An overview of the Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS Agreement)
Main features of the TRIPS Agreement
The TRIPS Agreement, which came into effect on 1
January 1995, is to date the most comprehensive multilateral agreement
on intellectual property. The areas of intellectual property that it covers
are: copyright and related rights (i.e. the rights of performers, producers
of sound recordings and broadcasting organizations); trademarks including
service marks; geographical indications including appellations of origin;
industrial designs; patents including the protection of new varieties of
plants; the layout-designs of integrated circuits; and undisclosed information
including trade secrets and test data.
The three main features of the Agreement are:
(i) Standards. In respect of each of the main
areas of intellectual property covered by the TRIPS Agreement, the Agreement
sets out the minimum standards of protection to be provided by each Member.
Each of the main elements of protection is defined, namely the subject-matter
to be protected, the rights to be conferred and permissible exceptions
to those rights, and the minimum duration of protection. The Agreement
sets these standards by requiring, first, that the substantive obligations
of the main conventions of the WIPO, the Paris Convention for the Protection
of Industrial Property (Paris Convention) and the Berne Convention for
the Protection of Literary and Artistic Works (Berne Convention) in their
most recent versions, must be complied with. With the exception of the
provisions of the Berne Convention on moral rights, all the main substantive
provisions of these conventions are incorporated by reference and thus
become obligations under the TRIPS Agreement between TRIPS Member countries.
The relevant provisions are to be found in Articles 2.1 and 9.1 of the
TRIPS Agreement, which relate, respectively, to the Paris Convention and
to the Berne Convention. Secondly, the TRIPS Agreement adds a substantial
number of additional obligations on matters where the pre-existing conventions
are silent or were seen as being inadequate. The TRIPS Agreement is thus
sometimes referred to as a Berne and Paris-plus agreement.
(ii) Enforcement. The second main set of provisions
deals with domestic procedures and remedies for the enforcement of intellectual
property rights. The Agreement lays down certain general principles applicable
to all IPR enforcement procedures. In addition, it contains provisions
on civil and administrative procedures and remedies, provisional measures,
special requirements related to border measures and criminal procedures,
which specify, in a certain amount of detail, the procedures and remedies
that must be available so that right holders can effectively enforce their
rights.
(iii) Dispute settlement. The Agreement makes
disputes between WTO Members about the respect of the TRIPS obligations
subject to the WTO's dispute settlement procedures.
In addition the Agreement provides for certain basic
principles, such as national and most-favoured-nation treatment, and some
general rules to ensure that procedural difficulties in acquiring or maintaining
IPRs do not nullify the substantive benefits that should flow from the
Agreement. The obligations under the Agreement will apply equally to all
Member countries, but developing countries will have a longer period to
phase them in. Special transition arrangements operate in the situation
where a developing country does not presently provide product patent protection
in the area of pharmaceuticals.
The TRIPS Agreement is a minimum standards agreement,
which allows Members to provide more extensive protection of intellectual
property if they so wish. Members are left free to determine the appropriate
method of implementing the provisions of the Agreement within their own
legal system and practice.
Certain general provisions
As in the main pre-existing intellectual property
conventions, the basic obligation on each Member country is to accord the
treatment in regard to the protection of intellectual property provided
for under the Agreement to the persons of other Members. Article 1.3 defines
who these persons are. These persons are referred to as "nationals" but
include persons, natural or legal, who have a close attachment to other
Members without necessarily being nationals. The criteria for determining
which persons must thus benefit from the treatment provided for under the
Agreement are those laid down for this purpose in the main pre-existing
intellectual property conventions of WIPO, applied of course with respect
to all WTO Members whether or not they are party to those conventions.
These conventions are the Paris Convention, the Berne Convention, International
Convention for the Protection of Performers, Producers of Phonograms and
Broadcasting Organizations (Rome Convention), and the Treaty on Intellectual
Property in Respect of Integrated Circuits (IPIC Treaty).
Articles 3, 4 and 5 include the fundamental rules
on national and most-favoured-nation treatment of foreign nationals, which
are common to all categories of intellectual property covered by the Agreement.
These obligations cover not only the substantive standards of protection
but also matters affecting the availability, acquisition, scope, maintenance
and enforcement of intellectual property rights as well as those matters
affecting the use of intellectual property rights specifically addressed
in the Agreement. While the national treatment clause forbids discrimination
between a Member's own nationals and the nationals of other Members, the
most-favoured-nation treatment clause forbids discrimination between the
nationals of other Members. In respect of the national treatment obligation,
the exceptions allowed under the pre-existing intellectual property conventions
of WIPO are also allowed under TRIPS. Where these exceptions allow material
reciprocity, a consequential exception to MFN treatment is also permitted
(e.g. comparison of terms for copyright protection in excess of the minimum
term required by the TRIPS Agreement as provided under Article 7(8) of
the Berne Convention as incorporated into the TRIPS Agreement). Certain
other limited exceptions to the MFN obligation are also provided for.
The general goals of the TRIPS Agreement are contained
in the Preamble of the Agreement, which reproduces the basic Uruguay Round
negotiating objectives established in the TRIPS area by the 1986 Punta
del Este Declaration and the 1988/89 Mid-Term Review. These objectives
include the reduction of distortions and impediments to international trade,
promotion of effective and adequate protection of intellectual property
rights, and ensuring that measures and procedures to enforce intellectual
property rights do not themselves become barriers to legitimate trade.
These objectives should be read in conjunction with Article 7, entitled
"Objectives", according to which the protection and enforcement of intellectual
property rights should contribute to the promotion of technological innovation
and to the transfer and dissemination of technology, to the mutual advantage
of producers and users of technological knowledge and in a manner conducive
to social and economic welfare, and to a balance of rights and obligations.
