Intellectual Property Rights

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The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) recognizes that widely varying standards in the protection and enforcement of intellectual property rights and the lack of multilateral disciplines dealing with international trade in counterfeit goods have been a growing source of tension in international economic relations. With that in mind, the agreement addresses the applicability of basic GATT principles and those of relevant international intellectual property agreements; the provision of adequate intellectual property rights; the provision of effective enforcement measures for those rights; multilateral dispute settlement; and transitional implementation arrangements.

Part I of the agreement sets out general provisions and basic principles, notably a national-treatment commitment under which nationals of other members must be given treatment no less favourable than that accorded to a member's own nationals with regard to the protection of intellectual property. It contains a most-favoured-nation clause under which any advantage a member gives to the nationals of another member must normally be extended to the nationals of all other members, even if such treatment is more favourable than that which it gives to its own nationals.

Part II addresses different kinds of intellectual property rights. It seeks to ensure that adequate standards of intellectual property protection exist in all members countries, taking as a starting point the substantive obligations of the main pre-existing conventions of the World Intellectual Property Organization (WIPO) - namely, the Paris Convention for the Protection of Industrial Property and the Berne Convention for the Protection of Literary and Artistic Works (copyright). It adds a significant number of new or higher standards where the exuisting conventions were silent or thought inadequate

With respect to copyright, the agreement ensures that computer programs will be protected as literary works under the Berne Convention and outlines how data bases should be protected.

An important addition to existing international rules in the area of copyright and related rights is the provision on rental rights. Authors of computer programmes and producers of sound recordings have the right to authorize or prohibit the commercial rental of their works to the public. A similar exclusive right applies to films where commercial rental has led to widespread copying which is materially impairing the right of reproduction. Performers are protected from unauthorized recording, reproduction and broadcast of live performances (bootlegging) for no less than 50 years. Producers of sound recordings must have the right to prevent the reproduction of recordings for a period of 50 years.

The agreement defines what types of signs must be eligible for protection as trademarks or service marks and what the minimum rights conferred on their owners must be. Marks that have become well-known in a particular country enjoy additional protection. The agreement identifies a number of obligations for the use of trademarks and service marks, their terms of protection, and their licensing or assignment. For example, requirements that foreign marks be used in conjunction with local marks will, as a general rule, be prohibited.

In respect of geographical indications, members must provide means to prevent the use of any indication which misleads the consumer as to the origin of goods, and any use which would constitute an act of unfair competition. Higher levels of protection are provided for geographical indications for wines and spirits, which are protected even where there is no danger of the public's being misled as to the true origin. Some exceptions are allowed, for example for names which are generic terms, but any country using such an exception must be willing to negotiate to protect the geographical indication in question. Further negotiations are foreseen to establish a multilateral system of notification and registration of geographical indications for wines.

Industrial designs are protected under the agreement for a period of 10 years. Owners of protected designs must be able to prevent the manufacture, sale or importation of articles bearing or embodying a design which is a copy of the protected design.

As for patents,the agreement requires that 20-year patent protection be available for all inventions, whether of products or processes, in almost all fields of technology. Inventions may be excluded from patentability if their commercial exploitation is prohibited for reasons of public order or morality; otherwise, the permitted exclusions are for diagnostic, therapeutic and surgical methods, and for plants and (other than microorganisms) animals and essentially biological processes for the production of plants or animals (other than microbiological processes). Plant varieties, however, must be protectable either by patents or by a sui generis system (such as the breeder's rights provided in the conventions of UPOV - the International Union for the Protection of New Varieties of Plants). Detailed conditions exist for compulsory licensing or governmental use of patents without the authorization of the patent owner. Rights conferred in respect of patents for processes must extend to the products directly obtained by the process; under certain conditions alleged infringers may be ordered by a court to prove that they have not used the patented process.

With respect to the protection of layout designs of integrated circuits, members are to provide protection on the basis of the Washington Treaty on Intellectual Property in Respect of Integrated Circuits opened for signature in May 1989, but with a number of additions: protection must be available for a minimum period of 10 years; the rights must extend to articles incorporating infringing layout designs; innocent infringers must be allowed to use or sell stock in hand or ordered before learning of the infringement against a suitable royalty; and compulsory licensing and government use is only allowed under a number of strict conditions.

Trade secrets and know-how which have commercial value must be protected against breach of confidence and other acts contrary to honest commercial practices. Test data submitted to governments in order to obtain marketing approval for pharmaceutical or agricultural chemicals must also be protected against unfair commercial use.

The final section in this part of the agreement concerns anti-competitive practices in contractual licences. It recognizes the right of members to take measures in this area and provides for consultations between governments where there is reason to believe that licensing practices or conditions relating to intellectual property rights constitute an abuse of these rights and have an adverse effect on competition. Remedies against such abuses must be consistent with the other provisions of the agreement.

Part III of the agreement concerns enforcement. It sets out the obligations of member governments to provide procedures and remedies under their domestic law to ensure that intellectual property rights can be effectively enforced. Procedures must permit effective action against infringement of intellectual property rights and should be fair and equitable, not unnecessarily complicated or costly, and should not entail unreasonable time-limits or unwarranted delays. They must allow for judicial review of final administrative decisions and, generally, of initial judicial decisions.

The civil and administrative procedures and remedies spelled out in the text include provisions on evidence, provisional measures, injunctions, damages and other remedies which would include the right of judicial authorities to order the disposal or destruction of infringing goods. Memebers must also provide for criminal procedures and penalties at least in cases of wilful trademark counterfeiting or copyright piracy on a commercial scale. Remedies must include imprisonment and/or fines sufficient to act as a deterrent. In addition, members must provide a mechanism whereby rights holders can obtain the assistance of customs authorities to prevent the importation of counterfeit and pirated goods.

With respect to transition arrangements, the agreement envisages a one-year period for developed countries to bring their legislation and practices into conformity. Developing countries and, in general, transition economies must do so in five years and least-developed countries in 11 years.

Developing countries which do not at present provide product patent protection in an area of technology have up to 10 years to introduce such protection. However, in the case of pharmaceutical and agricultural chemical products, they must accept the filing of patent applications from the beginning of the transitional period, though the patent need not be granted until the end of this period. If authorization for the marketing of the relevant pharmaceutical or agricultural chemical is obtained during the transition period, the developing country concerned must, subject to certain conditions, provide an exclusive marketing right for the product for five years, or until a product patent is granted, whichever is shorter.

Subject to certain exceptions, the general rule is that obligations in the agreement apply to existing intellectual property rights as well as to new ones.

A Council for Trade-Related Aspects of Intellectual Property Rights monitors the operation of the agreement and governments' compliance with it.