WIPO, WTO/TRIPS

UNIT 2 WIPO, WTO/TRIPS AND IPR and IPR

Structure

2.1 Introduction
Objectives
2.1 The Paris Convention
2.3 The World Intellectual Property Organization (WIPO)
2.4 WTO/TRIPS Agreement
2.5 India and the TRIPS Agreement
Patent Law in India
Interpretations and Implementations
2.6 Transitional Period
2.7 Summary
2.8 Answers and Hints to SAQs

2.1 INTRODUCTION

Intellectual property enjoys protection within a country under specific rights given by
the national laws for the purpose. Thus, Intellectual Property Rights (IPRs) are subject
to territorial limitations. The IPRs available within a country are not automatically
extendable to another country if no agreement exists between the two countries in that
respect. If laws for IPRs were substantially different from one country to another, the
flow of technology and intellectual resources/property would be severely impeded,
which in time would gravely undermine the economic growth and development. The
owners and creators of intellectual wealth would be reluctant to send their wares to a
country, which would be lax in safeguarding their interests.

Such a situation indeed arose in the nineteenth century, some 130 years ago, when
many foreign countries were not interested in bringing their inventions to an
exhibition in Vienna in 1873 at the invitation of the Empire of Austria–Hungary.
Inadequate legal protection to the exhibits as intellectual property was the reason
behind this unwillingness to participate. It gave a jolt to the international community,
precipitating the realization of an immediate need to forge an international
understanding on patent protection.

Objectives

After studying this unit, you should be able to:

• discuss the initiative taken at the Paris Convention;

• explain the provisions of the Patent Cooperation Treaty;
• understand the role of WIPO;
• discuss the agreement on the Trade Related Aspects of Intellectual Property
Rights (TRIPS of WTO);
• discuss Indian initiatives towards compliance with TRIPS; and
• analyse Indian provisions relating to TRIPS

2.2 THE PARIS CONVENTION

The realisation at Vienna served as a catalyst to convene the Congress of Vienna for
Patent Reform in 1873. An International Congress on Industrial Property at Paris in
1878 followed it. A proposal was circulated by France to establish an international
union for the protection of industrial property. There was an international conference
in Paris in 1880, which adopted a draft convention. The Paris Convention was finally 15
Awareness Course on approved and signed as a result of a diplomatic conference held in Paris in 1883. The
Intellectual Property
Rights
Paris Convention has since been revised several times: in Brussels (1900), in
Washington (1911), in The Hague (1925), in London (1934), in Lisbon (1958), in
Stockholm (1967), and amended on October 2, 1979.

The Paris Convention constitutes a Union of member countries for the protection of
industrial property (patents, utility models, industrial designs, trademarks, service
marks, trade names, indications of source or appellations of origin and the repression
of unfair competition). A utility model is an invention that is new and useful but fails
to qualify for patent protection. In several countries, including France, Italy, Germany,
Japan, Korea, Taiwan and Brazil, such small inventions of demonstrable practicability
can be protected, without the rigorous examination required for the subject matter of a
patent, for a period, generally ten years or less. A trade name is the name of an
enterprise. The Paris Convention stands for three basic principles:

1. National Treatment: Nationals of any country of the Union shall enjoy, in another
country of the Union, the same treatment as that other country extends to its own
nationals in respect of the protection of industrial property.

2. Independence of Patents: Patent applied for by a national of a member-country of

the Union, in other countries of the Union, is independent of patent obtained for
the same invention in any other country. It does not matter whether the country
where the patent has been granted is a member of the Union or not.

3. Right to Priority: If a national of a member country of the Union has applied for
patent in a Union country, he can claim the same priority date for application in
any other country or countries of the union for the same invention as for the first
application, provided the subsequent applications are made within a period of
twelve months from the filing of the first application.

The last revision of the Paris Convention in 1967 also led to the establishment of an
international organisation for administering and fostering intellectual property, called
as the World Intellectual Property Organisation (WIPO). In 1996 the WIPO came
up with two WIPO treaties: (a) the WIPO Copyright treaty (WCT) and (b) WIPO
Performances and Phonograms Treaty (WPPT). Today, the WIPO is the UNO’s
specialised agency for inter-governmental cooperation on intellectual property,
covering both the industrial property, and copyright and neighbouring rights. India is
a member of the WIPO. The mission of WIPO is to promote through international
cooperation the creation, dissemination, use and protection of works of the human
mind for the economic, cultural and social progress of all mankind. WIPO is
increasingly involved in helping developing countries to receive the full benefits of
the creations of their citizens as well as those of outside world. WIPO’s help is also
available in the preparation and enforcement of laws, in the establishment of
institutions and administrative structures and in the training of the personnel. WIPO
has also played notable role in resolution of disputes between individuals and
companies through the WIPO Arbitration and Mediation Centre. WIPO is adopting a
global approach to finding the places of IP in the framework of emerging issues such
as traditional knowledge, folklore, biological diversity, environmental protection and
human rights.

2.3 THE WORLD INTELLECTUAL PROPERTY

ORGANIZATION (WIPO)

The World Intellectual Property Organization (WIPO) is one of the specialized

agencies of the United Nations (UN) system of organizations. The convention
establishing the World Intellectual Property Organization was signed at Stockholm in
1967 and entered into force in l970. However, the origins of WIPO go back to l883
16
and 1886, with the adoption of the Paris Convention and the Berne Convention WIPO, WTO/TRIPS
and IPR
respectively. Both of these conventions provided for the establishment of international
secretariats, and both were placed under the supervision of the Swiss Federal
Government. The few officials who were needed to carry out the administration of the
two conventions were located in Berne, Switzerland.

