WTO TRIPS Agreement

MHROD 2010

A. Background: The Uruguay Round TRIPS Agreement

• Uruguay Round TRIPS Agreement is one of four new agreements negotiated during the UR Round that deal with a substantive area totally new & not previously governed by any part of the GATT’47 (the others being Agriculture, Services, & Trade-Related Investment Measures (TRIMS)).

• It incorporates by reference a number of other essentially unenforceable international agreements or conventions on aspects of IPR.

• After the Uruguay round, the GATT became the basis for the establishment of the World Trade Organization.

• Because ratification of TRIPS is a compulsory requirement of World Trade Organization membership, any country seeking to obtain easy access to the numerous international markets opened by the World Trade Organization must enact the strict intellectual property laws mandated by TRIPS.

• For this reason, TRIPS is the most important multilateral instrument for the globalization of intellectual property laws.

• States like Russia and China that were very unlikely to join the Berne Convention have found the prospect of WTO membership a powerful enticement

• Furthermore, unlike other agreements on intellectual property, TRIPS has a powerful enforcement mechanism. States can be disciplined through the WTO's dispute settlement mechanism.

Something Special About TRIPS:

• TRIPS is the only GATT/WTO Framework agreement that incorporates the provisions of other essentially unenforceable international agreements & makes them enforceable under the GATT/WTO Dispute Settlement process, e.g.,

- The Berne Convention (1971) relating to Copyright & Related Rights

- The Paris Convention (1967) relating to Industrial Property The IPIC Treaty [Integrated Circuits] (1989 ).

• But TRIPS goes beyond the Paris & Berne Conventions to provide additional protection by establishing minimum standards for the protection of intellectual property rights.

Structural Outline of the TRIPS Agreement

Part I: General Provisions & Basic Principles (Arts.1-8)• * Includes: - Nature & Scope of Obligations• - IPR Conventions (Paris, Berne, IPRIC)• - National Treatment - MFN Treatment• - Objectives for IPR Enforcement Part II: Standards Concerning the Availability, Scope, & Use of IPRs (Arts. 9-40):• Section 1 – Copyright & Related Rights (Arts. 9-14)• Section 2 - Trademarks (Arts. 15-21)• Section 3 - Geographical Indications (Arts. 22-24)• Section 4 - Industrial Designs (Arts. 25,26)• Section 5 - Patents (Arts. 27-34)• Section 6 - Layout Designs [Integrated Circuits] (Art. 35-38)• Section 7 - Undisclosed Information [Trade Secrets] (Art. 39)• Section 8 - Anti-Competitive Practices in Contractual Licenses• (Art. 40)

Part III: Enforcement of IPR (Arts. 41-61)• Section 1 - General Obligations (Art. 41)• Section 2 - Civil & Administrative Procedures/Remedies (Arts. 42-

49)• Section 3 - Provisional Measures (Art. 50)• Section 4 - Special requirements for Border Measures (Arts. 51-60)• Section 5 - Criminal Procedures (Art. 61)• Part IV: Acquisition & Maintenance of IPRS & Related Inter-Partes

Procedures (Art. 62)• Part V: Dispute Prevention & Settlement (Arts. 63,64)• Part VI: Transitional Arrangements (Arts. 65-67) [in particular]:• Article 66 – Least-Developed Country Members• Article 67 - Technical Cooperation

What is the “TRIPS” Agreement?

• The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) is an international agreement administered by the World Trade Organization (WTO)

• that sets down minimum standards for many forms of intellectual property (IP) regulation as applied to nationals of other WTO Members.

• It was negotiated at the end of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) in 1994.

• It deals with the protection & enforcement of “Trade-Related” intellectual property “rights”.

Intellectual Property

• What is “Intellectual Property”?• Intellectual Property comprises 2

distinct forms:• * Literary & Artistic Works• * Industrial Property

What are “Literary & Artistic Works”

• They are books, paintings, musical compositions,

• plays, operas, movies, radio/tv programs,• performances, & other artistic works.

How are they Protected?

• They are protected by “Copyright” which provides the individual “author” or “artist” the exclusive right to do certain things with an “original work”, including the right to reproduce, publish, perform the work in public, & to make adaptations of it & benefit thereby.

What is “Industrial Property”?

• Industrial Property describes physical matter that is the product of an idea or concept or design (other than matter subject to Copyright) that is developed specifically for commercial purposes.

What does “Industrial Property” include?

