The World Trade Organization issued approval on Monday for Antigua and Barbuda to impose sanctions on the United States that would authorize the suspension of  “certain concessions and obligations” that Antigua has “under international law to the United States in respect of intellectual property rights.”  The authorization would apply to obligations imposed on Antigua by the Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS Agreement”).

This authorization is the latest development in a long-running dispute between Antigua and the United States concerning the U.S. ban on online gambling, which, according to the Financial Minister of Antigua, has “devastated” the Antiguan economy.  After the online gambling ban was instituted, Antigua sought recourse with the WTO, who ruled in Antigua’s favor in 2004.  This latest decision is based on the WTO’s finding that the United States has failed to comply with the judgments issued against it and that Antigua is therefore permitted to sanction the United States.

This is the latest in WTO authorizations permitting “cross-retaliation” under the TRIPS agreement.  In 2009, Brazil sought to suspend its TRIPS obligations with respect to United States intellectual property in order to retaliate for the United States’ failure to comply with previous WTO rulings regarding cotton subsidies.  That request was granted, with the caveat that Brazil could retaliate via suspension of intellectual property rights only after reaching a threshold of $410M worth of other sanctions. Ultimately, Brazil did not suspend its TRIPS obligations.

Whether cross-retaliation under TRIPS is an effective way to force compliance with WTO judgments remains to be seen.  If Antigua goes forward with the suspension of United States intellectual property rights in Antigua, though, it could set a significant precedent for small nations seeking to impose sanctions on large exporters of intellectual property.