Initially there were two secretariats (one for industrial property, one for copyright) for
the administration of the two conventions, but in l893 the two secretariats united. The
most recent name of the organization, before it became WIPO, was BIRPI, the
acronym of the French language version of the name: United International Bureau for
the Protection of Intellectual Property (in English). In l960, BIRPI moved from Berne
to Geneva.

At the l967 diplomatic conference in Stockholm, when WIPO was established, the
administrative and final clauses of all the then existing multilateral treaties
administered by BIRPI were revised. The said clauses had to be revised because
member States wished to assume the position of full governing body of the
Organization (WIPO), thus removing the supervisory authority of the Swiss
Government, to give it the same status as all the other comparable intergovernmental
organizations, and to pave the way for WIPO to become a specialized agency of the
United Nations system of intergovernmental organizations.

Long before the United Nations was established, BIRPI was the responsible
intergovernmental organization in the field of intellectual property. WIPO, the
successor to BIRPI, became a specialized agency of the United Nations when an
agreement was signed to that effect between the United Nations and WIPO, which
came into effect on December l7, l974.

The agreement between the United Nations and WIPO recognizes that WIPO is,
subject to the competence of the United Nations and its organs, responsible for taking
appropriate action in accordance with its basic instrument, treaties and agreements
administered by it, for promoting creative intellectual activity and for facilitating the
transfer of technology related to industrial property to the developing countries in
order to accelerate economic, social and cultural development.

Mission and Activities

The mission of WIPO is to promote through international cooperation the creation,

dissemination, use and protection of works of the human mind for the economic,
cultural and social progress of all mankind. Its effect is to contribute to a balance
between the stimulation of creativity worldwide, by sufficiently protecting the moral
and material interests of creators, on the one hand, and the provision of access to the
socio-economic and cultural benefits of such creativity worldwide, on the other hand.

WIPO’s place on the international scene has greatly changed since its beginnings,
when it was created to serve as the secretariat of treaties concluded between States.
Although WIPO has maintained this function (it currently administers 21 such
treaties), together with the consequential one of promoting intergovernmental
cooperation in the administration of intellectual property, its activities have not only
expanded, but also greatly diversified.

An example of the expansion of WIPO’s earlier work is the growth of its registration
activities. That is the increase in the use of international treaties, which facilitate a
single procedure to apply for patents, and registered trade marks and industrial designs
valid in up to all member States of those treaties. The Patent Cooperation Treaty
(PCT), the Madrid Agreement and Protocol concerning the International Registration
of Marks, and the Hague Agreement concerning the International Deposit of Industrial
Designs have all given rise to an increased volume of registration activities. To
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Awareness Course on strengthen this aspect of WIPO’s work, a new international treaty, namely, the Patent
Intellectual Property
Rights
Law Treaty, came into existence in June 2000. Its purpose is to streamline application
procedures and to reduce the cost of obtaining simultaneous patent protection in
several countries.

In its more recent history, WIPO is increasingly involved in helping developing

countries, whose creativity has yet to be adequately harnessed, to receive the full
benefits of the creations of their citizens, as well as those of the outside world.
WIPO’s role is to assist them also in the preparation and enforcement of laws, in the
establishment of sound institutions and administrative structures, and in the training of
appropriate personnel. WIPO has given particular attention to the 49 Least Developed
Countries (LDCs) and has also given similar assistance to countries whose economies
are in transition, in Central Asia, Central and Eastern Europe and in the Baltic region.

WIPO’s cooperation for development program is closely interwoven with

governmental and intergovernmental cooperation, including WIPO’s agreement with
the World Trade Organization (WTO), whereby WIPO assists developing countries in
the implementation of WTO’s Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS).

The problem of development is compounded by rapid technological and scientific

progress. WIPO’s approach is twofold: it is to identify and to promote international
solutions to the legal and administrative problems posed by digital technology,
especially the Internet, to the traditional notions and practices of intellectual property.

WIPO’s work in alternative dispute resolution between individuals and companies,

through the WIPO Arbitration and Mediation Center has been extended to cover the
problems arising from the misuse of domain names on the Internet. The Internet
Corporation has accredited WIPO for Assigned Names and Numbers (ICANN) to
administer cases filed under ICANN’s Uniform Domain Name Dispute Resolution
Policy. Disputes are handled and resolved on-line, enabling parties to settle cases in a
time and cost effective manner, without being physically present in the same place.

A project that will greatly advance the sharing of valuable intellectual property
information benefits is the worldwide global intellectual property information network
(WIPONET), a project launched by WIPO in 1999. WIPONET is designed to
establish a secure, global network linking the intellectual property offices of all
WIPO’s Member States, facilitating access to and exchange of information
worldwide. Already WIPO’s main and subsidiary websites are heavily used all over
the world.

WIPO is increasingly adopting a global approach not only to intellectual property in

itself, but to the place of intellectual property in the wider framework of emerging
issues such as traditional knowledge, folklore, biological diversity, environmental
protection and human rights. WIPO has followed the method of consultation and
empirical research to find, for example, the relation between intellectual property and
genetic resources, traditional knowledge and folklore.

