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TRIPS Agreement

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The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) was negotiated between 1986 and 1994 during the Uruguay Round of the General Agreement on Tariffs and Trade (GATT), which led to the establishment of the World Trade Organization (WTO). The TRIPS Agreement sets minimum levels of several types of intellectual property (IP) protection, including copyright, trademarks, patents, industrial design, and trade secrets protection. Membership in the WTO includes an obligation to comply with the TRIPS Agreement. According to the WTO, the Agreement attempts to strike a balance between long-term social benefits to society of increased innovations and short-term costs to society from the lack of access to inventions (World Trade Organization (n.d.) Intellectual property: protection and enforcement. Retrieved from understanding the WTO: the agreements: http://wto.org/english/thewto_e/whatis_e/tif_e/agrm7_e.htm ).

This entry considers this balance by looking at the two poles of intellectual property policy: providing incentives to increase innovation and optimizing access to inventions both for consumptive use and for potentially innovation-increasing experimentation. This entry also surveys the notion of calibration , the idea that every country or region should adapt its regulatory framework to reflect its own strengths and weaknesses in optimizing what one might refer to as its innovation policy. A calibration approach suggests that providing innovation incentives and optimizing access are not mutually exclusive objectives.

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Alain Marciano

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DiGSPES, University of Eastern Piedmont, Alessandria, Italy

Giovanni Battista Ramello

IEL, Torino, Italy

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Gervais, D. (2019). TRIPS Agreement. In: Marciano, A., Ramello, G.B. (eds) Encyclopedia of Law and Economics. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-7753-2_563

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World Trade Organization (WTO)

Trt/wto01/001, agreement on trade-related aspects of intellectual property rights (trips agreement), uruguay round agreement: trips trade-related aspects of intellectual property rights.

The TRIPS Agreement is Annex 1C of the Marrakesh Agreement Establishing the World Trade Organization, signed in Marrakesh, Morocco on 15 April 1994.

TABLE OF CONTENTS

Desiring to reduce distortions and impediments to international trade, and taking into account the need to promote effective and adequate protection of intellectual property rights, and to ensure that measures and procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade;

Recognizing , to this end, the need for new rules and disciplines concerning:

(a) the applicability of the basic principles of GATT 1994 and of relevant international intellectual property agreements or conventions;

(b) the provision of adequate standards and principles concerning the availability, scope and use of trade-related intellectual property rights;

(c) the provision of effective and appropriate means for the enforcement of trade-related intellectual property rights, taking into account differences in national legal systems;

(d) the provision of effective and expeditious procedures for the multilateral prevention and settlement of disputes between governments;  and

(e) transitional arrangements aiming at the fullest participation in the results of the negotiations;

Recognizing the need for a multilateral framework of principles, rules and disciplines dealing with international trade in counterfeit goods;

Recognizing that intellectual property rights are private rights; 

Recognizing the underlying public policy objectives of national systems for the protection of intellectual property, including developmental and technological objectives;

Recognizing also the special needs of the least-developed country Members in respect of maximum flexibility in the domestic implementation of laws and regulations in order to enable them to create a sound and viable technological base;

Emphasizing the importance of reducing tensions by reaching strengthened commitments to resolve disputes on trade-related intellectual property issues through multilateral procedures;

Desiring to establish a mutually supportive relationship between the WTO and the World Intellectual Property Organization (referred to in this Agreement as "WIPO") as well as other relevant international organizations;

Hereby agree as follows:

Part I General Provisions and Basic Principles

Article 1 Nature and Scope of Obligations

1. Members shall give effect to the provisions of this Agreement.  Members may, but shall not be obliged to, implement in their law more extensive protection than is required by this Agreement, provided that such protection does not contravene the provisions of this Agreement.  Members shall be free to determine the appropriate method of implementing the provisions of this Agreement within their own legal system and practice.

2. For the purposes of this Agreement, the term "intellectual property" refers to all categories of intellectual property that are the subject of Sections 1 through 7 of Part II. 

3. Members shall accord the treatment provided for in this Agreement to the nationals of other Members. [1]   In respect of the relevant intellectual property right, the nationals of other Members shall be understood as those natural or legal persons that would meet the criteria for eligibility for protection provided for in the Paris Convention (1967), the Berne Convention (1971), the Rome Convention and the Treaty on Intellectual Property in Respect of Integrated Circuits, were all Members of the WTO members of those conventions. [2]   Any Member availing itself of the possibilities provided in paragraph 3 of Article 5 or paragraph 2 of Article 6 of the Rome Convention shall make a notification as foreseen in those provisions to the Council for Trade-Related Aspects of Intellectual Property Rights (the "Council for TRIPS").  

Article 2 Intellectual Property Conventions

1. In respect of Parts II, III and IV of this Agreement, Members shall comply with Articles 1 through 12, and Article 19, of the Paris Convention (1967).

2. Nothing in Parts I to IV of this Agreement shall derogate from existing obligations that Members may have to each other under the Paris Convention, the Berne Convention, the Rome Convention and the Treaty on Intellectual Property in Respect of Integrated Circuits.

Article 3 National Treatment

1. Each Member shall accord to the nationals of other Members treatment no less favourable than that it accords to its own nationals with regard to the protection [3] of intellectual property, subject to the exceptions already provided in, respectively, the Paris Convention (1967), the Berne Convention (1971), the Rome Convention or the Treaty on Intellectual Property in Respect of Integrated Circuits.  In respect of performers, producers of phonograms and broadcasting organizations, this obligation only applies in respect of the rights provided under this Agreement.  Any Member availing itself of the possibilities provided in Article 6 of the Berne Convention (1971) or paragraph 1(b) of Article 16 of the Rome Convention shall make a notification as foreseen in those provisions to the Council for TRIPS.

2. Members may avail themselves of the exceptions permitted under paragraph 1 in relation to judicial and administrative procedures, including the designation of an address for service or the appointment of an agent within the jurisdiction of a Member, only where such exceptions are necessary to secure compliance with laws and regulations which are not inconsistent with the provisions of this Agreement and where such practices are not applied in a manner which would constitute a disguised restriction on trade.

Article 4 Most-Favoured-Nation Treatment

With regard to the protection of intellectual property, any advantage, favour, privilege or immunity granted by a Member to the nationals of any other country shall be accorded immediately and unconditionally to the nationals of all other Members.  Exempted from this obligation are any advantage, favour, privilege or immunity accorded by a Member:

(a) deriving from international agreements on judicial assistance or law enforcement of a general nature and not particularly confined to the protection of intellectual property;

(b) granted in accordance with the provisions of the Berne Convention (1971) or the Rome Convention authorizing that the treatment accorded be a function not of national treatment but of the treatment accorded in another country; 

(c) in respect of the rights of performers, producers of phonograms and broadcasting organizations not provided under this Agreement;

(d) deriving from international agreements related to the protection of intellectual property which entered into force prior to the entry into force of the WTO Agreement, provided that such agreements are notified to the Council for TRIPS and do not constitute an arbitrary or unjustifiable discrimination against nationals of other Members.

Article 5 Multilateral Agreements on Acquisition or Maintenance of Protection

The obligations under Articles 3 and 4 do not apply to procedures provided in multilateral agreements concluded under the auspices of WIPO relating to the acquisition or maintenance of intellectual property rights.

Article 6 Exhaustion

For the purposes of dispute settlement under this Agreement, subject to the provisions of Articles 3 and 4 nothing in this Agreement shall be used to address the issue of the exhaustion of intellectual property rights.

Article 7 Objectives

The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.

Article 8 Principles

1. Members may, in formulating or amending their laws and regulations, adopt measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development, provided that such measures are consistent with the provisions of this Agreement. 

2. Appropriate measures, provided that they are consistent with the provisions of this Agreement, may be needed to prevent the abuse of intellectual property rights by right holders or the resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology.

Part II Standards Concerning the Availability, Scope and Use of Intellectual Property Rights

Section 1: Copyright and Related Rights

Article 9 Relation to the Berne Convention

1. Members shall comply with Articles 1 through 21 of the Berne Convention (1971) and the Appendix thereto.  However, Members shall not have rights or obligations under this Agreement in respect of the rights conferred under Article 6 bis of that Convention or of the rights derived therefrom.

2. Copyright protection shall extend to expressions and not to ideas, procedures, methods of operation or mathematical concepts as such.

Article 10 Computer Programs and Compilations of Data

1. Computer programs, whether in source or object code, shall be protected as literary works under the Berne Convention (1971).

2. Compilations of data or other material, whether in machine readable or other form, which by reason of the selection or arrangement of their contents constitute intellectual creations shall be protected as such.  Such protection, which shall not extend to the data or material itself, shall be without prejudice to any copyright subsisting in the data or material itself.

Article 11 Rental Rights

In respect of at least computer programs and cinematographic works, a Member shall provide authors and their successors in title the right to authorize or to prohibit the commercial rental to the public of originals or copies of their copyright works.  A Member shall be excepted from this obligation in respect of cinematographic works unless such rental has led to widespread copying of such works which is materially impairing the exclusive right of reproduction conferred in that Member on authors and their successors in title.  In respect of computer programs, this obligation does not apply to rentals where the program itself is not the essential object of the rental.

Article 12 Term of Protection

Whenever the term of protection of a work, other than a photographic work or a work of applied art, is calculated on a basis other than the life of a natural person, such term shall be no less than 50 years from the end of the calendar year of authorized publication, or, failing such authorized publication within 50 years from the making of the work, 50 years from the end of the calendar year of making.

Article 13 Limitations and Exceptions

Members shall confine limitations or exceptions to exclusive rights to certain special cases which do not conflict with a normal exploitation of the work and do not unreasonably prejudice the legitimate interests of the right holder. 

Article 14 Protection of Performers, Producers of Phonograms (Sound Recordings) and Broadcasting Organizations

1. In respect of a fixation of their performance on a phonogram, performers shall have the possibility of preventing the following acts when undertaken without their authorization:  the fixation of their unfixed performance and the reproduction of such fixation.  Performers shall also have the possibility of preventing the following acts when undertaken without their authorization:  the broadcasting by wireless means and the communication to the public of their live performance.

2. Producers of phonograms shall enjoy the right to authorize or prohibit the direct or indirect reproduction of their phonograms.

3. Broadcasting organizations shall have the right to prohibit the following acts when undertaken without their authorization:  the fixation, the reproduction of fixations, and the rebroadcasting by wireless means of broadcasts, as well as the communication to the public of television broadcasts of the same.  Where Members do not grant such rights to broadcasting organizations, they shall provide owners of copyright in the subject matter of broadcasts with the possibility of preventing the above acts, subject to the provisions of the Berne Convention (1971).

4. The provisions of Article 11 in respect of computer programs shall apply mutatis mutandis to producers of phonograms and any other right holders in phonograms as determined in a Member's law.  If on 15 April 1994 a Member has in force a system of equitable remuneration of right holders in respect of the rental of phonograms, it may maintain such system provided that the commercial rental of phonograms is not giving rise to the material impairment of the exclusive rights of reproduction of right holders. 

5. The term of the protection available under this Agreement to performers and producers of phonograms shall last at least until the end of a period of 50 years computed from the end of the calendar year in which the fixation was made or the performance took place.  The term of protection granted pursuant to paragraph 3 shall last for at least 20 years from the end of the calendar year in which the broadcast took place.

6. Any Member may, in relation to the rights conferred under paragraphs 1, 2 and 3, provide for conditions, limitations, exceptions and reservations to the extent permitted by the Rome Convention.  However, the provisions of Article 18 of the Berne Convention (1971) shall also apply, mutatis mutandis , to the rights of performers and producers of phonograms in phonograms.

Section 2: Trademarks

Article 15 Protectable Subject Matter

1. Any sign, or any combination of signs, capable of distinguishing the goods or services of one undertaking from those of other undertakings, shall be capable of constituting a trademark.  Such signs, in particular words including personal names, letters, numerals, figurative elements and combinations of colours as well as any combination of such signs, shall be eligible for registration as trademarks.  Where signs are not inherently capable of distinguishing the relevant goods or services, Members may make registrability depend on distinctiveness acquired through use.  Members may require, as a condition of registration, that signs be visually perceptible.

2. Paragraph 1 shall not be understood to prevent a Member from denying registration of a trademark on other grounds, provided that they do not derogate from the provisions of the Paris Convention (1967). 

3. Members may make registrability depend on use.  However, actual use of a trademark shall not be a condition for filing an application for registration.   An application shall not be refused solely on the ground that intended use has not taken place before the expiry of a period of three years from the date of application.

4. The nature of the goods or services to which a trademark is to be applied shall in no case form an obstacle to registration of the trademark.

5. Members shall publish each trademark either before it is registered or promptly after it is registered and shall afford a reasonable opportunity for petitions to cancel the registration.  In addition, Members may afford an opportunity for the registration of a trademark to be opposed.

Article 16 Rights Conferred

1. The owner of a registered trademark shall have the exclusive right to prevent all third parties not having the owner’s consent from using in the course of trade identical or similar signs for goods or services which are identical or similar to those in respect of which the trademark is registered where such use would result in a likelihood of confusion.  In case of the use of an identical sign for identical goods or services, a likelihood of confusion shall be presumed.  The rights described above shall not prejudice any existing prior rights, nor shall they affect the possibility of Members making rights available on the basis of use.

2. Article 6 bis of the Paris Convention (1967) shall apply, mutatis mutandis , to services.  In determining whether a trademark is well-known, Members shall take account of the knowledge of the trademark in the relevant sector of the public, including knowledge in the Member concerned which has been obtained as a result of the promotion of the trademark.

3. Article 6 bis of the Paris Convention (1967) shall apply, mutatis mutandis , to goods or services which are not similar to those in respect of which a trademark is registered, provided that use of that trademark in relation to those goods or services would indicate a connection between those goods or services and the owner of the registered trademark and provided that the interests of the owner of the registered trademark are likely to be damaged by such use.

Article 17 Exceptions

Members may provide limited exceptions to the rights conferred by a trademark, such as fair use of descriptive terms, provided that such exceptions take account of the legitimate interests of the owner of the trademark and of third parties.

Article 18 Term of Protection

Initial registration, and each renewal of registration, of a trademark shall be for a term of no less than seven years.  The registration of a trademark shall be renewable indefinitely.

Article 19 Requirement of Use

1. If use is required to maintain a registration, the registration may be cancelled only after an uninterrupted period of at least three years of non-use, unless valid reasons based on the existence of obstacles to such use are shown by the trademark owner.  Circumstances arising independently of the will of the owner of the trademark which constitute an obstacle to the use of the trademark, such as import restrictions on or other government requirements for goods or services protected by the trademark, shall be recognized as valid reasons for non-use.

2. When subject to the control of its owner, use of a trademark by another person shall be recognized as use of the trademark for the purpose of maintaining the registration.

Article 20 Other Requirements

The use of a trademark in the course of trade shall not be unjustifiably encumbered by special requirements, such as use with another trademark, use in a special form or use in a manner detrimental to its capability to distinguish the goods or services of one undertaking from those of other undertakings. This will not preclude a requirement prescribing the use of the trademark identifying the undertaking producing the goods or services along with, but without linking it to, the trademark distinguishing the specific goods or services in question of that undertaking.

Article 21 Licensing and Assignment

Members may determine conditions on the licensing and assignment of trademarks, it being understood that the compulsory licensing of trademarks shall not be permitted and that the owner of a registered trademark shall have the right to assign the trademark with or without the transfer of the business to which the trademark belongs. 

Section 3: Geographical Indications

Article 22 Protection of Geographical Indications

1. Geographical indications are, for the purposes of this Agreement, indications which identify a good 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.

2. In respect of geographical indications, Members shall provide the legal means for interested parties to prevent: 

(a) the use of any means in the designation or presentation of a good that indicates or suggests that the good 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 good;

(b) any use which constitutes an act of unfair competition within the meaning of Article 10 bis of the Paris Convention (1967).

3. 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.

4. The protection under paragraphs 1, 2 and 3 shall be applicable against a geographical indication which, 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.

Article 23 Additional Protection for Geographical Indications for Wines and Spirits

1. Each Member shall provide the legal means for interested parties to prevent use of a geographical indication identifying wines for wines not originating in the place indicated by the geographical indication in question or identifying spirits for spirits not originating in the place indicated by the geographical indication in question, even where the true origin of the goods is indicated or the geographical indication is used in translation or accompanied by expressions such as "kind", "type", "style", "imitation" or the like. [4]

2. The registration of a trademark for wines which contains or consists of a geographical indication identifying wines or for spirits which contains or consists of a geographical indication identifying spirits shall be refused or invalidated, ex officio if a Member's legislation so permits or at the request of an interested party, with respect to such wines or spirits not having this origin.

3. In the case of homonymous geographical indications for wines, protection shall be accorded to each indication, subject to the provisions of paragraph 4 of Article 22. Each Member shall determine the practical conditions under which the homonymous indications in question will be differentiated from each other, taking into account the need to ensure equitable treatment of the producers concerned and that consumers are not misled.

4. In order to facilitate the protection of geographical indications for wines, negotiations shall be undertaken in the Council for TRIPS concerning the establishment of a multilateral system of notification and registration of geographical indications for wines eligible for protection in those Members participating in the system.

Article 24 International Negotiations;  Exceptions

1. Members agree to enter into negotiations aimed at increasing the protection of individual geographical indications under Article 23.   The provisions of paragraphs 4 through 8 below shall not be used by a Member to refuse to conduct negotiations or to conclude bilateral or multilateral agreements.  In the context of such negotiations, Members shall be willing to consider the continued applicability of these provisions to individual geographical indications whose use was the subject of such negotiations.

2. The Council for TRIPS shall keep under review the application of the provisions of this Section;  the first such review shall take place within two years of the entry into force of the WTO Agreement.  Any matter affecting the compliance with the obligations under these provisions may be drawn to the attention of the Council, which, at the request of a Member, shall consult with any Member or Members in respect of such matter in respect of which it has not been possible to find a satisfactory solution through bilateral or plurilateral consultations between the Members concerned.  The Council shall take such action as may be agreed to facilitate the operation and further the objectives of this Section.

3. In implementing this Section, a Member shall not diminish the protection of geographical indications that existed in that Member immediately prior to the date of entry into force of the WTO Agreement.

4. Nothing in this Section shall require a Member to prevent continued and similar use of a particular geographical indication of another Member identifying wines or spirits in connection with goods or services by any of its nationals or domiciliaries who have used that geographical indication in a continuous manner with regard to the same or related goods or services in the territory of that Member either ( a ) for at least 10 years preceding 15 April 1994 or ( b ) in good faith preceding that date.

5. Where a trademark has been applied for or registered in good faith, or where rights to a trademark have been acquired through use in good faith either:

(a) before the date of application of these provisions in that Member as defined in Part VI;  or

(b) before the geographical indication is protected in its country of origin; 

measures adopted to implement this Section shall not prejudice eligibility for or the validity of the registration of a trademark, or the right to use a trademark, on the basis that such a trademark is identical with, or similar to, a geographical indication.

