trips agreement member countries

Twenty-five years since TRIPS: Patent policy and international business

• Published: 12 October 2020
• Volume 3 , pages 315–328, ( 2020 )

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• Suma Athreye 1 ,
• Lucia Piscitello 2 , 3 &
• Kenneth C. Shadlen 4  

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In this introduction to the special issue, we take stock of the impact of the TRIPS agreement on international business in the hyper-globalised world of the late twentieth and early twenty-first century. We begin by providing a brief background on TRIPS, putting it in the historical context of international agreements on intellectual property (IP) and then looking at the logic of national patent policies, examining how policies may vary across countries, in theory, and reviewing literature that discusses the factors driving historical variation, in practice. We review the key issues in the domestic politics of implementation as the new rules migrate from the international to national levels. Lastly, we consider the implications of TRIPS for the governance of innovations in industries based on ICT and where ICT has enabled global value chains (GVCs), where the speed and distributed nature of innovation makes IPR simultaneously less effective and more necessary.

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Introduction

The Uruguay Round of trade negotiations, which began in 1986 and concluded in 1994 with the signing of the Marrakesh Agreement by all 123 negotiating countries, was notable for numerous reasons, including the formal integration of intellectual property rights into international trade rules. When the World Trade Organization (WTO) was launched in 1995, a product of the Uruguay Round, one of its main pillars would be the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

TRIPS is not the first international agreement on intellectual property (IP); the Paris Convention (patents), Madrid System (trademarks), and Berne Convention (copyright) have existed since the late 1800s.Yet TRIPS can be understood as marking a fundamental break in a variety of ways. TRIPS is much deeper and more granular, placing external constraints on many more dimensions of national IP policy than previous agreements had. Beyond establishing shared commitments to basic principles, as previous international accords had done, TRIPS, in a detailed set of articles, includes specific prescriptions and proscriptions for national policy. 1 Notwithstanding its title, TRIPS addresses national IP measures regardless of whether these are “trade-related.” TRIPS is also stronger and more binding than previous agreements, as the costs of non-compliance are substantial. Because the inclusion of TRIPS in the WTO means that it is subject to the WTO’s dispute settlement system, which authorizes trade sanctions as a penalty against countries judged to be in violation of its rules, failure to abide by the rules can have economically painful consequences. The establishment of extensive and binding rules on national IP policy marks a shift from “international” to “global” IP governance (Maskus, 2014 ; Drahos, 1997 ) and, importantly, a major step toward global harmonization of national policies and practices for establishing and protecting intellectual property rights.

This Special Issue presents papers examining 25 years since TRIPS came into effect, in January 1995. In these two and a half decades, much has changed in the global innovation landscape. Technology trade has flourished and more technology has been transferred to subsidiaries by MNEs (Branstetter et al., 2006 ). Although IB theories emphasize the role of innovation and technological change in originating and strengthening the competitive advantages of the MNE, IB scholarship has focused mostly on considering IPR regulations as a location advantage/disadvantage (e.g., Ivus, Park & Saggi, 2017 ), or an institutional factor (e.g., Peng, Ahlstrom, Carraher, & Shi, 2017 ; Peng, 2013 ) interacting with MNE strategies. Through this Special Issue, our aim is to champion research analysing the contribution of IP harmonization to processes of technology transfer, policy-making, capability building and challenges to governance. Assessing the TRIPS experience to highlight what has worked well and what has not can offer new insights and lessons.

In this Introduction, we take stock of the impact of TRIPS on international business in the hyper-globalised world of the late twentieth and early twenty-first century. We begin by providing a brief background on TRIPS, putting it in the historical context of international agreements on IP. We then look at the logic of national patent policies, examining how policies may vary across countries, in theory, and reviewing literature that discusses the factors driving historical variation, in practice. The following section discusses the international campaign that produced the TRIPS Agreement and considers key issues in the domestic politics of implementation as the new rules migrate from the international to national levels. We then look more closely at the implications of TRIPS for industries based on ICTs and where governance of GVCs feature prominently. The final section introduces the papers in the Special Issue, placing each of them in the broader debates and themes discussed in this Introduction.

A Brief Primer on TRIPS

One of the remarkable aspects of TRIPS is how it expanded over time during the course of the Uruguay Round. 2 What was originally advanced as a global accord against counterfeiting after years of negotiation ended up being a comprehensive agreement covering a wide range of IP policies. As the content expanded, the axes of political conflict shifted as well. Although, at the time of the Uruguay Round’s launch, divisions over whether to include IP on the agenda were largely of a “North-South” nature, once this hurdle was cleared, subsequent negotiations on substantive issues revealed “North-North” divisions as well.

This dynamic was notable, for instance, in the area of IP for pharmaceuticals. Many developing countries tried to block the inclusion of IP on the Uruguay Round negotiating agenda, maintaining that IP and trade rules should be kept separate, and having failed to keep IP off the agenda they mobilized their efforts to resist the inclusion of the provision that would require countries to allow patents on pharmaceuticals products. After all, prior to the 1990s, few developing countries did so. Though developing countries lost this fight too, 3 the specifics of this requirement (for example, transition periods and whether this should be done retroactively), and more generally the rules about how countries should treat IP in pharmaceuticals, were produced by extensive negotiations and compromise, not only between North and South, the original antagonists, but also among countries in the North. Most European countries, for example, had only recently (since the late 1970s) begun to allow patents on pharmaceuticals, and they too were grappling with the consequences of this change and were resistant to some of the proposals made by countries where pharmaceutical patenting was longer established (Taubmann & Watal, 2015 ; Reichman, 2009 ; Matthews, 2002 ).

As much as the content of TRIPS expanded during the Uruguay Round, the world’s changes outpaced it. The establishment of the European Common Market in 1993 altered (or reflected on-going shifts in) the political and economic strategies of many European countries, and the balance of power within international organizations. The collapse of the Berlin Wall and the dissolution of the Soviet Union (as well as that of Yugoslavia), and thus the end of communism and state-planning in most of Central, Eastern, and South-Eastern Europe, meant that a large group of additional countries would now seek to attract foreign investment, participate in international trade, and, more generally, integrate into the global economy. 4 At the same time, many developing countries abandoned industrial planning and policies of import-substituting industrialization, reduced barriers to imports and foreign investment, and also sought greater integration into the global economy. And, of course, China, the world’s most populous country, also underwent a major reorientation of economic strategy in this period; though not a participant in the Uruguay Round negotiations, by the time the WTO was launched in 1995, China, which eventually became a WTO member in 2001, was already emerging as an industrial powerhouse.

The worlds of business and technology were also markedly different by the end of the Uruguay Round than they had been at the start. The spread of new technologies of ICT began to gather steam and ultimately ushered in a new phase in the development of industry and global production largely dominated by increasing fragmentation of production and global value chains (GVCs). For the leading industrial countries strident in their demand for stricter IP protection, the TRIPS provisions had few safeguards for the new technology sectors that were emerging, such as software, AI, and telecommunications. Patent and copyright policies towards the new ICT industries, and their relation to competition policy, remain contentious areas where consensus has yet to evolve. In some sectors marked by globalization of production and the presence of GVCs, TRIPS has been almost redundant and supplanted by standards and cooperative agreements over essential patents as the mode of governance of innovation and appropriability. The emergence of digital commerce created new challenges and forms of conflict that TRIPS was unable to address (Azmeh, Foster, & Echavarri, 2020 ; Haggart, 2014 ). International labour mobility has also brought a slew of new issues to consider such as trade secrets and espionage activity. Thus TRIPS, though the most comprehensive international IP agreement, was in some ways born outdated, having to cope with new realities that were unforeseen at the start of – and even during most of – the Uruguay Round.

National Patent Policies in Theory and Practice

Standard economic theory as outlined in Scotchmer ( 2004 ) argues that optimal (patent) incentive polices will differ when we consider the national or international context. In a domestic context, the optimal patent policy tries to balance benefits that accrue to consumers and producers, mainly by addressing the question: how much monopoly profit should the innovator be allowed in order to maximise the social welfare that society as a whole may derive from a new invention? Phrasing the question in this way recognises that pricing under patenting will be higher due to the implicit monopoly granted by the patent and as such will produce a deadweight loss to society as a whole because of the restriction of output and the higher price borne by consumers (Nordhaus, 1969 ). As a consequence, economic thinking about patents is also dominated by market share arguments and the societal lack of welfare due to the monopoly granted by patents. Indeed, economic theory since Schumpeter has long recognized that patents (and IP protection, more generally) can have both dynamic effects, by creating incentives for innovation, and static and deadweight losses, by allowing patent-owners to charge monopoly prices. The optimal patent policy tries to balance these two effects, and thus the benefits that accrue to producers of innovations and users of innovations. 5

In establishing national patent systems, three levers are available to the government to strike this delicate balance between producer and social welfare interests. These are the scope of patentability, which defines the boundaries of what types of knowledge are eligible for private ownership; the exemptions to property rights, which define the relative rights of owners versus users; and the duration of patents, which establishes the time when privately owned knowledge enters the public domain. 6 In the paragraphs that follow we briefly discuss each of the three levers, though before doing so it is worth noting simply that the first lever, which affects the establishment of the IPR, is the most important of the three in a gatekeeper sense, as the abilities of owners to exercise such rights and how long they may do so are relevant only in the context of there being a property right.

Regarding “scope,” patents are available for inventions and not available for products of nature, but countries may differ in their determinations of what knowledge fits within each of these categories. More concretely (and less philosophically), countries may declare that certain types of knowledge, even if “inventions,” are nevertheless ineligible for patent protection. As noted above, the area of pharmaceuticals provides an example: new molecules and compounds are “inventions,” but until the late 1970s only a handful of countries allowed pharmaceutical products to obtain patents (Liu & LaCroix, 2015 ; Shadlen, Sampat, & Kapczynski, 2020 ).

