the earliest forms of privilege granting by European sovereigns in the fifteenth and sixteenth centuries, when exclusive rights were bestowed not as natural entitlements but as instruments of public policy.Footnote ¹¹² Printing privileges, monopoly licenses for inventions, and exclusive rights over specific trades were conferred by sovereigns for finite periods and within specific geographic jurisdictions. These privileges served multiple functions: incentivizing inventors and authors, generating revenue for the sovereign, enabling censorship, and fostering local economic development. Crucially, their geographic scope corresponded to the territory of the granting authority. A Venetian printing privilege in the sixteenth century had force only within Venice; it carried no effect in Florence or Paris unless those jurisdictions voluntarily recognized it. This early practice crystallized the notion that exclusive rights over intangible creations depended entirely on sovereign endorsement and that such endorsement was territorially bounded.

The Statute of Monopolies (1624) and the Statute of Anne (1709) are pivotal milestones in the transformation of these sovereign privileges into modern IP rights.Footnote ¹¹³ The Statute of Monopolies curtailed arbitrary monopolies while protecting the rights of ‘true and first inventors’, whereas the Statute of Anne granted authors exclusive rights to print their own works for limited periods.Footnote ¹¹⁴ Both statutes formalized the idea that intellectual property was tied to the territorial jurisdiction of the legislating state. Even when later theorists such as KantFootnote ¹¹⁵ and FichteFootnote ¹¹⁶ advanced natural-rights justifications for authors’ moral rights, and when KohlerFootnote ¹¹⁷ conceptualized intellectual property through a property-based lens influenced by Locke’s labor theory,Footnote ¹¹⁸ the territorial structure remained intact. Continental systems that emphasized the personality of the author (droit d’auteur) continued to rely on national legislative acts for the creation, recognition, and enforcement of rights.Footnote ¹¹⁹ Thus, whether understood as natural rights, utilitarian incentives, or property rights, IP depended fundamentally on domestic legal authority.

The nineteenth century also saw profound institutional developments. As international trade expanded and authors sought protection abroad, inconsistencies in national copyright and trademark laws created persistent frictions. States experimented with bilateral copyright treaties, but the resulting web of obligations was patchy and often contradictory. The Paris and Berne Conventions were negotiated to provide a more coherent multilateral structure. As discussed above in Section 3.5, these instruments did not abandon the territorial foundation of IP law, rather they preserved it as a structural premise. National treatment emerged as the organizing principle of international cooperation, ensuring equal protection for foreign and domestic authors within the protecting state while leaving intact each state’s authority to define the scope, limitations, and enforcement of rights under its own laws.Footnote ¹²⁰ Consistent with this earlier discussion, even Berne’s automatic protection principle did not displace territoriality – it merely removed formalities without altering the rule that foreign works are protected through domestic law in each member state.Footnote ¹²¹

The twentieth century introduced new complexity. The proliferation of multinational corporations, cross-border distribution channels, and digital technologies created scenarios in which acts in one jurisdiction affected markets in another. Yet the fundamental architecture of IP, territorial rights granted and enforced by states, remained unaltered. National courts confronted increasingly transnational disputes, particularly in cases of cross-border copyright infringement or multi-jurisdictional patent licensing.Footnote ¹²² The default response was not to relax territoriality but to reinforce it through conflict-of-laws principles. Courts applied lex loci protectionis, the rule that the law of the country where protection is sought governs the existence, scope, and infringement of IP rights.Footnote ¹²³ This doctrine ensures that disputes involving rights registered or recognized in multiple jurisdictions are adjudicated under the respective domestic laws rather than a single transnational standard.

