TRADE RELATED INTELLECTUAL PROPERTY RIGHTS(TRIPs):

ISSUES WITH REFERENCE TO DEVELOPING COUNTRIES.

CHAPTER NO 1
1.1 INTRODUCTION
In 1993, the GATT was updated (GATT 1994) to include new obligations upon its
signatories. One of the most significant changes was the creation of the World Trade
Organization (WTO). The 75 existing GATT members and the European
Communities became the founding members of the WTO on 1 January 1995. The other 52
GATT members rejoined the WTO in the following two years. Since the founding of the
WTO, 21 new non-GATT members have joined and 29 are currently negotiating membership.
There are a total of 161 member countries in the WTO, with Laos and Tajikistan being new
members as of 2013.
The General Council of WTO, on 4 May 2010, agreed to establish a working party to
examine the request of Syria for WTO membership. The contracting parties who founded
the WTO ended official agreement of the "GATT 1947" terms on 31 December
1995. Montenegro became a member in 2012, while Serbia is in the decision stage of the
negotiations and is expected to become one of the newest members of the WTO in 2014 or in
near future.
Whilst GATT was a set of rules agreed upon by nations, the WTO is an institutional body.
Although it was designed to serve multilateral agreements, during several rounds of GATT
negotiations plurilateral agreements created selective trading and caused fragmentation

among members. WTO arrangements are generally a multilateral agreement settlement

mechanism of GATT.

1.2 MAIN AGREEMENTS OF WTO

a) Agreement on Agriculture.
The Agreement on Agriculture includes specific and binding commitments
made by WTO Member governments in the three areas of market access, domestic
support and export subsidization for strengthening GATT disciplines and improving
agricultural trade. These commitments were implemented over a six-year period. The
Agreement also includes provisions on the implementation of these commitments.
b) Agreement on Textiles and Clothing Textile.
Trade was governed by the Multi-Fiber Arrangement (MFA) since 1974. However,
the GATT principles had been undermined by import protection policies, etc. The
agreement provides that textile trade should be deregulated by gradually integrating it
into GATT disciplines over a 10-year transition period, which expired at the end of
2004.
c) Agreement on Trade-Related Investment Measures (TRIMs)
In relation to cross-border investment, countries receiving foreign investment may
take various measures, including imposing requirements, conditions and Part II
Overview of the WTO Agreements 315 restrictions (investment measures) on
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investing corporations. In the Uruguay Round, negotiations were initially conducted

with an eye toward expanding disciplines governing investment measures. However,
the Agreement on Trade-Related Measures, which was the result of the negotiations,
banned only those investment measures inconsistent with the provisions of Article
and Article XI which have direct adverse effects on trade in goods.
d) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)
This agreement stipulates most-favored-nation treatment and national treatment for
intellectual properties, such as copyright, trademarks, geographical indications,
industrial designs, patents, IC layout designs and undisclosed information. In
addition, it requires Member countries to maintain high levels of intellectual property
protection and to administer a system of enforcement of such rights. It also stipulates
procedures for the settlement of disputes related to the agreement

1.3 ORIGIN OF TRIPS

TRIPS were negotiated at the end of the Uruguay Round of the General Agreement on
Tariffs and Trade (GATT) in 1994. Its inclusion was the culmination of a program of
intense lobbying by the United States, supported by the European Union, Japan and
other developed nations. Campaigns of unilateral economic encouragement under
the Generalized System of Preferences and coercion under Section 301 of the Trade Act
played an important role in defeating competing policy positions that were favoured by
developing countries, most notably Korea and Brazil, but also including Thailand, India and
Caribbean Basin states. In turn, the United States strategy of linking trade policy to
intellectual property standards can be traced back to the entrepreneurship of senior
management at Pfizer in the early 1980s, who mobilized corporations in the United States
and made maximizing intellectual property privileges the number one priority of trade policy
in the United States.
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After the Uruguay round, the GATT became the basis for the establishment of the
World Trade Organization. Because ratification of TRIPS is a compulsory requirement of
World Trade Organization membership, any country seeking to obtain easy access to the
numerous international markets opened by the World Trade Organization must enact the strict
intellectual property laws mandated by TRIPS. For this reason, TRIPS is the most important
multilateral instrument for the globalization of intellectual property laws. States like Russia
and China that were very unlikely to join the Berne Convention have found the prospect of
WTO membership a powerful enticement.
Furthermore, unlike other agreements on intellectual property, TRIPS has a powerful
enforcement mechanism. States can be disciplined through the WTO's dispute
settlement mechanism.