Article 8, entitled "Principles", recognizes the rights of Members to adopt
measures for public health and other public interest reasons and to prevent
the abuse of intellectual property rights, provided that such measures
are consistent with the provisions of the TRIPS Agreement.
Substantive standards of protection
Copyright
During the Uruguay Round negotiations, it was recognized
that the Berne Convention already, for the most part, provided adequate
basic standards of copyright protection. Thus it was agreed that the point
of departure should be the existing level of protection under the latest
Act, the Paris Act of 1971, of that Convention. The point of departure
is expressed in Article 9.1 under which Members are obliged to comply with
the substantive provisions of the Paris Act of 1971 of the Berne Convention,
i.e. Articles 1 through 21 of the Berne Convention (1971) and the Appendix
thereto. However, Members do not have rights or obligations under the TRIPS
Agreement in respect of the rights conferred under Article 6bis
of that Convention, i.e. the moral rights (the right to claim authorship
and to object to any derogatory action in relation to a work, which would
be prejudicial to the author's honour or reputation), or of the rights
derived therefrom. The provisions of the Berne Convention referred to deal
with questions such as subject-matter to be protected, minimum term of
protection, and rights to be conferred and permissible limitations to those
rights. The Appendix allows developing countries, under certain conditions,
to make some limitations to the right of translation and the right of reproduction.
In addition to requiring compliance with the basic
standards of the Berne Convention, the TRIPS Agreement clarifies and adds
certain specific points.
Article 9.2 confirms that copyright protection shall
extend to expressions and not to ideas, procedures, methods of operation
or mathematical concepts as such.
Article 10.1 provides that computer programs, whether
in source or object code, shall be protected as literary works under the
Berne Convention (1971). This provision confirms that computer programs
must be protected under copyright and that those provisions of the Berne
Convention that apply to literary works shall be applied also to them.
It confirms further, that the form in which a program is, whether in source
or object code, does not affect the protection. The obligation to protect
computer programs as literary works means e.g. that only those limitations
that are applicable to literary works may be applied to computer programs.
It also confirms that the general term of protection of 50 years applies
to computer programs. Possible shorter terms applicable to photographic
works and works of applied art may not be applied.
Article 10.2 clarifies that databases and other compilations
of data or other material shall be protected as such under copyright even
where the databases include data that as such are not protected under copyright.
Databases are eligible for copyright protection provided that they by reason
of the selection or arrangement of their contents constitute intellectual
creations. The provision also confirms that databases have to be protected
regardless of which form they are in, whether machine readable or other
form. Furthermore, the provision clarifies that such protection shall not
extend to the data or material itself, and that it shall be without prejudice
to any copyright subsisting in the data or material itself.
Article 11 provides that authors shall have in respect
of at least computer programs and, in certain circumstances, of cinematographic
works the right to authorize or to prohibit the commercial rental to the
public of originals or copies of their copyright works. With respect to
cinematographic works, the exclusive rental right is subject to the so-called
impairment test: a Member is excepted from the obligation unless such rental
has led to widespread copying of such works which is materially impairing
the exclusive right of reproduction conferred in that Member on authors
and their successors in title. In respect of computer programs, the obligation
does not apply to rentals where the program itself is not the essential
object of the rental.
According to the general rule contained in Article
7(1) of the Berne Convention as incorporated into the TRIPS Agreement,
the term of protection shall be the life of the author and 50 years after
his death. Paragraphs 2 through 4 of that Article specifically allow shorter
terms in certain cases. These provisions are supplemented by Article 12
of the TRIPS Agreement, which provides that whenever the term of protection
of a work, other than a photographic work or a work of applied art, is
calculated on a basis other than the life of a natural person, such term
shall be no less than 50 years from the end of the calendar year of authorized
publication, or, failing such authorized publication within 50 years from
the making of the work, 50 years from the end of the calendar year of making.
Article 13 requires Members to confine limitations
or exceptions to exclusive rights to certain special cases which do not
conflict with a normal exploitation of the work and do not unreasonably
prejudice the legitimate interests of the right holder. This is a horizontal
provision that applies to all limitations and exceptions permitted under
the provisions of the Berne Convention and the Appendix thereto as incorporated
into the TRIPS Agreement. The application of these limitations is permitted
also under the TRIPS Agreement, but the provision makes it clear that they
must be applied in a manner that does not prejudice the legitimate interests
of the right holder.
Related rights
The provisions on protection of performers, producers
of phonograms and broadcasting organizations are included in Article 14.
According to Article 14.1, performers shall have the possibility of preventing
the unauthorized fixation of their performance on a phonogram (e.g. the
recording of a live musical performance). The fixation right covers only
aural, not audiovisual fixations. Performers must also be in position to
prevent the reproduction of such fixations. They shall also have the possibility
of preventing the unauthorized broadcasting by wireless means and the communication
to the public of their live performance.
In accordance with Article 14.2, Members have to
grant producers of phonograms an exclusive reproduction right. In addition
to this, they have to grant, in accordance with Article 14.4, an exclusive
rental right at least to producers of phonograms. The provisions on rental
rights apply also to any other right holders in phonograms as determined
in national law. This right has the same scope as the rental right in respect
of computer programs. Therefore it is not subject to the impairment test
as in respect of cinematographic works. However, it is limited by a so-called
grand-fathering clause, according to which a Member, which on 15 April
1994, i.e. the date of the signature of the Marrakesh Agreement, had in
force a system of equitable remuneration of right holders in respect of
the rental of phonograms, may maintain such system provided that the commercial
rental of phonograms is not giving rise to the material impairment of the
exclusive rights of reproduction of right holders.
Broadcasting organizations shall have, in accordance
with Article 14.3, the right to prohibit the unauthorized fixation, the
reproduction of fixations, and the rebroadcasting by wireless means of
broadcasts, as well as the communication to the public of their television
broadcasts. However, it is not necessary to grant such rights to broadcasting
organizations, if owners of copyright in the subject-matter of broadcasts
are provided with the possibility of preventing these acts, subject to
the provisions of the Berne Convention.