• Patented objects • Layout-designs of Integrated Circuits• Trademarks• Industrial Designs • Geographical Indications• Trade Secrets

Introduction to Intellectual Property Rights (IPR)

• Why Protect “Intellectual Property”?1) Because companies & individuals expend a lot of investment in time, energy, & money into conceptualization & production of new & innovative products & processes (services) & they have a right, at least for a period of time, to:• have their name associated with their product and/or their

authorship associated with it• get paid for their efforts & to recover their investment, & • frustrate the efforts of “free riders” to make money off their efforts &

investment whilst not having any input.2) So authors & inventors have a right to be protected for their efforts.3) Protection stimulates creativity and innovation necessary for

productivity, competitiveness, and national economic development.

B. Relevancy of IPR to International Trade & Investment

1) The rationale for IPR provisions in the GATT/WTO Framework (& other trade agreements) is to ensure that IPR enforcement is consistent with free trade principles of effective market access & non-discrimination.

2) Trade will be inhibited (& foreign direct investment frustrated) if the laws of a country do not protect the IPR of its trading partners and/or prospective investors, but, overzealous enforcement of IPR can also inhibit trade by putting traders at a competitive disadvantage.

IPR Protection - Definitions of Terms:

• Patent – is the right given to inventors to have protected exclusive use for specified period of time (“term”)

for making, using, or selling a new, useful, non-obvious invention. Patents are available for both products & processes.

• Copyright – is the exclusive right to do certain things with an original work,

including the right to reproduce, publish, perform the work in public,

& to make adaptations of it. Copyright does not protect ideas as such, but only the original expression of ideas.

• Trademark – consists of any sign, or combination of signs,capable of distinguishing the goods or services of one person from

those of another, including personal names, designs, letters,numerals, colours,

figurative elements, shape of goods, or their packaging.

TMs include service marks, collective marks, & may include certification marks.

• Trade Secrets – are information deriving its value from not being known or available to the

public, competitors, or other parties who might otherwise gain benefit from its disclosure or use.

• Geographical Indications – (sometimes called appellations of origin)

are any indication that identifies a product as originating in the territory of a Member,or a region or locality therein,

for reason of which a particular quality, reputation, or other characteristic of the product is essentially attributable to geographical origin.

• Industrial Design – is the shape, configuration, pattern, or ornamentation of a useful article but not a method or principle of construction

General TRIPS Principles/Requirements RelevantTo ALL IPR Covered Under the Agreement:

• While A Member may implement more extensive IPR protection than provided in TRIPS,

such increased protection may not contravene provisions of TRIPS.

• Members must accord nationals of other WTO members the treatment provided for in TRIPS, e.g., “most favoured

nation” or “MFN” treatment. &• A WTO Member must accord nationals of other WTO

members treatment no less favourable than it accords to its own nationals, e.g., “national treatment”.

TRIPS Agreement: Main Provisions on Patents

1. Patents shall be granted for any inventions, whether products or processes, provided they are new, involve an inventive step, & are capable of industrial application.

2. Patents shall be granted in all fields of technology. No discrimination is allowed with respect to the place of invention, or based on whether the products are locally-produced or imported.

3. Members can exclude from patentability diagnostic, therapeutic, & surgical methods of treatment for humans or animals, as well as plants & animals & biological process for the production thereof.

4. Plant varieties shall be protected by patents, an effective sui generis(unique)regime, or a combination of both.

5. Exclusive rights conferred in the case of product and process patents are defined, subject in the case of imports, to the principle of exhaustion.

6. Inventions shall be disclosed in a manner which is sufficiently clear & complete for a skilled person in the art to carry out the invention. Indication of the best code of carrying out the invention, as well as information concerning corresponding patent applications & grants,

may be required.

7. Limited exceptions to the exclusive rights can be defined by national laws (TRIPS Art. 30)

8. Conditions for granting other uses without authorisation of the patent-holder (compulsory licenses) are set forth – Members can determine the grounds to allow such uses.9. Revocation/forfeiture of a patent is subject to judicial review.10. The term of protection shall be at least 20 years from the date of

application.