CHAPTER NO 2
TRADE RELATED ASPECTS OF INTELLECTUAL PROPERTY
RIGHTS
2.1 AGREEMENT
a) Article 1- Nature and Scope of Obligations
Members shall give effect to the provisions of this Agreement. Members may, but shall not be
obliged to, implement in their law more extensive protection than is required by this
Agreement, provided that such protection does not contravene the provisions of this
Agreement. Members shall be free to determine the appropriate method of implementing the
provisions of this Agreement within their own legal system and practice.
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b) Article 2- Intellectual Property Conventions

1. In respect of Parts II, III and IV of this Agreement, Members shall comply with Articles 1
through 12, and Article 19, of the Paris Convention (1967).
2. Nothing in Parts I to IV of this Agreement shall derogate from existing obligations that
Members may have to each other under the Paris Convention, the Berne Convention, the
Rome Convention and the Treaty on Intellectual Property in Respect of Integrated Circuits.
c) Article 3- National Treatment
1.Each Member shall accord to the nationals of other Members treatment no less favourable
than that it accords to its own nationals with regard to the protection3 of intellectual property,
subject to the exceptions already provided in, respectively, the Paris Convention (1967), the
Berne Convention (1971), the Rome Convention or the Treaty on Intellectual Property in
Respect of Integrated Circuits. In respect of performers, producers of phonograms and
broadcasting organizations, this obligation only applies in respect of the rights provided
under this Agreement. Any Member availing itself of the possibilities provided in Article 6 of
the Berne Convention (1971) or paragraph 1(b) of Article 16 of the Rome Convention shall
make a notification as foreseen in those provisions to the Council for TRIPS.
d) Article 4- Most-Favoured-Nation Treatment
With regard to the protection of intellectual property, any advantage, favour, privilege or
immunity granted by a Member to the nationals of any other country shall be accorded
immediately and unconditionally to the nationals of all other Members. Exempted from this
obligation are any advantage, favour, privilege or immunity accorded by a Member:
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(a) deriving from international agreements on judicial assistance or law enforcement of a

general nature and not particularly confined to the protection of intellectual property;
(b) granted in accordance with the provisions of the Berne Convention (1971) or the Rome
Convention authorizing that the treatment accorded be a function not of national treatment
but of the treatment accorded in another country
e) Article 5- Multilateral Agreements on Acquisition or Maintenance of Protection
The obligations under Articles 3 and 4 do not apply to procedures provided in multilateral
agreements concluded under the auspices of WIPO relating to the acquisition or maintenance
of intellectual property rights.
f) Article 6- Exhaustion
For the purposes of dispute settlement under this Agreement, subject to the provisions of
Articles 3 and 4 nothing in this Agreement shall be used to address the issue of the exhaustion
of intellectual property rights.

g) Article 7- Objectives
The protection and enforcement of intellectual property rights should contribute to the
promotion of technological innovation and to the transfer and dissemination of technology, to
the mutual advantage of producers and users of technological knowledge and in a manner
conducive to social and economic welfare, and to a balance of rights and obligations.
h) Article 8- Principles
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1. Members may, in formulating or amending their laws and regulations, adopt measures
necessary to protect public health and nutrition, and to promote the public interest in sectors
of vital importance to their socio-economic and technological development, provided that
such measures are consistent with the provisions of this Agreement.
2. Appropriate measures, provided that they are consistent with the provisions of this
Agreement, may be needed to prevent the abuse of intellectual property rights by right
holders or the resort to practices which unreasonably restrain trade or adversely affect the
international transfer of technology.

2.2 ASPECTS
The state of play of India`s obligations under TRIPS arising as on 1.1.2000 in respect of the
seven IPRs covered under TRIPS is briefly given below.
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a) COPYRIGHTS
Copyright and related rights: i.e., rights granted to authors of literary and artistic works,
and the rights of performers, producers of phonograms and broadcasting organizations.
The main purpose of protection of copyright and related rights is to encourage and
reward creative work. The distinguishing feature of this category of rights is that they
protect only the tangible expression of an idea and not the idea itself. Further, these rights
generally come into existence the moment a work is created and need not be registered
with any central authority.
b) TRADEMARKS
A trademark is a sign or mark that is used to distinguish the goods or services of one
enterprise from those of another enterprise. It can be any distinctive word, letter,
numeral, drawing, picture, shape, colour, sound, smell, logotypes, or any combination
of these that may be used for distinguishing goods and services, of any given
business. A trademark is used extensively by an enterprise to reach customers by
enabling customers to identify and locate the product. A trademark is issued by a
national office and is granted for a period of 10 years and may be renewed
indefinitely.

c) GEOGRAPHICAL INDICATION
Geographical Indications of goods are indications which identify a good as
originating in the territory of a country or a region or locality in that territory.
Typically, such a name conveys an assurance of quality and distinctiveness which is
essentially attributable to the fact of its origin in that defined geographical locality,
region or country. In contrast to other IPRs, a Geographical Indication is owned by
members of a community who produce the good in question.
d) DESIGN
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Design is another intellectual property right and refers to external features of shape,
configuration, pattern, ornamentation or composition of lines or colours applied to
any article, whether in two or three dimensional (or both) forms. Design does not
include any mode or principle of construction or anything which is mere mechanical
device. It also does not include any trade mark or any artistic work.
e) PATENTS
Patents provide property rights to inventions. An 'invention' may be defined as a
novel idea which permits in practice the solution of a specific problem in a field of
technology. Patents are available for any invention, whether products or processes, in
all fields of technology, provided that they are new, involve an inventive step and are
capable of industrial application. Thus, the TRIPS Agreement stipulates that countries
shall grant patents for inventions in all fields of technology and for both:
Products, and
Processes, including those used in manufacturing products.

