Investment treaties languages on intellectual property rights: a comparative study of the Republic of Korea’s bits and Russian Federation’s bits

Qom university, Iran, , ‐0003‐3520‐9309

protected under the BITs3. Various types of intellectual property have been covered by the treaties of the ROK and RF. As art 1(1)(d) of the Korea, Republic of ‐ Kyrgyzstan BIT (2007) states, "investment means every kind of asset invested by investors of one Contracting Party in the territory of the other Contracting Party and in particular, though not exclusively, in‐ cludes:...(d) intellectual property rights includ‐ ing rights with respect to copyrights, patents, trademarks, trade names, industrial designs, technical processes, trade secrets and know‐ how, and goodwill”1. Also, art 1(a)(vi) of the Armenia ‐ Korea, Republic of BIT (2019), states, “investment means every kind of asset in the territory of one Contracting Party, owned or controlled directly or indirectly by an investor of the other Contracting Party, provided that the investment has been made in accordance with the laws and regulations of the former Contracting Party, including, though not exclu‐ sively:…(vi) intellectual property rights”2 the same goes for art 1(1)(d) of the Morocco ‐ Rus‐ sian Federation BIT (2016), as states, "Invest‐ ments" shall mean any kind of assets invested by investor of the State of one Contracting Party in the territory of the State of the other Contracting Party in accordance with the laws and regulations of the State of the latter Con‐ tracting Party and shall include, in particular, though not exclusively:... d) intellectual prop‐ erty rights, including copyrights, patents, trademarks, trade names, industrial designs, technical processes, know‐how”3. In fact, these these articles state the types of the intellectual property and indicate which type of intellectual property is protected by the current agree‐ ment. In addition, there are two important points in these articles: First, the investment agreement refers to intellectual property and its types within the definition of the invest‐ ment. Second, each of these articles has a dif‐ ferent expression. According to these two points, two hypotheses are made in the paper: First, the investment agreements of the ROK do not provide any definition of intellectual property. Second, there are two approaches to the intellectual property rights under the BITs of the ROK and RF.

In accordance with the hypotheses and in or‐ der to answer the main question, namely what are the languages to the intellectual property rights in the BITs. The paper uses the quantitative and qualitative methods and in line with the me‐ thods, analyzes all South Korean and Russian BITs. In this way, the paper proceeds in four steps: the first part focuses on the definition of the IP and its types under the mentioned BITs. The second part provides the types of the lan‐ guages to the IP rights within the BITs. In fact, in this part, the paper focuses on two languages, namely, absolute and conditional. The third part analyzes the languages in this regard. The last one contains the conclusions we have arrived at.

The Definition of the IP rights under the BITs of ROK and RF. There is no definition of intellec‐ tual property under the Korean and Russian BITs. However, the BITs have addressed intellectual property under the definition of investment and have protected the intellectual property as kind of investment. As art 1(1)(e) of the Kenya ‐ Korea, Republic of BIT (2014), states, "investment means every kind of asset in the territory of one Con‐ tracting Party, owned or controlled directly or indirectly by an investor of the other Contracting Party, provided that the investment has been made in accordance with the laws and regula‐ tions of the former Contracting Party, including, though not exclusively:… (e) intellectual proper‐ ty rights including rights with respect to copy‐ right, patents, trademarks, trade names, indus‐ trial designs, technical processes, trade secrets and know‐how, and goodwill”4. Also, the art 1(1)(d) of the China ‐ Korea, Republic of BIT, states, “investment means every kind of asset invested by investors of one Contracting Party in the terri‐ tory of the other Contracting Party and, in partic‐ ular, though not exclusively, includes:… (d) intel‐ lectual property rights including rights with re‐ spect to copyrights, patents, trademarks, trade names, industrial designs, technical processes, trade secrets and know‐how, and goodwill”5. Furthermore, the art 1(1)(d) of the Iran, ‐ Russian Federation BIT (2015), states, “ The term "invest‐ ment" refers to any kind of asset, invested by the investors of one Contracting Party in the territory of the other Contracting Party in accordance with the laws and regulations of the latter Contracting Party including the following:… (d) intellectual property rights such as, in particular, copyrights, patents, utility models, industrial designs, trade marks and names and know‐how” 1. As it seems, these articles do not provide a definition of the intellectual property rights, and only describe its types as types of the investment. Therefore, in order to achieve the definition, it is necessary to refer to other related regulations, such as the international regulations in which the ROK2 and RF3 have acceded to or the domestic regulations of them, or related authorities like Korean intel‐ lectual property office (KIPO).