The term of protection is at least 50 years for performers
and producers of phonograms, and 20 years for broadcasting organizations
(Article 14.5).
Article 14.6 provides that any Member may, in relation
to the protection of performers, producers of phonograms and broadcasting
organizations, provide for conditions, limitations, exceptions and reservations
to the extent permitted by the Rome Convention.
Trademarks
The basic rule contained in Article 15 is that any
sign, or any combination of signs, capable of distinguishing the goods
and services of one undertaking from those of other undertakings, must
be eligible for registration as a trademark, provided that it is visually
perceptible. Such signs, in particular words including personal names,
letters, numerals, figurative elements and combinations of colours as well
as any combination of such signs, must be eligible for registration as
trademarks.
Where signs are not inherently capable of distinguishing
the relevant goods or services, Member countries are allowed to require,
as an additional condition for eligibility for registration as a trademark,
that distinctiveness has been acquired through use. Members are free to
determine whether to allow the registration of signs that are not visually
perceptible (e.g. sound or smell marks).
Members may make registrability depend on use. However,
actual use of a trademark shall not be permitted as a condition for filing
an application for registration, and at least three years must have passed
after that filing date before failure to realize an intent to use is allowed
as the ground for refusing the application (Article 14.3).
The Agreement requires service marks to be protected
in the same way as marks distinguishing goods (see e.g. Articles 15.1,
16.2 and 62.3).
The owner of a registered trademark must be granted
the exclusive right to prevent all third parties not having the owner's
consent from using in the course of trade identical or similar signs for
goods or services which are identical or similar to those in respect of
which the trademark is registered where such use would result in a likelihood
of confusion. In case of the use of an identical sign for identical goods
or services, a likelihood of confusion must be presumed (Article 16.1).
The TRIPS Agreement contains certain provisions on
well-known marks, which supplement the protection required by Article 6bis
of the Paris Convention, as incorporated by reference into the TRIPS Agreement,
which obliges Members to refuse or to cancel the registration, and to prohibit
the use of a mark conflicting with a mark which is well known. First, the
provisions of that Article must be applied also to services. Second, it
is required that knowledge in the relevant sector of the public acquired
not only as a result of the use of the mark but also by other means, including
as a result of its promotion, be taken into account. Furthermore, the protection
of registered well-known marks must extend to goods or services which are
not similar to those in respect of which the trademark has been registered,
provided that its use would indicate a connection between those goods or
services and the owner of the registered trademark, and the interests of
the owner are likely to be damaged by such use (Articles 16.2 and 3).
Members may provide limited exceptions to the rights
conferred by a trademark, such as fair use of descriptive terms, provided
that such exceptions take account of the legitimate interests of the owner
of the trademark and of third parties (Article 17).
Initial registration, and each renewal of registration,
of a trademark shall be for a term of no less than seven years. The registration
of a trademark shall be renewable indefinitely (Article 18).
Cancellation of a mark on the grounds of non-use
cannot take place before three years of uninterrupted non-use has elapsed
unless valid reasons based on the existence of obstacles to such use are
shown by the trademark owner. Circumstances arising independently of the
will of the owner of the trademark, such as import restrictions or other
government restrictions, shall be recognized as valid reasons of non-use.
Use of a trademark by another person, when subject to the control of its
owner, must be recognized as use of the trademark for the purpose of maintaining
the registration (Article 19).
It is further required that use of the trademark
in the course of trade shall not be unjustifiably encumbered by special
requirements, such as use with another trademark, use in a special form,
or use in a manner detrimental to its capability to distinguish the goods
or services (Article 20).
Geographical indications
Geographical indications are defined, for the purposes
of the Agreement, as indications which identify a good as originating in
the territory of a Member, or a region or locality in that territory, where
a given quality, reputation or other characteristic of the good is essentially
attributable to its geographical origin (Article 22.1). Thus, this definition
specifies that the quality, reputation or other characteristics of a good
can each be a sufficient basis for eligibility as a geographical indication,
where they are essentially attributable to the geographical origin of the
good.
In respect of all geographical indications, interested
parties must have legal means to prevent use of indications which mislead
the public as to the geographical origin of the good, and use which constitutes
an act of unfair competition within the meaning of Article 10bis
of the Paris Convention (Article 22.2).
The registration of a trademark which uses a geographical
indication in a way that misleads the public as to the true place of origin
must be refused or invalidated ex officio if the legislation so
permits or at the request of an interested party (Article 22.3).
Article 23 provides that interested parties must
have the legal means to prevent the use of a geographical indication identifying
wines for wines not originating in the place indicated by the geographical
indication. This applies even where the public is not being misled, there
is no unfair competition and the true origin of the good is indicated or
the geographical indication is accompanied be expressions such as "kind",
"type", "style", "imitation" or the like. Similar protection must be given
to geographical indications identifying spirits when used on spirits. Protection
against registration of a trademark must be provided accordingly.
Article 24 contains a number of exceptions to the
protection of geographical indications. These exceptions are of particular
relevance in respect of the additional protection for geographical indications
for wines and spirits. For example, Members are not obliged to bring a
geographical indication under protection, where it has become a generic
term for describing the product in question (paragraph 6). Measures to
implement these provisions shall not prejudice prior trademark rights that
have been acquired in good faith (paragraph 5). Under certain circumstances,
continued use of a geographical indication for wines or spirits may be
allowed on a scale and nature as before (paragraph 4). Members availing
themselves of the use of these exceptions must be willing to enter into
negotiations about their continued application to individual geographical
indications (paragraph 1). The exceptions cannot be used to diminish the
protection of geographical indications that existed prior to the entry
into force of the TRIPS Agreement (paragraph 3). The TRIPS Council shall
keep under review the application of the provisions on the protection of
geographical indications (paragraph 2).
