Unit VII – Trade Related Aspect of Intellectual Property Rights (TRIPs)

The intent behind TRIPs

The Trade Related Aspects of Intellectual Property Rights (TRIPs) Agreement is as

important as that of trade in goods (GATT) and trade in services (GATS). The main objective is
providing protection to the holder of the intellectual property right, which can be claimed by an
individual, company or even people of a geographical region.

This right over an intellectual property is called a “monopoly right” conferred on the
inventor (patent on an industrial product), creator (copyright over a literary work) or user
(trademark of a business establishment) or regions (geographical indicators of origin).

This right recognized as “legal property”, however, can be claimed for fixed pre-
determined periods except Trademarks and Geographical Indications of Origin where protection
is in perpetuity.

Such protection was earlier given to goods and services under what are called the “Great
Conventions”. The Paris convention related to patents, the Rome Convention to the field of
performing arts and the Washington Treaty on integrated chips. Much of the intent of these
conventions has found place in the TRIPs Agreement. However, the World Intellectual Property
Organization (WIPO) has simultaneously responsibility for the Paris and Borne Conventions.

TRIPs Coverage:

The Agreement encompasses the following areas;

1. Patents
2. Designs
3. Trademarks
4. Copyrights
5. Geographical Indication of Goods (also known as Geographical Appellations of Origin)
6. Trade Secrets
7. Layout of Integrated Chips (IC)
 Patents:

Patents are given to inventions that are:

(i) New (or Novel): This implies the invention must be different from other previous
inventions (“prior art”) in a very important way. The inventor has to prove that there
has been a significant and unique intellectual intervention in the working of the
product.
(ii) Non-obvious: This implies that the “inventive step” should only be obvious to the
patent inventor and not so to any other person, whether a layman or expert in the
field. The inventive step should be an enigma to other than the inventor.
(iii) Should have industrial application or commercial use: This implies that the patent
should have commercial use or some utility. Thus, these also go by the term “utility
patents” in the United States. The inventor has to prove, at least in theory, that the
proposed product will be capable of “being worked”.

Terms of a Patent

A patent is valid for 20 years from the date of filing of the patent.

Inventions that can be patented

The following items are some of the things that might qualify for patent protection:
biological inventions; computer hardware and peripherals; computer software; cosmetics;
food inventions; machines; mechanical inventions; medical accessories and devices;
medicines; musical instruments etc.

Inventions that cannot be patented

• Ordre public:
Inventions contrary to order public or morality, this explicitly includes invention
dangerous to human, animal or plant life or health or seriously prejudicial to the environment.
• Diagnostic, therapeutic and surgical methods:
The second exception is that members may exclude from patentability diagnostic,
therapeutic and surgical methods for the treatment of humans or animals.
 • Plants and animals other than micro- organisms
The third is that members may exclude plants and animals other than micro-organisms
and essentially biological processes for production of plants or animals other than non-
biological and microbiological processes. This means genetically altered bacteria to cows may
qualify for utility patents. Sequences of DNA that have been created to test genetic behaviors and
the methods used to accomplish this sequencing can be adopted.

What about human beings? There is no clear answer to this question as the advent of
new cloning techniques is bound to raise a debate on the ethical question involved. What also
can be patented are mathematical formulae, laws of nature, newly discovered substances that
occur naturally in the world, as also purely theoretical phenomena such as scientific principles
like superconductivity.

• Compulsory Licensing

Compulsory licensing and government use method 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 are mainly contained in Article 31. The main conditions are listed
below;

“These conditions should be read together with the related provisions of Article 27. 1,
which require that patent right shall be enjoyable without discrimination as to the field of
technology and whether products are imported or locally produced. As a general rule, an
unsuccessful attempt must first be made to obtain a voluntary license on reasonable
commercial terms and condition with a reasonable period”.

• Scope and Duration

The scope and duration of such use without the authorization of the right holder
must be limited to the purpose for which it was authorized. An application to use the subject
matter of a patent must be considered on its individual merits.

• Non–exclusive Licences
Any authorization to use the subject matter of a patent must be non – exclusive. The right
holder must be paid adequate remuneration in the circumstances of each case, taking into
account the economic value of the license. Any such use, as in the case of compulsory licensing
in situations of natural calamities and epidemics, should be authorized predominantly for the
supply of the domestic market of the member authorizing such use.