f) TRADE SECRETS
A trade secret is an IPR that is with the holder indefinitely or rather as long as he can
keep his secret as a trade secret. To enable an enterprise to keep something as a trade
secret, the holder must ensure secrecy agreements with the employees in the business.
These can be built into the service contract agreements. For information to be treated
as a trade secret, it is necessary that there should be commercial value associated with
the information, that this commercial value would be lost, damaging the commercial
interests of the holder of the trade secret and that the holder had taken reasonable care
to protect the secret so that its loss would be possible only through an illegal access.
g) LAYOUT DESIGN OF INTEGERATED CIRCUITS
Modern age is electronic age. All the modern products are having transistors and other
circuity elements which are inseparably form on semi conductor materials and these
semi conductors are interested to perform an electronic function. Layout design of
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integrated circuits is considered as intellectual property. Infringement of these layouts

designs is punishable. The protection of integrated circuits and layout design was
internationally recognized and the treaty on intellectual property of integrated circuits
was made at Washington DC on May 26 1989.

CHAPTER NO 3
A MORE DETAILED OVERVIEW OF THE TRIPS AGREEMENT
3.1 FEATURES
The TRIPs agreement which came into effect from 1 Jan 1995 is to date the most
comprehensive multi lateral agreement on intellectual property. The areas of intellectual
property that it covers are: copyright and related property trademarks including service
marks, geographical indications including appellations of origins, industrial designs, patents
including the protection of new variety of plants, layout designs of integrated designs, and
undisclosed information including trade secrets and test data.
a) StandardsIn respect of each of the main areas of intellectual property covered by the TRIPs
agreement, the agreements sets out the minimum standards of protection to be provided
by each member. Each of the main elements of protection is defined, namely the subject
matter to be protected, the rights to be conferred and permissible exception to those
rights and the minimum duration of protection.
b) EnforcementThe 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.
c) Dispute Settlement11

The agreement make disputes between WTO members about the respect of the TRIPs
obligations subject to the WTOs dispute settlement procedures.

3.2 POLICY IMPLICATIONS OF TRIPS

Besides its significance in helping to secure agricultural trade liberalisation in the Uruguay
Round, TRIPS has important implications for domestic policy. Given the strong international
orientation of IPR protection, the analysis presented in this paper suggests that generally,
Australias best approach from an economic point of view seems to be to provide IPR
protection that complies with the minimum protection standards required by TRIPS, but does
not exceed those standards. Compliance with the minimum standards of TRIPS is advisable
in order to avoid political and trade retaliation and disciplinary action under the WTO. On the
other hand, providing protection beyond the minimum standards might hamper competition
in the domestic market and provide additional income to foreign IPR holders at the expense
of Australian consumers. Without reciprocal agreements with our major trading partners,
providing protection above the minimum international standards does not help our exporters.
However, in areas where IPR protection is mainly aimed to prevent imitation and copying by
domestic (rather than overseas) competitors, the rule not to exceed the minimum standards of
TRIPS might not represent the best approach.
The fairly general rule outlined above suggests that Australia should avoid introducing
legislative changes that might bring in protection standards well beyond the minimum
requirements of TRIPS, unless other benefits can be shown to outweigh costs. There are
currently a number of reform proposals under consideration by the Government (such as a
new form of patents for low level innovations, changes to the protection of designs and
improvements to the copyright protection of databases, digital transmissions and performers
rights) that are examined in the light of this criterion.

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3.3 THE TRIPS NEGOTIATIONS

The earlier international IPR protection system coordinated by WIPO proved less than
satisfactory in safeguarding against widespread piracy of copyright protected items, the
misappropriation of well known marks and the imitation of some patent protected inventions
in member and non-member countries. The increasing globalisation of the world economy
has made matters worse. Consequently, in the last two decades a growing political pressure
emerged from developed IP exporting countries (particularly the United States) to strengthen
the international protection of IPRs. Since many developing countries were reluctant to
embrace stronger protection of IPRs, an agreement had to be worked out that offered some
compensating benefits to these countries, to induce them to join a binding international IPR
agreement. This was accomplished through the forum of the Uruguay Round negotiations.
Initially IPR protection entered into these multilateral trade negotiations as a result of
complaints about exports from some East Asian and Latin American countries of pirated
copyright protected material and counterfeit products that misappropriated well known
marks. At a later stage, the agenda widened to include all IPR issues and not just these items.
After protracted negotiations, developing countries agreed to join a new international IPR
agreement, partly in exchange for the liberalisation of agricultural and textile imports by
developed nations. The ideological shift in many developing countries toward faith in the
market and free trade may have contributed to accepting a larger role for IPRs in providing
incentives for technological innovation and cultural endeavours, instead of viewing these
areas as public responsibilities. Last but not least, the threat of unilateral trade retaliation by
the United States and the European Union against IPR infringing countries was another factor
that convinced many developing countries to accept a multilateral IPR agreement.

