TABLE OF CONTENTS

THE WTO

THE TRIPS AGREEMENT

TYPES OF INTELLECTUAL PROPERTY RIGHTS

FEATURES OF THE TRIPS AGREEMENT

Standards

Enforcement

Dispute resolution

GENERAL PRINCIPLES

Non-discrimination

Exhaustion of intellectual property rights

STANDARDS OF PROTECTION IN RELATION TO SPECIFIC TYPES OF INTELLECTUAL

PROPERTY RIGHTS

Copyright

Trademark

Geographical indications

Industrial designs

Patents

Layout designs of integrated circuits

Undisclosed information

IMPLEMENTATION

THE TRIPS AGREEMENT AND INTERNATIONAL DEVELOPMENT

FURTHER READING
The WTO

The Agreement on Trade-Related Aspects of Intellectual Property Rights (the TRIPS Agreement) is a multilateral agreement
administered by the World Trade Organisation (the WTO).1 The WTO was established in 1995 to facilitate negotiations
within the international trading system. It oversees a range of covered agreements which set out the results of specific trade
discussions concluded between the WTOs participant countries (referred to as member states). In addition to the TRIPS
Agreement, the covered agreements include the General Agreement on Tariffs and Trade (the GATT), originally signed in
1947 but since refined through a series of negotiations conducted over the succeeding fifty years (referred to as rounds).

The WTO, and indeed the entire international trading system, is founded on the principle that international trade is globally
beneficial. Historically, this principle was not widely accepted. The traditional mercantilist approach was that close
government regulation was necessary to encourage exports and discourage imports. More recently, economists have produced
a wealth of evidence suggesting that if individual countries focus on producing the goods and services that they can produce
most efficiently (in relation to which they have a comparative advantage), all countries ultimately benefit. However,
objections to free trade do remain and its effects are acknowledged to be economically painful in some circumstances.

The WTO continues to encourage trade negotiations, but the stagnation of the most recent Doha Round suggests that the
Uruguay Round, during which the TRIPS Agreement was concluded, may have provided the last major multilateral advances
for some time.

The TRIPS Agreement

Apart from the GATT, which provides many of the general fundamental principles of the international trading systems, the
covered agreements tend to address a specific trade topic, such as agriculture, services, safeguards or dispute resolution. The
TRIPS Agreement focuses on the regulation of intellectual property rights and is designed to ensure that adequate protection
exists for intellectual property rights internationally.

Intellectual property is property that takes the form of ideas or knowledge, as opposed to property that takes tangible or
physical form. For example, a musical composition is a piece of intellectual property, whereas a compact disc containing a
recorded performance of that composition is an item of physical property.

Intellectual property rights are rights that certain people have to use intellectual property exclusively. For example, the creator
of a musical composition may obtain a copyright in respect of that composition, which allows him or her to use it and to
prevent others from using it without his or her consent. The fundamental purpose of intellectual property rights is to
encourage creative work.

Economists argue that the protection of intellectual property rights has important implications for international trade and
international development. According to the theory, a failure to protect intellectual property rights can result in piracy and
counterfeiting, which diminish market access for legitimately traded goods and impact negatively on international trade (and
therefore global welfare). Whether that theory holds for all countries remains a matter for debate, especially among
developing countries. The efficacy of the theory from the perspective of international development is explored in more detail
in section 8 below.

Types of intellectual property rights

The TRIPS Agreement covers the following main types of intellectual property rights:

copyright and related rights;

trademarks;

geographical indications;
industrial designs;

patents;

layout design of integrated circuits; and

undisclosed information.

A detailed discussion of each type of intellectual property right, along with the substantive provisions of the TRIPS
Agreement that apply to it, is contained in section 6 below.

Features of the TRIPS Agreement

The TRIPS Agreement has three main features:

it sets out minimum standards for the protection of intellectual property rights that member states must provide;

it provides rules for the enforcement of intellectual property rights in member states; and

it provides for the resolution of disputes arising between member states in relation to the TRIPS Agreement in accordance
with the WTOs dispute resolution procedures.