Related to the scope of patentability is the “breadth” of patents, which regards the number and type of claims that are allowed. Broad patents allow the producer to profit from subtle product differentiation and make it more difficult for potential competitors to “invent around the patent” and enter the market upon achieving such differentiation (Merges & Nelson, 1990 ). Until the late 1980s Japan stood out among advanced economies for having a patent system that imposed narrow breadth, restricting patents on a single claim (Ordover, 1991 ). For the most part, patent breadth is determined through office practices and jurisprudence, and not a matter of policy per se.

A second lever concerns exemptions to patent rights. With intellectual property, which is based on non-rivalrous material, consumers and other producers beyond the owners (i.e., “third parties”) typically are allowed more rights to use the privately-owned knowledge than is the case with ordinary property. Patent systems will always have provisions that set out and delimit such rights. Some of these will be established as automatic exemptions that do not depend on permission from the rights-holder or the State, such as research use, or preparing products for commercial launch upon expiration of the patent. Other exemptions, which are non-automatic, require the State to grant permission to private or public actors to use patented knowledge without the owner’s consent, as is the case with a compulsory license. Although pharmaceuticals is the area where we observe the most amount of action with regard to compulsory licensing, as discussed by Ramani and Urias in this SI, other sectors where such exemptions play an important part include semiconductors (chip manufacturers need to experiment with various chips to create their own) and seed producers (they need to experiment with seeds in order to create new hybrids). 7

The final lever of national policies, the duration of patents, is also the clearest: longer-lasting patents allow producers to charge monopoly prices (and thus earn greater profits) for a longer time, while consumers in the economy pay higher prices for longer periods of time. Note, however, that in sectors with rapid technological change, the length of the patent is less consequential than it might seem if inventions become obsolete well before their patents expire.

The discussion of the three levers allows us to conclude that countries’ IP systems afford “stronger” protection when they allow more types of knowledge to be patented, the exemptions to owners’ private rights of exclusion are fewer, and they last longer. Indeed, we could, at least theoretically (subject to data constraints), use these dimensions to compare the strength of all countries’ patent systems across time and space. 8

Having explained how patent policies may differ in theory, the next question is what factors account for variation in practice. Scholars have argued that IP institutions are endogenous to the growth process and acquire prominence with the growth of technological capacity, and strong IPR in earlier stages of development can prove to be barriers to the development of technological capability and innovation, rather than act as incentives. As countries acquire more innovative capabilities and their scientific and industrial sectors expand, and as their firms move closer to the technological frontier, the case for stronger IP protection often follows (Sweet & Eterovic, 2019 ; Sweet & Maggio, 2015 ; Kalaycı & Pamukçu, 2014 ; Acemoglu, Aghion, & Zilibotti, 2006 ).

Accordingly, a substantial body of research has shown that countries’ choices of how strong to set the level of protection in their IP systems have, historically, been a function of domestic conditions, such as levels of income, industrial structure, and scientific-technological capabilities. In general, countries seeking to catch-up with wealthier and more technologically advanced countries tended to offer weaker IP protection to facilitate the use of foreign knowledge and information, and subsequent strengthening of IP tended to reflect changes in these same characteristics. Indeed, the close relationship between national conditions and IP policies has long been demonstrated (Chen & Puttitanun, 2005 ; Lerner, 2000 ; LaCroix & Liu, 2009 ; Maskus, 2000 , 2012 ; May & Sell, 2006 ). The Netherlands and Switzerland had no patent systems in the 19 th and much of the 20 th centuries (Schiff, 1971 ); the German patent system was only established in 1870. And even as countries had patent systems, some areas of knowledge remained off limits, and the rights of exclusion were moderated. In the USA, although a patent system to protect inventions was mandated in the first article of the constitution, throughout much of the 19 th century, protection for inventions originating abroad remained weak (Peng et al., 2017 ; Mowery, 2010 ; Khan, 2005 ). 9 As noted, not until the late 1980s did Japan offer stronger patent protection, rather it was designed to maximize the diffusion of knowledge and maximize opportunities for local actors to develop technological capabilities (Ordover, 1991 ). For many late-developing countries, IP policies featuring weak patent protection were fundamental to their industrialization strategies (Kim et al., 2012 ; Odagiri, Goto, Sunami, & Nelson, 2010 ; Kumar, 2002 ).

This scenario of national variation in patent policies was a function of a permissive international environment. That is, prior to TRIPS, international rules were based on the principle that different approaches to IP made sense in different countries depending on national conditions. Indeed, international rules on patents, which established a framework for an international patent system (e.g., rules on priority dates) but imposed few substantive obligations on countries, explicitly accommodated cross-national diversity. In the next section, again focusing on patents, we explain the major shift in global governance, from the Paris Convention to TRIPS.

The International Political Economy of Harmonization: From Paris Convention to TRIPS

The most important provision of the Paris Convention regards “national treatment,” which requires countries to afford foreign inventors the same opportunities and rights as those available to national inventors. But this is extremely limited. National treatment equalizes treatment at whatever level the country chooses, but it does not address the level of treatment. That is, in the language of the three levers of policy discussed above, national treatment does not say that countries should allow patents over given types of knowledge, or limit exemptions in particular ways, or have longer-lasting patents, but rather that if they do grant patents in particular technological classes, with particular rights of exclusion attached for a given period of time, they must treat foreign inventors the same as they treat national inventors. If a country does not offer strong patent protection, national treatment simply means that no one receives strong patent protection in that country.

From the perspective of firms in information- and knowledge-intensive industries which sought stronger protection on a global scale, the Paris Convention was clearly inadequate. They wanted to raise the bar across the globe, establishing international arrangements that would encourage harmonization at a higher level of IP protection. Starting in the late 1970s and early 1980s, these firms, both on their own and through their sectoral associations, mobilized intensively in the US and Europe to create a new international arrangement, with the key step being to link IP rules to international trade (Sell, 2003 , 2010 ; Ryan, 1998 ; Drahos, 1995 ). In doing so, they made achieving stronger IP protection a key feature of American and European foreign economic policy in this period.

The USA first linked IP practices to trade in 1984, with a reform of the Trade Act that defined “unfair” trade to include IP practices that did not meet US standards. The punishments attached to transgressions could range from trade sanctions imposed under Section 301 to withdrawal of preferential market access provided by the General System of Preferences. Then, in 1988, just as the Uruguay Round discussions on IP were picking up pace, the US Trade Act underwent a further amendment, this time creating a new mechanism that was specifically about IP. Starting in 1989, the United States Trade Representative (USTR) began issuing an annual “Special 301” Report, essentially a global report card that evaluated all countries’ IP practices and placed those judged to be problematic on the “Watch List” or “Priority Watch List.” As countries were placed on the Watch List and then escalated to the Priority Watch List, the threat of penalties increased, and when a country was identified as a “Priority Foreign Country,” the USTR was obligated to initiate proceedings to apply sanctions. 10

Not surprisingly, many countries that were most resistant to IP negotiations in the Uruguay Round were targeted directly by the USTR. Unilateral pressures of this sort not only brought many hesitant countries to the negotiating table, but made agreement on a multilateral set of rules more attractive too (Odell, 2006 ; Drahos, 1995 ; Bayard & Elliott, 1994 ; Bhagwati & Patrick, 1990 ). When the WTO was launched in 1995, the agreement on IP, TRIPS, was included.

TRIPS took international IP rules to an entirely new level, by calling for harmonization at a level closer to what was available in wealthier countries. 11 Its aims extended far beyond reciprocal national treatment of foreign inventions to the harmonization and strengthening of IP systems in the world. In the quest for stronger protection, TRIPS addressed each of the levers of national policy. It called for wider scope, requiring patents to be granted in all fields of technology; it tried to restrict the range of allowable exemptions to patent rights; and it established longer terms for patents, requiring terms of 20 years from the date of application.

This new approach to IP did not respect where particular countries were in their national evolution, but sought to construct a uniform system of protection that could support a global market for trade in technology goods. Low and middle-income countries who were net buyers of technology, were fearful that stronger protection at home would increase profit flows to foreigners. International profit flows depended upon the relative size of domestic markets and the relative sizes of country innovative capacities. Thus, countries with smaller national markets and countries with stronger innovative capacities (most high-income countries) generally favoured stronger protection, but countries with larger markets and weak innovative capacities resisted. Middle and Low-income countries who opposed TRIPS were in the latter group.

It is important to underscore that the WTO was concluded as a “single undertaking,” meaning that all members were subject to all of its agreements. As a result, even countries that resisted TRIPS ended up as parties to – and bound by – it. Thus, once the Uruguay Round was concluded and the new WTO’s rules came into effect in 1995, countries began revising their national laws to come into conformity with TRIPS (and other WTO agreements). In other words, WTO member states moved from a period of TRIPS negotiation to TRIPS implementation (Shadlen, 2017 ; Deere, 2008 ). In this context, with participation in the international trading system conditioned on being in compliance with TRIPS, the question that countries faced was not if but how they would comply with the new international agreement.

