Introduction to the TRIPS Agreement:
To review the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), its origins and background, as well as its contents. The various forms of intellectual property (IP) are identified and their harmonized standards of protection described.
2.2 Historical background
2.3 TRIPS content synopsis
Within the GATT framework several international negotiation rounds have aimed at harmonizing and facilitating global trade. The Agreement on Trade-Related Aspects of Intellectual Property Rights is one of the results of the Uruguay Round.
TRIPS Agreement more ambitious than contemplated at the start of the Uruguay Round
The foundations for the Uruguay Round were laid by a ministerial meeting in Geneva in November 1982, where contracting parties agreed to a new negotiation round to begin in September 1986 in Punta del Este, Uruguay.
Government ministers assembled in Uruguay adopted an agenda covering every outstanding trade-related policy issue. Within the framework of these negotiations there was a request from the United States of America to include a multilateral agreement on minimum standards for intellectual property rights.
The multilateral trade negotiations took very long and it was only on 15 December 1993 that all aspects of the negotiations were finally resolved. The "Final Act Embodying the Results of the Uruguay Round on Multilateral Trade Negotiations" was signed at Marrakesh, Morocco, on 15 April 1994. By signing this Final Act, countries agreed to submit the "Marrakesh Agreement establishing the World Trade Organization" (called also "World Trade Organization Agreement" or "WTO Agreement") for the consideration of their competent national authorities with a view to seeking their approval. As one of the Agreements for which the WTO Agreement is an umbrella, the TRIPS Agreement entered into force on 1 January 1995.
The "Marrakesh Agreement establishing the World Trade Organization" has four Annexes. Annex 1 (divided, in its turn, in Annex 1A, Annex 1B and Annex 1C), Annex 2 and Annex 3 are integral parts of the Agreement, binding on all Members. The legal instruments included in these three Annexes are referred to as Multilateral Trade Agreements. On the contrary, Annex 4 is part of the Agreement only for those Members that expressly accept it. The legal instruments included in Annex 4 are referred to as Plurilateral Trade Agreements. Annex 1C is entitled "Agreement on Trade-Related Aspects of Intellectual Property Rights".
The growing international economic relations between States all over the world has given rise to global counterfeiting and piracy problems related to intellectual property. This has become a critical policy issue in trade relations due to the significant value of know-how embodied in commercialized products.
The lack of protection of IP at the international level has been the source of rising tensions in economic relations and has hindered technological transfer and innovation. Existing agreements in the area did not have enforcement mechanisms or sanctions if the obligations were not met. Equally, there was concern that measures and procedures to enforce IPR do not themselves become barriers to legitimate trade. It was to deal with these issues that the international community engaged in the development of a multilateral agreement on trade-related aspects of intellectual property rights.
TRIPS covers all forms of intellectual property
The TRIPS Agreement encompasses, in principle, all forms of intellectual property and aims at harmonizing and strengthening standards of protection and providing for effective enforcement at both national and international levels. It addresses applicability of general GATT principles as well as the provisions in international agreements on IP (Part I). It establishes standards for availability, scope, use (Part II), enforcement (Part III), acquisition and maintenance (Part IV) of Intellectual Property Rights. Furthermore, it addresses related dispute prevention and settlement mechanisms (Part V). Formal provisions are addressed in Part VI and VII of the Agreement, which cover transitional, and institutional arrangements, respectively.
General provisions and basic principles
Part I of the Agreement contains general provisions and basic principles. In Article 1 the implementation framework is set out for Members. Governments commit themselves to minimum standards, for which compliance is mandatory. Governments are free to increase additional intellectual property rights (IPR) protection or to decide how such protection should be adopted in their own legal system and practice, provided such protection does not contravene the provisions of the Agreement.
Earlier treaties on IPR were not meant to be abrogated by TRIPS. Negotiating parties therefore included substantive provisions to this effect in Article 2. As a result, the Paris Convention for the Protection of Industrial Property, the Berne Convention for the Protection of Literary and Artistic Works and the Rome Convention (International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations), as well as the Treaty on Intellectual Property in Respect of Integrated Circuits became part of the aspects to be considered in the implementation process.
MFN and national treatment
The general principles of the GATT Agreement, employed as a framework for the Uruguay Round negotiations, are reflected in the TRIPS general provisions found in Articles 3 and 4. Members are compelled to respect the principle of "national treatment" (Article 3), under which nationals of other countries are to be granted treatment no less favourable than that accorded to the Member's own nationals with regard to the protection of IP. Likewise, the "most-favoured-nation" (MFN) commitment of Article 4 must be considered. According to this, an advantage conferred on any country must be extended to all Members. This is a novelty in the field of intellectual property.