One of the most significant present-day tasks of WIPO is to demystify intellectual

property, so that it is recognized as a part of everyday life not only by those directly
involved in it at governmental, legal, industrial and cultural levels, but also by any
others who compose civil society, whether in non-governmental organizations or
small businesses, whether farmers, public health personnel, individual creators or
simply interested members of the general public. Realizing the importance of small-
and medium-sized enterprises (SMEs) as the backbone of market economies, WIPO
has established a program aimed at helping them to fulfill their potential as a powerful
force behind wealth creation.

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WIPO’s agenda of outreach to all members of society is through their inclusion as WIPO, WTO/TRIPS
and IPR
stakeholders and partners in global and national intellectual property systems. To
ensure that such inclusion is of benefit to the parties concerned, WIPO pursues a
policy of empowerment. This means that WIPO’s activities aim to give to all levels of
society an awareness of how they have a stake in a healthy intellectual property
system, and also to provide them access to the knowledge, experience and expertise
which will enable them effectively to use those systems.

Administration

The Convention establishing WIPO provides for four different organs: the General
Assembly, the Conference, the Coordination Committee, and the International Bureau
of WIPO or Secretariat.

The general assembly consists of all the States, which are members of WIPO and also
of any of the Unions. The Conference consists of all the States, which are members of
the WIPO.

The General Assembly is the supreme organ of WIPO. Among its other powers and
functions, the General Assembly appoints the Director General upon nomination by
the Coordination Committee; it reviews and approves the reports and activities of the
Coordination Committee as well as the reports of the Director General concerning
WIPO; it adopts the financial regulations of WIPO and the biennial budget of
expenses common to the Unions; it approves the measures proposed by the Director
General concerning the administration of the international agreements designed to
promote the protection of intellectual property; it determines the working languages of
the Secretariat taking into consideration the practice of the United Nations; and it also
determines which States not members of WIPO and which intergovernmental and
international non-governmental organizations shall be admitted to its meetings as
observers.

The fourth organ of WIPO is the International Bureau of WIPO or Secretariat. It is

headed by the Director General, and further consists of those who make up its regular
staff; the staff in the professional and higher categories are recruited on a principle of
equitable geographical distribution established in the United Nations system, and
other staff are from a wide range of countries of all regions of the world.

Membership

The Convention establishing WIPO declares that membership shall be open to any
State which is a member of any of the Unions, and to any State which is not a member
of any of the Unions, provided that it is a member of the United Nations, of any of the
specialized agencies of the United Nations, or of the International Atomic Energy
Agency, or is a party to the Statute of the International Court of Justice or is invited by
the General Assembly of WIPO to become a member. Thus, only States can be
members of WIPO or, indeed, of any other specialized agency of the United Nations.

To become a member, a State must deposit an instrument of ratification or accession

with the Director General of WIPO at Geneva. States party to the Paris or Berne
Conventions may become members of WIPO only if they are already bound by, or
concurrently ratify or accede to, at least the administrative provisions of the
Stockholm (l967) Act of the Paris Convention or of the Paris (1971) Act of the Berne
Convention.

The States party to the Convention Establishing the World Intellectual Property
Organization (WIPO) are listed on the WIPO website: www.wipo.int or
www.wipo.org.

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Awareness Course on
Intellectual Property 2.4 WTO/TRIPS AGREEMENT
Rights
Following the end of the Second World War, a General Agreement on Trade and
Tariff (GATT) came into force in 1947 to deal with issues concerning trade and tariff
at the global level. In the 1980s, as technology became the dominant engine for
economic growth, the clamour of multinational corporations, which are the principal
generators of technology, for an effective mechanism for world-wide protection of
intellectual property, and strict enforcement of IP rights gained momentum. They had
full and active support of their governments. Developed countries and international
agencies projected intellectual property protection as the major factor in the growth of
the world trade and made it an important item of discussion under GATT in what is
known as the Uruguay Round of negotiations. The Uruguay Round began in
September, 1986 in Punta del Esta, Uruguay, and after intense debate spreading over
eight years, concluded on April 18, 1994 with the signing of a Final Act in Marrakesh,
Morocco. The World Trade Organisation (WTO) was thus born at Marrakesh. The
basic purpose of the WTO is to ensure a smooth and full flow of the world trade,
through removal of protectionism and developing a transparent, multilateral trading
system.

The WTO is the only international Organization dealing with the global rules of trade
between nations. The GATT, which underwent a major revision as the result of
negotiations, is now the principal rulebook of the WTO for trade in goods. New rules
came into force for dealing with trade in services, General Agreement on Trade in
Services (GATS), Trade Related Aspects of Intellectual Property Rights (TRIPS),
dispute settlement and trade policy reviews. All WTO members are subjected to
periodic scrutiny.

As of April 2003, 146 countries were members of the WTO accounting for over 97%
of world trade. Decisions are made by the entire membership, typically by consensus.

A Ministerial Council (MC) is the apex body of the WTO, which meets at least once
in two years. Below it is a Governing Council (GC) to run it. The GC functions in
two more capacities: as a Trade Policy Review Body and also as a Dispute Settlement
Body.

