UNIT 2 WIPO, WTO/TRIPS AND IPR

Structure
2.1 2.1 2.3 2.4 2.5 2.6 2.7 2.8 Introduction
Objectives

WIPO, WTO/TRIPS and IPR

The Paris Convention The World Intellectual Property Organization (WIPO) WTO/TRIPS Agreement India and the TRIPS Agreement
Patent Law in India Interpretations and Implementations

Transitional Period Summary Answers and Hints to SAQs

2.1

INTRODUCTION

Intellectual property enjoys protection within a country under specific rights given by the national laws for the purpose. Thus, Intellectual Property Rights (IPRs) are subject to territorial limitations. The IPRs available within a country are not automatically extendable to another country if no agreement exists between the two countries in that respect. If laws for IPRs were substantially different from one country to another, the flow of technology and intellectual resources/property would be severely impeded, which in time would gravely undermine the economic growth and development. The owners and creators of intellectual wealth would be reluctant to send their wares to a country, which would be lax in safeguarding their interests. Such a situation indeed arose in the nineteenth century, some 130 years ago, when many foreign countries were not interested in bringing their inventions to an exhibition in Vienna in 1873 at the invitation of the Empire of AustriaHungary. Inadequate legal protection to the exhibits as intellectual property was the reason behind this unwillingness to participate. It gave a jolt to the international community, precipitating the realization of an immediate need to forge an international understanding on patent protection. Objectives After studying this unit, you should be able to: discuss the initiative taken at the Paris Convention; explain the provisions of the Patent Cooperation Treaty; understand the role of WIPO; discuss the agreement on the Trade Related Aspects of Intellectual Property Rights (TRIPS of WTO); discuss Indian initiatives towards compliance with TRIPS; and analyse Indian provisions relating to TRIPS

2.2

THE PARIS CONVENTION

The realisation at Vienna served as a catalyst to convene the Congress of Vienna for Patent Reform in 1873. An International Congress on Industrial Property at Paris in 1878 followed it. A proposal was circulated by France to establish an international union for the protection of industrial property. There was an international conference in Paris in 1880, which adopted a draft convention. The Paris Convention was finally

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Awareness Course on Intellectual Property Rights

approved and signed as a result of a diplomatic conference held in Paris in 1883. The Paris Convention has since been revised several times: in Brussels (1900), in Washington (1911), in The Hague (1925), in London (1934), in Lisbon (1958), in Stockholm (1967), and amended on October 2, 1979. The Paris Convention constitutes a Union of member countries for the protection of industrial property (patents, utility models, industrial designs, trademarks, service marks, trade names, indications of source or appellations of origin and the repression of unfair competition). A utility model is an invention that is new and useful but fails to qualify for patent protection. In several countries, including France, Italy, Germany, Japan, Korea, Taiwan and Brazil, such small inventions of demonstrable practicability can be protected, without the rigorous examination required for the subject matter of a patent, for a period, generally ten years or less. A trade name is the name of an enterprise. The Paris Convention stands for three basic principles: 1. National Treatment: Nationals of any country of the Union shall enjoy, in another country of the Union, the same treatment as that other country extends to its own nationals in respect of the protection of industrial property. 2. Independence of Patents: Patent applied for by a national of a member-country of the Union, in other countries of the Union, is independent of patent obtained for the same invention in any other country. It does not matter whether the country where the patent has been granted is a member of the Union or not. 3. Right to Priority: If a national of a member country of the Union has applied for patent in a Union country, he can claim the same priority date for application in any other country or countries of the union for the same invention as for the first application, provided the subsequent applications are made within a period of twelve months from the filing of the first application. The last revision of the Paris Convention in 1967 also led to the establishment of an international organisation for administering and fostering intellectual property, called as the World Intellectual Property Organisation (WIPO). In 1996 the WIPO came up with two WIPO treaties: (a) the WIPO Copyright treaty (WCT) and (b) WIPO Performances and Phonograms Treaty (WPPT). Today, the WIPO is the UNOs specialised agency for inter-governmental cooperation on intellectual property, covering both the industrial property, and copyright and neighbouring rights. India is a member of the WIPO. The mission of WIPO is to promote through international cooperation the creation, dissemination, use and protection of works of the human mind for the economic, cultural and social progress of all mankind. WIPO is increasingly involved in helping developing countries to receive the full benefits of the creations of their citizens as well as those of outside world. WIPOs help is also available in the preparation and enforcement of laws, in the establishment of institutions and administrative structures and in the training of the personnel. WIPO has also played notable role in resolution of disputes between individuals and companies through the WIPO Arbitration and Mediation Centre. WIPO is adopting a global approach to finding the places of IP in the framework of emerging issues such as traditional knowledge, folklore, biological diversity, environmental protection and human rights.

