Trips Agreement

TRIPS AGREEMENTINTRODUCTION: The intellectual property rights are private rights, but there is need for a multilateral framework of principles, rules and disciplines dealing with the intellectual property rights. The World Intellectual Property Organization (WIPO) and Paris Convention are already covering patents well. However, they lack the authority to enforce the law. The Agreements of WTO are subject to the common authority to enforce the law. The Agreement of WTO are subject to the common dispute settlement system, hence eforts to bring intellectual property under WTO are made as Trade-Related Aspects of Intellectual Property Rights (TRIPS). The TRIPS Agreement is added to the Agreement Establishing the World Trade Organization (WTO) as Annexure IC. It is multilateral Trade Agreement. The TRIPS is an integral Part of the WTO Agreement, binding of all members countries as per Article II of the WTO Agreement. The TRIPS Agreement has no annexes, or Ministerial Decisions unlike most of the other major WTO Agreements. The emphasis is on implementation TRIPS. Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) is an international agreement between the member nations of World Trade 1 TRIPS AGREEMENT Organization (WTO). TRIPS Agreement is aimed at harmonizing the Intellectual Property (IP) related laws and regulations worldwide. The TRIPS Agreement accomplishes this motive by setting minimum standards for protection of various forms of IP. The nations that are signatory to the TRIPS Agreement have to abide by these minimum standards in their national laws related to IP. The TRIPS Agreement generally sets out the minimum standards regarding the grant of rights to the owner of IP, enforcement requirements in the national laws, and settlement of disputes and remedies to those whose IP rights get infringed. The coverage of the TRIPS Agreement encompasses the various areas of IP including patents, trademarks, copyrights, geographical indications, industrial designs, etc. The objective of the TRIPS Agreement is to ensure the protection and enforcement of Intellectual Property Rights (IPR) to contribute to the promotion of technological innovation, transfer and dissemination of technology, mutual advantage of producers and users of technological knowledge in a manner that is conducive to social and economic welfare, and balance of rights and obligations, worldwide. TRIPS are a minimum standard agreement, and it encourages countries to provide a high level of protection for intellectual property and explicitly permits to do so. The TRIPS Agreement sets out the minimum protection that must be 2 TRIPS AGREEMENT given for each category of intellectual property rights in the national law of each WTO members country. The Agreement also lays down procedures and remedies to be provided by each country for intellectual property rights enforcement. The Paris Convention (1967) for Industrial Patents and the Berne Convention (1971) for Copyrights are the starting points of the TRIPS. Members are expected to comply with these standards. Similarly the obligations under the Rome Convention (1961) and the IPIC Treaty (1986) are also protected under TRIPS. TRIPS consists of seven Intellectual property items namely Copyright and related rights, trade marks, geographical indications, industrial designs, patents, integrated circuits and undisclosed information. It contains altogether 73 Articles in VII parts. 3 TRIPS AGREEMENT BACKGROUND AND HISTORY In 1944, for the frst time an international agreement was reached upon to govern the international monitory policy. This was called the Bretton Woods Agreement. The Bretton Woods Agreement created two institutions to govern the international monitory policy: International Bank for Reconstruction and Development (IBRD, the World Bank) in 1945 and the International Monetary Fund (IMF) in 1946. These were called the Bretton Woods Institutes. Subsequently, the General Agreement on Tarifs and Trades (GATT) was established in 1947 to harmonize the trade between various nations. GATT was the only multilateral instrument governing international trade from 1948 until the establishment of WTO in 1995. In all, eight rounds of negotiations were held under GATT. These rounds were held for refning the international trade and tarif rules. The frst fve rounds exclusively concentrated on the tarifs. The sixth round included discussion on anti-dumping measures as well which included provisions for member nations to control the dumping of goods into their territory by other nations which can afect the member nation’s economy. Further, the seventh round discussed tarif and non-tarif measures. The last GATT round was the Uruguay Round (1986-1994). The Uruguay Round, for the 4 TRIPS AGREEMENT frst time introduced discussions on trade related to agriculture, services and IPR. After long discussions and complex negotiations, fnally in 1994, WTO was established. WTO became efective from 1st January 1995. All the 123 nations that participated in the Uruguay Round became the members of WTO. India also became the member of WTO. At present WTO has 153 members i.e. almost 90% of World’s nations. WTO deals with the rules of trade between nations at a global or near-global level. The objective of WTO is to provide the common institutional framework for the conduct of trade relations among its member nations in matters related to the agreements and associated legal instruments. WTO is responsible for negotiating and implementing new trade agreements, and is in charge of monitoring member countries' adherence to all the WTO agreements, signed by the majority of the world's trading nations. Under the provisions of WTO, many new agreements, regulations, treaties and conventions were introduced to provide the framework for implementation, administration and operation of the multilateral trade agreements between member nations. All these agreements, treaties, conventions and regulations were based on two principles, namely: a) Most Favored Nation treatment: Equal treatment for nationals of all trading partners in the WTO; 5 TRIPS AGREEMENT b) National Treatment: Treating one’s own nationals and foreigners equally. Need of TRIPS To achieve the reduction of distortions and impediments to international trade, the member countries of the WTO recognized the following: i) There is the need to promote efective and adequate protection of intellectual property rights. ii) There is the need for new rules and disciplines concerning the intellectual property right; iii) There is the need to provide adequate standards and principles, scope and use of trade-related intellectual property rights; iv) There is the need to provide efective and appropriate means for the enforcement of trade-related aspects of intellectual property rights and settlement of disputes between governments regarding them; v) There is the need for the maximum fexibility in domestic implementation of laws and regulations in the least-developed countries. vi) There is the need to establish a mutually supportive relationship between the WTO and the World Intellectual Property Organization (WIPO) as well as other relevant international organizations. 