What is TRIPs?

Having defined and classified IP, let us now look at TRIPs: The Agreement on TradeRelated Aspects of Intellectual Property Rights (TRIPs) is an international treaty
administered by the World Trade Organization (WTO) which sets down minimum standards
for most forms of intellectual property (IP) regulation within all member countries of the
World Trade Organization.
TRIPs deals with the following IPRs

Copyright and related rights;

Patents;
Trademarks;
Geographical indications, including appellations of origin;
Industrial designs;
Integrated circuit layout-designs;
Protection of undisclosed information
Control of anti-competitive practices in contractual licenses

TRIPs also specifies enforcement procedures, remedies, and dispute resolution procedures.
WTO specifies the three main features of the Agreement as;

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.
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.
Dispute settlement: The Agreement makes disputes between WTO Members about
the respect of the TRIPS obligations subject to the WTO's dispute settlement
procedures.

Under TRIPs, all countries have to provide for protection of product patents from January 1,
1995. But developing countries like India, which did not have a regime of product patents,
had a transition period of ten years-until January 1, 2005, to affect the switch over. During
this transition period, it was decided that these economies would accept applications for
patents (which would be considered and granted after January 2005) and provide EMR
(Exclusive Marketing Rights) for the producers of patented drugs (in the pharmaceutical
industry) and agrochemicals.

The transition period for least developed countries was extended to 2016, and could be
extended beyond that.
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.
Comparison of India's Patent Act and TRIPs
Indian Patent Act of 1970

TRIPs

Only process not product patents in food,

medicines, chemicals

Process and product patents in almost all

fields of technology

Term of patents 14 years; 5-7 in

chemicals, drugs

Term of patents 20 years

Compulsory licensing and license of right

Limited compulsory licensing, no license

of right

Several areas excluded from patents

(method of agriculture, any process for
medicinal surgical or other treatment of
humans, or similar treatment of animals
and plants to render them free of disease
or increase economic value of products)

Almost all fields of technology patentable.

Only area conclusively excluded from
patentability is plant varieties; debate
regarding some areas in agriculture and
biotechnology

Government allowed to use patented

invention to prevent scarcity

Very limited scope for governments to

use patented inventions

Source: Adapted from Patent Office Technical Society, Indian Patent Act, 1970 and Rules,
1991 and MVIRDC, GATT Agreements: Results of the Uruguay Round, World Trade Centre,
January 1995
World Trade Organization came into function on 1/1/1995 with an objective to increase
world trade and employment. India is also a member of World Trade Organization. The
features of World Trade Organization are as follows:
(1) World Trade Organization is a separate legal entity.

(2) It has a legal and institutional foundation of the multi trading system.
(3 All its agreements are permanent and binding to all member countries.
(4) World Trade Organization has global status like IMF, but it is not an agent of UN.
(5) All its members enjoys equal voting rights, irrespective of type and volume of trade.
(6) It has an automatic dispute settlement system.
(7) WTO has a rule based and time bound approach.
(8) It has a wide coverage of not only trade but also service.
(9) WTO focuses an trade related aspects of intellectual property rights.
(10) World Trade organization is a huge organizational body having a large secretariat.
After IMF and World Bank, World Trade Organization is the third largest organization which
has its own functioning system. It is managed on democratic principles and it is managed by
Director General. He is overall in charge of World Trade Organization. He is assisted by four
deputy director generals. Each director is appointed for a period of four years. This director
is elected by member countries.
Mr. Renato Gugurio was the first D.G. of World Trade Organization. It is a legal body. All
member countries enjoy world privileges and each member enjoys one vote only. World
Trade Organization has two councils i.e. the ministerial council and the general council.
Ministry council is the highest authority. It is supported by general council. The Ministerial
council meets at least once in every two years. General council is the lower body which is
consisting representatives from member countries. World Trade Organization also has other
council committees, working parties and negotiating groups for respective issues. The
decisions are taken by majority of votes. Any decision relating to admission of a new
member or any amendment in multilateral agreement requires at least 2/3rd majority.
World Trade Organization has its own dispute settlement machinery. It has a dispute
settlement panel to settle disputes. The complaints or objections raised by any country are
referred to dispute settlement body , and then they dispute settlement body refer that
complaint to dispute settlement panel for quick redressal.

objectives and functions of WTO.