3.4 REQUIREMENT OF TRIPs

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A TRIP requires member states to provide strong protection for intellectual property rights.
For example, under TRIPS:
a) Copyright terms must extend at least 50 years, unless based on the life of the author.
b)

Copyright must be granted automatically, and not based upon any "formality," such
as registrations, as specified in the Berne Convention.

c)

Computer programs must be regarded as "literary works" under copyright law and
receive the same terms of protection.

d)

National exceptions to copyright (such as "fair use" in the United States) are
constrained by the Berne three-step test

e)

Patents must be granted for "inventions" in all "fields of technology" provided they
meet all other patentability requirements (although exceptions for certain public interests
are allowed and must be enforceable for at least 20 years

f)

Exceptions to exclusive rights must be limited, provided that a normal exploitation of

the work and normal exploitation of the patent is not in conflict.

g)

No unreasonable prejudice to the legitimate interests of the right holders of computer

programs and patents is allowed.

h)

Legitimate interests of third parties have to be taken into account by patent rights.

i)

In each state, intellectual property laws may not offer any benefits to local citizens
which are not available to citizens of other TRIPS signatories under the principle
of national treatment TRIPS also has a most favoured nation clause.
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Many of the TRIPS provisions on copyright were copied from the Berne Convention for the
Protection of Literary and Artistic Works and many of its trademark and patent provisions
were modelled on the Paris Convention for the Protection of Industrial Property. It is the case
of the protection of software and database.
Computer programs, whether in source or object code, shall be protected as literary works
under the Berne Convention (1971). Compilations of data or other material, whether in
machine readable or other form, which by reason of the selection or arrangement of their
contents constitute intellectual creations shall be protected as such. Such protection, which
shall not extend to the data or material itself, shall be without prejudice to any copyright
subsisting in the data or material itself."

3.5 CHANGES INTRODUCED BY TRIPs

TRIPS is based largely on earlier international IPR agreements, including the Paris and Berne
Conventions dating back to the last century and the more recent Rome Convention and
Washington Treaty. In addition to mandating stricter enforcement procedures, TRIPS contains
a number of additions and elaborations to the legal and institutional norms and practices
specified in earlier international IPR agreements. The most significant ones are:
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a) the minimum patent term is set to 20 years, the minimum copyright protection term
for sound recordings and performances is 50 years and for broadcasts 20 years;
b) computer programs and databases must be protected with copyright;
c) countries must provide for the registration of service marks;
d) the provisions of the Paris Convention regarding the registration of well known marks
have been strengthened;
e) no country can force the use of a foreign trade mark in combination with a local mark;
f) the provisions of the Paris Convention regarding geographical indications have been
strengthened;
g) integrated circuit layout designs must be protected for at least ten years;
h) artificially developed new varieties of micro-organisms must be protected through
patents; no area of technology can be excluded from patent protection, with the
exception of medical methods and new life forms above the micro-organism level;
i) countries must protect new plant varieties, either within their patent systems or with a
separate system of breeders rights;
j) countries must develop a legal system for protecting trade secrets from unfair
disclosure in accordance with principles of fair competition.

3.6 OUTSTANDING ISSUES IN TRIPs

TRIPS has an in-built agenda for review and further consideration of issues that were not
resolved during the original negotiations. There are currently two issues subject to review
under this in-built agenda biological innovations is one, geographical indications is the
other.
a) IPR protection of biotechnology
A review on how to incorporate biological innovations into TRIPS has already
started, though it is not clear when negotiations as such will commence. The major
contentious issue in this area is whether TRIPS should require mandatory protection
of bioengineering innovations above the micro-organism level. TRIPS already
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requires the patentability of new micro-organisms, as well as sui generis IPR

protection of new plant varieties. Some of the controversy is related to ethical
concerns about the development of new life forms using genetic engineering
techniques. There is also debate whether new life forms created through
bioengineering techniques represent scientific discoveries or technological
innovations. Australia already permits the patenting of new life forms.
b) Geographical indications
The protection of geographical indications formed part of the Paris Convention and
consequently the original TRIPS agreement. Current negotiations on this subject have
been at the request of the European Union, which would like to see the same strong
protection that is now applied to wine and spirit geographical indications in TRIPS be
applied to other products, including processed foods, agricultural products and
handicrafts. It wants protection for a variety of terms that are now protected within the
European Union as geographical indications.

3.7 CRITICISM
Since TRIPS came into force, it has been subject to criticism from developing
countries, academics, and non-governmental organizations. Though some of this criticism is
against the WTO generally, many advocates of trade liberalisation also regard TRIPs as poor
policy. TRIPs wealth concentration effects (moving money from people in developing
countries to copyright and patent owners in developed countries) and its imposition
of artificial scarcity on the citizens of countries that would otherwise have had weaker
intellectual property laws, are common bases for such criticisms. Other criticism has focused
on the failure of TRIPs to accelerate investment and technology flows to low-income
countries, a benefit advanced by WTO members in the lead-up to the agreement's formation.
Statements by the World Bank indicate that TRIPs has not led to a demonstrable acceleration
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of investment to low-income countries, though it may have done so for middle-income