6 TRIPS AGREEMENT To fulfll the above needs, the members’ countries of the WTO accepted the TRIPS Agreement. One of the important agreements among all of WTO Agreements is the TRIPS Agreement. The TRIPS Agreement has emerged as the most widely impacting agreement post WTO leading to harmonization of IP related laws and regulations among member nations. The TRIPS agreement came into force on 1st January, 1995. Taking into consideration the disparities in economic and technological developments among diferent member nations, WTO provided for diferent transition time periods in diferent member nations for application of these rules. After the Uruguay round, the GATT became the basis for the establishment of the World Trade Organization. Because ratifcation 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. 7 TRIPS AGREEMENT Furthermore, unlike other agreements on intellectual property, TRIPS has a powerful enforcement mechanism. States can be disciplined through the WTO's dispute settlement mechanism. 8 TRIPS AGREEMENT WHAT IS TRIPS AGREEMENT The TRIPS Agreement (hereinafter referred to as, the Agreement) is an international agreement administered by WTO that sets down minimum standards for many forms of IP regulations. The Agreement, which came into efect on 1st January, 1995 is till date the most comprehensive multilateral agreement on IP. The Agreement covers the following areas of IP: Copyrights and Related rights (i.e. the rights of performers, producers of sound recordings and broadcasting organizations) Trademarks (including service marks) Geographical Indications (including appellations of origin) Industrial Designs Patents (including the protection of new varieties of plants) 9 TRIPS AGREEMENT Layout-designs of Integrated Circuits Undisclosed Information (including Trade Secrets and Test Data) With respect to the above areas of IP, the Agreement governs the following issues: How basic principles of the trading system and other international IP agreements should be applied? How to give adequate protection to IPR? How countries should enforce IPR adequately in their own territories? How to settle disputes on IP between members of the WTO? Special transitional arrangements during the period when the new system is being introduced. The Agreement is the frst agreement under WTO under which the member nations are required to establish relatively detailed norms within their national legal systems, as well as to establish enforcement measures and procedures meeting minimum standards. The three important features of the Agreement are: Standards Enforcement Dispute Settlement 10 TRIPS AGREEMENT THE THREE MAIN FEATURES OF THE AGREEMENT ARE: STANDARDS: In respect of each of the main areas of intellectual property covered by the TRIPS Agreement, the Agreement sets out the minimum standards of protection to be provided by each Member. Each of the main elements of protection is defned, namely the subject-matter to be protected, the rights to be conferred and permissible exceptions to those rights, and the minimum duration of protection. The Agreement sets these standards by requiring, frst, that the substantive obligations of the main conventions of the WIPO, the Paris Convention for the Protection of Industrial Property (Paris Convention) and the Berne Convention for the Protection of Literary and Artistic Works (Berne Convention) in their most recent versions must be complied with. With the exception of the provisions of the Berne Convention on moral rights, all the main substantive provisions of these conventions are incorporated by reference and thus become obligations under the TRIPS Agreement between TRIPS Member countries. The relevant provisions are to be found in Articles 2.1 and 9.1 of the TRIPS Agreement, which relate, respectively, to the Paris Convention and to the Berne Convention. Secondly, the TRIPS 11 TRIPS AGREEMENT Agreement adds a substantial number of additional obligations on matters where the pre-existing conventions are silent or were seen as being inadequate. The TRIPS Agreement is thus sometimes referred to as a Berne and Paris-plus agreement. ENFORCEMENT: The second main set of provisions deals with domestic procedures and remedies for the enforcement of intellectual property rights. The Agreement lays down certain general principles applicable to all IPR enforcement procedures. In addition, it contains provisions on civil and administrative procedures and remedies, provisional measures, special requirements related to border measures and criminal procedures, which specify, in a certain amount of detail, the procedures and remedies that must be available so that right holders can efectively enforce their rights. DISPUTE SETTLEMENT: The Agreement makes disputes between WTO Members about the respect of the TRIPS obligations subject to the WTO's dispute settlement procedures. First, in respect of each of the areas of IP covered by the Agreement, each of the member nations is obliged to provide a minimum set of standards for protecting the respective IPR. Under each of the areas of IP covered by the 12 TRIPS AGREEMENT Agreement, the main elements of protection are defned, namely the subject- matter to be protected, the rights to be conferred and permissible exceptions to those rights, and the minimum duration of protection. Second, each member nation is obliged to provide domestic procedures and remedies with respect to protection of IPR. The Agreement lays down certain general principles applicable to all IPR enforcement procedures. The Agreement also lays down certain other provisions on civil and administrative procedures and remedies, special requirements related to border measures and criminal procedures, which specify, in a certain amount of detail, the procedures and remedies that must be available so that right holders can efectively enforce their rights. Third, under the Agreement disputes between WTO member nations regarding the respect of the TRIPS obligations are subject to the WTO's dispute settlement procedures.  STRUCTURE OF THE TRIPS AGREEMENT The three important features of the Agreement, i.e. standards, enforcement and dispute settlement are covered in seven parts i.e. the Agreement consists of seven parts. 