Advantages of a disclosure of a patent.

- All interested persons come to know the source of a particular technology;

- Other innovators may be in a position to carry forward further scientific and technological development, and come up with new processes and products based on the existing patented matter, particularly for those in countries that do not have much domestic innovation and wish to encourage it;

- At the expiry of the patent period, it may be possible for all interested persons to use the patented subject freely.

Process patent.

If the subject-matter of a patent is a process for obtaining a product, the judicial authorities shall have the authority to order the defendant to prove that the process to obtain an identical product is different from the patented process, where certain conditions indicating a likelihood that the protected process was used are met.

Patent of plant varieties.

Plant varieties, however, must be protected by patents or by a special system (such as the breeder’s rights provided in the conventions of UPOV — the International Union for the Protection of New Varieties of Plants).

The agreement describes the minimum rights that a patent owner must enjoy.

Exceptions.

TRIPs agreement also allows certain exceptions. Governments can refuse to issue a patent for an invention if its commercial exploitation is prohibited for reasons of public order or morality. They can also exclude diagnostic, therapeutic and surgical methods, plants and animals (other than microorganisms), and biological processes for the production of plants or animals (other than microbiological processes).

There are three permissible exceptions to the basic rule on patentability.

One is for inventions contrary to ordre public or morality; this explicitly includes inventions dangerous to human, animal or plant life or health or seriously prejudicial to the environment. The use of this exception is subject to the condition that the commercial exploitation of the invention must also be prevented and this prevention must be necessary for the protection of ordre public or morality.

The second exception is that Members may exclude from patentability diagnostic, therapeutic and surgical methods for the treatment of humans or animals.

The third is that Members may exclude plants and animals other than micro-organisms, e.g., bacteria, viruses, fungi, algae, protozoa, etc., and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, any country excluding plant varieties from patent protection must provide an effective sui generis system of protection.

Furthermore, for countries which wish to encourage domestic innovation, it may be desirable to provide a limited exception that patented matter may be put to experimental use without the authorization of the patent-holder, especially for reverse engineering, i.e., proceeding backwards from the patented product to learn how it has been produced.

Moreover, the whole provision is subject to review four years after entry into force of the Agreement.

Compulsory licenses.

A patent-owner could abuse his rights, for example by failing to supply the product on the market. To deal with that possibility, the agreement says governments can issue “compulsory licenses”, allowing a competitor to produce the product or use the process under license. But this can only be done under certain conditions aimed at safeguarding the legitimate interests of the patent-holder.

Compulsory licensing and government use without the authorization of the right holder are allowed, but are made subject to conditions aimed at protecting the legitimate interests of the right holder. The conditions include the obligation, as a general rule, to grant such licenses only if an unsuccessful attempt has been made to acquire a voluntary license on reasonable terms and conditions within a reasonable period of time; the requirement to pay adequate remuneration in the circumstances of each case, taking into account the economic value of the license; and a requirement that decisions be subject to judicial or other independent review by a distinct higher authority. Certain of these conditions are relaxed where compulsory licenses are employed to remedy practices that have been established as anticompetitive by a legal process. These conditions should be read together with the related provisions (Article 27.1) which require that patent rights shall be enjoyable without discrimination as to the field of technology, and whether products are imported or locally produced.

Integrated circuits layout designs.

TRIPS Agreement requires Member countries to protect the layout-designs of integrated circuits in accordance with the provisions of the IPIC Treaty (the Treaty on Intellectual Property in Respect of Integrated Circuits), negotiated under the auspices of WIPO in 1989. These provisions deal with, inter alia, the definitions of “integrated circuit” and “layout-design (topography)”, requirements for protection, exclusive rights, and limitations, as well as exploitation, registration and disclosure. The TRIPS agreement adds a number of provisions: for example, protection must be available for at least 10 years.

Definition.

An “integrated circuit” means a product, in its final form or an intermediate form, in which the elements, at least one of which is an active element, and some or all of the interconnections are integrally formed in and/or on a piece of material and which is intended to perform an electronic function.

A “layout-design (topography)” is defined as the three-dimensional disposition of the elements, at least one of which is an active element, and of some or all of the interconnections of an integrated circuit, or such a three-dimensional disposition prepared for an integrated circuit intended for manufacture.