6. Nothing in this Section shall require a Member to apply its provisions in respect of a geographical indication of any other Member with respect to goods or services for which the relevant indication is identical with the term customary in common language as the common name for such goods or services in the territory of that Member.  Nothing in this Section shall require a Member to apply its provisions in respect of a geographical indication of any other Member with respect to products of the vine for which the relevant indication is identical with the customary name of a grape variety existing in the territory of that Member as of the date of entry into force of the WTO Agreement.

7. A Member may provide that any request made under this Section in connection with the use or registration of a trademark must be presented within five years after the adverse use of the protected indication has become generally known in that Member or after the date of registration of the trademark in that Member provided that the trademark has been published by that date, if such date is earlier than the date on which the adverse use became generally known in that Member, provided that the geographical indication is not used or registered in bad faith.

8. The provisions of this Section shall in no way prejudice the right of any person to use, in the course of trade, that person’s name or the name of that person’s predecessor in business, except where such name is used in such a manner as to mislead the public.

9. There shall be no obligation under this Agreement to protect geographical indications which are not or cease to be protected in their country of origin, or which have fallen into disuse in that country.

Section 4: Industrial Designs

Article 25 Requirements for Protection

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 significantly differ from known designs or combinations of known design features.  Members may provide that such protection shall not extend to designs dictated essentially by technical or functional considerations.

2. Each Member shall ensure that requirements for securing protection for textile designs, in particular in regard to any cost, examination or publication, do not unreasonably impair the opportunity to seek and obtain such protection.  Members shall be free to meet this obligation through industrial design law or through copyright law.

Article 26 Protection

1. The owner of a protected industrial design shall have the right to prevent third parties not having the owner’s consent from making, selling or importing articles bearing or embodying a design which is a copy, or substantially a copy, of the protected design, when such acts are undertaken for commercial purposes.

2. Members may provide limited exceptions to the protection of industrial designs, provided that such exceptions do not unreasonably conflict with the normal exploitation of protected industrial designs and do not unreasonably prejudice the legitimate interests of the owner of the protected design, taking account of the legitimate interests of third parties.

3. The duration of protection available shall amount to at least 10 years.

Section 5: Patents

Article 27 Patentable Subject Matter

1. Subject to the provisions of paragraphs 2 and 3, patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application. [5]   Subject to paragraph 4 of Article 65, paragraph 8 of Article 70 and paragraph 3 of this Article, patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced.

2. Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law.

3. Members may also exclude from patentability:

(a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals;

(b) plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes.  However,  Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof.  The provisions of this subparagraph shall be reviewed four years after the date of entry into force of the WTO Agreement.

Article 28 Rights Conferred

1. A patent shall confer on its owner the following exclusive rights:

(a) where the subject matter of a patent is a product, to prevent third parties not having the owner’s consent from the acts of:  making, using, offering for sale, selling, or importing [6] for these purposes that product;

(b) where the subject matter of a patent is a process, to prevent third parties not having the owner’s consent from the act of using the process, and from the acts of:  using, offering for sale, selling, or importing for these purposes at least the product obtained directly by that process.

2. Patent owners shall also have the right to assign, or transfer by succession, the patent and to conclude licensing contracts.

Article  29 Conditions on Patent Applicants

1. Members shall require that an applicant for a patent shall disclose the invention in a manner sufficiently clear and complete for the invention to be carried out by a person skilled in the art and may require the applicant to indicate the best mode for carrying out the invention known to the inventor at the filing date or, where priority is claimed, at the priority date of the application.

2. Members may require an applicant for a patent to provide information concerning the applicant’s corresponding foreign applications and grants.

Article 30 Exceptions to Rights Conferred

Members may provide limited exceptions to the exclusive rights conferred by a patent, provided that 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 account of the legitimate interests of third parties.

Article 31 Other Use Without Authorization of the Right Holder

Where the law of a Member allows for other use [7] of the subject matter of a patent without the authorization of the right holder, including use by the government or third parties authorized by the government, the following provisions shall be respected:

(a) authorization of such use shall be considered on its individual merits;

(b) such use may only be permitted if, prior to such use, the proposed user has made efforts to obtain authorization from the right holder on reasonable commercial terms and conditions and that such efforts have not been successful within a reasonable period of time.  This requirement may be waived by a Member in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use.  In situations of national emergency or other circumstances of extreme urgency, the right holder shall, nevertheless, be notified as soon as reasonably practicable.  In the case of public non-commercial use, where the government or contractor, without making a patent search, knows or has demonstrable grounds to know that a valid patent is or will be used by or for the government, the right holder shall be informed promptly;

(c) the scope and duration of such use shall be limited to the purpose for which it was authorized, and in the case of semi-conductor technology shall only be for public non-commercial use or to remedy a practice determined after judicial or administrative process to be anti-competitive;

(d) such use shall be non-exclusive;

(e) such use shall be non-assignable, except with that part of the enterprise or goodwill which enjoys such use;

(f) any such use shall be authorized predominantly for the supply of the domestic market of the Member authorizing such use;

(g) authorization for such use shall be liable, subject to adequate protection of the legitimate interests of the persons so authorized, to be terminated if and when the circumstances which led to it cease to exist and are unlikely to recur.  The competent authority shall have the authority to review, upon motivated request, the continued existence of these circumstances;

(h) the right holder shall be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization;

(i) the legal validity of any decision relating to the authorization of such use shall be subject to judicial review or other independent review by a distinct higher authority in that Member;

(j) any decision relating to the remuneration provided in respect of such use shall be subject to judicial review or other independent review by a distinct higher authority in that Member;

(k) Members are not obliged to apply the conditions set forth in subparagraphs (b) and (f) where such use is permitted to remedy a practice determined after judicial or administrative process to be anti-competitive.  The need to correct anti-competitive practices may be taken into account in determining the amount of remuneration in such cases.  Competent authorities shall have the authority to refuse termination of authorization if and when the conditions which led to such authorization are likely to recur;

(l) where such use is authorized to permit the exploitation of a patent ("the second patent") which cannot be exploited without infringing another patent ("the first patent"), the following additional conditions shall apply:

(i) the invention claimed in the second patent shall involve an important technical advance of considerable economic significance in relation to the invention claimed in the first patent;

(ii) the owner of the first patent shall be entitled to a cross-licence on reasonable terms to use the invention claimed in the second patent;  and

(iii) the use authorized in respect of the first patent shall be non-assignable except with the assignment of the second patent.

Article 32 Revocation/Forfeiture

An opportunity for judicial review of any decision to revoke or forfeit a patent shall be available.

Article 33 Term of Protection

The term of protection available shall not end before the expiration of a period of twenty years counted from the filing date. [8]

Article 34 Process Patents:  Burden of Proof

1. For the purposes of civil proceedings in respect of the infringement of the rights of the owner referred to in paragraph 1(b) of Article 28, 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.  Therefore, Members shall provide, in at least one of the following circumstances, that any identical product when produced without the consent of the patent owner shall, in the absence of proof to the contrary, be deemed to have been obtained by the patented process:

(a) if the product obtained by the patented process is new;

(b) if there is a substantial likelihood that the identical product was made by the process and the owner of the patent has been unable through reasonable efforts to determine the process actually used.

2. Any Member shall be free to provide that the burden of proof indicated in paragraph 1 shall be on the alleged infringer only if the condition referred to in subparagraph (a) is fulfilled or only if the condition referred to in subparagraph (b) is fulfilled.

3. In the adduction of proof to the contrary, the legitimate interests of defendants in protecting their manufacturing and business secrets shall be taken into account. 

Section 6: Layout-Designs (Topographies) of Integrated Circuits

Article 35 Relation to the IPIC Treaty

Members agree to provide protection to the layout-designs (topographies) of integrated circuits (referred to in this Agreement as "layout-designs") in accordance with Articles 2 through 7 (other than paragraph 3 of Article 6), Article 12 and paragraph 3 of Article 16 of the Treaty on Intellectual Property in Respect of Integrated Circuits and, in addition, to comply with the following provisions.

Article 36 Scope of the Protection

Subject to the provisions of paragraph 1 of Article 37, Members shall consider unlawful the following acts if performed without the authorization of the right holder [9] : importing, selling, or otherwise distributing for commercial purposes a protected layout-design, an integrated circuit in which a protected layout-design is incorporated, or an article incorporating such an integrated circuit only in so far as it continues to contain an unlawfully reproduced layout-design.

Article 37 Acts Not Requiring the Authorization of the Right Holder

1. Notwithstanding Article 36, no Member shall consider unlawful the performance of any of the acts referred to in that Article in respect of an integrated circuit incorporating an unlawfully reproduced layout-design or any article incorporating such an integrated circuit where the person performing or ordering such acts did not know and had no reasonable ground to know, when acquiring the integrated circuit or article incorporating such an integrated circuit, that it incorporated an unlawfully reproduced layout-design.  Members shall provide that, after the time that such person has received sufficient notice that the layout-design was unlawfully reproduced, that person may perform any of the acts with respect to the stock on hand or ordered before such time, but shall be liable to pay to the right holder a sum equivalent to a reasonable royalty such as would be payable under a freely negotiated licence in respect of such a layout-design.

2. The conditions set out in subparagraphs (a) through (k) of Article 31 shall apply mutatis mutandis in the event of any non-voluntary licensing of a layout-design or of its use by or for the government without the authorization of the right holder.

Article 38 Term of Protection

1. In Members requiring registration as a condition of protection, the term of protection of layout-designs shall not end before the expiration of a period of 10 years counted from the date of filing an application for registration or from the first commercial exploitation wherever in the world it occurs.

2. In Members not requiring registration as a 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 wherever in the world it occurs.

3. Notwithstanding paragraphs 1 and 2, a Member may provide that protection shall lapse 15 years after the creation of the layout-design.

Section 7: Protection of Undisclosed Information

1. In the course of ensuring effective protection against unfair competition as provided in Article 10 bis of the Paris Convention (1967), Members shall protect undisclosed information in accordance with paragraph 2 and data submitted to governments or governmental agencies in accordance with paragraph 3.

2. Natural and legal persons shall have the possibility of preventing information lawfully within their control from being disclosed to, acquired by, or used by others without their consent in a manner contrary to honest commercial practices [10] so long as such information:

(a) is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;

(b) has commercial value because it is secret;  and

(c) has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.

3. Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use.  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.

Section 8: Control of Anti-Competitive Practices in Contractual Licences

1. Members agree 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.

2. Nothing in this Agreement shall prevent Members from specifying in their legislation licensing practices or conditions that may in particular cases constitute an abuse of intellectual property rights having an adverse effect on competition in the relevant market.  As provided above, a Member may adopt, consistently with the other provisions of this Agreement, appropriate measures to prevent or control such practices, which may include for example exclusive grantback conditions, conditions preventing challenges to validity and coercive package licensing, in the light of the relevant laws and regulations of that Member.

3. Each Member shall enter, upon request, into consultations with any other Member which has cause to believe that an intellectual property right owner that is a national or domiciliary of the Member to which the request for consultations has been addressed is undertaking practices in violation of the requesting Member's laws and regulations on the subject matter of this Section, and which wishes to secure compliance with such legislation, without prejudice to any action under the law and to the full freedom of an ultimate decision of either Member.  The Member addressed shall accord full and sympathetic consideration to, and shall afford adequate opportunity for, consultations with the requesting Member, and shall cooperate through supply of publicly available non-confidential information of relevance to the matter in question and of other information available to the Member, subject to domestic law and to the conclusion of mutually satisfactory agreements concerning the safeguarding of its confidentiality by the requesting Member.

4. A Member whose nationals or domiciliaries are subject to proceedings in another Member concerning alleged violation of that other Member's laws and regulations on the subject matter of this Section shall, upon request, be granted an opportunity for consultations by the other Member under the same conditions as those foreseen in paragraph 3.

Part III Enforcement of Intellectual Property Rights

Section 1: General Obligations

1. Members shall ensure that enforcement procedures as specified in this Part are available under their law so as to permit effective action against any act of infringement of intellectual property rights covered by this Agreement, including expeditious remedies to prevent infringements and remedies which constitute a deterrent to further infringements.  These procedures shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse.

2. Procedures concerning the enforcement of intellectual property rights shall be fair and equitable.  They shall not be unnecessarily complicated or costly, or entail unreasonable time-limits or unwarranted delays.

3. Decisions on the merits of a case shall preferably be in writing and reasoned.  They shall be made available at least to the parties to the proceeding without undue delay.  Decisions on the merits of a case shall be based only on evidence in respect of which parties were offered the opportunity to be heard.

4. Parties to a proceeding shall have an opportunity for review by a judicial authority of final administrative decisions and, subject to jurisdictional provisions in a Member's law concerning the importance of a case, of at least the legal aspects of initial judicial decisions on the merits of a case.  However, there shall be no obligation to provide an opportunity for review of acquittals in criminal cases.

5. It is understood that this Part does not create any obligation to put in place a judicial system for the enforcement of intellectual property rights distinct from that for the enforcement of law in general, nor does it affect the capacity of Members to enforce their law in general.  Nothing in this Part creates any obligation with respect to the distribution of resources as between enforcement of intellectual property rights and the enforcement of law in general.

Section 2: Civil and Administrative Procedures and Remedies

Article 42 Fair and Equitable Procedures

Members shall make available to right holders [11] civil judicial procedures concerning the enforcement of any intellectual property right covered by this Agreement.  Defendants shall have the right to written notice which is timely and contains sufficient detail, including the basis of the claims.  Parties shall be allowed to be represented by independent legal counsel, and procedures shall not impose overly burdensome requirements concerning mandatory personal appearances.  All parties to such procedures shall be duly entitled to substantiate their claims and to present all relevant evidence.  The procedure shall provide a means to identify and protect confidential information, unless this would be contrary to existing constitutional requirements.

Article 43 Evidence

1. The judicial authorities shall have the authority, where a party has presented reasonably available evidence sufficient to support its claims and has specified evidence relevant to substantiation of its claims which lies in the control of the opposing party, to order that this evidence be produced by the opposing party, subject in appropriate cases to conditions which ensure the protection of confidential information.

2. In cases in which a party to a proceeding voluntarily and without good reason refuses access to, or otherwise does not provide necessary information within a reasonable period, or significantly impedes a procedure relating to an enforcement action, a Member may accord judicial authorities the authority to make preliminary and final determinations, affirmative or negative, on the basis of the information presented to them, including the complaint or the allegation presented by the party adversely affected by the denial of access to information, subject to providing the parties an opportunity to be heard on the allegations or evidence.

Article 44 Injunctions

1. The judicial authorities shall have the authority to order a party to desist from an infringement, inter alia to prevent the entry into the channels of commerce in their jurisdiction of imported goods that involve the infringement of an intellectual property right, immediately after customs clearance of such goods.  Members are not obliged to accord such authority in respect of protected subject matter acquired or ordered by a person prior to knowing or having reasonable grounds to know that dealing in such subject matter would entail the infringement of an intellectual property right. 

2. Notwithstanding the other provisions of this Part and provided that the provisions of Part II specifically addressing use by governments, or by third parties authorized by a government, without the authorization of the right holder are complied with, Members may limit the remedies available against such use to payment of remuneration in accordance with subparagraph (h) of Article 31.   In other cases, the remedies under this Part shall apply or, where these remedies are inconsistent with a Member's law, declaratory judgments and adequate compensation shall be available.

Article 45 Damages

1. The judicial authorities shall have the authority to order the infringer to pay the right holder damages adequate to compensate for the injury the right holder has suffered because of an infringement of that person’s intellectual property right by an infringer who knowingly, or with reasonable grounds to know, engaged in infringing activity.

2. The judicial authorities shall also have the authority to order the infringer to pay the right holder expenses, which may include appropriate attorney's fees.  In appropriate cases, Members may authorize the judicial authorities to order recovery of profits and/or payment of pre-established damages even where the infringer did not knowingly, or with reasonable grounds to know, engage in infringing activity.

Article 46 Other Remedies

In order to create an effective deterrent to infringement, the judicial authorities shall have the authority to order that goods that they have found to be infringing be, without compensation of any sort, disposed of outside the channels of commerce in such a manner as to avoid any harm caused to the right holder, or, unless this would be contrary to existing constitutional requirements, destroyed.  The judicial authorities shall also have the authority to order that materials and implements the predominant use of which has been in the creation of the infringing goods be, without compensation of any sort, disposed of outside the channels of commerce in such a manner as to minimize the risks of further infringements.  In considering such requests, the need for proportionality between the seriousness of the infringement and the remedies ordered as well as the interests of third parties shall be taken into account.  In regard to counterfeit trademark goods, the simple removal of the trademark unlawfully affixed shall not be sufficient, other than in exceptional cases, to permit release of the goods into the channels of commerce.

Article 47 Right of Information

Members may provide that the judicial authorities shall have the authority, unless this would be out of proportion to the seriousness of the infringement, to order the infringer to inform the right holder of the identity of third persons involved in the production and distribution of the infringing goods or services and of their channels of distribution. 

Article 48 Indemnification of the Defendant

1. The judicial authorities shall have the authority to order a party at whose request measures were taken and who has abused enforcement procedures to provide to a party wrongfully enjoined or restrained adequate compensation for the injury suffered because of such abuse.  The judicial authorities shall also have the authority to order the applicant to pay the defendant expenses, which may include appropriate attorney's fees.

2. In respect of the administration of any law pertaining to the protection or enforcement of intellectual property rights, Members shall only exempt both public authorities and officials from liability to appropriate remedial measures where actions are taken or intended in good faith in the course of the administration of that law.

Article 49 Administrative Procedures

To the extent that any civil remedy can be ordered as a result of administrative procedures on the merits of a case, such procedures shall conform to principles equivalent in substance to those set forth in this Section.

Section 3: Provisional Measures

1. The judicial authorities shall have the authority to order prompt and effective provisional measures:

(a) to prevent an infringement of any intellectual property right from occurring, and in particular to prevent the entry into the channels of commerce in their jurisdiction of goods, including imported goods immediately after customs clearance;

(b) to preserve relevant evidence in regard to the alleged infringement.

2. The judicial authorities shall have the authority to adopt provisional measures inaudita altera parte where appropriate, in particular where any delay is likely to cause irreparable harm to the right holder, or where there is a demonstrable risk of evidence being destroyed.

3. The judicial authorities shall have the authority to require the applicant to provide any reasonably available evidence in order to satisfy themselves with a sufficient degree of certainty that the applicant is the right holder and that the applicant’s right is being infringed or that such infringement is imminent, and to order the applicant to provide a security or equivalent assurance sufficient to protect the defendant and to prevent abuse.

4. Where provisional measures have been adopted inaudita altera parte , the parties affected shall be given notice, without delay after the execution of the measures at the latest.  A review, including a right to be heard, shall take place upon request of the defendant with a view to deciding, within a reasonable period after the notification of the measures, whether these measures shall be modified, revoked or confirmed.

5. The applicant may be required to supply other information necessary for the identification of the goods concerned by the authority that will execute the provisional measures.

