What is the “mostfavored-nation (MFN)treatment” principle?
The principle of Most-Favored Nation (MFN) treatment, which is included in the TRIPS Agreement, is a traditional principle that originated in GATT and is not present in any other IP conventions. This principle is widely applied because any country wishing to join the WTO must sign the TRIPS Agreement, which is one of the WTO's three pillars. MFN treatment requires that any advantage, favor, privilege, or immunity granted by a member to the nationals of any other country must be immediately and unconditionally granted to the nationals of all other member states in terms of IP protection.
It is essential to differentiate the concept of MFN treatment from national treatment. The national treatment principle ensures that foreign nationals are treated the same as the nationals of a country, eliminating differences in treatment between foreigners and the nationals of the country. In contrast, under the MFN rule, nationals of different foreign countries must be treated consistently. For instance, the treatment accorded to American nationals in a country should also be given to German and Japanese nationals doing business in that country, with no prejudice to nationals of any member country. The aim of the MFN principle is to eliminate differences in treatment among foreign nationals.