Although TRIPS established harmonization, it did not create a world of uniform patent policies and levels of patent protection. That is, a set of countries could all be in compliance with TRIPS yet all demonstrate differences in the details of their national IP systems. The reasons for this are twofold. First, TRIPS is not a self-executing body of law, but rather an agreement that prescribes and proscribes different practices, leaving matters of implementation to countries. For example, TRIPS establishes a set of conditions that should be met in granting compulsory licenses, but how these conditions are operationalized in national patent systems (What sort of behaviour by patent owners constitute grounds for compulsory licenses? Can the Ministry of Health act on its own? Does there need to be a health emergency, and, if so, how is it determined and who declares it?) was left to be determined locally. This means that TRIPS left countries with policy options (Commission on Intellectual Property Rights, 2002 ; Correa, 2000 ), and countries could – and did – comply with TRIPS differently. Second, TRIPS for the most part addressed laws, not so much enforcement practices. That means that not only may countries differ de jure (e.g., the three policy levers, or the details of the compulsory licensing rules), but also de facto due to the enforcement of their new laws. And evidence suggests substantial gaps between de jure and de facto levels of IP protection (Maskus, 2000 ; Shadlen, Schrank, & Kurtz, 2005 ). One recent study (Papageorgiadis & McDonald, 2019 ) shows that de jure IP protection departs significantly from the de facto IP protection for several middle- and low-income countries. Figure  1 is from their paper and shows the two dimensions of de jure and de facto IPR on the two axes. 12

Country plot of 48 patent systems in the post-TRIPS year 2005 using the annual scores of two indices of patent law on the books and patent law in practice. Source: Papageorgiadis and McDonald ( 2019 ), Figure  2 .

Although attention on lax enforcement has often focussed on China, China is not alone. Figure  1 reveals similar gaps between laws on the books and laws in practice in many other emerging economies, such as Argentina, Mexico, the Philippines, and Turkey, as well as India, Russia and Brazil (many of these countries initially opposed the TRIPS agreement). Indeed, as pointed out in Athreye, Martelli and Piscitello ( 2020 ), one can discern two groups of countries – those for whom de jure and de facto IPR move in the same direction (a positive relation) and a smaller group of middle income countries for whom the two are compensatory (a negative relation). 13

As we examine the dynamics of TRIPS implementation at the national level, both introducing and enforcing new laws, it is worth underscoring how the new international agreement altered the nature of domestic politics by imbuing technology-intensive sectors with new authority and importance. This happened in much the same way as Baldwin ( 2016 ) argues the reciprocity principle in GATT helped shift political interests to create a juggernaut of tariff cutting behaviour across nations. Prior to TRIPS, national patent policies were shaped largely by strong consumer groups and import substituting industrial sectors. Innovators (actual, fledgling, and aspiring) rarely had large and direct say in the drawing up of national IP policies, which in many developing countries were not designed to encourage innovation so much as to assure that knowledge, information, and technologically-intensive goods were accessible to consumers and as inputs to local industry. By forcing shifts in national policies toward stronger IP protections, TRIPS served as an exogenous shock that changed the distribution of incomes between innovative and non-innovative business groups. 14 Once stronger IP protection was implemented, innovative businesses/sectors gained from the new arrangements while businesses that relied on the previous arrangements experienced shrinking margins and some even left non-innovative lines of business. This changed the balance of political power with the two groups in ways that became self-reinforcing, as in subsequent political conflicts over IP, it was now the more innovation-focused sets of actors in business (and also within the state) that hold the upper hand. And the preferences of actors changed too. Faced with a new status quo , some actors that opposed TRIPS adjusted to the new environment and began to see opportunities where they previously felt only threats. When this happened, they revised their political strategies and were likely to seek alliances with actors that had supported the introduction of new arrangements (Sinha, 2016 ; Shadlen, 2011 ).

New Technologies of ICT, GVC Governance and TRIPS

In the spectrum of goods to which the provision of TRIPS could apply, scholarly attention has focussed sharply on goods with externalities, such as access to medicines and climate change technologies where the stronger monopoly enabled by TRIPS was obviously to the detriment of many poorer nations and poor consumer in richer nations. The adoption of TRIPS, however, came before the full impact of the newly emerging ICTs was felt. Consequently, the ICT sectors themselves and the ICT-mediated global value chains faced challenging governance issues shaped by the uncertainty of IP rights and in some cases, these were sorted out through sectoral innovations in the governance of IP rights.

Improvements in ICTs and rapid globalisation created unprecedented opportunities for the fragmentation of global value chains by reducing the transaction costs of exchanging information and communication across different stages of production. The best example of the changing industrial organization of production is the car industry, which moved from being a monolithic Fordist assembly line to gradual vertical disintegration along component lines. Today the car we drive has engine and components sourced from different parts of the world and includes improvements due to R&D conducted in different countries. Ghemawat ( 2007 ) ascribes this development to the globalization of markets being accompanied by the globalization of production. Thus, in many sectors of industrial activity, firms today select the best location for every value chain activity, either at home or abroad, and whether inside or outside organizational boundaries (Alcacer, Cantwell, & Piscitello, 2016 ).

As ICTs allow higher-quality information to be more readily accessed through a greater diversity of potential channels (Rangan & Sengul, 2009 ); market-based transactions and outsourcing are favoured and the use of ICT tends to reduce the extent to which facilities are owned by the MNE (Zaheer & Manrakhan, 2001 ). Thanks to IT-enabled integration capabilities, the fragmentation of processes across units allows firms to exploit complementarities between dispersed fragments, to vary their information-protection approach according to the specific institutional context of each host country, and to (selectively) develop a differentiated use of internal controls over activities performed abroad (Gooris & Peeters, 2016 ). On the other hand, better quality of IPR institutions in host countries facilitates intra-firm knowledge transmission by MNEs to their affiliates (Branstetter et al., 2006 ), and shifts the organisational mode towards outsourcing by reducing the need for integration to hedge against knowledge dissipation and opportunistic behaviour by the supplier/local unit.

One important consequence of the new possibilities opened up by GVCs is that attention has shifted from market share arguments (based on the economic efficiency of IP policies) toward property-based arguments that highlight the role of IP in facilitating technology trade and the emergence of disintegrated, specialized technology markets (Spulber, 2021 ; Barnett, 2011 ; Arora, Fosfuri & Gambardella, 2001 ; Athreye, 1997 ). The greater is the use of specialized markets, the greater the need for IP to enable transactions across them. This is shown in Figure  2 , adapted from Barnett ( 2011 ), which illustrates the different IP requirements of the integrated and disintegrated industrial organization models. The first model in Figure  2 represents the classical case of R&D-based innovation to produce a technology product (as in the case of big pharma). But the next two models represent different realities of subcontracting and vertically disintegrated supply chain models, with the second and the third being representations of sectors like Semiconductors or the new Biopharma. What is interesting is the more IP-intensive nature of the second and third models shown by the shaded boxes, which involve IP-based technology transfer activities. The more points at which IP transactions occur as technology is handed over for further processing to create the final product, the more patent-intensive is the final product. Having patents protecting these stages reduces transactions costs. The higher the division of labour in R&D, the more the scope for such IP transactions. However, this IP is for the most part protecting very small market shares as each stage involves a number of different operators.

Use of IP in integrated and disintegrated supply chains. Source By authors, based on Figure 4 in Barnett ( 2011 : 821)

ICTs, due to the higher use of patents in more fragmented value chains, increased the scope for TRIPS-like provisions. This is the case even in those sectors like telecommunications where it is not immediately obvious that patents are always the most effective means for protection as technology is changing so rapidly. Widespread patent ownership created other issues – such as the difficulty of new innovations in the presence of fragmented patent ownership (patent thickets) and blockage to innovation that is cumulative. In these instances, sectors have come up with their own institutional innovations such as patent pooling to permit cross –licensing of fragmented patent ownership into a single contract in ICT and the use of Fair, Reasonable, and Non-discriminatory licensing of essential patents (FRAND) to allow scaled up manufacturing in telecommunications. The effect of these institutional innovations in the governance of IP on globalization of R&D and production is sadly an understudied but important subject.

Although Figure  2 does not distinguish between domestic and foreign operations, we can speculate that MNEs’ strategic choices also influenced the effects and trajectories of IP policies in different countries (Bessen & Meurer, 2008 ). The global fragmentation of value chains is associated with multidirectional flows of information and knowledge across the entities involved in the international network of MNEs (Markus, Sia, & Soh, 2012 ) and weak IPR protection increases the risk of information leakage and misappropriation (e.g., Martinez-Noya & Garcia-Canal, 2011 ). Successful GVC integration requires a dense circulation of information flows to communicate specifications, standards and technical know-how in addition to costs and other items (Gereffi, Humphrey, & Sturgeon, 2005 ). Within this context, lead firms need to weigh the advantages of disaggregating the production process and the cost reduction this can bring against the risk of losing control over some of their proprietary intangible assets. Thus, lead firms engaged in GVC trade are interested in stricter IPRs in trade agreements to contain the risk of IP appropriation resulting from the international fragmentation of production. However, in order to circumvent the difficulty of using formal IP protection channels and to find other ways to enforce IPRs without limiting the scope of GVC activity, other mechanisms for the management of IP are increasingly emerging, mainly based on the attempt to move beyond legal procedures. Strategies such as a finer slicing of the processes (Gooris & Peters, 2016 ), or a sort of holistic approach using Corporate Social Responsibility to enforce stricter IPR standards along the chains (Gillai, Rammohan, & Lee, 2014 ), or the actions aiming at fostering “a culture of IP protection and compliance” throughout the global supply chain are all becoming mainstream (WIPO, 2017 ).