The TRIPS Agreement including trade in counterfeit goods is a part of the final
agreement. The preamble to the TRIPS agreement makes mention of (i) the desire to
reduce distortions and impediments to international trade, and (ii) the need to promote
effective and adequate protection of IPR, while ensuring that resources and
procedures to enforce IPR do not themselves become barriers to legitimate trade. The
TRIPS Agreement consists of Seven Parts (73 Articles in all). The seven parts are as
follows:

Part I General Provisions and Basic Principles

Part II Standards concerning the availability, scope and use of
Intellectual Property Rights
Part III Enforcement of Intellectual Property Rights
Part IV Acquisition and Maintenance of Intellectual Property Rights
and Related Inter-Partes Procedure
Part V Dispute Prevention and Settlement
Part VI Transitional Arrangements
Part VII Institutional Arrangements: Final Provisions

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 WIPO, WTO/TRIPS
and IPR
Members are free to determine the method of implementing the provisions of the
TRIPS agreement within their own legal system and practice, and they are not obliged
to implement more extensive protection than is required in this Agreement. (Art. 1)

In respect of Parts II, III and IV, members shall comply with the provisions of articles
1 through 12, and article 19 of the Paris Convention (1967).

The TRIPS prescribes adherence to two basic principles namely, National Treatment
(Art. 3) and Most-Favoured- Nation Treatment (Art. 4).

National treatment means that every member of TRIPS shall accord to the nationals of
other members the same treatment in respect of intellectual property as it accords to
its own nationals.

Most-favoured-nation (MFN) treatment in respect of protection of IP means that 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 of the TRIPS Agreement, subject to some limited exceptions.
Obligations under national treatment and MFN treatment do not apply to procedures
provided in multilateral agreements concluded under the auspices of the WIPO
relating to the acquisition or maintenance of IPR (Art. 5).

The TRIPS is alive to the need to promote technological innovation and ensure
technology transfer in a manner that would serve the public interest in developing
countries (DCs) and the least developed countries (LDCs). Art. 7 states: The
protection and enforcement of the IPRs 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.

Art. 8.1 provides that members may adopt measures 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 TRIPS Agreement

Art. 8.2 cautions that appropriate measures, consistent with the provisions of the
TRIPS, may be needed to prevent the abuse of IPRs by those who hold the rights or
who resort to practices, which unreasonably restrain trade or adversely affect the
international transfer of technology.

The TRIPS identifies the following seven instruments for intellectual property rights
depending on the kind of intellectual property to be protected:

• Copyrights and related rights (rights of performers, producers of sound recordings

and broadcasting organisations)
• Trademarks and service marks
• Geographical indications including appellations of origin
• Industrial designs
• Patents
• Protection of layout designs (topographies) of integrated circuits
• Protection of undisclosed information including trade secrets and test data.

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Awareness Course on A last item seeks to curb abuse of the IPRs:
Intellectual Property
Rights
• Control of anti-competitive practices in contractual licences.

In matters of Copyrights and Related Rights, the TRIPS Agreement requires members
to comply with Articles 1 through 21 and the appendix of the Berne Convention of the
protection of literary and Artistic Works (1971). It recognises computer programmes,
whether in source code or object code, as literary works entitled for protection.
Similarly compilation of data or other materials, whether in the machine-readable or
other forms, which qualifies as intellectual creation by reason of selection or
arrangement of contents can be protected. However, such protection is not extendable
to the data or the material itself and is without prejudice to any copyright subsisting in
the data or the material. The TRIPS for the first time in an international agreement
provides rental rights for computer programmes and cinematographic works; this is
the right of an author of a copyright to authorise to the public commercial rental of
their copyrighted works or to prohibit such commercial rental.

The TRIPS Agreement requires all member countries of WTO to protect Geographical
Indications; reinforced protection is given to wines and spirits.

New or original industrial designs are to be protected for at least 10 years.

The area of Patents has seen major change under the TRIPS Agreement. Before its
introduction, the countries could determine on their own what was patentable, what
would be the term (duration) of a patent and what rights would the grant of a patent
confer on a patentee. This freedom does not exist any more. Now patents shall be
available for any inventions, whether products or processes, in all fields of
technology provided they are new, involve an inventive step and are capable of
industrial application. The grant of patents would be without discrimination as to the
place of invention, the field of technology, and whether products are imported or
locally produced. However, inventions may be excluded from patentability on
grounds of public order or morality including protection of human, animal or plant life
or health or serious prejudice to the environment.

Two other categories are also excluded from patentability: (a) diagnostic, therapeutic
and surgical methods for the treatment of humans or animals, and (b) plants and
animals other than microorganisms, and essentially biological processes for the
production of plants or animals other than non-biological and microbiological
processes.

A significant provision concerns protection of plant varieties. Members are required to

afford such protection either by patents or by an effective sui generis system or by any
combination of the two. However, this provision is to be reviewed four years after the
Agreement takes force.

The TRIPS Agreement lays down the rights, which the grant of a patent confers on the
owner. If the patent is for a product, the owner has the exclusive right to produce, sell
or import the protected product. If the patent is for a process, the owner gets the
exclusive right over the use of the process, including the right to produce, sell and
import the protected product made by the protected process.

In the case of infringement of a patented process the burden of proof lies on the
defendant, that is, the defendant has to prove that the process being used to obtain an
identical product is different from the patented process. However, this burden of proof
will apply if the product obtained by the patented process is new to the market or if
the owner of the patent has not been able, through reasonable efforts, to determine the
process being used by the defendant to make an identical product.

