Territoriality in Intellectual Property Law: Examining the tension between securing societal goals and treating Intellectual Property as an investment asset

The principle of territoriality is one of the foundational principles of International Intellectual Property Law. This principle allows countries to design their intellectual property laws in a manner that facilitates the achievement of specific societal goals. However, while it is true that this principle has managed to survive the incorporation of intellectual property into the International Trade Law system (via the WTO’s TRIPS Agreement), some scholars have expressed concern that the incorporation of intellectual property into the International Investment Law system via investment agreements (such as Bilateral Investment Treaties) constitutes a potential threat to the principle of territoriality in the International Intellectual Property system. This paper will investigate the tension between the principle of territoriality and the global harmonization of intellectual property standards in the context of the current iteration of intellectual property as an asset in investment agreements. Specifically, it will critically examine how this tension was resolved in two recent investment arbitration disputes. The first is the dispute between Philip Morris and Uruguay which concerned the latter’s implementation of certain measures to curb the consumption of tobacco products in its country but which Philip Morris construed as an expropriation of its trademarks. The second is the dispute between Eli Lilly and Canada which concerned the interpretation of the utility requirement under Canadian patent law. These cases will be used to assess whether there is still scope for the preservation of the principle of territoriality within the ISDS system.