6. Without prejudice to paragraph 4, provisional measures taken on the basis of paragraphs 1 and 2 shall, upon request by the defendant, be revoked or otherwise cease to have effect, if proceedings leading to a decision on the merits of the case are not initiated within a reasonable period, to be determined by the judicial authority ordering the measures where a Member's law so permits or, in the absence of such a determination, not to exceed 20 working days or 31 calendar days, whichever is the longer.

7. Where the provisional measures are revoked or where they lapse due to any act or omission by the applicant, or where it is subsequently found that there has been no infringement or threat of infringement of an intellectual property right, the judicial authorities shall have the authority to order the applicant, upon request of the defendant, to provide the defendant appropriate compensation for any injury caused by these measures.

8. To the extent that any provisional measure can be ordered as a result of administrative procedures, such procedures shall conform to principles equivalent in substance to those set forth in this Section.

Section 4: Special Requirements Related to Border Measures [12]

Article 51 Suspension of Release by Customs Authorities

Members shall, in conformity with the provisions set out below, adopt procedures [13] to enable a right holder, who has valid grounds for suspecting that the importation of counterfeit trademark or pirated copyright goods [14] may take place, to lodge an application in writing with competent authorities, administrative or judicial, for the suspension by the customs authorities of the release into free circulation of such goods.  Members may enable such an application to be made in respect of goods which involve other infringements of intellectual property rights, provided that the requirements of this Section are met.  Members may also provide for corresponding procedures concerning the suspension by the customs authorities of the release of infringing goods destined for exportation from their territories.

Article 52 Application

Any right holder initiating the procedures under Article 51 shall be required to provide adequate evidence to satisfy the competent authorities that, under the laws of the country of importation, there is  prima facie an infringement of the right holder’s intellectual property right and to supply a sufficiently detailed description of the goods to make them readily recognizable by the customs authorities.  The competent authorities shall inform the applicant within a reasonable period whether they have accepted the application and, where determined by the competent authorities, the period for which the customs authorities will take action.

Article 53 Security or Equivalent Assurance

1. The competent authorities shall have the authority to require an applicant to provide a security or equivalent assurance sufficient to protect the defendant and the competent authorities and to prevent abuse.  Such security or equivalent assurance shall not unreasonably deter recourse to these procedures.

2. Where pursuant to an application under this Section the release of goods involving industrial designs, patents, layout-designs or undisclosed information into free circulation has been suspended by customs authorities on the basis of a decision other than by a judicial or other independent authority, and the period provided for in Article 55 has expired without the granting of provisional relief by the duly empowered authority, and provided that all other conditions for importation have been complied with, the owner, importer, or consignee of such goods shall be entitled to their release on the posting of a security in an amount sufficient to protect the right holder for any infringement.  Payment of such security shall not prejudice any other remedy available to the right holder, it being understood that the security shall be released if the right holder fails to pursue the right of action within a reasonable period of time.

Article 54 Notice of Suspension

The importer and the applicant shall be promptly notified of the suspension of the release of goods according to Article 51.

Article 55 Duration of Suspension

If, within a period not exceeding 10 working days after the applicant has been served notice of the suspension, the customs authorities have not been informed that proceedings leading to a decision on the merits of the case have been initiated by a party other than the defendant, or that the duly empowered authority has taken provisional measures prolonging the suspension of the release of the goods, the goods shall be released, provided that all other conditions for importation or exportation have been complied with;  in appropriate cases, this time-limit may be extended by another 10 working days.  If proceedings leading to a decision on the merits of the case have been initiated, a review, including a right to be heard, shall take place upon request of the defendant with a view to deciding, within a reasonable period, whether these measures shall be modified, revoked or confirmed.  Notwithstanding the above, where the suspension of the release of goods is carried out or continued in accordance with a provisional judicial measure, the provisions of paragraph 6 of Article 50 shall apply.

Article 56 Indemnification of the Importer and of the Owner of the Goods

Relevant authorities shall have the authority to order the applicant to pay the importer, the consignee and the owner of the goods appropriate compensation for any injury caused to them through the wrongful detention of goods or through the detention of goods released pursuant to Article 55.

Article 57 Right of Inspection and Information

Without prejudice to the protection of confidential information, Members shall provide the competent authorities the authority to give the right holder sufficient opportunity to have any goods detained by the customs authorities inspected in order to substantiate the right holder’s claims.  The competent authorities shall also have authority to give the importer an equivalent opportunity to have any such goods inspected.  Where a positive determination has been made on the merits of a case, Members may provide the competent authorities the authority to inform the right holder of the names and addresses of the consignor, the importer and the consignee and of the quantity of the goods in question.

Article 58 Ex Officio Action

Where Members require competent authorities to act upon their own initiative and to suspend the release of goods in respect of which they have acquired prima facie evidence that an intellectual property right is being infringed:

(a) the competent authorities may at any time seek from the right holder any information that may assist them to exercise these powers;

(b) the importer and the right holder shall be promptly notified of the suspension.  Where the importer has lodged an appeal against the suspension with the competent authorities, the suspension shall be subject to the conditions, mutatis mutandis , set out at Article 55;

(c) Members shall only exempt both public authorities and officials from liability to appropriate remedial measures where actions are taken or intended in good faith.

Article 59 Remedies

Without prejudice to other rights of action open to the right holder and subject to the right of the defendant to seek review by a judicial authority, competent authorities shall have the authority to order the destruction or disposal of infringing goods in accordance with the principles set out in Article 46. In regard to counterfeit trademark goods, the authorities shall not allow the re-exportation of the infringing goods in an unaltered state or subject them to a different customs procedure, other than in exceptional circumstances.

Article 60 De Minimis Imports

Members may exclude from the application of the above provisions small quantities of goods of a non-commercial nature contained in travellers' personal luggage or sent in small consignments.

Section 5: Criminal Procedures

Members shall provide for criminal procedures and penalties to be applied at least in cases of wilful trademark counterfeiting or copyright piracy on a commercial scale.  Remedies available shall include imprisonment and/or monetary fines sufficient to provide a deterrent, consistently with the level of penalties applied for crimes of a corresponding gravity.  In appropriate cases, remedies available shall also include the seizure, forfeiture and destruction of the infringing goods and of any materials and implements the predominant use of which has been in the commission of the offence.  Members may provide for criminal procedures and penalties to be applied in other cases of infringement of intellectual property rights, in particular where they are committed wilfully and on a commercial scale.

Part IV Acquisition and Maintenance of Intellectual Property Rights and Related Inter-Partes Procedures

1. Members may require, as a condition of the acquisition or maintenance of the intellectual property rights provided for under Sections 2 through 6 of Part II, compliance with reasonable procedures and formalities.  Such procedures and formalities shall be consistent with the provisions of this Agreement.

2. Where the acquisition of an intellectual property right is subject to the right being granted or registered, Members shall ensure that the procedures for grant or registration, subject to compliance with the substantive conditions for acquisition of the right, permit the granting or registration of the right within a reasonable period of time so as to avoid unwarranted curtailment of the period of protection.

3. Article 4 of the Paris Convention (1967) shall apply mutatis mutandis to service marks.

4. Procedures concerning the acquisition or maintenance of intellectual property rights and, where a Member's law provides for such procedures, administrative revocation and inter partes procedures such as opposition, revocation and cancellation, shall be governed by the general principles set out in paragraphs 2 and 3 of Article 41.

5. Final administrative decisions in any of the procedures referred to under paragraph 4 shall be subject to review by a judicial or quasi-judicial authority.  However, there shall be no obligation to provide an opportunity for such review of decisions in cases of unsuccessful opposition or administrative revocation, provided that the grounds for such procedures can be the subject of invalidation procedures.

Part V Dispute Prevention and Settlement

Article 63 Transparency

1. Laws and regulations, and final judicial decisions and administrative rulings of general application, made effective by a Member pertaining to the subject matter of this Agreement (the availability, scope, acquisition, enforcement and prevention of the abuse of intellectual property rights) shall be published, or where such publication is not practicable made publicly available, in a national language, in such a manner as to enable governments and right holders to become acquainted with them.  Agreements concerning the subject matter of this Agreement which are in force between the government or a governmental agency of a Member and the government or a governmental agency of another Member shall also be published.

2. Members shall notify the laws and regulations referred to in paragraph 1 to the Council for TRIPS in order to assist that Council in its review of the operation of this Agreement.  The Council shall attempt to minimize the burden on Members in carrying out this obligation and may decide to waive the obligation to notify such laws and regulations directly to the Council if consultations with WIPO on the establishment of a common register containing these laws and regulations are successful.  The Council shall also consider in this connection any action required regarding notifications pursuant to the obligations under this Agreement stemming from the provisions of Article 6 ter of the Paris Convention (1967).

3. Each Member shall be prepared to supply, in response to a written request from another Member, information of the sort referred to in paragraph 1.   A Member, having reason to believe that a specific judicial decision or administrative ruling or bilateral agreement in the area of intellectual property rights affects its rights under this Agreement, may also request in writing to be given access to or be informed in sufficient detail of such specific judicial decisions or administrative rulings or bilateral agreements.

4. Nothing in paragraphs 1, 2 and 3 shall require Members to disclose confidential information which would impede law enforcement or otherwise be contrary to the public interest or would prejudice the legitimate commercial interests of particular enterprises, public or private.

Article 64 Dispute Settlement

1. The provisions of Articles XXII and XXIII of GATT 1994 as elaborated and applied by the Dispute Settlement Understanding shall apply to consultations and the settlement of disputes under this Agreement except as otherwise specifically provided herein.

2. Subparagraphs 1(b) and 1(c) of Article XXIII of GATT 1994 shall not apply to the settlement of disputes under this Agreement for a period of five years from the date of entry into force of the WTO Agreement.

3. During the time period referred to in paragraph 2, the Council for TRIPS shall examine the scope and modalities for complaints of the type provided for under subparagraphs 1(b) and 1(c) of Article XXIII of GATT 1994 made pursuant to this Agreement, and submit its recommendations to the Ministerial Conference for approval.  Any decision of the Ministerial Conference to approve such recommendations or to extend the period in paragraph 2 shall be made only by consensus, and approved recommendations shall be effective for all Members without further formal acceptance process. 

Part VI Transitional Arrangements

Article 65 Transitional Arrangements

1. Subject to the provisions of paragraphs 2, 3 and 4, no Member shall be obliged to apply the provisions of this Agreement before the expiry of a general period of one year following the date of entry into force of the WTO Agreement.

2. A developing country Member is entitled to delay for a further period of four years the date of application, as defined in paragraph 1, of the provisions of this Agreement other than Articles 3, 4 and 5.

3. Any other Member which is in the process of transformation from a centrally-planned into a market, free-enterprise economy and which is undertaking structural reform of its intellectual property system and facing special problems in the preparation and implementation of intellectual property laws and regulations, may also benefit from a period of delay as foreseen in paragraph 2.

4. To the extent that a developing country Member is obliged by this Agreement to extend product patent protection to areas of technology not so protectable in its territory on the general date of application of this Agreement for that Member, as defined in paragraph 2, it may delay the application of the provisions on product patents of Section 5 of Part II to such areas of technology for an additional period of five years.

5. A Member availing itself of a transitional period under paragraphs 1, 2, 3 or 4 shall ensure that any changes in its laws, regulations and practice made during that period do not result in a lesser degree of consistency with the provisions of this Agreement.

Article 66 Least-Developed Country Members

1. In view of the special needs and requirements of least-developed country Members, their economic, financial and administrative constraints, and their need for flexibility to create a viable technological base, such Members shall not be required to apply the provisions of this Agreement, other than Articles 3, 4 and 5, for a period of 10 years from the date of application as defined under paragraph 1 of Article 65.   The Council for TRIPS shall, upon duly motivated request by a least-developed country Member, accord extensions of this period.

2. Developed country Members shall provide incentives to enterprises and institutions in their territories for the purpose of promoting and encouraging technology transfer to least-developed country  Members in order to enable them to create a sound and viable technological base.

Article 67 Technical Cooperation

In order to facilitate the implementation of this Agreement, developed country Members shall provide, on request and on mutually agreed terms and conditions, technical and financial cooperation in favour of developing and least-developed country Members.  Such cooperation shall include assistance in the preparation of laws and regulations on the protection and enforcement of intellectual property rights as well as on the prevention of their abuse, and shall include support regarding the establishment or reinforcement of domestic offices and agencies relevant to these matters, including the training of personnel. 

Part VII Institutional Arrangements; Final Provisions

Article 68 Council for Trade-Related Aspects of Intellectual Property Rights

The Council for TRIPS shall monitor the operation of this Agreement and, in particular, Members' compliance with their obligations hereunder, and shall afford Members the opportunity of consulting on matters relating to the trade-related aspects of intellectual property rights.  It shall carry out such other responsibilities as assigned to it by the Members, and it shall, in particular, provide any assistance requested by them in the context of dispute settlement procedures.  In carrying out its functions, the Council for TRIPS may consult with and seek information from any source it deems appropriate.  In consultation with WIPO, the Council shall seek to establish, within one year of its first meeting, appropriate arrangements for cooperation with bodies of that Organization.

Article 69 International Cooperation

Members agree to cooperate with each other with a view to eliminating international trade in goods infringing intellectual property rights.  For this purpose, they shall establish and notify contact points in their administrations and be ready to exchange information on trade in infringing goods.  They shall, in particular, promote the exchange of information and cooperation between customs authorities with regard to trade in counterfeit trademark goods and pirated copyright goods.

Article 70 Protection of Existing Subject Matter

1. This Agreement does not give rise to obligations in respect of acts which occurred before the date of application of the Agreement for the Member in question. 

2. Except as otherwise provided for in this Agreement, this Agreement gives rise to obligations in respect of all subject matter existing at the date of application of this Agreement for the Member in question, and which is protected in that Member on the said date, or which meets or comes subsequently to meet the criteria for protection under the terms of this Agreement.  In respect of this paragraph and paragraphs 3 and 4, copyright obligations with respect to existing works shall be solely determined under Article 18 of the Berne Convention (1971), and obligations with respect to the rights of producers of phonograms and performers in existing phonograms shall be determined solely under Article 18 of the Berne Convention (1971) as made applicable under paragraph 6 of Article 14 of this Agreement.

3. There shall be no obligation to restore protection to subject matter which on the date of application of this Agreement for the Member in question has fallen into the public domain.

4. In respect of any acts in respect of specific objects embodying protected subject matter which become infringing under the terms of legislation in conformity with this Agreement, and which were commenced, or in respect of which a significant investment was made, before the date of acceptance of the WTO Agreement by that Member, any Member may provide for a limitation of the remedies available to the right holder as to the continued performance of such acts after the date of application of this Agreement for that Member.  In such cases the Member shall, however, at least provide for the payment of equitable remuneration.  

5. A Member is not obliged to apply the provisions of Article 11 and of paragraph 4 of Article 14 with respect to originals or copies purchased prior to the date of application of this Agreement for that Member.

6. Members shall not be required to apply Article 31, or the requirement in paragraph 1 of Article 27 that patent rights shall be enjoyable without discrimination as to the field of technology, to use without the authorization of the right holder where authorization for such use was granted by the government before the date this Agreement became known.

7. In the case of intellectual property rights for which protection is conditional upon registration, applications for protection which are pending on the date of application of this Agreement for the Member in question shall be permitted to be amended to claim any enhanced protection provided under the provisions of this Agreement.  Such amendments shall not include new matter.

8. Where a Member does not make available as of the date of entry into force of the WTO Agreement patent protection for pharmaceutical and agricultural chemical products commensurate with its obligations under Article 27, that Member shall:

(a) notwithstanding the provisions of Part VI, provide as from the date of entry into force of the WTO Agreement a means by which applications for patents for such inventions can be filed;

(b) apply to these applications, as of the date of application of this Agreement, the criteria for patentability as laid down in this Agreement as if those criteria were being applied on the date of filing in that Member or, where priority is available and claimed, the priority date of the application;  and

(c) provide patent protection in accordance with this Agreement as from the grant of the patent and for the remainder of the patent term, counted from the filing date in accordance with Article 33 of this Agreement, for those of these applications that meet the criteria for protection referred to in subparagraph (b).

9. Where a product is the subject of a patent application in a Member in accordance with paragraph 8(a), exclusive marketing rights shall be granted, notwithstanding the provisions of Part VI, for a period of five years after obtaining marketing approval in that Member or until a product patent is granted or rejected in that Member, whichever period is shorter, provided that, subsequent to the entry into force of the WTO Agreement, a patent application has been filed and a patent granted for that product in another Member and marketing approval obtained in such other Member.

Article 71 Review and Amendment

1. The Council for TRIPS shall review the implementation of this Agreement after the  expiration of the transitional period referred to in paragraph 2 of Article 65.   The Council shall, having regard to the experience gained in its implementation, review it two years after that date, and at identical intervals thereafter.  The Council may also undertake reviews in the light of any relevant new developments which might warrant modification or amendment of this Agreement. 

2. Amendments merely serving the purpose of adjusting to higher levels of protection of intellectual property rights achieved, and in force, in other multilateral agreements and accepted under those agreements by all Members of the WTO may be referred to the Ministerial Conference for action in accordance with paragraph 6 of Article X of the WTO Agreement on the basis of a consensus proposal from the Council for TRIPS.

Article 72 Reservations

Reservations may not be entered in respect of any of the provisions of this Agreement without the consent of the other Members.

Article 73 Security Exceptions

Nothing in this Agreement shall be construed:

(a) to require a Member to furnish any information the disclosure of which it considers contrary to its essential security interests;  or

(b) to prevent a Member from taking any action which it considers necessary for the protection of its essential security interests;

(i) relating to fissionable materials or the materials from which they are derived;

(ii) relating to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials as is carried on directly or indirectly for the purpose of supplying a military establishment;

(iii) taken in time of war or other emergency in international relations;  or

(c) to prevent a Member from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.

[1] When "nationals" are referred to in this Agreement, they shall be deemed, in the case of a separate customs territory Member of the WTO, to mean persons, natural or legal, who are domiciled or who have a real and effective industrial or commercial establishment in that customs territory.

[2] In this Agreement, "Paris Convention" refers to the Paris Convention for the Protection of Industrial Property;  "Paris Convention (1967)" refers to the Stockholm Act of this Convention of 14 July 1967.   "Berne Convention" refers to the Berne Convention for the Protection of Literary and Artistic Works;  "Berne Convention (1971)" refers to the Paris Act of this Convention of 24 July 1971.   "Rome Convention" refers to the 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" (IPIC Treaty) refers to the Treaty on Intellectual Property in Respect of Integrated Circuits, adopted at Washington on 26 May 1989.   "WTO Agreement" refers to the Agreement Establishing the WTO.

[3] For the purposes of Articles 3 and 4, "protection" shall include matters affecting the availability, acquisition, scope, maintenance and enforcement of intellectual property rights as well as those matters affecting the use of intellectual property rights specifically addressed in this Agreement.

[4] Notwithstanding the first sentence of Article 42, Members may, with respect to these obligations, instead provide for enforcement by administrative action.

[5] For the purposes of this Article, the terms "inventive step" and "capable of industrial application" may be deemed by a Member to be synonymous with the terms "non-obvious" and "useful" respectively.