2.3

THE WORLD INTELLECTUAL PROPERTY ORGANIZATION (WIPO)

The World Intellectual Property Organization (WIPO) is one of the specialized agencies of the United Nations (UN) system of organizations. The convention establishing the World Intellectual Property Organization was signed at Stockholm in 1967 and entered into force in l970. However, the origins of WIPO go back to l883
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and 1886, with the adoption of the Paris Convention and the Berne Convention respectively. Both of these conventions provided for the establishment of international secretariats, and both were placed under the supervision of the Swiss Federal Government. The few officials who were needed to carry out the administration of the two conventions were located in Berne, Switzerland. Initially there were two secretariats (one for industrial property, one for copyright) for the administration of the two conventions, but in l893 the two secretariats united. The most recent name of the organization, before it became WIPO, was BIRPI, the acronym of the French language version of the name: United International Bureau for the Protection of Intellectual Property (in English). In l960, BIRPI moved from Berne to Geneva. At the l967 diplomatic conference in Stockholm, when WIPO was established, the administrative and final clauses of all the then existing multilateral treaties administered by BIRPI were revised. The said clauses had to be revised because member States wished to assume the position of full governing body of the Organization (WIPO), thus removing the supervisory authority of the Swiss Government, to give it the same status as all the other comparable intergovernmental organizations, and to pave the way for WIPO to become a specialized agency of the United Nations system of intergovernmental organizations. Long before the United Nations was established, BIRPI was the responsible intergovernmental organization in the field of intellectual property. WIPO, the successor to BIRPI, became a specialized agency of the United Nations when an agreement was signed to that effect between the United Nations and WIPO, which came into effect on December l7, l974. The agreement between the United Nations and WIPO recognizes that WIPO is, subject to the competence of the United Nations and its organs, responsible for taking appropriate action in accordance with its basic instrument, treaties and agreements administered by it, for promoting creative intellectual activity and for facilitating the transfer of technology related to industrial property to the developing countries in order to accelerate economic, social and cultural development. Mission and Activities The mission of WIPO is to promote through international cooperation the creation, dissemination, use and protection of works of the human mind for the economic, cultural and social progress of all mankind. Its effect is to contribute to a balance between the stimulation of creativity worldwide, by sufficiently protecting the moral and material interests of creators, on the one hand, and the provision of access to the socio-economic and cultural benefits of such creativity worldwide, on the other hand. WIPOs place on the international scene has greatly changed since its beginnings, when it was created to serve as the secretariat of treaties concluded between States. Although WIPO has maintained this function (it currently administers 21 such treaties), together with the consequential one of promoting intergovernmental cooperation in the administration of intellectual property, its activities have not only expanded, but also greatly diversified. An example of the expansion of WIPOs earlier work is the growth of its registration activities. That is the increase in the use of international treaties, which facilitate a single procedure to apply for patents, and registered trade marks and industrial designs valid in up to all member States of those treaties. The Patent Cooperation Treaty (PCT), the Madrid Agreement and Protocol concerning the International Registration of Marks, and the Hague Agreement concerning the International Deposit of Industrial Designs have all given rise to an increased volume of registration activities. To

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Awareness Course on Intellectual Property Rights

strengthen this aspect of WIPOs work, a new international treaty, namely, the Patent Law Treaty, came into existence in June 2000. Its purpose is to streamline application procedures and to reduce the cost of obtaining simultaneous patent protection in several countries. In its more recent history, WIPO is increasingly involved in helping developing countries, whose creativity has yet to be adequately harnessed, to receive the full benefits of the creations of their citizens, as well as those of the outside world. WIPOs role is to assist them also in the preparation and enforcement of laws, in the establishment of sound institutions and administrative structures, and in the training of appropriate personnel. WIPO has given particular attention to the 49 Least Developed Countries (LDCs) and has also given similar assistance to countries whose economies are in transition, in Central Asia, Central and Eastern Europe and in the Baltic region. WIPOs cooperation for development program is closely interwoven with governmental and intergovernmental cooperation, including WIPOs agreement with the World Trade Organization (WTO), whereby WIPO assists developing countries in the implementation of WTOs Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The problem of development is compounded by rapid technological and scientific progress. WIPOs approach is twofold: it is to identify and to promote international solutions to the legal and administrative problems posed by digital technology, especially the Internet, to the traditional notions and practices of intellectual property. WIPOs work in alternative dispute resolution between individuals and companies, through the WIPO Arbitration and Mediation Center has been extended to cover the problems arising from the misuse of domain names on the Internet. The Internet Corporation has accredited WIPO for Assigned Names and Numbers (ICANN) to administer cases filed under ICANNs Uniform Domain Name Dispute Resolution Policy. Disputes are handled and resolved on-line, enabling parties to settle cases in a time and cost effective manner, without being physically present in the same place. A project that will greatly advance the sharing of valuable intellectual property information benefits is the worldwide global intellectual property information network (WIPONET), a project launched by WIPO in 1999. WIPONET is designed to establish a secure, global network linking the intellectual property offices of all WIPOs Member States, facilitating access to and exchange of information worldwide. Already WIPOs main and subsidiary websites are heavily used all over the world. WIPO is increasingly adopting a global approach not only to intellectual property in itself, but to the place of intellectual property in the wider framework of emerging issues such as traditional knowledge, folklore, biological diversity, environmental protection and human rights. WIPO has followed the method of consultation and empirical research to find, for example, the relation between intellectual property and genetic resources, traditional knowledge and folklore. One of the most significant present-day tasks of WIPO is to demystify intellectual property, so that it is recognized as a part of everyday life not only by those directly involved in it at governmental, legal, industrial and cultural levels, but also by any others who compose civil society, whether in non-governmental organizations or small businesses, whether farmers, public health personnel, individual creators or simply interested members of the general public. Realizing the importance of smalland medium-sized enterprises (SMEs) as the backbone of market economies, WIPO has established a program aimed at helping them to fulfill their potential as a powerful force behind wealth creation.