Copyright

While patents can be called a “monopoly right”, copyright can be termed as a ’negative
right’. That is, a copyright prohibits persons from reproducing or “copying” any “literary,
dramatic, musical work,” without the consent of the owner who has the copyright over that work.
This protection also applies to cinematography films, sound recordings and now, computer
programmes.

The TRIPs Agreement mentions that “copyright protection shall extend to expressions
and not ideas, procedures and methods of operation or mathematical concept as such”. Just as
“commercial use or utility” is an important precondition for the granting of a patent, ideas should
have crystallized as expressions or artistic forms for the granting of a copyright.

Copyright Subsist in the following class of works:

Literary Work: This includes books of fiction, non-fiction and poems, computer programmes,
table, and compilations including data bases. Computer programmes, whether in source or object
code are protected as literary works under the Bern Convention, 1971.

Dramatic Work: This includes any piece of recitation (prose or poetry), choreographic work or
entertainment, a scenic arrangement or acting form with or without words, but does not include
cinematograph film.

The term of protection, as stipulated by TRIPs agreement for literary, dramatic, musical
works, is life time of the person plus fifty years.

The Indian Copyright (Amendment) Act, 1999, which came into force with effect from
January 15, 2000, gives protection for life time plus sixty years. In the case of literary works not
published during the life time of an author, the copyright can be transmitted to any person by
making mention of it in a will.
Artistic Work: This refers to a painting, a sculpture, a drawing (including a diagram, map, chart
or plan), and engraving or a photograph, a work of architecture, cinematograph films, and sound
recordings.

The term of protection for films, sound recordings and photographs is sixty years from
the publishing date.

The owner of a copyright can:

1) Reproduce the work in any material form including those electronic.

2) Perform the work in public or commercial to the public, for example through the medium
of television or radio.
3) Translate or make any adaptation of work.

Trademarks

A trademark is a visual symbol in the firm of word, device, name, letter or numerical,
brand, heading, signature or label or any combination of these that enable a person to make a
connection between a product and the company involved in offering the product. The company
can be involved in manufacturing goods or offering services.

In the case latter, the term “service mark” is used. Essentially, a trademark or a service
mark enables a person to make a distinction between products and suppliers.

Section (2): Trademarks of TRIPs protectable subject matter (Article 15 of TRIPs).

• Where signs are not inherently capable of distinguishing the relevant goods or services,
members may make registrability (of the trademark) depend on distinctiveness acquired
through use. Members may acquire, as a condition of registration, that signs be visually
perceptible.
• Members may make regitrability depend on use. However, actual use of a trademark shall
not be a for filing an application for registration.
• The nature of goods or services to which a trademark is to be applied shall in no case
form an obstacle to registration of the trademark.
 • Members shall publish each trademark either before it is registered or promptly after it is
registered and shall afford a reasonable opportunity for petition to cancel the registration.
In addition, members may afford an opportunity for the registration of trade mark to be
opposed.

Term of Protection (Article 18 of TRIPs):

The term of protection for a trademark shall be for a term of not less than seven years.
The registration of a trademark shall be renewable indefinitely.

Requirement of use (Article 19 of TRIPs):

If user is required to maintain a registration, the registration may be cancelled only after
an uninterrupted period of at list three years of non-use, unless the owner of the trade mark
shows valid reasons for non-uses. This article also goes on to mention that the use of trademark
by a person other than the owner can be consider as the use of trademark for the purposes of
maintaining the registration. The condition in this case being that the trademark should be under
the control of owner.

Under the Trademarks Act of 1999, that came in to effect on Sep. 15, 2003 (India) there
is infringement of a trademark if; the new trademark is identical or deceptively similar to an
existing trademark and thus causes confusion in the mind of the customer.

This is also applicable not only when same or similar goods or services are moved but
also when goods or services of a different category are involved. Example- using an established
trademark in the education industry on a machine that is used for grinding food materials.

Geographical Indications:

Geographical indications are place, names use to identify the origin and quality,
reputation or other characteristics of products. The examples usually mention that,
“Champagne”, “Tequila” or “Roquefort”. However, countries such as India would like
“Kancheepuram saree”, and perhaps even “Mysore Dosa”, to become standard example.

Protection required under the TRIPs agreement is defined in the articles. All products are
covered by Article 22, which defines a standard level of protection. This says that geographical
indications have to be protected in order to avoid misleading the public and to prevent unfair
competition.