Standards

In relation to each type of intellectual property right, the TRIPS Agreement sets out minimum standards of protection that
countries must provide. The main aspects of these standards of protection are:
the subject matter to be protected;

the permissible exclusions from the subject matter to be protected;

the rights to be conferred (including the minimum duration of the protection); and

the permissible exceptions to the standards of protection.

The TRIPS Agreement establishes such standards of protection in two ways:

it obliges member states to comply with the Paris Convention for the Protection of Industrial Property (1967) (the Paris
Convention) and the Berne Convention for the Protection of Literary and Artistic Works (1971) (the Berne Convention)
apart from the Berne Convention provisions on moral rights, the substantive provisions of these conventions are incorporated
by reference through the TRIPS Agreement and therefore apply to all member states; and

it places certain additional obligations on member states beyond those contained in the Paris Convention and the Berne
Convention.

Enforcement

The TRIPS Agreement sets out certain general principles in relation to the enforcement of intellectual property rights under
the domestic law of member states. For example, member states must ensure that:

enforcement procedures under domestic law are fair and equitable, are not unnecessarily complicated or costly and do not
entail unreasonable time limits or unwarranted delays;

decisions on the merits of a case are in writing and reasoned, are made available to parties without undue delay and are based
on evidence in respect of which parties were offered the opportunity to be heard; and

parties have an opportunity to have final administrative decisions reviewed by the courts.

Dispute resolution

Disputes between member states that arise out of the TRIPS Agreement are resolved pursuant to the WTOs dispute
settlement procedures. This means that the WTOs standardised dispute resolution provisions contained in the GATT and the
Dispute Settlement Understanding apply.
General principles

The TRIPS Agreement also contains certain general principles that pertain to all types of intellectual property rights. The two
main types of general principles relate to:

non-discrimination; and

the exhaustion of intellectual property rights.

Non-discrimination

The general principle of non-discrimination between products from different countries pervades all of the covered
agreements. In the TRIPS Agreement (as in most of the WTOs other covered agreements), the general concept manifests
itself in two more specific principles:

the national treatment principle; and

the most favoured nation principle.

The national treatment principle prohibits discrimination by a member state between its own nationals and the nationals of
other member states. This principle is also found in both the Paris Convention and the Berne Convention.

The most-favoured nation principle prohibits discrimination by a member state between the nationals of two different member
states. This principle is not found in either the Paris Convention or the Berne Convention.

Exhaustion of intellectual property rights

The rules governing exhaustion of intellectual property rights determine whether intellectual property rights may be used to
control the further disposition of a product after it is first sold (in other words, the rules determine how far intellectual
property rights extend).

There are two different jurisprudential approaches to the exhaustion of rights:

the doctrine of international (or universal) exhaustion; and

the doctrine of domestic (or territorial) exhaustion.

The doctrine of international exhaustion provides that if a product is lawfully placed on the market in one state, the holder of
a parallel intellectual property right in another state is not entitled to control its importation or resale based on that parallel
intellectual property right.

The doctrine of domestic exhaustion provides that if a product is lawfully placed on the market in one state, the holder of a
parallel intellectual property right in another state is entitled to control its importation or resale based on that parallel
intellectual property right.

The rules relating to exhaustion of rights affect the issue of parallel (or grey-area) imports, which are products that are
lawfully placed on the market in one state and imported into another state without the approval of the intellectual property
right holder.

On one hand, if a member state applies the doctrine of international exhaustion, the holder of the intellectual property right
has no power to restrict that importation. On the other hand, if a member state applies the doctrine of domestic exhaustion, the
holder of the intellectual property right has the power to restrict that importation. As such, the issue of the exhaustion of
intellectual property rights has important implications for trade.
The TRIPS Agreement expressly states that it contains no uniform rule of exhaustion of rights, and state practice is divergent.
The Doha Declaration on the TRIPS Agreement and public health (the Doha Declaration), an important recent declaration of
member states regarding the impact of the TRIPS Agreement on public health, confirms that states may elect to deal with
exhaustion in a way that best fits their domestic policy objectives.
Standards of protection in relation to specific types of intellectual property rights

The bulk of the TRIPS Agreement is devoted to setting out the rules governing relating the standards of protection that
member states must apply to each type of intellectual property right. This section briefly summarises those rules.

