The TRIPS Agreement: Principles and Minimum Standards

1. How IP became a trade issue

By the late 1970s US industries (pharmaceuticals, software, film and music) argued that weak foreign IP laws cost them sales. Efforts to raise Paris and Berne standards through WIPO failed because developing countries had a majority there. The United States amended its trade law to create the Special 301 procedure, which threatened unilateral sanctions against countries with inadequate IP protection, and pressed to bring IP into the GATT. The Punta del Este Declaration of 1986 put “trade-related aspects of intellectual property rights, including trade in counterfeit goods” on the agenda of the Uruguay Round. India and Brazil led the opposition, arguing that IP was not a trade matter. The resistance collapsed for several reasons: trade-offs in agriculture and textiles, the threat of Special 301, and the fact that TRIPS came as part of a single undertaking that had to be accepted whole. The Agreement on Trade-Related Aspects of Intellectual Property Rights is Annex 1C to the Marrakesh Agreement Establishing the WTO, signed on 15 April 1994 and in force from 1 January 1995.

2. Structure

3. Basic principles: Part I

• Minimum standards (Article 1(1)): members must give effect to the Agreement and may give more extensive protection, but are not obliged to. Members are free to determine the appropriate method of implementing it within their own legal system and practice.
• “Berne-plus” and “Paris-plus” (Articles 2 and 9): the substantive provisions of Paris and Berne are incorporated, so TRIPS adds to them rather than replacing them. Moral rights under Berne Article 6bis are expressly excluded (Article 9(1)).
• National treatment (Article 3) and most-favoured-nation treatment (Article 4). MFN was new to IP: an advantage given to the nationals of any country must be given immediately and unconditionally to the nationals of all members.
• Exhaustion (Article 6): nothing in the Agreement, for dispute settlement purposes, addresses exhaustion. Members may therefore choose national, regional or international exhaustion, and so may allow parallel imports. Paragraph 5(d) of the Doha Declaration confirmed this.
• Objectives (Article 7): IP protection should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users, in a manner conducive to social and economic welfare, and to a balance of rights and obligations.
• Principles (Article 8): members may adopt measures necessary to protect public health and nutrition and to promote the public interest in sectors of vital importance, consistent with the Agreement, and may prevent abuse of IP rights.

4. Minimum standards: Part II

• Copyright (Arts 9–14): Berne Articles 1–21 incorporated; protection of expressions, not ideas (9(2)); computer programs protected as literary works and compilations of data protected (10); rental rights (11); minimum term (12); the three-step test for limitations and exceptions (13); rights of performers, producers of phonograms and broadcasters (14).
• Trademarks (Arts 15–21): any sign capable of distinguishing; exclusive rights against confusing use; extension of Paris Article 6bis to services and, for registered well-known marks, to dissimilar goods (16); initial registration and each renewal for at least seven years, renewable indefinitely (18); compulsory licensing of marks not permitted (21).
• Geographical indications (Arts 22–24): general protection against misleading use (22); additional protection for wines and spirits even without confusion (23); negotiations and exceptions (24).
• Industrial designs (Arts 25–26): new or original designs; at least ten years.
• Patents (Arts 27–34): patents for inventions in all fields of technology, without discrimination as to place of invention, field of technology, or whether products are imported or locally produced (27(1)); exclusions for ordre public (27(2)) and for methods of treatment, and for plants and animals other than microorganisms, with protection of plant varieties by patents, a sui generis system or both (27(3)); exclusive rights (28); disclosure (29); limited exceptions (30); use without authorisation of the right holder, the compulsory licence provision (31) and the 2017 amendment (31bis); term of at least twenty years from filing (33); reversal of burden of proof for process patents (34).
• Layout-designs of integrated circuits (Arts 35–38), built on the Washington Treaty of 1989.
• Undisclosed information (Art 39): trade secrets and test data submitted for marketing approval.
• Anti-competitive practices in licences (Art 40).

5. Enforcement, dispute settlement and transition

Part III requires fair and equitable procedures, civil remedies, provisional measures, border measures and criminal penalties at least for wilful trademark counterfeiting and copyright piracy on a commercial scale (Article 61); it is treated in the enforcement note. Part V makes TRIPS disputes subject to the WTO Dispute Settlement Understanding, which is what gives TRIPS its force: a losing member can face authorised retaliation, including cross-retaliation in other sectors. Part VI gave developed members one year, developing members until 1 January 2000 (Article 65(2)), and an additional five years, to 1 January 2005, for product patents in fields not previously protected (Article 65(4)). Least-developed members have repeated extensions under Article 66(1), currently to 2034 for general obligations and to 2033 for pharmaceutical patents and test data.

6. India and the Mailbox dispute

India used the Article 65(4) extension for pharmaceutical and agrochemical product patents. But Article 70(8) required a means for filing product patent applications from 1995 (the “mailbox”) so that their priority would be preserved, and Article 70(9) required exclusive marketing rights for products in the mailbox that obtained marketing approval. India relied on administrative instructions after a 1994 Ordinance lapsed. In India – Patent Protection for Pharmaceutical and Agricultural Chemical Products (WT/DS50, Appellate Body report, 1997), brought by the United States, the WTO found India in breach. The Patents (Amendment) Act, 1999, with retrospective effect from 1 January 1995, cured the breach; the mailbox applications were taken up for examination after 1 January 2005, and the Glivec application in Novartis was one of them.

7. Interpretation: key WTO disputes

• Canada – Pharmaceutical Patents (DS114, panel, 2000): Canada’s regulatory review (Bolar) exception was a permitted limited exception under Article 30, but its stockpiling exception was not.
• US – Section 110(5) Copyright Act (DS160, panel, 2000): the “homestyle” exemption for small shops satisfied the three-step test of Article 13, but the wider business exemption did not.
• Australia – Tobacco Plain Packaging (Appellate Body, 2020): plain packaging did not unjustifiably encumber the use of trademarks under Article 20; trademark rights are negative rights to exclude, not positive rights to use.

How this is examined

Questions: “Discuss the salient features of TRIPS,” “TRIPS and its impact on Indian IP law,” or “Has TRIPS served the interests of developing countries?” Give history, structure, basic principles, the standards per right in a list, enforcement and dispute settlement, then India’s amendments and the Mailbox case. For the evaluative question, use the competing views box and end with the flexibilities in Articles 6, 7, 8, 27 and 31.