[6] This right, like all other rights conferred under this Agreement in respect of the use, sale, importation or other distribution of goods, is subject to the provisions of Article 6.

[7] "Other use" refers to use other than that allowed under Article 30.

[8] It is understood that those Members which do not have a system of original grant may provide that the term of protection shall be computed from the filing date in the system of original grant.

[9] The term "right holder" in this Section shall be understood as having the same meaning as the term "holder of the right" in the IPIC Treaty.

[10] For the purpose of this provision, "a manner contrary to honest commercial practices" shall mean at least practices such as breach of contract, breach of confidence and inducement to breach, and includes 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.

[11] For the purpose of this Part, the term "right holder" includes federations and associations having legal standing to assert such rights.

[12] Where a Member has dismantled substantially all controls over movement of goods across its border with another Member with which it forms part of a customs union, it shall not be required to apply the provisions of this Section at that border.

[13] It is understood that there shall be no obligation to apply such procedures to imports of goods put on the market in another country by or with the consent of the right holder, or to goods in transit.

[14] For the purposes of this Agreement:

(a) "counterfeit trademark goods" shall mean any goods, including packaging, bearing without authorization a trademark which is identical to the trademark validly registered in respect of such goods, or which cannot be distinguished in its essential aspects from such a trademark, and which thereby infringes the rights of the owner of the trademark in question under the law of the country of importation;

(b) "pirated copyright goods" shall mean any goods which are copies made without the consent of the right holder or person duly authorized by the right holder in the country of production and which are made directly or indirectly from an article where the making of that copy would have constituted an infringement of a copyright or a related right under the law of the country of importation.

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The TRIPS Agreement : drafting history and analysis

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• Acknowledgments
• Foreword to the first edition
• Table of Relevant WTO Cases
• Bibliography
• Part One A The Emergence Of the TRIPS Agreement During The Uruguay Round Of Multilateral Trade Negotiations
• B The Evolution Of Trips
• C Trips And Access To Medicine
• D Trips And Electronic Commerce
• E TRIPS And Traditional Knowledge
• F The Logic Of Trips
• Part Two Analyses Of The Agreement On Trade-Related Aspects Of Intellectual Property Rights
• Part I General Provisions And Basic Principles
• Part II Standards Concerning The Availability, Scope and Use of Intellectual Property Rights, Section 1 Copyright and Related Rights
• Section 2 Trademarks
• Section 3 Geographical Indications
• Section 4 Industrial Designs
• Section 5 Patents
• Section 6 Layout-designs (Topographies) of Integrated Circuits
• Section 7 Protection of Undisclosed Information
• Section 8 Control of Anti-competitive Practices In Contractual Licenses
• Part III Enforcement of Intellectual Property Rights Section 1 General Obligations
• Section 2 Civ.
• (source: Nielsen Book Data)

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INTELLECTUAL PROPERTY

TRIPS — Trade-Related Aspects of Intellectual Property Rights

The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is the most comprehensive multilateral agreement on intellectual property (IP). It plays a central role in facilitating trade in knowledge and creativity, in resolving trade disputes over IP, and in assuring WTO members the latitude to achieve their domestic policy objectives. It frames the IP system in terms of innovation, technology transfer and public welfare. The Agreement is a legal recognition of the significance of links between IP and trade and the need for a balanced IP system.

TRIPS and COVID-19

• COVID-19: Measures regarding trade-related intellectual property rights
• An integrated health, trade and IP approach to respond to the COVID-19 pandemic
• Information Note: The TRIPS Agreement and COVID-19
• Information Note: How WTO members have used trade measures to expedite access to COVID-19 critical medical goods and services
• Information Note: Developing and delivering COVID-19 vaccines around the world

WHO-WIPO-WTO Technical Assistance Platform

WIPO-WTO Colloquium Papers

Staff working papers

Full list , understanding trips.

• What are intellectual property rights?
• Basic introduction to the TRIPS Agreement
• Guide to the TRIPS Agreement
• The economics of TRIPS
• Frequently asked questions on TRIPS

Specific topics

• Biotechnology, biodiversity and traditional knowledge
• Climate change
• Enforcement
• Geographical indications
• Innovation policy
• Least developed countries (LDCs)
• Non-violation complaints
• Public health
• Public interest
• Technology transfer

TRIPS Council

The TRIPS Council is responsible for administering and monitoring the operation of the TRIPS Agreement. In its regular meetings , the TRIPS Council serves as a forum for discussion between members on key issues.

In its special sessions , the TRIPS Council serves as a forum for negotiations on a multilateral system of notification and registration of geographical indications (GIs) for wines and spirits.

TRIPS transparency

Transparency mechanisms help the TRIPS Council to monitor the operation of the TRIPS Agreement and promote the understanding of members intellectual property policies and legal systems. These mechanisms include WTO members' notifications, responses to checklists of questions, reviews of implementing legislation , reports on technical assistance and technology transfer, and contact points.

The Guide to Transparency under TRIPS provides further details about these mechanisms and how members can provide and access the materials.

Access notifications, responses to checklists, and reports submitted by members and observers through the e-TRIPS Gateway.

Members and observers may submit notifications, checklist responses, and reports online via the e-TRIPS Submission System (restricted access).

Trade in knowledge: Intellectual property, digital trade and knowledge flows

Since the WTO TRIPS Agreement came into force in 1995, the scale, diversity and nature of cross-border commercial transactions in knowledge, and the ways in which intellectual property is licensed and traded, have changed fundamentally. A new portal provides material aimed at helping policymakers and others keep abreast of current developments in trade in knowledge, understand the changing patterns of knowledge flows across borders, and consider the legal, economic and policy dimensions of these developments.

Technical assistance

The main objective of the WTO's technical assistance activities is to help members and observers implement an intellectual property regime that meets their developmental and other domestic policy objectives. The activities take a holistic approach, recognizing that policy choices within the TRIPS framework are integral to a broader policy context.

Cooperation with other intergovernmental organizations

The WTO Secretariat cooperates with WIPO , WHO , and many other intergovernmental and regional organizations on matters of common interest. This cooperation includes participating as an observer in other organizations� meetings, collaborating on technical assistance, and consulting on other topics upon request.

• Briefing Note
• e-TRIPS Gateway : a global resource on intellectual property law and policy
• e-TRIPS Submission System : a portal for members to provide notifications, review materials, and reports

Legal and interpretive texts

• TRIPS Agreement (as amended on 23 January 2017)
• TRIPS Agreement (unamended)

30 years of TRIPS- High Level Dialogue: Charting the way ahead

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Chapter 6 TRIPS Agreement: The Negotiating History of the TRIPS Agreement and Patent Exhaustion

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Different aspects of ipr s are governed and administered by different international inter-governmental organisations ( igo ) under the aegis of number of international treaties and multilateral agreements. The World Intellectual Property Organisation ( wipo ) is the specialised organ of the United Nations (UN) to administer ipr s globally, however the United Nations Educational, Scientific and Cultural Organisation ( unesco ) also addresses certain issues of ipr s like Copyright. 299 In today’s context, amidst a broad array of multilateral agreements on ipr s, one important agreement is the trips . With the signing of the gatt 1994 and establishment of the wto , trips Agreement became a founding pillar of the gatt 1994. gatt 1947 had nominally covered issues related to ipr s without any effectiveness and were taken up first as a matter of serious discussion only in the Tokyo Round of gatt Ministerial Conference in 1978.

Intellectual Property Conventions 1. In respect of Parts 2, 3 and 4 of this Agreement, Members shall comply with Articles 1 through 12, and Article 19, of the Paris Convention (1967). 2. Nothing in Parts I to iv of this Agreement shall derogate from existing obligations that Members may have to each other under the Paris Convention, the Berne Convention, the Rome Convention and the Treaty on Intellectual Property in Respect of Integrated Circuits.

Along with the gatt and General Agreement on Trade in Services ( gats ), the trips Agreement forms one of the pillars of the wto -based multilateral system. In that it continues to follow the fundamental principles of non-discrimination through an elaborate and transparent regime of Most Favoured Nation ( mfn ) and National Treatment ( nt ) that existed in Paris and Rome Conventions. 301 However, deviating from the Paris Convention, which allows members to determine the subject matter of patents, the trips Agreement elaborately defines patentable subject matter and also exceptions to patentability. 302 Further, a significant move from status-quo with the trips Agreement coming into effect was its inclusion in wto dispute settlement mechanism. The issue of counterfeit trademarked products along with copyright piracy as problems hindering multilateral trade, were widely discussed right from the Tokyo Ministerial Round. Through protruded negotiations, it took the shape of trips at the Punta del Este round culminating elaborate enforcement mechanisms within the Agreement itself. 303

The fundamental reason for introducing mfn and nt in the multilateral trading system under the wto is to have equal conditions of competition to determine that like products are treated equally. 304 The importance of this agreement lies in the fact that it established a uniform minimum standard of protection of ipr s, 305 as well as directly connected ipr s with multilateral trade. Thus, the trips Agreement provides a harmonised bottom floor of protection of ipr s for all members while allowing the members to decide the upper level of protection they prefer to provide.

The other significance of the trips Agreement is that while a multitude of different treaties on ipr s catered to the governance and administration of ipr s, the linking of them with trade is through the trips Agreement and it brought ipr s within the realm of the dispute settlement mechanism of the wto . The Understanding on Rules and Procedures of Governing the Settlement of Disputes in the wto , commonly referred to as Dispute Settlement Understanding ( dsu ), covers the trips . 306 The mandatory surrender to the dispute resolution mechanism of the wto with appeal provisions before the Appellate Body ( ab ) of the wto , a permanent standing body, made the trips unique in comparison with any of the other treaties on different ipr s. 307

This completely changed the scenario since it was no longer just the industrialised nations that would need to provide effective protection of ipr s, but all members would need to have a common minimum threshold of protection (subject to certain transition time flexibility). This minimum threshold was much higher than that followed in the municipal laws of many gatt members at the time when trips became part of the wto system with the signing of gatt 1994. At the time trips was signed, many of the member countries restricted patent protection only to processes and not products. Further, in many countries, protection was lower than 20 years and over 40 countries did not provide patent protection to pharmaceuticals. 308 With the introduction of trips that was all set to change.

Since the 1967 Stockholm Revision, the Paris Convention contains a rule on dispute settlement (Art. 28), according to which, as first step, negotiations between the disputants should take place, and then, in the absence of a mutual agreement, the matter is to be brought before the International Court of Justice. This regulation is to be seen as a special, contractual submission to the jurisdiction of the International Court of Justice. It is applicable to all Union countries unless they have declared that they do not consider themselves bound (Art. 28.2)

However, even with such regulations, adjudication by the icj was not effective. 309

The trips Agreement stands unique from the other wto Agreements by way of acknowledging individual rights. 310 Thus at one end it precludes discrimination between international trade 311 and on the other it allows the members necessary flexibility to countries to interpret crucial substantive issues like ‘ novelty ’, ‘ inventive step ’, ‘ disclosure ’, ‘ grace period ’, while according individual rights. Interesting to note that while the rights are elaborated at great extent, the trips Agreement does not mandate any specific mode of exhaustion even when exhaustion is covered in Article 6 of the Agreement. Apparently, it allows the members to adopt any mode of exhaustion it prefers. This, although seems to provide flexibility to the members, only adds to the confusion and hinders seamless removal of barriers to multilateral trade.

6.1 Intellectual Property Rights under the gatt and the Negotiating History of trips

First and foremost, I am convinced that it would be very serious if protection of ip were to stifle and prevent research. In a sense it would be self-defeating. There would be less genuine progress to protect. My other concern is more general. I think both politicians and the business community should consider the obvious need to demand a clear, visible, inventive step in order to award 20 years’ protection from competition. 313

Apart from such published memoirs, this book has also sourced the negotiating history from such scholarly works and through the author’s personal interactions with some of the negotiators of the trips Agreement where published records were not available.

From the beginning there was scepticism as to whether ipr s as a non-trade issue should have been linked with trade issues under the new wto regime. There was a strong belief that ipr s under trips were significantly different from other trade issues such as the labour and environment standards. Also, in effect, trade liberalisation undertaken on a multilateral platform produces positive efficiency where ipr s are trade restrictive. This is since ipr s can lower the economic welfare by increasing costs due to the monopolistic nature of the ipr s. 314

At the time when the gatt was negotiated after World War ii , even strong technology-based exporting countries like the US had less than 10% percent of its exports tied to ip . 315 For this reason there was initially not much interest even among the industrialised countries to link up international trade and ipr s internationally. On the other hand, developing countries did not have any interest in linking ipr s and international trade issues since they were mainly ipr s importing countries. They preferred not to increase the cost of the products through enhanced transaction costs due to protection of ipr s. For this reason, although ipr s were referred to in the original gatt 1947 Agreement, they were not so elaborate. 316 They were in terms of rights and obligations related to goods. In fact, some other international agreements like the ‘ Customs Valuation Code ’ and the ‘ Standards Code ’ had more elaborate provisions. 317

Much later, during the US president Ronald Reagan’s tenure, the US government decided on linking international trade and ipr s at that 98th US Congress. As a result of this, number of measures were taken to examine the level of ipr s that are maintained by the trade partners of US and how it affected trade with these partners. 318 This led to the promulgation of The Trade Act of 1984 in US, wherein different policy issues to address protection of ipr s were introduced. Initially steps were taken on the bi-lateral front wherein the US managed to effectively change the ip regimes of some of its partners (e.g. Korea, Taiwan and Singapore). By this time the US government also started moving the ip issues at the international front and it was taken up at the gatt negotiations as an issue of trade in counterfeit goods. In fact, the issue of commercial counterfeiting was first taken up at the end of the Tokyo Round of the gatt 1978 Ministerial meeting. But due to lack of consensus it had to be dropped from the agenda. Later the matter came up again in the Ministerial Declaration of the gatt in 1982.

The first time ipr s came up for discussion was regarding the need for stricter enforcement measures to restrict counterfeit of trademarked products and copyright piracy. The USA and the eec tried to initiate negotiations on a draft ‘ Anti-Counterfeit Code ( acc ) ’ at the end of Tokyo round but did not pick up any traction due to lack of support from other industrialised countries. 319 Further, although the issue of higher protection of ipr s had come up in the Tokyo Round, it did not bring any impact. The US was not satisfied with the results and in the early 1980s, protectionist tendencies had already been rising in the US Congress. 320

In the gatt , a group of ip experts was formed in 1984 to assess the situation given that there were differences on many issues (e.g. whether gatt was the right forum to address ipr s issues, what should be covered in the ipr protection code), however the core issue generally remained ipr s. There was a consensus that the problem in trade in counterfeit goods had to be tackled and the matter was taken up again in the mid-term review meeting at Montreal in 1986, wherein the US government mainly aimed at stopping piracy. The US government exerted tremendous pressure on specifically countries which accorded weaker protection of ipr s through its ‘ Special 301 ’ unilateral punitive measure under ‘ Omnibus Trade and Competitiveness Act ’ of 23rd August 1988. 321

Most of these were developing countries that were severely impacted with serious public health and access to affordable medicine problems. They used weaker patent laws that supported legitimate reverse-engineering to locally manufacture pharmaceutical drugs but did not necessarily have weak trademark laws or their enforcement. It is interesting to note that a perception was created by vested interests that developing countries were counterfeiters while the accuser industrialised countries were the sufferers. This narrative was deliberately expanded and propagated pushing the developing countries to a defensive position and making the way for enhanced demands for stricter protection norms under the gatt umbrella. 322

Some members presented fifteen subjects on the negotiation agenda but the members failed to gain consensus on four issues, of which the issue of trade in counterfeit goods was one. 323 The developing country members resisted inclusion of trade in counterfeits for some time, but gradually yielded. The first signal of yielding was noticed when fourteen developing country members presented their position on enforcement of trademarks and copyrights. 324 There were many other issues including some on which there were differences between the industrialised countries that kept the debate going, but finally the mandate to introduce regulations on trade in counterfeit goods was given at the Punta del Este, 1986 Ministerial meeting in Uruguay. 325

The Industrialised countries had formed the ‘ Quad ’ group, which pushed for stricter enforcement of ipr s included in the gatt regime with a wide coverage of ip s. This was countered by another group of 10 developing countries led by India and Brazil with Argentina, Cuba, Egypt, Nicaragua, Nigeria, Peru, Tanzania and Yugoslavia also joining. They resisted formation of a comprehensive code on ip within the gatt . 326 Finally, a ten-plus-ten group was formed and under the leadership of the chair of the negotiating group and assistance of the secretariat, negotiations proceeded to the July 1990 text.

The July 1990 text was the most controversial text since for the first time there was an official proposal that expanded beyond trade in counterfeits and pirated goods. ‘ Approach A ’ proposals from developed countries included all aspects of ipr s and ‘ Approach B ’ proposal from developing countries that restricted reference only to counterfeits and pirated goods. Eventually ‘ Approach B ’ moved up to the Brussels text but was dropped as a separate alternate text since it was not considered credible. In fact, ‘ Approach B ’ was incorporated in the comprehensive text including all ipr s hence it became redundant.

The role played by the private sector in pushing the ipr s issue in the gatt negotiations was very crucial at this stage. Practically they were the driving force in moving the issue of protection of ipr s beyond the debate on trade in counterfeit goods. The pharmaceutical, software and entertainment industries played a vital role, led by the Chief Executive Officer of the prominent US pharmaceutical giant, Pfizer as the Chairman of the Intellectual Property Rights Committee ( ipc ). Within two years the ipc managed to create a coalition of international multinational corporations ( mnc ) which comprised not only industries from the US but also from Europe and Japan. This coalition exerted influence on their governments to go beyond restriction on trade in counterfeit goods. As a result, issues like ‘ minimum standards of ipr s protection ’, ‘ strict enforcement mechanisms ’ and ‘ dispute settlement ’ under the new gatt rules were laid on the table. This was objected by the developing countries led by Brazil and India, gradually depicting a larger North-South divide.

The issue of ip protection had caused a good bit of tension not just two camps with India and Brazil on one side and the US and EU on the other, but in general it polarised industrialised nations on one side and the developing world on the other. It even took the turn of an ideological dispute since the industrialised members pushed its ideology on the developing countries. This is because the industrialised countries tried to follow the line of natural justice wherein they tried to argue that they should not be robbed off their technological and literary innovations. While the developing countries felt that the ipr s would increase their costs since protection of ipr s would transfer wealth from their countries without providing proportionate social and economic gains. 327

One of the main objections by developing nations to introduce ipr s protection measures, beyond trademarks and copyrights that would address counterfeits and pirated goods was because they would lose the ability to use reverse-engineering as a mode of technology dissemination. The developing nations believed that strict patent rights would hinder technology-transfer since they would increase the difficulty as well as costs in absorbing new technologies. They felt that there were double standards since their present position is not different to what many of the developed countries had in the last eighteenth and nineteenth centuries. 328 Further, the trips Agreement placed a significant burden on the developing countries in terms of completely reforming the ipr s legal regime in most developing countries. This increased the transaction costs in introducing and implementing the changes on one hand and with the harmonised bottom level of protection on the other. It also imposed negative economic implications in the short run where rents got transferred from developing to developed nation. 329

India which was in the forefront of resistance against including ipr s, objected, based on the belief that enhanced protection of ipr s would retard the pace of the country’s economic development because India had witnessed a tremendous growth in the generic pharmaceutical sector by removing product patents on pharmaceuticals. 330 But still in India the debate regarding ip protection was divided between definite groups but not effectively organised via associations or organisations as was noticed at later times. Some industries that would possibly be affected by a new stricter regime was against it, while others which had a more global stake was in favour of the need for enhanced protection. 331 It is well known that Brazil and India took the leading role on behalf of the developing countries in the debate on ipr s and tried to keep trips issues outside the gatt framework or to maintain a status quo because they had industries that would be negatively affected.