Condition for protection.

The obligation to protect layout-designs applies to such layout-designs that are original in the sense that they are the result of their creators' own intellectual effort and are not commonplace among creators of layout-designs and manufacturers of integrated circuits at the time of their creation.

For the purpose of protection, disclosure of the layout design has to be made, such as a copy or a drawing of the layout design, information on the electronic function, etc.

The duration between the first commercial exploitation of the layout design and the date of filing the application cannot be less than two years.

Rights of layout design holder.

The exclusive rights include the right of reproduction and the right of importation, sale and other distribution for commercial purposes. Certain limitations to these rights are provided for.

Exception.

The exceptions to the scope of protection are the following:

- Acts of reproduction for private purpose;

- Acts of reproduction for the purposes of evaluation, analysis, research or teaching;

- Use of an identical but original layout design created independently by a person other than the right-holder;

Term.

The term must be at least 10 years from the date of filling the application for registration, or from the first commercial exploitation in the world.

A Member may provide that the term will lapse 15 years after the creation of the layout design.

Undisclosed information and trade secrets.

Trade secrets and other types of “undisclosed information” which have commercial value must be protected against breach of confidence and other acts contrary to honest commercial practices. But reasonable steps must have been taken to keep the information secret. Test data submitted to governments in order to obtain marketing approval for new pharmaceutical or agricultural chemicals must also be protected against unfair commercial use.

Conditions for protection.

The TRIPS Agreement requires undisclosed information -- trade secrets or know-how -- to benefit from protection. The protection must apply to information that is secret, that has commercial value because it is secret and that has been subject to reasonable steps to keep it secret.

The Agreement does not require undisclosed information to be treated as a form of property, but it does require that a person lawfully in control of such information must have the possibility of preventing it from being disclosed to, acquired by, or used by others without his or her consent in a manner contrary to honest commercial practices. “Manner contrary to honest commercial practices” includes breach of contract, breach of confidence and inducement to breach, as well as the acquisition of undisclosed information by third parties who knew, or were grossly negligent in failing to know, that such practices were involved in the acquisition.

The Agreement also contains provisions on undisclosed test data and other data whose submission is required by governments as a condition of approving the marketing of pharmaceutical or agricultural chemical products which use new chemical entities. In such a situation the Member government concerned must protect the data against unfair commercial use. In addition, Members must protect such data against disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use.

Curbing anti-competitive licensing contracts.

The owner of a copyright, patent or other form of intellectual property right can issue a license for someone else to produce or copy the protected trademark, work, invention, design, etc. The agreement recognizes that the terms of a licensing contract could restrict competition or impede technology transfer. It says that under certain conditions, governments have the right to take action to prevent anti-competitive licensing that abuses intellectual property rights. It also says governments must be prepared to consult each other on controlling anti-competitive licensing.

TRIPS Agreement recognizes that some licensing practices or conditions pertaining to intellectual property rights which restrain competition may have adverse effects on trade and may impede the transfer and dissemination of technology. Member countries may adopt, consistently with the other provisions of the Agreement, appropriate measures to prevent or control practices in the licensing of intellectual property rights which are abusive and anti-competitive. The Agreement provides for a mechanism whereby a country seeking to take action against such practices involving the companies of another Member country can enter into consultations with that other Member and exchange publicly available non-confidential information of relevance to the matter in question and of other information available to that Member, subject to domestic law and to the conclusion of mutually satisfactory agreements concerning the safeguarding of its confidentiality by the requesting Member. Similarly, a country whose companies are subject to such action in another Member can enter into consultations with that Member.

5. Enforcement of IPRs

Having intellectual property laws is not enough. They must be enforceable. WTO Members have to implement the TRIPs agreement through their respective domestic legislation. In the multilateral forum of the WTO, a Member is responsible for the establishment of the necessary administrative and legal framework and for ensuring that the machinery works. The agreement says governments have to ensure that intellectual property rights can be enforced under their laws, and that the penalties for infringement are tough enough to deter further violations. The procedures must be fair and equitable, and not unnecessarily complicated or costly. They must not entail unreasonable time-limits or unwarranted delays. People involved should be able to ask a court to review an administrative decision or to appeal a lower court’s ruling.

