The Agreement establishing the World Trade Organization (WTO), including the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), came into force on 1 January 1995. The WTO is divided into three main parts: the Agreements on trade in goods, which includes a new GATT and the various subsidiary agreements to it; a newly negotiated General Agreement on Trade in Services (GATS); and the Agreement on TRIPS. Any country wishing to be a Member of the WTO is obliged to accept all these agreements as part of a package which reflects the trade-offs made during the negotiating process.

The TRIPS Agreement covers all the main areas of intellectual property - copyright and related rights, trademarks, geographical indications, industrial designs, patents, layout-designs of integrated circuits and undisclosed information or trade secrets. In respect of these areas, the Agreement contains three main sets of provisions:

Standards. The Agreement lays down minimum standards of substantive protection for each category of rights that must be provided in the national law of each Member. It defines each of the main elements of protection, namely the subject matter to be protected, the rights to be conferred and any permissible exceptions to those rights, and the minimum duration of protection.

Enforcement. The second major characteristic of the Agreement is that, for the first time in international law, it requires Members to provide effective procedures and remedies for the enforcement of intellectual property rights (IPRs).

Dispute settlement. It makes disputes between governments about whether TRIPS obligations have been complied with subject to a strengthened version of the GATT dispute settlement system under the World Trade Organization. In addition, the Agreement provides for certain basic principles, such as national treatment, and some general rules to ensure that procedural difficulties in acquiring or maintaining IPRs do not negate the protection due.

Another general point about the Agreement should also be made. It is a minimum standards Agreement that leaves Members free to provide more extensive protection of intellectual property if they so wish. The TRIPS Agreement does require, as a general rule, that any more extensive protection so implemented be extended to the nationals of all WTO Members on a national and most-favoured-nation treatment basis.

The TRIPS provisions on pharmaceutical patents

The question of the protection of pharmaceutical patents was one of the key issues in the negotiations as a whole and perhaps the key issue in the north-south axis of the negotiations. It was the last issue to be resolved in the negotiations prior to the tabling of the draft Agreement at the end of 1991.

Patentable subject matter

The basic rule is that patents must be available for any inventions, whether products or processes, in all fields of technology without discrimination, subject to the normal tests. There are three exceptions to this basic rule. One is for inventions contrary to public order or morality. The second exception is that Members may exclude from patentability diagnostic, therapeutic and surgical methods for the treatment of humans or animals, and the third is that Members may exclude plants and animals other than microorganisms and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. It is worth noting that this exception is considerably broader than the exceptions for life forms found in the patent laws of the United States, European countries and Japan. This reflected a concern on the part of many developing countries not to be obliged to go further in this area of technology, at least for the time being.

Patent rights

The rights that must be conferred by a product patent include the usual ones of making, using and selling. The Agreement makes it clear that the issue of the exhaustion of rights cannot be addressed in dispute settlement proceedings under the Agreement, except in regard to the national treatment and most favoured nation obligations. Thus, subject to these exceptions, what a country does in the area of exhaustion cannot be challenged through the WTO. However, the text does not specifically legitimize national discretion in this area and is interpreted by some as meaning that exhaustion practices are not covered by the restraint on the use of unilateral measures that the WTO dispute settlement provisions require.

Compulsory licensing

The outcome of these debates can be found in Article 31 of the TRIPS text. This contains a common set of rules applying to both forms of use without the authorization of the right holder - that is to say compulsory licensing and government use - and does not limit the grounds on which compulsory licences can be granted. It does, however, contain, together with related provisions in Article 27.1, a number of conditions that have to be respected in order to protect the legitimate interests of the right holder.