The highlights of “Protection of geographical indications” as enumerated in Article 22 are:

• Geographical indications are those, which identify goods as originating in the territory of
a member or a region or locality in that territory, where a given quality, reputation or
other characteristic of the good is essentially attributable to its geographical origin. That
is just like trademarks, the importance is of distinctiveness conferred on a product from a
certain geographical area of the world.
• As in the case of other intellectual property rights, members are required to “protect” the
“owners” of the geographically indicated product.

Members are required to prevent:

(a) The use of any means in the designation or presentation of a goods that indicates or
suggests that the goods in question originates in a geographical area other than the true
place of origin in a manner which misleads the public as to the geographical origin of the
goods.
(b) Any use which constitutes an act of unfair competition within the meaning of Article 10 *
of the Paris Convention (1967)
• A member shall, ex- officio if its legislation so permits or at the request of an
interested party, refuse or invalidate the registration of a trademark which contains or
consists of a geographical indication with respect to goods not originating in the
territory indicated, if use of the indication in the trademark for such goods in that
member is of such a nature as to mislead the public as to the true place of origin.
• The protection under paragraph 1, 2 and 3 shall be applicable against a geographical
indication that, although literally true as to the territory, region or locality in which the
goods originate, falsely represents to the public that the goods originate in another
territory.

While this is the protection awarded to products unique to a particular geographical area,
questions have been asked about goods being sold as “tax mate” and basmati rice. The
production being provided exclusively under Article 23 for wines and spirits is unfortunately not
available to several products from the developing world.

Article 23 on “Additional protection for Geographical Indications for wines and spirits”
places restriction.

• Preventing uses of expression (or aids translations) such as “kind”, “type”, “style”,
“limitation” or the like when identifying wines or spirits not originating in the place
indicated by the geographical indication in question. That is, wine grown in another
part of the world cannot be described as wine of the same “type” as that made in
France.

In the run-up to Cancun round, the term “three pillars” was coined to signify market
access, domestic support and export subsidies under the discussions on Agreement on
Agriculture. India as a geographical indication as the “forth pillar”.

The Indian Geographical Indication Act 1999 has also adopted the criteria for
geographical indications that are qualities, reputation and other characteristics of the goods. the
Act extents to Agricultural goods, natural or manufactured, handicraft and food stuff.

Both WTO and the Indian Act provide for the prohibition of a registration of
geographical indications as a trademark with respect to goods not originating in the territory
indicated if the use of the trademark tends to mislead the public.

Registration and Infringement:-

The registration is for a period of ten years and can be renewed indefinitely subject to provisions
of the Act. True registration confers upon the registered user the exclusive right over the use of
geographical indication in relation to the goods that have been registered. Though the right does
not extend to licensing or pledging, it devolves on the legal succession on the death of an
authorized user.
The Indian act recognizes an infringement when attempt is made to mislead person by indicating
that a good has originated from a particular area or region through it is unreal so. For example:-
maintaining a tea grown outside West Bengal, India as ‘Darjeeling’ tea.

Layout designs (topographies) of integrated circuits

With regard to the treaty on Intellectual Property in Respect of Integrated Circuits (IPIC treaty),
members agreed to provide protection to the layout designs (topographies) of integrated circuits
(referred in the WTO agreement as lay-out design).

The IPIC treaty recognizes as unlawful imposing, selling or otherwise disturbing for commercial
purposes a protected layout designs without authorization of the holder to such a right.

However, the changes of an unlawful act is not directed when a person does not know and had
no reasonable ground to know, when a person acquiring the integrated circuits or article
incorporating such an integrated circuits, that it incorporates an unlawfully reproduced layout
designs.

In the event of trading in integrated circuit incorporating an unlawfully reproduced layout design
or any article incorporating such an integrated circuit, the person concerned upon being informed
of such an act, shall pay the “holder a sum equivalent to a reasonable royalty such as would be
payable under a freely negotiated license in respect of such a layout design”.

Terms of protection

1. In the event of minutes requiring registration as a condition of protection as a

condition of protection, the term of protection of layout design shall intend before
the expiration of a period of 10 years contend from the date of filling an
application for registration or from the date of filling an application for
registration or from the first commercial exploitation whenever in the world it
occurs.
2. In the event of members not requiring registration as condition for protection,
layout designs shall be protected for a term of no less than 10 years from the date
of the first commercial exploitation whenever in the world it occurs.
 3. Notwithstanding paragraphs laid a member may provide that protection shall
lapse 15 years after the creation of legal layout designs.