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WIPOs agenda of outreach to all members of society is through their inclusion as stakeholders and partners in global and national intellectual property systems. To ensure that such inclusion is of benefit to the parties concerned, WIPO pursues a policy of empowerment. This means that WIPOs activities aim to give to all levels of society an awareness of how they have a stake in a healthy intellectual property system, and also to provide them access to the knowledge, experience and expertise which will enable them effectively to use those systems. Administration The Convention establishing WIPO provides for four different organs: the General Assembly, the Conference, the Coordination Committee, and the International Bureau of WIPO or Secretariat. The general assembly consists of all the States, which are members of WIPO and also of any of the Unions. The Conference consists of all the States, which are members of the WIPO. The General Assembly is the supreme organ of WIPO. Among its other powers and functions, the General Assembly appoints the Director General upon nomination by the Coordination Committee; it reviews and approves the reports and activities of the Coordination Committee as well as the reports of the Director General concerning WIPO; it adopts the financial regulations of WIPO and the biennial budget of expenses common to the Unions; it approves the measures proposed by the Director General concerning the administration of the international agreements designed to promote the protection of intellectual property; it determines the working languages of the Secretariat taking into consideration the practice of the United Nations; and it also determines which States not members of WIPO and which intergovernmental and international non-governmental organizations shall be admitted to its meetings as observers. The fourth organ of WIPO is the International Bureau of WIPO or Secretariat. It is headed by the Director General, and further consists of those who make up its regular staff; the staff in the professional and higher categories are recruited on a principle of equitable geographical distribution established in the United Nations system, and other staff are from a wide range of countries of all regions of the world. Membership The Convention establishing WIPO declares that membership shall be open to any State which is a member of any of the Unions, and to any State which is not a member of any of the Unions, provided that it is a member of the United Nations, of any of the specialized agencies of the United Nations, or of the International Atomic Energy Agency, or is a party to the Statute of the International Court of Justice or is invited by the General Assembly of WIPO to become a member. Thus, only States can be members of WIPO or, indeed, of any other specialized agency of the United Nations. To become a member, a State must deposit an instrument of ratification or accession with the Director General of WIPO at Geneva. States party to the Paris or Berne Conventions may become members of WIPO only if they are already bound by, or concurrently ratify or accede to, at least the administrative provisions of the Stockholm (l967) Act of the Paris Convention or of the Paris (1971) Act of the Berne Convention. The States party to the Convention Establishing the World Intellectual Property Organization (WIPO) are listed on the WIPO website: www.wipo.int or www.wipo.org.

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Awareness Course on Intellectual Property Rights

2.4

WTO/TRIPS AGREEMENT

Following the end of the Second World War, a General Agreement on Trade and Tariff (GATT) came into force in 1947 to deal with issues concerning trade and tariff at the global level. In the 1980s, as technology became the dominant engine for economic growth, the clamour of multinational corporations, which are the principal generators of technology, for an effective mechanism for world-wide protection of intellectual property, and strict enforcement of IP rights gained momentum. They had full and active support of their governments. Developed countries and international agencies projected intellectual property protection as the major factor in the growth of the world trade and made it an important item of discussion under GATT in what is known as the Uruguay Round of negotiations. The Uruguay Round began in September, 1986 in Punta del Esta, Uruguay, and after intense debate spreading over eight years, concluded on April 18, 1994 with the signing of a Final Act in Marrakesh, Morocco. The World Trade Organisation (WTO) was thus born at Marrakesh. The basic purpose of the WTO is to ensure a smooth and full flow of the world trade, through removal of protectionism and developing a transparent, multilateral trading system. The WTO is the only international Organization dealing with the global rules of trade between nations. The GATT, which underwent a major revision as the result of negotiations, is now the principal rulebook of the WTO for trade in goods. New rules came into force for dealing with trade in services, General Agreement on Trade in Services (GATS), Trade Related Aspects of Intellectual Property Rights (TRIPS), dispute settlement and trade policy reviews. All WTO members are subjected to periodic scrutiny. As of April 2003, 146 countries were members of the WTO accounting for over 97% of world trade. Decisions are made by the entire membership, typically by consensus. A Ministerial Council (MC) is the apex body of the WTO, which meets at least once in two years. Below it is a Governing Council (GC) to run it. The GC functions in two more capacities: as a Trade Policy Review Body and also as a Dispute Settlement Body. The TRIPS Agreement including trade in counterfeit goods is a part of the final agreement. The preamble to the TRIPS agreement makes mention of (i) the desire to reduce distortions and impediments to international trade, and (ii) the need to promote effective and adequate protection of IPR, while ensuring that resources and procedures to enforce IPR do not themselves become barriers to legitimate trade. The TRIPS Agreement consists of Seven Parts (73 Articles in all). The seven parts are as follows: Part I Part II Part III Part IV Part V Part VI Part VII
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General Provisions and Basic Principles Standards concerning the availability, scope and use of Intellectual Property Rights Enforcement of Intellectual Property Rights Acquisition and Maintenance of Intellectual Property Rights and Related Inter-Partes Procedure Dispute Prevention and Settlement Transitional Arrangements Institutional Arrangements: Final Provisions