Copyright

• Many of the TRIPS provisions on copyright were imported from the Berne Convention

for the Protection of Literary and Artistic Works and

many of its trademark and patent provisions were imported from the

Paris Convention for the Protection of Industrial Property

TRIPS Agreement: Main Provisions on Copyright

1) Protection of works covered by the Berne Convention, excluding moralrights to the expression but not the ideas, procedures, methods ofoperation, or mathematical concepts as such.2) Protection of computer programs as literary works & of compilations ofdata.3) Recognition of rental rights, at least for phonograms, computer programs,& for cinematographic works (except if rental has not led to widespreadcopying that impairs the reproduction rights).4) Exceptions to exclusive rights must be limited to special cases which donot conflict with normal exploitation of the work & do not unreasonablyprejudice the legitimate interests of the rights-holder.5) Recognition of the 50 year minimum exclusivity term for works (otherthan photographic or applied artworks) owned by juridical persons & forperformers & phonogram producers.6) Recognition of rights of performers, producers of phonograms, &broadcasting organisations.

TRIPS Agreement: Provisions on Trademarks

1) Definition of protected signs, e.g., those capable of distinguishing the goods or services of one undertaking from those of other under-takings. Service marks receive protection equivalent to that for marks for goods.

2) Registrability, but not filing of an application, can be dependent on use.

3) Protection of well-known TMs for goods & services, including if knowledge thereon is acquired through their promotion.

4) Exceptions to exclusivity must be limited & take into account the legitimate interests of the TM owner & of third parties.

5) The minimum term of protection is 7 years, indefinitely renewable.6) Requirements for use are to be limited in terms of both the minimum

period of non-use & the admissibility of reasons there for.7) A TM may be assigned without transfer of the business.8) Measures to combat trade in counter-feiting products should be

available at the border.

TRIPS Agreement: Provisions on Industrial Designs

1) Protection should be conferred on designs which are

• new or original.2) Requirements for protection of textile designs

should• not impair the opportunity to obtain such

protection.3) Exclusive rights can be exercised against acts

for• commercial purposes, including importation.4) The minimum term of protection is 10 years.

TRIPS Agreement: Provisions forLayout Designs for Integrated

Circuits:1) The layout designs (topographies) of integrated circuits shall be protected according to the provisions of the Washington Treaty of 1989, except those specifically excluded by that Agreement, e.g., provisions on compulsory licenses.2) Protection shall extend to layout designs as such & to the industrial articles that incorporate them.3) Bona fide purchasers of products involving infringing layout designs shall be liable to pay a compensation to the rights-holder after notification.4) The term of protection is a minimum of 10 years.

TRIPS Agreement: Provisions for Trade Secrets

1) Undisclosed information is to be protected against unfair commercial practices, if the information is secret, has commercial value, & is subject to steps to keep it secret.2) Secret data submitted for the approval of new chemical entities for pharmaceutical & agrochemical products should be protected against unfair commercial use & disclosure by governments.

TRIPS Agreement: Provisions forGeographical Indications

1) WTO Members are obligated under TRIPS Art. 22.2 to provide legal means for interested parties to prevent: use of any means in the designation or presentation of a good that indicates or suggests that the good in question originates in a geographical area other than the true place of origin in a manner that misleads the public as to its true origin; or any use that constitutes an act of unfair competition within the meaning of Paris Convention of 1967.2) Members are also required to refuse or invalidate registration of a TM that contains or consists of a geographical indication with respect to goods not originating in the territory indicated, if it would mislead the public as to the true place of origin.

Doha Round• In 2001, developing countries, concerned that developed

countries were insisting on an overly narrow reading of TRIPS, initiated a round of talks that resulted in the Doha Declaration.

• The Doha declaration is a WTO statement that clarifies the scope of TRIPS, stating for example that TRIPS can and should be interpreted in light of the goal "to promote access to medicines for all.“

• The TRIPS agreement introduced intellectual property law into the international trading system for the first time and remains the most comprehensive international agreement on intellectual property to date.

The TRIPS Agreement & the Doha Round:

• A number of developing & LDC Members of the WTO have expressed concerns about certain provisions of the TRIPS Agreement relating to:

• TRIPS’ provisions regarding patents for pharmaceuticals & their access to medicines & maintenance of public health;

• Regulation of Biodiversity & origin of Genetic Resources;

• Regulation of Biotechnology; &• Protection of Traditional & Indigenous

Knowledge.

• Some developed countries (EU) want an expansion of the TRIPS regulatory rules for Geographical Indications.