Anti-competitive practices

The TRIPS Agreement contains a Section on the control of anti-competitive practices. The Section recognizes that some licensing practices or conditions pertaining to IPRs which restrain competition may have adverse effects on trade and impede the transfer and dissemination of technology. The Section further recognizes the right of Members to adopt measures, consistently with the provisions of the Agreement, to prevent or control abusive anti-competitive practices and includes an illustrative list of such practices. These provisions essentially reflect the concerns expressed in the negotiations by representatives of developing countries. However, it is also worth noting that attitudes towards a general consideration of matters of competition law, including restrictive business practices, as they relate to the conditions of international trade have evolved in the GATT/WTO recently. There is widespread support from developed as well as developing countries for the inclusion, by the 1996 Singapore Ministerial, of this issue on the future work programme of the World Trade Organization.

Undisclosed information and test data

Although the matter was somewhat contentious at the outset of the negotiations, delegations generally recognized that such protection was desirable and in many cases was already available in one form or another through their national law. The information that should be protected is defined as information that is secret, that has commercial value because it is secret, and that has been subject to reasonable steps under the circumstances to keep it secret.

Undisclosed test data and other data whose submission is required by a Member as a condition of approving the marketing of pharmaceutical or agricultural chemical products which use new chemical entities and whose origination involved a considerable effort must be protected against unfair commercial use.

Transitional arrangements

The basic rule in this area is that, as from 1 January 1995 - the date of entry into force of the WTO Agreement - developed countries had a one-year transition period (i.e. until the beginning of this year), and developing and least-developed countries generally have five- and eleven-year transition periods respectively in order to bring their legislation and practices into conformity with their TRIPS obligations. Countries in transition to a market economy may also benefit from a five-year transition period subject to certain conditions. All WTO Members have had to comply with the national treatment and most favoured nation obligations of the TRIPS Agreement since the beginning of this year. These transition periods are optional and many countries are making the necessary changes to their legislation in advance.

Special transitional arrangements apply in the situation where a developing country does not provide product protection in a given area of technology, such as Pharmaceuticals, on the general date of application of this Agreement for that Member, i.e. in the year 2000. In such a situation, the country concerned may delay the application of the TRIPS obligations on product patents to that area of technology for an additional five years (i.e. to the year 2005). If this was all the TRIPS Agreement said on this matter, the effect would be that such a developing country would be obliged to start providing patent protection from the year 2005 for pharmaceutical product inventions which will be "new" as of that date. Given the delay between the date of filing applications for patents for new pharmaceutical products and those products receiving marketing approval, especially in developing countries, the practical commercial effect of the TRIPS provisions in the pharmaceutical sector would, in many such cases, have not become apparent until the year 2015 or so. This was clearly not a negotiable prospect in the context of the Uruguay Round. It is for this reason that the TRIPS text also includes additional transitional arrangements - the so-called "mailbox" and exclusive marketing rights provision of Article 70.8 and 70.9 - in the situation where a country does not provide, as of the date of entry into force of the WTO Agreement, patent protection for pharmaceutical (and agricultural chemical) products commensurate with the TRIPS provisions. The net effect of these arrangements is that, in countries which do not presently grant product protection for Pharmaceuticals, pharmaceutical inventions that meet the normal criteria for protection as of the date of entry into force of the Agreement for that country (normally, 1 January 1995) must generally be protected, at least by the time that protection becomes of commercial significance.

The TRIPS Agreement also regulates another transition issue, namely the extent to which patents still valid as of the end of a Member's transition period will benefit from the standards under the Agreement. The basic rule is that the obligations in the Agreement will apply to such patents.

Dispute settlement

One of the major innovations of the TRIPS Agreement is that treaty obligations in the area of intellectual property will be subject for the first time to a functioning dispute settlement system. Under the World Trade Organization, an integrated dispute settlement system will apply to disputes in all of the areas covered. This system is a strengthened version of the existing GATT mechanism. Another important feature of the dispute settlement rules is that they contain commitments regarding the use of unilateral methods of dealing with disputes. WTO Members seeking redress of a violation of TRIPS or other WTO obligations commit themselves to have recourse to, and abide by, the multilateral WTO dispute settlement procedures. Moreover, they specifically commit themselves not to retaliate except in accordance with authorization from the WTO.

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