Protection of undisclosed information

Undisclosed information is:-

➢ ‘Secret’ information which is not generally known and accessible
➢ Information which has commercial value because it is secret
➢ Person in control of information has taken steps to keep it secret

Under article 39, members shall protect undisclosed test or other data submitted during the
process of marketing approval of pharmaceutical or of agricultural chemical products which
utilizes new chemical entities. In addition, members shall 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.

To give effect to the IPIC treaty, Indian government passed the legislation, “The
Semiconductor Integrated Circuit Layout Act, 2000”. As per the Act, ‘Layout Design’ means a
layout of transistors and others circuiting elements and included lead wires connecting such
elements and expressed in any manner in a semiconductor integrated circuit.

“Semiconductor Integrated Circuits” means a product having transistors and others circuiting
elements which are inseparably formed as semiconductor material on insulating materials and
designed to perform an electric circuitry function.

The Act disallows registration for IC layout design that is:-

• Not signed; or
• That has been commercially exploits anywhere in India or in a convention
country; or
• That is not indirectly distinctive or that is not inherently distinguishable from
another recognized layout design.
The registration of a layout design is for a period of 10 years from the date of filing of an
application for registration or from the date of first commercial exploitation anywhere in India or
any Country, whichever is earlier.

Industrial Designs

A design must satisfy the following:-

• It must be new or original, meaning that the design must have all been previously
published
• It must relates to the features of shape
• It must be applied to any article by industrial process
• It should appeal to and be judged solely by naked eye

Requirements for Protection (Article 25)

This article states that:-

1. Members shall provide for the protection of independently created industrial
designs that are new or original members may provide that designs are not new or
original if they do not significally differs from known designs or combinations of
known features. Members may provide that such protection shall not extend to
designs dedicated essentially by technical or functional consideration.
2. Each member shall ensure that requirements for securing protection for textile
design to any cost, examination or publication, do not unreasonably impair the
opportunity to seek and obtain such protection.

Members shall be free to meet thus obligation through industrial design law or
through copyright law.

protection (Article 26)

It states that:-
1. The owner of a protected industrial design shall have to prevent third parties not
having the owner’s consent from making selling or importing articles bearing or
 involving a design which is a copy, or substantially a copy, of protected design,
when such acts are undertaken for commercial purposes.
2. The duration of protection shall amount at least for 10 years.

Under the TRIPS agreement, minimum standards of protection of industrial design have been
provided for. India has already amended its national legislation to provide for those minimal
standards. The essentials purpose of design law is to promote innovative activity in the field of
industries. The existing legislation on industrial designs in India is contained in The Design Act,
2000. Under this legislation the duration of protection is 10 years. The copyright of a registered
design can be enjoyed from the date of registration, extendable on an application from the
registered properties for second period of five years from the expiration of original period.

As per the definition given under Indian Designs Act, “Article” means any article of manufacture
and any substance, artificial, or partly artificial and partly natural and includes any part of an
article being made and sold separately.

“Design” means only the features of shape, configuration, pattern, ornaments or composition of
lines or colours applied to any article whether in two dimensional or three dimensional or in both
forms, by any industrial process or means whether manual, mechanical or chemical, separate or
combined, which in the finished article appeal to and are judged solely by the eye.

• Prohibition Of Registration Of Certain Designs

A design will not be registered:-
a) If it is not new or original; or
b) If it has been disclosed to public anywhere in India or in any other country
publication in any publication in any tangible form or by use or in any other way
prior to the filing data; or
c) If it is not significantly distinguished from known designs or combination of
known designs; or
d) If it comprises or contains scandalous or obscene material.

TRIPS and Control of Anti- Competitive Practices

Under Section 8 regarding ‘Control of Anti- Competitive Practices in contractual Licenses’, there
is recognition “that some licensing practices or conditions pertaining to intellectual property
rights which restrains competition may have adverse effect on trade and many impede the
transfer and dissemination of technology”.

Thus members are allowed to specify in their legislation licensing practices or conditions that
may in particular cases constitutes an abuse of intellectual property rights having an adverse
effect on competition in the relevant market.