The WTO Agreement on Trade‐Related As‐ pects of Intellectual Property Rights (TRIPS) is the most comprehensive multilateral agree‐ ment in this regard. It plays a central role in facilitating trade in knowledge and creativity, in resolving trade disputes over IP, and in as‐ suring WTO members the latitude to achieve their domestic policy objectives. The Republic of Korea is a party to this Agreement4. So we can refer to this agreement to get the defini‐ tion. According to the TRIPS, “Intellectual property rights are the rights given to persons over the creations of their minds. They usually give the creator an exclusive right over the use of his/her creation for a certain period of time”5. Another definition used in the domestic tic legal system of South Korea, the Korean Intellectual Property Office states, “intellectual property is a term referring to a brand, inven‐ tion, design or other kind of creation, which a person or business has legal rights over”6. Thus, property that is the results of thought , namely, intellectual activity is called intellectual property7. Almost all businesses own some form of IP, which could be a business asset8.

Types of the languages to the IP rights un‐ der the BITs of the ROK and RF. In order to reach the languages contained within the Ko‐ rean and Russian BITs, we have reviewed all of the related BITs. Therefore, after reviewing 184 treaties, we concluded that the mentioned BITs are classified into two groups. The basis of this classification is a reference to national laws and regulations. In fact, the treaties in this re‐ gard, either refer to national laws or do not so. Hence, two languages are created and we call them absolute and conditional.

BITs with the Absolute language. In fact, in this approach, the treaties do not refer to the domestic laws and only absolutely mention the types of intellectual property. Art 1(1)(d) of the Gabon ‐ Korea, Republic of BIT (2007), provides, that “investment means every kind of asset in‐ vested by investors of one Contracting Party in the territory of the other Contracting Party and, in particular, though not exclusively, in‐ clude:…(d) intellectual property rights including rights with respect to copyrights, patents, trademarks, trade names, industrial designs, technical processes, trade secrets and know‐ how, and goodwill” 9. Also, art 1(1)(d) of the Azerbaijan ‐ Korea, Republic of BIT, states, “in‐ vestments means every kind of asset invested by investors of one Contracting Party in the ter‐ ritory of the other Contracting Party and, in par‐ ticular, though not exclusively, include: …(d) intellectual property rights including rights with respect to copyrights, patents, trademarks, trade names, industrial designs, technical processes, trade secrets and know‐how, and goodwill” 1. The same goes for art 1(1)(d) of the Japan ‐ Russian Federation BIT (1998) as states, “The term "investment" comprises every kind of asset including:… (d) intellectual property rights including patents, trademarks,. industrial designs, layout‐designs of integrated circuits, trade names, 'indications of source or appella‐ tions of origin and undisclosed information”2. It is clear that there is no reference to national law in the texts of these articles3. In the absolute language, the legislators only pay attention to the types of the investments and do not consid‐ er any other conditions in this regard4.