Copyright

Under the TRIPS Agreement, member states are required to provide copyright protection to certain literary and artistic works
(as defined in the Berne Convention). Such works include written works, lectures, dramatic works, choreographic works,
musical compositions, cinematographic works, drawings, paintings, architecture, sculptures, photographic works and maps.
The TRIPS Agreement also extends the Berne Convention definition to include computer programs.

Member states must provide a copyright holder with the rights set out in the Berne Convention. These vary depending on the
type of literary or artistic work, but generally involve exclusive rights of use and rights to authorise others to use the work.
Such protection must be given to the copyright holder for the life of the author of the relevant work plus fifty years after the
authors death.

Limitations or exceptions to the copyright holders rights are restricted to cases which do not conflict with a normal
exploitation of the work and which do not unreasonably prejudice the legitimate interests of the copyright holder.

Trademark

Member states are required to provide trademark protection available in relation to any sign, or any combination of signs,
capable of distinguishing the goods and services of one undertaking from those of any other undertaking.

The owner of a trademark must be granted the exclusive right to prevent third parties that do not have the owners 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 that use would result in a likelihood of confusion.

Member states must provide initial registration for a period of not less than seven years, and must ensure that registration is
renewable indefinitely. Cancellation of a trademark is only permitted on the grounds of non-use if the non-use has continued
for an uninterrupted period of three years, and even then the owner of a trademark may prevent the cancellation by providing
valid reasons for such non-use based on the existence of obstacles to use.

Limited exceptions to the rights of a trademark owner are permitted, provided that the exceptions take account of the
legitimate interests of the trademark owner and of third parties.

Geographical indications

Member states must provide protection for geographical indications, which are indications that identify a good as originating
in the territory of a member state, or a region forming part of the territory of a member state, where the quality, reputation or
another characteristic of a good is essentially attributable to the geographic origin of the good. An example of a geographical
indication is the description of a wine as being from Bordeaux, since such a description suggests that the wine has a particular
quality or reputation.

Interested parties must be given legal means to prevent:

any aspect of the designation or presentation of a good that suggests that the good originates in a geographical area other than
its true place of origin, in a manner that misleads the public as to the geographical origin of the good; or

any use which constitutes an act of unfair competition.

There are also particular rules that protect geographical indications for wines and spirits. For those goods, interested parties
must be given the legal means to prevent the use of a geographical indication identifying a particular wine or spirit, where
that wine or spirit does not in fact originate from the place indicated by the geographical indication, even if:

the true origin of the wine or spirit is indicated; or

the geographical indication is used in translation or accompanied by expressions like kind, type, style or imitation.

There are a number of exceptions to the protection of geographical indications. For example, a member state need not provide
protection for a geographical indication that has become a generic term for describing the good in question.

Industrial designs

Member states must provide protection for independently created industrial designs that are new or original. Member states
may provide that:

designs are not new or original if they do not differ significantly from known designs or combinations of known design
features; and

protection is not available for designs dictated essentially by technical or functional considerations.

The owner of a protected industrial design must be granted the right to prevent third parties, without the owners consent,
from making, selling or importing articles bearing a design which is a copy of the protected design, when such acts are
undertaken for commercial purposes. The duration of the protection must be at least ten years.

Limited exceptions may be provided to the protection of industrial designs, provided that such exceptions do not
unreasonably conflict with the normal exploitation of protected industrial designs and do not unreasonably prejudice the
legitimate interests of the owner of the design, taking account of the legitimate interests of third parties.

Patents

Member states are required to make patents available in relation to inventions (whether products or processes), in all fields of
technology, that:

are new;

involve an inventive step; and

are capable of industrial application.

