Globalization and the Technology StandardsGame: Balancing Concerns of Protectionismand Intellectual Property in InternationalStandards

Christopher Gibson, Suffolk University Law School, Associate Professor of Law

1/12/2008
(Original Publish Date: 1/1/2007)

Standards for technology have become a significant factor in international trade. Intellectual property (“IP”) is central to the development of standards, particularly in ICT industries. This article explores the relationship between standards, IP and international trade. I focus, as a test-case, on China’s development of a proprietary encryption standard for wireless communications - the WAPI standard. In May 2003, China approved the WAPI standard and decreed that by December of that year, all wireless devices sold or imported into China would be required to incorporate this technology. This mandatory approach would have fractured the world market for wireless products, raising trade law concerns. Under pressure from the U.S., China later suspended its mandate. An uneasy tension arises from obligations in the WTO’s Agreement on Technical Barriers to Trade (“TBT Agreement”) to use relevant international standards, and the possibility that their adoption will entail payment of royalties to foreign IP owners. The claim against China has been that it is focusing on home-grown standards, to the detriment of existing international standards. China has responded that the mandatory adoption of international standards does not come without cost, particularly for developing countries. It has complained of unfair treatment when seeking to participate in the international standards system, contending that IP rights create obstacles to trade.