countries. Lengthy patent periods under TRIPs have been scrutinised for unduly slowing the
entry of generic substitutes and competition to the market. In particular, the illegality of preclinical trials or submission of samples for approval until a patent expires have been blamed
for driving the growth of a few multinationals, rather than developing country producers.
Daniele Archibugi and Andrea Filippetti argue that the importance of TRIPS in the process of
generation and diffusion of knowledge and innovation has been overestimated by its
supporters. This point has been supported by United Nations findings indicating many
countries with weak protection routinely benefit from strong levels of foreign direct
investment (FDI). Analysis of OECD countries in the 1980s and 1990s showed that while
total number of products registered increased slightly, the mean innovation index remained
unchanged.
The 2002 Doha Declaration affirmed that the TRIPs agreement should not prevent members
from taking measures necessary to protect public health. Despite this recognition, lessdeveloped countries have argued that TRIPs flexible provisions, such as compulsory
licensing, are near-on impossible to exercise. In particular, less developed countries have
cited their infant domestic manufacturing and technology industries as evidence of the
policy's bluntness.
TRIPS-plus conditions mandating standards beyond TRIPs have also been the subject of
scrutiny. These FTA agreements contain conditions that limit the ability of governments to
introduce competition for generic producers. In particular, the United States has been
criticised for advancing protection well beyond the standards mandated by TRIPs. The United
States Free Trade Agreements with Australia, Morocco and Bahrain have extended
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patentability by requiring patents be available for new uses of known products. The TRIPs
agreement allows the grant of compulsory licenses at a nations discretion. TRIPS-plus
conditions in the United States FTAs with Australia, Jordan, Singapore and Vietnam have
restricted the application of compulsory licenses to emergency situations, antitrust remedies,
and cases of public non-commercial use.

3.8 TRIPs IN DEVELOPING COUNTRIES

Effective developing country decision making concerning TRIPs and international
intellectual property rule making more generally, is hampered by a no. of factors. The first is
an inevitable consequence of these nations enormous diversity in terms of economic
circumstances. This diversity translates into quite desperate interest with respect to TRIPs. So
while congruent negotiating positions across the developing world are possible, widely ones
can arise too.

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The second difficulty is that intellectual property rights are designed with certain assumptions
as to what a protectable intellectual production should look like and this categories are
abundant in developed world but less so in most developing countries. In the latter nations,
creativity may be common but cannot easily be described or communicated in ways that lend
it to IP production. Of course, India cannot become a rich, oil based economy where there is
no oil to base its economy on. But most Indians work on the land and the diffusion of state of
the art knowledge and technologies is the only one part of the whole solution to the problem
of how to eke a decent income from agriculture.
Creativity is not the sole preserve of suited knowledge workers in gassy office blocks,
professional artist and musicians and laborarty scientist. If necessity really is the mother of
invention you would surely expect to see most innovations where the needs are greatest. And
no needs are greater than those of desperately poor people getting themselves and their
families through each day alive and well.

3.9 THE IMPACT OF TRIPS ON DEVELOPING COUNTRIES

The main purpose of the TRIPS agreement was to improve IPR enforcement in developing
countries. IPR related legal and enforcement practices in the developing world are a very
wide subject that will not be reviewed here. The interested reader can find relevant
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descriptive material in USITC (1988), Primo Braga (1995), Maskus and Penubarti (1996) and
Subramanian (1997).
The purpose of the discussion in this section is to outline in broad terms the directions for
reform in developing countries and to analyse certain developments that could be of
relevance to Australia.
a) The main problem areas
Exports from countries in East Asia and Latin America of pirated and counterfeit
products were one of the prime motives for formulating the TRIPS agreement. These
infringing exports were concentrated mainly in copyright material, in particular sound
and video recordings, books and software. The misappropriation of trade marks of
high class fashion goods was another major problem area.
b) Income transfers from developing to industrialised countries:
In regard to the first issue, on income distributional grounds one would like to see the
transfer of income from rich to poor nations and not the other way around, as is
claimed to have happened as a result of TRIPS (Frischtak 1993). However, excluding
the income transfer resulting from the decrease in the production and exports of IPR
infringing goods from developing countries, there have not been many TRIPS-related
income transfers from poorer to richer countries in connection with legitimate
business transactions.

c) Technology transfer and direct foreign investment

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In regard to the transfer of technologies, tighter IPR protection disciplines are not
entirely unfavourable for developing countries. The majority of recently patented
inventions are largely irrelevant to the needs of developing countries, which are
unable to imitate on a wide scale even technologies that are many decades old, due to
shortages of capital, skilled labour and manufacturing experience. Addressing these
problems is more crucial to their development needs than facing fewer restrictions on
the imitation of the most recent inventions, apart from a few cases of easy free-riding.
d) Implications for Australia
There are a number of implications for Australia from the TRIPS driven IPR reforms
currently under way in the developing world, particularly in South and East Asia.
While it is not clear to what extent IP piracy has diminished, there has been some
improvement in the international cooperation to combat it. This weakens the
TRADE-RELATED ASPECTS OF IPRS case for maintaining the prohibition on
parallel imports, which is partly aimed at reducing the risk of importing pirated
products. At the present stage, this seems to be the most important policy implication
from the on-going IPR reforms in developing countries.