13 TRIPS AGREEMENT Part I deals with the general provisions and basic principles. Part II describes the standards concerning the availability, scope and use of IPR with respect to diferent types of IP. Part III describes the IPR enforcement obligations of member nations, and Part IV addresses the provisions for acquiring and Maintaining IPR. Part V is directed specifcally to dispute settlement under the Agreement. Part VI concerns transitional arrangements, and the Part VII concerns various institutional arrangements. The detailed discussion of the above mentioned seven parts of the Agreement will follow in subsequent sections of this article. 14 TRIPS AGREEMENT GENERAL PROVISIONS AND BASIC PRINCIPLES Part I of the Agreement deals with the general provisions and basic principles. Part I of the Agreement has eight Articles out of which Articles 3 and 4 form the basic fundamentals of the Agreement. Article 3 deals with National Treatment commitment. Under this article the member nations are obliged to accord to the nationals of other member nations, a treatment no less favorable than that it accords to its own nationals with regard to the protection of IPR. However, this article recognizes certain exceptions already provided in the Paris Convention (1967), the Berne Convention (1971), the Rome Convention and the Treaty on Intellectual Property in Respect of Integrated Circuits. Article 4 deals with Most-Favored-Nation Treatment. Under the provision of this article, with regard to the protection of IPR, any advantage, favor, privilege or immunity granted by a member nation to the nationals of any other country 15 TRIPS AGREEMENT shall be accorded immediately and unconditionally to the nationals of all other member nations, except for a few exceptions mentioned in this article. 16 TRIPS AGREEMENT STANDARDS CONCERNING THE AVAILABILITY, SCOPE AND USE OF IPR Part II of the agreement consists of 22 articles which deal with each of the areas of IP covered by the Agreement with respect to the main elements of protection, such as, the subject-matter to be protected, the rights to be conferred and permissible exceptions to those rights, and the minimum duration of protection. This is one of the most important part of the Agreement as it deals with almost all the forms of IP like, Patents, Trademarks, Copyrights, Geographical Indications, etc. As an obligation under this part of the Agreement, all the member nations have to provide same protection to each of the IPs covered by the Agreement. For example, in all the member nations the duration of protection ofered by a utility patent has to be for minimum 20 years. 5.1 COPYRIGHT AND RELATED RIGHTS Copyright protects literary works and other forms of works that constitute expression of ideas, like painting, etc. Under the provision of Article 10, Computer Programs, whether in source or object code, are protected as literary works under the Berne Convention (1971). The term of protection for such kind 17 TRIPS AGREEMENT of works under the Agreement is calculated based on the life of a natural person. Term of protection for copyright is not less than up to 50 years from date of end of calendar year of making of such a work. The related rights regarding protection of performers, producers of phonograms (Sound Recordings) and broadcasting organizations mentioned in Article 14 grants the producers of phonograms the right to authorize or prohibit the direct or indirect reproduction of their phonograms. These rights grant the broadcasting organizations the rights to prohibit the fxation, the reproduction of fxations, and the rebroadcasting by wireless means of broadcasts, as well as the communication to the public of television broadcasts of the same. 5.2 TRADEMARK Any sign, or any combination of signs, capable of distinguishing the goods or services of one undertaking from those of other undertakings, is capable of constituting a trademark. Such signs, in particular words including personal names, letters, numerals, fgurative elements and combinations of colors as well as any combination of such signs, are eligible for registration as trademarks. Where signs are not inherently capable of distinguishing the relevant goods or services, member nations may make registrability to depend on distinctiveness acquired through use. Member nations may require, as a condition of registration, that signs be visually perceptible. For initial 18 TRIPS AGREEMENT registration, and each renewal of registration of a trademark a term of protection is no less than seven years. The registration of a trademark is renewable indefnitely. 5.3 GEOGRAPHICAL INDICATIONS As per the Agreement, Geographical Indications are indications which identify certain goods as originating in the territory of a member nation, or a region or locality in that territory. Geographical Indications are used to protect those goods whose quality, reputation or other characteristics are essentially because of their geographical origin. Under the provisions of the Agreement, a member nation can prohibit other member nations from the use of any designation or resentation of any goods that indicates or suggests that those goods originate from a geographical area other than the true place of origin in a manner which misleads the public. The term of protection for Geographical Indication is eternal. 5.4 PATENTS Article 27 of the Agreement deals with patentable subject matter. The patentable subject matter according to the Agreement constitutes any inventions, whether products or processes, in all felds of technology, provided 19 TRIPS AGREEMENT that they are new, involve an inventive step and are capable of industrial application. However, the member nations may exclude from patentability, diagnostic, therapeutic and surgical methods for the treatment of humans or animals. Further, plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes may also be excluded from patentability. Under the provisions of the Agreement the member nations have to provide protection for plant varieties either by patents or by an efective sui generis system or by any combination thereof. The term of protection available is usually twenty years counted from the fling date of the patent application. Under provisions of Article 21 of the Agreement, member nations may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably confict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties. Article 31 of the Agreement has provisions for allowing the grant a compulsory license for pharmaceuticals by the government of a member nation without the 20 TRIPS AGREEMENT consent of the patentee in certain conditions. Compulsory license may be allotted particularly in following conditions:  Normally the person or company applying for a license has to have tried to negotiate a voluntary license with the patent holder on reasonable commercial terms.  