Members are free to determine the method of implementing the provisions of the TRIPS agreement within their own legal system and practice, and they are not obliged to implement more extensive protection than is required in this Agreement. (Art. 1) In respect of Parts II, III and IV, members shall comply with the provisions of articles 1 through 12, and article 19 of the Paris Convention (1967). The TRIPS prescribes adherence to two basic principles namely, National Treatment (Art. 3) and Most-Favoured- Nation Treatment (Art. 4). National treatment means that every member of TRIPS shall accord to the nationals of other members the same treatment in respect of intellectual property as it accords to its own nationals. Most-favoured-nation (MFN) treatment in respect of protection of IP means that any advantage, favour, privilege or immunity granted by a member to the nationals of any other country shall be accorded immediately and unconditionally to the nationals of all other members of the TRIPS Agreement, subject to some limited exceptions. Obligations under national treatment and MFN treatment do not apply to procedures provided in multilateral agreements concluded under the auspices of the WIPO relating to the acquisition or maintenance of IPR (Art. 5). The TRIPS is alive to the need to promote technological innovation and ensure technology transfer in a manner that would serve the public interest in developing countries (DCs) and the least developed countries (LDCs). Art. 7 states: The protection and enforcement of the IPRs 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. Art. 8.1 provides that members may adopt measures to protect public health and nutrition and to promote the public interest in sectors of vital importance to their socio-economic and technological development provided that such measures are consistent with the TRIPS Agreement Art. 8.2 cautions that appropriate measures, consistent with the provisions of the TRIPS, may be needed to prevent the abuse of IPRs by those who hold the rights or who resort to practices, which unreasonably restrain trade or adversely affect the international transfer of technology. The TRIPS identifies the following seven instruments for intellectual property rights depending on the kind of intellectual property to be protected: Copyrights and related rights (rights of performers, producers of sound recordings and broadcasting organisations) Trademarks and service marks Geographical indications including appellations of origin Industrial designs Patents Protection of layout designs (topographies) of integrated circuits Protection of undisclosed information including trade secrets and test data.

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A last item seeks to curb abuse of the IPRs: Control of anti-competitive practices in contractual licences.

