BUSINESS LAW

TRADE RELATING TO INTELLECTUAL PROPERTY RIGHTS

(TRIPS)

Lecturer:
G. Sri Nurhartanto, Dr., S.H., L.LM,
Created by:
I Gede Surya Narmada (12/327039/EK/18751)
Rizaldy Z. Rachmad (12/336047/EK/19176)
Fildza Adilla (14/361172/EK/19700)
Thea Tamara Ozora (14/365449/EK/19956)
Hanif Rajasa(14/365460/EK/19966)

INTERNATIONAL UNDERGRADUATE PROGRAM

FACULTY OF ECONOMICS AND BUSINESS
UNIVERSITAS GADJAH MADA
2016

A. Introduction
The debate between international trade and intellectual property protection
has been one of the most controversial issues in global negotiations in the last few
years. The discussion has largely about the implications of the agreement on the
Trade-related Aspects of Intellectual Property Rights (TRIPS) under the World Trade
Organization (WTO) for international trade in general, and for developing countries in
particular. Most of the views expressed by developing countries on the TRIPS
agreement arise from their interest in technological development.
In the international domain, companies in developed economies have been
complaining for years that patent infringement and duplication of their products by
firms in third-world countries significantly cut into their profits. In response to these
complaints, the World Trade Organization (WTO) approved TRIPS (Agreement on
Trade-Related Aspects of Intellectual Property Rights) agreement in the Uruguay
Round of Trade Negotiations in 1995. Under TRIPS, all countries must, as a condition
for membership in the World Trade Organization, recognize and enforce patents in all
fields of technology.
The agreement represented an important step in efforts to harmonize
intellectual property rules and establishing minimum standards for national laws.
Most of the key elements of the intellectual property systems of the United States,
Europe and Japan were similar and could be easily harmonized. Many of the views
expressed by developing countries stem from their perception that the TRIPS
agreement affects their ability to use technological knowledge to promote public
interest goals such as health, nutrition and environmental conservation.
The efforts to promote compliance with to the TRIPS agreement should be
accompanied by measures that enhance the participation of the developing countries
in international trade. These measures include a broadening of the intellectual
property regime to cover products and resources that are provided by these countries.
It notes the importance of exploring ways by which public interest issues such as
health, nutrition and environmental conservation could be addressed through scientific
and technological cooperation in accordance with the provisions of the TRIPS
agreement.
The differences in disclosure practices between the US, Europe and Japan are
also being discussed. Under European and Japanese systems, patent applications are

publicly disclosed after 18 months from the filing date irrespective of whether a
patent has been granted or not. In contrast, the US system publicly discloses patent
information only when a patent is granted. The US Congress has adopted legislation
that would bring the US patent system in line with its European and Japanese
counterparts.

B. The Agreement on Trade-Related Aspects of Intellectual Property Rights

Covers and Features.
The agreement covers the basic prinsicples of the trading system and other
international property agreeemtns that should be applied, adequate protection to
intellectual property rights, the way every countries enforce the right adequately in
their own territories, settling disputes on intellectual property between members of
WTO and transitional arrangements during the period when every new system get
introduced.
Providing a pure legality covers gives this agreement features to covered some
areas in intellectual property include copyright and related rights, trademark including
service marks, geographical indications including appealations of origin and industrial
design, patents, the layout designs and undislosed information including trade secret
and test data. Also features the enforcement provisions, general princisples applicable
to IPRs and specifies procedures that must be available and dispute settelement.
These arguments reflect the classic trade-off between the static efficiency loss
(higher prices) and potential dynamic gains (research, new products) associated with
IPR protection. Price increases are unlikely, both because of existing price controls
and regulation in most countries and because developing country consumers are
simply too poor to afford higher priced medicines. Dynamic gains are equally
unlikely as developing country markets are too small at present to change the research
priorities of pharmaceutical concerns. In contrast, the potentially largest effects of IPR
enforcement in developing countries are to be expected in the distribution and
availability of new products, both temporally and geographically.
The TRIPS agreement provides a series of transitional arrangements,
timetables and reviews to enable countries to eventually comply fully with its
provisions. These include a five-year moratorium on the filing of non-compliance