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3.10 EMERGING STRATEGIES TO REACH THE POOR:

Assessing the implications of TRIPS for the development of new products to treat
diseases of poverty is difficult. Technology transfer and innovation, in general, are
strongly viewed as ways to strengthen an economy; clearly, however, emerging
pharmaceutical industries can do more than generate new knowledge, skilled labour,
and markets. These industries can address social objectives by developing healthrelated products to meet local needs. But will the emerging pharmaceutical industries
in Brazil, China, India, and elsewhere become sources of new medicines for diseases
that disproportionately affect low-and middle-income nations? Early evidence
suggests the answer is no. Pharmaceutical firms in India are focusing globally,
exploiting their strengths to develop or improve therapeutic drugs for wellcharacterized medical conditions that exist in robust global markets. For example,
based on projected sales growth, Ranbaxy Laboratories aspires to increase its
percentage of revenue from sales to member countries of the Organisation for
Economic Cooperation and Development (OECD) from 20% in 2000 to 70% in 2007
(presentation at investors conference in Mumbai, September 2004).
The public sector predominantly remains responsible for promoting the
development of new technologies to meet local needs. For example, the government of
India is addressing this task by promoting investment in drug development through
several innovative schemes, such as increased R&D tax benefits and subsidies to
support industryuniversity partnerships. The New Millennium Indian Technology
Leadership Initiative, for example, supports local technology partnerships between
publicly supported R&D institutes and industrial companies. Among health-related
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activities, the program supports the development of new targets, drug delivery
systems, bio enhancers, and therapeutics for latent mycobacterium tuberculosis to
better manage Indias high disease-burden of tuberculosis. Researchers are also
working to identify gene based drug targets for prevalent cancers in India. The
program may serve as a model for supporting local publicprivate partnerships in
other regions, especially as firms seek academic ties to enhance their R&D base in
drug discovery. Importantly, when the public sector invests in product development, it
can control the intellectual property to help benefit the poor
Equally important, the new global IP standards have emerged just as public
private product-development partnerships (PDPs) are pioneering creative forms of IP
management. PDPs use intellectual property as a negotiating tool for developing highquality, affordable therapeutics and vaccines for diseases of the poor. For example, the
Medicines for Malaria Venture (MMV) has formed technology partnerships to develop
an artemisinin-derived lead compound for malaria. In explaining the success of the
partnership, MMV points to its pragmatic approach to collaboration with the private
sector, an approach made possible by the effective identification and management of
intellectual property. Indeed, each PDP must adapt its IP strategies to the contributions
of its public sector and industrial partners. Nonetheless, PDPs share the common goal
of constructing deals that both provide incentives to the private sector and meet the
social objectives of the public sector. These deals are achieved through negotiated
agreements on territorial markets, pricing structures for public and private markets, or
field of use, among other areas.
.

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3.11 TRIPS AND PUBLIC HEALTH SAFEGUARDS:

TRIPS also raises issues related to compulsory licensing and parallel trade.These
public-health safeguards are provided under the TRIPS agreement and were reinforced by
the Doha Ministerial Conference. In December 2005, the WTO Council permanently
adopted a key policy on compulsory licenses that had existed as a waiver since 2003. The
waiver has significantly improved the ability of developing countries without
manufacturing capabilities to import patented drugs from sources other than the
originator company. The waiver will become a formal part of the agreement after WTO
members ratify it.
Production under compulsory licenses, however, presents some operational
challenges. First, companies need to secure adequate know-how from the original
manufacturer, or from elsewhere, to recreate products. Second, the products must reach
markets that are large enough to enable compulsory licensees to recoup development and
production costs. While compulsory licenses are potentially beneficial tools, developing
countries can use other ways to help ensure that intellectual property does not create
barriers to access. These include both conventional licensing arrangements and, notably,
the enactment of laws to permit and regulate the governments use of patented inventions.
Other options include the actions of patent courts to protect the public interest, the
thoughtful management of genetic resources and traditional knowledge, and the judicious
framing of competition law and policy.

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In sum, the international IP standards mandated by TRIPS allow member nations

considerable discretion to enact laws and provisions that both meet treaty obligations and
support national innovation policies and development priorities.