Industrial designs
Article 25.1 of the TRIPS Agreement obliges Members
to provide for the protection of independently created industrial designs
that are new or original. Members may provide that designs are not new
or original if they do not significantly differ from known designs or combinations
of known design features. Members may provide that such protection shall
not extend to designs dictated essentially by technical or functional considerations.
Article 25.2 contains a special provision aimed at
taking into account the short life cycle and sheer number of new designs
in the textile sector: requirements for securing protection of such designs,
in particular in regard to any cost, examination or publication, must not
unreasonably impair the opportunity to seek and obtain such protection.
Members are free to meet this obligation through industrial design law
or through copyright law.
Article 26.1 requires Members to grant the owner
of a protected industrial design the right to prevent third parties not
having the owner's consent from making, selling or importing articles bearing
or embodying a design which is a copy, or substantially a copy, of the
protected design, when such acts are undertaken for commercial purposes.
Article 26.2 allows Members to provide limited exceptions
to the protection of industrial designs, provided that such exceptions
do not unreasonably conflict with the normal exploitation of protected
industrial designs and do not unreasonably prejudice the legitimate interests
of the owner of the protected design, taking account of the legitimate
interests of third parties.
The duration of protection available shall amount
to at least 10 years (Article 26.3). The wording "amount to" allows the
term to be divided into, for example, two periods of five years.
Patents
The TRIPS Agreement requires Member countries to
make patents available for any inventions, whether products or processes,
in all fields of technology without discrimination, subject to the normal
tests of novelty, inventiveness and industrial applicability. It is also
required that patents be available and patent rights enjoyable without
discrimination as to the place of invention and whether products are imported
or locally produced (Article 27.1).
There are three permissible exceptions to the basic
rule on patentability. One is for inventions contrary to ordre public
or morality; this explicitly includes inventions dangerous to human, animal
or plant life or health or seriously prejudicial to the environment. The
use of this exception is subject to the condition that the commercial exploitation
of the invention must also be prevented and this prevention must be necessary
for the protection of ordre public or morality (Article 27.2).
The second exception is that Members may exclude
from patentability diagnostic, therapeutic and surgical methods for the
treatment of humans or animals (Article 27.3(a)).
The third is that Members may exclude plants and
animals other than micro-organisms and essentially biological processes
for the production of plants or animals other than non-biological and microbiological
processes. However, any country excluding plant varieties from patent protection
must provide an effective sui generis system of protection. Moreover,
the whole provision is subject to review four years after entry into force
of the Agreement (Article 27.3(b)).
The exclusive rights that must be conferred by a
product patent are the ones of making, using, offering for sale, selling,
and importing for these purposes. Process patent protection must give rights
not only over use of the process but also over products obtained directly
by the process. Patent owners shall also have the right to assign, or transfer
by succession, the patent and to conclude licensing contracts (Article
28).
Members may provide limited exceptions to the exclusive
rights conferred by a patent, provided that such exceptions do not unreasonably
conflict with a normal exploitation of the patent and do not unreasonably
prejudice the legitimate interests of the patent owner, taking account
of the legitimate interests of third parties (Article 30).
The term of protection available shall not end before
the expiration of a period of 20 years counted from the filing date (Article
33).
Members shall require that an applicant for a patent
shall disclose the invention in a manner sufficiently clear and complete
for the invention to be carried out by a person skilled in the art and
may require the applicant to indicate the best mode for carrying out the
invention known to the inventor at the filing date or, where priority is
claimed, at the priority date of the application (Article 29.1).
If the subject-matter of a patent is a process for
obtaining a product, the judicial authorities shall have the authority
to order the defendant to prove that the process to obtain an identical
product is different from the patented process, where certain conditions
indicating a likelihood that the protected process was used are met (Article
34).
Compulsory licensing and government use without the
authorization of the right holder are allowed, but are made subject to
conditions aimed at protecting the legitimate interests of the right holder.
The conditions are mainly contained in Article 31. These include the obligation,
as a general rule, to grant such licences only if an unsuccessful attempt
has been made to acquire a voluntary licence on reasonable terms and conditions
within a reasonable period of time; the requirement to pay adequate remuneration
in the circumstances of each case, taking into account the economic value
of the licence; and a requirement that decisions be subject to judicial
or other independent review by a distinct higher authority. Certain of
these conditions are relaxed where compulsory licences are employed to
remedy practices that have been established as anticompetitive by a legal
process. These conditions should be read together with the related provisions
of Article 27.1, which require that patent rights shall be enjoyable without
discrimination as to the field of technology, and whether products are
imported or locally produced.
Layout-designs of integrated circuits
Article 35 of the TRIPS Agreement requires Member
countries to protect the layout-designs of integrated circuits in accordance
with the provisions of the IPIC Treaty (the Treaty on Intellectual Property
in Respect of Integrated Circuits), negotiated under the auspices of WIPO
in 1989. These provisions deal with, inter alia, the definitions
of "integrated circuit" and "layout-design (topography)", requirements
for protection, exclusive rights, and limitations, as well as exploitation,
registration and disclosure. An "integrated circuit" means a product, in
its final form or an intermediate form, in which the elements, at least
one of which is an active element, and some or all of the interconnections
are integrally formed in and/or on a piece of material and which is intended
to perform an electronic function. A "layout-design (topography)" is defined
as the three-dimensional disposition, however expressed, of the elements,
at least one of which is an active element, and of some or all of the interconnections
of an integrated circuit, or such a three-dimensional disposition prepared
for an integrated circuit intended for manufacture. The obligation to protect
layout-designs applies to such layout-designs that are original in the
sense that they are the result of their creators' own intellectual effort
and are not commonplace among creators of layout-designs and manufacturers
of integrated circuits at the time of their creation. The exclusive rights
include the right of reproduction and the right of importation, sale and
other distribution for commercial purposes. Certain limitations to these
rights are provided for.
