Intangible Assets and the Alchemy of Investment Law

Description

Two remarkable developments have occurred over the last three decades: the phenomenal growth of intangible assets and the rapid development of international investment law. These phenomena, rarely studied concomitantly, are in fact co-constitutive. It is well known that the largest companies by market capitalisation today tend to be intangible-asset-heavy companies, with intangible assets sometimes accounting for over 80% of total company value. Although a not insignificant part of these intangible assets is of the ‘unidentifiable’ kind, a large proportion is identifiable in the form of intellectual property rights (IPRs).

This shift in the value composition of capitalism has gone hand in hand with the expansion of the global IPR regime, certainly, but also with the growth of international investment law. Investment treaties have multiplied rapidly in recent decades and currently weave almost every country into so comprehensive a web that foreign investment unprotected by a treaty is the exception today.

A controversial development has been the treatment of IPR as “investment” in a number of investor-state dispute settlement cases; the ability to constitute an alleged violation of IPRs as an investment treaty breach affords private right-holders a truly unique and unprecedented opportunity to vindicate one of, if not their most important source of wealth.