Amidst all the heat on the ipr s, the Uruguay Round of the gatt started on 20th September 1986 at Punta del Esté. In the initial stage the Ministers representing the different Members issued the Ministerial Declaration to establish guidelines regarding the topics to be covered by the negotiations that included subjects like tariffs, non-tariff measures, safeguards, textiles and clothing, agriculture, subsidies and countervailing measures, dispute settlement and the most important among few others were that on ipr s. 332 There was a strong opinion that bringing ipr s into gatt was actually stretching gatt into the domains of wipo and unesco . 333 However once the negotiations picked steam, it was clear that there was no possibility of preventing ipr s to be included along with the gatt agreement. India tried to block the mfn and nt in gatt from applying to ipr s on the grounds that since the obligations were related to goods and not rights of persons, these should not apply. However, although most of the developed countries had already settled to accept ipr s in the agenda, India’s efforts were side-lined and it too like others agreed to include ipr s to restrict trade in counterfeits and pirated goods.

In order to reduce the distortions and impediments to international trade, and taking into account the need to promote effective and adequate protection of intellectual property rights, and to ensure the measures and procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade, the negotiations shall aim to clarify gatt provisions and elaborate as appropriate new rules and disciplines. Negotiations shall aim to develop a multilateral framework of principles, rules and disciplines dealing with international trade in counterfeit goods, taking into account work already undertaken in the gatt . These negotiations shall be without prejudice to other complementary initiatives that may be taken in the World Intellectual Property Organisation and elsewhere to deal with these matters. 334

After nearly eight years of trade negotiations, the gatt 1994 agreement establishing the wto was signed and became effective from 1st January 1995. The overall issue of ip was covered by a separate agreement – Agreement on trips , covered under gatt 1995. The trips Agreement became part and parcel of the wto system as soon as it came into existence. 335 A transition period of one year was allowed 336 to all countries that needed to amend their domestic laws to bring them in compliance with trips . Developing countries were provided an additional ten years to comply to trips , but were required to introduce mechanisms to accept applications for patents from 1st January 2000 either immediately or through a mailbox for deferred examination of patent while providing an immediate emr to these applications. 337

After long and protruded negotiations and consistent resistance, the developing countries finally agreed to the trips Agreement once certain important flexibilities were incorporated into it. 338 The trips Agreement introduced a common minimum standard of ipr s for all members and further, it brought ipr s in direct relationship with multilateral trade for the first time. It became the most comprehensive agreement on ip without replacing the different international conventions and treaties that had been signed earlier.

6.2 The Negotiating History of Exhaustion

It is important to note that at the time of negotiating trips Agreement, industrialised countries were already generators of ip while the developing countries were not, but both were net users. Hence the obvious divide between developed and the developing nations where the developed countries wanted strictest level of ipr s protection and the developing countries wanted to treat ipr s goods as knowledge goods thus public products, to be used for economic development rather than private gains. 339 ipr s were introduced in the negotiations with the sole intention to restrain trade in counterfeit goods and it was obviously difficult to oppose. In the beginning, on 20th September 1986 when the ministers adopted the initial declaration, a very prominent objective outlined by the declaration was that, the measures and procedures to protect ipr s themselves should not become barriers to legitimate trade.

27. The question has been raised as to what would be the substantive intellectual property norms by reference to which counterfeit goods should be defined. In this regard the following points have been made: – parallel imports are not counterfeit goods and a multilateral framework should not oblige parties to provide means of action against such goods. 340

Limited exceptions to the exclusive rights conferred by a trademark, which take account of the legitimate interests of the proprietor of the trademark and of third parties, may be made, such as fair use of descriptive terms and exhaustion of rights. 342

On the contrary, the US presented a proposal in support of national exhaustion of trademarks. 343 This was opposed by the developing countries including India. They had proposed international exhaustion for both patents and trademarks. 344

[Patents] Article 24: Rights Conferred . A participant expressed the view that the proposed provisions on rights conferred were not in line with the principles of intellectual property protection, for example because they tried to invalidate parallel imports and the doctrine of exhaustion of rights. 345

unless expressly provided to the contrary in this agreement, nothing in this agreement shall limit the freedom of parties to provide that any intellectual property rights conferred in respect of the use, sale, importation and other distribution of goods are exhausted once those goods have been put on the market by or with the consent of the right holder. 347

The Anell Draft was duly revised to include specific provision on exhaustion separate from the issue of counterfeit goods but there was no modification of the exhaustion clause. 348 This was the first time that the issue of ‘ exhaustion ’ appeared in the issues for negotiations in somewhat direct manner. 349 However due to stiff resistance from the United States which wanted to install a ‘ national exhaustion ’ mode, it was still not clear whether international exhaustion can be introduced universally. 350 The US proposed provisions of national exhaustion was termed as ‘ international non-exhaustion ’ rule where the ipr s in one jurisdiction would not exhaust with the first sale in any other wto member country jurisdiction. The exhaustion issues witnessed North-South cooperation with some of the commonwealth countries like Hong Kong, Australia and New Zealand taking the lead to exclude parallel trade from dispute settlement with number of developing countries following. The industries lobbied extensively with their governments and even when a number of countries preferred international exhaustion, the interest of increased profits restrained the members any consensus position on exhaustion. 351

Subject to the provisions of Article 3 and 4 above, nothing in this Agreement impose any obligation on, or limits the freedom of, parties with respect to the determination of their respective regimes regarding the exhaustion of any intellectual property rights conferred in respect of the use, sale, importation or other distribution of goods once those goods have been put on the market by or with the consent of the right holder. 352

The modification of the earlier draft to change the language content, clearly shows that the drift from the mode of international exhaustion was not focused on any principle of removal of trade barriers but rather to cater to the demand of some influential negotiating members. Further the lack of progress in the negotiations on Agriculture, Services and Market Access also had a negative effect on the trips negotiation. Further study of the negotiations shows that instead of moving towards a consensus the negotiations on determining exhaustion was about to become standstill. There was confusion as to how the right holder would exhaust the right and a deep divide was noticed between developing and industrialised members that restricted any consensus on the issue. 353

[Products] Where the subject matter of the patent concerns a product, the owner of the patent shall have the right to prevent third parties from performing, without his authorisation, at least the following acts: the making of the product, the offering or the putting on the market of the product, the using of the product, or the importing or stocking of the product for such offering or putting on the market or for such use. [Processes] … Exceptions to Paragraphs (1) and (2) (a) Notwithstanding paragraphs (1) and (2), any Contracting Party shall be free to provide that the owner of a patent has no right to prevent third parties from performing, without his authorisation, the acts referred to in paragraphs (1) and (2) in the following circumstances: Where the act concerns a product which has been put on the market by the owner of the patent, or with his express consent, insofar as such an act is performed after that product has been put on the market in the territory of that Contracting Party, or in the case of a regional market, in the territory of one of the members States of such group. 354

There appears to be no dissent from the view that under the existing international regimes, countries are already free to practice whatever system of exhaustion they wish, and it has proved to be impossible to negotiate any modification or restriction on this freedom whatsoever. This is to a large extent due to the absence of any kind of consensus internationally on what should or what should not be permissible. 355

for the purposes of dispute settlement and subject to Article 3 and 4, nothing in this Agreement shall be used to address the issue of the exhaustion of intellectual property rights. 356

It is understood that the US, European and Japanese Pharmaceutical industry representatives that grouped together under the name ‘ interpat ’ exerted influence on their countries’ negotiators to take a very strict ipr s stand. In their joint views that they had released after the presentation of the Dunkel Draft, they pressed for complete deletion of the text on exhaustion in Article 6 and preferred a clear adoption of ‘ National exhaustion ’. 357 Further they also wanted the related footnote in Article 28 (1) to be removed. However, there was strong opposition by developing countries when the industrialised members tried to establish a national exhaustion regime and fearing a total failure on the issue, the matter was dropped. As a result, a compromise took shape in the form of Article 6 of the trips text (which is an unaltered version of that in the Dunkel Draft). Although it is true that national mode of exhaustion was not introduced, a mode of international exhaustion was also not installed per se . However, the compromise resulted in removal of exhaustion related disputes from the purview of the dsb .

One can argue that both national and international exhaustions have their drawbacks. National exhaustion allows market segmentation and differential pricing, so obviously less expensive parallel imports can be blocked. This means that this type of exhaustion is not favourable for the consumer since who would have to pay more for a product that is available at a cheaper price in the international market. International exhaustion is said to be deficient from the perspective of the ipr s owner who could have reaped higher profits based on the territorial royalty consideration. 358 It is ironical that from the beginning of the negotiations, while members discussed ways and means to remove barriers to trade with immense enthusiasm for globalisation, things changed outright the moment discussion started on exhaustion of ipr s. The negotiations were said to have broken down completely on this issue and although there was a lot of deliberation on how national ipr s were to work at the international level, there was only signs of disagreement as far as the vital issue of exhaustion of ipr s was concerned. As a result of this, trips in its apparent interpretation and without any decision of the dsb of the wto on the issue of exhaustion of patents, not only remained a dissatisfactory agreement but allowed ipr s to become a barrier to international trade. 359

6.3 Exhaustion under trips / wto : Analysis from the Multilateral Trade Perspective

The fundamental principle on which the wto as a multilateral system is built is the concept of elimination of illegitimate barriers to trade. It advocates removal of barriers that can restrict free movement of goods and services within different geographical boundaries. This is further based on the economic concept of comparative advantage that encourages specialisation to bring in efficiency in the market and thus enhance production . The main reason for bringing ipr s within full purview of gatt 1994 was to remove illegitimate barriers to trade in ip goods through proper enforce mechanisms that got initiated to restrain trade in counterfeits and pirated goods.

Issues like exhaustion of ipr s can be considered core, given that its treatment would ascertain treatment of parallel importation. Once limited to restraining trade through legitimate exceptions, ipr s became an integral part of the wto multilateral trade regime. It is rather astonishing that even when the aim of gatt is to remove rent-seeking measures, the negotiating members could not determine on the mode of exhaustion and ideally install the type of exhaustion that would be based on the fundamental principles of the gatt 1994 regulations. 360

The issue of exhaustion was one of the most difficult issues during the trips negotiations since some, adamantly favoured adopting national exhaustion while others were equally bent on installing international exhaustion. Finally, it was rested by the decision to exclude the issue of exhaustion from the purview of the wto as a compromise. 361 The cause for the confusion in determining a particular mode of exhaustion is because countries were not sure whether ip law should supersede trade law. In case of national exhaustion, it can be argued that because it restricts entry of competing goods from licensed producers of other countries, the goods might not be available at the lowest price. In addition, it causes hindrance to competition in the market and thus negatively affecting international trade. But at the same time, it enforces a stricter ip regime and allows enhanced exclusivity through stricter enforcement of ipr s. Whereas in the case of international exhaustion, it also allows manufacturers of parallel goods from licensed producers to make use of the comparative advantage and thus manufacture and market their products at a lower price. International exhaustion would enable not only open market competition but also in the process result in more efficient allocation of resources. 362 Such practice is supported by the principles of multilateral trade law in line with the wto rules. Moreover, one needs to ascertain the level of monopoly that the ipr s should provide.

On the other hand, if international exhaustion is followed then, it is stated by its critics that the economic benefits of a legal monopoly accorded to the owner of an ip might not be exploited to its fullest capacity. Hence according to some critics, it will undermine the purpose of having ipr s. Although one cannot ignore the fact that the essential functions of ipr s are not to artificially partition a market (as it is done when national exhaustion is followed). It is further argued that if the ip owners sold products in one country and exhausted the rights internationally, then the owner would most likely try to charge a higher price to cover the less profit that would result due to exhaustion. Thus, the monetary interest behind having the ip right would be at stake. Further, it could also be possible that the ip owner would avoid differential pricing, which in the long run would go against the argument that international exhaustion would encourage more competition and low prices.

There was considerable confusion amongst trips negotiators to commit on a single mode of exhaustion of the ipr s and hence it became a backburner. 363 Before moving into a debate over the confirmation of the most preferred mode of exhaustion from multilateral trade perspective, a detailed analysis of the different Articles of the trips Agreement as well as the gatt and any other covered Agreement of the wto is essential.

6.3.1 Patent Exhaustion under the trips Agreement

6.3.1.1 preamble to the trips agreement.

to reduce distortions and impediments to international trade, and taking into account the need to promote effective and adequate protection of intellectual property rights, and to ensure that measures and procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade; 364

Among the limited number of trips cases that have been addressed by wto Panels and the ab , in India – Pharmaceutical Patents Case 365 the ab legitimizes the importance of the Preamble of the trips Agreement while referring to it in terms of consistency with the ‘ Objects and purpose of the trips Agreement ’. Contrary to the aims of the Preamble, the mode of national exhaustion restricts free movement of goods protected by ipr s since it disallows legally licensed products from competing with the patented products. Further, national exhaustion is discriminatory in terms of international trade because although it allows the patent holder to reap monetary benefit through licensing, the patent holder can still restrict importation of the product he first marketed in that country. Thus, in the case of imported products, the titleholder would be allowed to exercise his rights multiple times, i.e. in the country where the product was first marketed as well as in the countries of importation, whereas in the domestic market the title-holder is allowed to exercise his rights only once. 366

If the Preamble to the trips Agreement is followed in letter and spirit, then a member cannot support the mode of national exhaustion since it is not conducive to international trade in a multilateral set up governed by the wto . On the other hand, a mode of international exhaustion would allow the licensee to market its product simultaneously with the products of the patent holder and hence promote higher competition and encourage removal of barriers to legitimate trade. Thus, it is argued that international exhaustion is the most appropriate mode that reduces distortion and barriers to trade and is in line with the Preamble to the trips Agreement, while at the same time patent enforcement is possible, it does not sacrifice the interest of the patent holder.

6.3.1.2 Article 6: Exhaustion of Intellectual Property Rights

for the purposes of dispute settlement under this Agreement, subject to the provisions of Article 3 & 4 above, nothing in this Agreement shall be used to address the issue of exhaustion of intellectual property rights.

It has been already mentioned (while discussing the negotiating history of trips ) that the members of the wto could not agree to a common mode of exhaustion of ipr s for all members. As a result, apparently Article 6 was introduced which provides the flexibility to a member to adopt the exhaustion mode that it prefers. However, it is important to note that Article 6 actually does not give such liberty given that adoption of a particular exhaustion mode is subject to the specific obligations both within this Article and other wto Agreements. 368

However, one needs to carefully examine the notion that, prima-facie Article 6 allows members to follow any mode of exhaustion and further prevents members from referring the disputes to the dsb of the wto over an issue of exhaustion. Considering the trade enhancing characteristics of international exhaustion and the intention of trips as reflected in the Preamble to the trips , international exhaustion is most appropriate within the wto system. It is also sometimes argued that the language of Article 6, precludes exhaustion of patents being brought as a violation complaint before the wto dsb . 369 In fact, although apparently it might seem Article 6 restricts members from bringing exhaustion related disputes to the dsb , there is a qualification wherein disputes can still be brought under Article 3 ( nt ) and Article 4 ( mfn , i.e. mfn ) . Further, practice of Article 6 needs to qualify under gatt Article xx (d) as well as the necessity test as well as is not exempt from assessment of necessity under Article 31(3)(c) of the vclt . 370 In such scenario a question arises as to how decisions of domestic courts would be treated under nt and mfn . The same is discussed at length later while addressing nt and mfn specifically under gatt and trips . This means, although Article 6 tends to be neutral in supporting any specific mode of exhaustion, it makes the exhaustion mode subject to Article 3 and 4 , which are to be applied uniformly.

Further, one can argue that a member does not have the liberty to establish any mode of exhaustion since that could be inconsistent with Article 28 of the trips , hence exhaustion issue could still be a bilateral dispute issue. 371 This can be of considerable concern from the perspective of the necessary policy space that a wto member might want to exercise in deciding an exhaustion regime that it finds most appropriate, hence not positively contributing to a solution. It is noticed that even after lobbying attempts by industry groups like the International Trademark Association ( inta ), the exhaustion issue is limited to its interpretation in terms of Article 6 . 372 Thus, if a member invokes an exhaustion mode which violates Article 3 and 4 , then the matter might be taken up before the dsb . An in-depth study will show that if any mode other than the mode of international exhaustion is followed, ‘ like products ’ would be treated differently. Here it must be noted that exhaustion rules cannot and should not vary depending on the origin of the product. 373

Albeit this should not apply if the patents in the products does not naturally exhaust, in other words, if they are impacted by market manipulations like government regulatory interventions, price caps, etc. then such products need to be exempted from international exhaustion. The logic being, allowing international exhaustion in such cases will bring an effect of export subsidies not only distorting multilateral trade but also violating the Agreement on Subsidies and Countervailing Measures of the wto . 374 A case in point is the Swiss Patent law of 2009 that allows regional exhaustion but excludes cases where the patented products have been subjected to price control or similar other measures. However, this would not include general regulatory approvals or those covered under Article xx gatt . Considering that the fundamental reasoning of the gatt and trips is to effect equal treatment to like products, such exclusions would be considered compatible of Article 6 of the trips Agreement. 375

Some critics refuse to read Article 6 in conjunction with other Articles of trips and other wto Agreements and are of the opinion that this Article should be interpreted literally, i.e. exclusively on the basis of its content. These critics thus prefer to take a neutral stand and support the view that Members should be allowed to follow any exhaustion mode that they prefer. 376 Here it is important to note that the final wording of Article 6 resulted after long negotiations and are after careful consideration to maintain a status quo . Given the present circumstances when there are multiple interpretations of the Article specifically dealing with exhaustion, Members need to avoid any reading of Article 6 in isolation from the other Articles of the trips Agreement or in exclusion of the other wto Agreements. It is important to give not only due consideration to the other Articles of the trips , but also analyse gatt 1994 and other relevant wto Agreements to assess their impact on exhaustion. The exhaustion of patents under gatt mfn and nt are dealt with in detail in the next chapter including how in the erstwhile gatt 1947 regime Dispute Settlement panel in 1989 held US Patent Act Section 337 in violation of nt . 377 The fundamental premise being, there is no material difference of substantial nature in the approach towards the gatt / wto rules on goods and those on ipr s. Both seek to bring in positive effects for the betterment of international trade.