Only if that fails can a compulsory license be issued, and Even when a compulsory license has been issued, the patent owner has to receive payment; the TRIPS Agreement says “the right holder shall be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization”, but it does not defne “adequate remuneration” or “economic value”. Compulsory licensing must meet certain additional requirements as well. For example, it cannot be given exclusively to licensees (e.g. the patent- holder can continue to produce), and it should be subject to legal review in the country.) 5.5 INDUSTRIAL DESIGNS Member nations have to provide for the protection of independently created industrial designs that are new or original. Member nations may provide that designs are not new or original if they do not signifcantly difer from known 21 TRIPS AGREEMENT designs or combinations of known design features. Member nations may provide that such protection will not extend to designs dictated essentially by technical or functional considerations. The term of protection for industrial designs is 10 years from the creation of the industrial design. 5.6 LAY-OUT DESIGNS FOR INTEGRATED CIRCUITS Under the provisions of the Agreement, member nations are obliged to provide protection to the layout-designs (topographies) of integrated circuits in accordance with the Treaty on Intellectual Property in Respect of Integrated Circuits. The member nations have to provide for protection of not less than 10 years from the date of fling of application for lay-out designs, however, member nations may limit the duration of protection up to ffteen years from the date of creation of the lay-out design. 5.7 PROTECTION OF UNDISCLOSED INFORMATION Undisclosed information discussed herein is also called Trade Secret. The member nations are obliged to ofer protection for trade secrets as per the provisions of the Agreement. The undisclosed information is considered as trade secret, if: It is secret in the sense that it is not generally known among or readily accessible to persons within the circles that normally deal with the kind 22 TRIPS AGREEMENT of information in question; It has commercial value because it is secret; and It has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret. ENFORCEMENT OF IPR The Agreement was not only aimed at providing minimum standards for protecting IPR but it was also aimed at providing the enforcement of the same. The Agreement provides minimum standards for the enforcement of IPR that allows right holders to protect their legitimate interests through civil court or administrative proceedings. It is not required for a WTO member nation to establish special or separate courts for IPR, or specially allocate resources, like man power, special enforcement ofces, etc. for IPR enforcement. Part III of the Agreement on Enforcement of IPR sets out the obligations of member nations to establish administrative and judicial mechanisms through which IPR holders can seek efective protection of their interests. The general obligation of member nations to provide enforcement mechanisms requires that enforcement procedures should be available under their national law so as to permit efective action against any act of infringement of IPR covered by the Agreement, including expeditious remedies to prevent infringements and remedies which constitute a deterrent to further infringements. Member nations are obligated to ensure that enforcement procedures are “fair and 23 TRIPS AGREEMENT equitable”, and “not unnecessarily complicated or costly, or entail unreasonable time limits or unwarranted delays.” Regarding the civil administrative procedures and remedies, the Agreement provides for equal rights for both the defendant and complaining parties. The rules of the Agreement provide that both parties should have the opportunity to present and contest evidence, and that adequate remedial measures should be available. The Agreement permits member nations to exclude the grant of injunctions in circumstances involving compulsory licenses and other uses. The Agreement obligates member nations to make provision for the ordering of prompt and efective provisional measures to prevent entry of infringing goods into channels of commerce and preserve evidence against such infringing goods and their traders. This means that the IPR holder should be entitled to seek a prompt action against the infringement, whether or not the party alleged to be acting in an infringing manner can be notifed and given opportunity to be heard. With respect to Border Measures, the Agreement requires member nations to allow certain right holders to prevent release by customs authorities of infringing goods into circulation especially, with respect to counterfeit trademarks and pirated copyright goods. The Agreement also provides for 24 TRIPS AGREEMENT certain Criminal Measures (penalties) for trademark counterfeiting and copyright piracy on a commercial scale. ACQUISITION AND MAINTENANCE OF IPR Part IV of the Agreement deals with acquisition and maintenance of IPR. It provides that member nations are obligated to apply reasonable procedures and formalities in connection with the grant or maintenance of IPR, that registrations will be undertaken within a reasonable period of time, and that service mark registrations will be subjected to the same basic Paris Convention procedures as trademark registrations. The procedures by which IPR are granted or denied are of great interest to applicants, those opposing applications and the population that uses the subject matter of such IPR. The Agreement provides limited guidance in this area. DISPUTE SETTLEMENT AND PREVENTION Part V of the agreement deals with dispute settlement and prevention. Article 63 establishes the transparency requirements. Under these requirements there is an obligation on the part of member nations to publish or otherwise make available legal texts such as laws and judicial decisions. The provisions related to dispute settlement and prevention are governed by the 25 TRIPS AGREEMENT TRIPS council. The Article 63 establishes an obligation to notify laws and regulations to the TRIPS Council or to World Intellectual Property Organization (WIPO) for the common register, which contains a compilation of laws and regulations, fnal judicial decisions, etc. pertaining to the Agreement, should that be decided upon. Member nations are obligated to furnish applicable rules or decisions, or sufcient details about them, at the request of member nations who reasonably believe their rights may be afected. Confdential information is entitled to protection. Each member nation is required to be prepared to supply, in response to a written request from another member nation, the information regarding Law, rulings, Judicial decisions and administrative rulings pertaining to the subject matter of the Agreement (the availability, scope, acquisition, enforcement and prevention of the abuse of IPR). Article 64 deals with the dispute settlements. The Articles XXII and XXIII of GATT 1994 as described and applied by the Dispute Settlement Understanding (WTO’s procedure for resolving the trade quarrels) also apply to consultations and the settlement of disputes under the Agreement except as otherwise specifcally provided. Article XXIII of the GATT 1994 provides for three types of cause of action (a set of facts sufcient to justify a right to sue) in GATT dispute settlement: “violation”, “non-violation” and “situation”. 