In addition to requiring Member countries to protect
the layout-designs of integrated circuits in accordance with the provisions
of the IPIC Treaty, the TRIPS Agreement clarifies and/or builds on four
points. These points relate to the term of protection (ten years instead
of eight, Article 38), the applicability of the protection to articles
containing infringing integrated circuits (last sub clause of Article 36)
and the treatment of innocent infringers (Article 37.1). The conditions
in Article 31 of the TRIPS Agreement apply mutatis mutandis to compulsory
or non-voluntary licensing of a layout-design or to its use by or for the
government without the authorization of the right holder, instead of the
provisions of the IPIC Treaty on compulsory licensing (Article 37.2).
Protection of undisclosed information
The TRIPS Agreement requires undisclosed information
-- trade secrets or know-how -- to benefit from protection. According to
Article 39.2, the protection must apply to information that is secret,
that has commercial value because it is secret and that has been subject
to reasonable steps to keep it secret. The Agreement does not require undisclosed
information to be treated as a form of property, but it does require that
a person lawfully in control of such information must have the possibility
of preventing it from being disclosed to, acquired by, or used by others
without his or her consent in a manner contrary to honest commercial practices.
"Manner contrary to honest commercial practices" includes breach of contract,
breach of confidence and inducement to breach, as well as the acquisition
of undisclosed information by third parties who knew, or were grossly negligent
in failing to know, that such practices were involved in the acquisition.
The Agreement also contains provisions on undisclosed
test data and other data whose submission is required by governments as
a condition of approving the marketing of pharmaceutical or agricultural
chemical products which use new chemical entities. In such a situation
the Member government concerned must protect the data against unfair commercial
use.
In addition, Members must protect such data against disclosure, except
where necessary to protect the public, or unless steps are taken to ensure
that the data are protected against unfair commercial use.
Control of anti-competitive practices in contractual
licences
Article 40 of the TRIPS Agreement recognizes that
some licensing practices or conditions pertaining to intellectual property
rights which restrain competition may have adverse effects on trade and
may impede the transfer and dissemination of technology (paragraph 1).
Member countries may adopt, consistently with the other provisions of the
Agreement, appropriate measures to prevent or control practices in the
licensing of intellectual property rights which are abusive and anti-competitive
(paragraph 2). The Agreement provides for a mechanism whereby a country
seeking to take action against such practices involving the companies of
another Member country can enter into consultations with that other Member
and exchange publicly available non-confidential information of relevance
to the matter in question and of other information available to that Member,
subject to domestic law and to the conclusion of mutually satisfactory
agreements concerning the safeguarding of its confidentiality by the requesting
Member (paragraph 3). Similarly, a country whose companies are subject
to such action in another Member can enter into consultations with that
Member (paragraph 4).
Enforcement of intellectual property rights
The provisions on enforcement are contained in Part
III of the Agreement, which is divided into five Sections. The first Section
lays down general obligations that all enforcement procedures must meet.
These are notably aimed at ensuring their effectiveness and that certain
basic principles of due process are met. The following Sections deal with
civil and administrative procedures and remedies, provisional measures,
special requirements related to border measures and criminal procedures.
These provisions have two basic objectives: one is to ensure that effective
means of enforcement are available to right holders; the second is to ensure
that enforcement procedures are applied in such a manner as to avoid the
creation of barriers to legitimate trade and to provide for safeguards
against their abuse.
The Agreement makes a distinction between infringing
activity in general, in respect of which civil judicial procedures and
remedies must be available, and counterfeiting and piracy -- the more blatant
and egregious forms of infringing activity -- in respect of which additional
procedures and remedies must also be provided, namely border measures and
criminal procedures. For this purpose, counterfeit goods are in essence
defined as goods involving slavish copying of trademarks, and pirated goods
as goods which violate a reproduction right under copyright or a related
right.
General obligations
The general obligations relating to enforcement are
contained in Article 41. Paragraph 1 requires that enforcement procedures
must be such as to permit effective action against any act of infringement
of intellectual property rights, and that the remedies available must be
expeditious in order to prevent infringements and they must constitute
a deterrent to further infringements. On the other hand, these procedures
must be applied in such a manner as to avoid the creation of barriers to
legitimate trade and to provide for safeguards against their abuse.
The following three paragraphs contain certain general
principles, the aim of which is to guarantee due process. Paragraph 2 deals
with enforcement procedures. Such procedures must be fair and equitable,
and they may not be unnecessarily complicated or costly, or entail unreasonable
time-limits or unwarranted delays. Paragraph 3 concerns decisions on the
merits of a case. Such decisions shall preferably be in writing and reasoned,
and they shall be made available at least to the parties to the proceeding
without undue delay. Decisions on the merits of a case shall be based only
on evidence in respect of which parties were offered the opportunity to
be heard. Paragraph 4 requires that parties to a proceeding shall have
an opportunity for review by a judicial authority of final administrative
decisions and, subject to jurisdictional provisions in a Member's law concerning
the importance of a case, of at least the legal aspects of initial judicial
decisions on the merits of a case. However, there is no obligation to provide
an opportunity for review of acquittals in criminal cases.
According to paragraph 5, it is understood that the
provisions on enforcement do not create any obligation to put in place
a judicial system for the enforcement of intellectual property rights distinct
from that for the enforcement of law in general, nor does it affect the
capacity of Members to enforce their law in general. In addition, it is
stated that nothing in these provisions creates any obligation with respect
to the distribution of resources as between enforcement of intellectual
property rights and the enforcement of law in general. However, a number
of countries have found it helpful to establish special enforcement units
that pool together required experience needed to effectively fight against
counterfeiting and piracy. Moreover, some countries have centralized certain
types of intellectual property issues in one or a limited number of courts
in order to ensure the availability of necessary expertise.