On the flip side, many middle-income countries that aspired to move up the technological ladder and build their own domestic capabilities, could see a new path to growth through participation in GVCs if they were willing to embrace the tougher IP demands in TRIPS. For example, as MNEs became willing to locate their production in different countries, industrialists in these countries (hoping to become part of a global value chain) were also willing to conform to the IP standards required by the MNE – often with more stringent enforcement (Brandl et al., 2019 ). In fact, the tightening of IP regulations and the deeper integration between countries through regulatory standards convergence (Rodrik, 2018 ) goes in parallel with the expansion of GVC trade (Timmer et al., 2014 ). This has led authors like Chang ( 2002 ) to protest that the stronger and better institutions for development demanded of developing countries today was not fair but an attempt to “kick away the ladder” to prevent developing countries from joining the elite club of developed nations. However, China’s rise shows us that if the government/firms were prepared to make the R&D investments, then strong IP need not be a deterrent to technological growth in lower income countries. Indeed, China’s rapid growth today and the effect of its prosperity on the growth of other Middle and Low-income countries is testament to the success of such strategies, although as Gomory and Baumol ( 2001 ) predict, such a strategy can create conflicts when the incumbent countries feel that their market share is threatened.

The growing role of intangible assets (technology, design and branding) in production is increasingly reflected in the growing share of intangible assets in the value of final products in international trade (Durand & Milberg, 2020 ; WIPO, 2017 ; Timmer et al., 2016 ). Hsieh and Rossi-Hansberg ( 2020 ) attribute this to a second industrial revolution in services sectors due to which productivity in services has been raised by ICTs in a manner similar to what machines and mechanical engineering did during the first industrial revolution. Furthermore, lead firms in GVCs are increasingly focussing on the intangibles, while outsourcing the tangibles to their partners in Middle and Low-income countries. As a consequence, more protection of intangibles is being demanded under the ambit of TRIPS such as protection for data, trademarks and copyrights. Sectors that have greater intangible capital – whether because of technological knowledge or consumer goodwill (brands) – are also able to earn more by judiciously choosing their location strategies.

Twenty-Five Years of TRIPS: Scope of the Special Issue Papers

There is a growing recognition in the IB literature that institutions are not always exogenous and instead co-evolve with firms: as the behaviour of firms starts changing, institutions start adapting as well (Athreye, 2020 ; Cantwell, Dunning, & Lundan, 2010 ; Peng et al., 2017 ). However, the imposition of TRIPS and the acceptance of seemingly stringent agreements and the shift to stronger IP for Middle and Low-income countries was exogenously driven. Once the status quo changed and the new institutions were in place, actors did change their strategies and new political possibilities emerged (as was discussed earlier).

The papers in this special issue in one way or another describe the various strategies used to drive policy in the national implementation stage of the TRIPS agreement. One way in which a more nuanced use of harmonised IPR could emerge is through the drafting of more detailed IP chapters in Preferential Trade Agreements (PTAs) between countries. The paper by Christoph Mödlhamer argues that the innovative capacity of states that are members of a preferential agreement shapes demand for IPRs in the PTA. Innovative economies that rely on IP generation favour IPRs because IP-reliant industries press for IPR inclusion when governments negotiate PTAs with less innovative economies. By contrast, PTAs between non-innovators remain sparse in IPR provisions because few industries on either side demand IPR. Analyzing novel data on IPR provisions in 495 PTAs signed between 1988 and 2018, he shows that heterogeneity in PTA members’ innovativeness indeed increases the inclusion of IPR clauses in PTAs. His findings help to understand preferences towards IPRs in PTA negotiations and shed light on reasons for varying numbers of IPR inclusions, while offering a refinement of the conventional wisdom that adds to our understanding of PTA design.

In general, these findings on IP chapters of PTAs are consistent with Gamso and Grosse ( 2020 ). They find that deep PTAs with provisions such as investor-state dispute settlement mechanisms and property rights protections provide signals that are especially important to investors in countries where property rights are weak, as the extra protections provided by a deeper agreement can substitute for those that are missing at the domestic level. Empirically, they find that PTA depth is positively associated with FDI between member countries, but the association weakens as property rights laws in host countries increase in strength. Thus, they conclude that governments can attract higher levels of FDI through comprehensive trade agreements, as opposed to shallow PTAs, when domestic policies are not sufficient. However, shallow agreements suffice where domestic policy already protects property rights.

For many countries, another obvious way to prioritize national interest is to weaken the ‘national treatment’ principle in enforcement. A growing body of work has demonstrated anti-foreign bias in patent grants by offices around the world such as the JPO (Helfgott, 1990 ), EPO (Kotabe, 1992 ) and SIPO (Brander, Cui & Vertinsky, 2017 ). Though most of this evidence shows correlation rather than causation, if true it is a repudiation of the ‘national treatment’ principle, which as we noted earlier was a central pillar of the Paris Convention and TRIPS.

The paper by Rassenfosse and Hosseini, using data for the USPTO, shows that inventions of foreign origin are about ten percentage points less likely to be granted a patent than domestic inventions, which suggests discrimination against foreigners. Why does such discrimination exist? They distinguish between intentional and unintentional discrimination. Intentional discrimination relates to disparate treatment of a specific group of applicants, whereas unintentional discrimination arises when policies, practices, and rules have disparate impacts on a specific group of applicants. Their analysis shows that the bias against foreigners is largely the result of unintentional discrimination and can be explained by differences in patent agents used by foreigners and locals, the financial resources of the applicants, and the level of effort that applicants put into the prosecution process. Thus, the story they tell is about disparate impact (due to better financial resources) rather than disparate treatment.

The paper by Petit, van Pottelsberghe de la Potterie and Gimeno-Fabra disagrees with the results presented by Rassenfosse and Hosseini and argues that tests of the national treatment argument should be conducted not on grant rates (which may be influenced by more adverse market conditions facing the foreign applicant) but on the examination process. The examination process is defined as the work carried out by the patent examination office (to assess if an application fulfils the legal patentability conditions), which is assumed to be (mostly) independent from economic forces. Testing for national bias within the examination process relies on the fact that patent offices are legally required to justify each decision they publish through concrete and transparent evidence. As a result, discriminatory behaviours from patent offices should show up in the way applications are processed. Using this alternative empirical approach to test for national bias at the EPO, the JPO, and the USPTO, and through a unique database that quantifies the key patent examination processes and find no evidence of national bias throughout the work of three patent offices (WIPO, EPO and USPTO). 15

The paper by Ramani and Urias reviews the use of the much-publicized TRIPS flexibility – compulsory licensing for public health – in middle and low-income countries. Compulsory licensing is considered an important policy instrument to make medicines affordable in countries where a pharmaceutical industry does not exist or where stronger TRIPS provisions on product patents are likely to increase the prices of medicines placing then out of the reach of a large segment of the population in many low and middle income countries. Based on a systematic review of the existing evidence on the impact of compulsory licensing on drug prices, Ramani and Urias identify 24 instances of compulsory licensing in 8 countries – which is a very limited use of this much touted flexibility. They attribute this limited use to the very restrictive scope for the use of compulsory licensing in the TRIPS provisions.

Comparing pre- and post-compulsory licensing prices, their paper finds that a compulsory licensing event is likely to reduce the price of a patented drug, although public knowledge of the extent of price drop is poor. Further, they find compulsory licensing procurement from the international market is likely to be more effective in reducing drug prices than contracts to local companies. Interestingly, their findings are reconfirmed in the race to improve access to the antiviral medication Remdesivir for hospitalized COVID-19 patients, based on information that is publicly available. Clearly, the future incidence and impact of compulsory licensing will depend on further possible procedural refinements to ease its implementation, the development of technological and manufacturing capabilities in developing countries, and the importance of biologics among life-saving drugs. COVID-19 could prove a pivotal moment in redefining this flexibility and enabling its wider use.

Finally, Abinader’s in-depth analysis of pharmaceutical patenting in the Dominican Republic, a country that does not ordinarily receive much attention in the literature on IP, sheds light on what conformity with TRIPS looks like in practice. The paper allows us to observe patent prosecution in a developing country where substantive examination is new. The finding of low grant rates, not just for more questionable “secondary” patents but also for “primary” patents covering active ingredients suggests that, TRIPS-driven harmonization notwithstanding, domestic politics and state institutions continue to cast a substantial influence over de facto levels of patent protection.

Although the papers in this issue do not cover all aspects of international business since TRIPS, we hope some of the issues noted in this Introduction and in the included papers will create a rich menu of future options for research on TRIPS and patent policy by IB scholars.

TRIPS is also wider in that it covers more areas of IP. In addition to patents, trademarks, and copyright, TRIPS also addresses geographical indications, industrial designs, integrated circuits, and plant varieties.

Watal and Taubam ( 2015 ) provide a fascinating account of the process of negotiation and its twists and turns.

TRIPS Article 27, on “Patentable Subject Matter,” in its first paragraph states that “patents shall be available for any inventions, whether products or processes, in all fields of technology….”

Many of the post-communist countries eventually joined the European Union, contributing to its expansion from 15, at the time the WTO was founded, to 28 by the mid-2000s (and 27 after the United Kingdom’s departure in 2020).

It is also widely acknowledged that patents are not the only way to spur innovative R&D, and that complements include government funding and prizes. Governments have supplemented national patent policies with prizes in areas where solutions are needed e.g., the Longitude prize in 1714 by the UK government to solve the problem of determining the precise longitude of a ship, as this was causing deaths at sea. The Longitude prize has recently been re-established in 2012 around six challenge areas. See Scotchmer ( 2004 ) and David ( 1993 ) for more discussion of the array of incentives.

While conceptually these are three distinct policy levers, they are related to each other in their effects. For example, a patent system that, in terms of scope, allows multiple versions of similar inventions to be eligible for protection, may de facto offer longer periods of patent protection if the multiple patents are filed sequentially.

Cahoy ( 2011 ) provides detailed history and discussion of compulsory licensing in areas beyond pharmaceuticals.