complaints against developing countries. In other words, these countries have a grace
period of five years over which they are immune from charges of being in violation.
Many developing countries have asked for more time to bring their national laws and
institutions in line with the agreement.
In addition, the agreement on trade related aspects of intellectual property rights have
develop the trade activities that happen in WTO members. The TRIPS get some low
interest from many developing countries due to the regulation given to the
pharmaceutical industry, in turn, argued that most of its R&D investment is made
possible because of the existence of an intellectual property protection system. It may
maintains drug development, however, have big implication to the user.
C. What Things are Inside the TRIPS ?
Patent
A patent is a set of exclusive rights granted by a sovereign state to an inventor
or assignee for a limited period of time in exchange for detailed public disclosure of
an invention. An invention is a solution to a specific technological problem and is a
product or a process. Patents are a form of intellectual property.
The procedure for granting patents, requirements placed on the patentee, and
the extent of the exclusive rights vary widely between countries according to national
laws and international agreements. Typically, however, a granted patent application
must include one or more claims that define the invention. A patent may include many
claims, each of which defines a specific property right. These claims must meet
relevant patentability requirements, such as novelty, usefulness, and non-obviousness.
The exclusive right granted to a patentee in most countries is the right to prevent
others, or at least to try to prevent others, from commercially making, using, selling,
importing, or distributing a patented invention without permission.
Under the World Trade Organization's (WTO) Agreement on Trade-Related
Aspects of Intellectual Property Rights, patents should be available in WTO member
states

for

any

invention,

in

all

fields

of

technology, and

the term

of

protection available should be a minimum of twenty years. Nevertheless, there are

variations

on what

is patentable

subject

matter from country to

country.

Patentable, statutory or patent-eligible subject matter is subject matter which is

susceptible of patent protection. The laws or patent practices of many countries

provide that certain subject-matter is excluded from patentability, even if the

invention is novel and non-obvious. Together with novelty, inventive step or non
obviousness, utility, and industrial applicability, the question of whether a particular
subject matter is patentable is one of the substantive requirements for patentability.
A patent does not give a right to make or use or sell an invention. Rather, a
patent provides, from a legal standpoint, the right to exclude others from making,
using, selling, offering for sale, or importing the patented invention for the term of the
patent, which is usually 20 years from the filing date subject to the payment
of maintenance fees. From an economical and practical standpoint however, a patent
is better and perhaps more precisely regarded as conferring upon its proprietor "a right
to try to exclude by asserting the patent in court", for many granted patents turn out to
be invalid once their proprietors attempt to assert them in court. A patent is a limited
property right the government gives inventors in exchange for their agreement to
share details of their inventions with the public. Like any other property right, it may
be sold, licensed, mortgaged, assigned or transferred, given away, or simply
abandoned. A patent, being an exclusionary right, does not necessarily give the patent
owner the right to exploit the invention subject to the patent. For example, many
inventions are improvements of prior inventions that may still be covered by someone
else's patent. If an inventor obtains a patent on improvements to an existing invention
which is still under patent, they can only legally use the improved invention if the
patent holder of the original invention gives permission, which they may refuse. Some
countries have "working provisions" that require the invention be exploited in the
jurisdiction it covers. Consequences of not working an invention vary from one
country to another, ranging from revocation of the patent rights to the awarding of a
compulsory license awarded by the courts to a party wishing to exploit a patented
invention. The patentee has the opportunity to challenge the revocation or license, but
is usually required to provide evidence that the reasonable requirements of the public
have been met by the working of invention.
Trademark
Trademark is a sign or expression which identifies products or services of a
particular source from those of others although trademarks used to identify services
are usually called service marks. The trademark owner can be an individual, business
organization, or any legal entity. A trademark may be located on a package, a label, a

voucher, or on the product itself. For the sake of corporate identity, trademarks are
being displayed on company buildings. The essential function of a trademark is to
exclusively identify the commercial source or origin of products or services, so a
trademark, properly called, indicates source or serves as a badge of origin. In other
words, trademarks serve to identify a particular business as the source of goods or
services. The use of a trademark in this way is known as trademark use.
Certain exclusive rights attach to a registered mark.
It should be noted that trademark rights generally arise out of the use of, or to
maintain exclusive rights over, that sign in relation to certain products or services,
assuming there are no other trademark objections. Different goods and services have
been classified by the International (Nice) Classification of Goods and Services into
45 Trademark Classes (1 to 34 cover goods, and 35 to 45 services). The idea behind
this system is to specify and limit the extension of the intellectual property right by
determining which goods or services are covered by the mark, and to unify
classification systems around the world.
Copyright
Copyright is a legal right created by the law of a country that grants the
creator of an original work of exclusive rights for its use and distribution. This is
usually only for a limited time. The exclusive rights are not absolute but limited
by limitations and exceptions to copyright law, including fair use. A major limitation
on copyright is that copyright protects only the original expression of ideas, and not
the underlying ideas themselves.
Copyrights are considered as territorial rights, which means they do not extend
beyond the territory of a specific jurisdiction. While many aspects of national
copyright laws have been standardized through international copyright agreements,
copyright laws vary by country.
Typically, the duration of a copyright spans the author's life plus 50 to 100
years (that is, copyright typically expires 50 to 100 years after the author dies,
depending on the jurisdiction). Some countries require certain copyright formalities to
establishing copyright, but most recognize copyright in any completed work, without
formal registration. Generally, copyright is enforced as a civil matter, though some
jurisdictions do apply criminal sanctions.