Civil and administrative procedures and remedies
The second Section requires that civil judicial procedures
must be available in respect of any activity infringing intellectual property
rights covered by the Agreement. The provisions of the Section elaborate
in more detail basic features that such procedures must provide for.
Article 42 contains certain principles aiming at
ensuring due process. Defendants are entitled to written notice which is
timely and contains sufficient details of the claims. Parties must be allowed
to be represented by independent legal counsel, and procedures may not
impose overly burdensome requirements concerning mandatory personal appearances.
All parties are entitled to substantiate their claims and to present all
relevant evidence, while confidential information must be identified and
protected.
Article 43 deals with how the rules on evidence should
be applied in certain situations. In a situation where evidence that is
likely to be important for one party is in the possession of the opposing
party, the court must be empowered, provided that certain conditions are
met, to order the latter party to produce that evidence. In addition, courts
may be authorized to make their decisions on the basis of information presented
to them, if a party refuses without good reason access to evidence that
is in his or her possession, subject to providing the parties an opportunity
to be heard.
The Section contains provisions on injunctions, damages
and other remedies. Article 44 requires that the courts be empowered to
order injunctions, i.e. to order a party to desist from infringements,
including the possibility to prevent imported infringing goods from entering
into domestic distribution channels. Members are not obliged to provide
that authority where a person has acted in good faith. Article 45 provides
that the courts must be empowered to order an infringer, at least if he
or she acted in bad faith, to pay the right holder adequate damages. They
must also be authorized to order the infringer to pay the right holder's
expenses. These expenses may include appropriate attorney's fees. In appropriate
cases, the courts may be authorized to order recovery of profits and/or
payment of pre-established damages even where the infringer acted in good
faith.
In order to create an effective deterrent to infringement,
Article 46 requires that the judicial authorities must have the authority
to order infringing goods to be disposed of outside the channels of commerce,
or, where constitutionally possible, destroyed. Similarly, it must be possible
to dispose of materials and instruments predominantly used in the production
of the infringing goods. In considering such requests, the courts must
take into account proportionality between the seriousness of the infringement
and the remedies ordered as well as the interests of third parties. In
respect of counterfeit trademark goods, it is clarified that the simple
removal of the trademark unlawfully affixed shall not be sufficient, other
than in exceptional cases, to permit release of the goods into the channels
of commerce.
The judicial authorities may be authorized to order
the infringer to inform the right holder of the identity of third persons
involved in the production and distribution of the infringing goods or
services and of their channels of distribution (Article 47). This option
is aimed at assisting the right holders to find the source of infringing
goods and to take appropriate action against other persons in the distribution
channels. This provision must be applied in a way that is in proportion
to the seriousness of the infringement.
The Section contains certain safeguards against abuse
of enforcement procedures. Article 48 provides that the judicial authorities
must have the authority to order the applicant who has abused enforcement
procedures to pay an adequate compensation to the defendant who has been
wrongfully enjoined or restrained to cover both the injury suffered and
expenses. Such expenses may include appropriate attorney's fees. Public
authorities and officials are exempted from liability to appropriate remedial
measures only where actions are taken or intended in good faith in the
course of the administration of that law.
Article 49 provides that, to the extent that any
civil remedy can be ordered as a result of administrative procedures on
the merits of a case, such procedures shall conform to principles equivalent
in substance to those set forth in the Section.
Provisional measures
Article 41 requires that enforcement procedures must
permit effective action against infringements and must include expeditious
remedies. As these judicial procedures may take a fair amount of time,
it is necessary for the judicial authorities to be empowered to provide
provisional relief for the right holder in order to stop an alleged infringement
immediately. The provisions on provisional measures are contained in Article
50. It requires each country to ensure that its judicial authorities have
the authority to order prompt and effective provisional measures. Such
measures must be available in respect of any intellectual property right.
Provisional measures have to be available in two situations. One is where
they are needed to prevent an infringement from occurring, and to prevent
infringing goods from entering into the channels of commerce. This includes
preventing imported infringing goods from being dispersed into domestic
distribution channels immediately after customs clearance. The other situation
is where such measures are needed to preserve relevant evidence in regard
to the alleged infringement.
Effective use of provisional measures may require
that action be taken without giving prior notice to the other side. Therefore,
the judicial authorities must have the authority to adopt provisional measures
inaudita
altera parte, i.e. without prior hearing of the other side, where appropriate,
in particular where any delay is likely to cause irreparable harm to the
right holder, or where there is a demonstrable risk of evidence being destroyed
(paragraph 2).
The courts may require the applicant to provide any
reasonably available adequate evidence that the applicant is the right
holder and that the applicant's right is being infringed or that such infringement
is imminent (paragraph 3). The applicant may also be required to supply
information necessary for the identification of the goods (paragraph 5).
Where provisional measures have been adopted inaudita altera parte,
the parties affected must be given notice, without delay after the execution
of the measures at the latest. The defendant has a right to review with
a view to deciding, within a reasonable period after the notification of
the measures, whether these measures shall be modified, revoked or confirmed
(paragraph 4).
The provisions on provisional measures contain certain
safeguards against abuse of such measures. The judicial authority may require
the applicant to provide a security or equivalent assurance sufficient
to protect the defendant and to prevent abuse (paragraph 3). Provisional
measures shall, upon request by the defendant, be revoked or otherwise
cease to have effect, if the applicant fails to initiate proceedings leading
to a decision on the merits of the case within a reasonable period to be
determined by the judicial authority ordering the measures. In the absence
of such a determination, this period may not exceed 20 working days or
31 calendar days, whichever is the longer (paragraph 6). Where the provisional
measures are revoked or where they lapse due to any act or omission by
the applicant, or where it is subsequently found that there has been no
infringement or threat of infringement of an intellectual property right,
the judicial authorities shall have the authority to order the applicant
to provide the defendant appropriate compensation for any injury caused
by these measures (paragraph 7).