Examples of indices along these lines include Park ( 2008 ) as a general measure, Campi and Nuvolari ( 2020 ) for agricultural technologies, Liu and La Croix ( 2015 ) for pharmaceuticals.

A prominent example of this was not recognising the Bessemer patent for steel production, granted in the UK.

Although Priority Foreign Country designation is meant to trigger the process leading to trade sanctions, countries can be sanctioned without ever being labelled as such.

The Paris Convention continues to be the reference for coordinating procedures on how patents are applied for and the respect of priority dates, for example.

The axes in Figure  1 are better thought of as “strength” of patent systems, following the earlier discussion in this paper, than “quality.” After all, for poorer countries with minimal innovative capabilities, a patent system that provides extensive rights of exclusion over a wide array of knowledge may not be of high “quality.”

While the assumption in the literature is that weak enforcement will lead to IP protection being weaker “in practice” than what’s promised “on the books,” the inverse can also be true. Some countries have patent provisions that, though designed to reduce the level of protection (within the constraints imposed by TRIPS), are under-enforced, yielding levels of “in practice” that are greater that what’s “on the books.” See Sampat and Shadlen ( 2015 , 2018 ).

Rodrik ( 2020 ) makes a similar point.

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Athreye, S., Piscitello, L. & Shadlen, K.C. Twenty-five years since TRIPS: Patent policy and international business. J Int Bus Policy 3 , 315–328 (2020). https://doi.org/10.1057/s42214-020-00079-1

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28 Jun 2020    Working Papers Van den Bossche, Peter L.H.

The TRIPS Agreement and WTO Dispute Settlement: Past, Present and Future

WTI Working Paper No. 02/2020 by Peter Van den Bossche

In 2020, the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (‘TRIPS Agreement’) marked its 25th anniversary. There was, however, little reason for celebration. The COVID-19 pandemic had plunged the world economy in an unprecedented crisis. In April 2020, the IMF predicted that global GDP would contract by as much as 3 per cent in 2020, and the WTO forecasted that the volume of world trade would decline in 2020 between 13 and 32 per cent depending on the how long the health crisis would last and how governments would respond to the economic impact of the crisis. Even the decline under the best-case ‘13 per cent’ scenario would still be the steepest decline on record. However, global trade and the multilateral trading system, of which the TRIPS Agreement is one of the pillars, was in crisis already before any of us had heard of the new corona virus or considered ‘social distancing’ a civil duty (rather than deviant behavior). Global trade in goods declined in 2019 by 3 per cent in value terms and global trade in commercial services grew by a paltry 2 per cent only.

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Trade related aspects of IP rights

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) came into force in 1995, as part of the Agreement Establishing the World Trade Organization (WTO). TRIPS incorporates and builds upon the latest versions of the primary intellectual property agreements administered by the World Intellectual Property Organization (WIPO), the Paris Convention for the Protection of Industrial Property, and the Berne Convention for the Protection of Literary and Artistic Works, agreements that go back to the 1880s.

TRIPS is unique among these IPR accords because membership in the WTO is a "package deal," meaning that WTO members are not free to pick and choose among agreements. They are subject to all the WTO's multilateral agreements, including TRIPS. 

TRIPS applies basic international trade principles to member states regarding intellectual property, including national treatment and most-favored-nation treatment. TRIPS establishes minimum standards for the availability, scope, and use of seven forms of intellectual property: copyrights, trademarks, geographical indications, industrial designs, patents, layout designs for integrated circuits, and undisclosed information (trade secrets). It spells out permissible limitations and exceptions in order to balance the interests of intellectual property with interests in other areas, such as public health and economic development. (For the complete text of the TRIPS Agreement, as well as an explanation of its provisions, see the WTO web site at www.wto.org .)

According to TRIPS, developed countries were to have implemented the agreement fully by January 1, 1996. Developing-country members and members in transition to a market economy were entitled to delay full implementation of TRIPS obligations until January 1, 2000. Least-developed members were given until January 1, 2006, to implement their obligations, with the possibility of further transition upon request. Developing countries that did not provide patent protection for particular areas of technology on their date of application were given an additional five years, until January 1, 2005, to provide such protection. In November 2005, the 2006 transition period for least-developed countries was extended to July 1, 2013.

At the 2001 WTO Ministerial Conference in Doha, least-developed countries were given an additional 10 years to implement TRIPS patent and "undisclosed information" provisions as they relate to pharmaceuticals. In July 2002, the WTO General Council agreed to waive the obligations of least-developed countries concerning exclusive marketing rights for pharmaceutical products until January 1, 2016.

Because the TRIPS Agreement is over a decade old, however, it does not address several new developments, such as the Internet and digital copyright issues, advanced biotechnology, and international harmonization, the process of creating uniform global standards of laws or practice. It sets the floor for minimum IPR protection, not the ceiling.

Since the conclusion of the TRIPS Agreement, the World Intellectual Property Organization has addressed digital copyright issues in the so-called Internet Treaties, namely the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT).

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The Role of the TRIPS Agreement in International Intellectual Property Protection

Introduction.

The Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement , established under the auspices of the World Trade Organization (WTO), stands as a pivotal instrument in the realm of international intellectual property (IP) protection. Enacted in 1994, the TRIPS Agreement marked a significant turning point by integrating intellectual property concerns into the framework of global trade. This article delves into the multifaceted role of the TRIPS Agreement, exploring its origins, key provisions, impact on international trade, and its evolving relevance in the contemporary landscape of intellectual property protection.

Historical Context

To comprehend the importance of the TRIPS Agreement, it is crucial to understand the historical context that led to its creation. Before the establishment of the WTO, international trade agreements lacked a comprehensive framework for addressing intellectual property issues. The Uruguay Round of trade negotiations, conducted from 1986 to 1994, sought to rectify this gap by developing a unified approach to intellectual property on a global scale.

The TRIPS Agreement emerged as a landmark achievement during the Uruguay Round, as it marked the first time that intellectual property rights were systematically integrated into the international trading system. The agreement aimed to strike a balance between the interests of developed and developing countries, recognizing the need for protection and the imperative of fostering innovation and economic development.

Key Provisions of the TRIPS Agreement

The TRIPS Agreement comprises a set of provisions that outline the minimum standards for the protection and enforcement of various forms of intellectual property. These standards cover patents, trademarks, copyrights, trade secrets, and other related rights. Some of the key provisions include:

a. Patent Protection

The TRIPS Agreement mandates member countries to provide patent protection for inventions, both products and processes, across all fields of technology. The agreement establishes a minimum patent term of 20 years from the filing date and delineates the criteria for patentability, including novelty, inventiveness, and industrial applicability.

b. Copyright and Related Rights

The agreement addresses copyright protection , requiring member countries to grant authors exclusive rights over their literary, artistic, and musical works. It also covers related rights, such as those of performers, producers of phonograms, and broadcasting organizations. The minimum copyright term is set at 50 years, with flexibility for longer terms.

c. Trademarks

TRIPS mandates the protection of trademarks, requiring member countries to provide a minimum level of protection for registered trademarks. This includes the prohibition of the unauthorized use of identical or similar signs for identical or similar goods and services.

d. Enforcement Mechanisms

The TRIPS Agreement establishes enforcement mechanisms to ensure the effective protection of intellectual property rights. It includes provisions for civil and administrative procedures, provisional measures, and border measures to prevent the entry of counterfeit goods.

Impact on International Trade

The TRIPS Agreement significantly impacts international trade by integrating intellectual property considerations into the broader framework of the WTO. Intellectual property rights have become a vital aspect of global commerce, influencing trade patterns, investment decisions, and technology transfer. The following aspects highlight the impact of the TRIPS Agreement on international trade:

a. Technology Transfer

One of the primary objectives of the TRIPS Agreement is to promote the transfer of technology between developed and developing countries. By establishing a minimum standard of intellectual property protection, the agreement seeks to create a conducive environment for the flow of technology and knowledge across borders.

b. Market Access and Investment

Intellectual property protection, as mandated by the TRIPS Agreement, has become a crucial factor in market access and foreign investment decisions. Countries with robust intellectual property regimes are often perceived as more attractive for foreign investment, as companies seek to protect their innovations and technologies in jurisdictions with effective legal frameworks.

c. Dispute Resolution

The TRIPS Agreement provides a mechanism for dispute resolution within the WTO framework. Member countries can bring disputes related to intellectual property rights violations to the WTO Dispute Settlement Body , fostering a rules-based approach to resolving conflicts and ensuring compliance with TRIPS obligations.

Challenges and Criticisms

While the TRIPS Agreement has undoubtedly played a pivotal role in harmonizing international intellectual property standards, it has not been without challenges and criticisms. Some of the key issues raised include:

a. Access to Medicines

One of the most contentious issues relates to the impact of the TRIPS Agreement on access to essential medicines, particularly in developing countries. Critics argue that stringent patent protection can hinder the production and availability of affordable generic medicines, posing a barrier to public health initiatives.

b. Technology Transfer Disparities

Despite the intention to promote technology transfer , the TRIPS Agreement has been criticized for exacerbating disparities in technology access between developed and developing nations. The capacity of developing countries to fully engage in research and development may be constrained by the need to adhere to stringent intellectual property standards.

c. Flexibility and Policy Space

Developing countries have advocated for greater flexibility and policy space within the TRIPS framework to address their unique developmental needs. This includes the ability to adopt measures such as compulsory licensing and the limitation of exclusive rights in certain situations to balance public health concerns and industrial development.