BITs with the Conditional language. In this type of approach, which the paper calls condi‐ tional language, in fact, in addition to men‐ tioning the types of investments, it also refers to national laws and regulations. The BITs with the Conditional language identify kinds of investments if they comply with the na‐ tional laws and regulations. Therefore, in this approach, the mentioned condition is refer‐ ring to the domestic legal system. These agreements use the following terms to refer to national laws: “…provided that the invest‐ ment has been made in accordance with the laws and regulations of the former Contracting Party…” or “… every kind of asset invested by investors…in accordance with the legislation of the latter Contracting Party…” or “…rights recognized by the laws of the Contracting Par‐ ties…” or “… in accordance with the latter Contracting Party's legislation…” or “…in con‐ formity with the latter's legislation…”. As, art 1(1)(f) of the Korea, Republic of ‐ Myanmar BIT (2014) states, “investment means every kind of asset in the territory of one Contracting Party, owned or controlled directly or indirect‐ ly by an investor of the other Contracting Par‐ ty, provided that the investment has been made in accordance with the laws and regula‐ tions of the former Contracting Party, includ‐ ing, though not exclusively:… (f) intellectual property rights”5. Also, art 1(1)(d) of the Ko‐ rea, Republic of ‐ Mauritius BIT, states, “in‐ vestment means every kind of asset invested by investors of one Contracting Party in the territory of the other Contracting Party in ac‐ cordance with the legislation of the latter Con‐ tracting Party and in particular, though not exclusively, includes: … (d) intellectual prop‐ erty rights such as industrial property rights, copyrights, patents, utility model patents, de‐ signs, trade‐marks, trade‐names, technical processes, know‐how, and goodwill” 6. Fur‐ thermore, art 1(1)(d) of the Korea, Republic of ‐ Lebanon BIT states, “ intellectual property rights, such as copyrights, patents, industrial designs or models, trade or service marks, trade names, technical processes, know‐how and goodwill, as well as other similar rights recognized by the laws of the Contracting Par‐ ties” 1. Also, art 1(b) of the Russian Federation ‐ Yemen BIT (2002) states, “ Term "invest‐ ments" shall mean all kinds of assets invested by investor of one Contracting Party in the territory of the other Contracting Party in ac‐ cordance with the latter Contracting Party's legislation and in particular:… exclusive rights to intellectual property (copyrights, patents, industrial designs, models, trademarks and service marks, technology, information having commercial value and "know‐how")”2. The same goes for art 1(1) of the Russian Federa‐ tion ‐ Ukraine BIT, as it states, “Investments shall denote all kinds of property and intellec‐ tual values, which are put in by the investor of one Contracting Party on the territory of the other Contracting Party in conformity with the latter's legislation, and in particular: … c)rights to objects of intellectual property, including authors' copyrights and related rights, trade marks, the rights to inventions, industrial samples, models and also technolo‐ gical processes and know‐how”3. These ar‐ ticles correctly show that an investment is ac‐ ceptable when it is in accordance with the na‐ tional law4. In other words, domestic legal system plays an important role and should undoubtedly be considered5.

Analysis of the languages. As a result, in con‐ nection with the IP rights in BITs of the ROK, there are two main languages, including the ab‐ solute and conditional. The paper has analyzed the BITs of the ROK, except the treaties were in negotiations or those don’t exist their texts be‐ cause of termination , like Korea, Republic of ‐ Zimbabwe BIT (2010)⁶, Korea, Republic of ‐ Ro‐ mania BIT (2006)⁷, Congo, Democratic Republic of the ‐ Korea, Republic of BIT (1990)⁸, the China ‐ ‐ Russian Federation BIT (1990)⁹, or the Denmark ‐ Russian Federation BIT (1990) ¹⁰. Hence, al‐ though the ROK has 105 BITs (including those in force, signed and terminated), 102 agreements are available. Also, Russian Federation has 84 BITs but were analyzed 82 of them¹¹. The follow‐

• ⁵    The same goes for the Korea, Republic of ‐ Uzbe‐ kistan BIT (2019), the Armenia ‐ Korea, Republic of BIT(2018), the Kenya ‐ Korea, Republic of BIT (2014), the Cameroon ‐ Korea, Republic of BIT (2013), the Co‐ lombia ‐ Republic of Korea BIT (2010), the Korea, Re‐ public of ‐ Zimbabwe BIT (2010), the China ‐ Korea, Republic of BIT (2007), the Dominican Republic ‐ Ko‐ rea, Republic of BIT (2006), the Croatia ‐ Korea, Repub‐ lic of BIT (2005), The texts of all the agreements are available at: https://investmentpolicy.unctad.org/in‐ ternational‐investment‐agreements/countries/111/ko‐ rea‐republic‐of (accessed 5/26/2022).

• ⁶    Korea, Republic of ‐ Zimbabwe BIT, date of signa‐ ture: 24/05/2010, date of entry into force: 07/04/2021.

• ⁷    Korea, Republic of ‐ Romania BIT (2006), date of signature: 06/09/2006, date of entry into force: 11/01/2008.

• ⁸    Congo, Democratic Republic of the ‐ Korea, Re‐ public of BIT (1990), date of signature: 19/07/1990, not in force.

• ⁹    China ‐ Russian Federation BIT, Terminated, date of signature: 21/07/1990, date of entry into force: 26/07/1991.

• ¹⁰    Denmark ‐ Russian Federation BIT (1990), Termi‐ nated, date of signature: 01/05/1990, not in force.