The above principles apply also to administrative
procedures to the extent that any provisional measure can be ordered as
a result of such procedures (paragraph 8).
Special requirements related to border measures
The emphasis in the enforcement part of the TRIPS
Agreement is on internal enforcement mechanisms, which, if effective, would
enable infringing activity to be stopped at source, the point of production.
Where possible, this is both a more efficient way of enforcing IPRs and
less liable to give rise to risks of discrimination against imports than
special border measures. However, the Agreement recognizes that such enforcement
at source will not always be possible and that in any event not all countries
are Members of the TRIPS Agreement. The Agreement therefore also recognizes
the importance of border enforcement procedures that will enable right
holders to obtain the cooperation of customs administrations so as to prevent
the release of infringing imports into free circulation. The special requirements
related to border measures are contained in Section 4 of the enforcement
part of the Agreement.
According to Article 51 of the Agreement, the goods
which must be subject to border enforcement procedures must include at
least counterfeit trademark and pirated copyright goods that are being
presented for importation (see footnote 14 to that Article for the precise
definition of these terms). The Article leaves flexibility to Member governments
on whether to include imports of goods which involve other infringements
of IPRs. Members are also free to determine whether to apply these procedures
to parallel imports. This is confirmed in footnote 13 to the Article, according
to which it is understood that there shall be no obligation to apply such
procedures to imports of goods put on the market in another country by
or with the consent of the right holder. In accordance with Article 60,
Members may exclude from the application of these procedures de minimis
imports, i.e. small quantities of goods of a non-commercial nature contained
in travellers' personal luggage or sent in small consignments. Article
51 leaves it to Members to decide whether to apply corresponding procedures
to the suspension by customs authorities of infringing goods destined for
exportation from their territories, or to goods in transit.
The basic mechanism required by the Agreement is
that each Member must designate a "competent authority", which could be
administrative or judicial in nature, to which applications by right holders
for customs action shall be lodged (Article 51). The right holder lodging
an application to the competent authority shall be required to provide
adequate evidence of a prima facie infringement of his IPR and to
supply a sufficiently detailed description of the goods to make them readily
recognizable by the customs authorities. The competent authorities shall
then inform the applicant whether the application has been accepted and,
if so, for what period, and give the necessary directions to customs officers
(Article 52). After this, it is the responsibility of the applicant to
initiate proceedings leading to a decision on the merits of the case. The
Agreement requires a system to be put in place under which action will
be taken on the basis of an application from a right holder, but leaves
it to Members to determine whether they require competent authorities to
act upon their own initiative. Article 58 contains certain additional provisions
applicable to such ex officio action.
The provisions on border measures require the taking
of what are essentially provisional measures against imports of infringing
goods. Many of the same types of safeguards against abuse as appear in
Article 50 on provisional judicial measures are provided for. The competent
authority may require the applicant to provide a security or equivalent
assurance sufficient to protect the defendant and the competent authorities
and to prevent abuse. However, such security or equivalent assurance may
not be such as to unreasonably deter recourse to these procedures (Article
53.1). The importer and the applicant must be promptly notified of the
detention of goods (Article 54). If the right holder fails to initiate
proceedings leading to a decision on the merits of a case within ten working
days, the goods shall normally be released (Article 55). Where goods involve
the alleged infringement of industrial designs, patents, layout-designs
or undisclosed information, the importer must be entitled to obtain their
release on the posting of a security sufficient to protect the right holder
from any infringement, even if proceedings leading to a decision on the
merits have been initiated (Article 53.2). Once judicial proceedings on
the merits of a case have been initiated, the judicial authority may continue
the suspension of the release of goods in accordance with a provisional
judicial measure. In that case, the provisions on provisional measures
in Article 50 shall be applied. The applicant may be required to pay appropriate
compensation to persons whose interests have been adversely affected by
the wrongful detention of goods or through detention of goods released
pursuant to the failure of the applicant to initiate in time proceedings
leading to a decision on the merits of the case (Article 56).
The competent authorities must be able to give the
right holder sufficient opportunity to have any goods detained by the customs
authorities inspected in order to substantiate his or her claims. Where
goods have been found infringing as a result of a decision on the merits,
the Agreement leaves it to Members whether to enable the right holder to
be informed of other persons in the distribution channel so that appropriate
action could also be taken against them (Article 57).
In regard to remedies, the competent authorities
must have the power to order the destruction or disposal outside the channels
of commerce of infringing goods in such a manner as to avoid any harm to
the right holder. The principles contained in Article 46 on civil remedies,
such as the need for proportionality, apply also to border measures. In
regard to counterfeit trademark goods, the authorities may not allow the
re-exportation of the infringing goods in an unaltered state or subject
them to a different customs procedure, other than in exceptional circumstances.
These remedies are without prejudice to other rights of action open to
the right holder, such as to obtain damages through civil litigation, and
are also subject to the right of the defendant to seek review by a judicial
authority (Article 59).
Criminal procedures
The fifth and final section in the enforcement chapter
of the TRIPS Agreement deals with criminal procedures. According to Article
61, provision must be made for these to be applied at least in cases of
wilful trademark counterfeiting or copyright piracy on a commercial scale.
The Agreement leaves it to Members to decide whether to provide for criminal
procedures and penalties to be applied in other cases of infringement of
intellectual property rights, in particular where they are committed wilfully
and on a commercial scale.