Evolving Relevance in the Contemporary Landscape

As the global landscape continues to evolve, the relevance of the TRIPS Agreement remains a subject of ongoing debate. Several factors contribute to its evolving significance:

a. Technological Advancements

Rapid advancements in technology, especially in fields like biotechnology and digital innovation, pose new challenges for intellectual property regimes. The TRIPS Agreement, crafted in the pre-digital era, may need to adapt to address emerging issues such as artificial intelligence, blockchain, and gene editing.

b. Public Health Imperatives

The ongoing global health challenges, such as the COVID-19 pandemic, have reignited discussions about the balance between intellectual property protection and public health imperatives. The TRIPS Agreement has faced calls for temporary waivers of certain intellectual property rights to facilitate widespread access to vaccines and treatments.

c. Sustainable Development Goals

The United Nations’ Sustainable Development Goals (SDGs) emphasize the importance of balancing economic growth with social and environmental considerations. The TRIPS Agreement is increasingly viewed through the lens of its impact on sustainable development, requiring a nuanced approach to intellectual property that considers broader societal goals.

Future Prospects and Potential Reforms

As the international community grapples with the challenges and opportunities presented by the TRIPS Agreement, discussions about potential reforms and future prospects have gained momentum. Some areas of consideration include:

a. Flexibility and Development

Future reforms could focus on enhancing flexibility within the TRIPS framework to accommodate the diverse needs and development priorities of member countries. This may involve revisiting certain provisions to strike a more equitable balance between intellectual property protection and development objectives.

b. Access to Medicines

The debate surrounding access to medicines is likely to persist, with ongoing discussions about the role of intellectual property in responding to public health emergencies. Reforms could explore mechanisms to ensure timely and affordable access to critical medical technologies during health crises.

c. Technology Transfer and Capacity Building

Efforts to facilitate technology transfer and capacity building, especially for developing countries, could be a key area for future reforms. Collaborative initiatives, partnerships, and international cooperation may be promoted to address the technology gap between nations.

The TRIPS Agreement stands as a landmark in the history of international intellectual property protection, reshaping the landscape of global trade and innovation. While it has played a crucial role in establishing minimum standards for the protection of intellectual property, challenges and criticisms persist. As the world grapples with evolving technologies, public health crises, and sustainable development

goals, the TRIPS Agreement faces the imperative of adapting to meet the needs of a rapidly changing global landscape. The ongoing discourse surrounding the agreement underscores the importance of finding a delicate balance between protecting intellectual property rights and addressing broader societal imperatives in the pursuit of a more equitable and sustainable future.

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Advice on Flexibilities under the TRIPS Agreement

Under the Paris Convention , the national treatment principle allowed for what was usually called the "asymmetries", i.e., the adoption of different standards of protection by different countries in accordance with different levels of national development (provided national treatment was secured). The TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement of the World Trade Organization (WTO) established minimum standards of protection that each government has to give to the IP of fellow WTO members, thus limiting the former scope for flexible national approaches.

However, the TRIPS Agreement incorporates certain "flexibilities." These aim to permit developing and least-developed countries to use TRIPS-compatible norms in a manner that enables them to pursue their own public policies, either in specific fields like access to pharmaceutical products or protection of their biodiversity, or more generally, in establishing macroeconomic, institutional conditions that support economic development.

Government offices in charge of drafting laws frequently request advice from WIPO regarding how to use the TRIPS flexibilities so as to accommodate particular national interests or resolve issues that are specific to their countries. Advice is provided only after careful consideration of the flexibilities, TRIPS-consistency and their legal, technical and economic implications. The ultimate decision regarding the choice of legislative options lies exclusively with each individual Member State.

The WIPO Secretariat, in tandem with Member States, has identified four clusters of flexibilities:

Flexibilities as to the method of implementing TRIPS obligations

These result from the language of Article 1.1 of the TRIPS Agreement. Under these flexibilities, WTO Members can exploit creative solutions to transpose into national law and practice those concepts that the TRIPS Agreement simply enunciates but does not define. Examples of those flexibilities include concepts such as novelty and inventiveness; or of situations of extreme urgency for the purposes of compulsory licenses.

Flexibilities as to substantive standards of protection

These flexibilities can operate either downward or upward, i.e. they may permit measures that reduce or limit the rights conferred; or measures that raise the level of protection above the minimum standards established by the TRIPS Agreement. (The latter are sometimes referred to as TRIPS plus).

Examples of the former are the introduction of exceptions to rights conferred (such as experimental use and the "Bolar" exceptions; and the limitation to the use of trademarks in packages and advertisement of products considered prejudicial to health, like alcohol and tobacco).

Examples of raising the level of protection are the introduction of temporary protection of industrial property rights before the grant of protection; the extension of the term of patents to compensate for delays in granting the marketing approval of products; or the extension of the scope of patentability and/or registrability of trademarks beyond the minimums established, respectively, by Articles 27 and 15 of the TRIPS Agreement.

 Flexibilities as to mechanisms of enforcement

In the field of enforcement, the TRIPS Agreement (in Part III)

• identifies the mechanisms that Members are obliged to adopt in order to make enforcement rights available to IP owners; and
• prohibits Members from adopting stricter measures against defendants than those that are established.

Nevertheless, Members can resort to their own legal system and practices to implement enforcement obligations. WTO Members are, for example, free to maintain their own judicial system. They also can use enforcement measures to implement flexibilities as to the standards of protection.

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TRADE-RELATED ASPECT INTELLECTUAL PROPERTY RIGHTS (TRIPS) AGREEMENT

• by Manish Kumar
• July 31, 2023
• 18 minutes read
• 9 months ago

Table of Contents

Introduction

In today’s era, the world is becoming familiar with several intellectual inventions which are impacting the relations of one another. The TRIPS agreement, created in 1995 by the WTO, addresses international trade intellectual property rights. This agreement was formed to set standards for protecting and implementing trade rights in different countries. As the TRIPS agreement is an important part of promoting trade, resolving disputes and having fair trade practices.

What is Trade and International Trade?   

Trade is the exchange of goods and services between two or more parties. While International Trade means the trade between two independent sovereign nations.

What is Intellectual Property Rights (IPR)?

“Intellectual Property shall include rights relating to literary, artistic, and scientific works, discoveries throughout all areas of human endeavor, scientific advances, industrial design rights, trademarks, service marks, and commercial names and designations, protection against unfair competition,” states Article 2 of the WIPO (World Intellectual Property Organization) – Central Organization for the Protection of Intellectual Property laws and the UN expert organization.

IP is intangible assets of individual mind’s creation. It includes artistic expressions, signs, symbols and names used in commerce, designs and inventions. IPR is legal right given to individual for their creation. The WTO’s TRIPS agreement recognizes the necessity of IP in international market as IPR are valued and exchanged. IP rights give their owners rights to exclude others from making use of their creations only for a limited period. IP rights entitle the owners to receive a royalty or any sort of financial compensation or payment when another person uses their creations [1] .

There are two types of IPR:

• Industrial Property

Details of TRIPS and its Agreement

TRIPS originated in the Uruguay Round of GATT trade negotiations, leading to the WTO’s establishment in 1995. It aimed to address concerns about inadequate intellectual property protection and enforcement. TRIPS introduced minimum standards for various forms of IP and sought to balance protection with innovation and fair trade. It also established dispute settlement mechanisms. Additionally, TRIPS shaped global IP norms, influenced domestic laws, and spurred discussions on public health, access to medicines, and traditional knowledge. It is a crucial international framework for IP protection and enforcement.

What is TRIPS?   

TRIPS stands for Trade-Related Aspects of Intellectual Property Rights. The TRIPS agreement is a WTO-administered international agreement setting minimum standards for IP protection among member countries. TRIPS covers various forms of IP, including patents, copyrights, trademarks, industrial designs, and trade secrets. Moreover, It aims to establish a balance between protecting IP rights and promoting innovation, technology transfer, and fair international trade. TRIPS also provides a framework for dispute resolution and encourages cooperation among nations in the field of intellectual property. [2]

Before the establishment of the WTO, the leading international agreements under WIPO were the Paris Convention for the Protection of Industrial Property (covering patents, industrial designs, etc.) and the Berne Convention for the Protection of Literary and Artistic Works (covering copyright). However, these agreements did not cover all areas of intellectual property, and in some cases, the prescribed standards of protection were considered insufficient. The TRIPS Agreement was introduced to supplement these existing international standards and significantly enhance the level of intellectual property protection globally.                            

What is Agreement on TRIPS?

The TRIPS Agreement was established in 1995 as part of the World Trade Organization (WTO) agreement. It sets forth minimum standards for the availability, scope, and use of various forms of intellectual property, including trademarks, copyrights, geographical indications, patents, industrial designs, layout designs for integrated circuits, and undisclosed information or trade secrets. Moreover, It applies to all member states of the WTO and incorporates fundamental international trade principles regarding intellectual property.

One of the key aspects of the TRIPS Agreement is the provision of exceptions and limitations that strike a balance between the interests of intellectual property and those of public health and economic development. Additionally, This agreement plays a significant role in facilitating trade in creativity and knowledge, resolving trade disputes related to intellectual property, and providing WTO members with the flexibility to pursue their domestic policy objectives. It also outlines the importance of innovation, technology transfer, and public welfare within the framework of the intellectual property system.

The administration and monitoring of the TRIPS Agreement is the responsibility of the TRIPS Council. The agreement was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) from 1986 to 1994. It is often referred to as a “Berne and Paris-plus” Agreement, signifying its extension beyond the provisions of the Berne Convention for the Protection of Literary and Artistic Works and the Paris Convention for the Protection of Industrial Property. [3]

Issue govern by TRIPS Agreement [4]

Majorly 3 types of issue is governed under this agreement

• Standards: Member states must establish minimum criteria for protecting intellectual property rights (IPRs) in each covered category, including subject matter, granted rights, exceptions, and minimum duration of protection.
• Enforcement: The Agreement covers domestic enforcement processes and remedies for intellectual property rights, including rules on civil, administrative, and criminal proceedings, provisional measures, border requirements, ensuring effective exercise of right holders’ rights.
• Dispute resolution: WTO member disputes on TRIPS Agreement responsibilities are resolved through the WTO’s dispute resolution processes.