CHAPTER NO 4
CASE STUDY
Basmati Rice Patent:
Basmati which means the perfumed one is a high-quality, long-grain, semidwarf rice that
has been grown in the foothills of the Himalayas for thousands of years. Basmati rice requires
deep fertile soil, cool climate and a short photoperiod. Therefore it is difficult to grow
Basmati rice for commercial purposes in other areas. Nonetheles, a Texas rice development
company, RiceTec, began producing and exporting a Basmatitype rice it called Texmati in
1985, long before TRIPS. After TRIPS came about, RiceTec sought to obtain a patent on its
rice. On September 2, 1997, RiceTec did obtain a patent titled Basmati rice lines and grains
on the basis of 20 claims made by the company in its patent application to the United States
Patent and Trademark Office (USPTO). The patent was for novel rice lines, methods used to
make the different varieties and determine the rice quality.1 RiceTecs claims, nonetheless,
were in fact typical characteristics of Basmati rice. In fact, the 2-acetyl-1-pyrroline content
compound is what gives Basmati rice its distinct aromatic scent. Based on the patent granted
to RiceTec by the USPTO, RiceTec applied for the registration of the trademark Texmati
with the U.K Trademark Registry in 1997. In April 2000, officials of the Indian Agricultural
and Processed Food Products Export Development Authority (APEDA), a body established
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for development of agricultural commodities and furthering their exports, filed an application
with the USPTSO to reexamine the Basmati patent, specifically claims 15 through 17. It took
APEDA over two years to gather the data to challenge the claim due to the intricacies of
RiceTecs claims. Another complication is 1 6 that under U.S. patent law, a patent can be
challenged only after it is granted. Further, challenging an entire patent is complex because if
one loses on even one count of the claims in the patent the entire patent can be upheld. Soon
after APEDAs challenge, RiceTec gave up the right to claim 4 and claims 15 through 17.
Even with this concession, however, the USPTO found that the 16 remainder claims were
also questionable. Subsequently, RiceTec was issued notice by USPTO on March 27, 2001
that its patent was in jeopardy. RiceTec then withdrew the remainder claims except claims 8,
9, 11, 12 and 13 which pertained to new cross bred lines developed by RiceTec that are not
similar to any of the varieties grown in India, although Rice Tec claims that the new rice
varieties produce grains similar or superior to those of good quality Basmati rice. Thus
RiceTec now has a narrow patent on three specific rice varieties developed through the
companys own research. However, because it no longer has a patent on Basmati lines, it is
now prohibited from used the term Basmati in marketing its rice. Nevertheless, the revised
patent does not prohibit RiceTec from marketing its rice as similar to Basmati . RiceTec
markets Texmati, Kasmati and Jasmati. Though India was successful in winning the
legal battle against RiceTec in the US, it still faces legal battles in about 25 countries for 40
different cases since TRIPS places the onus on the importing nation, not the exporting nation,
of deciding whether another nations geographical indication of its traditional goods is valid.
7 According to APEDA of India, these cases are varied and the battle ranges over obtaining
exclusive control over the Basmati trademark in each country to breach of the geographical
indication of Basmati. Countries where legal battles are currently waged are Brazil, Chile,
Greece, Britain, South Africa, Jordan, United Arab Emirates, Spain, Turkey, Kuwait and
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Taiwan. In order to cover the legal costs to fight the cases, the All India Rice Exporters
Association has established a Basmati Development Fund which has been collecting Rs
50/tonne for Basmati rice exported from India. India has also obtained the aid of the
Trademark Watch Agency to keep a watch on any new trademark applications for Basmati
rice or its misleading variations that are filed overseas. Of 40 cases filed, India has been
successful in winning 15 cases against countries like Britain, Australia, France, Spain, Chile
and UAE. In Spain, APEDA has been successful in obtaining a registered trademark for
Basmati rice as aromatic rice produced in the sub-continent, thus deterring non-Indian or
Pakistani food companies from using the Basmati brand name. In Brazil, India has been able
to overturn an application for using Basmati as a trademark for sweets and condiments. India
has also been successful in two other cases against RiceTec in Greece and UK (Nilacharal,
2001). In France a food company Establissments Haudecoeur La Courneuve was given two
trademarks by the French government to use the name Basmati, specifically, Riz Long
Basmati and Riz Long Basmati Riz du Monde (The Economic Times, 1998). The Indian
government has opposed the trademarks and is awaiting a decision from the French
Trademark Office. In Greece, RiceTec filed an application to register Texmati, Jasmati
and Kasmati as trademarks while in the UK an application was filed to 8 register Texmati
as a trademark. India was able to overturn both applications on the grounds that the names
were very similar to Basmati rice and therefore very misleading . India could have avoided
the legal battle and strengthened Basmatis position in the global market if it had registered
Basmati as a geographical indication earlier, however, this would have required updating its
intellectual property laws, a process which has been slow in country without a long history of
trademark and patent law. It eventually did so, but by then it came at a cost. Further, a
revamped TRIPS agreement that extended article 23 to cover traditional goods, not just wines
and spirits, would also have prevented RiceTec from marketing its Kasmati brand rice as
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traditional Basmati style or the Texmati brand as American Basmati. In part because of
stories like this, India, Switzerland, EU, Czech Republic, Morocco and others are advocating
for stronger and wider protection for agricultural products under Geographical Indications.
However the United States, Australia, and New Zealand, who were initially in favor of
intellectual property rights and WTO and geographical indications for wines and spirits, are
opposed to the widening of Article 23 of the geographical indications to cover other
agricultural products that they see as mostly generic (RAFI, 2000). Whether or not to allow
imports of products that are labeled in a manner misleading to the general public is a
discretion exercised by the individual importing country. For example the UK Grain and Feed
Trade Association which is the largest importer of Basmati rice in Europe, specifically states
that only long grain rice from India and Pakistan can be labeled as Basmati rice. Saudi Arabia
which is the largest importer of Indian Basmati allows only Basmati rice grown in the Indian
sub- 9 continent to be labeled as Basmati rice. Therefore, the Indian Basmati is offered
protection in these countries . The United States, however, merely considers Basmati to be a
generic name like durum wheat. The USA Rice Federation (1998) advocates that the terms
basmati and jasmine refer to types or generic classes of aromatic rice and that these terms
cover many varieties and broad range of qualities. Additionally, these terms are not restricted
to products or varieties produced in any specific country or groups of countries. So far, India
cannot obtain a trademark for Basmati in the US . A point to note here is that RiceTec applied
for a patent after TRIPS came into force. Prior to TRIPS member countries were not required
to provide adopt common global levels of protection for intellectual property. Therefore,
there was little India could to obtain GI for Basmati rice in the United Sates. Another problem
relates to the fact that Basmati is not literally associated with a place. For example
Champagne is named after the champagne region of France where the wine is produced.
Also, Basmati exporters and producers do not label the rice so as to link the geographical
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origin with the product. Most Basmati rice packages usually print only the country of origin
on the label. As stated in article 24, in order for GIs to be protected in other member
countries,they must be protected under national law in their country of origin, something
which India has been very slow to accomplish. Though the Indian government passed the
Geographical Indication of Goods (Registration and Protection) Bill in 1999, currently, only
Darjeeling tea is protected under this Act. Further, a national registry of the goods offered
protection under this Act still needs to be established and the manner in which 10 protection
and registration will be offered is still to be determined. Two key points that we wish to
analyze from the patent granted to RiceTec, are whether India suffered any losses in its key
export market as results of not providing adequate protection to Basmati rice and also to
determine whether the extension of article 23 would benefit India in the many legal cases it
currently faces worldwide.