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The TRIPS Agreement permits limited exceptions to the exclusive rights conferred by WIPO, WTO/TRIPS
and IPR
a patent, if such exceptions do not unreasonably conflict with a normal exploitation of
the patent and do not unreasonably prejudice the legitimate interests of the patent
owner, taking into account legitimate interests of third parties.

There is provision for Compulsory Licensing of a patent by a member State under

certain conditions: (a) a national emergency or other circumstances of extreme
urgency; (b) public non-commercial use; (c) when the use of an invention requires use
of another patented invention; (d) to remedy an anticompetitive situation. However,
there could be other circumstances justifying compulsory licensing e.g. public interest,
public health and protection of environment. A compulsory licence has to be non-
exclusive and cannot be assigned. The Agreement permits member States to provide
limited exceptions to the exclusive rights conferred by a patent, if such exceptions do
not unreasonably conflict with a normal exploitation of the patent or prejudice the
legitimate interests of the patent owner. An opportunity for judicial review of any
decision to revoke or forfeit a patent is to be available.

The term of protection of a patent is stipulated as 20 years from the date of filing of
the application.

For protection of layout designs (topographies) of integrated circuits, members are

required to comply with the basic provisions of the Washington Treaty on Intellectual
Property in Respect of Integrated Circuits.

The TRIPS Agreement provides for protection of undisclosed information under

which trade secrets such as confidential know-how, and information protectable
against unfair competition under the Paris Convention (1967) can be protected. Test
results and data required to be submitted to government or its agencies are to be
protected against unfair commercial use or disclosure.

Restrictive practices in licensing of intellectual property, that would have adverse

effect on competition or trade or on transfer of technology, are required to be
controlled through suitable provisions in national legislation.

An important aspect of the TRIPS Agreement is Part III dealing with Enforcement of
Intellectual Property Rights. Earlier international agreements stopped at prescribing
the rights; the TRIPS Agreement goes farther and binds members to ensure that
enforcement procedures as specified under it are available under the national laws.
Urgent, effective and deterrent action is required under infringement of the IPR.
Detailed provisions have been laid down in respect of judicial and administrative
procedures; provisional measures have been authorised to safeguard the interest of the
right holder; specific action has been prescribed to prevent counterfeit trademark or
pirated copyright goods.

However, the TRIPS Agreement is not a self-executing agreement and no claim can
be based on the fact that a provision exists in the TRIPS Agreement. The action for
protection of IPR can be taken on the basis of the national law and all members of
WTO are obliged to bring their national laws in respect of IP rights and protection in
conformity with the TRIPS Agreement.

There is a Council for Trade Related Aspects of Intellectual Property Rights to

monitor the operation of the TRIPS Agreement and in particular, compliance by
Members with their obligations under the TRIPS Agreement.

Non-compliance with the TRIPS Agreement is taken to the Dispute Settlement Body
(DSB) composed of all WTO members. The time frame for the settlement of disputes
is limited. If non-compliance is proved and corrective measures are not taken, a
country, which is affected by such non-compliance, can take retaliatory commercial
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Awareness Course on measures not confined to intellectual property alone, but over a wide spectrum, like
Intellectual Property
Rights
revocation of most favoured nation status. Working of the dispute settlement body is
overseen by the General Council.

Part VI of the Agreement provides for transitional arrangements. These allow

developing countries, and countries in transition from a centrally planned to a free-
enterprise, market economy, a period of four years from the date the Agreement
comes into force, within which they have to comply with their obligations under the
Agreement. A country, like India, which did not grant product patent when the TRIPS
Agreement began, gets a further period of five years for full compliance which expires
on December 31, 2004. The least developed countries may delay it for up to ten years,
and the Council can further extend this period.

An obligation has been cast upon developed countries to provide technical and
financial cooperation to developing and least developed countries. Such cooperation
would be available on request and on mutually agreed terms and conditions. It would
include assistance in (i) the preparation of domestic legislation on the protection and
enforcement of IPRs and prevention of their abuse; (ii) establishing or strengthening
domestic agencies/offices for this purpose; (iii) training of personnel.

The TRIPS Agreement is to be revised after five years from the date of its coming into
force and subsequently after every two years.

Spend SAQ 1
10 min.
What does National Treatment under TRIPS mean?

SAQ 2

What do you understand by Most Favoured Nation Treatment under TRIPS?

SAQ 3

In the case of infringement of a patented process on whom does the burden of proof
lie under the TRIPS agreement?

SAQ 4

What do you understand by protection of undisclosed information?

2.5 INDIA AND THE TRIPS AGREEMENT

The TRIPS agreement leaves some room to deal with various issues at national level
such as the definition of an invention, exceptions to exclusive rights, compulsory
licences and others.

India has to a large extent complied with its obligations under TRIPS through a series
of Amendments to its existing laws and through new legislations. They are:

1. The Trade Marks Act, 1999

2. The Designs Act, 2000
3. The Protection of Plant Varieties and Farmers’ Rights Act, 2001
4. The Geographical Indication of Goods (Registration and Protection) Act, 1999
5. The Semiconductor Integrated Circuits Layout Designs Bill, 1999
6. The Patents Act, 1970, as amended by Patents (Amendment) Act, 2002.
7. The Copyright Act, 1957, together with International Copyright Order, 1999.