Further, while Article 6 of trips does not specifically restrain a member from adopting national or regional exhaustion of ipr s, the application of different relevant Articles of the gatt is implicit. gatt applies independently of trips hence non-violation of trips would not preclude compliance with gatt in any manner. 378 The relevance of gatt is founded in the fact that parallel trade, triggered by international exhaustion of ipr s including patents, refer to the geographical origin of the product and not the nationality of the right holders. Moreover, Article 6 of trips does not in any way exclude the purview of the gatt 1994. It has also been argued that trips is ‘ lex specialis ’ or ‘ sui generis ’ hence it supersedes in governance of ipr s and the gatt would not be relevant. 379

As a general principle of (international) law, the notion of lex specialis derogate generali applies between provisions of a single treaty, between provisions within two or more treaties, between a treaty and a non-treaty standard, as well as between two non-treaty standards. It suggests that whenever two or more norms deal with the same subject matter, priority should be given to the norm that is more specific since it often takes better account of the particular context addressed or creates a more equitable result. Confirming the relative nature of inter-legality, the lex specialis principle only applies in relation to those states which are bound by both norms – such as between two international ip treaties for those states bound by both. 380

Considering that trips Agreement imposes different obligations on wto members than under gatt and does not regulate discrimination based on origin of goods, it is doubtful if the doctrine of lex specialis derogat generali can be applied unchallenged. 381 The impact of different Articles of the gatt on exhaustion of patents and as a result in its treatment of parallel imports have been discussed at length more specifically in the next chapter.

6.3.1.3 Article 3: National Treatment

The nt requirement in trips Agreement require ip applicants and holders including patent holders from outside the wto member’s country the same treatment as that of domestic patent ip holders. 382 Some proponents of national and regional exhaustion, although agree that Article 3 and 4 of the trips lay down conditions that wto members are required to accord nt and mfn status to all members, still hold the opinion that national and regional exhaustion does not violate these Articles. According to them, these modes of exhaustion do not discriminate on the basis of the

origin of the imported goods but on the nationality of the patent right holder, a good case could be made that such exception would not violate the non-discrimination principles of the gatt . 383

This also shows that even these proponents of national and regional exhaustion admit that goods are discriminated and differentiated on the basis of nationality of the patent holders of the different wto members hence it is important to analyse these two Articles in greater depth.

Here it is important to note the difference between ‘ Same Treatment ’ under the Paris Convention and ‘ Treatment no less favourable ’ in the trips Agreement. Under Article 2 (1) & (2) of the Paris Convention, each member country is mandated to grant the same protection to nationals of other member countries that it grants its own nationals and nationals of the non-member countries are also entitled to the same treatment if they are domiciled in the country or have ‘ real and effective or commercial establishment ’ in the member country. 384 It is interesting to note that Article 3 , of the trips Agreement is not just restricted to same treatment but much beyond and reads similar to Article iii : 4 of the gatt Agreement on nt . A study of the negotiating history shows that nt always had been an important principle in international ip laws and was the fundamental principle in the gatt 1947 Agreement as far as trade in goods is concerned. The question that arises is whether nt would also apply to trips in respect of ipr s the same way as it applies in gatt .

1. Each Member shall accord to the nationals of other Members treatment no less favourable than that it accords to its own nationals with regard to the protection (here there is a footnote which states – For the purposes of Article 3 & 4, “protection” shall include matters affecting the availability, acquisition, scope, maintenance and enforcement of intellectual property rights as well as those matters affecting the use of intellectual property rights specifically addressed in this Agreement.) of intellectual property, subject to the exceptions already provided in, respectively, the Paris Convention (1967), the Berne Convention (1971), the Rome Convention or the Treaty on Intellectual Property in respect of Integrated Circuits.

As mentioned, considering that trips Agreement incorporates the provisions of the Paris Convention, it is important to note that ‘ nt ’ was included in it in the first category itself as a basic right.

Nationals of any country of the Union shall, as regards the protection of industrial property, enjoy in all the other countries of the Union the advantages that their respective laws now grant, or may hereafter grant, to nationals; all without prejudice to the rights specially provided for by this Convention. Consequently, they shall have the same protection as the latter, and the same legal remedy against any infringement of their rights, provided that the conditions and formalities imposed upon nationals are complied with.

Nationals of countries outside the Union who are domiciled or who have a real and effective industrial or commercial establishments in the territory of one of the countries of the Union shall be treated in the same manner as nationals of the countries of the Union. 385

From this it’s clear that a country which is a member of the Paris Convention shall have to grant the same level of protection to other member countries’ subjects as provided to its own. Interestingly, although both the Paris Convention and trips mandates nt , there is distinction. While Paris Convention mandates same treatment, trips require treatment that is no less favourable.

In gatt there is the notion of de facto non-discrimination that was applied in the European Communities – Protection of Trademarks and Geographical Indications for Agricultural Products and Foodstuffs ( ec – gi ) case. In this case, apart from violation of Article 3 of trips and Article iii (4) of gatt , the Panel decided in favour of US and Australia that the ec ’s gi Regulation did not provide nt to other wto members’ right holders and their products. Protection to other members’ gi was made contingent upon the government of that country adopting gi protection mechanism equivalent to that of the ec and in the process, provide reciprocal protection to ec gi s. The Panel found that the ec ’s regulations pertaining to gi themselves being in breach of gatt were as such inconsistent under Article xx (d) gatt . Further, the Regulations that was to be introduced by the other wto members also needed to have a product examination mechanism for cases where applications and objections were raised by other wto members. In other words, foreign nationals would have access to the ec gi protection only if the ec granted it on examination through the mechanism like that of the ec , hence no guaranteed access. Hence, the additional gi protection being challenged as mentioned above failed the consistency test and could not be justified under Article xx (d) . 386

Here it raises the argument that if both are like products as is the case for patented products, whether this will be a valid differentiation based on the origin of the goods. In case of trademark for different products, the test of nt under gatt is whether the marked products originate from the same source. 387 Here reference may be made to the two decisions of the ab of the wto , Japan – Taxes on Alcoholic Beverages (Japan – Alcoholic Beverages) and Korea – Taxes on Alcoholic Beverages (Korea – Alcoholic Beverages) cases. 388 These two orders of the ab emphasised that in case of directly competitive or substitutable products which are in competition with each other, if the imported goods are taxed higher than the locally produced goods, then the dissimilar taxation of the directly competitive or substitutable imported domestic products would be considered as protection accorded to domestic product and this would result in violation of Article iii : 2 of the gatt Agreement.

The question as to whether Article 3 of the trips Agreement treats exhaustion of ipr s in the same manner as gatt , would ascertain the eligibility of the ‘ national ’ or ‘ regional ’ exhaustion modes under this Article. Article 3 clearly states that members should accord no less favourable treatment to products from other members as it does to products from its own country. One might argue that if a country follows national exhaustion, it restricts parallel import of products from other members through injunctive relief, damages, etc. on ground that the imported product has infringed the ipr s of the products. 389 On the other hand, no such effect exists for domestic products moving from one part of the country to another or within the markets under fta . The imported products are manufactured legally under licence from the original producer while being marketed through their own channels instead of the distributors chosen by the patent holder. However, that is not actually the test for nt in case of trips since the test is whether there is discrimination is between the local patent holder and the foreign right holder.

Under national exhaustion too, the foreign patent holder can stop the entry of parallel imports exactly in the same way as the original patent holder if the same is registered in the country. Hence there is no discrimination from the perspective of nt under Article 3 trips either for national, or regional or international exhaustion. Hence on comparison with similar provision under gatt , there is a distinct difference. While in case of the former, nt relates to the nationality of the right holder, in case of gatt , it relates to the origin of the product. In the latter there is discrimination between the free movement of goods within the country in modes of exhaustion other than international exhaustion and restrictions imposed on imported like products. The significant difference being the right and title being on the good and not on the right holder.

6.3.1.4 Article 4: Most Favoured Nation Treatment

With regard to the protection of ip , 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.

It must be noted that the mfn principle in trips , is not adopted from the previous ip conventions since it was absent in these conventions. However, it was very much present in the gatt 1947 Agreement although restricted only to its applications to goods. With the extension of the mfn principle to trips , the principle has been extended not just to ipr s but also to persons, i.e. nationals who would hold ipr s in different member countries. Given that it is now concerning right holder, the question related to exhaustion of patent rights any mode other than the ‘ international exhaustion ’ would be in violation of the well-established mfn principle.

When “nationals” are referred to in this Agreement, they shall be deemed, in the case of a separate customs territory Member of the wto , to mean persons, natural or legal, who are domiciled or who have a real and effective industrial or commercial establishment in that customs territory.

However, given that the other regional blocs like the nafta , asean and others do not practice regional exhaustion of ipr s, it is not very clear if such a qualification is restricted only to cu or would apply to fta s in general.

Another case in point is the Unitary Patent system in EU, considering that it is expected to provide a mechanism for a single patent right for participating members along with a unified patent court, question arises as to whether and if so, why regional exhaustion would still be legitimate. 390 The contrary argument is that, such unitary patent mechanism does not replace the national patents in each member States but exist at parallel with the separate adjudicating mechanisms, hence the question on regional exhaustion within EU is still questionable. Given the fact that the patent right exists in the member State independent of the European patent, considering the entire EU as a single entity for exhaustion is more a decision of market integration enforced through the ecj , rather than based on legal reasoning.

On the issue of exhaustion, one must note that by allowing exhaustion of ipr s for goods imported from a particular country, a member of the Union while refusing to do the same if the products were from another country a member of the wto but not of the Union, would seem to outright violate the mfn principle in the gatt . Such discrimination of the mfn principle was however curved in, under a special exemption for regional agreements as provided by Article xxiv of the gatt Agreement. It is questionable whether such exemption which is against free trade principles, should be accorded to regional agreements at the cost of multilateral trade. Pre-negotiation view of the effect of mfn on ipr s had exposed some problems since there was a view that it was better not to apply mfn to ipr s since then it would have to be extended to persons (which would in turn affect many bilateral and regional agreements). 391 The issue of mfn in gatt 1994 with relation to the exhaustion principle will be discussed in greater details in the analysis of the gatt 1994 Agreement in the next chapter.

It is indeed an irony that multilateral trade agreements like the gatt Agreement and it is covered agreements, including the trips Agreement which aims at reduction of distortions in international trade, does not consider restrictions imposed by way of such exemption null and void. Had it not been that nt relating to the nationality of the right holder or specific exclusions curved in at the formative stage itself, such exemptions would not have qualified in the ‘ necessity ’ test since international exhaustion, which facilitates in the removal of trade barriers also allow protection of ipr s. Given that the trips Agreement being within the larger framework of gatt 1994 Agreement, one might question whether the necessity test as reflected in Article 8 of trips Agreement needs to be read within the context of gatt 1994. 392 However, based on the above study on nt and mfn , the issue of national and regional exhaustion discriminating over international exhaustion needs to be assessed under relevant provisions of the gatt Agreement rather than the trips .

6.3.1.5 Article 7: Objectives of trips Agreement

Article 7 of the trips Agreement, ties dissemination of knowledge with patent protection through technology transfer. Remedies to patent infringement through injunctive relief, damages, etc. are awarded so that the society is benefited from the invention while the patent holder enjoys government assured market exclusivity for a certain predetermined period. More specifically, Article 7 aims at promotion of technological innovation and transfer of technology in a manner that is ‘conducive to social and economic welfare’ and at the same time brings ‘a balance of rights and obligations’. 393 While interpreting Article 7 in the background of the exhaustion issue, it will be noticed that international exhaustion enables the licensee to come in to direct competition with the licensor. Hence it enhances more opportunities of technology transfer, enabling increased dissemination of technology through market competition which is most conducive to economic welfare. The other modes do not enable possibilities of any such technology transfer and are far more restrictive, thus would fail to meet the aims of Article 7 .

6.3.1.6 Article 8: Underlying Principles of trips Agreement

Appropriate measures, provided that they are consistent with the provisions of this Agreement, may be needed to prevent the abuse of ipr s by right holders or the resort to practices which unreasonably restrain trade or adversely affect the international transfer of technology.

It has been mentioned earlier and decided by the ecj (discussed in detail later) that the mode of national exhaustion restrains trade and it is for this reason, the ec (including countries of the eea ) follows the mode of international exhaustion within the region. It is important to read Article 8 with Article xx (d) gatt , applying the necessity test, reflecting suitability, necessity and proportionality. There is absolute clarity that, restraining parallel imports by opting out of international exhaustion of patents is untenable. 394 It would be impossible to establish that to protect patents, parallel imports of products need to be restricted.

A careful study of clause (2) of the Article mentioned above will show that it requires appropriate measures (consistent with the provisions of the Agreement) to be taken to prevent practices which unreasonably restrain trade. In such circumstances any mode of exhaustion other than international exhaustion calls for outright rejection since it restrains trade. Further, since national exhaustion mode allows the patent holder to benefit from charging royalty more than once, it can be interpreted as an abuse of the monopoly right accorded to the patent holder. Given that often doubts have been raised as to whether strong ipr s regime can exclusively bring in technological change and economic growth, it is logical to install a strong patent regime while at the same time allowing enhanced market competition. 395 If international exhaustion is adopted, parallel trade will be allowed and the industries in the developing countries will be interested in technology transfer as they would gain from comparative advantage.

Recognizing that no country should be prevented from taking measures necessary to ensure the quality of its exports, or for the protection of human, animal or plant life or health, of the environment, or for the prevention of deceptive practices, at the levels it considers appropriate, subject to the requirement that they are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail or a disguised restriction on international trade, and are otherwise in accordance with the provisions of this Agreement.

Here exemption from nt triggers only for specific purposes as mentioned and needs to be justified. It cannot be arbitrary action or disguised restriction on international trade. Similarly, the exemption provided for protection of ipr in Article 8 of trips , enables patent holders to take specific enforcement measures if the rights are infringed but restricting parallel importation by following the mode of national or regional exhaustion for protecting patents, cannot qualify as justified restriction on nt .

6.3.1.7 Article 28: Patent Rights Conferred

Proponents of national and regional exhaustion usually cite Article 28 of trips Agreement and state that under this Article, the mode of international exhaustion is not allowed. Before starting a discussion on this Article, the historical developments in ip law in the pre- trips era should be noted when ipr s were governed mainly by the international ip conventions. These conventions acknowledged the principle of territoriality in ip law. 396 It is for this reason many supporters of strong ipr s regimes prefer the mode of national exhaustion and fail to accept the fact that trips has changed the scenario and no longer can one look at ipr s exclusively as a territorial issue without considering its effect on multilateral trade in a global setting.

It is an irony that some critics fail to acknowledge that the main reason to include trips is to promote multilateral trade along with effective protection of ipr s. Often it is overlooked that in line with the overall aim of the wto Agreements, trips Agreement aims to promote barrier-free trade in addition to its aim of providing a harmonized minimum level of ipr protection. Article 28 does not restrict the possibility of following international exhaustion in any manner since following international exhaustion cannot lead to infringement of the patent. 397 Article 28 does not in any manner present even a hypothetical situation of restraining international exhaustion of patents, it only excludes exhaustion issues from being taken up before the dsb of the wto .

1. A patent shall confer on its owner the following exclusive rights: (a) where the subject matter of a patent is a product, to prevent third parties not having the owner's consent from the acts of: making, using, offering for sale, selling, or importing (Here the footnote 6 with reference to 'importing' states that, this right, like all other rights conferred under this Agreement in respect of the use, sale, importation or other distribution of goods, is subject to the provisions of Article 6) for these purposes that product; (b) where the subject matter of a patent is a process, to prevent third parties not having the owner's consent from the act of using the process, and from the acts of: using, offering for sale, selling, or importing for these purposes at least the product obtained directly by that process ( Emphasis added).

A careful study of this Article will show that the contradiction in views on the issue of exhaustion occurs because of the mention of ‘ importing without the owner’s consent ’ and its treatment.

The critics who support the mode of national exhaustion, often state that this Article allows patent holders to restrict others from, ‘ making, using, offering for sale, selling or importing (emphasis added) ’ products that are covered by the patents, hence restrict items of parallel trade since they are marketed without the prior consent of the patent holders. According to them the exclusive right granted by this Article would not allow third parties to import a patented product or a direct product made from a patented process. 398 Further, they are of the opinion that if a wto member follows international exhaustion, another member that does not follow international exhaustion can retaliate through trade policy sanctions against the member that follows international exhaustion. Such arguments are based on the interpretation that the footnote to Article 28 (1) (a) (with reference to Article 6 of trips ), does not change the substantive patent law under trips . 399

Proponents of national exhaustion often fail to analyse the issue of exhaustion from the perspective of multilateral trade in the setting of global trade rules of the wto including the trips Agreement the very purpose of having an elaborate agreement on ipr s. They try to interpret the issue from a very narrow (pre- trips ) perspective, thus over-ruling international exhaustion. One might argue that under the Paris Convention international exhaustion could be restricted under Article 4bis (1) and (2) of the Paris Convention. Under the Paris Union, members are required to treat patent applications in different member countries independent of patents obtained for the same invention in other member countries. Although there is no specific mention of the exhaustion issue, there is no express mention of excluding it either, hence one can argue that it would apparently apply for exhaustion too. Based on such an interpretation, it is sometimes advocated that Article 4bis (2) mentions the independence of patents. As such if a patent is nullified in one country, it would not necessarily be nullified in the other country or if it lapses in one country would not mean that it would also lapse in another country. Similarly, according to this interpretation, if the patent rights are exhausted in one country it should not necessarily mean that it would exhaust in the other country.

Some critics of international exhaustion further comment that there is no obligation on the part of wto members to comply with Article 6 of the trips Agreement since it is placed in Part 1 of the Agreement. According to such interpretation, under Article 2.1 of trips , Members are obliged to comply with the principles of independence in respect of Parts 2, 3, and 4 of the trips Agreement. Hence, it’s argued that even if Article 6 of the trips might allow international exhaustion, it is against the Paris Convention since it is against the principle of independence of patents. 400 Critics also argue that Article 6 does not affect Part 2 of the trips Agreement and Part 2 which elaborates on the standards concerning the availability, scope and use of ipr s, makes parallel imports illegal based on the principle of territoriality. 401 Such view does not hold ground since the principle of territoriality as established by the Paris Convention, applies to the existence and not the exercise of the patent right.

Members shall give effect to the provisions of this Agreement. Members may, but shall not be obliged to, implement in their law more extensive protection than is required by this Agreement, provided that such protection does not contravene the provisions of this Agreement. Members shall be free to determine the appropriate method of implementing the provisions of this Agreement within their own legal system and practice.

Here it must also be pointed out that the Paris Convention does not state that due to the territorial and independent nature of the patents, developments outside the country where it is patented would not affect or influence it in any manner. Even when patents follow territoriality principle, it is a standard practice to follow absolute novelty instead of relative novelty. If this is the case, then the novelty will consider ‘ state of the art ’ globally and not nationally. Under same logic exhaustion of patent laws should also be international. Here it must be considered carefully that there is nothing contradictory between Article 4 bis of the Paris Convention and the doctrine of exhaustion since while the former deals with domestic patent right the latter deals with the economic exploitation of the patented product. 403

Further, nothing impairs the law of territory to consider effects of facts and events that take place outside the territory. In fact, since the footnote to Article 28 clearly refers to the exhaustion issue, the right of ‘ making, using, selling and importing ’ cannot escape exhaustion. The footnote makes it clear that the right of importation does not affect exhaustion in any way. It should also be noted that if it is accepted that exhaustion is allowed because of the footnote to Article 28 , then in true sense there cannot be discrimination between national and international exhaustion. Moreover, one cannot interpret exhaustion based on territoriality principle and at the same time overlook the basic intention of patent law.

