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Agreement on Trade-related Aspects of Intellectual Property Rights

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Background Edit

There was no single international source for intellectual property obligations and norms until the 1994 Uruguay Round of the General Agreement on Tariffs and Trade (GATT), which created the World Trade Organization (WTO) and included the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

TRIPS requires all WTO Members to provide minimum standards of protection for a wide range of Intellectual-property rights including copyright, patents, trademarks, industrial designs, geographical indications, semiconductor topographies and undisclosed information. In doing so, TRIPS incorporates provisions from many existing IP international agreements such as the Paris and Berne Conventions administered by the World Intellectual Property Organisation (WIPO). TRIPS however also introduces a number of new obligations, particularly in relation to geographical indications, patents, trade secrets, and measures governing how IP rights should be enforced.

The significance of the TRIPS Agreement is three-fold:

(1) It is the first single, truly international agreement that establishes minimum standards of protection for several forms of intellectual property rights (IPR);
(2) It is the first international intellectual property agreement that mandates detailed civil, criminal, and border enforcement provisions; and
(3) It is the first international intellectual property agreement that is subject to binding, enforceable dispute settlement.

The United States, the European countries, and the IPR business community were instrumental in including IPR on the Uruguay Round agenda. Many developing countries were wary of including IPR in trade negotiations, preferring to discuss them under the World Intellectual Property Organization (WIPO) instead. However, developing countries acceded, after being granted delayed compliance periods, and after achieving negotiating goals on other issues such as textiles and clothing, and savoring the prospect of operating under a rules-based trading system.

While previous international agreements on intellectual property rights continue to exist, the TRIPS Agreement was the first time that intellectual property rules were incorporated into the multilateral trading system.

Two basic tenets of the TRIPS Agreement are national treatment (signatories must treat parties of other WTO members no less favorably in terms of IPR protection than the party’s own nationals) and most-favored-nation treatment (any advantage in IPR protection granted to the party of another WTO member shall be granted to nationals of all other WTO member states).

Because the TRIPS Agreement is over decade old, however, it does not address several new developments, such as the Internet and digital copyright issues, advanced biotechnology, and international harmonization (the process of creating uniform global standards of laws or practice).[1]

TRIPS Council Edit

The Council for TRIPS (commonly known as the "TRIPS Council"), on which each WTO Member is represented, was established to administer the operation of the TRIPS. The TRIPS Council is responsible for reviewing various aspects of TRIPS as mandated in the agreement itself and also as requested by the biennial WTO Ministerial Conference.

TRIPS coverage Edit

TRIPS establishes minimum standards for the availability, scope, and use of seven forms of intellectual property: copyrights, trademarks, geographical indications, industrial designs, patents, layout designs for integrated circuits, and undisclosed information (trade secrets). It spells out permissible limitations and exceptions in order to balance the interests of intellectual property with interests in other areas, such as public health and economic development.[2]

The TRIPS Agreement provisions build on several existing IPR treaties administered by the WIPO. Another part provides standards of enforcement for IPR covered by the agreement. It enumerates standards for civil and administrative procedures and remedies, the application of border measures, and criminal procedures.

Finally, the agreement provides for the resolution of disputes under the Uruguay Round Agreement’s Dispute Settlement Understanding (DSU). The binding nature of the DSU, with the possibility of the withdrawal of trade concessions (usually the reimposition of tariffs) for non-compliance, sets this agreement apart from previous IPR treaties that did not have effective dispute settlement mechanisms.

The TRIPS Agreement also seeks a balance of rights and obligations between the private right, enumerated above, and the obligation “to secure social and cultural development that benefits all.” Article 7 declares that:

. . . the protection and enforcement of IPR should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare and to a balance of rights and obligations.

This paragraph attempts to link the protection of IPR with greater technology transfer, including technology covered by IPR protection, to the developing world. The language itself has been interpreted in various ways. Developed countries have tended to consider this language exhortatory, but developing countries have tried, without much success, to make technology transfer a meaningful obligation within the TRIPS Agreement system. Article 66.2 of the agreement requires developed country members to provide incentives to their enterprises and institutions to promote technology transfer to least-developed countries to assist them in establishing a viable technology base. Developed countries report annually on their efforts to encourage technology transfer.