26 TRIPS AGREEMENT TRANSITIONAL ARRANGEMENTS Under the transitional arrangements of the Agreement, the member nations were allowed some transition period to make the national laws compliant with the Agreement. The developing and least developed countries were given an extra period as compared to developed nations. Developing countries were granted a grace period of fve years (i.e. up till 2000) to make their national laws compliant with TRIPS. An additional grace period of fve years (i.e. up till 2005) was given to the developing countries to introduce product patent protection in those felds of technology in which there was no provision for product patent protection. INSTITUTIONAL ARRANGEMENTS The Council for TRIPS monitors implementation of the Agreement. Also the council for TRIPS monitors member nations’ compliance with the obligations required under the Agreement. The council for TRIPS afords member nations the opportunity of consulting on matters relating to TRIPS. It also carries out other responsibilities assigned to it by the member nations, and provides any assistance requested by them in the context of dispute settlement procedures. 27 TRIPS AGREEMENT TRIPS AGREEMENT AND INDIA India became a party to the TRIPS Agreement in April 1995. The Patent Act of 1970 was in contravention with the Article 27 of the Agreement. Hence India needed to take some measures to make its IPR laws compliant with the Agreement. The Agreement provided a three stage framework for developing countries like India which did not allow product patents in the areas of Pharmaceuticals and agricultural chemicals before the Agreement came into force. These three stages included: Introduction of Mail-Box facility from 1st January, 1995 for product patent applications in the feld of pharmaceuticals and agricultural chemicals. These Mail-Box applications were not examined till the end of 2004. But Exclusive Marketing Rights (EMR) could be granted for the Mail-Box applications for which a patent had been granted in at least one member nations and the application was not rejected in the 28 TRIPS AGREEMENT member nation where the patent protect was sought by the applicant for the reason of invention being not patentable. Compliance with the other obligations of the Agreement such as, rights of patentee, term of protection, compulsory licensing, etc. from 1st January, 2000. Full implementation of product patents in all technological domains including pharmaceuticals and agricultural chemicals with efect from 1 st January, 2005. Also, all Mail-Box applications were to be taken for examination from 1st January, 2005. Thus the Agreement came into force in India from 1st January, 2005. The Agreement changed the face of the IP regime in the world. Many developing countries, including India, which had weaker IPR systems (for example, patents) had to extensively revise their patent laws, or where there were no IPR regimes (the most important examples being plant variety protection, layout designs and geographical indications) had to put in place new IPR systems. The implications of the Agreement have their own pros and cons. 29 TRIPS AGREEMENT On the positive side, with the revision of patent laws, a stronger patent protection system came into existence which is of international standards, because of which the foreign investors were encouraged to invest in India. It may be expected that while domestic investment may not respond to a stronger patent regime in a big way in either the short or long term, Foreign Direct Investment (FDI) might. Further, the research and development expenditures of the domestic players tremendously increased in post Agreement period as compared to the pre- Agreement period. The other positive implication of a technological nature is the availability of better products which might not have been available with weaker IPR protection. However, the prices of these better and patented products may not be afordable for majority of population. Domestic private sector investment and foreign investment in the seeds sector has risen. The post Agreement environment has encouraged domestic private sector and foreign frms to invest in research and development for the development of better seeds. Some of the geographical indications belonging to India which are of importance for domestic industry have got protection and have encouraged investment in these sectors, for example, Darjiling Tea. On the negative side, the most immediate impact of post Agreement may be seen on 30 TRIPS AGREEMENT prices of drugs. The new and required drugs will have product patent protection unlike the earlier scenario and so the prices might escalate. 31 TRIPS AGREEMENT TRIPS IN INTERNATIONAL SCENARIO Why is TRIPS Important from a Development Perspective? The TRIPS agreement could have profound implications for development prospects. These implications could be positive or negative, with the balance depending on characteristics of each country. Governments can work to maximize the potential long-run gains (or minimize the losses) from IPRs by embedding their regimes within a comprehensive set of complementary policies. There is a long history of international treaties designed to coordinate protection of IPR across international borders. The Paris Convention for the Protection of Intellectual Property and the Berne Convention for the Protection of Literary and Artistic Works, both established in the 1880s, were the primary instruments of trans‐border IPR protection until the formation of the WTO. The Paris Convention established minimum standards for the protection of industrial property (patents) and called for national treatment of patents among signatory countries. The Berne Convention established protection standards for art and written works, and called for national treatment and a