CHAPTER NO 5
A. RECOMMENDATIONS
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Firstly do consult law firm familiar with intellectual property law. The law firm
will help you to identify those elements of your intellectual property that you

should protect and advise you on the process you apply for registration.
Secondly do register your intellectual property rights in own countries. Trademark
and patent regimes operate on a first to file registration system, rather than a
first to use or first to invent basis. The safest action is to register your IP as

soon as possible.
Third, do carry out due diligence on your partners, agents and/or distributors.
Unfortunately, associates or former employees are a frequent source of IPR
violations. Make sure that you have clear contractual protection for all aspects of
IP, including clauses on your ownership rights and use limitations on your partner,
distributor, licensee or employees. When hiring employees, it is important to have
them sign an agreement that contains clauses on confidentiality, non-concurrence

and the use and ownership of IP.

Fourth, do include clear contractual protection for all IP. Contractual problems are
also a frequent source of IPR infringements. Ensure that you have your own legal
counsel (do not rely on the legal advice from your Chinese partner) before you
enter into an agreement and be prudent in conducting negotiations. Remember that
the best contracts are those that do not have to be enforced.

B. CONCLUSIONS
The proper role of IPRs in light of a globalizing economy remains contested. The
difficulty stems from divergent concepts of property and ownership. Different legal
31

principles exist from country to country, stemming from the particular social, political
and ideological experiences of each. Prior to the TRIPS Agreement, IPRs protection
ranged from totally open regimes that did not protect private IPRs to highly
protectionist regimes in which both products and processes could be protected. While
views both for and against extensive IPRs protection, as evidenced by the TRIPS
Agreement, are strong, there is little concrete evidence that it is the only incentive for
innovation or that it will lead to socio-economic and technological development.
Ultimately, the TRIPS Agreement is the type of global protection of IPRs that
developed countries have been seeking. However, the TRIPS Agreement
simultaneously narrows the developing countries access to technology, discouraging
the rapid diffusion of new technology needed for economic growth. Some headway
was made at Doha on addressing issues faced by developing countries and LDCs in
relation to the TRIPS Agreement, but the balance between creating private incentives
and fostering technology transfers and development for the public benefit has not yet
been achieved. After Doha, it is clear that the TRIPS Agreement should not prevent
developing countries from addressing public health needs.

C. BIBLIOGRAPHY

Akpan, G. (2008). Developing Countries and the Reform of the WTO

Dispute Settlement System: Expectations and Realities. In Samson, G.P. &
Chambers B. (Eds.), Developing Countries and the WTO (pp. 255-279).

New Delhi, India: United Nations University Press, Bookwell.

Srivastava, V (2003). Indias Accession to the Government Procurement
Agreement: Identifying Costs and Benefits. In Matoo, A. and Stern R.M.
32

(Eds.), India and the WTO (198-234). Washington D.C., U.S.A.: World

Bank and Oxford University Press.

Sampson, G.P. (2008). Trade in Services and Policy Priorities for
Developing Countries. In Samson, G.P. & Chambers B. (Eds.), Developing
Countries and the WTO (pp. 86-106). New Delhi, India: United Nations

University Press, Bookwell.

Saqib, M. (2014). Tachnical Barriers to Trade and the Role of Indian
Standard SettingInstitutions.In Rout, T.K. & Majhi, B. (Eds.) WTO, TRIPS
and Geographical Indications (GIs). New Delhi, India: New Century
Publications.

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