Objective and importance of TRIPS

Objective: To promote and defend intellectual property rights to facilitate technology transfer, fair international trade, and innovation. Establish guidelines, enforce procedures, support developing nations, encourage global cooperation, and balance IP protection with public interests and economic development. [5]

Importance: The TRIPS Agreement, a treaty among WTO member countries, aims to safeguard intellectual property rights by setting minimum standards of protection. It encourages innovation, economic growth, and job creation while providing a legal framework for enforcement and combating piracy. It promotes a level playing field for international trade in intellectual property rights, benefiting all WTO members. [6]

Parts of TRIPS Agreement

• PART I GENERAL PROVISIONS AND BASIC PRINCIPLES:- Deals with Article 1 to 8
• PART II STANDARDS CONCERNING THE AVAILABILITY, SCOPE AND USE OF INTELLECTUAL PROPERTY RIGHTS:- Deals with Article 9 to 40
• PART III ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS:- Deals with Article 41 to 61
• PART IV ACQUISITION AND MAINTENANCE OF INTELLECTUAL PROPERTY RIGHTS AND RELATED INTER-PARTES PROCEDURES:- Deals with Article 62
• PART V DISPUTE PREVENTION AND SETTLEMENT:- Deals with Article 63 to 64
• PART VI TRANSITIONAL ARRANGEMENTS:- Deals with Article 65 to 67
• PART VII INSTITUTIONAL ARRANGEMENTS; FINAL PROVISIONS:- Deals with Article 68 to 73. [7]

General provisions and basic principles

Articles 3, 4, and 5 of the TRIPS Agreement outline the essential principles of national and most-favored-nation treatment for foreign individuals and entities in relation to intellectual property. These principles cover all aspects of intellectual property protection, including standards, availability, acquisition, scope, maintenance, enforcement, and use. The national treatment provision prohibits discrimination between a member’s own nationals and those of other members, while the most-favored-nation treatment clause prohibits discrimination between nationals of different members.

TRIPS allows for the same exclusions permitted under the pre-existing WIPO intellectual property treaties in terms of national treatment commitments. Governments also have the authority to enact legislation to prevent IPR abuse or challenge practices that unjustly restrict commerce or hinder the international transfer of technology, in accordance with the provisions of the Agreement. [8] [9]

Kinds of IP

Part 2 (“STANDARDS CONCERNING THE AVAILABILITY, SCOPE AND USE OF INTELLECTUAL PROPERTY RIGHTS”) of “AGREEMENT ON TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS” contains all the kinds of IP.

They are as follows: [10] [11]

Section 1:- Copyright and Related Rights (Article 9 to 14)

According to the Agreement, copyright protection applies to various forms of creative works, including literary, musical, dramatic, photographic, sculptural, architectural, choreographic, graphic, motion picture, sound recording, multimedia works, and computer programs. The copyright owner has the exclusive rights to control the reproduction, distribution, derivative works, performance, exhibition, and utilization of the copyrighted work for a certain period of time. Copyright protection is based on originality rather than innovation, meaning the work must be created by the copyright owner or claimant, but it does not necessarily have to be groundbreaking or innovative.

The Berne Convention extends copyright protection to computer programs in both source and object code. Compilations of data in various formats, protected due to the selection or arrangement of their contents, are also recognized as creative works. Authors of computer programs and cinematographic works have the right to control the commercial rental of original or copied works to the public. However, member governments have the authority to revoke rental rights if it leads to widespread copying that threatens the uniqueness of the work. The minimum term of copyright protection is not less than 50 years, as stated in Article 12 of the Agreement.

Section 2:- Trademarks (Article 15 to 21)

Article 15 of the Agreement states that any sign or combination of signs capable of distinguishing the products or services of one undertaking from those of others is eligible for trademark registration, as long as it is perceptible. This includes words, characters, digits, figurative elements, color combinations, and any combinations thereof. Article 16 grants the trademark owner exclusive rights to prevent third parties from using similar or identical signs for goods or services that are similar to those covered by the registered trademark.

Section 3:- Geographical Indications (Article 22 to 24)

Article 22 of the Agreement recognizes geographical indications as designations that identify a good as originating from a specific territory or region. The quality, reputation, or unique characteristics of the product are primarily attributed to its geographical origin. Geographical indications have traditionally been associated with goods produced in specific territories. They serve as reliable indicators of the product’s qualities, and their significance is comparable to trademarks, warranting legal protection.

Section 4:- Industrial Designs (Articles 25 to 26)

Articles 25 and 26 of the TRIPS Agreement require member states to provide protection for original and distinctive industrial designs. The Agreement, building upon the principles of the Paris Convention, sets a minimum duration of 10 years for the protection of industrial designs. When commercial activities are involved, the rights holder has the authority to prohibit third parties from producing, importing, or selling products that incorporate the protected design without the holder’s consent. The TRIPS Agreement expands upon the scope of protection provided by the Paris Convention, offering stronger safeguards for industrial designs.

Section 5:- Patents (Articles 27 to 34)

Article 27 of the TRIPS Agreement establishes patents as intellectual property rights granted to inventors, enabling them to prevent others from creating, using, selling, or importing the patented invention within a designated region for a specified period. However, patentability is subject to three exceptions. Firstly, inventions contrary to public health, animal or plant life, or the environment are excluded. Secondly, diagnostic, medicinal, and surgical procedures for human and animal treatment may be excluded from patentability.

The standard term of patent protection is 20 years from the filing date, with member nations having the flexibility to provide limited exemptions to exclusive patent rights under Article 21. These exemptions should not unreasonably prejudice the legitimate interests of patent owners or conflict with the normal exploitation of the patent, while considering the legitimate interests of third parties. Additionally, Article 29 requires patent applications to disclose the invention in a clear and complete manner that enables a person skilled in the relevant field to carry it out.

Article 31 permits a member government to issue a compulsory license for medicines without the patentee’s consent in certain circumstances. This provision ensures access to essential medications, subject to specific requirements.

Section 6:- Layout-Designs (Topographies) of Integrated Circuits (Article 35 to 38)

Article 36 of the TRIPS Agreement prohibits importing, selling, or distributing secured layout designs, integrated circuits containing secured layout designs, or articles incorporating such circuits for commercial purposes. This intellectual property sector guarantees protection for layout designs for a minimum of ten years from the date of filing an application. However, member countries have the option to limit the duration of protection to fifteen years from the date of the layout design’s creation, as stated in Article 37. This provision allows flexibility for member nations to determine the specific length of protection for layout designs within the provided range.

Section 7:- Protection of Undisclosed Information (Article 39)

Article 39 of the TRIPS Agreement protects trade secrets, which refer to undisclosed information. Member states must provide trade secret protection in line with the Agreement’s provisions. TRIPS stipulates that countries should enact national laws to prevent the unauthorized disclosure, acquisition, or use of trade secrets by third parties without the consent of the rightful owner, in a manner inconsistent with fair trade practices. To qualify for protection, the information must be confidential, possess commercial value due to its confidentiality, and have been subject to reasonable measures to maintain its secrecy. The TRIPS Agreement recognizes the importance of safeguarding trade secrets and encourages member countries to establish legal frameworks that effectively protect such valuable undisclosed information.

Section 8:- Control of Anti-Competitive Practices in Contractual Licenses (Article 40)

The members of the TRIPS Agreement recognize that certain licensing arrangements or restrictions related to intellectual property rights (IPR) can hinder competition, trade, and the transfer of technology. To address this concern, the Agreement includes provisions allowing governments to engage in discussions when there is an infringement of IPR that negatively affects competition. In specific cases, the TRIPS Agreement provides flexibility by waiving certain requirements typically needed for issuing a compulsory license for a patent. For instance, a compulsory license may be granted by the government to remedy an anti-competitive practice.

These provisions reflect the recognition that striking a balance between intellectual property rights and competition is crucial for promoting innovation, technology dissemination, and fair trade. The TRIPS Agreement allows exceptions in cases of anti-competitive behavior to prevent intellectual property rights misuse that hinders market competition or technology transfer. This approach encourages a more balanced and inclusive intellectual property framework that promotes both innovation and fair market practices.

Enforcement

Part 3(ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS) of “AGREEMENT ON TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS” contains the enforcement. The TRIPS Agreement mandates that governments ensure the effective enforcement of intellectual property rights (IPR) to prevent or deter infringement. Enforcement methods should be fair, equitable, and not excessively burdensome or costly. Unreasonable deadlines or unwarranted delays should not be imposed. Moreover, Individuals should have the right to seek judicial review, challenge administrative decisions, or appeal lower court judgments.

