Chapter §25.04 The World Trade Organization's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)

• Jurisdiction: United States

§25.04 The World Trade Organization's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)

[A] Introduction

§25.04 THE WTO'S TRIPS AGREEMENT

In the 1980s, the primary forum for legislating multinational intellectual property (IP) agreements shifted from the WIPO, an exclusively IP-focused organization, to the World Trade Organization (WTO), an independent body with its roots in post-World War II efforts to reduce trade barriers between nations.⁷⁶ As discussed supra,⁷⁷ the Uruguay Round⁷⁸ of the General Agreement on Tariffs and Trade (GATT) brought IP rights (including patents, copyrights, and trademarks) into the GATT WTO system for the first time. The Uruguay Round resulted, inter alia, in enactment of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement).⁷⁹ The TRIPS Agreement entered into force on January 1, 1995, and is administered by the WTO.

The TRIPS agreement is a landmark achievement in international IP for a number of reasons. For example, TRIPS is the first international IP treaty to mandate minimum standards for enforcement of rights by individual IP holders. TRIPS mandates that procedures for enforcing IP rights shall be fair and equitable.⁸⁰ Decisions on the merits shall preferably be in writing.⁸¹ Accused infringers shall have the right to timely and sufficiently detailed notice.⁸² Injunctions⁸³ and damages⁸⁴ shall be available.

[B] Dispute Settlement Procedures

As part of the WTO Agreement, TRIPS also provides procedures for the settlement of disputes between member countries when one country believes that another's IP laws are not in compliance with the provisions of TRIPS. These procedures involve country-to-country consultations, the establishment of WTO panels to consider disputes and produce written reports, and the possibility of appellate review within the WTO. The considerable details of these dispute settlement procedures are set forth in the Dispute Settlement Understanding (DSU) of the WTO.⁸⁵ The United States has invoked the WTO dispute settlement procedures in patent cases involving such topics as India's "mailbox" rule, "local working" and compulsory licensing in Brazil, Canada's term of patent protection, and China's denial of foreign patent holders' ability to enforce their rights against certain licensees and joint-venture parties.⁸⁶

The availability of the DSU procedures put real "teeth" into TRIPS. If a country is unsuccessful in a WTO dispute proceeding and does not timely bring its intellectual property laws into compliance with the WTO's ruling, trade sanctions (e.g., tariffs, import quotas, and taxes) can potentially be imposed on the offending country's exported products that have nothing to do with the intellectual property dispute at issue. This is known as "cross-sector retaliation."⁸⁷

For example, consider a hypothetical in which the United States contends that France is not providing sufficient patent protection for computer software. Assume that the United States prevails in a WTO dispute settlement proceeding against France, but France does not subsequently bring its laws into compliance with the decision. The WTO could decide to permit the United States to impose sanctions on France by increasing the tariffs imposed on exports of French wine to the United States. It is irrelevant that computer software and wine are unrelated products and that wine was not the subject of the WTO dispute.

[C] Substantive Minimum Levels of Protection

§25.04 THE WTO'S TRIPS AGREEMENT

The TRIPS Agreement also is critically important because it is the first international IP treaty to establish "substantive minima" of protection for all types of intellectual property. With respect to patents, Article 27 of TRIPS provides that, subject to certain important exceptions,⁸⁸ "[p]atents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application."⁸⁹ This language was targeted at developing and least-developed countries that had previously refused to grant patents on pharmaceuticals and agricultural inventions; if such countries want to become TRIPS signatories, they must bring their national patent laws into compliance with TRIPS within certain designated time periods by providing patent protection (or at least pipeline protection) on this subject matter.⁹⁰

The above-quoted language of TRIPS Article 27 also established three substantive criteria of patentability (novelty, inventive step, and industrial application) that parallel the U.S. criteria of novelty, nonobviousness, and utility. TRIPS does not explicitly define these substantive criteria, however, leaving member countries certain flexibilities in interpretation.⁹¹

[D] Limitations on Compulsory Licensing

TRIPS also reflects the United States' historic antipathy toward...