Most jurisdictions recognize copyright limitations, allowing "fair" exceptions

to the creator's exclusivity of copyright and giving users certain rights. The
development of digital media and computer network technologies have prompted
reinterpretation of these exceptions, introduced new difficulties in enforcing
copyright, and inspired additional challenges to copyright law's philosophic basis.
Simultaneously, businesses with great economic dependence upon copyright, such as
those in the music business, have advocated the extension and expansion of copyright
and sought additional legal and technological enforcement. For a work to be
considered to infringe upon copyright, its use must have occurred in a nation that has
domestic copyright laws and/or adheres to a bilateral treaty or established
international convention such as the Berne Convention or WIPO Copyright Treaty.
Improper use of materials outside of legislation is deemed "unauthorized edition", not
copyright infringement.
Copyright infringement most often occurs to software, film and music.
However, infringement upon books and other text works remains common, especially
for educational reasons. Statistics regarding the effects of copyright infringement are
difficult to determine. Studies have attempted to determine whether there is a
monetary loss for industries affected by copyright infringement by predicting what
portion of pirated works would have been formally purchased if they had not been
freely available. Other reports indicate that copyright infringement does not have an
adverse effect on the entertainment industry, and can have a positive effect. In
particular, a 2014 university study concluded that free music content, accessed on
YouTube, does not necessarily hurt sales, instead it has the potential to increase sales.
D. COPYRIGHT LAW IN INDONESIA
Intellectual Properties rights are protected in Indonesia under the laws and
government regulations on patents, trademarks, copyright, industrial designs, trade
secrets, layout designs of integrated circuits and plant variety protection. There are
also regulations that extend protection to geographical indications and other IP rights.
1958, Prime Minister Djuanda declared Indonesia joined the Berne Convention so that
Indonesia could take advantage of the intellectual work, creativity, and initiative from
foreign nations without having to pay royalties.

In 1982, the Government of Indonesia revoked the copyright act Auteurswet

Staatsblad 1912 and enacted Act No. 6 of 1982 on Copyright.
There are some organization that are involved in protecting copyright in Indonesia:

KCI : Karya Cipta Indonesia

ASIRI : Asosiasi Indrustri Rekaman Indonesia (Association of Recording

Industry Indonesia)

APMINDO : Asosiasi Pengusaha Musik Indonesia (Association of Music

Indonesia)

ASIREFI : Asosiasi Rekaman Film Indonesia (Association of Recording Film

Indonesia)

PAPPRI : Persatuan Artis Penata Musik Rekaman Indonesia (United Artists

Records Playground Music Indonesia)

IKAPI : Ikatan Penerbit Indonesia (Association of Indonesian Publishers)

MPA : Motion Picture Association

ACT NUMBER 19 YEAR 2002

COPYRIGHT ACT
Considering:
a. That Indonesia is a country which has diversity of ethnics/tribes and culture as
well as wealth in the field of arts and literatures which needs the protection of
Copyright for the intellectual property originating from the diversity;
b. That Indonesia has become a member of several conventions/ international
agreements in the field of intellectual property rights in general, and
particularly in the field of Copyright, which needs further manifestation in its
national legal system;

c. That the development in the field of trade, industry, and investment has grown
so rapidly so that it needs improvement on the protection for Authors and
Owners of Related Rights by considering the interest of the public in general;
d. The existing Copyright Law, it is necessary to enact a new Copyright Law to
replace Law no.6 of 1982 on Copyright as amended by Law no.7 of 1987, and
lastly by Law no.12 of 1997;
e. That based on the considerations mentioned in points a, b, c and d, Law on
Copyright is needed.

