Developing countries have a period of transition of five years in which to meet all the obligations incumbent upon them under the Agreement, with the exception of non-discrimination between nationals and foreigners (national treatment), or between different foreign nationals (MFN treatment). By the year 2000, they should have introduced into their national regulations on intellectual property the various rules of the Agreement they accepted by acceding to the WTO.

However, the Agreement grants a further derogation to developing countries that did not issue patents before they joined the WTO, for example, for pharmaceutical products. In practice, a number of developing countries only granted patents for drug manufacturing processes, or possibly no patents at all in the pharmaceutical sector. In this case, Article 65.4 gives them an extra five-year period of grace to introduce patentability of these products in their legislation, which amounts to a total transitional period of ten years for developing countries in respect of pharmaceutical products.

However, given the substantial time that elapses between the application for a patent for a new pharmaceutical product and authorization to market that product, strict application of this provision would have the consequence that new patented drugs would not be marketed in developing countries until at least 2015 (2005 + about ten years of development prior to marketing).

In order to limit this effect, the TRIPS Agreement also has special transitional provisions (“mail-box” and “exclusive marketing rights” mechanisms - see below) for cases in which a State does not grant pharmaceutical products patents as of January 1995 and therefore has a period of ten years in which to do so.