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The TRIPS provides minimum standards of the protection of Intellectual Property WIPO, WTO/TRIPS
and IPR
Rights (IPRs) in all the WTO member countries. Though such standards are
considerably detailed, particularly in the patent field, they leave different degrees of
freedom for legislation at the national level. The aim of the TRIPS is fixing minimum
standards for protection of intellectual property, which are to be followed by all WTO
members. The TRIPS does not create a uniform law, and allows a certain degree of
freedom to legislate at the national level.

2.5.1 Patent Law in India

We discuss in this section India’s compliance with the provisions of TRIPS

Agreement on patents and examine whether India has exercised all options when it
enacted the Patents (Amendment) Act, 2002. We also deal with the transitional period
and implications of the Indian practice and suggest options available to India. This
stocktaking acquires a special significance in the wake of the U.S putting India in the
priority watch list under Special 301 provision of the Trade Act alleging poor
intellectual property protection in India.

The Concept of Invention

Article 27.1 of the TRIPS Agreement stipulates that:

• Patents shall be available for any inventions, whether product or process, in all
field of technology and,
• Patent rights shall be enjoyable without discrimination as to the field of
technology.

The TRIPS Agreement does not specify what an invention is. The national laws may
define this concept according to standards generally applied. These are subject to
normal tests of novelty, inventiveness and industrial application. It is also required
that patents be available and patent rights enjoyable without discrimination as to the
place of invention and irrespective of whether products are imported or produced
locally.

There is no obligation under the TRIPS to adopt an expansive concept of invention.

While implementing Article 27.1, each country should carefully consider the
economic, legal and ethical aspects involved in the patenting of living materials or
certain types thereof.

Some countries may decide not to confer protection on new uses of plants, such as
medicinal purposes or second uses of known medicinal products, whose patentability
has been accepted in most industrialised countries. Likewise, computer programmes
may be deemed as patentable, like the US has now done.

One of the main areas in which the lack of a uniform definition of invention is
relevant, relates to the distinction between invention and discovery. The former is
patentable and the latter is not. A discovery is commonly considered to mean the mere
recognition of what already exists.

The definitions of inventions are generally explained in a negative way, i.e. what
cannot be considered as inventions:

a) Discoveries, scientific theories and mathematical methods;

b) Aesthetic creations;
c) Rule and methods, and schemes for forming mental acts, playing games, or doing
business;
d) Presentation of information;

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Awareness Course on e) The whole or part of the natural living beings and biological materials found in
Intellectual Property
Rights
nature, even if isolated from it or purified, including the genome or germplasm of
any natural being;
f) The biological processes for the production of plants and animals other than
through non-biological and microbiological processes.

Exclusions from the Subject Matter of Patent

The Indian Act, excludes the following from subject matter of patent:

• A mere discovery of a scientific principle or the formulation of an abstract theory

or discovery of any living thing or non-living substance occurring in nature;
• Plants and animals other than microorganisms in whole or any part thereof
including seeds, varieties and species and essentially biological processes for
production or propagation of plants and animals;
• A mathematical or business method or computer programme or algorithms;
• A literary, dramatic, musical or artistic work or any other aesthetic creation
whatsoever including cinematographic works and television productions;
• A mere scheme or rule or method of performing mental act or method of playing
game; presentation of information;
• Topography of integrated circuits.

Exceptions to Patentability

National laws under the TRIPS Agreement can establish exceptions to the
patentability of invention that would otherwise be protectable. Inventions contrary to
public order or morality can be denied patents. The ethical, economic and legal
implications of allowing the patenting of plants and animals, even if genetically
modified, strongly indicate that these should be kept out of the domain of patenting.
The same applies to therapeutic and surgical methods for treatment of human or
animals. The concept of microorganism is extensively interpreted under the TRIPS.
Patenting is permitted as applicable only to genetically modified microorganisms and
not to those existing in nature. This concept should be interpreted, however, in
accordance with the scientific concept that may be adopted by national legislation. A
microorganism is a member of any of the following classes: bacteria, fungi, algae,
protozoa or viruses.

The Indian Act excludes, an invention whose primary or intended use or commercial
exploitation could be contrary to law or morality or which causes serious prejudice to
human, animal or plant life or health or to environment from being patented. Without
violating the TRIPS provision, the Indian courts can interpret what is contrary to
morality or what are the kinds of commercial exploitations, which cause serious
prejudice to human or animal or plant life. Like the TRIPS provisions Indian law also
does not precisely lay down what is opposed to public policy. It is for the Indian
courts and authorities to interpret. The meaning and content of the law will evolve as
courts and authorities decide the cases that will come up for decisions.

Criteria of Patentability

Article 27.1 of TRIPS provides that patents shall be granted to protect inventions,
which are new, involve an inventive step and are capable of industrial application. In
a footnote, the agreement allows member countries to interpret inventive step as
synonymous with non-obviousness. Similarly, a country can consider capable of
industrial application as synonymous with usefulness. The latter concept is looking
somewhat broader, since it would allow even the patentability of purely experimental
inventions. Other option to be considered relate to the concept of prior art which may
be defined more or less broadly, and to the processes which are not novel but which
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use or produce a novel product.
 WIPO, WTO/TRIPS
and IPR
Prior Art

It is the existing body of technological information against which an invention is

judged to determine if it is novel and non-obvious enough for the purpose of granting
a patent. If there is an identity between any part of the prior art and the invention
claiming a patent, it makes the claim untenable as being anticipated.