E. DIFFERENT PERSPECTIVES
TRIPs is a the pioneer of the big changes in the world trade
organization at the time. Large countries, like the United States to realize the
importance of the protection of intellectual property rights, and therefore, the
provision of international trade should be up to the arrangements for the
protection of intellectual property rights itself.
Approval formulation of TRIPS as one of the principles applied in the
WTO is not without a hitch. TRIPs arised much debate, especially between
developed countries and developing countries. Developed countries certainly
highly recommended the issuance of TRIPs because the technology and many
creations came from many developed countries. Developing countries
certainly feel aggrieved. However, even though TRIPs has gone through a lot
of debate, of course, developing countries won and managed to make TRIPS
negotiations as one of the key principles of the WTO. This victory was later
considered as a victory hegemony of developed countries in protecting capital
and investments on inventions, and it gives a lot of advantages to developed
countries.
For developing countries, the obligation to implement the TRIPS
Agreement is a heavy and difficult burden to do since the legal infrastructure
has not sophisticated yet and the economic conditions are not as advanced as
industrialized countries. Developing countries argue that TRIPS makes them
more difficult to obtain transfer of technology they need from developed
countries. Moreover, this perspective is reinforced by the role of WIPO where

the developing countries also supports the higher rules protection. Therefore,
according to the developing countries, the role of WIPO should be changed.

F. COUNTERFEITING
1. Definition
Counterfeiting is the practice of manufacturing, importing/exporting,
distributing, selling or otherwise dealing in goods, often of inferior quality,
under a trademark that is identical to or substantially indistinguishable from a
registered trademark, without the approval or oversight of the registered
trademark owner. Counterfeits are most commonly called fake goods or
knock-offs.
2. Problem Statement
Many well-known and successful brands, including apparels, automotive,
cosmetic, music, software, medicine, and daily product, are victims of
counterfeiting. The production of counterfeit goods is most prevalent in
developing countries with strong but low-cost manufacturing capability,
including in Indonesia. The fact is that counterfeit goods are highly demanded
and sold, and the law and regulation about copyright is still not efficient.

3. Counterfeit Goods in Indonesia

A 2010 joint study by the Masyarakat Indonesia Anti Pemalsuan (MIAP),
estimated losses from counterfeiting in Indonesia at average is Rp 37 trillion
annually. Indonesia counterfeit product sales increases 50% from 2010 to
2014.
The size of the counterfeit goods market in Indonesia 3.8% in
pharmaceuticals, 8.5% in food and beverages, 12.6% in cosmetics, 33.5%in
software, 37.2% in leather goods, 38.9% in apparel and 49.4% in printer ink.

Even though there is a strict rule of copyright and counterfeiting in Indonesia,

it is still not efficient enough because the implementation by the government
and society is still very low.
4. Solution
To minimize counterfeiting in Indonesia, we provide several solutions based
on 3 perspectives:
a. Companys perspective

Registering your trademarks in countries where you sell, manufacture, ship or

store products.

Recording your trademarks with national customs where possible.

Monitoring and auditing your companys supply chains.

Adding authentication devices to genuine products.

Setting up a corporate brand protection program and training employees about

anti-counterfeiting measures.

Providing training for local law enforcement personnel on your companys

brand protection program.

b. Consumers perspective
Rethinking about the danger and disadvantages of using knockoff products,
even though it is way cheaper than the original product, it might be not safe to

be consumed.
Respect and appreciate the authors and creators.
Not buying any counterfeit products, because with purchasing means you
supporting.

c. Government & Organizations Perspective

Raise public awareness through education, dissemination, consultancy, and

supervision.
Strictly apply and implement the law.
Block any sites who sell knockoff products.

References:
-

Pugatch, Meir Perez. The International Political Economy of Intellectual

Property Rights: the TRIPs Agreement and the Advanced Pharmaceutical

Industry in Europe. 2002. http://etheses.lse.ac.uk/2284/1/U615231.pdf

ela, Mirsi. Trade Related Aspects of Intellectual Property Rights and
Developing

countries.

2014.

http://www.mcser.org/journal/index.php/ajis/article/view/2976
BOISSON DE CHAZOURNES, Laurence, DHANJEE, Rajan. Trade-Related
Aspects of Intellectual Property Rights (TRIPs): Objectives, Approaches and

Basic Principles of the GATT and of the Intellectual Property Conventions.

-

Journal of World Trade, 1990, no. 5, p. 5-15

https://en.wikipedia.org/wiki/Copyright_law_of_Indonesia
https://en.wikisource.org/wiki/Copyright_Act_of_Republic_of_Indonesia
http://www.inta.org/TrademarkBasics/FactSheets/Pages/Counterfeiting.aspx
http://miap.or.id/main/aksi/

http://lib.ui.ac.id/file?file=pdf/abstrak-107954.pdf

http://fyustiazari-fisip12.web.unair.ac.id/artikel_detail-120647-Prinsipprinsip
%20Hukum%20Internasional-Hukum%20Hak%20Kekayaan%20Intelektual
%20Internasional.html