The Agreement provides detailed provisions for defending IPR, including requirements for evidence gathering, interim measures, injunctions, damages, and other penalties. It stipulates that courts should have the authority to order the disposal or destruction of infringing objects in specific circumstances. Treating willful trademark counterfeiting or commercial-scale copyright infringement as a criminal offense is necessary. Governments must also ensure that rights holders receive assistance from customs authorities to prevent the importation of counterfeit and pirated goods. These provisions aim to establish robust mechanisms for the protection and enforcement of IPR in a manner that upholds fairness and safeguards against infringement. [12] [13]

TRANSITIONAL ARRANGEMENTS

PART 6 (TRANSITIONAL ARRANGEMENTS) of “AGREEMENT ON TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS” says that the TRIPS Agreement allowed for varying transition periods during which member countries could delay the implementation of its provisions. The timeframes were set from January 1, 1995 (Agreement’s entry into force) until implementation in each country. The main transition periods were as follows:

• Developed countries had a one-year transition period, ending on January 1, 1996, following the entry into force of the WTO Agreement.
• The TRIPS provisions, excluding Articles 3, 4, and 5 that cover non-discrimination principles, granted developing countries an additional four years until January 1, 2000, to implement.
• Transition economies, countries transitioning from centrally planned to market economies, could also benefit from the same extension until January 1, 2000, provided they met specific additional criteria.
• Least-developed countries were granted an extended transition period until January 1, 2006, with the potential for additional extensions. They have extended the transition period three times, and it currently continues until July 1, 2034, or until a member no longer qualifies as a Least Developed Country (LDC), whichever comes first.

These transition periods aimed to allow countries time to adjust their laws and institutions to comply with the TRIPS Agreement, taking into account the varying levels of development and capacity among member nations. [14] [15]

Institutional arrangements

Part 7(INSTITUTIONAL ARRANGEMENTS; FINAL PROVISIONS) of “AGREEMENT ON TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS”:-

Article 68 of the TRIPS Agreement establishes the TRIPS Council as the governing body responsible for the administration and implementation of the Agreement. Moreover, The TRIPS Council oversees members’ compliance with their obligations under the Agreement and provides a platform for consultation on trade-related aspects of intellectual property rights.

The TRIPS Council fulfills any additional duties delegated to it by the members, which may include providing assistance requested by members in the context of dispute resolution procedures. Moreover, It has the authority to consult with and gather information from any relevant source it deems necessary to carry out its responsibilities.

The TRIPS Council plays a crucial role in ensuring the effective implementation and enforcement of intellectual property rights within the framework of the TRIPS Agreement. It serves as a forum for discussions, cooperation, and information exchange among member countries on matters related to intellectual property rights and their impact on international trade. [16] [17]

Pros and cons of TRIPS Agreement

TRIPS encourage R&D, innovation, and equitable global trade while attracting investment. It facilitates technology transfer, provides legal certainty, and supports access to medicines. TRIPS also safeguards traditional knowledge and promote international cooperation in intellectual property. It enhances IP policy transparency, strengthens WIPO’s legal system, reduces trade conflicts, and promotes patent applications in developing countries. [18] [19]

TRIPS establish requirements for patent protection, which can have both positive and negative impacts. While it strengthens patent protection, it can lead to increased prices, potential deadweight losses, and limited stimulation of local innovation. Some industries, such as fertilizers, insecticides, pharmaceuticals, and procedures, previously benefited from the absence of patent protection, resulting in low-cost food and drugs. Lack of copyright protection for informational products fostered education and technology transfer. However, TRIPS does not provide explicit protection for traditional knowledge. [20]

Analysis       

The TRIPS Agreement, while imposing essential obligations on member nations to protect intellectual property rights, has had significant implications for developing countries. The stringent intellectual property restrictions often hinder the growth of indigenous enterprises in these regions. Implementing intellectual property rights in developing nations must be cautious to prevent negative impacts on the economy and public health.

The consequences of the patent protection regime, for instance, can have a discouraging effect on the development of local sectors, such as pharmaceuticals. It is crucial to ensure that intellectual property rights are not used to impede the interests of developing nations, especially in areas like public health where harm is already prevalent. Consequently, there is a need for a re-evaluation of the implementation of intellectual property rights, with effective and strict enforcement of exceptions when required.

The TRIPS Agreement has had a noticeable impact on intellectual property rights protection in poor nations, but its effect on developed countries has been less discernible. This is due to the fact that the TRIPS requirements were designed to align as closely as possible with the existing intellectual property protection systems in many developed nations. Therefore, compliance with the TRIPS Agreement did not necessitate significant policy changes in developed countries. Additionally, developed nations that heavily rely on exports to countries advocating for the inclusion of TRIPS in the WTO may consider the potential for retaliatory trade penalties seriously, as they stand to lose substantial export revenues. This demonstrates the effectiveness of the TRIPS Agreement as a coercive tool in international economic negotiations.

Many criticisms have questioned the TRIPS Agreement’s validity and efficacy, particularly its impact on developing nations. Even proponents of free trade, such as Martin Wolf, have criticized TRIPS as hypocritical, perceiving it as a rent-seeking mechanism that could have detrimental consequences for education, public health, and economic growth in many poor nations. Some argue that major corporations, not developed countries, are the actual beneficiaries of TRIPS due to their advocacy for adoption. TRIPS has also failed to address policymakers’ concerns, as trade imbalances have continued to worsen, and the current emphasis on private rights may hinder innovation and knowledge dissemination in developed nations in the long run.

While cautioning against misrepresenting the impact of TRIPS, it is evident that the agreement has not functioned as intended. A tiered structure providing meaningful special treatment based on developmental needs would have been more beneficial. Major revisions to TRIPS for the benefit of developing nations are uncertain due to its entrenched position within the WTO.

TRIPS mandates robust intellectual property rights protection among its member states. It encompasses copyright rights for authors, performers, sound recording producers, and broadcasting organizations. It covers geographical indications, industrial designs, integrated circuit layout designs, patents, plant varieties, trademarks, trade names, as well as confidential information. TRIPS includes provisions for enforcement procedures, remedies, and dispute-resolution mechanisms. Additionally, it incorporates a most favored nation (MFN) clause, ensuring equal treatment among member states.

The TRIPS Agreement is indeed a crucial component of the global intellectual property protection system. Moreover, It establishes a standardized framework to enforce and protect intellectual property rights, promoting fairness and international trade. The TRIPS Agreement harmonizes global intellectual property laws, fostering robust protection and enforcement of these rights.

To read related articles click here

[1] https://byjus.com/free-ias-prep/trade-related-aspects-of-intellectual-property-rights-trips/

[2] https://www.wto.org/english/docs_e/legal_e/27-trips_03_e.htm

[3] https://byjus.com/free-ias-prep/trade-related-aspects-of-intellectual-property-rights-trips/

[4] https://blog.ipleaders.in/all-you-need-to-know-about-the-trips-agreement/#What_is_the_TRIPS_Agreement_about

[5] https://testbook.com/ias-preparation/trips-agreement

[6] https://testbook.com/ias-preparation/trips-agreement

[7] https://www.wto.org/english/docs_e/legal_e/27-trips.pdf

[8] https://www.wto.org/english/docs_e/legal_e/27-trips.pdf

[9] https://blog.ipleaders.in/all-you-need-to-know-about-the-trips-agreement/#Advantages_of_the_TRIPS_Agreement

[10] https://blog.ipleaders.in/all-you-need-to-know-about-the-trips-agreement/#Advantages_of_the_TRIPS_Agreement

[11] https://www.wto.org/english/docs_e/legal_e/27-trips.pdf

[12] https://blog.ipleaders.in/all-you-need-to-know-about-the-trips-agreement/#Advantages_of_the_TRIPS_Agreement

[13] https://www.wto.org/english/docs_e/legal_e/27-trips.pdf

[14] https://www.wto.org/english/docs_e/legal_e/27-trips.pdf

[15] https://blog.ipleaders.in/all-you-need-to-know-about-the-trips-agreement/#Advantages_of_the_TRIPS_Agreement

[16] https://blog.ipleaders.in/all-you-need-to-know-about-the-trips-agreement/#Advantages_of_the_TRIPS_Agreement

[17] https://www.wto.org/english/docs_e/legal_e/27-trips.pdf

[18] https://blog.ipleaders.in/all-you-need-to-know-about-the-trips-agreement/#Advantages_of_the_TRIPS_Agreement

[19] https://testbook.com/ias-preparation/trips-agreement

[20] https://blog.ipleaders.in/all-you-need-to-know-about-the-trips-agreement/#Advantages_of_the_TRIPS_Agreement

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LEAST-DEVELOPED COUNTRIES (LDCS)

The workshop provided an opportunity for participants to reflect on the practical experiences and continuing challenges faced by LDCs in harnessing technological advances for their economic progress. It provided a platform for dialogue on the technological needs and priorities of LDCs, while allowing for an in-depth analysis of technology transfer programmes reported by developed members in furtherance of their commitments under Article 66.2 of the TRIPS Agreement .

Speaking at the opening session of the workshop, WTO Deputy Director-General Johanna Hill indicated that since 2003, when the TRIPS Council agreed on the transparency mechanism for the implementation of Article 66.2 of the TRIPS Agreement, developed members have submitted 318 reports detailing various actions taken or envisaged in terms of technology transfer.

She noted that the WTO Secretariat has been organizing this workshop since 2008 to help LDC members and observers analyze these reports and engage in direct dialogue with the reporting delegations. The reports and the discussions in the TRIPS Council offer a wealth of comprehensive information essential to carry out the necessary detailed analytical work.

Ambassador Pimchanok Pitfield of Thailand, Chair of the Council for TRIPS, further explained that these reports help members understand the range and character of technology transfer mechanisms and can help determine how best to shape programmes to meet LDC priority needs. 

Stressing the importance of the connection created between the workshop and the TRIPS Council meeting, she encouraged participants, particularly LDC members, to use the platform to examine the reports in more detail than is possible at formal Council meetings.

Health, agriculture and the environment remained among the identified priority needs, as outlined by Ambassador Kadra Ahmed Hassan of Djibouti, coordinator of the WTO's LDC Group. She also pointed out that the programme was designed to actively involve all participants in the subsequent meeting of the TRIPS Council, thereby increasing the impact of the workshop on the Council's work in this area.

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