General Provisions Edit

The TRIPS Agreement requires each WTO member state to observe the standards of “national treatment” and “most favored nation” with respect to its intellectual property laws.[3]

National Treatment Edit

Following the national treatment principle, WTO members agree to treat foreign inventors no worse than domestic inventors in their patent laws, so long as these foreign inventors are nationals of a WTO member state. It would be impermissible, for example, for the USPTO to charge nationals of a WTO member state a higher application fee than is required of U.S. citizens, or to provide a shorter patent term for such inventors than is granted to U.S. inventors.

Most Favored Nation Edit

Under the most favored nation provision, with limited exceptions, any privilege granted to nationals of one WTO member state must also be afforded to nationals of all WTO member states.[4]

The TRIPS Agreement also requires each WTO member state to comply with certain provisions of earlier international agreements pertaining to intellectual property.[5] These treaties include the Berne Convention,[6] which relates to copyrights; the Paris Convention,[7] which concerns patents and trademarks; and the Treaty on Intellectual Property in Respect of Integrated Circuits,[8] concerning semiconductor chip topography designs.

Copyrights Edit

The TRIPS Agreement obligates each WTO member state to provide a term of copyright protection of no less than 50 years from the death of the author.[9] The TRIPS Agreement additionally requires WTO member states to protect computer programs as literary works.[10] Protection must also be accorded to data compilations that, by virtue of their selection or arrangement, constitute “intellectual creations.”[11]

The TRIPS Agreement also calls for “rental rights” — the right to authorize or prohibit the commercial rental to the public of a protected work of authorship — with respect to computer programs and cinematographic works.[12]

Patents Edit

Following the TRIPS Agreement, each WTO member state agreed to allow patents to issue on inventions “in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application.”[13] The TRIPS Agreement includes some exceptions to this broad principle, however. Certain methods of medical treatment, plants and animals other than microorganisms, and inventions that violate the “ordre public or morality” may be excluded from patentability at the option of the member state.[14]

WTO member states also agreed that patentees shall have the right to exclude others from making, using, offering for sale, selling, or importing the patented invention,[15] subject to limited exceptions.[16] The TRIPS Agreement further stipulates that the term of patent protection available shall not end before the expiration of a period of 20 years counted from the filing date.[17] The TRIPS Agreement places some limits upon the ability of WTO member states to award compulsory licenses for the use of another’s patented invention.[18]

Among the most detailed provisions of the TRIPS Agreement, Article 31 in part imposes the following restrictions upon the issuance of compulsory licenses:

  • Each application for a compulsory license must be considered on its individual merits.
  • The proposed user must have made efforts to obtain authorization from the patent owner on reasonable commercial terms and conditions and must demonstrate that such efforts have not been successful within a reasonable period of time. However, this requirement may be waived in the case of a national emergency or other circumstances of extreme urgency.
  • The compulsory license must be revocable if and when its motivating circumstances cease to exist and are unlikely to recur.
  • The patent owner must be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization.
  • The legal validity of any decision relating to the authorization of such use shall be subject to judicial or other independent review.
  • Any such use shall be authorized predominantly for the supply of the domestic market of the member authorizing such use.

Many nations considered the last of the restrictions noted above — requiring that any compulsory license be authorized predominantly for local use — to be a burdensome standard. Some countries may lack the technological or financial capabilities to manufacture advanced products, including certain pharmaceuticals needed to combat AIDS or other epidemics.

Trademarks Edit

The TRIPS Agreement provides that “[a]ny sign, or combination of signs, capable of distinguishing the goods or services of one undertaking from those of other undertakings, shall be capable of constituting a trademark.” The TRIPS Agreement further requires that a trademark owner, with some exceptions,[19] “shall have the exclusive right to prevent all third parties not having the owner’s consent from using in the course of trade identical or similar signs for [[goods] or services which are identical or similar to those in respect of which the trademark is registered where such use would result in a likelihood of confusion.”[20] Trademarks that have become well-known in a particular country are entitled to additional protection.[21]

Trademarks are subject to a minimum term of seven years, which may be renewed indefinitely.[22] The TRIPS Agreement further stipulates that compulsory licensing of trademarks shall not be permitted.[23] Under this rule, legal requirements that foreign marks be used in conjunction with local marks are, as a general matter, prohibited.