An invention is obvious and non-patentable if the difference between the invention

and the prior art are such that the subject matter as a whole would have been obvious
at the time the invention was made to a person having ordinary skill in the art to which
the subject matter pertains. Insistence on documentation as the sole proof of prior art
may create problems in certain cases like indigenous and traditional knowledge. For
example, the Indian system of medicine is to be considered as prior art because though
at times not documented, such knowledge has been in the public domain through word
of mouth and public usage handed down from generation to generation for centuries.
We may recall here the difficulties faced by India in seeking cancellation of patents
relating to Neem and Haldi.

2.5.2 Interpretations and Implementations

The Indian Act defines invention as a new product or process involving an inventive
step and capable of industrial application. Capable of industrial application, in
relation to an invention, means, that the invention is capable of being made or used in
any kind of industry. These definitions are mere reproduction of relevant portions
from TRIPS.

Further, the Indian Act defines an inventive step as a feature that makes the invention
not obvious to a person skilled in the art. This could make patenting of Indian
Ayurvedic medicines difficult due to non-obviousness.

A Limitation on Rights Conferred

A care has to be taken while considering a process-patent, that the process does not
lead to a product that is excluded from patentability; e.g. plants or animals, inventions
being contrary to public order etc. This is to avoid an indirect product by process
protection that would nullify the exclusion from protection. Under the Indian Act the
rights conferred by a patent are limited by a proviso: provided that the product
obtained is not a product in respect of which no patent shall be granted under this
Act. This provision is completely in consonance with the TRIPS text.

Interpretation of Claims

The TRIPS agreement leaves full freedom to member countries to determine the limits
of allowable claims. This is an important issue left to the national legislations. There
are different approaches to deal with this issue. In the approach followed in Germany,
equivalence is established if, on the basis of an objective evaluation, the allegedly
infringing process or product is found to perform substantially the same function as
the invention.

In another approach, equivalence may not be based on a functional analysis, but on a

comparison of the elements that constitute the invention. This solution permits
adequate protection of the inventor’s interests. It also facilitates improvement and
further innovation in the field covered by the patent. In effect it requires that a
product invention be defined precisely in terms of its specific structure particularly in
the field of chemical substances, in order to avoid excessively broad claims and
ensure the practicability of the invention.

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Awareness Course on Exception to Exclusive Rights
Intellectual Property
Rights
Article 30 of the TRIPS agreement defines the exceptions in broad terms, which
allows for limited exception so long as these do not unreasonably conflict with the
normal exploitation of the patent and do not unreasonably prejudice the legitimate
interests of the patent owner. Under this provision there is considerable freedom for
national legislation to define the kind and extent of exception to be granted. Among
them, it is important to provide for exceptions relating to research and
experimentation on the invention i.e. with regard to a person who in good faith uses
the invention prior to the filing of a patent by a third party. These exceptions include
the use of the patented invention. The options available are:

a) Acts done privately and on a non-commercial scale or for a non-commercial

purpose;
b) Use of an invention for scientific research or teaching purposes;
c) Experimentation on the invention for commercial purposes, for instance to test it
or improve on it;
d) Preparation of medicines under individual prescriptions;
e) Use of the invention by third party that had used it bonafide before the date of
application for the patent.

Compulsory Licences

The TRIPS agreement refers to five possible specific grounds for the granting of
compulsory licenses: refusal of the owner to grant authorisation; emergency and
extreme urgency, anti-competitive practices, public non-commercial use and
dependent patents. Also the conditions are concerned with the actual use of the patent
and not the grant of compulsory licence, per se.

The Indian Act provides for compulsory licence on any of the following grounds:

• Reasonable requirements of public are not satisfied;

• The invention is not available to the public at reasonable price;
• The invention is not worked in India.

Reversal of Burden of Proof

The significant change is in the right of process patentees. Article 34 of the TRIPS
states that the judicial authorities shall have the authority to order the defendant to
prove that the process he used to obtain identical product is different from the
patented process. This is a reversal of the burden of proof as it is normally up to the
petitioner to adduce evidence about the infringement of his patent right. WTO
members have a choice of two circumstances under which any identical product
produced without the authorization of the patent owner shall, in the absence of proof
to the contrary, be deemed to have infringed the patented process:

a) If the product obtained by the patented process is new (new means, new to the
market).
b) If there is a substantial likelihood that the identical product was made by the
patented process and the patent owner has been unable, through reasonable
efforts, to determine the process actually used.

The first option limits the scope of the reversal of burden of proof to new products,
while the second one applies to any product independent of its novelty, and is likely to
create uncertainty.

The Indian Act incorporates both the conditions as alternatives i.e. if (a) or (b) is
satisfied the burden of proof will be on the defendant provided that the patentee
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proves that the product is identical to the product directly obtained by the patented WIPO, WTO/TRIPS
and IPR
process. The defendant is not required to disclose any manufacturing or commercial
secrets, if the court thinks it would be unreasonable to do so.