In matters of Copyrights and Related Rights, the TRIPS Agreement requires members to comply with Articles 1 through 21 and the appendix of the Berne Convention of the protection of literary and Artistic Works (1971). It recognises computer programmes, whether in source code or object code, as literary works entitled for protection. Similarly compilation of data or other materials, whether in the machine-readable or other forms, which qualifies as intellectual creation by reason of selection or arrangement of contents can be protected. However, such protection is not extendable to the data or the material itself and is without prejudice to any copyright subsisting in the data or the material. The TRIPS for the first time in an international agreement provides rental rights for computer programmes and cinematographic works; this is the right of an author of a copyright to authorise to the public commercial rental of their copyrighted works or to prohibit such commercial rental. The TRIPS Agreement requires all member countries of WTO to protect Geographical Indications; reinforced protection is given to wines and spirits. New or original industrial designs are to be protected for at least 10 years. The area of Patents has seen major change under the TRIPS Agreement. Before its introduction, the countries could determine on their own what was patentable, what would be the term (duration) of a patent and what rights would the grant of a patent confer on a patentee. This freedom does not exist any more. Now patents shall be available for any inventions, whether products or processes, in all fields of technology provided they are new, involve an inventive step and are capable of industrial application. The grant of patents would be without discrimination as to the place of invention, the field of technology, and whether products are imported or locally produced. However, inventions may be excluded from patentability on grounds of public order or morality including protection of human, animal or plant life or health or serious prejudice to the environment. Two other categories are also excluded from patentability: (a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals, and (b) plants and animals other than microorganisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. A significant provision concerns protection of plant varieties. Members are required to afford such protection either by patents or by an effective sui generis system or by any combination of the two. However, this provision is to be reviewed four years after the Agreement takes force. The TRIPS Agreement lays down the rights, which the grant of a patent confers on the owner. If the patent is for a product, the owner has the exclusive right to produce, sell or import the protected product. If the patent is for a process, the owner gets the exclusive right over the use of the process, including the right to produce, sell and import the protected product made by the protected process. In the case of infringement of a patented process the burden of proof lies on the defendant, that is, the defendant has to prove that the process being used to obtain an identical product is different from the patented process. However, this burden of proof will apply if the product obtained by the patented process is new to the market or if the owner of the patent has not been able, through reasonable efforts, to determine the process being used by the defendant to make an identical product.
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The TRIPS Agreement permits limited exceptions to the exclusive rights conferred by a patent, if 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 into account legitimate interests of third parties. There is provision for Compulsory Licensing of a patent by a member State under certain conditions: (a) a national emergency or other circumstances of extreme urgency; (b) public non-commercial use; (c) when the use of an invention requires use of another patented invention; (d) to remedy an anticompetitive situation. However, there could be other circumstances justifying compulsory licensing e.g. public interest, public health and protection of environment. A compulsory licence has to be nonexclusive and cannot be assigned. The Agreement permits member States to provide limited exceptions to the exclusive rights conferred by a patent, if such exceptions do not unreasonably conflict with a normal exploitation of the patent or prejudice the legitimate interests of the patent owner. An opportunity for judicial review of any decision to revoke or forfeit a patent is to be available. The term of protection of a patent is stipulated as 20 years from the date of filing of the application. For protection of layout designs (topographies) of integrated circuits, members are required to comply with the basic provisions of the Washington Treaty on Intellectual Property in Respect of Integrated Circuits. The TRIPS Agreement provides for protection of undisclosed information under which trade secrets such as confidential know-how, and information protectable against unfair competition under the Paris Convention (1967) can be protected. Test results and data required to be submitted to government or its agencies are to be protected against unfair commercial use or disclosure. Restrictive practices in licensing of intellectual property, that would have adverse effect on competition or trade or on transfer of technology, are required to be controlled through suitable provisions in national legislation. An important aspect of the TRIPS Agreement is Part III dealing with Enforcement of Intellectual Property Rights. Earlier international agreements stopped at prescribing the rights; the TRIPS Agreement goes farther and binds members to ensure that enforcement procedures as specified under it are available under the national laws. Urgent, effective and deterrent action is required under infringement of the IPR. Detailed provisions have been laid down in respect of judicial and administrative procedures; provisional measures have been authorised to safeguard the interest of the right holder; specific action has been prescribed to prevent counterfeit trademark or pirated copyright goods. However, the TRIPS Agreement is not a self-executing agreement and no claim can be based on the fact that a provision exists in the TRIPS Agreement. The action for protection of IPR can be taken on the basis of the national law and all members of WTO are obliged to bring their national laws in respect of IP rights and protection in conformity with the TRIPS Agreement. There is a Council for Trade Related Aspects of Intellectual Property Rights to monitor the operation of the TRIPS Agreement and in particular, compliance by Members with their obligations under the TRIPS Agreement. Non-compliance with the TRIPS Agreement is taken to the Dispute Settlement Body (DSB) composed of all WTO members. The time frame for the settlement of disputes is limited. If non-compliance is proved and corrective measures are not taken, a country, which is affected by such non-compliance, can take retaliatory commercial

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measures not confined to intellectual property alone, but over a wide spectrum, like revocation of most favoured nation status. Working of the dispute settlement body is overseen by the General Council. Part VI of the Agreement provides for transitional arrangements. These allow developing countries, and countries in transition from a centrally planned to a freeenterprise, market economy, a period of four years from the date the Agreement comes into force, within which they have to comply with their obligations under the Agreement. A country, like India, which did not grant product patent when the TRIPS Agreement began, gets a further period of five years for full compliance which expires on December 31, 2004. The least developed countries may delay it for up to ten years, and the Council can further extend this period. An obligation has been cast upon developed countries to provide technical and financial cooperation to developing and least developed countries. Such cooperation would be available on request and on mutually agreed terms and conditions. It would include assistance in (i) the preparation of domestic legislation on the protection and enforcement of IPRs and prevention of their abuse; (ii) establishing or strengthening domestic agencies/offices for this purpose; (iii) training of personnel. The TRIPS Agreement is to be revised after five years from the date of its coming into force and subsequently after every two years. Spend 10 min. SAQ 1 What does National Treatment under TRIPS mean? SAQ 2 What do you understand by Most Favoured Nation Treatment under TRIPS? SAQ 3 In the case of infringement of a patented process on whom does the burden of proof lie under the TRIPS agreement? SAQ 4 What do you understand by protection of undisclosed information?

2.5

INDIA AND THE TRIPS AGREEMENT

The TRIPS agreement leaves some room to deal with various issues at national level such as the definition of an invention, exceptions to exclusive rights, compulsory licences and others. India has to a large extent complied with its obligations under TRIPS through a series of Amendments to its existing laws and through new legislations. They are: 1. 2. 3. 4. 5. 6. 7.
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The Trade Marks Act, 1999 The Designs Act, 2000 The Protection of Plant Varieties and Farmers Rights Act, 2001 The Geographical Indication of Goods (Registration and Protection) Act, 1999 The Semiconductor Integrated Circuits Layout Designs Bill, 1999 The Patents Act, 1970, as amended by Patents (Amendment) Act, 2002. The Copyright Act, 1957, together with International Copyright Order, 1999.