Data Protection Edit

The TRIPS Agreement requires each WTO member state to establish protections for pharmaceutical and agricultural chemical test data under certain conditions. Although this obligation is stated succinctly in Article 39.3 of the TRIPS Agreement, it has proven controversial. Article 39.3 specifically provides:

Members, when requiring as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use. In addition, Members shall protect such data against disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use.

Many commentators have observed that, in contrast to the more specific wordings of many other TRIPS Agreements provisions, Article 39.3 establishes broad parameters using vague language.[24] In particular, terms such as “new chemical entities,” “considerable effort,” and “unfair commercial use” receive no further definition within the TRIPS Agreement. As a result, the precise nature of the obligations Article 39.3 imposes upon WTO member states is not entirely clear.[25]

Other Intellectual Property Rights Edit

The TRIPS Agreement also establishes minimum standards of substantive protection with respect to a number of other intellectual property rights. WTO member states must protect certain geographical indications, which are defined as “indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin.”[26]

They must also protect industrial designs, which consist of a shape, configuration, pattern, or ornament applied to an article manufacture.[27] In addition, they must also provide a cause of action for the misappropriation of trade secrets.[28]

Enforcement Edit

Along with other commitments made by WTO member states, TRIPS Agreement obligations are subject to enforcement through the WTO Dispute Settlement Body (DSB).[29] If one WTO member state believes that another member state is in violation of the TRIPS Agreement, the member states may enter into consultation through the DSB. If the member states cannot resolve their disagreement, the DSB will convene a panel to hear and resolve the dispute.

Panel decisions are subject to review by the DSB Appellate Body. The WTO Agreement calls for compensatory trade measures in circumstances where the DSB finds a WTO member state to be in violation of the TRIPS Agreement, yet that member state does not amend its laws. If the parties are unable to agree upon mutually acceptable compensation, then the complaining state may impose limited trade sanctions, such as heightened tariff rates commensurate with the determined injury resulting from the offending practice, against the other member state.[30]

Effective Dates Edit

The various patent portions of the TRIPS Agreement feature a variety of effective dates. These dates depend upon whether the WTO member state designates itself a developed, developing or least developed country. For WTO members other than developing and least developed countries, the compliance date for all requirements of the TRIPS Agreement was set to January 1, 1996.[31]

For signatory states designated as developing countries, the TRIPS Agreement set the general compliance date as January 1, 2000. However, there is one exception to this general date. If on January 1, 2000, a developing country did not extend patent protection to all areas of technology within the meaning of Article 27, that developing country may delay implementation of these provisions for an additional five years. Prior to the TRIPS Agreement, for example, many developing countries did not allow patents to issue on pharmaceuticals. The practical effect of this additional transition period was that developing countries did not need to allow patents concerning pharmaceuticals until January 1, 2005.

Least-developed countries are entitled to a lengthier transition period in implementing TRIPS Agreement obligations. Effective dates with respect to least-developed countries are found in the TRIPS Agreement itself, as well as the 2001 “Declaration on the TRIPS Agreement and Public Health” issued following the Doha Ministerial.

Following 2005 modifications to the text of the TRIPS Agreement, a least-developed country may delay implementing the TRIPS Agreement until July 1, 2013. A showing of hardship may qualify least-developed countries for further delays and other concessions.[32] The Doha Declaration further excuses least-developed country members from granting or enforcing patents on pharmaceuticals through January 1, 2016, without prejudice to their ability to seek other extensions of these transition periods.