Article 7 states that the protection of intellectual property rights should aim at promoting technological innovation and the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge, in a manner conducive to social and economic welfare; it should also aim at a balance of rights and obligations.
With respect to the enactment or amendment of their national laws, Members may adopt measures necessary to protect public health and nutrition and to promote public interest in sectors of vital importance for their socio-economic and technological development, provided that such measures conform to the TRIPS Agreement. Moreover, governments are entitled to provide for measures to prevent the abuse of IPR by right holders or to contest practices which unreasonably restrain trade or adversely affect the international transfer of technology, again consistent with the provisions of the Agreement.
Part II of the Agreement addresses, in its various sections, the different kinds of IPR and establishes standards for each category.
According to the Agreement, copyright protection shall extend to expressions and not to ideas, procedures, methods of operation or mathematical concepts as such.
Copyright is granted to literary work, musical work, dramatic work, pictorial work, sculptural work, architectural work, choreographic work, graphic work, motion picture, sound recording, audiovisual work, computer programmes, etc. The owner of a copyright has the right to exclude others from reproducing, distributing, preparing derivative works, performing, displaying, or using the work covered by copyright for a specific period of time. The essence of copyright is originality, which implies that the copyright owner or claimant originated the work. However, a work of originality need not be novel. Originality does not imply novelty in copyright law; it only implies that the copyright claimant did not copy from someone else.
The Section also makes reference to the Berne Convention for the Protection of Literary and Artistic Works of 1971 and establishes that Members should comply with Articles 1 through 211 and with the Appendix thereto2. Members are compelled to provide enforcement procedures to protect these rights.
For the first time at the international level, rental rights for phonograms, films and data compilations and minimum standards of protection for works not belonging to natural persons are being granted. Section 1 is also dedicated to the protection of software, in particular computer programmes which, whether in source or object code, should be protected as literary works under the Berne Convention.
According to this section of Part II of the Agreement, 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 and therefore eligible for registration as a trademark. The holder of a trademark has the right to exclude others from using that trademark.
Based on the provisions laid down in the Paris Convention for the Protection of Industrial Property, the TRIPS Agreement defines the signs' criteria necessary for eligibility for trademark or service mark protection, laying down prerequisites for assignment, terms of protection and exploitation of the entitled rights.
Geographical indications 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.
Several commercial products are traditionally produced in a specific geographically definable region. Where these products are accredited specific criteria essentially attributable to their geographical provenance, the geographical indication becomes, in trade relations, the reliable "carrier" of qualifying product characteristics. Geographical indications are then ascribed the function and importance of trademarks and are entitled to legal protection.
Section 3 incorporates the principles of the Lisbon Agreement for the Protection of Appellations of Origin and their International Registration signed in 1958 and revised in 1967, although without explicit reference in the text.
Under the Agreement Members are committed to adopt legislation which prevents the use of indications likely to mislead the public as to the geographical origin of the goods or to constitute an act of unfair competition. Members should also refuse or invalidate the registration of a trademark which contains or consists of a geographical indication with respect to goods not originating in the territory indicated, if use of the indication in the trademark is of such a nature as to mislead the public as to the true place of origin.
Wines and spirits
More restrictive provisions have been developed for wines and spirits. Here, Members shall provide the legal means for preventing the use of a geographical indication identifying wines or spirits as not originating in the place indicated by the geographical indication in question, even where the true origin of the goods is indicated or where the geographical indication is accompanied by corrective supplements such as "kind", "style", "imitation" or similar. The holder of the right does not have to show that there is a likelihood of confusion or that there is unfair competition; the use of an identical or similar indication of origin is itself an infringement.
Section 3 also comprises exceptions to given provisions. Previously existing protection of rights may not be diminished because of the Agreement. Members may refuse protection of geographical indications, which have become generic terms of product description in that Member.
The implementation process must avoid distortion of prior trademark rights. Where a trademark right has been applied for or registered in good faith, or where rights to a trademark have been acquired through use in good faith either before the date of application of the Agreement in that Member or before the geographical indication is protected in its country of origin, implementing measures should not prejudice eligibility for or the validity of the registration of a trademark, or the right to use a trademark, which is identical with, or similar to, a geographical indication.
Members are not obliged to protect geographical indications which are not or cease to be protected in their country of origin, or which have fallen into disuse in that country.
According to Section 4 of Part II of the Agreement, Members shall provide for the protection of independently created industrial designs that are new or original.
Also based on the Paris Convention, yet going far beyond that, the Agreement undertakes to protect industrial designs for a minimum period of ten years. This enables the right holder to prevent third parties not having the holder's consent from manufacturing, importing or selling products embodying the protected design, when such acts are undertaken for commercial purposes.