PRINCIPAL OBJECTIVES OF WTO
1)

Trade Without Discrimination :Trade without discrimination through the application of Most Favoured Nation (MFN)
Principle. As per MFN clause, a member nation of WTO must accord (give) the same
preferential treatment to other member nations which it gives to any other member nation.
2)

Raising The Standard Of Living :Raising the standard of living and incomes and ensuring full employment of the
citizens of its member nations.
3)

Optimum Use Of World's Resources :Ensuring optimum use of world's resources and, thereby, expanding world
production and trade of goods as well as services.
4)

Settlement Of Disputes :Settlement of disputes among members through consultation, conciliation, and as a
last resort through dispute settlement procedures.
5)

Growth Of Less Developed Countries (LDCs) :It recognises the need for positive efforts designed to ensure that developing
countries especially the LDCs, secure a better share of growth in international trade.
6)
Protection Of Environment
Preserving and protecting the environment of the world so as to benefit all the nations of
the world.
7)

Enlargement Of Production And Trade

WTO aims to enlarge production and trade of goods as well as services.

8)

Employment
WTO aims at generating full employment and increase in effective demand.

FUNCTIONS OF WTO

1)
2)
3)
4)
5)

6)
7)
8)

WTO has following functions

Implementation Of Reduction In Trade Barriers
WTO shall check the implementation of tariff cuts and reduction of non-tariff
measures agreed upon the member nations at the conclusion of Uruguay Round.
Forum For Negotiation
WTO shall provide the forum of negotiations among its members concerning their
multilateral trade relations.
Settlement Of Disputes
WTO shall administer the understanding on rules and procedures governing the
settlement of disputes.
Assistance To IMF And IBRD
WTO shall co-operate with IMF, IBRD and its affiliated agencies to achieve greater
coherence in global economic policy.
Administration Of Agreements
WTO shall look after the administration of 29 agreements (signed at the conclusion of
Uruguay Round in 1994), plus a number of other agreements, entered into after Uruguay
Round.
Examination Of Trade Policies
WTO shall regularly examine the foreign trade policies of member nations, to see that
such policies are in line with WTOs guidelines.
Consultancy Services
WTO shall keep a watch on the developments in the world economy and it provides
consultancy services to its member nations.
Collection Of Foreign Trade Information
WTO shall collect information on import - export trade and on various trade measures
and other trade statistics of member nations.

SALIENT FEATURES OF URUGUAY ROUND I WTO AGREEMENTS

The main agreements of WTO are
1)
Agreement On Agriculture (AOA) :The main objective is to increase market orientation in agriculture trade. It provides
for commitments in the area of market access, domestic support and export competition.
The members have to transform their non-tarrif barriers like quotas into equivalent tariff
measures. The tariffs are to be reduced by 36% within 6 years in case of developed
countries and by 24% within 10 years in case of developed countries. The least developed
countries need not make any commitment for reduction.
2)

Agreement On Trade In Textiles And Clothing (Multi - Fibre Arrangement) :-

This provides for phasing out the import quotas on textiles and clothing in force
under the Multi - Fibre Arrangement since 1974, over a| span of 10 years i.e. by 1st
January, 2005. With this agreement quota on textile and clothing has now been abolished.
3)
Agreement On Manufactured Goods
The developed countries agreed to reduce tariffs on manufactured goods other than
textiles by 40%. The tariffs would now be brought down to an average of 3.8% from earlier
6.3%.
4)
Agreement On TRIMs
An Agreement on Trade Related Investment Measures (TRIMs) calls for introducing
national treatment of foreign investments and removal of quantitative restrictions. It
identifies 5 investment measures which are inconsistent with the GATT provisions on
national treatment and on general elimination of qualitative restrictions.
5)
Agreement On TRIPs
Trade Related Intellectual Property Rights (TRIPs) pertain to Patents and
Copyrights. Whereas earlier on process patents were granted to food, medicines, drugs and
chemical products, the TRIPs Agreement now provides for granting product patents also in
all these areas. Protection will be available for 20 years for patents and 50 years for
copyrights.
6)
General Agreement On Trade And Services (GATS)
For the first time, trade in services like banking, insurance, travel, maritime
transportation, mobility of labour etc. has been brought within the ambit of negotiations. The
General Agreement on Trade in Services (GATS) provides a multilateral framework of
principles and services which should govern trade in services under conditions of
transparency and progressive liberalisation.
7)
Disputes Settlement Body
Settllement of disputes under GATT was a never ending process. The Disputes
Settlement Body (DSB) set up under WTO seeks to plug the loopholes and provide security
and predictability to the multilateral trading system. It has now been made mandatory to
settle a dispute within 18 months. The findings of disputes settlement panels will be final
and binding on all parties concerned.
In addition to the above, the Uruguay Round also reached agreements on the
understanding and implications of certain articles of GATT 1947, viz, pre-shipment
inspection, rules of origin, import licensing, anti - dumping measures and countervailing
duties, safeguards, subsidies etc.