The TRIPS provides minimum standards of the protection of Intellectual Property Rights (IPRs) in all the WTO member countries. Though such standards are considerably detailed, particularly in the patent field, they leave different degrees of freedom for legislation at the national level. The aim of the TRIPS is fixing minimum standards for protection of intellectual property, which are to be followed by all WTO members. The TRIPS does not create a uniform law, and allows a certain degree of freedom to legislate at the national level.

WIPO, WTO/TRIPS and IPR

2.5.1 Patent Law in India

We discuss in this section Indias compliance with the provisions of TRIPS Agreement on patents and examine whether India has exercised all options when it enacted the Patents (Amendment) Act, 2002. We also deal with the transitional period and implications of the Indian practice and suggest options available to India. This stocktaking acquires a special significance in the wake of the U.S putting India in the priority watch list under Special 301 provision of the Trade Act alleging poor intellectual property protection in India. The Concept of Invention Article 27.1 of the TRIPS Agreement stipulates that: Patents shall be available for any inventions, whether product or process, in all field of technology and, Patent rights shall be enjoyable without discrimination as to the field of technology.

The TRIPS Agreement does not specify what an invention is. The national laws may define this concept according to standards generally applied. These are subject to normal tests of novelty, inventiveness and industrial application. It is also required that patents be available and patent rights enjoyable without discrimination as to the place of invention and irrespective of whether products are imported or produced locally. There is no obligation under the TRIPS to adopt an expansive concept of invention. While implementing Article 27.1, each country should carefully consider the economic, legal and ethical aspects involved in the patenting of living materials or certain types thereof. Some countries may decide not to confer protection on new uses of plants, such as medicinal purposes or second uses of known medicinal products, whose patentability has been accepted in most industrialised countries. Likewise, computer programmes may be deemed as patentable, like the US has now done. One of the main areas in which the lack of a uniform definition of invention is relevant, relates to the distinction between invention and discovery. The former is patentable and the latter is not. A discovery is commonly considered to mean the mere recognition of what already exists. The definitions of inventions are generally explained in a negative way, i.e. what cannot be considered as inventions: a) Discoveries, scientific theories and mathematical methods; b) Aesthetic creations; c) Rule and methods, and schemes for forming mental acts, playing games, or doing business; d) Presentation of information;
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Awareness Course on Intellectual Property Rights

e) The whole or part of the natural living beings and biological materials found in nature, even if isolated from it or purified, including the genome or germplasm of any natural being; f) The biological processes for the production of plants and animals other than through non-biological and microbiological processes. Exclusions from the Subject Matter of Patent The Indian Act, excludes the following from subject matter of patent: A mere discovery of a scientific principle or the formulation of an abstract theory or discovery of any living thing or non-living substance occurring in nature; Plants and animals other than microorganisms in whole or any part thereof including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals; A mathematical or business method or computer programme or algorithms; A literary, dramatic, musical or artistic work or any other aesthetic creation whatsoever including cinematographic works and television productions; A mere scheme or rule or method of performing mental act or method of playing game; presentation of information; Topography of integrated circuits.

Exceptions to Patentability National laws under the TRIPS Agreement can establish exceptions to the patentability of invention that would otherwise be protectable. Inventions contrary to public order or morality can be denied patents. The ethical, economic and legal implications of allowing the patenting of plants and animals, even if genetically modified, strongly indicate that these should be kept out of the domain of patenting. The same applies to therapeutic and surgical methods for treatment of human or animals. The concept of microorganism is extensively interpreted under the TRIPS. Patenting is permitted as applicable only to genetically modified microorganisms and not to those existing in nature. This concept should be interpreted, however, in accordance with the scientific concept that may be adopted by national legislation. A microorganism is a member of any of the following classes: bacteria, fungi, algae, protozoa or viruses. The Indian Act excludes, an invention whose primary or intended use or commercial exploitation could be contrary to law or morality or which causes serious prejudice to human, animal or plant life or health or to environment from being patented. Without violating the TRIPS provision, the Indian courts can interpret what is contrary to morality or what are the kinds of commercial exploitations, which cause serious prejudice to human or animal or plant life. Like the TRIPS provisions Indian law also does not precisely lay down what is opposed to public policy. It is for the Indian courts and authorities to interpret. The meaning and content of the law will evolve as courts and authorities decide the cases that will come up for decisions. Criteria of Patentability Article 27.1 of TRIPS provides that patents shall be granted to protect inventions, which are new, involve an inventive step and are capable of industrial application. In a footnote, the agreement allows member countries to interpret inventive step as synonymous with non-obviousness. Similarly, a country can consider capable of industrial application as synonymous with usefulness. The latter concept is looking somewhat broader, since it would allow even the patentability of purely experimental inventions. Other option to be considered relate to the concept of prior art which may be defined more or less broadly, and to the processes which are not novel but which use or produce a novel product.