A patent is an IPR granted to inventors. The inventor, as owner of the patent, has the right to exclude any other person from making, using, selling or importing the invention protected by the patent, for a certain period of time in a given territory.
Before the adoption of the Agreement, countries were free to determine the terms for patentability, the rights conferred to patent holders and the duration of patent protection. The establishment of areas of non-patentability was also left to countries' own discretion. It is not surprising that patent law was thus tailored to follow countries' own economic interests. This resulted in diverging standards among Members, which inevitably caused substantial tensions in global trade relations.
Partly based on the Paris Convention in its latest version, Section 5 lays down minimum standards for patent law at the international level, thus mitigating this longstanding problem among Members. According to the provisions of the Agreement, Members are committed to make patents available for any invention, whether products or processes, in all fields of technology without discrimination as to the place of invention and whether products are imported or locally produced, provided the requirements of novelty, inventiveness and industrial applicability are fulfilled. Mandatory terms of application comprise complete and sufficiently clear disclosure of the invention as to the method of use and production.
Exceptions from the rule of patentability are admissible where inventions are contrary to ordre public or morality, or where inventions are dangerous to human, animal or plant life or health or to the integrity of the environment. It is no longer possible to exclude patentability on the grounds that it would harm economic development. Members may also exclude from patentability diagnostic, therapeutic and surgical methods for the treatment of humans or animals.
Members can also exclude from patentability plants and animals other than micro-organisms, as well as naturally occurring breeding methods. However, Members are required to allow the patentability of non-biological and microbiological processes such as biotechnological gene manipulation, gene transfer and so on. Members must also provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof (Article 27.3(b)). The complexity of this subject matter prevented a clear definition of the implementation terms and left unresolved differences among the contracting Parties. Hence, Article 27.3(b), although not a minor commitment, is viewed as a transitional solution which, according to the Agreement, was to be reviewed four years after the date of the entry into force of the Agreement.
Patent protection within TRIPS standards must confer on the right holder exclusive rights of making, using, offering for sale, selling and importing. Process patents must additionally extend these rights over products obtained directly by the process in question. Patent owners shall also have the right to assign, or transfer by succession, the patent and to conclude licensing contracts.
Minimum period of protection
Members are committed to provide this protection for a minimum period of 20 years commencing on the filing date. However, Members are entitled to provide for exceptions to the exclusive rights conferred by a patent, where such exceptions do not unreasonably conflict with the normal exploitation of such rights.
Section 5 contains a "reversal of burden of proof". Provided the patent's subject matter is a process for obtaining a product, judicial authorities have the right to call the defendant to prove that the process by which an identical product is produced, substantially differs from that which benefits protection.
Rules for compulsory licensing
Where patentee and license applicant have failed to agree on commercial terms and within a reasonable period of time, provisions are included to allow for the issuance of compulsory licences under defined conditions, and which require the payment of adequate remuneration to the patentee in each case. Governments are equally subject to the terms of licensing.
For any decision based on such provisions Members are compelled to provide for the opportunity for judicial review from a higher authority.
In Section 6 of Part II of the Agreement, Members agree to provide protection to the layout-designs (topographies) of integrated circuits.
Authorization of the right holder is necessary for importing, selling, or otherwise distributing for commercial purposes a protected layout-design, an integrated circuit in which a protected layout-design is incorporated, or an article incorporating such an integrated circuit only in so far as it continues to contain an unlawfully reproduced layout-design.
As regards the Treaty on Intellectual Property in Respect of Integrated Circuits, the TRIPS Agreement gives additional terms of protection for this subject matter, i.e. minimum protection for ten years, and provides for minimum penalties for infringements.
Recognizing the commercial value of trade secrets and non patentable "know-how", TRIPS requires Members to develop national legislation to protect such information from being disclosed to, acquired by, or used by persons without the consent of the person who is lawfully in control of it, in a manner contrary to honest commercial practices. To be awarded protection, such information must be secret, have commercial value because it is secret, and have been subject to reasonable steps to keep it secret.
Likewise, these provisions are valid, under defined circumstances, for information submitted to governments (i.e. undisclosed tests or other data submitted as a condition of approving the marketing of pharmaceutical or agricultural chemical products), giving protection against unfair commercial use.
Definitions of abuse
In the last section of Part II of the Agreement, Members agree that some licensing practices or conditions pertaining to IPR which restrain competition may have adverse effects on trade and may impede the transfer and dissemination of technology.
The section provides for consultations between governments where there is an abuse of IPR resulting in an adverse effect on competition.