Some others who support national and regional exhaustion modes, opine that a mode of international exhaustion is against Article 1 of the trips Agreement which requires all parties to abide by the trips rules. They confer that Article 28 requires members to follow the mode of national exhaustion and hence they feel that if a member does not follow such mode of exhaustion, it would be against the member’s obligation under Article 1 . 404 However again these proponents of national and regional exhaustion tend to overlook the fact that the wto Agreement clearly states that the other covered agreements (which includes the trips Agreement), are governed by the wto Agreement which aims at removal of trade barriers. Restraining international exhaustion of patent, converts ipr s into non-tariff barriers to trade hence are counter-productive to the aims of the wto multilateral system.

The critics also argue that since the rights of the patent holder under the trips Agreement are subject to the patent owner’s consent, exhaustion is also tied to the consent. Such arguments are flawed given the fact that it undermines the exceptions to such consent which are already embedded in domestic law and trips defines such exceptions, albeit limiting them. 405 Moreover, these interpretations totally fail to acknowledge the fact that the aims and objectives of the trips is not identical to the ip conventions. Article 4bis of the Paris Convention never declared that national exhaustion is to be adopted by members. With the establishment of wto and with the trips coming into force, protection of ipr s have moved beyond the principle of territoriality to ipr s as crucial component of free trade which cannot enjoy the fruits of ipr s enforcement without honouring foundation of free trade.

In the present scenario under the gatt / wto regime, the trips Agreement not only makes the ipr s regime strict and effective, it also has a role to promote global trade. International exhaustion of patents aims at promoting a balanced approach towards rights and obligations of producers so that technical knowledge can be used in a way conducive to social and economic welfare. Further, international exhaustion also acts as checks and balance measure to restrain the patent holder from profiteering from the exercise of the patent. It receives its due incentive through the returns on placing the patented product or the product manufactured under a patented process on the market the first time. International exhaustion mandates the patent owner to compete in the global market on principles of free trade and pass on the benefits of consumer benefits by way of access to the patented products at the lowest possible market driven price. 406 The, national exhaustion on the contrary, limits competition only among exclusive licences and distributors operating in restrictive geographical areas.

6.3.1.8 Article 30: Exceptions to the Patent Rights Conferred

Members may provide limited exceptions to the exclusive rights conferred by a patent, provided that 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 account of the legitimate interests of third parties.

This can be considered a limited exemption that, on one hand serves the purpose of the exemption, while on the other, does not hinder the legitimate interests of the patent owner. Given its nature, wto members have used the provision to draft laws to allow research exemptions for patents that are similar to ‘ fair use ’ in copyrights. 407 Popular in some jurisdictions as ‘ Bolar Exceptions ’, in the pharmaceutical industry such exceptions are used for applying to regulatory bodies by generic manufacturers before expiry of the patent to enable quick marketing of a generic drug on expiry of the patent. 408

The legality of use of Article 30 exception by pharmaceutical manufacturers was challenged before the wto dsb in the ‘ Canada – Patent Protection for Pharmaceutical Products ’ case (Canada – Pharmaceuticals) and found to be permissible. The practice of filing for regulatory compliance of generic versions of patented pharmaceutical drugs before the national drug authority before expiry of the relevant patent and stockpiling of generic drugs in anticipation of the patent expiry were upheld to be within the exemptions provided under Article 30. The Panel considered the public policy requirements that a wto member may need to address while adjudicating the case and decided that this exception claimed by Canada under Article 3 0 of the trips Agreement would result in a balanced intellectual property regime. The Panel Report also provided guidance to how the three-step test is to be interpreted as well laid down that the words ‘ limited ’ and ‘ exceptions ’ to be interpreted in combination as a narrow exception. Through the three-step test the Panel decided that the exception curtails the patent owner’s right in only a small diminution. 409 The findings in Canada Pharmaceutical case confirmed that the trips Agreement allowed wto members necessary flexibilities in framing and enforcing their municipal legislation to provide certain restricted exemptions to patent protection for a balanced patent regime. Further, as per the Doha Declaration (discussed in details in Chapter 10 ), wto members may also authorise exportation and importation of pharmaceutical drugs to address national health emergencies as an exception provided under Article 30 . 410

The provisions under Article 30 have been lauded to bring a balanced patent regime in a wto member country through limited exceptions to the patent rights wherein the patent owner would not be able to allege infringement and enforce its rights. However, there would be considerable conditions too as such exceptions would be only applicable under certain conditions. In a hypothetical case, if a generic pharmaceutical company decides to manufacture a patented pharmaceutical drug under Article 30 exception exclusively for exporting to a wto member country without capacity to produce the drug, it cannot be considered an infringement. In such a case, the importing country would need to grant cl for such importation exactly in a manner it would have needed to grant for locally producing the patented pharmaceutical product.

Article 30 as interpreted by the Panel in Canada Pharmaceutical case, clearly does not impact exhaustion. However if a comparison is to be drawn between the patent exemption regime under Article 30 and patent exhaustion regime of a wto member, specifically in case of exportation under the exceptions, international exhaustion would be more seamless and use of Article 30 could be more restrictive. 411 It has already been found that although patent rights are territorial in nature, legitimate extraterritorial sales outside the authorised dealership via parallel trade is not barred. 412 It must also be noted that the use of Article 30 exception in an exporting country needs to be in sync with a compulsory licensing for importation under Article 31 in the importation country would work. Hence, such exportation would be a violation in absence of cl under Article 31 in the importing country. In other words, if a country evokes Article 30 and allows a company to produce generic version of a patented product for permitted exceptions but instead exports them to some other wto member’s markets which has not notified importation under Article 31 , the patent being unenforceable, cannot be considered to have exhausted. Hence, when a patent is temporarily withdrawn or suspended or made un-enforceable under Article 30 , products covered under such patent shall not exhaust on exportation.

6.3.1.9 Article 31: Use of the Patent without Authorisation of the Right Holder

Each country of the Union shall have the right to take legislative measures providing for the grant of compulsory licenses to prevent the abuses which might result from the exercise of the exclusive rights conferred by the patent, for example, failure to work. 414

Slightly differing from the provision in the Paris Convention where the aim had been solely to address market abuses, in the trips Agreement, Article 31 adds on to the exceptions to patent rights that has already been provided in Article 30 , hence the reason might not necessarily be to address ipr -centric abuses but to address other situations too. Further, subsequently in the Doha Declaration (discussed in details in Chapter 10 ), the cl provisions under Article 31 address situations of national calamities or exigencies are vividly dealt with.

The scope and duration of such use shall be limited to the purpose for which it was authorized, and in the case of semi-conductor technology shall only be for public non-commercial use or to remedy a practice determined after judicial or administrative process to be anti-competitive. (Emphasis added) .

Members are not obliged to apply the conditions set forth in subparagraphs (b) and (f) 415 where such use is permitted to remedy a practice determined after judicial or administrative process to be anti-competitive. The need to correct anti-competitive practices may be taken into account in determining the amount of remuneration in such cases. Competent authorities shall have the authority to refuse termination of authorization if and when the conditions which led to such authorization are likely to recur. (Emphasis added).

It is clear that there is no direct relation between Article 31 , Article 31bis and exhaustion of patents hence it is not analysed in further details. However, it is important to note that if Article 31 or Article 31bis is evoked, the patent rights would be curtailed. E.g. in case of issuance of cl the right holder would be restricted from monetising the patent under free market conditions. In such scenario, as earlier discussed in case of evoking Article 30, the patents should not be allowed to exhaust since its existence itself is controlled. As such if a patented product is manufactured under cl at restrictive licensing conditions, any import of such products cannot be considered for parallel importation. Exhaustion is and should be adopted independent of Article 31 and Article 31bis and the two should not be linked in any manner.

6.3.1.10 Article 40: Controlling Anti-competitive Practices in Licensing

Article 40 of the trips Agreement provides with measures to control anti-competitive practices that might occur through ip licence contracts. However, most of the measures are guidelines for domestic action by national adjudicators and regulatory authorities hence to be applied in the relevant market and not at the multilateral level. Further, in absence of any definition of ‘ relevant market ’, or clear indication as to what might constitute ‘ abuse ’ of ip , it completely depends on the competent national adjudicators or regulatory authorities to address it on a case-by-case basis. Some guidance is provided by the United Nations Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices. 416

It has already been discussed that there are no definite competition/anti-trust laws in the wto or the trips Agreement to control anti-competitive trade practices. In such circumstance, owners of ipr s might try to supersede their legitimate exclusivity to the extent of abusive monopoly not only directly through ipr s but also through their license contracts. Very often the licensee is unable to negotiate a balanced deal due to the stronger market power of the licensor, resulting in anti-competitive license contracts. Hypothetically, the licensor might contractually bind the licensee not to sale its products beyond a certain market if it receives the patent holder’s technology, even when the country’s laws on ipr s allow such trade, i.e. allows international exhaustion. This is in essence, a reflection of the Preamble of the trips Agreement wherein, it aims to put in place an effective system of checks and balance so that protection of ipr s does not become an impediment to dissemination of knowledge and technology.

In the first instance, Article 40 acknowledges the fact that licensing agreements can restrict free and fair competition and at the same time allows countries to take necessary legal measures to restrain owners of ipr s from abusing the monopoly that might have been created through the exclusivity. 417 However the problem lies in the fact that although the aim is to provide sufficient checks against possible abuse of ipr s, there is a proviso that makes any such measure compliant to the protection of ipr s. As such it becomes a matter of interpretation as to whether the protection of ipr s provided is necessary or an excess that constitutes an abuse. Moreover, the action against any anti-competitive contract is also voluntary and not obligatory. This means that member countries can put in place legal measures in their national laws to check any anti-competitive practice but that is not mandatory under trips Article 40 . Hence, if a country does not have any such laws to check anti-competitive practice, the country cannot be brought before the dsb of the wto .

It must also be noted that Article 40 also provides guidance on problems related to cross-border restraints wherein it requires wto members to solve the problems through consultations. But here too there is no specific right or norm set by trips , hence such clauses are mere guidance which can never contribute effectively in providing any remedy. 418 It has been discussed in Chapter 3.2.3 how in the EU, competition law principles were adopted by the ecj and international exhaustion within the EU was established by the Grundig-Consten case which became a landmark in being known as regional exhaustion. Here the free movement of goods within the EU member countries was considered from the perspective of intra-brand trade. However, the most crucial arguments in the case that superseded trademark laws were that of anti-cartel aspect of European Competition law. 419 Although a country might not be mandated under Article 40 to remedy an anti-competitive practice through adjudication before the dsb of the wto , hypothetically not following international exhaustion under Article 6 might be brought before the dsb in conjunction with Article 40 .

wipo was earlier known by its French acronym ‘Bureaux Internationaux Réunis pour la Protection de la Propriété Intellectuelle’ ( birpi ) or as ‘United International Bureau for the Protection of Intellectual Property’. It administers different international Treaties and Conventions in the area of patents. Under the auspices of the birpi and later wipo (after its establishment in 1967), the ‘Paris Convention’ for Protection of Industrial Property signed in 1883 and updated in the later years, ‘The Patent Co-operation Treaty’ signed in 1970, ‘The Strasbourg Convention on the International Classification of Patents’ signed in 1971 and the ‘Patent Law Treaty’ of 2000 were signed. They provide the basic guidelines and rules for member countries to opt for and follow to enhance protection of ipr in the member countries.

Yusuf Abdulqawi, “ trips : Background, Principles and General Provisions”, in Correa Carlos and Yusuf Abdulqawi (eds.), “Intellectual Property and International Trade – The trios Agreement”, Walters Kluwer 2nd Edition, pgs. 19, 20, 21 (3–21), 2008.

Braga Carlos Primo, “Trade-related intellectual property issues: the Uruguay Round Agreement and its economic implications”, in Maskus Keith (ed.), “The wto , Intellectual Property Rights and the Knowledge Economy”, Edward Elgar Publishing Ltd., pg. 6, (3–41), 2004.

Kaur Annette, “Limitations and exceptions under the three-step test – how much room to walk the middle ground?” in Kur Annette and Levin Marianne (eds.), “Intellectual Property Rights in a Fair World Trade System”, Edward Elgar Publishing Ltd., pgs. 220, 221 (208–261), 2011.

Cottier Thomas, “The Prospects for Intellectual Property in gatt ”, 28 Common Market Law Review, pg. 386, 387, (383–414), Kluwer Academic Publishers 1991.

Cottier Thomas & Schneider Lena, “The philosophy of non-discrimination in international trade regulation”, in Sanders Anselm Kamperman edited, “The Principle of National Treatment in International Economic Law Trade, Investment and Intellectual Property” Edward Elgar Publishing Ltd., pg. 13 (3–33), 2014.

Otten Adrian, “Implications of the trips Agreement for Dispute Settlement in Industrial Property” in Cottier Thomas and Widmer Peter (eds.), “Strategic Issues of Industrial Property Management in a globalising Economy”, Hart Publishing, pg. 103, 1999.

Nolff Markus, “The relevance of trips for Patent Law”, in “ trips , pct and Global Patent Procurement”, Kluwer Law International, pg. 29, 2001.

Land Molly, “Adjudicating trips for development”, in trips and Developing Countries Towards a New ip World Order? Edward Elgar Publishing Ltd., pgs. 146, 147 (142–162), 2014.

Vivekanandan V. C., “The Indian Patent Matrix: issues in patent amendment 2005”, in Bird Robert and Jain Subhash (eds.), “The Global Challenge of Intellectual Property Rights”, Edward Elgar Publishing Ltd., pg. 137 (135–152), 2008.

Stoll Peter-Tobias, Busche Jan and Arend Katrin, “ wto – Trade-Related Aspects of Intellectual Property Rights”, Max Planck Institute for Comparative Public Law and International Law, Martinus Nijhoff Publishers, pgs. 2, 3, 4, 2009.

Haugen Hans Morten, “ trips and compatible protection”, in “The right to food and the trips Agreement”, Martinus Nijhoff Publishers, Boston, pg. 216, (213–253), 2007.

McGinnis John & Movsesian Mark, “The World Constitution” 114 Harvard Law Review at pg. 511, (524–526) 2000.

The negotiating draft of Ambassador Lars Annell (of Sweden) is discussed at length later in this chapter. See, https://www.wto.org/english/res_e/booksp_e/trips_agree_e/chapter_4_e.pdf .

Anell Lars, “Keynote speech at the trips Symposium 26 February 2015” in Watal Jayashree and Taubman Antony (eds.), “The Making of the trips Agreement Personal Insights from The Uruguay Round Negotiations” wto , pg. 366, 371 (365–371), 2015. Also available at, https://www.wto.org/english/res_e/booksp_e/trips_agree_e/chapter_4_e.pdf .

Panagariya Arvind, “ trips and the wto : An uneasy Marriage”, in Maskus Keith (ed.), “The wto , Intellectual Property Rights and the Knowledge Economy”, Edward Elgar Publishing Ltd., pg. 43 (42–47), 2004.

Gadbaw Michael, “Intellectual Property and International Trade: Merger or Marriage of Convenience?” in Brown Lonnie and Szweda Eric (eds.), “Trade-Related Aspects of Intellectual Property”, pg. 232, 1990.

Article ix of gatt 1947 established marks of origin and Article xx (d) allowed enforcement against infringements of ipr .

Braga Carlos Primo, “The Economics of Intellectual Property Rights and the gatt : A View from the South”, Brown Lonnie and Szweda Eric (eds.), “Trade Related Aspects of Intellectual Property”, Vanderbilt Journal of Transnational Law, William S. Hein and Co. Inc., pg. 247 (243–264) 1990.

U.S. Trade Representative, National Trade Estimate, Report, pgs. 222–237, 1985.

Ibid at 303, pg. 386. Reference to Draft Agreement on Measures to Discourage the Importation of Counterfeit Goods, gatt Doc. l /8417 (31 July 1979).

Ostry Sylvia, “Intellectual Property Protection in the wto : Major issues in the millennium round”, Fraser Institute Conference Santiago, Chile, pg. 1, 19th April 1999.

Molly Land, “Adjudicating trips for development”, in trips and Developing Countries Towards a New ip World Order? Edward Elgar Publishing Ltd., pgs. 146, 147 (142–162), 2014.

Watal Jayashree, “From Punta del Este to Doha and Beyond: Lessons from the trips Negotiating Process”, ssrn Electronic Journal, pg. 3, 2011. Available at https://www.researchgate.net/publication/228122380_From_Punta_Del_Este_to_Doha_and_Beyond_Lessons_from_the_TRIPS_Negotiating_Processes .

Hartridge David and Subramanian Arvind, “Intellectual Property Rights: The Issues in gatt ”, 22 Vanderbilt Journal of Transnational Law, pg. 894, (893–910), 1989.

Communication from Argentina, Chile, Brazil, China, Colombia, Cuba, Egypt, India, Nigeria, Peru, Tanzania and Uruguay, (later joined by Pakistan and Zimbabwe), mtn.gng/ng 11/ w /71 (14th May 1990).

Bradley Jane, “Intellectual Property Rights, Investment and Trade in Services in the Uruguay Round: Laying the Foundations.” 23 Stanford Journal of International Law, pgs. 57–98, 1987.

Stern Richard, “Intellectual Property” in Finger Michael and Olechowski Andrzej (eds.) “The Uruguay Round – A Handbook for the Multilateral Trade Negotiations”, World Bank publication pg. 205, 1987.

Christopher May, “A Global Political Economy of Intellectual Property Rights – The New Enclosures?”, Routledge pg. 86, 2000.

Anell Lars, “Keynote speech at the trips Symposium 26 February 2015” in Watal Jayashree and Taubman Antony (eds.), “The Making of the trips Agreement Personal Insights from The Uruguay Round Negotiations” wto , pg. 393, 2015. Also available at, https://www.wto.org/english/res_e/booksp_e/trips_agree_e/chapter_4_e.pdf .

Michael R. Gadbaw and Timothy J. Richards, “Intellectual Property Rights in the New gatt Round”, Westview Press, pg. 189, 1988.

Dwyer Amy, “Trade-Related Aspects of Intellectual Property Rights” in “The gatt Uruguay Round: A Negotiating History (1986–1994), Volume iv : “The End Game”, Stewart Terence (ed.), Kluwer Law International pg. 20–21, 1999. See, Ministerial Declaration on the Uruguay Round, gatt Doc. No. min (86)/ w/ 19 dec (20 September 1986) available at, https://www.wto.org/gatt_docs/English/SULPDF/91240226.pdf .

Cottier Thomas, “The Prospects for Intellectual Property in gatt ”, 28 Common Market Law Review, pg. 393, Kluwer Academic Publishers 1991.