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Prior Art It is the existing body of technological information against which an invention is judged to determine if it is novel and non-obvious enough for the purpose of granting a patent. If there is an identity between any part of the prior art and the invention claiming a patent, it makes the claim untenable as being anticipated. An invention is obvious and non-patentable if the difference between the invention and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which the subject matter pertains. Insistence on documentation as the sole proof of prior art may create problems in certain cases like indigenous and traditional knowledge. For example, the Indian system of medicine is to be considered as prior art because though at times not documented, such knowledge has been in the public domain through word of mouth and public usage handed down from generation to generation for centuries. We may recall here the difficulties faced by India in seeking cancellation of patents relating to Neem and Haldi.

WIPO, WTO/TRIPS and IPR

2.5.2 Interpretations and Implementations

The Indian Act defines invention as a new product or process involving an inventive step and capable of industrial application. Capable of industrial application, in relation to an invention, means, that the invention is capable of being made or used in any kind of industry. These definitions are mere reproduction of relevant portions from TRIPS. Further, the Indian Act defines an inventive step as a feature that makes the invention not obvious to a person skilled in the art. This could make patenting of Indian Ayurvedic medicines difficult due to non-obviousness. A Limitation on Rights Conferred A care has to be taken while considering a process-patent, that the process does not lead to a product that is excluded from patentability; e.g. plants or animals, inventions being contrary to public order etc. This is to avoid an indirect product by process protection that would nullify the exclusion from protection. Under the Indian Act the rights conferred by a patent are limited by a proviso: provided that the product obtained is not a product in respect of which no patent shall be granted under this Act. This provision is completely in consonance with the TRIPS text. Interpretation of Claims The TRIPS agreement leaves full freedom to member countries to determine the limits of allowable claims. This is an important issue left to the national legislations. There are different approaches to deal with this issue. In the approach followed in Germany, equivalence is established if, on the basis of an objective evaluation, the allegedly infringing process or product is found to perform substantially the same function as the invention. In another approach, equivalence may not be based on a functional analysis, but on a comparison of the elements that constitute the invention. This solution permits adequate protection of the inventors interests. It also facilitates improvement and further innovation in the field covered by the patent. In effect it requires that a product invention be defined precisely in terms of its specific structure particularly in the field of chemical substances, in order to avoid excessively broad claims and ensure the practicability of the invention.
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Awareness Course on Intellectual Property Rights

Exception to Exclusive Rights Article 30 of the TRIPS agreement defines the exceptions in broad terms, which allows for limited exception so long as these do not unreasonably conflict with the normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner. Under this provision there is considerable freedom for national legislation to define the kind and extent of exception to be granted. Among them, it is important to provide for exceptions relating to research and experimentation on the invention i.e. with regard to a person who in good faith uses the invention prior to the filing of a patent by a third party. These exceptions include the use of the patented invention. The options available are: a) Acts done privately and on a non-commercial scale or for a non-commercial purpose; b) Use of an invention for scientific research or teaching purposes; c) Experimentation on the invention for commercial purposes, for instance to test it or improve on it; d) Preparation of medicines under individual prescriptions; e) Use of the invention by third party that had used it bonafide before the date of application for the patent. Compulsory Licences The TRIPS agreement refers to five possible specific grounds for the granting of compulsory licenses: refusal of the owner to grant authorisation; emergency and extreme urgency, anti-competitive practices, public non-commercial use and dependent patents. Also the conditions are concerned with the actual use of the patent and not the grant of compulsory licence, per se. The Indian Act provides for compulsory licence on any of the following grounds: Reasonable requirements of public are not satisfied; The invention is not available to the public at reasonable price; The invention is not worked in India. Reversal of Burden of Proof The significant change is in the right of process patentees. Article 34 of the TRIPS states that the judicial authorities shall have the authority to order the defendant to prove that the process he used to obtain identical product is different from the patented process. This is a reversal of the burden of proof as it is normally up to the petitioner to adduce evidence about the infringement of his patent right. WTO members have a choice of two circumstances under which any identical product produced without the authorization of the patent owner shall, in the absence of proof to the contrary, be deemed to have infringed the patented process: a) If the product obtained by the patented process is new (new means, new to the market). b) If there is a substantial likelihood that the identical product was made by the patented process and the patent owner has been unable, through reasonable efforts, to determine the process actually used. The first option limits the scope of the reversal of burden of proof to new products, while the second one applies to any product independent of its novelty, and is likely to create uncertainty. The Indian Act incorporates both the conditions as alternatives i.e. if (a) or (b) is satisfied the burden of proof will be on the defendant provided that the patentee

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proves that the product is identical to the product directly obtained by the patented process. The defendant is not required to disclose any manufacturing or commercial secrets, if the court thinks it would be unreasonable to do so.