Sanctions must include imprisonment and/or monetary
fines sufficient to provide a deterrent, consistent with the level of penalties
applied for crimes of a corresponding gravity. Criminal remedies in appropriate
cases must also include seizure, forfeiture and destruction of the infringing
goods and of materials and instruments used to produce them.
Other provisions
Acquisition and maintenance of intellectual property
rights and related inter partes procedures
On the whole, the Agreement does not deal in detail
with procedural questions concerning acquisition and maintenance of intellectual
property rights. Part IV of the Agreement contains some general rules on
these matters, the purpose of which is to ensure that unnecessary procedural
difficulties in acquiring or maintaining intellectual property rights are
not employed to impair the protection required by the Agreement. According
to paragraph 1 of Article 62, Members may require, as a condition of the
acquisition or maintenance of rights related to trademarks, geographical
indications, industrial designs, patents and layout-designs, compliance
with reasonable procedures and formalities. Where the acquisition of an
intellectual property right is subject to the right being granted or registered,
the procedures must permit the granting or registration of the right within
a reasonable period of time so as to avoid unwarranted curtailment of the
period of protection (paragraph 2). Procedures concerning the acquisition
or maintenance of intellectual property rights and, where a Member's law
provides for such procedures, administrative revocation and inter partes
procedures such as opposition, revocation and cancellation, must be governed
by the general principles concerning decisions and review set out in paragraphs
2 and 3 of Article 41 of the Agreement (paragraph 4). Final administrative
decisions in such procedures must generally be subject to review by a judicial
or quasi-judicial authority (paragraph 5).
Transitional arrangements
The TRIPS Agreement gives all WTO Members
transitional periods so that they can meet their obligations under it.
The transitional periods, which depend on the level of development of the
country concerned, are contained in Articles 65 and 66.
Developed country Members have had to comply with
all of the provisions of the TRIPS Agreement since 1 January 1996. However,
all Members, even those availing themselves of the longer transitional
periods, have had to comply with the national treatment and MFN treatment
obligation as of 1 January 1996.
For developing countries, the general transitional
period is five years, i.e. until 1 January 2000. A country whose economy
is in transition, but which is not a developing country, may nonetheless
delay application until the year 2000, if it meets three tests:
- it is in the process of transformation
from a centrally-planned into a market, free enterprise economy;
- it is undertaking structural
reform of its intellectual property system; and
- it faces special problems in
the preparation and implementation of intellectual property laws and regulations.
For those countries on the United Nations list of
least-developed countries, the transitional period is eleven years. The
Agreement provides a possibility to extend the transitional period upon
duly motivated request.
There are two important substantive obligations that
have been effective from the entry into force of the TRIPS Agreement on
1 January 1995. One is the so-called "non-backsliding" clause in Article
65.5 which concerns changes made during the transitional period, and the
other the so-called "mail-box" provision in Article 70.8 for filing patent
applications for pharmaceutical and agricultural chemical products during
the transitional period.
The "non-backsliding" clause in Article 65.5 forbids
countries from using the transition period to reduce the level of protection
of intellectual property in a way which would result in a lesser degree
of consistency with the requirements of the Agreement.
Special transition rules apply in the situation where
a developing country does not provide product patent protection in a given
area of technology, especially to pharmaceutical or agricultural chemical
inventions, on the general date of application of the Agreement for that
Member, i.e. in the year 2000. According to Article 65.4, such a developing
country may delay the application of the TRIPS obligations on product patents
to that area of technology for an additional five years (i.e. to the year
2005). However, the Agreement includes additional transitional arrangements
in the situation where a country does not provide, as of the date of entry
into force of the WTO Agreement, patent protection for pharmaceutical and
agricultural chemical products commensurate with the TRIPS provisions.
In accordance with the "mail-box" provision contained in Article 70.8,
the country concerned must provide, as from the date of entry into force
of the WTO Agreement, a means by which patent applications for such inventions
can be filed. These applications will not need to be examined for their
patentability until the country starts applying product patent protection
in that area, i.e. for a developing country, at the end of the ten-year
transition period. However, at that time, the application must be examined
by reference to the prior art as it existed at the time the application
was made. If the application is successful, product patent protection would
then have to be granted for the remainder of the patent term counted from
the filing date of the application. If a product that has been the subject
of such a patent application obtains marketing approval before the decision
on the grant of the patent is taken, there is an obligation under Article
70.9 to grant exclusive marketing rights for a period of up to five years
to tide over the gap. This is subject to a number of safeguards to ensure
that the product concerned is a genuine invention: subsequent to the entry
into force of the WTO Agreement, a patent application must have been filed,
a patent granted and marketing approval obtained in another Member for
the product in question.
Protection of existing subject-matter
An important aspect of the transition arrangements
under
the TRIPS Agreement is the provisions relating to the treatment of subject-matter
already existing at the time that a Member starts applying the provisions
of the Agreement. As provided in Article 70.2, the rules of the TRIPS Agreement
generally apply to subject-matter existing on the date of application of
the Agreement for the Member in question and which is protected in that
Member on the said date. In respect of copyright and most related rights,
there are additional requirements. Articles 9.1, 14.6 and 70.2 of the TRIPS
Agreement oblige WTO Members to comply with Article 18 of the Berne Convention,
not only in respect of the rights of authors but also in respect of the
rights of performers and producers of phonograms in phonograms. Article
18 of the Berne Convention as incorporated into the TRIPS Agreement includes
the so-called rule of retroactivity, according to which the Agreement applies
to all works which have not yet fallen into the public domain either in
the country of origin or the country where protection is claimed through
the expiry of the term of protection. The provisions of Article 18 allow
some transitional flexibility where a country is, as a result, taking subject-matter
out of the public domain and putting it under protection, in respect of
the interests of persons who have in good faith already taken steps on
the basis of the material being in the public domain. |