Enforcement of IPR
Sufficient protection for IPR would be worthless unless the right holders have the opportunity to claim their rights and infringers can be prosecuted. These issues are dealt with in Part III of the Agreement, which commits Members to the development of remedies and procedures under domestic law to ensure that IPR are effectively enforced for both national and foreign right-holders. The implementation should comprise procedures for effective action against infringement of IPR, ensuring that they are fair and equitable, not unnecessarily complicated or costly, and do not entail unreasonable time limits or unwarranted delays.
Without being obliged to put in place a judicial system distinct from that for the enforcement of domestic law in general, Members have to allow judicial review of final administrative decisions and initial judicial decisions.
Further provisions in Part III include civil and administrative procedures and remedies on evidence of proof, injunctions, damages and other remedies including the right of judicial authorities to order the disposal or destruction of infringing goods. Where a delay is likely to cause irreparable harm to right-holders or where evidence is likely to be destroyed, the same authorities should be conferred the right to order effective provisional measures.
Finally, Members must provide for criminal procedures and penalties at least in cases of wilful counterfeiting or piracy on commercial scale. Remedies should include imprisonment and fines.
Rules governing acquisition and maintenance of IPRs
Part IV of the Agreement deals with procedural questions concerning acquisition and maintenance of IPR, yet avoiding detailed definition of the subject. Hence, Part IV contains general rules concerning procedures and formalities for obtaining IPR, requiring that they are fair, reasonably expeditious, not unnecessarily complicated or costly, and generally sufficient to avoid impairment of the value of other commitments.
Dispute settlement procedures
Part V of the Agreement includes dispute prevention and settlement procedures. For this purpose the integrated dispute settlement mechanism as laid down in the WTO Agreement shall apply to TRIPS issues.
Part VI of the Agreement lays down transitional arrangements, in particular as regards the obligation to apply the provisions of the Agreement. The deadlines for implementation are to be counted from the date of entry into force of the Agreement. The length of the period granted to ensure compliance depends on the level of development of Members as recognized by the United Nations.
Developed countries must comply with all the Agreement provisions within one year, i.e. by 1 January 1996. All Members, including those availing themselves of longer transitional periods, must comply with the provisions concerning "national treatment" and the "MFN" commitment.
Developing countries are required to bring legislation and practices into conformity within a transitional period of five years, i.e. by 1 January 2000; and in some cases of product patents, they are given a further period of five years3 .
Countries in the process of transition from a centrally-planned to a market economy are given the same privileges as to terms of implementation as developing countries, provided they are planning a structural reform of their IP system and encounter special problems in the preparation and implementation of the latter within domestic law.
In view of their special needs and requirements and the various obstacles that might deter rapid implementation, least developed country Members are given a transitional period of eleven years, i.e. by 1 January 2006. This transition period is subject to a possibility of extension upon duly motivated request.
Countries availing themselves of a transition period are compelled, since entry into force of the Agreement, to comply with the so-called "non-backsliding" clause and the "mail-box" provision. As to the former, during the period of transition, Members are not allowed to reduce the level of protection of IP to a level below that which is provided by the Agreement. As to the latter principle, developing country Members which do not provide for patent protection for pharmaceutical and agricultural chemical products at the date of entry into force of the WTO Agreement are compelled to accept the filing of patent applications for such products as from that date.
Council for TRIPS
Finally, provisions in Part VII establish the Council for TRIPS as the compliance monitoring institution of the Agreement. The Council for TRIPS shall, moreover, review the implementation of the Agreement after five years from coming into force and every two years thereafter at identical intervals.
1 These Articles regulate, inter alia, literary and artistic works covered by the Convention; nationality of authors and coverage; nationality and motion pictures or architecture; national treatment; moral rights; joint authorship; right of translation; right of reproduction; news coverage; rights of performance, broadcast, public recitation, and adaptation; sound recordings; cinematographic rights, protection of cinematographic works; and seizure of infringing works.
2 "Appendix Provisions Dealing with Developing Countries".
3 This second transition period of five years (ten years altogether) available to developing countries refers to cases where the developing country may delay the granting of a product patent protection to areas of technology which have not been protectable before 1 January 2000. Since the TRIPS Agreement does not oblige to extend product patent protection to plants, this second period of five years does not apply to plants and, in particular, to a sui generis system (see Article 65.4 of the TRIPS Agreement). See Leskien, Dan and Flitner, Michael, Intellectual Property Rights and Plant Genetic Resources: Options for a "Sui Generis" System, Issues in Genetic Resources No. 6, Volume Editor: Jan Engels, International Plant Genetic Resources Institute (IPGRI), Rome 1997, p. 4-5.