WIPO, WTO/TRIPS and IPR

2.6

TRANSITIONAL PERIOD

The Indian parliament has passed the patents (Amendment) Act, 2002 with a view to fulfilling Indias obligations under the TRIPS Agreement. It was also influenced by the WTO Dispute Settlement Panels adverse ruling against India, following complaints made by the U.S and the European Union that India has failed to meet its commitments under the Agreement, (Art. 70.8 the mail box provision; Art 70.9. granting exclusive marketing rights). The TRIPS agreement allows developing countries a transitional period of five years with effect from January 1995, to implement the provisions of the TRIPS agreement as a whole. Also if a developing country has not permitted product patent to any class of products under its law as on January 1995, it can take another 5 years to amend its law to provide product patents. Thus India had a transitional period of 10 years up to December 31, 2004 to amend its law to extend product patents to food, pharmaceutical products, agrochemicals, microorganisms and seeds. However, the TRIPS agreement places a limitation on the transition periods in respect of pharmaceuticals and agrochemicals. Article 70.8 establishes a mailbox mechanism and Article 70.9 provides for exclusive marketing rights (EMR) to the applicants in respect of pharmaceutical and agricultural chemical products. Mail Box All countries that did not provide product patents as on January 1995 were required to provide means for accepting applications for product patents. Such applications are to be examined only from the date of January 2005; till then the applications are kept in a mailbox but the priority date shall be the priority date of the application. Exclusive Marketing Rights (EMR) During the transitional period where a product is the subject of a patent application in a member country, EMR is to be granted for a period of 5 years from the date of obtaining marketing approval in that country or until a product patent is granted or rejected, whichever period is shorter. It means India had to receive patent applications for pharmaceuticals and agro-chemicals from January 1, 1995 itself and that exclusive marketing rights were to be granted to an applicant, who applied for those rights. The following conditions are to be fulfilled for granting EMR: A product patent has been granted in any WTO country; A patent application has been filed in any WTO country on or after January 1995; Marketing approval has been obtained in that country; An application for a product patent should have been filed in India on or after January 1995 under the mailbox facility.

India chose to adopt the EMR route for pharmaceuticals and agro-chemicals. The real implication of Article 70.8 and 70.9 is that, in respect of pharmaceuticals and agrochemical products for which product applications were filed after January 1995, Indian companies will not have the freedom that they had enjoyed under the earlier Patent Act of 1970, to produce and market those products in India or elsewhere without any legal restrictions. The product patent system has now become an accepted norm even in most of the developing countries. Thailand amended its Patent Act in 1992 to provide product patents in food, pharmaceuticals and chemical sectors. China also amended its Patent
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Awareness Course on Intellectual Property Rights

Law in 1992, for providing product patents in the above sectors; China was not even a member of WTO at that time. Turkey, Brazil, Argentina and other Latin American countries have opted to introduce product patents by amending their patent laws.

2.7

SUMMARY

Economic growth and development depends on free flow of technology and intellectual resources into a country. This flow is facilitated by a uniform intellectual property protection regime across the globe. The World Intellectual Property Organisation (WIPO) has been active for long to promote creation, dissemination and protection of intellectual property through international cooperation. It has been helping developing countries in the preparation and enforcement in IP laws, the establishment of necessary institutions and administrative structures, and the training of personnel. It has been active in dispute resolution and is now playing a leading role in finding the place of IP in emerging issues such as traditional knowledge, folk lore, biological diversity, environmental protection and human rights. WIPO has facilitated access to and exchange of IP information through its global network, WIPONET, which links IP offices in all member States of WIPO. The three basic principles of the Paris Convention, whose last revision in 1967 led to the establishment of WIPO in its present form are: national treatment, independence of patents and right to priority. The World Trade Organisation (WTO) replaced the General Agreement on Trade and Tariff after 8 years of global negotiations. The relevant agreement under WTO dealing with IP is the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). It consists of 7 parts comprising of 73 Articles. It recognises seven kinds of IP. Two basic principles underlie TRIPS, viz. national treatment and most favoured nation treatment. The TRIPS Agreement treats Undisclosed Information as IP entitled to protection. India has aligned its IP law with the provisions of the TRIPS Agreement.

2.8
SAQ 1

ANSWERS AND HINTS TO SAQs

The national of any country of the Union constituted under the Paris Convention shall enjoy, in another country of the Union, the same treatment as that other country extends to its own nationals in respect of the protection of its intellectual property. SAQ 2 MFN Treatment means that any advantage, favour, privilege or immunity granted by a member of TRIPS to the nationals of any other country shall be accorded immediately and unconditionally to the nationals of all other members of the TRIPS Agreement, subject to some limited exceptions.

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SAQ 3 Normally if A charges B with infringement of As right, it is for A to prove how B has infringed As right. But under the TRIPS Agreement, in the case of infringement of a patented process, B, the defendant will have to prove that the process being used for obtaining an identical product is different from the patented process. This is the reversal of the burden of proof. It applies if the product is new to the market or if the owner of the patent has not been able, through reasonable effort, to determine the process being used by the defendant to make an identical product. SAQ 4 Under TRIPS agreement, any information like trade secrets or confidential know-how or test data submitted to government or its agencies are protected under undisclosed information.

WIPO, WTO/TRIPS and IPR

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