Patent law offers an even starker example. It provides perhaps the clearest illustration of territoriality in intellectual property law. A patent is a territorial grant of exclusive rights issued by a sovereign authority and has a legal effect only within the jurisdiction that grants it. A patent is a purely territorial grant of monopoly rights; it has no legal existence outside the granting jurisdiction.Footnote ¹²⁴ The US Supreme Court’s decision in Microsoft v. AT&T (2007) underscores this principle. The Court held that software supplied from the United States but installed abroad did not infringe a US patent because the act of installation occurred outside US territory. The Court explicitly rejected arguments that would extend patent infringement liability extraterritorially, emphasizing both the territorial nature of patent rights and the presumption against extraterritoriality in US law.Footnote ¹²⁵ Similar conclusions have been reached in other jurisdictions. Similarly, in Menashe v William Hill (2002) the English Court of Appeal reaffirmed that patent infringement under UK law is strictly territorial, even where a patented system spans multiple countries.Footnote ¹²⁶

Trademarks also demonstrate the centrality of territoriality. Even in the European Union, where trademark rights are harmonized and where the EU Trade Mark (EUTM) operates across all member states, territorial thinking persists.Footnote ¹²⁷ National courts treat the EUTM as a bundle of territorially limited rights, and infringement analyses often consider the territorial scope of consumer perception and market impact. The Court of Justice of the European Union (CJEU), in cases such as L’Oréal v. eBay (2011), declined to impose general, cross-border monitoring obligations on online intermediaries and confirmed that questions of liability and remedies remain for national courts to determine within the territorial contours of EU trade mark law.Footnote ¹²⁸

Thus, across history, doctrine, judicial practice, and institutional design, territoriality emerges not as an incidental feature but as a structural principle of IP law. It reflects the dependence of IP rights on domestic legislative acts, respects state sovereignty, ensures administrative feasibility, and maintains coherence in an international system characterized by legal diversity. It is against this rich backdrop that the legal analysis in discussed Section 4.2 must be situated.

4.2 Why Cross-Border Spillovers Do Not Justify Expansive Judicial Interpretation

Building on Section 4.1, the territoriality of intellectual property rights reflects a structural principle of both domestic and international law rather than a contingent or purely historical feature. Even in an increasingly globalized economy where cross-border spillovers are common, the existence of such spillovers does not by itself transform the territorial structure of intellectual property rights or the jurisdictional limits governing their enforcement.Footnote ¹²⁹

Intellectual property is fundamentally a state-created entitlement: patents, copyrights, and trademarks exist and are enforceable only within the boundaries defined by domestic legislation. Territoriality ensures that states retain administrative control, legal coherence, and the ability to calibrate incentives for innovation and creativity within their own jurisdictions.

From the perspective of general international law, territorial limits are central to preserving state sovereignty.Footnote ¹³⁰ States possess exclusive authority to legislate and enforce rights within their territory, and customary international law constrains the prescriptive reach of domestic law beyond borders. The mere existence of cross-border spillovers, economic, strategic, or technological, does not automatically generate binding obligations for other states, nor does it grant domestic courts authority to adjudicate foreign conduct.Footnote ¹³¹ Only when the spillover reaches the threshold of significant transboundary harm may international law impose procedural or, in limited cases, substantive duties.Footnote ¹³² While international law recognizes that certain spillovers may produce tangible cross-border consequences, such as environmental damage, consumer harm, or interference with foreign legal systems,Footnote ¹³³ these situations remain exceptional and do not alter the underlying principle that territorial sovereignty continues to structure the limits of domestic jurisdiction.Footnote ¹³⁴ Even then, the response required by international law is cooperative rather than unilateral. Such obligations must be discharged through notification, consultation, or other institutional mechanisms, rather than through the extraterritorial expansion of domestic adjudicatory authority.Footnote ¹³⁵ For example, in Pulp Mills, the International Court of Justice held that even where potentially significant transboundary harm exists, the affected states must engage in procedural cooperation and good-faith consultation, underscoring that cross-border externalities do not permit unilateral assertions of domestic regulatory or adjudicatory power.Footnote ¹³⁶ In other words, spillovers may trigger policy or procedural attention, but they do not create inherently legal entitlements or impose extraterritorial duties.Footnote ¹³⁷ From the perspective of intellectual property, spillovers rarely meet the threshold of significant transboundary harm. The ‘effects’ of cross-border IP activity, such as a copyrighted work being accessible abroad or the economic influence of licensing, are primarily strategic or economic, rather than physical, environmental, or systemic in nature. Even where cross-border effects exist, the appropriate response under international law is cooperative and procedural, such as consultation or coordination, rather than unilateral extraterritorial enforcement.