most‐favoured nation obligation. The United Nations’ World Intellectual 32 TRIPS AGREEMENT Property Organisation (WIPO) was created in 1967 as the administrative body for multilateral IPR treaties. The WIPO provides technical support to developing countries in the establishment of IPR laws and shares information with the WTO. The WIPO is a UN agency, and has no mechanism for enforcing IPR or the treaties (Paris and Berne) that it administers. The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) was made part of the World Trade Organization’s (WTO’s) set of agreements in the Uruguay Round (UR) negotiations to provide a coercive framework in which WTO member countries could extraterritorially enforce the Intellectual Property Rights (IPR) of domestic frms. Member countries were obliged to undertake legislative reform to establish laws and regulations that meet with international standards, as described in the TRIPS Agreement. If innovating frms from member countries are dissatisfed with the level of IPR protection aforded to their innovations, then disputes between the innovating frm’s host country and the ofending country are handled through the WTO’s Dispute Settlement Understanding (DSU). The DSU allows for cross‐agreement retaliation, which means that a country that is found in violation of its TRIPS Agreement obligations can be subjected to retaliatory trade sanctions under another WTO agreement; usually the General Agreement on Tarifs and Trade (GATT). 33 TRIPS AGREEMENT The introduction of the TRIPS Agreement into the WTO marked a signifcant departure for multilateral trade agreements; the focus of a major agreement was a nontrade issue for the frst time. The requirements that are spelled out in the TRIPS Agreement confer obligations on how member countries must protect IPR within their domestic boundaries, while other WTO agreements aim to provide a predictable regulatory environment for international trade and to reduce barriers and trade‐distorting policies in member countries. Developing WTO member countries, under pressure from developed countries, agreed to the inclusion of the TRIPS Agreement in return for promised better access to developed‐country markets for manufactured and agricultural products. Developed countries viewed intellectual property as important components of their future industrial strategies, and were dissatisfed with the level of IPR protection in the markets of many of their trading partners. This “capture” of the WTO by developed‐countries’ innovating frms has been controversial; Bhagwati (2004) characterises this phenomenon as the transition of the WTO from a promoter of international trade to a “royalty collection agency”. The TRIPS Agreement also diverges from other WTO agreements by introducing rules that cannot be shown to be welfare increasing at the global level. The GATT and Agreement on Agriculture can be shown to have global welfare‐ 34 TRIPS AGREEMENT enhancing efects within the confnes of neoclassical trade theory through gains from trade. Deardorf (1990), however, shows that the marginal cost of protection (measured as the growth of deadweight loss that results from monopoly pricing) is constant, or increases, as geographic coverage expands and the marginal beneft of IPR protection decreases as geographical coverage expands. There must, therefore, exist an optimal geographic coverage of IPR protection, beyond which global welfare declines. The fallout of this argument is that certain countries should be exempt from TRIPS Agreement obligations if the objective of such an agreement is to maximise global welfare. The TRIPS Agreement does not strive for such an optimum; rather the TRIPS Agreement calls for the harmonisation of IPR regulations across all WTO member Countries. Research provide evidence that the TRIPS Agreement has been, at least somewhat, successful in its primary objective. If a signifcant relationship cannot be identifed, then the efectiveness of the TRIPS Agreement is uncertain. The TRIPS Agreement came into efect with the formation of the WTO in 1995. Developing and least‐developed member countries were granted initial implementation delays, and have been granted further delays over the past several years . The TRIPS Agreement has also been the subject of consultations 35 TRIPS AGREEMENT at the Doha Development Agenda (DDA) negotiations, though primarily on issues of implementation, not substance. There are two primary points of IP negotiation in the DDA. The frst is the extension of protection for products that are defned by geographic indicators, beyond existing UR protection for wines and spirits. The second issue revolves around the use of genetic resources and traditional knowledge in commercialized technology (primarily agricultural products and pharmaceuticals). A proposal by a group of developing countries would require patent applications to disclose the country of origin of genetic materials and traditional knowledge that are used in novel products (WTO, 2008) and the Plant Genetic Resources Treaty calls for a sui generis system that would authorize payments from commercializing frms to populations indigenous to the source of the genetic material. This strategy is an attempt by developing countries to forestall incidents of “biopiracy”, in which frms obtain legal rights over traditional and indigenous products and remedies. If a DDA deal is completed, then the TRIPS Agreement will remain largely unchanged from its current structure with only minor implementation amendments. It is important to note that the nature of the WTO’s DSU does not automatically result in the imposition of penalties on member countries that do 36 TRIPS AGREEMENT not fulfll their Agreement obligations. Retaliatory measures are only authorized if a complainant country wins a case through the initial, and usually appellate, body of the WTO. It is therefore important to view the TRIPS Agreement not only as a means of structuring punitive measures against those members that violate their obligations, but also as a tool that can be brandished to make coercive threats against member countries in eforts to change behavior without instigating formal WTO panels. The jurisprudence under the TRIPS Agreement provides some guidance on how WTO panels will interpret international disputes over protection of IPR, but there have been relatively few TRIPS Agreement disputes (relative to the number of disputes arising from other WTO agreements, such as the Agreement on Agriculture or the Agreement on Antidumping). One of the primary avenues through which the TRIPS Agreement can afect the international protection of IPR is member countries use of the Agreement as a threat. Negotiated settlements between