The agreement describes in some detail how enforcement have to be handled, including rules for obtaining evidence, provisional measures, injunctions, damages and other penalties. It says courts must have the right, under certain conditions, to order the disposal or destruction of pirated or counterfeit goods. Willful trademark counterfeiting or copyright piracy on a commercial scale must be criminal offences. Governments have to make sure that intellectual property rights owners can receive the assistance of customs authorities to prevent imports of counterfeit and pirated goods.

Transition arrangements.

When the WTO agreements took effect on 1 January 1995, developed countries were given one year to ensure that their laws and practices conform with the TRIPS agreement. Developing countries and (under certain conditions) transition economies from centrally planned economy to a market economy are given five years, or 4 years after 1 January 1996. Least developed countries have 11 years, or 10 years from 1 January 1996. Thus, it has to apply it, at the least, by 1 January 2006.

If a developing country did not provide product patent protection in a particular area of technology when the TRIPS Agreement came into force (1 January 1995), it has up to 10 years to introduce the protection. But for pharmaceutical and agricultural chemical products, the country must accept the filing of patent applications from the beginning of the transitional period, though the patent need not be granted until the end of this period. If the government allows the relevant pharmaceutical or agricultural chemical to be marketed during the transition period, it must — subject to certain conditions — provide an exclusive marketing right for the product for five years, or until a product patent is granted, whichever is shorter.

Subject to certain exceptions, the general rule is that obligations in the agreement apply to intellectual property rights that exist at the end of a country’s transition period, as well as to new ones.

Annex: Other intellectual property conventions incorporated by reference into the TRIPS Agreement. The TRIPS Agreement contains references to the provisions of certain pre-existing intellectual property conventions.

Below is a list of these agreements.

- Paris Convention for the Protection of Industrial Property (1967) (the Stockholm Act of 14 July 1967 of the Paris Convention for the Protection of Industrial Property)

- Berne Convention for the Protection of Literary and Artistic Works (1971) and the Appendix thereto (the Paris Act of 24 July 1971 of the Berne Convention for the Protection of Literary and Artistic Works)

- The Rome Convention: International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations adopted at Rome on 26 October 1961

- Treaty on Intellectual Property in Respect of Integrated Circuits (1989), adopted at Washington on 26 May 1989

Questions

1. What is the rationale of protecting intellectual property rights in general? Should IPs be protected under the WTO? Wouldn’t the WIPO be sufficient?

2. Think of other legal (under WTO or beyond WTO) grounds for exempting TRIPs obligations as to pharmaceuticals in order to save human lives in poor countries?

3. What would be demerits of expanding the protection of geographical indication?

4. What is the relationship between the TRIPS Agreement and the pre-existing international conventions that it refers to?

5. Which of the following statements is correct? Support your respond with arguments.

a) intellectual property rights are divided into 2 main categories – industrial property rights, and copyrights and related rights

b) Copyrights and related rights include the protection of distinctive signs such as trademarks and geographical indications

c) TRIPS Agreement requires all member’s rules on protection of intellectual property to be identical

d) the main principles of the TRIPS agreement are free trade, non-discrimination, MFN and tarification

Reference

1. Jackson, The World Trading System, 305-317.

2. Jackson/Davey/Sykes, 844-892, 893-490.

3. WIPO. 2004. WIPO Intellectual Property Handbook: Policy, Law and Use. WIPO Publication No.489 (E). Geneva.

4. Trading into the Future – WTO, 3rd edition, Revised August 2003.

5. Robert H. Folsom, International Trade and Investment in a Nutshell (2nd ed., St. Paul, Minn.: West Pub. Co., 2000).

6. World Bank. 2002-2005. Global Economic Prospects. Washington, DC: World Bank. http://www.worldbank.org/prospects.

7. www.wto.org see Trade topics - TRIPS.

Lecture 8. Rules and Procedures Governing the Settlement of Disputes (DSU)

1. WTO Dispute settlement system – main definitions

DSU means the Understanding on Rules and Procedures Governing the Settlement of Disputes which is Annex 2 to the WTO Agreement;

DSB means


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