The Doha WTO Ministerial Declaration the TRIPSAgreement & Public Health, 14 November 2001,

stated, inter alia:

• We recognize that intellectual property protection is important for the development of new medicines. We also recognize the concerns about its effects on prices.• We agree that the TRIPS Agreement does not and should not prevent members from taking measures to protect public health. Accordingly, while reiterating our commitment to the TRIPS Agreement, we affirm that the Agreement can & should be interpreted & implemented in a manner supportive of WTO members’ right to protect public health &, in particular, to promote access to medicines for all.”

Non Tariff Measures

• Non Tariff Measures (NTMs) are all measures other than normal tariffs namely trade related procedures, regulations, standards, licencing systems and even trade defense measures such as anti-dumping duties etc which have the effect of restricting trade between nations. Some of these measures could be justified under the provisions or the exceptions provided under the various multilateral agreements governing international trade. On the other hand,  certain non tariff measures which cannot be justified under any of these legal provisions are normally termed as non tariff barriers (NTBs).

• With the lowering of tariffs across the globe, NTMs have come into prominence with Members using these measures to erect entry barriers for goods and services. It is therefore, not surprising that the developed countries with relatively lower tariffs are the more prolific users of NTMs / NTBs especially to keep out developing country

exports. • The details of some of the major NTMs that are maintained against Indian exports are

as under: 

Some of them are :United States Increased Marine products inspections under the Bio-

Terrorism Act, Customs Bond requirement, Mandatory labeling discriminating “farm raised” and “wild” with punitive fines and non-recognition of EIC certification

Australia Mangoes Australia maintains ban on the pretext of  the presence of fruit flies and stone weevils.

China Agricultural products Opacity of Sanitary and Phytosanitary (SPS) measures and delays in giving clearances

Uzbekistan All products Cumbersome procedure for registration and certification, a custom processing fee @ 0.7% of value and lengthy procedure for conversion of hard currency as well as profit repatriation

India’s Action

• With a view to strengthening its  information base on NTMs/ NTBs, the Department of Commerce has attempted to put in place a database of NTMs/ NTBs imposed by trading partners on its exports

International Trade Agreements

• Agreements already concluded

• Asia Pacific Trade Agreement APTA• CECA between The Republic of India and the Republic of Singapore • India Chile PTA(Preferential Trade Agreement) • India Afghanistan PTA • India Bangladesh Trade Agreement• India Bhutan Trade Agreement• India China Trade Agreement • India Japan Trade Agreement • India MERCOSUR PTA • India Nepal Trade Treaty • India Sri Lanka FTA (Free Trade Agreement)

MERCOSUR• MERCOSUR is a trading bloc in Latin America comprising Brazil, Argentina, Uruguay and Paraguay. It has Chile and Bolivia as its associate members. MERCOSUR was formed in 1991 with the objective of facilitating the free movement of goods, services, capital and people among the four member countries. MERCOSUR has become a successful market of about 200 million people, representing about 1 trillion dollars of GDP and 190 billion dollars of trade. It is the fourth largest integrated market after the European Union (EU), North

American Free Trade Agreement (NAFTA) and ASEAN.

Other Agreements/ Negotiations

• Framework Agreement with ASEAN • Framework agreement with Chile • Framework Agreement with GCC States(The Member States of the Cooperation

Council for the Arab States of the Gulf i.eThe Governments of the United Arab Emirates, the Kingdom of Bahrain, the Kingdom of Saudi Arabia, the Sultanate of Oman, the State of Qatar and the State of Kuwait, that are parties to the Charter of the Cooperation Council for the Arab States of the Gulf, or GCC)

• Framework Agreement with Thailand • India EU Trade and Investment Agrement TIA • India US Trade Policy Forum • Joint Statement India Ceylon Trade Agreement • India DPR Korea Trade Agreement • India EU Strategic Partnership Joint Action Plan • India Korea Joint Study Group • India Korea Trade Agreement • India Maldives Trade Agreement • India Mongolia Trade Agreement • India Pakistan Trading Arrangement • India United States Commercial Dialogue •  