The TRIPS Agreement does not oblige its signatories to protect subject matter that fell into the public domain prior to the time its obligations became effective.[33]

Debate on the TRIPS Agreement Edit

The TRIPS Agreement has generated considerable controversy. Some commentators believe that the TRIPS Agreement has led to large transfers of wealth from poor countries to the developed world, and in particular to the United States.[34] Others have contended that the introduction of strong intellectual property rights protection into the developing world restricts sustainable development and perpetuates their dependence upon developed nations.[35]

Proponents of the TRIPS Agreement instead believe that the introduction of full-fledged intellectual property laws around the globe will provide needed incentives for investment and innovation.[36]

Supporters also observe that the TRIPS Agreement was one component of a multi-faceted WTO agreement, and believe that the developing world obtained trade benefits in exchange for assuming obligations to protect intellectual property. Even after a decade of experience with the TRIPS Agreement, the exchange of views about possible reforms to the TRIPS Agreement continues at a brisk pace.

References Edit

  1. Since the conclusion of the TRIPS Agreement, the World Intellectual Property Organization has addressed digital copyright issues in the so-called Internet Treaties, namely the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT).
  2. For the complete text of the TRIPS Agreement, as well as an explanation of its provisions, see the WTO website.[1]
  3. TRIPS Agreement, art. 4.
  4. See Kevin J. Nowak, “Staying Within the Negotiated Framework: Abiding by the Non-Discrimination Clause of TRIPS Article 27,” 26 Mich. J. of Int'l Law 899 (2005).
  5. TRIPS Agreement, arts. 2, 9, 35.
  6. Berne Convention for the Protection of Literary and Artistic Works, Sept. 9, 1886, 828 U.N.T.S. 221.
  7. Paris Convention for the Protection of Industrial Property, Mar. 20, 1883, 13 U.S.T. 1.
  8. May 26, 1989, I.L.M. 1477.
  9. TRIPS Agreement, art. 12.
  10. Id., art. 10.
  11. Id.
  12. Id., art. 11.
  13. Id., art. 27(1).
  14. Id., art. 27(2).
  15. Id., art. 28.
  16. Id., art. 30.
  17. Id. at Art. 33.
  18. A “compulsory license” constitutes a statutorily created license that allows individuals to pay a royalty and use the invention without the patentee’s permission. Black’s Law Dictionary 938 (Bryan A. Gardner, ed., 8th ed. 2004).
  19. TRIPS Agreement, art. 17.
  20. Id., art. 16.
  21. Id.
  22. Id., art. 18.
  23. Id., art. 21.
  24. See Lorna Brazell, "A World United? The US Approach to the Protection of Regulatory Data (Jan. 12, 2005).[2])
  25. Compare G. Lee Skillington & Eric M. Solovy, “The Protection of Test and Other Data Required by Article 39.3 of the TRIPS Agreement,” 24 Northwestern J. of Int'l L. & Bus. 1 (2003), with Carlos Maria Correa, “Unfair Competition Under the TRIPS Agreement: Protection of Data Submitted for the Registration of Pharmaceuticals,” 3 Chicago J. of Int'l L. 69 (2002).
  26. TRIPS Agreement, art. 22.1.
  27. Black’s Law Dictionary 791 (Bryan A. Gardner, ed., 8th ed. 2004).
  28. TRIPS Agreement, art. 39. A trade secret has been defined as a “formula, process, device, or other business information that is kept confidential to maintain an advantage over competitors.” See James Pooley, Trade Secrets §1.01 (1998).
  29. Understanding on Rules and Procedures Governing the Settlement of Disputes, Apr. 15, 1994, WTO Agreement, Annex 2, Legal Instruments — Results of the Uruguay Round, vol. 31, 33 I.L.M. 1226 (1994).
  30. Mark Clough, “The WTO Dispute Settlement System — A Practitioner’s Perspective,” 24 Fordham Int'l L.J. 252 (2000).
  31. TRIPS Agreement, art. 65.
  32. TRIPS Agreement, art. 66.
  33. Id., art. 70.
  34. Frederick M. Abbott, “Intellectual Property Rights in Global Trade Framework: IP Trends in Developing Countries,” 98 American Soc'y of Int'l L. Proceedings 95 (2004).
  35. See A. Samuel Oddi, “TRIPS — Natural Rights and a ‘Polite Form of Economic Imperialism,’” 29 Vanderbilt J. of Transnational L. 415 (1996).
  36. See Jean Raymond Homere, “Intellectual Property Rights Can Help Stimulate the Economic Development of Least Developed Countries,” 27 Columbia J. of L. & the Arts (2004), 277.

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