countries often precede, and sometimes prevent, formal WTO cases. These negotiations between complainant and defendant countries may be favoured by the existence of the TRIPS Agreement. Both parties know that the TRIPS Agreement allows for punitive retaliatory measures against an ofending member country, and defendant 37 TRIPS AGREEMENT countries have to weigh the potential costs of trade retaliation in their decisions on IPR protection reform. CASE LAWS : Trebilcock and Howse (2005) discuss one important such case in which lawyers representing US and EU pharmaceutical frms pressured the South African government to repeal legislation that allowed parallel importation of HIV/AIDS medication from lower‐price countries. Though the TRIPS Agreement allows for parallel importation of medications under specifc circumstances, the signifcant uncertainty surrounding a potential WTO dispute panel’s interpretation of the Agreement allowed pharmaceutical‐industry negotiators to use the threat of TRIPS Agreement retaliation to infuence South African legislators. The implementation of a levy on genetically‐modifed soybean seeds in Brazil is another example in which a negotiated agreement may have averted a formal WTO case. A large share of Brazil’s herbicide‐tolerant soybean crop is grown from farmer‐saved seeds, for which no royalties are paid to innovating frms. The Brazilian National Association of Seed Producers agreed to the application of a levy on soybean seeds, some of the proceeds of which are directed to the 38 TRIPS AGREEMENT IP‐owning frms (The Western Producer, 2005). Farmers can either pay a levy on certifed seeds at the point of purchase and receive a certifcate of authenticity, or can deliver their crops to points of sale (usually elevators) and be charged the levy if they cannot produce a certifcate of authenticity. These cases speak to the potential for the TRIPS Agreement to act as a credible threat in disputes over IPR protection. The efects of the TRIPS Agreement on developed and developing countries are expected to difer because many of the TRIPS Agreement’s disciplines call for harmonization of IPR protection to levels that already exist in many developed countries; this suggests that the TRIPS binary variable will be larger/more signifcant for developing than for developed countries. Another important reason for separating the efects by geography is that the TRIPS Agreement, as part of the WTO set of agreements, is subject to the DSU. Countries that do not fulfll their obligations may be subject to punitive barriers on their exports to other WTO member countries. As such, the efectiveness of the TRIPS Agreement in determining the level of IPR across regions can provide some information on the efectiveness of the TRIPS Agreement as a coercive threat. Countries that have a lot to lose from trade retaliation may respond diferently than those with little to lose. 39 TRIPS AGREEMENT The efects of the TRIPS Agreement on IPR protection in Europe are positive, but not signifcant. This result is expected because many European countries maintained IPR protection regimes that were near or at TRIPS Agreement levels before 1995. Note that this aggregation includes all European countries, not just member countries of the European Union. Relatively low income European countries such as Bulgaria, Hungary and Romania are included in this group and can explain why the estimated efect of the TRIPS Agreement is larger for Europe than the estimated efect for developed countries. The results for North America, consisting of Canada and the US, are also insignifcant. The estimated efects of the TRIPS Agreement on countries in Central and South America are large and highly signifcant. Changes in deterministic microeconomic (education, R&D, governance) and microeconomic (GDP) variables have had positive and signifcant efects on IPR protection, and the presence of the TRIPS Agreement has signifcantly increased these countries’ commitments to IPR protection. the results suggest that countries in Central and South America take seriously the threat of cross‐ agreement trade retaliation. This result is consistent with the high degree of trade dependence that many Central and South American countries have on the US (the chief proponent of the TRIPS Agreement). 40 TRIPS AGREEMENT These countries have a lot to lose if retaliatory sanctions are imposed on their exports to the US. These countries also had to make signifcant adjustments to their domestic IPR systems in order to be compliant with the TRIPS Agreement, unlike most countries in North American and Europe. The results for North Africa and the Middle East are similar to those of Central and South America in both signifcance and magnitude. No Sub‐Saharan African countries are bound by TRIPS until 2013, with the exception of South Africa. The estimated coefcient for Sub‐Saharan Africa is positive, but is insignifcant; this suggests that the TRIPS Agreement has not signifcantly afected IPR protection in South Africa. South Africa is relatively dependent on exports to developed countries, but this does not seem to have resulted in the TRIPS Agreement having a signifcant efect on protection of IPR. It is possible that South Africa’s geographic and political positioning (neighboring countries that have weak IPR protection and are not bound by the TRIPS Agreement) have ofset any coercive efects that the WTO Agreements might have on other (non Sub‐Saharan) countries. The efect of the TRIPS Agreement on countries in Oceania is not signifcant. This result is anticipated because this aggregation includes only Australia and 41 TRIPS AGREEMENT New Zealand ‐ countries where IPR protection was relatively strong prior to the implementation of the TRIPS Agreement. The TRIPS Agreement binary variable has had positive and signifcant efects of IPR protection in Asian countries. The rationale for this result is similar to the results for Central and South America; several Asian countries are heavily dependent on access to consumer markets in Europe and the US and take seriously the threat of trade retaliation. TRIPS Agreement has had signifcant efects on IPR protection over its implementation period, but the signifcance of these efects depends on countries’ development levels. We fnd that disaggregating the panel of countries by level of development yields diferent results for developed and developing countries, even when controlling for per capita income. The TRIPS Agreement has had signifcant efects on IPR protection in developing countries, but has not measurably afected developed countries’ level of IPR protection. This result is consistent with the setting of TRIPS Agreements standards to conform closely to IPR protection regimes that were already in place in many developed countries. Developed countries did not have to markedly alter their regimes to be compliant with the TRIPS Agreement. 