Cottier Thomas, “The Prospects for Intellectual Property in gatt ”, 28 Common Market Law Review, pg. 393, Kluwer Academic Publishers 1991. See, Ministerial Declaration on the Uruguay Round, gatt Doc. No. min (86) /w/ 19 dec (20 September 1986) reprinted.

Although the wto was established in 1995, since all member countries were provided one year’s, transition under Article 65 to implement trips provisions into their domestic laws, it became effective in 1996. Article ii (2) of the wto Agreement, Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, gatt Doc. mtn/fa , 15, December 1993.

Under requirements of Article 65 (1) of the trips Agreement.

Under requirements of Article 65 (2) of the trips Agreement.

Ibid at 322.

Ross Julie and Wasserman Jessica, “The gatt Uruguay Round: A Negotiating History (1986–1994), Trade Related aspects of Intellectual Property Rights”, Volume ii : Commentary in Stewart Terence (ed. pg. 11, Kluwer Law, 1993).

Trade in Counterfeit Goods: Compilation of Written Submissions and Oral Statements, Prepared by the Secretariat, Doc. No. mtn.gng/ng 11/ w /23, 26th April, 1998. Reproduced in unctad – ictsd , “Resource Book on trips and Development”, Cambridge University Press, pg. 98, 2005.

Secretariat note dated 16th August 1989 of the Negotiating Group Meetings dated 3–4 July 1989, Doc. No. gng/ng 11/13 at para D7; Secretariat Note dated 12th September, 1989 of the Negotiating Group Meetings dated 12–14 July 1989, Doc. No. mtn.gng/ng 11/14 at paragraph 26.

Guidelines and objectives proposed by the European Community, Negotiating Group on trips , including Trade in Counterfeit Goods, Guidelines and Objectives Proposed by the European Community for the Negotiations on Trade-Related Aspects of Substantive Standards of Intellectual Property Rights, dated 7th July 1988, Doc No. mtn.gng/ng 11/ w /26, paragraph iii .D.3.b( i ).

Doc. No. mtn.gng/ng 11/ w /71 at paragraph 45.

Communication from Argentina, Brazil, Chile, China, Colombia, Cuba, Egypt, India, Nigeria, Peru, Tanzania and Uruguay, dated 14th May 1990, Doc No. mtn.gng/ng 11/14 at paragraph (1)( i ) for patents and 7(2) for trademarks.

Secretariat note dated 24th April, 1990 of the Negotiating Group Meetings dated 2nd, 4th and 5th April 1990, Doc. No. mtn.gng/ng 11/20. Reproduced in unctad – ictsd , “Resource Book on trips and Development”, Cambridge University Press, pg. 99, 2005.

Chairman’s report to the group negotiating on goods dated 23rd July 1990, Doc. No. mtn.gng/ng 11/ w /76.

See, Status of Work in the Negotiating Group, Chairman’s Report to the gng , gatt Doc. No. mtn.gng/ng 11/ w 76, July 18, 1990 reprinted.

unctad – ictsd , “Resource Book on trips and Development”, Cambridge University Press, pg. 101, 2005.

Status of Work in the Negotiating Group, Doc. Ref. No. 2341 (Oct. 1, 1990), See Amy S. Dwyer, “The gatt Uruguay Round: A Negotiating History (1986–1994), Trade Related aspects of Intellectual Property Rights, Volume iv : The End Game”, Terence P. Stewart (ed.) Kluwer Law International pgs. 30, 31, 1993.

Draft Agreement on the Trade Related aspects of Intellectual Property Rights: Communication from the United States, gatt Doc. mtn . gng/ng 11/ w /70, May 11, 1990.

Ibid at 322. Also see, Cottier Thomas, “Parallel Trade and Exhaustion of Intellectual Property in wto Law Revisited”, in Ruse Khan Grosse Henning & Metzger Axel (eds.), “Intellectual Property Ordering Beyond Borders”, Cambridge University Press, pgs. 193, 194 (189–232), 2022.

Brussels Draft, gatt Doc. No. mtn.tnc/w /35/Rev.1 (Dec. 3, 1990); also see Neff & Smallson, “ nafta : Protecting and Enforcing Intellectual Property Rights in North America 25 (1994)” – A comparison might be drawn here between trips and nafta negotiations to note that in both the US vehemently tried to install the mode of national exhaustion.

Reproduced in the unctad – ictsd , “Resource Book on trips and Development”, Cambridge University Press, pg. 102, 2005.

Reproduced in the unctad – ictsd , “Resource Book on trips and Development”, Cambridge University Press, pgs. 102–103, 2005.

Reinbothe Jörge & Howard Anthony, “The State of Play in the Negotiations on trips ( gatt /Uruguay Round)”, 5 eipr , pgs. 159–160, 1991.

Draft Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, gatt Doc. mtn.tnc/w/fa , Dec. 20, 1991.

Pugatch Meir, “The International Political Economy of Intellectual Property Rights: the trips Agreement and the Advanced Pharmaceutical Induarty in Europe”, Proquest llc ., pgs. 150, 2014.

Cottier Thomas, “The Value and Effects of Protecting Intellectual Property Rights within the World Trade Organization”, presentation to the Association Littéraire et Artistique Internationale ( alai ), Journée d’études, 27th & 28th June, 1984.

Chiapetta Vincent, “The desirability of Agreeing to disagree: The wto , trips , International ipr Exhaustion and a few other things”, in Introduction, 21 Michigan Journal of International Law pgs. 333, Spring 2000.

Taubman Antony, “A practical guide to working with trips ”, Oxford University Press 2011, page 85. Also see, Cottier Thomas, “Parallel Trade and Exhaustion of Intellectual Property in wto Law Revisited”, in Ruse Khan Grosse Henning & Metzger Axel (eds.), “Intellectual Property Ordering Beyond Borders”, Cambridge University Press, pg. 197 (189–232), 2022.

Gervais Daniel, “Exhaustion” in “The trips Agreement: Drafting History and Analysis”, Sweet & Maxwell, South Asian Edition, pg. 64, 2011.

Ibid at 5, pg. 100.

Preamble / Foreword to the Agreement on Trade Related Aspects of Intellectual Property Rights ( trips ).

wt/ds 50/ ab/r , 1997 para 57.

Yusuf Abdulqawi and Monacayo Andrés Hase, “Intellectual Property Protection and International Trade”, 16 World Competition, pg. 128, 1992.

Article 4 trips , “With regard to the protection of intellectual property, any advantage, favour, privilege or immunity granted by a Member to the nationals of any other country shall be accorded immediately and unconditionally to the nationals of all other Members. ”

Dutfield Graham and Sutherland Uma, “The international law and political economy of intellectual property”, in “Global Intellectual Property”, Edward Elgar Publishing Ltd. pgs. 34, 35, 2008. Also see, Cottier Thomas, “Parallel Trade and Exhaustion of Intellectual Property in wto Law Revisited”, in Ruse Khan Grosse Henning & Metzger Axel (eds.), “Intellectual Property Ordering Beyond Borders”, Cambridge University Press, pg. 200 (189–232), 2022.

Ibid 309, pgs. 172, 173.

Yamane Hiroko, “The trips Agreement de Lege Lata: The Outline”, in “Interpreting trips Globalisation of Intellectual Property Rights and Access to Medicines” Hart Publishing Ltd., pgs. 155, 156, (148–189), 2011. Also see, Cottier Thomas, “Parallel Trade and Exhaustion of Intellectual Property in wto Law Revisited”, in Ruse Khan Grosse Henning & Metzger Axel (eds.), “Intellectual Property Ordering Beyond Borders”, Cambridge University Press, pg. 217 (189–232), 2022.

Ibid at 122, pgs. 312, 313, (304–342).

Blakeney Michael, “Trade Related Aspects of Intellectual Property Rights: A Concise Guide to the trips Agreement”, Sweet & Maxwell, pg. 42, 1996.

Cottier Thomas, “The wto System and the Exhaustion of Intellectual Property Rights”, May 2000, Draft paper based on previous work presented to the conference on the Exhaustion of Intellectual Property Rights, ila Trade Law Committee, Geneva 6th & 7th November, 1998.

Bonadio Bonadio Enrico, “Parallel Imports in a Global Market: Should a Generalised International Exhaustion be the Next Step?”, 33 European Intellectual Property Review (3), pgs. 8, (153–161), 2011.

Article 9a : Federal Acts of Patents for Invention (Patents Act PatA) as on 1st April 2019. Available at, www.admin.ch/opc/en/classified-compilation/19540108/201904010000/232.14.pdf . Please also see, Ibid. at 5, pgs. 261, 262.

Bronckers Marco, “The Exhaustion of Patent Rights under wto Law”, 5 Journal of World Trade, pg. 142, 1998.

Ibid at 5, pg. 937.

Grigoriadis Lazaros, “Trademarks and Free Trade: A Global Analysis”, Springer, pg. 105, 2014.

Ibid at 376, pg. 143.

Ruse-Khan Henning Grosse, “The Protection of Intellectual Property in International Law”, Oxford University Press, pg. 2359, 2016.

Reichman Jerome, Okediji Ruth, Lianos Ioannis, Jacob Robin and Stothers Christopher, “The wto Compatibility of a Differentiated International Exhaustion Regime”, International Laboratory for Law and Development Research Paper Series, dated, pg. 20. Available at, http://www.eurasiancommission.org/ru/act/finpol/dobd/intelsobs/Documents/WTO%20Compartibility%20of%20Exhaustion%20Regimes_EEC_SkHSEreport.pdf .

Ibid at 5, pg. 27.

Ibid at 378, pg. 146.

Article 2, See https://wipolex.wipo.int/en/text/287556 .

Paris Convention for the protection of Industrial Property, see, https://www.unido.org/sites/default/files/2014-04/Paris_Convention_0.pdf .

Ruse-Khan Henning Grosse, “The Protection of Intellectual Property in International Law”, Oxford University Press, pg. 308, 313–315, 2016. See, European Communities – Protection of Trademarks and Geographical Indications for Agricultural Products and Foodstuffs case, See, https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=Q:/WT/DS/290R.pdf&Open=True .

The hag case in EU presents the established practice in trademarks long back. See, Case C 10/89, sa cnl – sucal nv v hag gf ag , ( http://curia.europa.eu/juris/showPdf.jsf?docid=96580&doclang=en ).

Japan – Taxes on Alcoholic Beverages case, wt/ds 8/ ab/r , wt/ds 10/ ab/r and wt/ds 11 / ab/r , of 4th October 1996 and Korea – Taxes on Alcoholic Beverages case, wt/ds 75/ ab/r , wt/ds 84/ ab/r of 18th January 1999.

Verma Surinder, “Exhaustion of Intellectual Property Rights and Free Trade – Article 6 of the trips Agreement”, 5 iic , pgs. 553, 554, 1998.

The ‘Unitary Patent’ system which is expected to come into effect from mid-2020 would enable patent protection to up to 26 EU Members through a single application. The Unified Patent Court expected to be set up as an international court would address the problem of parallel litigation. For more details please see, https://www.epo.org/law-practice/unitary/unitary-patent/start.html . However, it should also be noted that the unitary patent mechanism needs to be ratified in minimum of 13 countries of the EU and at present it has been challenged before the German Constitutional court. The fate of wide adoption of the unitary patent would be influenced by the German court in mid-2020.

Dhanjee Rajan and Chazournes Laurence de Boisson “Trade Related Aspects of Intellectual Property Rights ( trips ): Objectives, Approaches and Basic Principles of the gatt and of Intellectual Property Conventions”, 24 Journal of World Trade, pg. 12, 1990.

Rodrigues Edson Beas Jr., “The general exception clauses of the trips Agreement Promoting Sustainable Development” Cambridge University Press, pgs. 62, 63 (46–64), 2012.

Article 7 states: The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to balance of rights and obligations.

Article xx (d) states, “Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures: … (d) necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Agreement, including those relating to … the protection of patents, trademarks and copyrights.” Explained in details in the next chapter.

Mattoo Aaditya and English Philip (eds.), “Benefiting from Intellectual Property Protection” in, “Development, Trade, and the wto – A Handbook”, The World Bank, Washington D.C., pg. 369, 2002.

Here Article 4bis of the Paris Convention might be referred to, which clearly lays down the principle of territoriality but it must be carefully noted that it does not deal in the exhaustion of rights.

Demaret Paul & Govaere Inge, “Parallel Imports, Free Movement and Competition Rules! The European Experience and Perspective”, in Cottier Thomas and Mavroidis Petros (eds.), “Intellectual Property: Trade, Competition, and Sustainable Development”, The University of Michigan Press, pg. 158, 2003.

Straus Joseph, “Implications of trips Agreement in the field of Patent Law”, in Beier and Shricker edited, “From gatt to trip s – The Agreement on Trade – Related Aspects of Intellectual Property Rights”, 18 Studies International Review of Industrial Property and Copyright Law ( iic ), Max Planck Institute, Munich, pgs. 191, 192, 1996.

Footnote to Article 28 (1) (a) , “This right, like all other rights conferred under this Agreement in respect of the use, sale, importation or other distribution of goods, is subject to the provisions of Article 6 .

Pires de Carvalho Nuno, “The trips Regime of Patent Rights”, Kluwer Law International, pg. 104–105, 2002.

Gallus Nick, “The Mystery of Pharmaceutical Parallel Trade and Developing Countries”, 7 (2) The Journal of World Intellectual Property, pgs. 170, 169–182, 2004.

Osterrieth, “Die Hager Konferenz” 1925, Leipzig 1926, 37: S. Ladas, Patents, Trademarks and Related Rights, Cambridge (Mass.) 11975, 505, cited in Heath Christopher.

Ibid at 190, pg. 628, (623–632).

Harvey Bale James, “The conflicts between parallel trade and product access and innovation: The case of pharmaceuticals”, Journal of International Economic Law, pg. 638, 1998.

Abbott Frederick, “Parallel trade in pharmaceuticals: trade therapy for market distortions”, in Calboli Irene and Lee Edward (eds.), “Research handbook on Intellectual Property Exhaustion and Parallel Imports”, Edward Elgar Publishing Ltd., pg. 159 (145–165), 2016.

Soltysinski Stanislaw, “International Exhaustion of Intellectual Property Rights under the trips , the ec Law and the European Agreements”, 4 grur Int., pg. 317, 1996.

Gitter M. Donna, “International conflicts over patenting human dna sequences in the United States and the European Union: An argument for compulsory licensing and a fair use exception”, 76, New York University Law Review 6, pg. 1690, 2001. Available at, https://www.nyulawreview.org/wp-content/uploads/2018/08/NYULawReview-76-6-Gitter.pdf .

https://www.wto.org/english/tratop_e/trips_e/factsheet_pharm02_e.htm#art30 .

Canada – Patent Protection for Pharmaceutical Products , wt/ds 114/ r (2000). See, https://www.wto.org/english/tratop_e/dispu_e/7428d.pdf .

Daya Shankar, “Access to medicines, Article 30 of trips in the Doha Declaration and an Anthropological Critique of International Treaty Negotiations”, Deakin University – Bowater School of Management and Marketing, 2003. Available at, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=391540 .

This position has been widely been propagated as a policy option by Medicines sans Frontier. See, https://msfaccess.org/why-article-30-will-work-why-article-31-will-not .

Correa Carlos, “Intellectual Property Rights, the wto and Developing Countries – The trips Agreement and Policy Options”, Zed Books Ltd., pg. 84, 2000.

Schovsbo Jens, “Fire and water make steam – redefining the role of competition law in trips ”, in Kur Annette and Levin Marianne (eds.), “Intellectual Property Rights in a fair world trading system”, pgs. 326, 327, (308–358), 2011.

See, https://wipolex.wipo.int/en/text/287556 .

Article 30 (b) states, “such use may only be permitted if, prior to such use, the proposed user has made efforts to obtain authorization from the right holder on reasonable commercial terms and conditions and that such efforts have not been successful within a reasonable period of time. This requirement may be waived by a Member in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use. In situations of national emergency or other circumstances of extreme urgency, the right holder shall, nevertheless, be notified as soon as reasonably practicable. In the case of public non-commercial use, where the government or contractor, without making a patent search, knows or has demonstrable grounds to know that a valid patent is or will be used by or for the government, the right holder shall be informed promptly;” and Article 30 (f) states, “any such use shall be authorized predominantly for the supply of the domestic market of the Member authorizing such use.”

Roffe Pedro and Spennemann Christoph, “Control of Anti-competitive Practices in Contractual Licenses under the trips Agreement”, Kluwer Law, pgs., 322, 323, 324 (293–329), 2008.

Article 40 , “1. Members agree 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. 2. Nothing in this Agreement shall prevent Members from specifying in their legislation licensing practices or conditions that may in particular cases constitute an abuse of intellectual property rights having an adverse effect on competition in the relevant market. As provided above, a Member may adopt, consistently with the other provisions of this Agreement, appropriate measures to prevent or control such practices, which may include for example exclusive grant-back conditions, conditions preventing challenges to validity and coercive package licensing, in the light of the relevant laws and regulations of that Member.”

Article 40 , “3. Each Member shall enter, upon request, into consultations with any other Member which has cause to believe that an intellectual property right owner that is a national or domiciliary of the Member to which the request for consultations has been addressed is undertaking practices in violation of the requesting Member’s laws and regulations on the subject matter of this Section, and which wishes to secure compliance with such legislation, without prejudice to any action under the law and to the full freedom of an ultimate decision of either Member. The Member addressed shall accord full and sympathetic consideration to, and shall afford adequate opportunity for, consultations with the requesting Member, and shall cooperate through supply of publicly available non-confidential information of relevance to the matter in question and of other information available to the Member, subject to domestic law and to the conclusion of mutually satisfactory agreements concerning the safeguarding of its confidentiality by the requesting Member. 4. A Member whose nationals or domiciliaries are subject to proceedings in another Member concerning alleged violation of that other Member’s laws and regulations on the subject matter of this Section shall, upon request, be granted an opportunity for consultations by the other Member under the same conditions as those foreseen in paragraph 3.”

Ibid at 107.

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Jeff Mason is a White House Correspondent for Reuters. He has covered the presidencies of Barack Obama, Donald Trump and Joe Biden and the presidential campaigns of Biden, Trump, Obama, Hillary Clinton and John McCain. He served as president of the White House Correspondents’ Association in 2016-2017, leading the press corps in advocating for press freedom in the early days of the Trump administration. His and the WHCA's work was recognized with Deutsche Welle's "Freedom of Speech Award." Jeff has asked pointed questions of domestic and foreign leaders, including Russian President Vladimir Putin and North Korea's Kim Jong Un. He is a winner of the WHCA's “Excellence in Presidential News Coverage Under Deadline Pressure" award and co-winner of the Association for Business Journalists' "Breaking News" award. Jeff began his career in Frankfurt, Germany as a business reporter before being posted to Brussels, Belgium, where he covered the European Union. Jeff appears regularly on television and radio and teaches political journalism at Georgetown University. He is a graduate of Northwestern University's Medill School of Journalism and a former Fulbright scholar.

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