2.6 TRANSITIONAL PERIOD

The Indian parliament has passed the patents (Amendment) Act, 2002 with a view to
fulfilling India’s obligations under the TRIPS Agreement. It was also influenced by
the WTO Dispute Settlement Panel’s adverse ruling against India, following
complaints made by the U.S and the European Union that India has failed to meet its
commitments under the Agreement, (Art. 70.8 – the mail box provision; Art 70.9.
granting exclusive marketing rights).
The TRIPS agreement allows developing countries a transitional period of five years
with effect from January 1995, to implement the provisions of the TRIPS agreement
as a whole. Also if a developing country has not permitted product patent to any class
of products under its law as on January 1995, it can take another 5 years to amend its
law to provide product patents. Thus India had a transitional period of 10 years up to
December 31, 2004 to amend its law to extend product patents to food,
pharmaceutical products, agrochemicals, microorganisms and seeds.
However, the TRIPS agreement places a limitation on the transition periods in respect
of pharmaceuticals and agrochemicals. Article 70.8 establishes a mailbox mechanism
and Article 70.9 provides for exclusive marketing rights (EMR) to the applicants in
respect of pharmaceutical and agricultural chemical products.
Mail Box
All countries that did not provide product patents as on January 1995 were required to
provide means for accepting applications for product patents. Such applications are to
be examined only from the date of January 2005; till then the applications are kept in
a mailbox but the priority date shall be the priority date of the application.
Exclusive Marketing Rights (EMR)
During the transitional period where a product is the subject of a patent application in
a member country, EMR is to be granted for a period of 5 years from the date of
obtaining marketing approval in that country or until a product patent is granted or
rejected, whichever period is shorter. It means India had to receive patent applications
for pharmaceuticals and agro-chemicals from January 1, 1995 itself and that exclusive
marketing rights were to be granted to an applicant, who applied for those rights.
The following conditions are to be fulfilled for granting EMR:

• A product patent has been granted in any WTO country;

• A patent application has been filed in any WTO country on or after January 1995;
• Marketing approval has been obtained in that country;
• An application for a product patent should have been filed in India on or after
January 1995 under the mailbox facility.
India chose to adopt the EMR route for pharmaceuticals and agro-chemicals. The real
implication of Article 70.8 and 70.9 is that, in respect of pharmaceuticals and
agrochemical products for which product applications were filed after January 1995,
Indian companies will not have the freedom that they had enjoyed under the earlier
Patent Act of 1970, to produce and market those products in India or elsewhere
without any legal restrictions.
The product patent system has now become an accepted norm even in most of the
developing countries. Thailand amended its Patent Act in 1992 to provide product
patents in food, pharmaceuticals and chemical sectors. China also amended its Patent
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Awareness Course on Law in 1992, for providing product patents in the above sectors; China was not even a
Intellectual Property
Rights
member of WTO at that time. Turkey, Brazil, Argentina and other Latin American
countries have opted to introduce product patents by amending their patent laws.

2.7 SUMMARY
• Economic growth and development depends on free flow of technology and
intellectual resources into a country. This flow is facilitated by a uniform
intellectual property protection regime across the globe.

• The World Intellectual Property Organisation (WIPO) has been active for long to
promote creation, dissemination and protection of intellectual property through
international cooperation. It has been helping developing countries in the
preparation and enforcement in IP laws, the establishment of necessary institutions
and administrative structures, and the training of personnel. It has been active in
dispute resolution and is now playing a leading role in finding the place of IP in
emerging issues such as traditional knowledge, folk lore, biological diversity,
environmental protection and human rights.

• WIPO has facilitated access to and exchange of IP information through its global
network, WIPONET, which links IP offices in all member States of WIPO.

• The three basic principles of the Paris Convention, whose last revision in 1967 led
to the establishment of WIPO in its present form are: national treatment,
independence of patents and right to priority.

• The World Trade Organisation (WTO) replaced the General Agreement on Trade
and Tariff after 8 years of global negotiations.

• The relevant agreement under WTO dealing with IP is the Agreement on Trade
Related Aspects of Intellectual Property Rights (TRIPS). It consists of 7 parts
comprising of 73 Articles.

• It recognises seven kinds of IP.

• Two basic principles underlie TRIPS, viz. national treatment and most favoured
nation treatment.

• The TRIPS Agreement treats Undisclosed Information as IP entitled to protection.

• India has aligned its IP law with the provisions of the TRIPS Agreement.

2.8 ANSWERS AND HINTS TO SAQs

SAQ 1

The national of any country of the Union constituted under the Paris Convention shall
enjoy, in another country of the Union, the same treatment as that other country
extends to its own nationals in respect of the protection of its intellectual property.

SAQ 2

MFN Treatment means that any advantage, favour, privilege or immunity granted by a
member of TRIPS to the nationals of any other country shall be accorded immediately
and unconditionally to the nationals of all other members of the TRIPS Agreement,
subject to some limited exceptions.

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SAQ 3 WIPO, WTO/TRIPS
and IPR

Normally if A charges B with infringement of A’s right, it is for A to prove how B has
infringed A’s right. But under the TRIPS Agreement, in the case of infringement of a
patented process, B, the defendant will have to prove that the process being used for
obtaining an identical product is different from the patented process. This is the
reversal of the burden of proof. It applies if the product is new to the market or if the
owner of the patent has not been able, through reasonable effort, to determine the
process being used by the defendant to make an identical product.

SAQ 4

Under TRIPS agreement, any information like trade secrets or confidential know-how
or test data submitted to government or its agencies are protected under undisclosed
information.

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