Besides, the specific characteristics of intellectual property law reinforce these limits. Unlike tangible property, which can physically cross borders and create straightforward transnational claims, IP rights are intangible and exist only through recognition and enforcement by a competent sovereign authority.Footnote ¹³⁸ A key theoretical lens for understanding this constraint is the dual nature of intellectual property rights: property-based rights versus personality-based rights.Footnote ¹³⁹ Property-based rights, such as economic rights in copyrights or patent monopolies, serve utilitarian functions, they incentivize innovation and allow rights holders to extract economic benefits.Footnote ¹⁴⁰ These rights are entirely dependent on formal grants by the sovereign authority and are enforceable only within the territorial boundaries where that authority exercises power.Footnote ¹⁴¹ Personality-based rights, or moral rights (droit d’auteur), protect the personal connection between the author and the work, emphasizing attribution, integrity, and recognition of creative personality.Footnote ¹⁴² While moral rights reflect intrinsic personal interests, they operate only in jurisdictions that legally acknowledge them.Footnote ¹⁴³ The legal effect of any IP right thus depends on formal registration, statutory grant, and the availability of enforcement mechanisms within the relevant jurisdiction, whether the right is property-based or personality-based.Footnote ¹⁴⁴ Consequently, cross-border accessibility or economic impact does not transform an IP right into an extraterritorial entitlement. For example, the global accessibility of a copyrighted work via the Internet may allow foreign users to view or distribute content, but such accessibility alone does not confer a right to enforce the copyright abroad. Similarly, patent rights derive exclusively from the sovereign act granting them and are enforceable only against acts occurring within that state’s territory.Footnote ¹⁴⁵ By highlighting state dependence, formal recognition, and jurisdictionally limited enforceability, this analysis explains why spillovers produce strategic or economic effects but do not extend the scope of legal obligations beyond domestic borders.

This dual reasoning is embedded in TRIPS. The Agreement establishes minimum standards while explicitly limiting primary obligations to domestic enforcement. Article 1.1, by requiring members to implement the Agreement ‘within their own legal system and practice’, codifies territoriality, reflecting both the sovereign prerogatives of member states and the structural dependence of IP rights on domestic law. National treatment ensures equal protection for foreign rights holders within a jurisdiction but does not transform domestic rights into extraterritorial claims. Consequently, the design of TRIPS illustrates the deliberate balance between domestic autonomy and international coordination: spillovers are acknowledged as inevitable in a globalized IP environment, but they are addressed through cooperation, information exchange, and treaty-compliant domestic enforcement rather than through judicially imposed extraterritorial obligations.Footnote ¹⁴⁶

In sum, cross-border spillovers are analytically and legally distinct from obligations. General principles of international law, rooted in sovereignty and jurisdictional limits, prohibit unilateral expansion of legal duties beyond a state’s territory. The structural nature of IP law, as rights created and enforced by domestic authorities, reinforces this boundary. TRIPS reflects both constraints, embedding territoriality while permitting minimum harmonization. Understanding spillovers as practical or strategic phenomena, rather than as legal triggers, ensures that IP rights remain coherent, administrable, and consistent with both domestic and international legal principles.

4.3 Appropriate Solutions: Institutional Design Instead of Treaty Expansion

Managing cross-border spillovers in intellectual property requires solutions that respect territoriality while addressing the practical effects of globalization. Rather than interpreting treaties expansively, states and private actors rely on institutional, contractual, and cooperative mechanisms to anticipate and mitigate transnational risks.

Private contractual arrangements provide flexible tools for rights holders and users to coordinate across jurisdictions. Licensing agreements frequently include forum selection clauses, choice-of-law provisions, and indemnity or compliance clauses that define applicable law, allocate risk, and ensure predictability in international transactions.Footnote ¹⁴⁷ For example, in the renewable energy sector, companies holding patents for solar and wind technologies often draft licensing contracts specifying that disputes must be resolved in the jurisdiction of the licensee or the licensor, while addressing compliance with local environmental, safety, and technical standards.Footnote ¹⁴⁸ Similarly, multinational software and cloud-computing firms include contractual clauses to manage cross-border software usage, data storage, and intellectual property rights in countries with different IP and privacy regimes.Footnote ¹⁴⁹ Even in the agricultural biotechnology sector, companies often incorporate multi-jurisdictional licensing arrangements to coordinate patents for genetically modified seeds, explicitly defining permissible export, distribution, and use within each licensed territory.Footnote ¹⁵⁰ These instruments operate fully within the territorial authority of domestic courts while providing a framework to manage cross-border effects, demonstrating that contractual design can preempt transnational disputes without requiring extraterritorial legal mandates.