Patents must also be available without discrimination as to:

the place of invention;

the field of technology; or

whether the products are imported or locally produced. Member states may exclude from patentability:
inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or
morality;

diagnostic, therapeutic and surgical methods for the treatment of humans or animals; and

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.
The minimum rights that must be provided to the holder of a patent are as follows:

where the subject matter of the patent is a product, the right to prevent third parties from making, using, offering for sale,
selling or importing the product;

where the subject matter of the patent is a process, the right to prevent third parties from using the process and from using,
offering for sale, selling or importing the product obtained directly from that process; and

whether the subject matter of the patent is a product or a process, the right to assign or transfer by succession the patent and to
conclude licensing contracts.

These rights must be provided to the patent holder for a minimum period of twenty years from the filing date.

Member states may provide for an exception to the rights of a patent holder, but only if the following conditions are satisfied:

the exception is limited;

the exception does not unreasonably conflict with the normal exploitation of the patent; and

the exception does not unreasonably prejudice the legitimate interests of the patent holder, taking into account the legitimate
interests of third parties.

Compulsory licensing and government use without the authorisation of the patent holder are allowed, but are subject to
conditions designed to protect the legitimate interests of the patent holder.

Layout designs of integrated circuits

Member states are required to protect layout designs of integrated circuits in accordance with the provisions of the Treaty on
Intellectual Property in Respect of Integrated Circuits (IPIC), concluded under the auspices of World Intellectual Property
Organisation.

According to IPIC, an integrated circuit is a product in which the elements, at least one of which is an active element, and
some or all of the interconnections, are integrally formed in and/or on a piece of material and which is intended to perform an
electronic function. A layout design is the three-dimensional disposition of the elements, at least one of which is an active
element, and of some or all of the interconnections of an integrated circuit, or such three-dimensional disposition prepared for
an integrated circuit intended for manufacture.

Under IPIC, protection is available to layout designs of integrated circuits that are original, in the sense that they are the result
of their creators' own intellectual effort and are not commonplace among creators of layout designs and manufacturers of
integrated circuits at the time of their creation.

According to IPIC, the holder of rights in respect of a layout design of an integrated circuit has certain exclusive rights,
including those of reproduction, importation, sale and distribution for commercial purposes. The TRIPS Agreement further
provides that the right holder has exclusive rights to import, sell or otherwise distribute the layout design of the integrated
circuit for commercial purposes.

The minimum period of protection is ten years from the filing date or the first commercial exploitation.

Undisclosed information

Member states must provide protection to information that:

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 of information in question);

has commercial value because it is secret; and

has been subject to reasonable steps under the circumstances, taken by the person lawfully in control of the information, to
keep it secret.

Undisclosed information is not to be treated as property, but a person lawfully in control of such information must have the
possibility of preventing it from being disclosed to, acquired by or used by others without his or her consent in a manner
contrary to honest commercial practices.
Implementation

The TRIPS Agreement entered into force on 1 January 1995. The following timetable governs its implementation:

developed countries were required to ensure that their domestic laws complied with it within one year (ie by 1 January 1996);

developing countries were required to ensure that their domestic laws complied with it within five years (ie by 1 January
2000), except that such countries were only required to ensure that their domestic laws complied with the patent protection
provisions within ten years (ie by 1 January 2005); and

least developed countries were required to ensure that their domestic laws complied with it within eleven years (ie by 1
January 2006), although such countries are now only required to ensure that their domestic laws comply with the patent
protection provisions in respect of pharmaceutical patents within twenty-one years (ie by 1 January 2016).

The TRIPS Agreement and international development

Developed countries and developing countries have tended to take different views on the benefits associated with protecting
intellectual property rights. The fundamental criticism of such protection by developing countries is that the costs of
protecting intellectual property rights outweigh the sovereign benefits that accrue to them. Developed countries respond with
the contention that the protection of intellectual property rights achieves an overall welfare improvement for all participants in
the international trading community (developed and developing) through the incentives such protection provides for research
and innovation.