• ¹¹    In fact, our main source in this paper for download‐ ing the text of the treaties is the official website of UN‐ CTAD. A copy of every concluded investment agreement is submitted to UNCTAD and UNCTAD uploads it on its official website. However, the text of some of the agreements are not available on the UNCTAD website for various reasons (e.g. Some of them are still in the negoti‐ ation process or Some of them have terminated).

ing charts can show the percentages of every language under the BITs:

Republic of Korea

■    the absolute langauge: 61 agreements the conditional language: 41 agreements

Figure 1. The model of languages on IP rights under the BITs of the ROK

Russian Federation

■    the absolute language: 9 agreementsthe conditional language: 73 agreements

Figure 2. The model of languages on IP rights under the BITs of the RF

The choice of the approach in agreements depends on the negotiations of the parties [1, p. 27]. BITs with an absolute language to the IP rights, in fact, only state kinds of IP rights. BITs with a conditional language to IP rights, not only mention kinds of IP rights, but also refer to the national law. Therefore, in comparing the two approaches, the conditional language is more comprehensive, since the conditional language mentions a condition that, if not mentioned, may be confusing. It should be noted that whether or not the agreement re‐ fers to national regulations, intellectual prop‐ erty rights are related to the domestic legal system of the parties to an investment agree‐ ment. In fact, IP law is designed to address the needs of a country within its territorial bounda‐ ries, and thus, IP rights are domestic in nature1. ture1. Therefore, investors should refer to the national law of the host government to know the dimensions of intellectual property rights. However, if the investment agreement does not mention national law, the investor may be confused about the competent law.

Respectively, the ROK and RF have so far concluded 105 and 84 BITs. Although both states have used both languages in their trea‐ ties, Russia has performed better in this re‐ gard. First, the absolute language within the BITs of the ROK and RF amounts to 59 % and 11 %, respectively, whereas the conditional lan‐ guage of them amounts to 41 % and 89 %, re‐ spectively. Therefore, Russia has chosen a comprehensive approach and has used a con‐ ditional language in most of its treaties. It means, Russia has concluded 73 agreements with a conditional language and only 9 with absolute one. By contrast, Korea has con‐ cluded less than half of its agreements with conditional approach (41 out of 102) and more than half of them with absolute one (61 out of 102). A diagram that follows shows the above data in comparison:

Conclusion. Today, there is no definition of intellectual property rights in the text of the Russian or Korean BITs, and the definition of these rights should be found in other relevant documents. The important point on Russian and Korean BITs is that all agreements pay at‐ tention to intellectual property rights. Thus, although there is no definition of intellectual property rights in these agreements, intellec‐ tual property is nevertheless considered as a kind of investments. As art 1(1)(e) of the Kenya ‐ Korea, Republic of BIT (2014), states, "invest‐ ment means every kind of asset in the territory of one Contracting Party, owned or controlled directly or indirectly by an investor of the other Contracting Party, provided that the invest‐ ment has been made in accordance with the laws and regulations of the former Contracting Party, including, though not exclusively:… (e) intellectual property rights including rights with respect to copyright, patents, trademarks, trade names, industrial designs, technical processes, trade secrets and know‐how, and goodwill”. Also, art 1(1)(d) of the Iran, ‐ Russian Federation BIT (2015), states, “ The term "in‐ vestment" refers to any kind of asset, invested by the investors of one Contracting Party in the territory of the other Contracting Party in ac‐ cordance with the laws and regulations of the latter Contracting Party including the follow‐ ing:… (d) intellectual property rights such as, in particular, copyrights, patents, utility mod‐ els, industrial designs, trade marks and names and know‐how.”

In addition, by examining the BITs of both states, we came to a conclusion that there are two approaches to intellectual property rights in these treaties, which we call absolute and condi‐ tional. In accordance with the absolute language, the types of the IP rights are mentioned under the definition of the investments, however, no reference is made to the national law of the par‐ ties. Conversely, according to the conditional language, types of the IP rights are mentioned and, in addition, reference is made to the nation‐ al law of the parties. In this regard, South Korea has concluded 41 BITs with a conditional lan‐ guage and 61 agreements with an absolute one. The Russian Federation has concluded 73 BITs with the conditional language and 9 BITs with the absolute one. Comparing the two countries, we found that Russia performed better than South Korea. since it paid more attention to the condi‐ tional language. In fact, the conditional approach is better than the absolute one, because it clearly states that reference to domestic law is also re‐ quired. But the absolute approach does not men‐ tion such a condition, and this may be problemat‐ ic. In any case, intellectual property rights rely on the domestic legal system of the states and in‐ vestors must pay attention to the national law of the host states in this regard. For example, if an investor wants to register a trademark, he must comply with the national law of the host state. Since the host state does not accept a trademark that is not in accordance with its domestic cus‐ tom or domestic law.