TRIPS and Corporate Social Responsibility: Unethical Equals Unfair Business Practices?

Abstract

The overall purpose of TRIPS is not only to further competition but also to further fair competition. This is, however, done rather indirectly through the implementation of IP rights and the determination of their scope and limitations. Apart from this, TRIPS does not monitor acts in trade and commerce under the aspect of commercial fairness. In particular, TRIPS does not deal with commercial practices in connection with the negative side effects of a globalized economy, which, for instance, outsources production to countries with laxer standards in the field of labour, environment, and human rights. If at all, this is regarded as the domain of Article 10bis of the Paris Convention, which expressly prohibits “any act contrary to honest practices in industrial or commercial matters”. This paper addresses the issue of whether Article 10bis of the Paris Convention is part of TRIPS—or whether TRIPS could at least be interpreted in such a manner as to (directly or indirectly) include a general prohibition of unfair competition. As a second step it addresses the question of whether the obligation to combat unfair commercial practices under the Paris Convention (and possibly also under TRIPS) in its turn can be extended to cases where a company disregards its own pledges of commitment to so-called “corporate social responsibility”. This relatively new strategy used frequently by multinational companies tries to establish a favourable image in the public perception—typically by more or less explicitly pledging to respect certain principles of “business ethics”. Can non-compliance with one’s own standards of corporate social responsibility, often presented on the company’s website, be contrary to “honest practices” pursuant to Article 10bis of the Paris Convention? And if so, can this in its turn (also) be in breach of TRIPS