The TRIPS Agreement was itself only concluded by means of significant compromises between developed countries and
developing countries. Following the conclusion of the Tokyo Round in 1979, the United States in particular was frustrated at
the reluctance of developing countries to adopt high normative standards and strict enforcement rules for intellectual property
rights, and made a concerted effort to open negotiations on intellectual property rights during the Uruguay Round. At that
point, developing countries were determined to open up trade in other areas, such as agriculture, and were therefore willing to
reach a compromise on intellectual property rights. The eventual conclusion of the TRIPS Agreement was fundamentally a
marriage of convenience between these two bargaining positions.

The divergent perspectives on the benefits (or otherwise) of the TRIPS Agreement have resulted in ongoing disagreements
between developed and developing countries as the TRIPS Agreement has been applied over the past decade. Perhaps the
clearest manifestation of this tension is the debate surrounding the impact of the TRIPS Agreement on public health in
developing countries.

Until 2005, public health in developing countries was largely unaffected by the TRIPS Agreement. Since the TRIPS
Agreement did not require developing countries to recognise pharmaceutical patents in their domestic laws, companies in
developing countries could produce unlimited volumes of generic (cheap) pharmaceutical products for export to other
developing countries and least developed countries. Countries like India freely and legitimately permitted such
manufacturing.

From 1 January 2005, however, member states were required to implement patent protection. This meant that exports of
generic pharmaceutical products from developing countries became restricted, since those countries would be in violation of
their obligations under the TRIPS Agreement if they continued to permit domestic companies to produce generic
pharmaceuticals for export in violation of patents held by other companies.

The initial solution to this problem was the compulsory licensing regime, which allows governments to permit the use of
patented subject matter in contravention of a patent holders rights (see section 6.5 above). However, that regime was actually
of limited assistance, since it requires the products to be supplied predominantly to the domestic market (see article 31(f) of
the TRIPS Agreement). Inevitably, the countries in greatest need of inexpensive pharmaceuticals are those with the least
manufacturing capacity.
The international community recognised this as an important and pressing matter and, in the Doha Declaration, agreed to
waive the application of article 31(f) of the TRIPS Agreement. Although the waiver was subject to certain specified
procedural requirements and was limited to public health matters, it has been reasonably widely applied by developing
countries and is generally viewed by commentators as something of a victory for developing countries in advancing their
WTO agenda.
The original decision by the United States (the home of many of the worlds major pharmaceutical companies) not to block
the waiver was driven by several factors, including a lack of developed country support and a diversity of WTO interests
(requiring it to compromise on certain issues). However, it has subsequently adopted alternative means of protecting its
interests. The multilateral system promoted through the waiver is now being undermined by:

pressure from the United States on countries to sign regional trade agreements incorporating agreements not apply the waiver;
and

other unilateral commitments by mainly developed countries not to apply the waiver.

As such, the effectiveness of the waiver will perhaps be increasingly limited (to the likely detriment of public health in
affected countries). Possible longer term solutions have been discussed, including:

a proposal to introduce an amendment to the TRIPS Agreement; and

a proposal to fundamentally develop public health in developing countries by permitting subsidies or some other trade
remedy.

However, these alternatives have generated limited support so far. More likely to be implemented are private initiatives, such
as:

pharmaceutical companies acting as donors of essential medicines; or

assistance provided by the Global Fund.

It remains to be seen how this issue will be resolved; there is no easy or obvious solution. Ultimately, the interaction of the
TRIPS Agreement with public health in developing countries serves mainly to exemplify the difficulties associated with
reconciling the diversity of developed and developing countries' interests and agendas in this area. It also, of course,
highlights the increasing importance of the TRIPS Agreement for international development.

Trade theory suggests that the protection of intellectual property rights and international development are not mutually
exclusive objectives. However, tension is always likely to exist between the two goals, because enhancing the protection of
intellectual property rights will only advance international development in a delayed manner and at a macroeconomic level.

The challenge for the international community is to recognise that inherent tension and to work towards solutions that
safeguard the advance of intellectual property rights, but that recognise and assist those adversely affected, particularly in
developing countries.