42 TRIPS AGREEMENT We also fnd that the efects of the TRIPS Agreement vary across regions. The TRIPS Agreement has had positive and signifcant efects on IPR protection in Central and South America, in Asia and in North Africa and the Middle East. The TRIPS Agreement has not signifcantly afected protection of IPR in Sub‐ Saharan Africa, however the only Sub‐Saharan African country that is bound by the TRIPS Agreement is South Africa. TRIPS has had positive outcomes for developing countries, with transfers to India, China and Taiwan, not only in terms of locating production facilities in these countries, but also in terms of locating research and development facilities there. These are regions with low labour costs, adequate standards of education and stable political systems. Therefore, if these prerequisites are in place, there will be clear shifts in favour of developing countries as a result of the TRIPS Agreement. In this respect, intellectual property rights are the only means for recovering the costs of knowledge innovation and securing jobs. But there needs to be a balanced system. Countries that are relatively dependent on exports to countries that pushed for the TRIPS Agreement’s inclusion in the WTO (i.e., developed countries) may take the threat of retaliatory trade sanctions seriously because they have much to lose in the form of lost exports. This provides evidence that the TRIPS Agreement has been successful as a coercive threat in international trade 43 TRIPS AGREEMENT relations. An interesting extension of this research would be to investigate the reasons that some developing countries/regions have responded to the TRIPS Agreement more signifcantly than others. We observe that regions with high export dependence on developed countries have made signifcant changes to their IPR protection system. 44 TRIPS AGREEMENT CONCLUSIONS AND SUGGESSTION:  The poorest countries are unlikely to administer and enforce the required TRIPS standards efectively for some time to come. It would be benefcial to increase fnancial and technical assistance for improving administration capacities. One promising idea would be for WTO and WIPO members to agree that a small additional levy would be assessed on patent applications at the Patent Cooperation Treaty (PCT), and perhaps also on multilateral trademark applications, for purposes of fnancing administration eforts in the poorest countries.  TRIPS could be clarifed as to the minimum requirements for plant variety rights. Poor agricultural economies need to maintain a farmer’s privilege without signifcantly reducing the benefts to the original right holder.  Attention should be paid to overcoming the inconsistencies between TRIPS and the Convention on Biodiversity. The former agreement recognizes only private rights in technologies and products developed from genetic resources, while the latter recognizes the interests of states 45 TRIPS AGREEMENT in sharing benefts from such inventions. International benchmarks in this regard would be informative for implementing policies for protecting genetic resources. More attention could be paid to establishing sufcient market segmentation in certain goods (medicines, environmental technologies, education materials, and the like) that providers would be willing to ofer steep discounts to authorities and consumers in poor countries. Thus, some re- visitation of Article 6 (exhaustion) could be benefcial, along with linking it to competition issues and technology transfer.  There are no international norms on the scope of fair use in copyright, an increasingly important issue in the internet age. Widespread access of students and researchers to digital products is important but unimpeded electronic copying harms interests of copyright owners. The WIPO Copyright Treaty attempts to balance these concerns by requiring signatories to provide legal remedies against the circumvention of technological protection measures, while recognizing the need for fair use. It would be benefcial for TRIPS to be made more explicit about allowable scope for fair use in digital works. 46 TRIPS AGREEMENT  It is premature to negotiate stronger patent eligibility requirements in life forms (Article 27.3) and that language could be clarifed to make such patent requirements a matter of national policy. 47 TRIPS AGREEMENT There is no doubt that TRIPS will remain a debated issue for years to come. It has shown issues that deserve to be pursued further. In the EU we strongly believe in the virtues of IP as an engine for creation and innovation. At the same time, we do not remain blind to the difculties and challenges entailed by IP protection in certain areas and in certain regions in the world, especially in the developing world. Hence, there is a need to look at IP with an open mind and not be afraid to address shortcomings. It is also important to bear in mind that, at present, we have the means to catalyze ideas and innovations in ways that are less dominated by the economy of scarcity. Systems of free dissemination and free-of-cost access may prove efcient in certain areas. For EU trade policy, the challenge is to follow an approach that takes into due account the legitimate interest of industry and users, developed and developing economies, small and large enterprises, researchers and students, public and private goods. We must avoid lopsided and biased policies. 48 TRIPS AGREEMENT In conclusion, Pascal Lamy said that, when considering changes to TRIPS, we must continue to keep its basic purpose to mind. The purpose of IP, he said, is to enhance creativity and innovation for the economic and social development and welfare of all, and so must be the purpose of the globalisation of IP. LIST OF ACRONYMS DSU: Dispute Settlement Understandin FDI: F!rein Dire"t In#estment GATT: General Areement !n Trade and Tari$ IMF: Internati!nal M!netar% Fund IP: Intelle"tual Pr!pert% IPR: Intelle"tual Pr!pert% Ri&ts TRIPS: Trade Related Aspe"ts !' Intelle"tual Pr!pert% (): (!rld )an* (IPO: (!rld Intelle"tual Pr!pert% Orani+ati!n (TO: (!rld Trade Orani+ati!n EU: Eur!pean 49 TRIPS AGREEMENT REFERENCES:  TRIPS Agreement: An Overview : prepared by Ashish Jogi and Deepti Nigam  TRIPS and Development: sida  The Efects of the TRIPS Agreement on International Protection of Intellectual Property Rights† Ryan Cardwell Pascal L. Ghazalian**  THE TRIPS AGREEMENT – TEN YEARS LATER : A Report of a Conference Commemorating the 10 th Anniversary of the TRIPS Agreement held on 23 rd and 24 th June 2004 : European Commission, DG Trade 50