Recent Developments regarding TRIPS

• Access to essential medicines• The most visible conflict has been over AIDS drugs in Africa. Despite the role which patents have played in maintaining higher drug costs for public health programs across Africa, this controversy has not led to a revision of TRIPs. • Instead, an interpretive statement, the Doha Declaration, was issued in November 2001, which indicated that TRIPs should not prevent states from dealing with public health crises. After Doha, PhRMA, the United States and to a lesser extent other developed nations began working to minimize the effect of the declaration.• A 2003 agreement loosened the domestic market requirement, and allows developing

countries to export to other countries where there is a national health problem as long

as drugs exported are not part of a commercial or industrial policy. Drugs exported under such a regime may be packaged or colored differently to prevent them from prejudicing markets in the developed world.• In 2003, the Bush administration also changed its position, concluding that generic treatments might in fact be a component of an effective strategy to combat HIV. Bush created the PEPFAR program, which received $15 billion from 2003-2007, and was reauthorized in 2007 for $30 billion over the next five years. Despite wavering on the issue of compulsory licensing, PEPFAR began to distribute generic drugs in 2004-5

• Software and business method patents

• Another controversy has been over the TRIPS Article 27 requirements for patentability "in all fields of technology", and whether or not this necessitates the granting of software and business method patents.

TRIPS and Developing Countries

• The obligations under TRIPS apply equally to all member states, however developing countries were allowed extra time to implement the applicable changes to their national laws, in two tiers of transition according to their level of development.

• The transition period for developing countries expired in

2005. The transition period for least developed countries was extended to 2016, and could be extended beyond that.

• Developed countries are massive net-exporters of copyright-, patent- and trademark-related royalties. • It has therefore been argued that the TRIPS standard of requiring all countries to create strict intellectual property systems will be detrimental to poorer countries' development• Many argue that it is, prima facie, in the strategic interest of most if not all underdeveloped nations to use any flexibility available in TRIPS to write the weakest IP laws possible.• This has not happened in most cases. A 2005 report by the WHO found that many developing countries have not incorporated TRIPS flexibilities (compulsory licensing, parallel importation, limits on data protection, use of broad research and other exceptions to patentability, etc) into their legislation to the extent authorized under

Doha.

• This is likely caused by the lack of legal and technical expertise needed to draft legislation that implements flexibilities, • which has often led to developing countries directly copying developed country IP legislation,or relying on technical assistance from the World Intellectual Property Organization (WIPO), which, according to critics such as Cory Doctorow, encourages them to implement stronger intellectual property monopolies.

Post-TRIPS expansionism

• The requirements of TRIPS are, from a policy perspective, extremely stringent. Despite this, lobbyists for the industries that benefit from various intellectual property laws have continued since 1994 to campaign to strengthen existing forms of intellectual property and to create new kinds:

• The creation of anti-circumvention laws to protect Digital Rights Management systems.

This was achieved through the 1996 World Intellectual Property Organization Copyright Treaty (WIPO Treaty)

and the WIPO Performances and Phonograms Treaty. • The desire to further restrict the possibility of compulsory licenses for patents has led to provisions in recent bilateral US trade agreements. • It is one thing for states to have intellectual property laws on their statutes, and another for governments to enforce them aggressively. This distinction has led to provisions in bilateral agreements, as well as proposals for WIPO and European Union rules on intellectual property enforcement. The 2001 EU Copyright Directive was to implement the 1996 WIPO Copyright Treaty.

Comparison of India’s Patent Act and TRIPs

•

INDIAOnly process not product patents in food,

medicines, chemicals

TRIPSProcess and product patents in almost all

fields of technology

Term of patents 14 years; 5-7 in chemicals, drugs

Term of patents 20 years

Compulsory licensing and license of right Limited compulsory licensing, no license of right

Several areas excluded from patents (method of agriculture, any process for medicinal surgical or other treatment of humans, or similar treatment of animals and plants to render them free of disease or increase economic value of products)

Almost all fields of technology patentable. Only area conclusively excluded from patentability is plant varieties; debate regarding some areas in agriculture and biotechnology

Government allowed to use patented invention to prevent scarcity

Very limited scope for governments to use patented inventions

• India’s Patent Policy and Negotiations in TRIPs:Future Options for India and other Developing Countries

• Dr. Anitha Ramanna

Controversy • Since TRIPS came into force it has received a growing level of criticism from developing countries, academics, and Non-

governmental organizations. Some of this criticism is against the WTO as a whole, but many advocates of trade liberalization also regard TRIPS as bad policy (see, for example, Jagdish Bhagwati's In Defense of Globalization for a discussion on the detrimental effect of TRIPS on access to medicines in developing countries). • TRIPS' wealth redistribution effects (moving money from people in developing countries to copyright and patent owners in developed

countries) and its imposition of artificial scarcity on the citizens of countries that would otherwise have had weaker intellectual property laws, are a common basis for such criticisms.