Choice-of-law rules further reinforce territoriality. Courts routinely apply lex loci protectionis, the law of the jurisdiction where protection is sought, to determine the scope and enforceability of IP rights.Footnote ¹⁵¹ In practice, this approach allows domestic courts to adjudicate disputes arising within their territory while deferring to foreign courts for acts occurring abroad. By anchoring enforcement to domestic legal systems, choice-of-law principles maintain the coherence of IP rights across multiple jurisdictions without expanding treaty obligations.Footnote ¹⁵²

Beyond private agreements, multilateral and regional mechanisms complement domestic enforcement and provide additional layers of coordination. WIPO offers technical guidance, dispute-resolution services, and capacity-building initiatives that facilitate cross-border cooperation without altering territorial rights. Regional trade and investment agreements, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP),Footnote ¹⁵³ the US–Mexico–Canada Agreement (USMCA),Footnote ¹⁵⁴ and the EU–Japan Economic Partnership Agreement (EPA),Footnote ¹⁵⁵ include IP chapters that harmonize enforcement procedures, clarify remedies, and promote information sharing among signatories. These frameworks create predictable and coordinated enforcement environments for cross-border commercial activity. For instance, under the USMCA, provisions on pharmaceutical patents and biologic data exclusivity allow member states to enforce consistent minimum standards while respecting each state’s territorial jurisdiction, reducing the risk of conflicting judicial interpretations or duplicative litigation.Footnote ¹⁵⁶ Similarly, the EU–Japan EPA includes mechanisms for consultation and technical cooperation on IP enforcement, facilitating dispute avoidance across geographically and legally diverse markets.Footnote ¹⁵⁷

Private dispute resolution methods, such as arbitration and mediation, also play a crucial role. International arbitration centers, including WIPO Arbitration and Mediation Center (WIPO AMC), Singapore International Arbitration Centre (SIAC), and International Chamber of Commerce (ICC), offer procedural flexibility for disputes spanning multiple jurisdictions. For example, in one publicly described case, a US software developer and a European company concluded an online license agreement containing a WIPO arbitration clause. Years later the developer submitted a request under WIPO Expedited Arbitration claiming breach of the license (failure to prevent third-party unauthorized access). The WIPO Center appointed a sole arbitrator and the dispute was resolved through a final award.Footnote ¹⁵⁸ Similarly, under the WIPO Film and Media Rules, the Center has handled disputes in the audiovisual sector. For instance, a ‘broadcast rights distribution agreement’ dispute between a TV distribution company and international rights holders was submitted to WIPO Arbitration. In that case, the sole arbitrator considered the evidence and issued an award under WIPO rules.Footnote ¹⁵⁹ These real-world instances show how arbitration under WIPO auspices can be used for licensing and content distribution disputes crossing national borders, avoiding the need to litigate in different national courts.

Ultimately, the most effective strategy integrates multilateral, regional, and private mechanisms. These layers collectively enable rights holders and states to navigate the economic and strategic consequences of cross-border spillovers while preserving the territorial foundation of IP rights. For instance, a multinational biotechnology firm may coordinate with WIPO for technical guidance on plant variety or gene-editing patents, leverage CPTPP provisions to harmonize IP enforcement among participating countries, and structure licensing contracts to allocate regulatory, commercial, and IP risks across multiple jurisdictions. A multinational clean-energy company might combine bilateral contracts with CPTPP consultation mechanisms and WIPO guidance to coordinate patent enforcement and standard compliance across Asia-Pacific markets. Such an approach addresses practical challenges arising from globalization while respecting territorial limits, demonstrating that institutional design, not treaty expansion, is the appropriate response to cross-border spillovers. By relying on these multi-layered solutions, states and private actors can preserve the integrity of IP rights, maintain administrative feasibility, and uphold the balance between domestic sovereignty and international cooperation.