TNAG-1927-FCO40-2744-Future-of-Hong-Kong-Sino-British-Joint-Liaison-Group-sub-gro-1989 — Page 24

Notes on Article 5

53.

Ad paragraph (1): This paragraph provides for the so-called national treatment principle. According to that principle, each Contracting Party is obliged to accord to natural persons who are nationals of, or are domiciled in the territory of, any of the other Contracting Parties, and to legal entities which or natural persons who have a real and effective industrial

[or commercial] establishment in the territory of any of the other Contracting Parties, the same protection that it accords to its own nationals.

54. "Protection" includes not only the recognition of the rights of the foreign holder of the right but also offering him, in the case of any violation of his rights, the same legal remedies as those that are available to domestic holders of the right.

55. During the fourth session of the Committee of Experts, reservations were expressed by some delegations concerning the extension of national treatment to natural persons who were neither nationals of, nor domiciled in, a Contracting Party, but who had only a real and effective industrial or commercial establishment in a Contracting Party. The text of Article 5(1) continues to provide for the extension of national treatment in such circumstances. The failure to extend national treatment in such circumstances would represent a departure from the scope of the principle of national treatment usually included in treaties administered by WIPO (see, for example, Article 3 of the Paris Convention for the Protection of Industrial Property).

The

56. In accordance with the views expressed by several delegations during the fourth session of the Committee of Experts that national treatment should not be extended to legal entities or natural persons having only a real and effective commercial establishment in a Contracting Party, the words "or commercial" in subparagraph 5(1)(ii) have been placed in square brackets. deletion of these words would mean that a Contracting Party would not be obliged to extend national treatment to legal entities which, or natural persons (not being nationals of a Contracting Party) who, do not have industrial operations in the territory of another Contracting Party. effect, the deletion of the words in question would require the legal entities and natural persons of a non-Contracting Party to establish industrial operations in the territory of a Contracting Party in order to be assured of the benefits of protection under the Treaty by virtue of the principle of national treatment. Such a result would effectively work to the prejudice of the legal entities and natural persons of non-Contracting Parties.

In

57. The words "without prejudice to the protection provided in this Treaty" are inserted out of an abundance of caution to make it clear that national treatment cannot be used as a basis for extending to foreigners a level of protection which is less than that required by the provisions of the Treaty. Thus, and for example, if the law of a Contracting Party did not, as far as its own nationals are concerned, grant the rights provided for in Article 6 (possibly subject to the same limitations that are permitted by that Article), or provided for a term of protection shorter than the term provided for in Article 8, a national of another Contracting Party who invoked the Treaty would nevertheless be entitled to the said rights and the said term of protection. The example is, however, largely hypothetical, since it is unlikely that any Contracting Party would grant less rights, or a protection for a lesser duration, to its own nationals than to foreigners.

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